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EXHIBIT 4.5
AMENDED AND RESTATED AETHERWORKS CORPORATION
1997 STOCK OPTION PLAN
SECTION 1.
DEFINITIONS
As used herein, the following terms shall have the meanings indicated below.
(a) The "Board" or the "Board of Directors" shall mean the Board of Directors
of Netrix Corporation, a Delaware corporation.
(b) "Committee" shall mean a Committee of two or more directors who shall be
appointed by and serve at the pleasure of the Board. As long as the Company's
securities are registered pursuant to Section 12 of the Securities Exchange Act
of 1934, as amended, then, to the extent necessary for compliance with Rule
16b-3, or any successor provision, each of the members of the Committee shall be
a "Non-Employee Director." For purposes of this Section 1(a) "Non-Employee
Director" shall have the same meaning as set forth in Rule 16b-3, or any
successor provision, as then in effect, of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.
(c) The "Company" shall mean Netrix Corporation, a Delaware corporation.
(d) "Fair Market Value" as of any day shall mean (i) if such stock is reported
by the Nasdaq National Market or Nasdaq SmallCap Market or is listed upon an
established stock exchange or exchanges, the reported closing price of such
stock by the Nasdaq National Market or Nasdaq SmallCap Market or on such stock
exchange or exchanges on such date or, if no sale of such stock shall have
occurred on such date, on the next preceding day on which there was a sale of
stock; (ii) if such stock is not so reported by the Nasdaq National Market or
Nasdaq SmallCap Market or listed upon an established stock exchange, the average
of the closing "bid" and "asked" prices quoted by the National Quotation Bureau,
Inc. (or any comparable reporting service) on such date or, if there are no
quoted "bid" and "asked" prices on such date, on the next preceding date for
which there are such quotes; or (iii) if such stock is not publicly traded as of
such date, the per share value as determined by the Board, or the Committee, in
its sole discretion by applying principles of valuation with respect to the
Company's Common Stock.
(e) The "Internal Revenue Code" is the Internal Revenue Code of 1986, as amended
from time to time.
(f) "Non-Employee Director" shall mean members of the Board who are not
employees of the Company or any Subsidiary.
(g) "Option Stock" shall mean Common Stock of the Company (subject to adjustment
as described in Section 12) reserved for options pursuant to this Plan.
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(h) The "Optionee" means an employee of the Company or any Subsidiary to whom an
incentive stock option has been granted pursuant to Section 9; or a consultant
or advisor to or director including a Non-Employee Director, employee or officer
of the Company or any Subsidiary to whom a nonqualified stock option has been
granted pursuant to Section 10.
(i) "Parent" shall mean any corporation which owns, directly or indirectly in an
unbroken chain, fifty percent (50%) or more of the total voting power of the
Company's outstanding stock.
(j) The "Plan" means the Amended and Restated AetherWorks Corporation 1997 Stock
Option Plan, as amended hereafter from time to time, including the form of
agreements covering Incentive Stock Options and Nonqualified Stock Options
("Option Agreements") as they may be modified by the Board from time to time.
(k) A "Subsidiary" shall mean any corporation of which fifty percent (50%) or
more of the total voting power of outstanding stock is owned, directly or
indirectly in an unbroken chain, by the Company.
SECTION 2.
PURPOSE
The purpose of the Plan is to promote the success of the Company and
its Subsidiaries by facilitating the retention of competent personnel and by
furnishing incentive to officers, directors, employees, consultants, and
advisors upon whose efforts the success of the Company and its Subsidiaries will
depend to a large degree.
It is the intention of the Company to carry out the Plan through the
granting of stock options which will qualify as "incentive stock options" under
the provisions of Section 422 of the Internal Revenue Code, or any successor
provision, pursuant to Section 9 of this Plan, and through the granting of
"nonqualified stock options" pursuant to Section 10 of this Plan. Adoption of
this Plan shall be and is expressly subject to the condition of approval by the
shareholders of the Company within twelve (12) months before or after the
adoption of the Plan by the Board of Directors. Any incentive stock options
granted after adoption of the Plan by the Board of Directors shall be treated as
nonqualified stock options if shareholder approval is not obtained within such
twelve-rnonth period.
SECTION 3.
EFFECTIVE DATE OF PLAN
The Plan shall be effective as of the date of adoption by the Board of
Directors, subject to approval by the shareholders of the Company as required in
Section 2.
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SECTION 4.
ADMINISTRATION
The Plan shall be administered by a Committee which shall be appointed
by the Board from time to time (hereinafter referred to as the "Administrator").
The Administrator shall have all of the powers vested in it under the provisions
of the Plan, including but not limited to exclusive authority (where applicable
and within the limitations described herein) to determine, in its sole
discretion, whether an incentive stock option or nonqualified stock option shall
be granted, the individuals to whom, and the time or times at which, options
shall be granted, the number of shares subject to each Option and the option
price and terms and conditions of each option. The Administrator shall have full
power and authority to administer and interpret the Plan, to make and amend
rules, regulations and guidelines for administering the Plan, to prescribe the
form and conditions of the respective stock Option Agreements (which may vary
from Optionee to Optionee) evidencing each option and to make all other
determinations necessary or advisable for the administration of the Plan.
Notwithstanding the foregoing, the Administrator shall have no power to change
vesting and exercise provisions in the Option Agreements, except as specifically
set forth herein. The Administrator's interpretation of the Plan, and all
actions taken and determinations made by the Administrator pursuant to the power
vested in it hereunder, shall be conclusive and binding on all parties
concerned. No member of the Board or the Committee shall be liable for any
action taken or determination made in good faith in connection with the
administration of the Plan. Any action of the Committee with respect to the
administration of the Plan shall be taken pursuant to a majority vote of the
Committee members or pursuant to the written resolution of all Committee
members.
SECTION 5.
PARTICIPANTS
The Administrator shall, from time to time, at its discretion and
without approval of the shareholders, designate those employees of the Company
or any Subsidiary to whom incentive stock options shall be granted under this
Plan. The Administrator may grant additional incentive stock options or
nonqualified stock options under this Plan to some or all participants then
holding opinions and/or may grant options solely or partially to new
participant. In designating participants, the Administrator shall also determine
the number of shares to be optioned to each such participant.
The Administrator shall from time to time, at its discretion and
without approval of the shareholders, designate those employees, officers,
directors, consultants, and advisors of the Company or of any Subsidiary to whom
nonqualified stock options shall be granted under this Plan; provided, however,
that consultants or advisors shall not be eligible to receive stock options
hereunder unless such consultant or advisor renders bona fide services to the
Company or Subsidiary and such services are not in connection with the offer or
sale of securities in a capital-raising transaction.
The Board may from time to time designate individuals as being
ineligible to participate in the Plan.
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SECTION 6.
STOCK
The Stock to be optioned under this Plan shall consist of authorized
but unissued or Treasury shares of Option Stock. One million, eight hundred
twenty-six thousand, three hundred seventy-two (1,826,372) (which reflects the
conversion adjustment in connection with the merger, all as more specifically
set forth in the Agreement and Plan of Merger, dated December 31, 1999, among
Netrix Corporation, a Delaware corporation, Nx1 Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of Netrix Corporation, and AetherWorks
Corporation, a Minnesota corporation). Shares of Option Stock shall be reserved
and available for options under the Plan; provided, however, that the total
number of shares of Option Stock reserved for options under this Plan shall be
subject to adjustment as provided in Section 12 of the Plan. Options may be
exercised only in full shares of Common Stock; no fractional shares shall be
issued. In the event that any outstanding option under the Plan for any reason
expires or is terminated prior to the exercise thereof, the shares of Option
Stock allocable to the unexercised portion of such option shall continue to be
reserved for options under the Plan and may be optioned hereunder.
SECTION 7.
DURATION OF PLAN
Incentive stock options may be granted pursuant to the Plan from time
to time during a period of ten (10) years from the effective date as defined in
Section 3. Nonqualified stock options may be granted pursuant to the Plan from
time to time after the effective date of the Plan and until the Plan is
discontinued or terminated by the Board. Any incentive stock option granted
during such ten-year period and any nonqualified stock option granted prior to
the termination of the Plan by the Board shall remain in full force and effect
until the expiration of the option as specified in the written stock option
agreement and shall remain subject to the terms and conditions of this Plan.
SECTION 8.
PAYMENT
Optionees may pay for shares upon exercise of options granted pursuant
to this Plan with cash, personal check, certified check, Common Stock of the
Company valued at such Stock's then Fair Market Value, or such other form of
payment as may be authorized by the Administrator. The Administrator may, in its
sole discretion, limit the forms of payment available to the Optionee and may
exercise such discretion any time prior to the termination of the option granted
to the Optionee or upon any exercise of the option by the Optionee.
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With respect to payment in the form of Common Stock of the Company, the
Administrator may require advance approval or adopt such rules as it deems
necessary to assure compliance with Rule 16b-3, or any successor provision, as
then in effect, of the General Rules and Regulations under the Securities
Exchange Act of 1934, if applicable.
SECTION 9.
TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
Each incentive stock option granted pursuant to this Section 9 shall be
evidenced by a written agreement. The Option Agreement shall be in such form as
may be approved from time to time by the Administrator and may vary from
Optionee to Optionee; provided, however, that each Optionee and each Option
Agreement shall comply with and be subject to the following terms and
conditions:
(a) NUMBER OF SHARES AND OPTION PRICE. The Option Agreement shall state
the total number of shares covered by the incentive stock option. To the extent
required to qualify the Option as an incentive stock option under Section 422 of
the Internal Revenue Code, or any successor provision, the option price per
share shall not be less than one hundred percent (100%) of the Fair Market Value
of the Common Stock per share on the date the Administrator grants the option;
provided, however, that if an Optionee owns stock constituting more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of its Parent or any Subsidiary, the option price per share of an
incentive stock option granted to such Optionee shall not be less than one
hundred ten percent (110%) of the Fair Market Value of the Common Stock per
share on the date of the grant of the option. The Administrator shall have full
authority and discretion in establishing the option price and shall be fully
protected in so doing.
(b) TERM AND EXERCISABILITY OF INCENTIVE STOCK OPTION. The term during
which any incentive stock option granted under the Plan may be exercised shall
be established in each case by the Administrator. To the extent required to
qualify the Option as an incentive stock option under Section 422 of the
Internal Revenue Code, or any successor provision, in no event shall any
incentive stock option be exercisable during a term of more than ten (10) years
after the date on which it is granted; provided, however, that if an Optionee
owns stock constituting more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of its parent or any Subsidiary,
the incentive stock option granted to such Optionee shall be exercisable during
a tern of not more than five (5) years after the date on which it is granted.
The Option Agreement shall state when the incentive stock option
becomes exercisable and shall also state the maximum term during which the
option may be exercised. In the event an incentive stock option is exercisable
immediately, the manner of exercise of the option in the event it is not
exercised in full immediately shall be specified in the Option Agreement. The
Administrator may accelerate the vesting and exercisability of any incentive
stock option granted hereunder only in the case of the disability or death of
the Optionee.
(c) OTHER PROVISIONS. The Option Agreement authorized under this
Section 9 shall contain such other provisions as the Administrator shall deem
advisable. Any such Option Agreement shall contain such limitations and
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restrictions upon the exercise of the option as shall be necessary to ensure
that such option will be considered an "incentive stock option" as defined in
Section 422 of the Internal Revenue Code or to conform to any change therein.
SECTION 10.
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS
Each nonqualified stock option granted pursuant to this Section 10
shall be evidenced by a written Option Agreement. The Option Agreement shall be
in such form as may be approved from time to time by the Administrator and may
vary from Optionee to Optionee; provided, however, that each Optionee and each
Option Agreement shall comply with and be subject to the following terms and
conditions:
(a) NUMBER OF SHARES AND OPTION PRICE. The Option Agreement shall state
the total number of shares covered by the nonqualified stock option. Unless
otherwise determined by the Administrator, the option price per share shall be
one hundred percent (100%) of the Fair Market Value of the Common Stock per
share on the date the Administrator grants the option; provided, however, that
the option price may not be less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock per share on the date of grant.
(b) TERM AND EXERCISABILITY OF NON-QUALIFIED STOCK OPTION. The term
during which any nonqualified stock option granted under the Plan may be
exercised shall be established in each case by the Administrator. The Option
Agreement shall state when the nonqualified stock option becomes exercisable and
shall also state the maximum term during which the option may be exercised. In
the event a nonqualified stock option is exercisable immediately, the manner of
exercise of the option in the event it is not exercised in full immediately
shall be specified in the stock option agreement. The Administrator may
accelerate the exercisability of any nonqualified stock option granted hereunder
which is not immediately exercisable as of the date of grant.
(c) WITHHOLDING. The Company or its Subsidiary shall be entitled to
withhold and deduct from future wages of the Optionee all legally required
amounts necessary to satisfy any and all withholding and employment-related
taxes attributable to the Optionee's exercise of a nonqualified stock option. In
the event the Optionee is required under the Option Agreement to pay the
Company, or make arrangements satisfactory to the Company respecting payment of,
such withholding and employment-related taxes, the Administrator may, in its
discretion and pursuant to such rules as it may adopt, permit the Optionee to
satisfy such obligation, in whole or in part, by electing to have the Company
withhold shares of Common Stock otherwise issuable to the Optionee as a result
of the option's exercise equal to the amount required to be withheld for tax
purposes. Any stock elected to be withheld shall be valued at its Fair Market
Value, as of the date the amount of tax to be withheld is determined under
applicable tax law. The Optionee's election to have shares withheld for this
purpose shall be made on or before the date the option is exercised or, if
later, the date that the amount of tax to be withheld is determined under
applicable tax law. Such election shall be approved by the Administrator and
otherwise comply with such rules as the Administrator may adopt to assure
compliance with Rule 16b-3, or any successor provision, as then in effect, of
the General Rules and Regulations under the Securities Exchange Act of 1934, if
applicable.
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(d) OTHER PROVISIONS. The Option Agreement authorized under this Section 10
shall contain such other provisions as the Administrator shall deem advisable.
SECTION 11.
TRANSFER OF OPTION
No incentive stock option shall be transferable, in whole or in part,
by the Optionee other than by will or by the laws of descent and distribution
and, during the Optionee's lifetime, the option may be exercised only by the
Optionee. If the Optionee shall attempt any transfer of any incentive stock
option granted under the Plan during the Optionee's lifetime, such transfer
shall be void and the incentive stock option, to the extent not fully exercised,
shall terminate.
The Administrator may, in its sole discretion, permit the Optionee to
transfer any or all nonqualified stock options to any member of the Optionee's
"immediate family" as such term is defined in Rule 16a-l(e) promulgated under
the Securities Exchange Act of 1934, or any successor provision, or to one or
more trusts whose beneficiaries are members of such Optionee's "immediate
family" or partnerships in which such family members are the only partners;
provided, however, that the Optionee receives no consideration for the transfer
and such transferred nonqualified stock option shall continue to be subject to
the same terms and conditions as were applicable to such nonqualified stock
option immediately prior to its transfer.
SECTION 12.
RECAPITALIZATION, SALE, MERGER, EXCHANGE OR LIQUIDATION
In the event of an increase or decrease in the number of shares of
Common Stock resulting from a subdivision or consolidation of shares or the
payment of a stock dividend or any other increase or decrease in the number of
shares of Common Stock effected without receipt of consideration by the Company,
or of a conversion into Common Stock by Digi International of the Notes held by
it, the number of shares of Option Stock reserved under Section 6 hereof and the
number of shares of Option Stock covered by each outstanding option and the
price per share thereof shall be adjusted by the Board to reflect such change.
Additional shares which may be credited pursuant to such adjustment shall be
subject to the same restrictions as are applicable to the shares with respect to
which the adjustment relates.
Unless otherwise provided in the stock option agreement, in the event
of an acquisition of the Company through the sale of substantially all of the
Company's assets and the consequent discontinuance of its business or through a
merger, consolidation, exchange, reorganization, reclassification, extraordinary
dividend, divestiture or liquidation of the Company (collectively referred to as
a "transaction"), all outstanding options shall become immediately exercisable,
whether or not such options had become exercisable prior to the transaction;
provided, however, that if the acquiring party seeks to have the transaction
accounted for on a "pooling of interests" basis and, in the opinion of the
Company's independent certified public accountants, accelerating the
exercisability of such options would preclude a pooling of interests under
generally accepted accounting principles, the exercisability of such options
shall not accelerate. In addition to the foregoing, in the event of such a
transaction, the Board may provide for one or more of the following:
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(a) the complete termination of this Plan and cancellation of
outstanding options not exercised prior to a date specified by the Board (which
date shall give Optionees a reasonable period of time in which to exercise the
options prior to the effectiveness of such transaction);
(b) that Optionees holding outstanding incentive or nonqualified
options shall receive, with respect to each share of Option Stock subject to
such options, as of the effective date of any such transaction, cash in an
amount equal to the excess of the Fair Market Value of such Option Stock on the
date immediately preceding the effective date of such transaction in excess of
the option price per share of such options; provided that the Board may, in lieu
of such cash payment, distribute to such Optionees shares of stock of the
Company or shares of stock of any corporation succeeding the Company by reason
of such transaction, such shares having a value equal to the cash payment
herein; or
(c) the continuance of the Plan with respect to the exercise of options
which were outstanding as of the date of adoption by the Board of such plan for
such transaction and provide to Optionees holding such options the right to
exercise their respective options as to an equivalent number of shares of stock
of the corporation succeeding the Company by reason of such transaction.
The Board may restrict the rights of or the applicability of this
Section 12 to the extent necessary to comply with Section 16(b) of the
Securities Exchange Act of 1934, the Internal Revenue Code or any other
applicable law or regulation. The grant of an option pursuant to the Plan shall
not limit in any way the right or power of the Company to make adjustments
reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
Except as expressly provided herein, no issuance, for consideration, by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock
subject to an Option.
SECTION 13.
SECURITIES LAW COMPLIANCE
No shares of Common Stock shall be issued pursuant to the Plan unless
and until there has been compliance, in the opinion of Company's counsel, with
all applicable legal requirements, including without limitation, those relating
to securities laws and stock exchange listing requirements. As a condition to
the issuance of Option Stock to Optionee, the Administrator may require Optionee
to (i) represent that the shares of Option Stock are being acquired for
investment and not resale and to make such other representations as the
Administrator shall deem necessary or appropriate to qualify the issuance of the
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shares as exempt from the Securities Act of 1933 and any other applicable
securities laws, and (ii) represent that Optionee shall not dispose of the
shares of Option Stock in violation of the Securities Act of 1933, or any other
applicable securities laws.
As a further condition to the grant of any incentive or nonqualified
stock option or the issuance of Option Stock to Optionee, Optionee agrees to the
following:
(a) In the event the Company advises Optionee that it plans an
underwritten public offering of its Common Stock in compliance with the
Securities Act of 1933, as amended, and the underwriters seek to restrict
certain shareholders from selling, contracting to sell or otherwise disposing of
part or all of their rights relating to their shares of the Company's Common
Stock, then Optionee will, for a period not to exceed 180 days from the date of
the prospectus comply with such restrictions as they may apply to any incentive
or nonqualified stock options granted to Optionee pursuant to the Plan or to any
of the shares of Common Stock underlying such options.
(b) In the event the Company makes any public offering of its
securities and determines in its sole discretion that it is necessary to reduce
the number of issued but unexercised stock purchase rights for the sole and
explicit purpose of compliance with any states securities or Blue Sky law
limitations with respect thereto, the Board of Directors of the Company shall
have the right (i) to accelerate the exercisability of any incentive or
nonqualified stock option, vested or unvested, and the date on which such option
must be exercised, provided that the Company gives Optionee prior written notice
of such acceleration, and (ii) to cancel any options or portions thereof which
Optionee does not exercise prior to or contemporaneously with such public
offering.
(c) In the event of a transaction (as defined in Section 12 of the
Plan) which is treated as a "pooling of interests" under generally accepted
accounting principles, Optionee will comply with Rule 145 of the Securities Act
of 1933, and any other restrictions imposed under other applicable legal or
accounting principles if Optionee is an "affiliate' (as defined in such
applicable legal and accounting principles) at the time of the transaction, and
Optionee will execute any documents necessary to ensure compliance with such
rules.
The Company reserves the right to place a legend on any stock
certificate issued upon exercise of an option granted pursuant to the Plan to
assure compliance with this Section 14.
SECTION 14.
RIGHTS AS A SHAREHOLDER
An Optionee (or the Optionee's successor or successors) shall have no
rights as a shareholder with respect to any shares covered by an option until
the date of the issuance of a stock certificate evidencing such shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which the
record date is prior to the date such stock certificate is actually issued
(except as otherwise provided in Section 12 of the Plan).
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SECTION 15.
AMENDMENT OF THE PLAN
The Board may from time to time, insofar as permitted by law, suspend
or discontinue the Plan or revise or amend it in any respect; provided, however,
that no such revision or amendment, except as is authorized in Section 12, shall
impair the terms and conditions of any option which is outstanding on the date
of such revision or amendment to the material detriment of the Optionee without
the consent of the Optionee. Notwithstanding the foregoing, no such revision or
amendment shall (i) materially increase the number of shares subject to the Plan
except as provided in Section 12 hereof, (ii) change the designation of the
class of employees eligible to receive options, (iii) decrease the price at
which options may be granted, or (iv) materially increase the benefits accruing
to Optionees under the Plan without the approval of the shareholders of the
Company if such approval is required for compliance with the requirements of any
applicable law or regulation. Furthermore, the Plan may not, without the
approval of the shareholders, be amended in any manner that will cause incentive
stock options to fail to meet the requirements of Section 422 of the Internal
Revenue Code.
SECTION 16.
NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the Optionee
to exercise such option.
SECTION 17.
NO GUARANTEE OF EMPLOYMENT
The granting of an option hereunder shall not impose upon the Company
or any Subsidiary any obligation to retain the Optionee in its employ for any
period.
