September 22, 1999
Registration No. 0-23858
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
VIDEOLABS, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1726281
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5960 Golden Hills Drive
Golden Valley, MN 55416
(Address of Principal Executive Offices
612-542-0061
(Issuer's telephone number)
VideoLabs Stock Option Plan
(Full title of the plan)
Jill Larson Copy to:
Corporate Secretary Robert R. Ribeiro
5960 Golden Hills Drive Hinshaw & Culbertson
Golden Valley, MN 55416 3100 Piper Jaffray Tower
(Name and address of agent for service) 222 South Ninth Street
(612) 542-0061 Minneapolis, Minnesota 55402
(Telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: from time to
time after the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
Title of Amount Proposed maximum Proposed maximum Amount of
securities to to be offering price aggregate offering registration
be registered registered per share(l) price fee
Common Stock 500,000 $1.185 $592,500 $204.31
$.01 par value
(1) Estimated solely for purposes of computing the registration fee and
based upon the average of the high and low sales prices for the
Company's common stock on September 15, 1999, as reported on the NASDAQ
market system.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of VideoLabs, Inc. ("Company") which have been filed
with the Securities and Exchange Commission are hereby incorporated by reference
in this Registration Statement:
(a) the Company's Annual Report on Form 10-KSB for the year ended December 31,
1998;
(b) the Company's Quarterly Reports on Form 10-QSB for the quarters ended March
31 and June 30, 1999.
(c) all other reports filed by Company pursuant to Sections 13 or 15(d) of the
Exchange Act since December 31, 1999, including but not limited to the form 8-K
filed on August 13, 1999.
(d) the Company's Registration Statement on Form S-3, as amended, as filed with
the Securities Exchange Commission as Commission File No. 0-23858;
(e) the description of Company's Common Stock and Common Stock Purchase Rights
contained in any Registration Statement of the Company filed under the Exchange
Act and any amendment or report filed for the purpose of updating any such
description.
All documents filed by the Company pursuant to Sections 13, 14 or 15(d) of the
Exchange Act subsequent to the date of this Registration Statement and prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which de-registers all securities then remaining
unsold, shall be deemed to be incorporated by reference into this Registration
Statement and to be a part hereof from the respective date of filing of such
documents. Any statement contained herein or in a document all or part of which
is incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Bylaws of the Company provide that the Company shall indemnify the directors
and officers of the Company against liability (and expenses related thereto)
arising out of their status as directors and officers to the extent permitted by
law. Additionally certain indemnification rights are available under the
Minnesota General Corporation Law ("MCL") to officers and directors to the
extent they are successful in the defense of any proceeding to which they were a
party by virtue of their position as a director or officer.
Further, as permitted by the MCL, the Articles of Incorporation of the Company
include a provision limiting the personal liability of its directors for
monetary damages for certain breaches of their duties as directors to the extent
permitted under the MCL. The Company also maintains a directors' and officers'
liability policy which insures such person against claims arising from certain
acts or decisions by them in their capacities as directors and officers of the
Company, subject to certain exclusions and deductible and maximum amounts.
Such limitation of liability pursuant to state law does not affect liability, if
any, arising under the federal securities laws. Further, insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to contractual provisions or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore
unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
Exhibit No. Description
4.1 VideoLabs Stock Option Plan
5.1 Opinion of Hinshaw & Culbertson.
23.1 Consent of Hinshaw & Culbertson (included in Exhibit 5.1).
23.2 Consent of Boulay, Heutmacker, Zibell & Co, P.L.L.P independent
auditors.
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ITEM 9. UNDERTAKINGS
A. Post-Effective Amendments
The Company hereby undertakes:
(l) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in 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) under the Securities Act if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in
the maximum aggregate-offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change in the information set forth in the Registration
Statement;
PROVIDED, HOWEVER, that subparagraphs (i) and (ii) above do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
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B. Subsequent Documents Incorporated by Reference
The Company hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the Company'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 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. Claims for Indemnification
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minneapolis, State of Minnesota, on August 31, 1998.
VIDEOLABS, INC.
By /s/ James W. Hansen
President, CEO, Treasurer and Chairman
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Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
By /s/ James W. Hansen Dated: September 22, 1999
President, CEO, Treasurer and Chairman
By /s/ Jill Larson Dated: September 22, 1999
Corporate Secretary
By /s/ Richard Craven Dated: September 22, 1999
Director
By /s/ Robin Sheeley Dated: September 22, 1999
Director & Chief Technical Officer
EXHIBIT INDEX
Exhibit
Number Description Page
4.1 VideoLabs Stock Option Plan Filed Electronically
5.1 Opinion of Hinshaw & Culbertson Filed Electronically
23.1 Consent of Hinshaw & Culbertson Filed Electronically
(Included in Exhibit 5.1).
23.2 Consent of Boulay, Heutmacker, Zibell & Co., Filed Electronically
P.L.L.P, independent auditors.
EXHIBIT 4.1
VIDEOLABS
STOCK OPTION PLAN
ARTICLE I.
ESTABLISMENT AND PURPOSE
1.1 Establishment. VideoLabs (the "Company") hereby establishes a plan providing
for long term stock based compensation incentive awards for the performance by
certain eligible individuals of services for the Company. This plan shall be
known as the VideoLabs Stock Option Plan (the Plan").
1.2 Purpose. The purpose of the Plan is to advance the interests of the Company
and its stockholders by enabling the Company to attract and retain persons of
ability to perform services for the Company by providing an incentive to such
persons through equity participation in the Company and by rewarding such
persons who contribute to the achievement by the Company of its economic
objectives.
ARTICLE II.
DEFINITIONS
The following terms shall have the meanings set forth below, unless the context
clearly otherwise requires:
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.3 "Committee" means the persons administering the Plan, as provided in Section
3.1 of the plan.
2.4 "Common Stock" means the Common Stock of the Company, par value $.O1 per
share.
2.5 "Disability" means the permanent and total disability of the Participant as
defined in the Code Section 22(e)(3).
2.6 "Eligible Recipient" means full-time employee including, without limitation,
officers and directors who are also employees of the Company, upon whose
judgement, incentive, and efforts the Company, has or will become dependant for
the successful conduct of its business.
2.7 "Exchange Act" means the Securities and Exchange Act of 1934, as amended.
2.8 "Fair Market Value" means, with respect to Common Stock, as of any date:
(a) if the Common Stock is listed or admitted to unlisted trading
privileges on any national securities exchange or is not so listed or admitted
but transactions in the Common Stock are reported on the NASDAQ National Market
System, then the reported sale price of the Common Stock on such exchange or by
the NASDAQ National Market System as of the nearest day preceding such date.
(or, if no shares were traded on such day, as of the next preceding day on which
there was such a trade); or
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(b) if the Common Stock is not so listed or admitted to unlisted trading
privileges or reported on the NASDAQ National Market Systems, and bid an asked
prices therefore in the over-the-counter market are reported by the NASDAQ
system or the National Quotation Bureau, Inc. (or any comparable reporting
service), then the average of the closing bid and asked prices as of the nearest
day preceding such date, as so reported by the NASDAQ System, or, if not so
reported thereon, as reported by the National Quotation Bureau, Inc. (or such
comparable reporting service); or
(c) if the Common Stock is not listed or admitted to an unlisted trading
privilege or reported on the NASDAQ National Market System, and such bid and
asked prices are not so reported, the net book value of a share of Common Stock
as of the most recently completed calendar quarter as determined by the
independent certified public accounting firm then servicing the books of the
Company.
2.9 "Incentive Stock Option", "ISO" or "Option" means a right to purchase Common
Stock granted to a participant pursuant to Article VI of the Plan that qualifies
as an Incentive Stock Option within the meaning of Section 422 of the Code.
2.10 "Participant" means an eligible recipient selected by the Committee from
time to time during the term of the Plan to receive one or more of the Options
under the Plan.
2.11 "Previously Acquired Shares" means shares of Common Stock that are already
owned by the Participant or shares of Common Stock that are to be acquired by
the Participant pursuant to the exercise of an option.
2.12 "Retirement" means the retirement of the Participant pursuant to and in
accordance with the regular retirement/pension plan or practice of the Company
then covering the Participant.
2.13 Securities Act" means the Securities Act of 1933 as amended.
2.14 "Tax Date" means the date any withholding tax obligation arises under the
Code for a Participant with respect to an Option.
ARTICLE III.
PLAN ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Board or by a Committee
of the Board consisting of not less than two persons; provided, however, that
from and after the date on which the Company first registers the class of its
equities securities under Section 12 of the Exchange Act, the Plan shall he
administered by the Board, majority of the Board and a majority of whom acting
on any matter until such Plan shall be "disinterested persons" within the
meaning of Rule 16b-3 under the Exchange Act, or by a Committee solely of not
fewer than three members of the Board who are such "disinterested persons".
Members of such a Committee, if established, shall be appointed from time to
time by the Board, shall serve at the pleasure of the Board and may resign at
any time upon written notice of the Board. A majority of such Committee shall
constitute a quorum, and the act of a majority of a quorum shall constitute an
act of such Committee. Action of such a Committee may be taken without a meeting
of unanimous written consent to such action is given. A
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member of the Committee may attend meetings in person or by means of telephone
or other electronic communication whereby all Committee members in attendance
can simultaneously hear each other. Any such Committee shall keep minutes of its
meetings or actions by written consent and shall provide copies thereof to the
Board to be kept with the corporate records of the Company. As used in this
Plan, the term "Committee" will refer either to the Board or to such a
Committee, if established.
3.2 Authority of the Committee.
(a) In accordance with and subject to the provisions of the Plan, the
Committee shall have the authority to determine the following:
(i) The eligible recipients who shall be selected as Participants;
(ii) The nature and extent of the Options to be made to each Participant
(including the numbers of shares of Common Stock to be subject to each
Option, the exercise price and the manner in which Options will become
exercisable);
(iii) The time or times when Options will be granted;
(iv) The duration of each Option;
(v) The restrictions and other conditions to which the exercise of Options
shall be subject; and
(vi) Such other provisions of the Options as the Committee may deem
necessary or desirable and as consistent with the terms of the Plan. The
Committee shall determine the form or forms of the agreements with the
Participants which shall evidence the particular terms, conditions,
rights, and duties of the Company and the Participants with respect to the
Options granted pursuant to the Plan, which agreements shall be consistent
with the provisions of the Plan.
(b) With the consent of the Participant affected thereby, the Committee
may amend or modify the terms of any outstanding Options in any manner, provided
that the amended or modified terms are permitted by the Plan as then in effect.
Without limiting the generality of the foregoing, the Committee may, with the
consent of the Participant affected thereby, modify the exercise price, number
of shares or other terms and conditions of an Option, extend the term of an
Option, accelerate the exerciseability of an Option, accept the surrender of any
outstanding Option or, to the extent not previously exercised, authorize the
grant of new Options in substitution for surrendered Options.
(c) The Committee shall have the authority, subject to the provisions of
the Plan, to establish, adopt, and revise such rules and regulations relating to
the Plan as it may deem necessary or advisable for the administration of the
Plan. The Committee's decisions and determinations under the Plan need not be
uniform and may be made selectively among Participants, whether or not such
Participants are similarly situated. Each determination, interpretation, or
other action made or taken by the Committee pursuant to the provisions of the
Plan shall be conclusive and binding for all purposes and on all persons,
including, without limitation, the Company, the stockholders of the Company, the
Committee and each of its members, the directors, officers and employees of the
Company, and the Participants and their respective successors and interests. No
member of the Committee shall be liable for any action or
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determination made in good faith with respect to the Plan or any Option granted
under the Plan.
ARTICLE IV.
STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to an adjustment as provided in Section 4.3 below,
the maximum number of shares of Common Stock that shall be reserved for issuance
under the Plan shall be 200,000 shares. The maximum number of shares authorized
may also be increased from time to time by approval of the Board, and, if
required pursuant to Rule 16b-3 under the Exchange Act, Section 422 of the Code,
or the rules of any exchange or the NASD, the stockholders of the Company.
4.2 Shares Available for Use. Shares of Common Stock that may be issued upon the
exercise of Options shall be applied to reduce the maximum number of shares of
Common Stock remaining available for use under the Plan. Any shares of Common
Stock that are subject to an Option that lapses, expires or for any reason is
terminated unexercised, shall automatically again become available for use under
the Plan.
4.3 Adjustments. In the event of any reorganization, merger, consolidation,
re-capitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering or divestiture, or any other change in
the corporate structure of shares of the Company or any purchase, acquisition,
sale or disposition or a significant amount of assets or a significant portion
of the business, any extraordinary dividend or any other similar transaction, or
any substitution by the Company of Options for, or assumption by the Company, of
Options of any other corporation, the Committee shall make appropriate
adjustment as to the number and kind of securities subject and reserved under
the Plan, and, in order to prevent dilution or enlargement of the rights of the
Participants, the number, kind and exercise price of the securities subject to
outstanding Options.
ARTICLE V.
PARTICIPATION
Participants in the Plan shall be those eligible recipients who, in the judgment
of the Committee, have performed, are performing, or during the term of the
Option will perform, vital services in the management, operation, or development
of the Company and are significantly contributing or are expected to
significantly contribute to the achievement of the corporation's economic
objectives. Participants may be granted from time to time one or more Options,
as may be determined by the Committee in its sole discretion. The number, type,
terms and conditions of Options granted to various Participants need not be
uniform, consistent or in accordance with any plan, whether or not such
participants are similarly situated. Upon determination by the Committee that an
Option is to be granted to a Participant, written notice shall be given such
person, specifying the terms, conditions, rights and duties related thereto.
Each Participant shall enter into an agreement with the Company, in such form as
the Company shall determine and which is consistent with the provisions of the
Plan, specifying such terms, conditions, rights and duties. Options shall be
deemed to be granted as of the date specified in the grant resolution of the
Committee, which date shall be the date of the related agreement with the
Participant.
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ARTICLE VI.
STOCK OPTIONS
6.1 Granting. A Participant may be granted one or more Options under the Plan,
and such Options shall be subject to the terms and conditions, consistent with
the other provisions of the Plan, as shall be determined by the Committee in
it's sole discretion.
6.2 Exercise. An Option shall become exercisable at such times and such
installments, if any, as shall be determined by the Committee at the time the
Option is granted. Unless otherwise determined by the Committee at or after its
date of grant, no Options shall be exercisable prior to six (6) months from its
late of grant. Upon completion of its exercise period, an Option, to the extent
not exercised, shall expire.
6.3 Exercise Price. The per share price to be paid by the participant at the
time of an Incentive Stock Option is exercised shall be determined by the
Committee, in its discretion, at the date of grant and shall be set forth in the
Option Agreement; provided, however, that such price shall not be less than (i)
100% of the fair market value of one share of Common Stock on the date the
Option is granted; or (ii) 110% of the fair market value of one share of Common
Stock on the date the Option is granted if, at the time the Option is granted,
the Participant owns, directly or indirectly, more than 10% of the total
combined voting power of all the classes of stock of the Company as determined
pursuant to Section 422 of the Code.
6.4 Duration. The period during which an Option may be exercised shall be fixed
by the Committee in it's sole discretion at such time the Option is granted;
provided, however, that in no event shall such period exceed ten years from its
date of grant, or, in the case of a Participant who owns, directly or indirectly
more than 10% of the total combined voting power of all the classes of stock of
the Company as determined pursuant to Section 422 of the Code, five years from
its date of grant.
6.5 Manner of Option Exercise. An Option may be exercised by a Participant in
whole or in part from time to time, subject to the conditions contained herein
and in the agreement evidencing such Option, by delivery, in person or through
certified or registered mail, of written notice of exercise to the Company at
its principal executive offices, and by paying in full the total option exercise
price for the shares of Common Stock to be purchased. Such notice of exercise
shall be in the form satisfactory to the Committee and shall specify the
particular option that is being exercised and the number of shares with respect
to which the Option is being exercised. Subject to compliance with the
provisions of Section 10.1 of the Plan, the exercise of the Option shall be
deemed effective upon receipt by the Company's corporate secretary of such
notice of exercise and payment complying with the terms of the Plan and
agreement evidencing the Option. As soon as practice after the effective
exercise of the Option, the Participant shall be recorded oil the stock transfer
books of the Company as the owner of the shares purchased, and the Company shall
deliver to the Participant one or more duly issued stock certificates evidencing
such ownership. If a Participant exercises any Option with respect to some, but
not all, of the shares of Common Stock subject to such Option, the right to
exercise such Option with respect to the remaining shares shall continue until
it expires or terminates in accordance with the terms. No Option shall be
exercisable except in whole shares.
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6.6 Payment of the Exercise Price. The total purchase price of the shares to be
purchased upon exercise of an Option shall be paid entirely in cash, including
check, bank draft, or money order.
6.7 Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any shares of Common Stock covered by an Option
until the Participant shall have become the holder of record of such shares, and
no adjustments shall be made for the dividends or other distributions or other
rights as to which there is a record date proceeding the date the Participant
becomes a holder of record of such shares, except as the Committee may determine
pursuant to Section 4.3 of the Plan.
6.8 Disposition of Common Stock Acquired pursuant to the Exercise and Incentive
Stock Options. Prior to making a disposition (as defined in Section 425 of the
Code) of any shares of the Common Stock pursuant to the exercise of an Option
granted under the Plan before the expiration of two years after its date of
grant or before the expiration of one year after its date of exercise the
Participant shall send written notice to the Company of the proposed date of
such disposition, the number of shares to be disposed of' the amount of proceeds
to be received from such disposition and any other information relating to such
disposition that the Company may reasonably request. The right of a Participant
to make any such disposition shall be conditioned on the receipt by the Company
of all amounts necessary to satisfy any federal, state or local withholding and
employment related tax requirements attributable to such disposition. The
Committee shall have the right, in it's sole discretion, to endorse the
certificates representing such shares with a legend restricting transfer until
such time as the Company receives the amounts necessary to satisfy such
withholding and employment related tax requirements or until the later of the
expiration of two years from its date of grant or one year from its date of
exercise.
ARTICLE VII.
CASH BONUSES
In connection with any grant of an Option or any time thereafter, the Committee
may, in it's sole discretion, grant a cash bonus to Participant in connection
with the grant and/or exercise on Option. The determination of whether to grant
such a cash bonus, the nature and amount of any such cash bonus and the terms
and conditions of such cash bonus shall be within the sole discretion of the
Committee.
ARTICLE VIII.
EFFECT OF TERMINATION OF EMPLOYMENT ON OPTIONS
8.1 Termination of Employment due to Death, Disability or Retirement. In the
event a Participant's employment with the Company is terminated by reason of the
Participant's death, disability or retirement, all outstanding Options then held
by the Participant shall become immediately exercisable in full and remain
exercisable for a period of three months, with respect to termination by reason
of retirement, and one year with respect to termination by reason of death or
disability; provided, however, that Options may not he exercised after the
expiration date of such Option.
8.2 Termination of Employment for Reasons Other Than Death, Disability or
Retirement.
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(a) Except as otherwise provided in Section 8.3 or Article 11 of the Plan,
in the event that a Participant's employment by the Company is terminated for
any reason other than the Participant's death, disability or retirement, all
rights of the Participant under the Plan and any agreements evidencing an Option
shall immediately terminate without notice of any kind, and no Options then held
by the Participant shall thereafter be exercisable; provided, however, that if
such termination is due to any reason other than termination by the Company for
"Cause", all outstanding Options then held by such Participant shall remain
exercisable to the extent exercisable as of such termination for a period of
three months after such termination but in no event after the expiration of any
such Option.
(b) For the purposes of this Section 8.2, "Cause" shall be defined as (i)
dishonesty, fraud, misrepresentation, embezzlement or material or deliberate
injury or attempted injury, in each case related to the Company, (ii) any
unlawful or criminal activity of a serious nature, (iii) any willful breach of
duty, habitual neglect of duty or unreasonable job performance, or (iv) any
material breach of a confidentiality or upon-compete agreement entered into with
the Company.
8.3 Modification of Rights Upon Termination. Not withstanding the provisions of
this Article VIII, upon a Participants termination of employment by the Company,
the Committee, may, in it's sole discretion, cause Options then held by such
Participant to become exercisable in the manner determined by the Committee.
8.4 Date of Employment Termination. For purposes of this Plan, a Participant's
employment or service shall be deemed to have terminated on the effective date
of such termination as determined in accordance with the standard practices of
the Company; provided, however, that following a change in control of the
Company, such date of termination shall be no earlier than the last day of the
pay period covered by the Participant's final pay check.
ARTICLE IX.
RIGHTS OF ELIGIBLE PARTICIPANTS AND RECIPIENTS
9.1 Employment. Nothing in the Plan or in any agreement evidencing an Option
shall expressly or implied interfere with or limit in any way the right of the
Company to terminate the employment of any eligible recipient or Participant at
any time, nor confer upon any eligible recipient or Participant any right to
continue in the employ or service of the Company for any particularly period of
time, in any particularly capacity or at any particular level in compensation.
9.2 Non-transferability. No right or interest of any Participant in an Option
prior to its exercise shall be assignable or transferable or subject to any
lien, during the lifetime of the Participant, either voluntarily or
involuntarily, directly or indirectly, by operation of law or otherwise,
including without limitation, execution, levy, garnishment, attachment, pledge,
divorce or bankruptcy. In the event of a Participant's death, a Participant's
rights and interests in the Option shall be transferable by testamentary will or
the laws descendant distribution, and payment of any amounts due under the Plan
shall be made to, and exercise of any Options may be made by, the Participants
legal representatives, heirs or legatees. If, in the opinion of the Committee, a
person entitled to payments or exercise rights with respect to the Plan is
disabled from caring for such person's affairs because of mental condition or
physical condition, payment due such person may be made to, in such rights shall
be exercised by, such person's guardian, conservator or other
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legal personal representative upon furnishing the Committee with evidence
satisfactory to the Committee of such status.
9.3 Non-Exclusivity of the Plan. Nothing contained in the Plan is intended to
amend, modify or rescind any previously approved compensation plans or programs
entered into by the Company. The Plan will be construed to be in addition to any
and all such other plans or programs. Neither the adoption of the plan nor the
submission of the Plan to the stockholders of the Company for approval will be
construed as creating any limitations on the power of authority of the Board to
adopt such additional or other compensation arrangements as the Board may deem
necessary or desirable.
ARTICLE X.
SHARE ISSUANCE AND TRANSFER RESTRICTIONS
10.1 Share Issuances. Notwithstanding any other provision of the Plan or any
agreements entered into pursuant hereto, the Company shall not be required to
issue any certificate for shares of Common Stock under this Plan unless of the
following conditions have been fulfilled:
(a) There shall be in effect with respect to such shares a registration
statement under the Securities Act and any applicable state laws or, if the
Committee has determined not to so register the shares of Common Stock to be
issued under the Plan, exemptions from registration under the Securities Act and
applicable state securities laws shall be available for such issuance and there
shall have heel) received from the Participant or the Participant's heirs and
legal representatives, any representations or agreements requested by the
Company in order to permit such issuance to be made pursuant to such exemptions;
and
(b) There shall have been obtained any other consent, approval or permit
from any state or federal governmental agency which the Committee shall, in it's
sole discretion upon advise of counsel, deem necessary or advisable.
10.2 Share Transfers. Shares of Common Stock issued under the Plan may not be
sold, assigned, transferred, pledged, encumbered or otherwise disposed of,
whether voluntarily or involuntarily, directly or indirectly, by operation of
law or otherwise, except pursuant to the registration under the Securities Act
and applicable state securities laws or pursuant to exemptions from such
registrations. The Company may condition the sale, assignment, transfer, pledge,
encumbrance or other disposition of such shares not issued pursuant to and
effect in current registration statement and under the Securities Act and all
applicable state securities laws on the receipt from the party to whom the
shares of Common Stock are to be transferred of any representations or
agreements requested by the Company to permit such transfer to be made pursuant
to exemptions from registration under the Securities Act and applicable state
securities laws.
10.3 Legends. Unless a registration statement under the Securities Act is in
effect with respect to the issuance or transfer of shares of Common Stock under
the Plan, each certificate representing any such shares shall be endorsed with a
legend in substantially the following form: unless counsel for the Company is of
the opinion as to any such certificate that such legend is unnecessary:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
<PAGE>
UNDER APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, INCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND SUCH STATE LAWS OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUCH STATE LAWS THE AVAILABILITY
OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
Additionally, the Committee, in its sole discretion, may endorse certificates
representing shares issued pursuant to the exercise of Incentive Stock Options
with a legend in substantially the following form:
THE SALE, TRANSFER, ENCUMBRANCE, HYPOTHECATION, GIFT OR OTHER DISPOSITION OR
ALIENATION OF SUCH SHARES OR ANY INTEREST THEREIN THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, ENCUMBERED, HYPOTHECATED, OR OTHERWISE
DISPOSED OF ON OR BEFORE THE LATER OF THE ONE YEAR OR TWO YEAR INCENTIVE STOCK
OPTION HOLDING PERIODS WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY.
ARTICLE XI.
CHANGING CONTROL
11.1 Definition. For the purposes of Article XI, "Change in Control" means any
one or more of the following events:
(a) The sale, lease, exchange or other transfer of all or substantially
all of the assets or business of the Company in one transaction or in a series
of related transactions) to any person within the meaning of Section 14(d) of
the Exchange Act;
(b) The approval by the stockholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company; or
(c) A change in control of the Company of a nature that would be required
to be reported pursuant to Section 13 or 15(d) of the Exchange Act.
11.2 Acceleration of Vesting. If a Change in Control of the Company shall occur,
then, without any further action by the Committee or the Board, all outstanding
Options shall become immediately exercisable in full and shall remain
exercisable during the remaining term thereof, regardless of whether the
Participants to whom such Options have been granted remain employed by the
Company.
11.3 Cash Payment for Options. If a Change in Control of the Company shall
occur, then the Committee, in its sole discretion, and without the consent of
any Participant effected thereby, may determine that some or all Participants
holding outstanding Options shall receive, with respect to some or all of the
shares of Common Stock subject to such Options, as of the effective date of any
such Change in Control of the Company, cash in an amount equal to the excess of
the fair market value of such shares immediately prior to the effective date of
such Changing in Control of the Company over the exercise price per share of
such Options.
ARTICLE XII.
RIGHT TO WITHHOLD
12.1 General Rules. The Company is entitled to (a) withhold and deduct from
future wages of the Participant (or from other amounts which may be due and
<PAGE>
owning from the Participant to the Company),or make other arrangements for the
collection of, all legally required amounts necessary to satisfy any and all
federal, state and local withholding and employment related tax requirements
attributable to the grant or exercise of an Option.
ARTICLE XIII.
AMENDMENT, MODIFICATION AND TERMINATION
13.1 Board Authority. The Board may suspend or terminate the Plan or any portion
thereof at any time, and may amend the Plan from time to time in such respects
as the Board may deem advisable in order that Options under the Plan shall
conform to any changes and applicable laws or regulations or in any other
respect the Board may deem to be in the best interests of the Company; provided,
however, that no such amendment shall be effective, without the approval of the
stockholders of the Company if stockholder approval of the amendment is then
required pursuant to Rule 16b-3 under the Exchange Act or any successive rule or
Section 422A of the Code. No termination, suspension or amendment of the Plan
shall alter or impair any outstanding Options without the consent of the
Participant effected thereby; provided, however, that this sentence shall not
impair the right of the Committee to take whatever action it deems appropriate
under Section 4.3 or Article 11 of the Plan.
ARTICLE XIV.
EFFECTIVE DATE OF THE PLAN
14.1 The Plan is effective as of April 23, 1993, the date it was adopted by the
Board, subject to the approval of the stockholders of the Company; provided,
however, that if the approval is not received by the stockholders of the Company
within twelve (12) months of the foregoing effective date of the Plan, then no
Option shall be issued under the Plan.
14.2 Duration of the Plan. The Plan shall terminate at midnight local
Minneapolis, Minnesota time on April 22, 2003 and may be terminated by Board
action, and no Options shall be granted after such termination. Notwithstanding
the foregoing, no Options shall he granted after the expiration of ten (10)
years from the earlier of the date of adoption of the Plan or the date of
stockholder approval. Options outstanding at Plan termination may continue to be
exercised in accordance with their terms.
ARTICLE XV.
MISCELLANEOUS
15.1 Construction and Headings. The use of a masculine gender herein shall also
include within its meaning the feminine, and the singular may include the plural
and the plural may include the singular, unless the context clearly indicates to
the contrary. The headings of the articles, sections and their subparts are for
the convenience of reading only and are not meant to be of substantive
significance and shall not add or detract from the meaning of such articles,
sections or sub-part.
15.2 Expenses of Administration. All expenses of administrating the Plan shall
be borne by the Company.
15.3 Public Policy. No person shall have any claim or right to receive if an
Option if, in the opinion of counsel to the Company, such receipt conflicts with
law or is opposed to governmental or public policy.
<PAGE>
15.4 Governing Law. The place of administration of the Plan shall he
conclusively deemed to be within the State of Minnesota, and rights and
obligations of any and all persons having claim to or claiming to have an
interest herein or hereunder under any Option agreement shall be governed and
construed exclusively in solely in accordance with the laws of the State of
Minnesota. The parties agree to the jurisdiction of the state and federal courts
of Minnesota with respect to matters relating to the Plan and agree not to raise
or assert the defense that such forum is not convenient for such party.
15.5 Successors and Assigns. This Plan shall be binding upon and inure to the
benefit of successors and permitted assigns of the Company including, without
limitation, whether by way of merger, consolidation, operation of law,
assignment or purchase or other acquisition of substantially all assets or
business of the Company and any and all such successors shall absolutely and
unconditionally assume all of the Company's obligations hereunder.
15.6 Survival of Provisions. The rights remedies, agreements, obligations and
covenants of the parties contained in or made pursuant to the Plan, any
agreement evidencing an Option and any other notices or agreements in connection
therewith, including, without limitation, any notice of exercise of an Option,
shall survive the execution and delivery of such notices and agreements and the
exercise of any Option, the payment of the Option exercise price and the
delivery and receipt of the Option shares, and shall remain in full force and
effect.
VideoLabs, Inc.
By /s/ Ward Johnson
Its: President
EXHIBIT 5.1
Hinshaw & Culbertson Letterhead
September 21, 1999
VideoLabs, Inc.
5960 Golden Hills Drive
Golden Valley, MN 55416
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-8 that you intend to
file with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, as amended, for the purpose of registering 500,000 shares of Common
Stock, $.01 par value (the "Shares") of VideoLabs, Inc., a Delaware corporation
(the "Company"), initially issuable upon the exercise of stock options granted
pursuant to the VideoLabs Stock option Plan adopted April 23, 1993 (the "Plan"),
as amended.
We have examined such documents and have reviewed such questions of law as we
have considered necessary and appropriate for the purposes of the opinion set
forth below.
In rendering our opinion set forth below, we have assumed the authenticity of
All documents submitted to us as originals, the genuineness of all signatures
and the conformity to authentic originals of all documents submitted to us as
copies. We have also assumed the legal capacity for all purposes relevant hereto
of all natural persons and, with respect to all parties to agreements or
instruments relevant hereto other than the Company, that such parties had the
requisite power and authority (corporate or otherwise) to execute, deliver and
perform such agreements or instruments, that such agreements or instruments have
been duly authorized by all requisite action (corporate or otherwise), executed
and delivered by such parties and that such agreements or instruments are the
valid, binding and enforceable obligations of such Parties. As to questions of
fact material to our opinions, we have relied upon certificates of officers of
the Company and of public officials.
Based on the foregoing, we are of the opinion that the Shares have been duly
authorized and, upon issuance, delivery and payment therefor in accordance with
the terms of the Plan, will be validly issued, fully paid and non-assessable.
Our opinion expressed above is limited to the laws of the State of Minnesota and
the General Corporation Law of the state of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Hinshaw & Culbertson
By: /s/ Robert R. Ribeiro
Robert R. Ribeiro
EXHIBIT 23.2
Independent Auditors' Consent
Boulay, Heutmacker, Zibell & Co. P.L.L.P. Letterhead
The Board of Directors
VideoLabs, Inc.
We hereby consent to the inclusion of our report dated February 5, 1999 on the
financial statements of VideoLabs, Inc. for the years ended December 31, 1998
and 1997 by reference in the S-8 Registration Statement of VideoLabs, Inc. dated
on or about September 22, 1999.
/s/ Boulay, Heutmacker, Zibell & Co. P.L.L.P
Boulay Heutmacker Zeibell & Co. P.L.L.P.
Minneapolis, Minnesota
September 22, 1999
