<PAGE>
As filed with the Securities and Exchange Commission on December 15, 1997
Registration No. 333-______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________
APPLIED VOICE TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-1190085
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
11410 N.E. 122nd Way
KIRKLAND, WASHINGTON 98034
(Address of principal executive offices) (Zip code)
STOCK OPTION AGREEMENT DATED OCTOBER 22, 1997
STOCK OPTION AGREEMENT DATED OCTOBER 22, 1997
STOCK OPTION AGREEMENT DATED JANUARY 2, 1996
STOCK OPTION AGREEMENT DATED JANUARY 2, 1996
(Full title of the plan)
ROGER A. FUKAI
CHIEF FINANCIAL OFFICER
APPLIED VOICE TECHNOLOGY, INC.
11410 N.E. 122ND WAY
KIRKLAND, WASHINGTON 98034
(425) 820-6000
(Name, address and telephone number of agent for service)
________________________
COPY TO:
LINDA A. SCHOEMAKER
PERKINS COIE
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(5) PRICE(5) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share
Stock Option Agreement dated October 22, 1997... 60,000(1)
Stock Option Agreement dated October 22, 1997... 60,000(2)
Stock Option Agreement dated January 2, 1996.... 66,667(3)
Stock Option Agreement dated January 2, 1996.... 66,667(4)
Total $24.56 $6,221,883 $1,836
==============================================================================================================================
</TABLE>
(1) Together with an indeterminate number of additional shares that may be
necessary to adjust the number of shares reserved for issuance pursuant to
the Stock Option Agreement dated October 22, 1997, as the result of any
future stock split, stock dividend or similar adjustment of the outstanding
Common Stock of the Registrant.
(2) Together with an indeterminate number of additional shares that may be
necessary to adjust the number of shares reserved for issuance pursuant to
the Stock Option Agreement dated October 22, 1997, as the result of any
future stock split, stock dividend or similar adjustment of the outstanding
Common Stock of the Registrant.
(3) Together with an indeterminate number of additional shares that may be
necessary to adjust the number of shares reserved for issuance pursuant to
the Stock Option Agreement dated January 2, 1996, as the result of any
future stock split, stock dividend or similar adjustment of the outstanding
Common Stock of the Registrant.
(4) Together with an indeterminate number of additional shares that may be
necessary to adjust the number of shares reserved for issuance pursuant to
the Stock Option Agreement dated January 2, 1996, as the result of any
future stock split, stock dividend or similar adjustment of the outstanding
Common Stock of the Registrant.
(5) Estimated pursuant to Rule 457 of the Securities Act of 1933, as amended,
solely for the purpose of calculating the amount of the registration fee.
The price per share is estimated to be $24.56 based on the average of the
high sales price ($25) and low sales price ($24.125) for the Registrant's
Common Stock as reported on the Nasdaq National Market on December 12, 1997.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference into this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed with the Securities and Exchange Commission (the
"Commission") on March 26, 1997 under Section 13(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which contains certified financial
statements for the most recent fiscal year for which such statements have been
filed;
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act subsequent to the end of the fiscal year
covered by the Annual Report on Form 10-K referred to in (a) above; and
(c) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission on November 11,
1994, under Section 12 of the Exchange Act, including any amendments or reports
filed for the purpose of updating such descriptions.
Any document filed by the Registrant pursuant to Section 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 that indicates that the securities offered hereby have
been sold or that reregisters the securities covered hereby 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 date
on which such document is filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act (the "WBCA") authorize a court to award, or a corporation's
board of directors to grant, indemnification to directors, officers, employees
and agents of the Registrant and those serving at the Registrant's request in
similar positions in any other corporation, partnership, joint venture, trust or
other enterprise in terms sufficiently broad to permit such indemnification
under certain circumstances for liabilities (including reimbursement for
expenses incurred) arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 10 of the Registrant's Restated Bylaws provides for
indemnification of the Registrant's directors and officers against all expense,
liability and loss (including counsel fees, judgments, fines, ERISA excise taxes
or penalties and amounts to be paid in settlement) actually and reasonably
incurred in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative and whether
formal or informal, in which the director or officer is, was or becomes involved
by reason of the fact that the director or officer is or was a director or
officer of the Registrant, or that being or having been such a director or
officer or an employee of the Registrant, such director or officer is or was
serving at the request of the Registrant as a director, officer, partner,
trustee, employee or agent of another corporation or of a partnership, joint
venture, trust, employee benefit plan or other enterprise, whether the basis of
such proceeding is alleged action by the director or officer in an official
capacity as such a director, officer, partner, trustee, employee or agent or in
any other capacity while serving as such a director, officer, partner, trustee,
employee or agent. The director or officer is not indemnified for any action,
suit, claim or proceeding instituted by or at the direction of the director or
officer unless such action, suit, claim or proceeding is or was authorized by
the Registrant's Board of Directors or unless the action is to enforce the
rights of indemnification. No indemnity may be provided by the Registrant for
acts or omissions of the indemnitee finally adjudged to be intentional
misconduct or a knowing violation of law, for conduct of the indemnitee finally
adjudged to be in violation of Section 23B.08.310 of the WBCA, for any
transaction with respect to which it was finally adjudged that such indemnitee
personally received a benefit in money, property or services to which the
indemnitee was not legally entitled or if the corporation is otherwise
prohibited by applicable law from paying such indemnification.
Section 23B.08.320 of the WBCA authorizes a corporation to limit a
director's liability to the corporation or its shareholders for monetary damages
for acts or omissions as a director, except in certain circumstances involving
intentional misconduct, self-dealing or illegal corporate loans or
distributions, or any transaction from which the director personally receives a
benefit in money, property or services to which the director is not legally
entitled. Article 11 of the Registrant's Restated Articles of Incorporation
provides for limitation of the director liability to the maximum extent
permitted by the WBCA.
The Registrant has also entered into indemnity agreements pursuant to which
it has agreed, among other things, to indemnify its directors and executive
officers against certain liabilities. The Registrant also maintains an
insurance policy insuring its directors and officers against liability for
certain acts or omissions while acting in their official capacity.
The above discussion of the WBCA and the Registrant's Restated Bylaws and
Restated Articles of Incorporation is not intended to be exhaustive and is
qualified in its entirety by reference to such statute, the Restated Bylaws and
the Restated Articles of Incorporation.
II-1
<PAGE>
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<C> <S>
5.1 Opinion of Perkins Coie regarding legality of the common stock
being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie (included in its Opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 Stock Option Letter Agreement dated October 22, 1997
99.2 Stock Option Letter Agreement dated October 22, 1997
99.3 Stock Option Letter Agreement dated January 2, 1996
99.4 Stock Option Letter Agreement dated January 2, 1996
</TABLE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this 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) 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; and
(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 (1)(i) and (1)(ii) above do not apply if the
- -------- -------
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the termination of the
offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that, in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Kirkland, state of Washington, on the 15th day
of December, 1997.
APPLIED VOICE TECHNOLOGY, INC.
By /s/ RICHARD J. LAPORTE
-------------------------------------
Richard J. LaPorte
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Richard
J. LaPorte and Roger A. Fukai, and each of them, as true and lawful attorneys-
in-fact and agents with full power of substitution and resubstitution, to sign
in the name and on behalf of such person, individually and in each capacity
stated below, any or all amendments (including pre-effective and post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
the 15th day of December, 1997 in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ RICHARD J. LAPORTE President, Chief Executive Officer and Director
- -------------------------- (Principal Executive Officer)
Richard J. LaPorte
/s/ ROGER A. FUKAI Executive Vice President of Finance and
- -------------------------- Administration and Chief Financial Officer
Roger A. Fukai (Principal Financial and Accounting Officer)
/s/ JAMES S. CAMPBELL Director
- --------------------------
James S. Campbell
/s/ ROBERT L. LOVELY Director
- --------------------------
Robert L. Lovely
/s/ WILLIAM L. TRUE Director
- --------------------------
William L. True
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<C> <S>
5.1 Opinion of Perkins Coie regarding legality of the common stock being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie (included in its Opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 Stock Option Letter Agreement dated October 22, 1997
99.2 Stock Option Letter Agreement dated October 22, 1997
99.3 Stock Option Letter Agreement dated January 2, 1996
99.4 Stock Option Letter Agreement dated January 2, 1996
</TABLE>
<PAGE>
EXHIBIT 5.1
PERKINS COIE
A LAW PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
1201 THIRD AVENUE, 40TH FLOOR, SEATTLE, WASHINGTON 98101-3099
TELEPHONE: (206) 583-8888 FACSIMILE: (206) 583-8500
December 15, 1997
Applied Voice Technology, Inc.
11410 N.E. 122nd Way
Kirkland, WA 98034
Re: Registration Statement on Form S-8 of Shares of Common Stock, Par
Value $.01 Per Share, of Applied Voice Technology, Inc.
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), which you are filing with the
Securities and Exchange Commission with respect to 253,334 shares of Common
Stock, par value $.01 per share (the "Shares"), which may be issued pursuant to
two Stock Option Agreements each dated January 2, 1996 and two Stock Option
Agreements each dated October 22, 1997 (collectively, the "Plans"). We have
examined the Registration Statement and such documents and records of the
Company and other documents as we have deemed necessary for the purpose of this
opinion. In giving this opinion, we are assuming the authenticity of all
instruments presented to us as originals, the conformity with originals of all
instruments presented to us as copies and the genuineness of all signatures.
Based upon and subject to the foregoing, we are of the opinion that any
original issuance Shares that may be issued pursuant to the Plans have been duly
authorized and that, upon the due execution by the Company and the registration
by its registrar of such Shares, issuance thereof by the Company in accordance
with the terms of the Plans, and the receipt of consideration therefor in
accordance with the terms of the Plans, such Shares will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
PERKINS COIE
<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 on Form S-8 of our report dated January
24, 1997 included in the Applied Voice Technology, Inc. Annual Report on Form
10-K for the year ended December 31, 1996, and to all references to our Firm
included in this registration statement.
ARTHUR ANDERSEN LLP
Seattle, Washington
December 12, 1997
<PAGE>
EXHIBIT 99.1
APPLIED VOICE TECHNOLOGY, INC.
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: Max Anhoury Date of Grant: October 22, 1997
We are pleased to inform you that you have been selected by the Board of
Directors (the "Board") of Applied Voice Technology, Inc. (the "Company") to
receive a nonqualified stock option for the purchase of 60,000 shares of the
Company's Common Stock at an exercise price of $28.09 per share.
TERM: The term of the option is ten years from date of grant, unless
sooner terminated.
VESTING: The option will vest and become exercisable according to the
following schedule:
Date on and After Which Exercisable Portion
Option is Exercisable of Total Option
- ----------------------- ---------------
December 31, 1998 25%*
December 31, 1999 50%*
December 31, 2001 100%
*NOTE: This portion of the option will vest on these dates only if the net
revenue and income-before-tax targets set forth in Schedules A and B to the
Employment Agreement dated as of the date hereof between you and the Company
(the "Employment Agreement") are met. Otherwise, the entire option will vest on
December 31, 2001.
EXERCISE: During your lifetime only you can exercise the option. The
option may be exercised by the personal representative of your estate, by the
beneficiary you have designated on forms prescribed by and filed with the
Company, or the beneficiary of your estate following your death. Subject to the
vesting schedule set forth above, the option may be exercised in whole or in
part at any time and from time to time; provided, however, that no fewer than
100 shares (or the remaining shares then purchasable under the option, if less
than 100 shares) may be purchased upon any exercise of this option and that only
whole shares will be issued pursuant to the exercise of the option. You may use
the Notice of Exercise of Nonqualified Stock Option in the form attached to this
Agreement when you exercise the option.
PAYMENT FOR SHARES: The option may be exercised by the delivery of:
(a) Cash, personal check (unless, at the time of exercise, the Company
determines otherwise), bank certified or cashier's check;
(b) Unless the Board in its sole discretion determines otherwise, shares of
the capital stock of the Company held by you for a period of at least six months
having a fair market value at the time of exercise, as determined in good faith
by the Board, equal to the exercise price; or
(c) A properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.
<PAGE>
WITHHOLDING TAXES: As a condition to the exercise of the option, you must
make such arrangements as the Company may require for the satisfaction of any
federal, state or local withholding tax obligations that may arise in connection
with such exercise. The Company has the right to retain without notice
sufficient shares of stock to satisfy the withholding obligation. To the extent
permitted or required by the Company, you may satisfy the withholding obligation
by electing to have the Company or a related corporation withhold from the
shares to be issued upon exercise that number of shares having a fair market
value equal to the amount required to be withheld. If you are subject to
Section 16 of the Exchange Act you must comply with certain requirements in
order to make such election.
TERMINATION:
(a) If your relationship with the Company or any related corporation ceases
because you are terminated by the Company for "Cause" (as defined in Section 7.5
of the Employment Agreement), the option shall automatically terminate as of the
first discovery by the Company of any reason for termination for Cause, and you
shall thereupon have no right to purchase any shares pursuant to the option. If
your relationship with the Company or any related corporation is suspended
pending an investigation of whether or not you shall be terminated for cause,
your rights under the option likewise shall be suspended during the period of
investigation.
(b) If your relationship with the Company or any related corporation ceases
because you terminate your employment for any reason other than "Good Reason"
(as defined in the Employment Agreement), and unless by its terms the option
sooner terminates or expires, then you may exercise, for a three-month period,
that portion of the option which is exercisable at the time of such cessation,
but the option will terminate at the end of such period following such cessation
as to all shares for which it has not theretofore been exercised.
(c) If your relationship with the Company or any related corporation ceases
because (i) you are terminated by the Company for any reason other than for
"Cause" or (ii) you terminate your employment for "Good Reason," then the option
will continue to vest, and you will continue to be able to exercise the option,
on the same terms as if your relationship with the Company or any related
corporation had not ceased.
(d) If your relationship with the Company or any related corporation ceases
because of your death or "total disability" (as defined in Section 6.3 of the
Employment Agreement), and unless by its terms the option sooner terminates or
expires, then you or your personal representative may exercise, for a 12-month
period, that portion of the option which is exercisable at the time of such
cessation, but the option will terminate at the end of such period following
such cessation as to all shares for which it has not theretofore been exercised.
(e) As used herein, the term "related corporation," means any parent or
subsidiary corporation in an unbroken chain of corporations ending with the
Company, if stock possessing 50% or more of the total combined voting power of
all classes of stock of each of the corporations other than the Company is owned
by one of the other corporations in such chain.
DEATH OF OPTIONEE: If you die while having a relationship with the Company
or any related corporation or within the three-month period (or 12-month period
in the case of total disability) following cessation of such relationship, this
option (to the extent that you would have been entitled to exercise this option)
may be exercised within one year after your death by the personal representative
of your estate or by the person or persons to whom your rights under the option
pass (i) by will or by the applicable laws of descent and distribution or (ii)
by a designation or transfer.
TRANSFERABILITY OF OPTION: This option and the rights and privileges
conferred hereby may not be transferred, assigned, pledged or hypothecated in
any manner (whether by operation of law or otherwise) other than by will or by
the applicable laws of descent and distribution and shall not be subject to
execution, attachment or similar process. This option is personal to you and is
exercisable solely by you. Any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of this option or of any right or privilege conferred
hereby,
-2-
<PAGE>
contrary to the provisions hereof, or the sale or levy or any attachment or
similar process upon the rights and privileges conferred hereby will be null and
void. Notwithstanding the foregoing, to the extent permitted by applicable law
and regulation, the Company, in its sole discretion, may permit you to (i)
during your lifetime, designate a person who may exercise the option after your
death by giving written notice of such designation to the Company (such
designation may be changed from time to time by you by giving written notice to
the Company revoking any earlier designation and making a new designation) or
(ii) transfer the option and the rights and privileges conferred hereby.
NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights
and privileges under the option pass will be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of this option unless and until this option has been
exercised.
CONTINUATION OF RELATIONSHIP: Nothing in this option will confer upon you
any right to continue in the employ or other relationship of the Company or of a
related corporation, or to interfere in any way with the right of the Company or
of any such related corporation to terminate your employment or other
relationship with the Company at any time.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION: The aggregate number and class
of shares covered by this option and the exercise price per share thereof (but
not the total price), will all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend.
(a) EFFECT OF LIQUIDATION OR REORGANIZATION
(1) Cash, Stock or Other Property for Stock. Except as provided in
---------------------------------------
subsection (a)(2), upon a merger (other than a merger of the Company in which
the holders of shares of Common Stock immediately prior to the merger have the
same proportionate ownership of shares of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere reincorporation
or the creation of a holding company) or liquidation of the Company, as a result
of which the shareholders of the Company receive cash, stock or other property
in exchange for or in connection with their shares of Common Stock, this option
will terminate, but you will have the right immediately prior to any such
merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to exercise your option, at your election in whole
or in part, whether or not the vesting requirements set forth in this agreement
have been satisfied.
(2) Conversion of Options on Stock for Stock Exchange. If the
-------------------------------------------------
shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger (other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation
or reorganization (other than a mere reincorporation or the creation of a
holding company), this option will be converted into an option to purchase
shares of Exchange Stock. The amount and price of converted options will be
determined by adjusting the amount and price of this option in the same
proportion as used for determining the number of shares of Exchange Stock the
holders of the shares of Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The converted
option will be fully vested whether or not the vesting requirements set forth in
this agreement have been satisfied; provided that such acceleration will not
occur if, in the opinion of the Company's outside accountants, such acceleration
would render unavailable "pooling of interests" accounting treatment for any
reorganization, merger or consolidation of the Company for which pooling of
interests accounting treatment is sought by the Company and is applied in
accounting for the transaction.
-3-
<PAGE>
(b) FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by this
option, any fractional shares resulting from such adjustment will be disregarded
and the option will cover only the number of full shares resulting from such
adjustment.
(c) DETERMINATION OF BOARD TO BE FINAL
All adjustments referred to herein will be made by the Board, and its
determination as to what adjustments will be made, and the extent thereof, will
be final, binding and conclusive.
SECURITIES REGULATION:
Shares will not be issued with respect to this option unless the exercise
of such option and the issuance and delivery of such shares pursuant thereto
complies with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed.
As a condition to the exercise of this option, the Company may require you
to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any relevant provision of the aforementioned laws.
At the option of the Company, a stop-transfer order against any shares of stock
may be placed on the official stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold or otherwise
transferred, unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Company may also require such other
action or agreement by you as may from time to time be necessary to comply with
the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE
COMPANY TO UNDERTAKE REGISTRATION OF THIS OPTION OR THE SHARES ISSUABLE
HEREUNDER, but if the Company has filed or is filing a Registration Statement on
Form S-8 or any successor form for the registration of securities issued under
stock option or other employee benefit plans, the Company hereby undertakes to
include the shares issuable hereunder in any such registration.
Should any of the Company's capital stock of the same class as the stock
subject to this option be listed on a national securities exchange, all shares
issued hereunder if not previously listed on such exchange will be authorized by
that exchange for listing thereon prior to the issuance thereof.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
APPLIED VOICE TECHNOLOGY, INC.
By _____________________________
Its ____________________________
-4-
<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of Oregon, accept the nonqualified stock option
described herein. I have read and understand the Agreement.
Dated: _______________
_______________________________ ____________________________
Taxpayer I.D. Number Max Anhoury
Address ____________________
____________________________
____________________________
By her signature below, the spouse of the Optionee, if such Optionee is
legally married as of the date of his execution of this Agreement, acknowledges
that she has read this Agreement and is familiar with the terms and provisions
thereof, and agrees to be bound by all the terms and conditions of this
Agreement.
Dated: _________________
__________________________________
Spouse's Signature
__________________________________
Printed Name
By his signature below, the Optionee represents that he is not legally
married as of the date of execution of this Agreement.
Dated: _________________
__________________________________
Optionee's Signature
<PAGE>
NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION
To: Applied Voice Technology, Inc.
I, a resident of the State of Oregon, hereby exercise my nonqualified stock
option granted by Applied Voice Technology, Inc. (the "Company") on
_____________, 19___, and notify the Company of my desire to purchase ________
shares of Common Stock of the Company (the "Securities") at the exercise price
of $__________ per share which were offered to me pursuant to said option.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Securities; (2) I have had the opportunity to ask questions and
receive answers concerning the information received about the Securities and the
Company; and (3) I have been given the opportunity to obtain any additional
information I deem necessary to verify the accuracy of any information obtained
concerning the Securities and the Company.
Dated: _________________
_________________________ _______________________________
Taxpayer I.D. Number Max Anhoury
Address _______________________
_______________________________
_______________________________
<PAGE>
RECEIPT
_________________________ hereby acknowledges receipt from Max Anhoury in
payment for ______________ shares of Common Stock of Applied Voice Technology,
Inc., a Washington corporation, of $_____________ in the form of
[_] Cash
[_] Check (personal, cashier's or bank certified)
[_] __________ shares of the Company's Common Stock, fair market value
$_______ per share held by the Optionee for a period of at least six
months
[_] Copy of irrevocable instructions to Broker
____________________________
Date: ___________________ For: Applied Voice Technology, Inc.
<PAGE>
EXHIBIT 99.2
APPLIED VOICE TECHNOLOGY, INC.
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: Lloyd Johnson Date of Grant: October 22, 1997
We are pleased to inform you that you have been selected by the Board of
Directors (the "Board") of Applied Voice Technology, Inc. (the "Company") to
receive a nonqualified stock option for the purchase of 60,000 shares of the
Company's Common Stock at an exercise price of $28.09 per share.
TERM: The term of the option is ten years from date of grant, unless
sooner terminated.
VESTING: The option will vest and become exercisable according to the
following schedule:
Date on and After Which Exercisable Portion
Option is Exercisable of Total Option
- ----------------------- -------------------
December 31, 1998 25%*
December 31, 1999 50%*
December 31, 2001 100%
*NOTE: This portion of the option will vest on these dates only if the net
revenue and income-before-tax targets set forth in Schedules A and B to the
Employment Agreement dated as of the date hereof between you and the Company
(the "Employment Agreement") are met. Otherwise, the entire option will vest on
December 31, 2001.
EXERCISE: During your lifetime only you can exercise the option. The
option may be exercised by the personal representative of your estate, by the
beneficiary you have designated on forms prescribed by and filed with the
Company, or the beneficiary of your estate following your death. Subject to the
vesting schedule set forth above, the option may be exercised in whole or in
part at any time and from time to time; provided, however, that no fewer than
100 shares (or the remaining shares then purchasable under the option, if less
than 100 shares) may be purchased upon any exercise of this option and that only
whole shares will be issued pursuant to the exercise of the option. You may use
the Notice of Exercise of Nonqualified Stock Option in the form attached to this
Agreement when you exercise the option.
PAYMENT FOR SHARES: The option may be exercised by the delivery of:
(a) Cash, personal check (unless, at the time of exercise, the Company
determines otherwise), bank certified or cashier's check;
(b) Unless the Board in its sole discretion determines otherwise, shares of
the capital stock of the Company held by you for a period of at least six months
having a fair market value at the time of exercise, as determined in good faith
by the Board, equal to the exercise price; or
(c) A properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.
<PAGE>
WITHHOLDING TAXES: As a condition to the exercise of the option, you must
make such arrangements as the Company may require for the satisfaction of any
federal, state or local withholding tax obligations that may arise in connection
with such exercise. The Company has the right to retain without notice
sufficient shares of stock to satisfy the withholding obligation. To the extent
permitted or required by the Company, you may satisfy the withholding obligation
by electing to have the Company or a related corporation withhold from the
shares to be issued upon exercise that number of shares having a fair market
value equal to the amount required to be withheld. If you are subject to
Section 16 of the Exchange Act you must comply with certain requirements in
order to make such election.
TERMINATION:
(a) If your relationship with the Company or any related corporation ceases
because you are terminated by the Company for "Cause" (as defined in Section 7.5
of the Employment Agreement), the option shall automatically terminate as of the
first discovery by the Company of any reason for termination for Cause, and you
shall thereupon have no right to purchase any shares pursuant to the option. If
your relationship with the Company or any related corporation is suspended
pending an investigation of whether or not you shall be terminated for cause,
your rights under the option likewise shall be suspended during the period of
investigation.
(b) If your relationship with the Company or any related corporation ceases
because you terminate your employment for any reason other than "Good Reason"
(as defined in the Employment Agreement), and unless by its terms the option
sooner terminates or expires, then you may exercise, for a three-month period,
that portion of the option which is exercisable at the time of such cessation,
but the option will terminate at the end of such period following such cessation
as to all shares for which it has not theretofore been exercised.
(c) If your relationship with the Company or any related corporation ceases
because (i) you are terminated by the Company for any reason other than for
"Cause" or (ii) you terminate your employment for "Good Reason," then the option
will continue to vest, and you will continue to be able to exercise the option,
on the same terms as if your relationship with the Company or any related
corporation had not ceased.
(d) If your relationship with the Company or any related corporation ceases
because of your death or "total disability" (as defined in Section 6.3 of the
Employment Agreement), and unless by its terms the option sooner terminates or
expires, then you or your personal representative may exercise, for a 12-month
period, that portion of the option which is exercisable at the time of such
cessation, but the option will terminate at the end of such period following
such cessation as to all shares for which it has not theretofore been exercised.
(e) As used herein, the term "related corporation," means any parent or
subsidiary corporation in an unbroken chain of corporations ending with the
Company, if stock possessing 50% or more of the total combined voting power of
all classes of stock of each of the corporations other than the Company is owned
by one of the other corporations in such chain.
DEATH OF OPTIONEE: If you die while having a relationship with the Company
or any related corporation or within the three-month period (or 12-month period
in the case of total disability) following cessation of such relationship, this
option (to the extent that you would have been entitled to exercise this option)
may be exercised within one year after your death by the personal representative
of your estate or by the person or persons to whom your rights under the option
pass (i) by will or by the applicable laws of descent and distribution or (ii)
by a designation or transfer.
TRANSFERABILITY OF OPTION: This option and the rights and privileges
conferred hereby may not be transferred, assigned, pledged or hypothecated in
any manner (whether by operation of law or otherwise) other than by will or by
the applicable laws of descent and distribution and shall not be subject to
execution, attachment or similar process. This option is personal to you and is
exercisable solely by you. Any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of this option or of any right or privilege conferred
hereby,
-2-
<PAGE>
contrary to the provisions hereof, or the sale or levy or any attachment or
similar process upon the rights and privileges conferred hereby will be null and
void. Notwithstanding the foregoing, to the extent permitted by applicable law
and regulation, the Company, in its sole discretion, may permit you to (i)
during your lifetime, designate a person who may exercise the option after your
death by giving written notice of such designation to the Company (such
designation may be changed from time to time by you by giving written notice to
the Company revoking any earlier designation and making a new designation) or
(ii) transfer the option and the rights and privileges conferred hereby.
NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights
and privileges under the option pass will be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of this option unless and until this option has been
exercised.
CONTINUATION OF RELATIONSHIP: Nothing in this option will confer upon you
any right to continue in the employ or other relationship of the Company or of a
related corporation, or to interfere in any way with the right of the Company or
of any such related corporation to terminate your employment or other
relationship with the Company at any time.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION: The aggregate number and class
of shares covered by this option and the exercise price per share thereof (but
not the total price), will all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend.
(a) EFFECT OF LIQUIDATION OR REORGANIZATION
(1) Cash, Stock or Other Property for Stock. Except as provided in
---------------------------------------
subsection (a)(2), upon a merger (other than a merger of the Company in which
the holders of shares of Common Stock immediately prior to the merger have the
same proportionate ownership of shares of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere reincorporation
or the creation of a holding company) or liquidation of the Company, as a result
of which the shareholders of the Company receive cash, stock or other property
in exchange for or in connection with their shares of Common Stock, this option
will terminate, but you will have the right immediately prior to any such
merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to exercise your option, at your election in whole
or in part, whether or not the vesting requirements set forth in this agreement
have been satisfied.
(2) Conversion of Options on Stock for Stock Exchange. If the
-------------------------------------------------
shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger (other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation
or reorganization (other than a mere reincorporation or the creation of a
holding company), this option will be converted into an option to purchase
shares of Exchange Stock. The amount and price of converted options will be
determined by adjusting the amount and price of this option in the same
proportion as used for determining the number of shares of Exchange Stock the
holders of the shares of Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The converted
option will be fully vested whether or not the vesting requirements set forth in
this agreement have been satisfied; provided that such acceleration will not
occur if, in the opinion of the Company's outside accountants, such acceleration
would render unavailable "pooling of interests" accounting treatment for any
reorganization, merger or consolidation of the Company for which pooling of
interests accounting treatment is sought by the Company and is applied in
accounting for the transaction.
-3-
<PAGE>
(b) FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by this
option, any fractional shares resulting from such adjustment will be disregarded
and the option will cover only the number of full shares resulting from such
adjustment.
(c) DETERMINATION OF BOARD TO BE FINAL
All adjustments referred to herein will be made by the Board, and its
determination as to what adjustments will be made, and the extent thereof, will
be final, binding and conclusive.
SECURITIES REGULATION:
Shares will not be issued with respect to this option unless the exercise
of such option and the issuance and delivery of such shares pursuant thereto
complies with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed.
As a condition to the exercise of this option, the Company may require you
to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any relevant provision of the aforementioned laws.
At the option of the Company, a stop-transfer order against any shares of stock
may be placed on the official stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold or otherwise
transferred, unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Company may also require such other
action or agreement by you as may from time to time be necessary to comply with
the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE
COMPANY TO UNDERTAKE REGISTRATION OF THIS OPTION OR THE SHARES ISSUABLE
HEREUNDER, but if the Company has filed or is filing a Registration Statement on
Form S-8 or any successor form for the registration of securities issued under
stock option or other employee benefit plans, the Company hereby undertakes to
include the shares issuable hereunder in any such registration.
Should any of the Company's capital stock of the same class as the stock
subject to this option be listed on a national securities exchange, all shares
issued hereunder if not previously listed on such exchange will be authorized by
that exchange for listing thereon prior to the issuance thereof.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
APPLIED VOICE TECHNOLOGY, INC.
By _____________________________
Its ___________________________
-4-
<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of Oregon, accept the nonqualified stock option
described herein. I have read and understand the Agreement.
Dated: _______________
__________________________ _____________________________
Taxpayer I.D. Number Lloyd Johnson
Address _____________________
_____________________________
_____________________________
By her signature below, the spouse of the Optionee, if such Optionee is
legally married as of the date of his execution of this Agreement, acknowledges
that she has read this Agreement and is familiar with the terms and provisions
thereof, and agrees to be bound by all the terms and conditions of this
Agreement.
Dated: _________________
__________________________________
Spouse's Signature
__________________________________
Printed Name
By his signature below, the Optionee represents that he is not legally
married as of the date of execution of this Agreement.
Dated: _________________
__________________________________
Optionee's Signature
<PAGE>
NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION
To: Applied Voice Technology, Inc.
I, a resident of the State of Oregon, hereby exercise my nonqualified stock
option granted by Applied Voice Technology, Inc. (the "Company") on
_____________, 19___, and notify the Company of my desire to purchase ________
shares of Common Stock of the Company (the "Securities") at the exercise price
of $__________ per share which were offered to me pursuant to said option.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Securities; (2) I have had the opportunity to ask questions and
receive answers concerning the information received about the Securities and the
Company; and (3) I have been given the opportunity to obtain any additional
information I deem necessary to verify the accuracy of any information obtained
concerning the Securities and the Company.
Dated: _________________
_________________________ ________________________________
Taxpayer I.D. Number Lloyd Johnson
Address ________________________
________________________________
________________________________
<PAGE>
RECEIPT
_________________________ hereby acknowledges receipt from Lloyd Johnson in
payment for ______________ shares of Common Stock of Applied Voice Technology,
Inc., a Washington corporation, of $_____________ in the form of
[_] Cash
[_] Check (personal, cashier's or bank certified)
[_] __________ shares of the Company's Common Stock, fair market value
$_______ per share held by the Optionee for a period of at least
six months
[_] Copy of irrevocable instructions to Broker
_______________________________
Date: ___________________ For: Applied Voice Technology, Inc.
<PAGE>
EXHIBIT 99.3
APPLIED VOICE TECHNOLOGY, INC.
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: Bradley H. Feder Date of Grant: January 2, 1996
We are pleased to inform you that you have been selected by the Board of
Directors (the "Board") of Applied Voice Technology, Inc. (the "Company") to
receive a nonqualified stock option for the purchase of 100,000 shares of the
Company's Common Stock at an exercise price of $13.75 per share.
TERM: The term of the option is ten years from date of grant, unless
sooner terminated.
VESTING: The option will vest and become exercisable according to the
following schedule:
Date on and After Which Exercisable Portion
Option is Exercisable of Total Option
- ----------------------- -------------------
January 2, 1997 12/36
January 2, 1998 24/36
January 2, 1999 100%
EXERCISE: During your lifetime only you can exercise the option. The
option may be exercised by the personal representative of your estate, by the
beneficiary you have designated on forms prescribed by and filed with the
Company, or the beneficiary of your estate following your death. You may use
the Notice of Exercise of Nonqualified Stock Option in the form attached to this
Agreement when you exercise the option.
PAYMENT FOR SHARES: The option may be exercised by the delivery of:
(a) Cash, personal check (unless, at the time of exercise, the Company
determines otherwise), bank certified or cashier's check;
(b) Unless the Board in its sole discretion determines otherwise, shares of
the capital stock of the Company held by you for a period of at least six months
having a fair market value at the time of exercise, as determined in good faith
by the Board, equal to the exercise price; or
(c) A properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.
WITHHOLDING TAXES: As a condition to the exercise of the option, you must
make such arrangements as the Company may require for the satisfaction of any
federal, state or local withholding tax obligations that may arise in connection
with such exercise. The Company has the right to retain without notice
sufficient shares of stock to satisfy the withholding obligation. To the extent
permitted or required by the Company, you may satisfy the withholding obligation
by electing to have the Company or a related corporation withhold from the
shares to be issued upon exercise that number of shares having a fair market
value equal to the amount required to be withheld. If you are subject to
Section 16 of the Exchange Act you must comply with certain requirements in
order to make such election.
<PAGE>
TERMINATION:
(a) If your relationship with the Company or any related corporation ceases
because (i) you are terminated by the Company for "Cause" (as defined in Section
7.5 of the Employment Agreement dated as of the date hereof between you and the
Company (the "Employment Agreement")) or (ii) you terminate your employment for
any reason other than "Good Reason" (as defined in the Employment Agreement),
and unless by its terms the option sooner terminates or expires, then you may
exercise, for a three-month period, that portion of the option which is
exercisable at the time of such cessation, but the option will terminate at the
end of such period following such cessation as to all shares for which it has
not theretofore been exercised.
(b) If your relationship with the Company or any related corporation ceases
because (i) you are terminated by the Company for any reason other than for
"Cause" or (ii) you terminate your employment for "Good Reason," then the option
will continue to vest, and you will continue to be able to exercise the option,
on the same terms as if your relationship with the Company or any related
corporation had not ceased.
(c) If your relationship with the Company or any related corporation ceases
because of your death or "total disability" (as defined in Section 6.3 of the
Employment Agreement), and unless by its terms the option sooner terminates or
expires, then you or your personal representative may exercise, for a 12-month
period, that portion of the option which is exercisable at the time of such
cessation, but the option will terminate at the end of such period following
such cessation as to all shares for which it has not theretofore been exercised.
(d) As used herein, the term "related corporation," means any parent or
subsidiary corporation in an unbroken chain of corporations ending with the
Company, if stock possessing 50% or more of the total combined voting power of
all classes of stock of each of the corporations other than the Company is owned
by one of the other corporations in such chain.
DEATH OF OPTIONEE: If you die while having a relationship with the Company
or any related corporation or within the three-month period (or 12-month period
in the case of total disability) following cessation of such relationship, this
option (to the extent that you would have been entitled to exercise this option)
may be exercised within one year after your death by the personal representative
of your estate or by the person or persons to whom your rights under the option
pass (i) by will or by the applicable laws of descent and distribution or (ii)
by a designation or transfer.
TRANSFERABILITY OF OPTION: This option and the rights and privileges
conferred hereby may not be transferred, assigned, pledged or hypothecated in
any manner (whether by operation of law or otherwise) other than by will or by
the applicable laws of descent and distribution and shall not be subject to
execution, attachment or similar process. This option is personal to you and is
exercisable solely by you. Any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of this option or of any right or privilege conferred
hereby, contrary to the provisions hereof, or the sale or levy or any attachment
or similar process upon the rights and privileges conferred hereby will be null
and void. Notwithstanding the foregoing, to the extent permitted by applicable
law and regulation, the Company, in its sole discretion, may permit you to (i)
during your lifetime, designate a person who may exercise the option after your
death by giving written notice of such designation to the Company (such
designation may be changed from time to time by you by giving written notice to
the Company revoking any earlier designation and making a new designation) or
(ii) transfer the option and the rights and privileges conferred hereby.
NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights
and privileges under the option pass will be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of this option unless and until this option has been
exercised.
CONTINUATION OF RELATIONSHIP: Nothing in this option will confer upon you
any right to continue in the employ or other relationship of the Company or of a
related corporation, or to interfere in any way with the right
-2-
<PAGE>
of the Company or of any such related corporation to terminate your employment
or other relationship with the Company at any time.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION: The aggregate number and class
of shares covered by this option and the exercise price per share thereof (but
not the total price), will all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend.
(a) EFFECT OF LIQUIDATION OR REORGANIZATION
(1) Cash, Stock or Other Property for Stock. Except as provided in
---------------------------------------
subsection (a)(2), upon a merger (other than a merger of the Company in which
the holders of shares of Common Stock immediately prior to the merger have the
same proportionate ownership of shares of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere reincorporation
or the creation of a holding company) or liquidation of the Company, as a result
of which the shareholders of the Company receive cash, stock or other property
in exchange for or in connection with their shares of Common Stock, this option
will terminate, but you will have the right immediately prior to any such
merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to exercise your option in whole or in part
whether or not the vesting requirements set forth in this agreement have been
satisfied.
(2) Conversion of Options on Stock for Stock Exchange. If the
-------------------------------------------------
shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger (other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation
or reorganization (other than a mere reincorporation or the creation of a
holding company), this option will be converted into an option to purchase
shares of Exchange Stock. The amount and price of converted options will be
determined by adjusting the amount and price of this option in the same
proportion as used for determining the number of shares of Exchange Stock the
holders of the shares of Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The converted
option will be fully vested whether or not the vesting requirements set forth in
this agreement have been satisfied; provided that such acceleration will not
occur if, in the opinion of the Company's outside accountants, such acceleration
would render unavailable "pooling of interests" accounting treatment for any
reorganization, merger or consolidation of the Company for which pooling of
interests accounting treatment is sought by the Company.
(b) FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by this
option, any fractional shares resulting from such adjustment will be disregarded
and the option will cover only the number of full shares resulting from such
adjustment.
(c) DETERMINATION OF BOARD TO BE FINAL
All adjustments referred to herein will be made by the Board, and its
determination as to what adjustments will be made, and the extent thereof, will
be final, binding and conclusive.
SECURITIES REGULATION:
Shares will not be issued with respect to this option unless the exercise
of such option and the issuance and delivery of such shares pursuant thereto
complies with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Exchange Act, the
-3-
<PAGE>
rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed.
As a condition to the exercise of this option, the Company may require you
to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any relevant provision of the aforementioned laws.
At the option of the Company, a stop-transfer order against any shares of stock
may be placed on the official stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold or otherwise
transferred, unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Company may also require such other
action or agreement by you as may from time to time be necessary to comply with
the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE
COMPANY TO UNDERTAKE REGISTRATION OF THIS OPTION OR THE SHARES ISSUABLE
HEREUNDER.
Should any of the Company's capital stock of the same class as the stock
subject to this option be listed on a national securities exchange, all shares
issued hereunder if not previously listed on such exchange will be authorized by
that exchange for listing thereon prior to the issuance thereof.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
APPLIED VOICE TECHNOLOGY, INC.
By________________________________
Its ____________________________
-4-
<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of Arizona, accept the nonqualified stock option
described herein. I have read and understand the Agreement.
Dated: _______________
_______________________________ _____________________________
Taxpayer I.D. Number Bradley H. Feder
Address______________________
_____________________________
_____________________________
By her signature below, the spouse of the Optionee, if such Optionee is
legally married as of the date of his execution of this Agreement, acknowledges
that she has read this Agreement and is familiar with the terms and provisions
thereof, and agrees to be bound by all the terms and conditions of this
Agreement.
Dated: _________________
__________________________________
Spouse's Signature
__________________________________
Printed Name
By his signature below, the Optionee represents that he is not legally
married as of the date of execution of this Agreement.
Dated: _________________
__________________________________
Optionee's Signature
<PAGE>
NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION
To: Applied Voice Technology, Inc.
I, a resident of the State of Arizona, hereby exercise my nonqualified
stock option granted by Applied Voice Technology, Inc. (the "Company") on
_____________, 19___, and notify the Company of my desire to purchase ________
shares of Common Stock of the Company (the "Securities") at the exercise price
of $__________ per share which were offered to me pursuant to said option.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Securities; (2) I have had the opportunity to ask questions and
receive answers concerning the information received about the Securities and the
Company; and (3) I have been given the opportunity to obtain any additional
information I deem necessary to verify the accuracy of any information obtained
concerning the Securities and the Company.
Dated: _________________
_________________________ ________________________
Taxpayer I.D. Number Bradley H. Feder
Address_________________
________________________
________________________
<PAGE>
RECEIPT
_________________________ hereby acknowledges receipt from Bradley H. Feder
in payment for ______________ shares of Common Stock of Applied Voice
Technology, Inc., a Washington corporation, of $_____________ in the form of
[_] Cash
[_] Check (personal, cashier's or bank certified)
[_] __________ shares of the Company's Common Stock, fair market
value $_______ per share held by the Optionee for a period of at
least six months
[_] Copy of irrevocable instructions to Broker
_____________________________
Date: ___________________ For: Applied Voice Technology, Inc.
<PAGE>
EXHIBIT 99.4
APPLIED VOICE TECHNOLOGY, INC.
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: Joseph J. Cracchiolo Date of Grant: January 2, 1996
We are pleased to inform you that you have been selected by the Board of
Directors (the "Board") of Applied Voice Technology, Inc. (the "Company") to
receive a nonqualified stock option for the purchase of 100,000 shares of the
Company's Common Stock at an exercise price of $13.75 per share.
TERM: The term of the option is ten years from date of grant, unless
sooner terminated.
VESTING: The option will vest and become exercisable according to the
following schedule:
Date on and After Which Exercisable Portion
Option is Exercisable of Total Option
- ----------------------- -------------------
January 2, 1997 12/36
January 2, 1998 24/36
January 2, 1999 100%
EXERCISE: During your lifetime only you can exercise the option. The
option may be exercised by the personal representative of your estate, by the
beneficiary you have designated on forms prescribed by and filed with the
Company, or the beneficiary of your estate following your death. You may use
the Notice of Exercise of Nonqualified Stock Option in the form attached to this
Agreement when you exercise the option.
PAYMENT FOR SHARES: The option may be exercised by the delivery of:
(a) Cash, personal check (unless, at the time of exercise, the Company
determines otherwise), bank certified or cashier's check;
(b) Unless the Board in its sole discretion determines otherwise, shares of
the capital stock of the Company held by you for a period of at least six months
having a fair market value at the time of exercise, as determined in good faith
by the Board, equal to the exercise price; or
(c) A properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.
WITHHOLDING TAXES: As a condition to the exercise of the option, you must
make such arrangements as the Company may require for the satisfaction of any
federal, state or local withholding tax obligations that may arise in connection
with such exercise. The Company has the right to retain without notice
sufficient shares of stock to satisfy the withholding obligation. To the extent
permitted or required by the Company, you may satisfy the withholding obligation
by electing to have the Company or a related corporation withhold from the
shares to be issued upon exercise that number of shares having a fair market
value equal to the amount required to be withheld. If you are subject to
Section 16 of the Exchange Act you must comply with certain requirements in
order to make such election.
<PAGE>
TERMINATION:
(a) If your relationship with the Company or any related corporation ceases
because (i) you are terminated by the Company for "Cause" (as defined in Section
7.5 of the Employment Agreement dated as of the date hereof between you and the
Company (the "Employment Agreement")) or (ii) you terminate your employment for
any reason other than "Good Reason" (as defined in the Employment Agreement),
and unless by its terms the option sooner terminates or expires, then you may
exercise, for a three-month period, that portion of the option which is
exercisable at the time of such cessation, but the option will terminate at the
end of such period following such cessation as to all shares for which it has
not theretofore been exercised.
(b) If your relationship with the Company or any related corporation ceases
because (i) you are terminated by the Company for any reason other than for
"Cause" or (ii) you terminate your employment for "Good Reason," then the option
will continue to vest, and you will continue to be able to exercise the option,
on the same terms as if your relationship with the Company or any related
corporation had not ceased.
(c) If your relationship with the Company or any related corporation ceases
because of your death or "total disability" (as defined in Section 6.3 of the
Employment Agreement), and unless by its terms the option sooner terminates or
expires, then you or your personal representative may exercise, for a 12-month
period, that portion of the option which is exercisable at the time of such
cessation, but the option will terminate at the end of such period following
such cessation as to all shares for which it has not theretofore been exercised.
(d) As used herein, the term "related corporation," means any parent or
subsidiary corporation in an unbroken chain of corporations ending with the
Company, if stock possessing 50% or more of the total combined voting power of
all classes of stock of each of the corporations other than the Company is owned
by one of the other corporations in such chain.
DEATH OF OPTIONEE: If you die while having a relationship with the Company
or any related corporation or within the three-month period (or 12-month period
in the case of total disability) following cessation of such relationship, this
option (to the extent that you would have been entitled to exercise this option)
may be exercised within one year after your death by the personal representative
of your estate or by the person or persons to whom your rights under the option
pass (i) by will or by the applicable laws of descent and distribution or (ii)
by a designation or transfer.
TRANSFERABILITY OF OPTION: This option and the rights and privileges
conferred hereby may not be transferred, assigned, pledged or hypothecated in
any manner (whether by operation of law or otherwise) other than by will or by
the applicable laws of descent and distribution and shall not be subject to
execution, attachment or similar process. This option is personal to you and is
exercisable solely by you. Any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of this option or of any right or privilege conferred
hereby, contrary to the provisions hereof, or the sale or levy or any attachment
or similar process upon the rights and privileges conferred hereby will be null
and void. Notwithstanding the foregoing, to the extent permitted by applicable
law and regulation, the Company, in its sole discretion, may permit you to (i)
during your lifetime, designate a person who may exercise the option after your
death by giving written notice of such designation to the Company (such
designation may be changed from time to time by you by giving written notice to
the Company revoking any earlier designation and making a new designation) or
(ii) transfer the option and the rights and privileges conferred hereby.
NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights
and privileges under the option pass will be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of this option unless and until this option has been
exercised.
CONTINUATION OF RELATIONSHIP: Nothing in this option will confer upon you
any right to continue in the employ or other relationship of the Company or of a
related corporation, or to interfere in any way with the right
-2-
<PAGE>
of the Company or of any such related corporation to terminate your employment
or other relationship with the Company at any time.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION: The aggregate number and class
of shares covered by this option and the exercise price per share thereof (but
not the total price), will all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend.
(a) EFFECT OF LIQUIDATION OR REORGANIZATION
(1) Cash, Stock or Other Property for Stock. Except as provided in
---------------------------------------
subsection (a)(2), upon a merger (other than a merger of the Company in which
the holders of shares of Common Stock immediately prior to the merger have the
same proportionate ownership of shares of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere reincorporation
or the creation of a holding company) or liquidation of the Company, as a result
of which the shareholders of the Company receive cash, stock or other property
in exchange for or in connection with their shares of Common Stock, this option
will terminate, but you will have the right immediately prior to any such
merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to exercise your option in whole or in part
whether or not the vesting requirements set forth in this agreement have been
satisfied.
(2) Conversion of Options on Stock for Stock Exchange. If the
-------------------------------------------------
shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger (other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation
or reorganization (other than a mere reincorporation or the creation of a
holding company), this option will be converted into an option to purchase
shares of Exchange Stock. The amount and price of converted options will be
determined by adjusting the amount and price of this option in the same
proportion as used for determining the number of shares of Exchange Stock the
holders of the shares of Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The converted
option will be fully vested whether or not the vesting requirements set forth in
this agreement have been satisfied; provided that such acceleration will not
occur if, in the opinion of the Company's outside accountants, such acceleration
would render unavailable "pooling of interests" accounting treatment for any
reorganization, merger or consolidation of the Company for which pooling of
interests accounting treatment is sought by the Company.
(b) FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by this
option, any fractional shares resulting from such adjustment will be disregarded
and the option will cover only the number of full shares resulting from such
adjustment.
(c) DETERMINATION OF BOARD TO BE FINAL
All adjustments referred to herein will be made by the Board, and its
determination as to what adjustments will be made, and the extent thereof, will
be final, binding and conclusive.
SECURITIES REGULATION:
Shares will not be issued with respect to this option unless the exercise
of such option and the issuance and delivery of such shares pursuant thereto
complies with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Exchange Act, the
-3-
<PAGE>
rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed.
As a condition to the exercise of this option, the Company may require you
to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any relevant provision of the aforementioned laws.
At the option of the Company, a stop-transfer order against any shares of stock
may be placed on the official stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold or otherwise
transferred, unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Company may also require such other
action or agreement by you as may from time to time be necessary to comply with
the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE
COMPANY TO UNDERTAKE REGISTRATION OF THIS OPTION OR THE SHARES ISSUABLE
HEREUNDER.
Should any of the Company's capital stock of the same class as the stock
subject to this option be listed on a national securities exchange, all shares
issued hereunder if not previously listed on such exchange will be authorized by
that exchange for listing thereon prior to the issuance thereof.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
APPLIED VOICE TECHNOLOGY, INC.
By________________________________
Its ____________________________
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<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of Arizona, accept the nonqualified stock option
described herein. I have read and understand the Agreement.
Dated: _______________
_______________________________ _____________________________
Taxpayer I.D. Number Joseph J. Cracchiolo
Address______________________
_____________________________
_____________________________
By her signature below, the spouse of the Optionee, if such Optionee is
legally married as of the date of his execution of this Agreement, acknowledges
that she has read this Agreement and is familiar with the terms and provisions
thereof, and agrees to be bound by all the terms and conditions of this
Agreement.
Dated: _________________
__________________________________
Spouse's Signature
__________________________________
Printed Name
By his signature below, the Optionee represents that he is not legally
married as of the date of execution of this Agreement.
Dated: _________________
__________________________________
Optionee's Signature
<PAGE>
NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION
To: Applied Voice Technology, Inc.
I, a resident of the State of Arizona, hereby exercise my nonqualified
stock option granted by Applied Voice Technology, Inc. (the "Company") on
_____________, 19___, and notify the Company of my desire to purchase ________
shares of Common Stock of the Company (the "Securities") at the exercise price
of $__________ per share which were offered to me pursuant to said option.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Securities; (2) I have had the opportunity to ask questions and
receive answers concerning the information received about the Securities and the
Company; and (3) I have been given the opportunity to obtain any additional
information I deem necessary to verify the accuracy of any information obtained
concerning the Securities and the Company.
Dated: _________________
________________________ _________________________________
Taxpayer I.D. Number Joseph J. Cracchiolo
Address__________________________
_________________________________
_________________________________
<PAGE>
RECEIPT
_________________________ hereby acknowledges receipt from Joseph J.
Cracchiolo in payment for ______________ shares of Common Stock of Applied Voice
Technology, Inc., a Washington corporation, of $_____________ in the form of
[_] Cash
[_] Check (personal, cashier's or bank certified)
[_] __________ shares of the Company's Common Stock, fair market
value $_______ per share held by the Optionee for a period of at
least six months
[_] Copy of irrevocable instructions to Broker
____________________________
Date: ___________________ For: Applied Voice Technology, Inc.
