<PAGE>
As filed with the Securities and Exchange Commission on April 29, 1999
Registration No. 333-______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________
AVT CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Washington 91-1190085
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
11410 N.E. 122nd Way
Kirkland, Washington 98034
(Address of principal executive offices) (Zip code)
</TABLE>
MediaTel Corporation 1996 Stock Plan
Stock Option Agreement dated April 14, 1999
Stock Option Agreement dated April 14, 1999
(Full title of the plan)
ROGER A. FUKAI
Chief Financial Officer
AVT CORPORATION
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 LLP
1201 Third Avenue, 48th Floor
Seattle, Washington 98101-3099
________________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
Title of Securities Amount to Be Proposed Maximum Proposed Maximum Amount of
to Be Registered Registered(2) Offering Price Aggregate Offering Price(3) Registration Fee(3)
Per Share(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share:
MediaTel Corporation 1996 Stock Plan(1)....... 137,718 $ 6.65 $ 915,185
Stock Option Agreement dated April 14, 1999... 80,000 $24.75 $1,980,000
Stock Option Agreement dated April 14, 1999... 60,000 $24.75 $1,485,000
Total......................................... 277,718 $4,380,185 $1,218
====================================================================================================================================
</TABLE>
(1) Pursuant to an Agreement and Plan of Merger, dated as of April 13, 1999
(the "Merger Agreement"), among the Registrant, Goldengate Acquisition
Corp. and MediaTel Corporation ("MediaTel"), the Registrant assumed all of
the outstanding options to purchase common stock of MediaTel under the
MediaTel Corporation 1996 Stock Plan (the "MediaTel Assumed Options"), with
appropriate adjustments to the number of shares and exercise price of each
MediaTel Assumed Option to reflect the ratio at which the MediaTel common
stock was converted into common stock of the Registrant under the Merger
Agreement.
(2) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
the MediaTel 1996 Stock Plan, the Stock Option Agreement dated as of April
14, 1999 and the Stock Option Agreement dated as of April 14, 1999,
respectively, as the result of any future stock split, stock dividend or
similar adjustment of the outstanding common stock of the Registrant.
(3) Such shares are issuable upon exercise of outstanding options with fixed
exercise prices. Pursuant to Rule 457(h) under the Securities Act of 1933,
as amended (the "Securities Act"), the aggregate offering price and the
registration fee have been computed upon the basis of the price at which
the options may be exercised. The proposed maximum offering price per
share of $6.65 for the shares to be issued pursuant to the MediaTel
Corporation 1996 Stock Plan is a weighted average of the exercise prices of
the outstanding options.
<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, 1998, filed with the Securities and Exchange Commission (the
"Commission") on March 26, 1999 under Section 13(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which contains audited 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 deregisters 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
<PAGE>
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.
Item 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ----------- --------------------------------------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP regarding legality of the Common Stock being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie LLP (included in its Opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 MediaTel Corporation 1996 Stock Plan
99.2 Stock Option Letter Agreement, dated April 14, 1999, between AVT Corporation and David Sohm
99.3 Stock Option Letter Agreement, dated April 14, 1999, between AVT Corporation and Thomas Ryan
</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.
<PAGE>
(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.
<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 29th day of
April, 1999.
AVT CORPORATION
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 29th day of April, 1999 in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ RICHARD J. LAPORTE Chairman of the Board, President and Chief
- -----------------------------------------------
Richard J. LaPorte Executive Officer (Principal Executive Officer)
/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 F. GILB Director
- -----------------------------------------------
Robert F. Gilb
/s/ ROBERT L. LOVELY Director
- -----------------------------------------------
Robert L. Lovely
/s/ WILLIAM L. TRUE Director
- -----------------------------------------------
William L. True
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ----------- --------------------------------------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP regarding legality of the Common Stock being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie LLP (included in its Opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 MediaTel Corporation 1996 Stock Plan
99.2 Stock Option Letter Agreement, dated April 14, 1999, between AVT Corporation and David Sohm
99.3 Stock Option Letter Agreement, dated April 14, 1999, between AVT Corporation and Thomas Ryan
</TABLE>
<PAGE>
EXHIBIT 5.1
[Perkins Coie LLP Letterhead]
April 29, 1999
AVT Corporation
11410 N.E. 112nd Way
Kirkland, WA 98034
Re: Registration Statement on Form S-8
Dear Gentlemen and Ladies:
We have acted as counsel to AVT Corporation (the "Company") in connection
with the preparation of a Registration Statement on Form S-8 (the "Registration
Statement"), which is being filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"), with respect to
277,718 shares of common stock, $.01 par value, of the Company (the "Shares").
The Shares may be issued pursuant to the MediaTel Corporation 1996 Stock Plan
(the "Plan"), which was assumed by the Company in connection with a merger, or
pursuant to one of two Option Letter Agreements, dated April 14, 1999 (the
"Agreements"). We have examined the Registration Statement and such documents
and records of the Company and other documents as we have deemed relevant and
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 the
Shares that may be issued upon the exercise of stock options granted pursuant to
the Plan or the Agreements, upon the due execution by the Company and the
registration by its registrar of the Shares and the issuance thereof by the
Company in accordance with the terms of the Plan or the Agreements, as
applicable, and the receipt of the consideration therefor in accordance with the
terms of the Plan or Agreements, as applicable, will be validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit 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,
/s/ Perkins Coie LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
registration statement.
ARTHUR ANDERSEN LLP
Seattle, Washington
April 29, 1999
<PAGE>
EXHIBIT 99.1
MEDIATEL CORPORATION
1996 STOCK PLAN
1. Purposes of the Plan
The purposes of this Stock Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to Employees and Consultants of the Company and its
Subsidiaries and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant and subject to
the applicable provisions of Section 422 of the Code and the regulations
promulgated thereunder. Stock Purchase Rights and Long-Term Performance Awards
may also be granted under the Plan.
2. Definitions
As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees appointed
-------------
pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
-----
(c) "Code" means the Internal Revenue Code of 1986, as amended.
----
(d) "Committee" means a Committee appointed by the Board of Directors
---------
in accordance with Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
------------
(f) "Company" means MediaTel Corporation, a Nevada corporation.
-------
(g) "Consultant" means any person who is engaged by the Company or any
----------
Parent or Subsidiary to render consulting or advisory services and is
compensated for such services, and any Director of the Company whether
compensated for such services or not. If the Company registers any class of any
equity security pursuant to the Exchange Act, the term Consultant shall
thereafter not include Directors who are not compensated for their services or
are paid only a Director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" means that the
----------------------------------------------
employment or consulting relationship with the Company, any Parent or Subsidiary
is not interrupted or terminated. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of (i) any leave of
absence approved by the Company
<PAGE>
or (ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. A leave of absence approved by the
Company shall include sick leave, military leave, or any other personal leave
approved by an authorized representative of the Company. For purposes of
Incentive Stock Options, no such leave may exceed 90 days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract, including
Company policies. If reemployment upon expiration of a leave of absence approved
by the Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option.
(i) "Director" means a member of the Board of Directors of the
--------
Company.
(j) "Employee" means any person, including Officers and Directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a Director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(l) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
the Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(m) "Incentive Stock Option" means an Option intended to qualify as an
----------------------
incentive stock option within the meaning of Section 422 of the Code.
2
<PAGE>
(n) "Insider" means an Officer, Director or other person whose
-------
transactions in the Common Stock are subject to Section 16(b) of the Exchange
Act.
(o) "Long-Term Performance Award" means an award granted pursuant to
---------------------------
Section 13 of the Plan that is valued in whole or in part based on the
achievement of Company or individual performance factors or other criteria as
the Administrator may deem appropriate.
(p) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
(q) "Officer" means a person who is an officer of the Company within
-------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
------
(s) "Optioned Stock" means the Common Stock subject to an Option or a
--------------
Stock Purchase Right.
(t) "Optionee" means an Employee or Consultant who receives an Option,
--------
Stock Purchase Right, or Long-Term Performance Award.
(u) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this 1996 Stock Plan.
----
(w) "Restricted Stock" means shares of Common Stock acquired pursuant
----------------
to a grant of a Stock Purchase Right or a Long-Term Performance Award that are
subject to a repurchase option of the Company.
(x) "Section 16(b)" means Section 16(b) of the Securities Exchange Act
-------------
of 1934, as amended.
(y) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 14 below.
(z) "Stock Purchase Right" means a right to purchase Common Stock
--------------------
pursuant to Section 12 below.
(aa) "Subsidiary" means a "subsidiary corporation," whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3
<PAGE>
3. Stock Subject to the Plan
Subject to the provisions of Section 14 of the Plan, the number of Shares
reserved for issuance under the Plan is 3,000,000 Shares. The Shares may be
authorized but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an option
exchange program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). In addition, if any Shares of Restricted Stock granted hereunder
are forfeited or any award otherwise terminates without a payment being made to
a participant in the form of Common Stock, then such Shares shall be returned to
the Plan and shall be available for future grants of Options or other awards
under the Plan.
4. Administration of the Plan
(a) Initial Plan Procedure. Prior to the date, if any, upon which the
----------------------
Company becomes subject to the Exchange Act, the Plan shall be administered by
the Board or a Committee appointed by the Board.
(b) Plan Procedure After the Date if any, upon Which the Company becomes
--------------------------------------------------------------------
Subject to the Exchange Act.
- ---------------------------
(i) Multiple Administrative Bodies. If permitted by Rule 16b-3, the
------------------------------
Plan may be administered by different bodies with respect to Directors, and
Officers, and Employees who are neither Directors nor Officers.
(ii) Administration With Respect to Directors and Officers. With
-----------------------------------------------------
respect to grants of Options, Stock Purchase Rights and Long-Term Performance
Awards to Employees who are also Officers or Directors of the Company, the Plan
shall be administered by (A) the Board if the Board may administer the Plan in
compliance with the rules under Rule 16b-3 promulgated under the Exchange Act or
any successor thereto ("Rule 16b-3") relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made, or (B) a
Committee designated by the Board to administer the Plan, which Committee shall
be constituted to comply with the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be made.
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, all vacancies, however caused, and remove all members of the Committee
and thereafter directly administer the
4
<PAGE>
Plan, all to the extent permitted by the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be made.
(iii) Administration With Respect to Other Employees and Consultants.
-------------------------------------------------------------
With respect to grants of Options, Stock Purchase Rights and Long-Term
Performance Awards to Employees or Consultants who are neither Directors nor
Officers of the Company, the Plan shall be administered by (A) the Board or (B)
a Committee designated by the Board, which Committee shall be constituted in
such a manner as to satisfy the legal requirements relating to the
administration of incentive stock option plans, if any, of applicable state
corporate and securities laws, of the Code, and of any applicable stock exchange
(the "Applicable Laws"). Once appointed, such Committee shall continue to serve
in its designated capacity until otherwise directed by the Board. From time to
time the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies, however caused, and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.
(c) Powers of the Administrator. Subject to the provisions of the Plan
---------------------------
and, in the case of a Committee, the specific duties delegated by the Board to
such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(1) of the Plan;
(ii) to select the Consultants and Employees to whom Options, Stock
Purchase Rights, and Long-Term Performance Awards may from time to time be
granted hereunder;
(iii) to determine whether and to what extent Options and Rights or
any combination thereof are granted hereunder;
(iv) to determine the number of Shares to be covered by each such
award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions of any award granted
hereunder;
5
<PAGE>
(vii) to determine whether and under what circumstances an Option may
be settled in cash under Section 9(e) instead of Common Stock;
(viii) to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Option has declined since the date the Option was granted; and
(ix) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(d) Effect of Administrator's Decision. All decisions, determinations and
----------------------------------
interpretations of the Administrator shall be final and binding on all Optionees
and any other holders of any Options, Stock Purchase Rights, or Long-Term
Performance Awards.
5. Eligibility
(a) Nonstatutory Stock Options, Stock Purchase Rights and Long-Term
Performance Awards may be granted to Employees and Consultants. Incentive Stock
Options may be granted only to Employees. An Employee or Consultant who has
been granted an Option, Stock Purchase Rights, or Long-Term Performance Awards
may, if otherwise eligible, be granted additional Options, Stock Purchase
Rights, and Long-Term Performance Awards.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(c) Neither the Plan nor any grant made hereunder shall confer upon any
Optionee any right with respect to continuation of his or her employment or
consulting relationship with the Company, nor shall it interfere in any way with
his or her right or the Company's right to terminate his or her employment or
consulting relationship at any time, with or without cause.
6. Term of Plan
The Plan shall become effective upon the earlier to occur of its adoption
by the Board of Directors or its approval by the shareholders of the Company, as
described in
6
<PAGE>
Section 20 of the Plan. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 16 of the Plan.
7. Term of Option
The term of each Option shall be the term stated in the Option Agreement;
provided, however, that the term shall be no more than ten (10) years from the
date of grant thereof. In the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement.
8. Option Exercise Price and Consideration
(a) The per share exercise price for the Shares to be issued upon exercise
of an Option shall be such price as is determined by the Administrator, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of grant of such
Option, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.
(B) granted to any other Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of grant of such Option
owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of the grant.
(B) granted to any other person, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.
(b) The consideration to be paid for the Shares to be issued upon exercise
of an Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair
7
<PAGE>
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which such Option shall be exercised, (5) delivery of a
properly executed exercise notice together with such other documentation as the
Administrator and a broker, if applicable, shall require to effect an exercise
of the Option and delivery to the Company of the sale or loan proceeds required
to pay the exercise price, or (6) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept,
the Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
9. Exercise of Option
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
-----------------------------------------------
hereunder shall be exercisable at such times and under such conditions as
determined by the Administrator, including performance criteria with respect to
the Company and/or the Optionee, and as shall be permissible under the terms of
the Plan, but in no case at a rate of less than 20% per year over five (5) years
from the date the Option is granted.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8(b) hereof. Until
the issuance (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote, receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued)
such stock certificate promptly upon exercise of the Option. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided in Section 14
hereof.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment or Consulting Relationship. In the event of
----------------------------------------------------
termination of an Optionee's Continuous Status as an Employee or Consultant (but
not in the event of an Optionee's change of status from Employee to Consultant
(in which case an Employee's Incentive Stock Option shall automatically convert
to a Nonstatutory Stock Option on the date three (3) months and one day
following such change of status) or from Consultant to Employee), such Optionee
may, but only within such period of time as is determined by the Administrator,
of at least thirty (30) days, with such determination in
8
<PAGE>
the case of an Incentive Stock Option not exceeding three (3) months after the
date of such termination (but in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise his or her
Option to the extent that the Optionee was entitled to exercise it at the date
of such termination. To the extent that the Optionee was not entitled to
exercise the Option at the date of such termination, or if the Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
(c) Disability of Optionee. In the event of termination of an Optionee's
----------------------
Continuous Status as an Employee or Consultant as a result of his or her
disability, the Optionee may, but only within twelve (12) months from the date
of such termination (and in no event later than the expiration date of the term
of such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination. If
such disability is not a "disability" as such term is defined in Section
22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive
Stock Option shall automatically cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option on
the day three months and one day following such termination. To the extent that
the Optionee was not entitled to exercise the Option at the date of termination,
or if the Optionee does not exercise such Option to the extent so entitled
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant) by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option on the date of
death. If, at the time of death, the Optionee was not entitled to exercise his
or her entire Option, the Shares covered by the unexercisable portion of the
Option shall immediately revert to the Plan. If, after the Optionee's death,
the Optionee's estate or a person who acquires the right to exercise the Option
by bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy out
-----------------
for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
10. Stock Purchase Rights
(a) Rights to Purchase. Stock Purchase Rights may be issued either alone,
------------------
in addition to, or in tandem with other awards granted under the Plan and/or
cash awards made outside of the Plan. After the Administrator determines that
it will offer Stock
9
<PAGE>
Purchase Rights under the Plan, it shall advise the offeree in writing of the
terms, conditions and restrictions related to the offer, including the number of
Shares that such person shall be entitled to purchase, the price to be paid, and
the time within which such person must accept such offer, which shall in no
event exceed thirty (30) days from the date upon which the Administrator makes
the determination to grant the Stock Purchase Right. The offer shall be accepted
by execution of a Restricted Stock purchase agreement in the form determined by
the Administrator.
(b) Repurchase Option. Unless the Administrator determines otherwise, the
-----------------
Restricted Stock purchase agreement shall grant the Company a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
employment with the Company for any reason (including death or disability). The
purchase price for Shares repurchased pursuant to the Restricted Stock purchase
agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may determine,
but in no case at a rate of less than 20% per year over five years from the date
of purchase.
(c) Other Provisions. The Restricted Stock purchase agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.
(d) Rights as a Shareholder. Once the Stock Purchase Right is exercised,
-----------------------
the purchaser shall have rights equivalent to those of a shareholder and shall
be a shareholder when his or her purchase is entered upon the records of the
duly authorized transfer agent of the Company. No adjustment shall be made for
a dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 14 of the Plan.
11. Long-Term Performance Awards
(a) Administration. Long-Term Performance Awards may be granted either
--------------
alone or in addition to other awards granted under the Plan. The Administrator
shall determine the nature, length and starting date of the performance period
(the "Performance Period") for each Long-Term Performance Award, and shall
determine the performance objectives to be used in the valuation of Long-Term
Performance Awards and the extent to which such Long-Term Performance Awards
have been earned. Performance objectives may vary from participant to
participant and between groups of participants and shall be based upon such
Company, Subsidiary or individual performance factors or criteria as the
Administrator may deem appropriate. Performance Periods may overlap and
participants may participate simultaneously with respect to Long-Term
Performance Awards that are subject to different Performance Periods and
10
<PAGE>
different performance factors and criteria. Long-Term Performance Awards shall
be confirmed by, and be subject to the terms of, a Long-Term Performance Award
agreement. The terms of such awards need not be the same with respect to each
participant.
At the beginning of each Performance Period, the Administrator shall
determine for each Long-Term Performance Award subject to such Performance
Period the range of dollar values or number of shares of Common Stock to be
awarded to the participant at the end of the Performance Period if and to the
extent that the relevant measures of performance for such Long-Term Performance
Award are met. Such dollar values or number of shares of Common Stock may be
fixed or may vary in accordance with such performance or other criteria as may
be determined by the Administrator.
(b) Adjustment of Awards. The Administrator may adjust the performance
--------------------
goals and measurements applicable to the Long-Term Performance Awards to take
into account changes in law and accounting and tax rules and to make such
adjustments as the Administrator deems necessary or appropriate to reflect the
inclusion or exclusion of the impact of extraordinary or unusual items, events
or circumstances in order to avoid windfalls or hardships.
(c) Form of Payment. The earned portion of a Long-Term Performance Award
---------------
may be paid currently or on a deferred basis with such interest or earnings
equivalent as may be determined by the Administrator. Payment shall be made in
the form of cash or whole Shares of Common Stock, including Restricted Stock, or
a combination thereof, either in a lump sum payment or in annual installments,
all as the Administrator shall determine.
12. Non-Transferability of Options, Stock Purchase Rights and Long-Term
Performance Awards
Options, Stock Purchase Rights and Long-Term Performance Awards may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution or pursuant to a
qualified domestic relation order as defined by the Code or Title I of the
Employee Retirement Income Security Act, and the rules thereunder, and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
13. Stock Withholding to Satisfy Withholding Tax Obligation
When a participant incurs tax liability in connection with the exercise of
an Option, or the receipt of shares pursuant to a Stock Purchase Right or Long-
Term Performance Award, which tax liability is subject to tax withholding under
applicable tax laws, and the participant is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the participant may
satisfy the withholding tax
11
<PAGE>
obligation by making an election to have the Company withhold from the shares of
Common Stock or other securities of the Company to be issued that number of
shares having a Fair Market Value equal to the amount required to be withheld or
to tender to the Company at the time of exercise of the Option or the receipt of
shares pursuant to the Stock Purchase Right or the Long-Term Performance Award
that number of other shares of Common Stock or other securities of the Company
owned by the participant having such Fair Market Value.
All elections by participants to have Shares withheld for this purpose
shall be made in writing in a form acceptable to the Company and shall be
subject to the following limitations:
(i) the election must be made on or prior to the date that the amount
of tax to be withheld is to be determined (the "Tax Date");
(ii) once made, the election shall be irrevocable as to the
particular Shares as to which the election is made;
(iii) all elections shall be subject to the consent or disapproval
of the Board or its Committee at any time;
(iv) if the participant is an Insider, the election shall be made in a
manner that permits the election, and other transactions that may be matchable
with the election, to be exempt to the extent permitted under Rule 16b-3 from
liability under Section 16(b) of the Exchange Act.
14. Adjustments Upon Changes in Capitalization or Merger
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, Stock Purchase Right and Long-Term Performance Award,
and the number of shares of Common Stock which have been authorized for issuance
under the Plan but as to which no Options, Stock Purchase Rights or Long-Term
Performance Awards have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, Stock Purchase Right or Long-Term
Performance Award, as well as the price per share of Common Stock covered by
each such outstanding Option, Stock Purchase Right or Long-Term Performance
Award, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company. The
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and
12
<PAGE>
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option,
Stock Purchase Right or Long-Term Performance Award.
(b) Dissolution or Liquidation. In the event of the proposed dissolution
--------------------------
or liquidation of the Company, the Administrator shall notify the Optionee at
least fifteen (15) days prior to such proposed action. To the extent they have
not been previously exercised, all Options, Stock Purchase Rights and Long-Term
Performance Awards shall terminate immediately prior to the consummation of such
proposed action.
(c) Merger. In the event of a merger of the Company with or into another
------
corporation, each outstanding Option, Stock Purchase Right and Long-Term
Performance Award may be assumed or its equivalent may be substituted by such
successor corporation or a parent or subsidiary of such successor corporation.
If, in such event, an Option, Stock Purchase Right or Long-Term Performance
Award is not assumed or substituted for, the Option, Stock Purchase Right or
Long-Term Performance Award shall terminate as of the date of the closing of the
merger. For the purposes of this paragraph, the Option, Stock Purchase Right or
Long-Term Performance Award shall be considered assumed if, following the
merger, the Option, Stock Purchase Right or Long-Term Performance Award confers
the right to purchase or receive, for each Share of Optioned Stock subject to
the Option, Stock Purchase Right or Long-Term Performance Award immediately
prior to the merger, the consideration (whether stock, cash, or other securities
or property) received in the merger by holders of Common Stock for each Share
held on the effective date of the transaction (and if the holders are offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares). If such consideration received in the
merger is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option, Stock
Purchase Right or Long-Term Performance Award to be solely common stock of the
successor corporation or its Parent or Subsidiary equal in fair market value to
the per share consideration received by holders of Common Stock in the merger.
15. Time of Granting Options, Stock Purchase Rights and Long-Term Performance
Awards
The date of grant of an Option, Stock Purchase Right or Long-Term
Performance Award shall, for all purposes, be the date on which the
Administrator makes the determination granting such award, or such other date as
is determined by the Administrator. Notice of the determination shall be given
to each Employee or
13
<PAGE>
Consultant to whom an Option, Stock Purchase Right or Long-Term Performance
Award is so granted within a reasonable time after the date of such grant.
16. Amendment and Termination of the Plan
(a) Amendment and Termination. The Board may at any time amend, alter,
-------------------------
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or termination
----------------------------------
of the Plan shall not affect Options, Stock Purchase Rights or Long-Term
Performance Award already granted, and such Options, Stock Purchase Rights and
Long-Term Performance Awards shall remain in full force and effect as if this
Plan had not been amended or terminated, unless mutually agreed otherwise
between the Optionee and the Administrator, which agreement must be in writing
and signed by the Optionee and the Company.
17. Conditions Upon Issuance of Shares
Shares shall not be issued pursuant to the exercise of an Option, Stock
Purchase Right or Long-Term Performance Award unless the exercise of such
Option, Stock Purchase Right or Long-Term Performance Award and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, 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,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, Stock Purchase Right or Long-
Term Performance Award, the Company may require the person exercising such
Option, Stock Purchase Right or Long-Term Performance Award 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 of the aforementioned relevant provisions of law.
14
<PAGE>
18. Reservation of Shares
The Company, during the term of this Plan, shall at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
19. Agreements
Options, Stock Purchase Rights and Long-Term Performance Awards shall be
evidenced by written agreements in such form as the Administrator shall approve
from time to time.
20. Shareholder Approval
Continuance of the Plan shall be subject to approval by the shareholders of
the Company within twelve (12) months before or after the date the Plan is
adopted. Such shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law and the rules of any stock
exchange upon which the Common Stock is listed.
21. Information to Optionees and Purchasers
The Company shall provide to each Optionee and to each individual who
acquires Shares pursuant to the Plan, not less frequently than annually during
the period such Optionee or purchaser has one or more Options, Stock Purchase
Rights or Long-Term Performance Awards outstanding, and, in the case of an
individual who acquires Shares pursuant to the Plan, during the period such
individual owns such Shares, copies of annual financial statements, including a
balance sheet, statement of income and statement of cash flows. The Company
shall not be required to provide such statements to key employees whose duties
in connection with the Company assure their access to equivalent information.
15
<PAGE>
Exhibit 99.2
AVT Corporation
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: David Sohm Date of Grant: April 14, 1999
We are pleased to inform you that you have been selected by the Board of
Directors (the "Board") of AVT Corporation (the "Company") to receive a
nonqualified stock option for the purchase of 80,000 shares of the Company's
Common Stock at an exercise price of $24.75 per share. In addition to the terms
set forth below this option shall have substantially the same terms and
conditions set forth in the Company's 1989 Restated Stock Option Plan.
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:
<TABLE>
<CAPTION>
Date on and After Which Exercisable Portion
Option is Exercisable of Total Option
--------------------- ----------------
<S> <C>
April 14, 2000 25%
Each month thereafter 2.0833%
April 14, 2003 100%
</TABLE>
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:
<PAGE>
(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.
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.
-2-
<PAGE>
(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, 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
-3-
<PAGE>
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
-4-
<PAGE>
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.
(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
-5-
<PAGE>
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,
AVT Corporation
By /s/ Richard J. LaPorte
----------------------------------------
Its President and Chief Executive Officer
-------------------------------------
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<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of California, accept the nonqualified stock
option described herein. I have read and understand the Agreement.
Dated: _______________
_______________________________ _____________________________
Taxpayer I.D. Number David Sohm
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>
EXHIBIT 99.3
AVT Corporation
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: Thomas Ryan Date of Grant: April 14, 1999
We are pleased to inform you that you have been selected by the Board of
Directors (the "Board") of AVT Corporation (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 $24.75 per share. In addition to the terms
set forth below this option shall have substantially the same terms and
conditions set forth in the Company's 1989 Restated Stock Option Plan.
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:
<TABLE>
<CAPTION>
Date on and After Which Exercisable Portion
Option is Exercisable of Total Option
--------------------- ---------------
<S> <C>
April 14, 2000 25%
Each month thereafter 2.0833%
April 14, 2003 100%
</TABLE>
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:
<PAGE>
(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.
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.
2
<PAGE>
(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, 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
3
<PAGE>
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
4
<PAGE>
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.
(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
5
<PAGE>
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,
AVT Corporation
By Richard J. LaPorte
------------------------------------------
Its President and Chief Executive Officer
---------------------------------------
6
<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of California, accept the nonqualified stock
option described herein. I have read and understand the Agreement.
Dated: _______________
_______________________________ _____________________________
Taxpayer I.D. Number Thomas Ryan
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: _________________
