As filed with the Securities and Exchange Commission on December 13, 1996.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
ADVANCED VOICE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
62-1175379
(I.R.S. employer identification no.)
Delaware
(State or other jurisdiction of incorporation or organization)
369 Lexington Avenue, New York, New York 10017
(Address of principal executive offices) (Zip Code)
1994 Incentive Stock Option and Stock Appreciation Rights Plan
1994 Non-Qualified Stock Option Plan
(Full title of the plans)
Gwyeth Smith, President
Advanced Voice Technologies, Inc.
369 Lexington Avenue
New York, New York 10017
(Name and address of agent for service)
(212) 599-2062
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
==========================================================================
Title of Amount Proposed Proposed Amount
securities to be maximum maximum of
to be registered offering aggregate registration
registered (1) price per offering fee
share (2) price (2)
- --------------------------------------------------------------------------
Common Stock, 4,000,000 $1.6875 $6,750,000 $2,045.45
$.0001 par shares
value
==========================================================================
(1) Plus such additional number of shares as may be required pursuant to
the plans in the event of a stock dividend, split-up of shares,
recapitalization or other similar change in the Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee,
in accordance with Rule 457(h)(1), on the basis of the average of the
high and low prices of the Common Stock as reported on the Nasdaq
SmallCap Market on December 6, 1996.
<PAGE>
EXPLANATORY NOTE
This Registration Statement has been prepared in accordance with the
requirements of Form S-8, as amended, and relates to an aggregate of 4,000,000
shares of Common Stock, $.0001 par value, of Advanced Voice Technologies, Inc.
(the "Company") that have been reserved for issuance under the Company's 1994
Incentive Stock Option and Appreciation Rights Plan and 1994 Non-Qualified Stock
Option Plan.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-KSB and Form 10-KSB/A for
the year ended December 31, 1995;
(b) The Company's Quarterly Reports on Form 10-QSB and Form 10-QSB/A
for the three month period ended March 31, 1996, Quarterly Reports on Form
10-QSB and Form 10-QSB/A for the three month period ended June 30, 1996, and
Quarterly Report on Form 10-QSB for the three month period ended September 30,
1996;
(c) The description of the Company's Common Stock incorporated by
reference into the Company's registration statement on Form 8-A filed with the
Commission on February 2, 1995 from the Company's Registration Statement on Form
SB-2 (SEC File No. 33-86202) initially filed with the Commission on November 9,
1994.
In addition, all documents filed by the Company after the initial
filing date of this registration statement pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and prior to the filing of a post-effective amendment which indicates
that all shares registered hereunder have been sold or which de-registers all
shares then remaining unsold, shall be deemed to be incorporated by reference in
this registration statement and to be a part hereof from the date of filing of
such documents.
II-1
<PAGE>
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Officers and Directors
Section 145 of the Delaware General Corporation Law empowers a
corporation to indemnify its directors and officers and to purchase insurance
with respect to liability arising out of the performance of their duties as
directors and officers provided that this provision shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) arising under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit.
The Delaware General Corporation Law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's by-laws, any agreement, vote of shareholders or otherwise.
Article Ninth of the Company's Certificate of Incorporation eliminates
the personal liability of directors to the fullest extent permitted by Section
102(b)(7) of the Delaware General Corporation Law.
The effect of the foregoing is to require the Company to indemnify the
officers and directors of the Company for any claim arising against such persons
in their official capacities if such person acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
The Company does not currently have any liability insurance coverage
for its officers and directors.
Item 7. Exemption from Registration Claimed
Not applicable.
II-2
<PAGE>
Item 8. Exhibits
4.1* Specimen stock certificate.
5.1 Opinion of Sierchio & Albert, P.C., as to the legality
of the shares being registered.
23.1 Consent of Moore Stephens, P.C.
23.2 Consent of Sierchio & Albert, P.C. (included in Exhibit
5.1).
24.1 Power of Attorney (included in page II-6).
99.1 The Company's 1994 Incentive Stock Option and
Appreciation Rights Plan.
99.2 The Company's 1994 Non-Qualified Stock Option Plan.
- ------------------
*Incorporated by reference from the Company's registration
statement on Form SB-2 (SEC File No. 32-86202) initially filed with
the Commission on November 9, 1994.
Item 9. Undertakings
(a) The Company hereby undertakes:
(1) to file, during any period in which offers or
sales are being made, a post-effective amendment to this registration statement
to include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
(2) that, for the purpose of determining any liability
under the Securities Act of 1933, as amended (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; and
(3) to remove from registration by means of a post-
effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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<PAGE>
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the 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 Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 New York, State of New York on December 11, 1996.
ADVANCED VOICE TECHNOLOGIES, INC.
(Registrant)
By: /s/ Gwyeth Smith
--------------------------------------
Gwyeth Smith, Chief
Executive Officer
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Gwyeth Smith and Nancy Shalek, jointly
and severally, his true and lawful attorneys-in-fact and agents with full powers
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on December 11, 996 by the
following persons in the capacities indicated.
Name Capacity
/s/ Gwyeth Smith Chief Executive Officer,
Gwyeth Smith President and Director
(Principal Executive Officer)
/s/ Nancy Shalek Chief Financial Officer and
Nancy Shalek Chairman of the Board (Principal
Financial and Accounting Officer)
/s/ Gregory Harper Senior Vice-President and
Gregory Harper Director
/s/ Clayton L. Akin Secretary and Director
Clayton L. Akin
II-6
DS1-309240
Exhibit 5.1
SIERCHIO & ALBERT, P.C.
ATTORNEYS
FORTY-ONE EAST FIFTY-SEVENTH STREET, NEW YORK, NEW YORK 10022
AT MADISON AVENUE, PENTHOUSE A
PHONE: (212) 446-9600 - TELEFAX: (212) 446-9504
December 13, 1996
Advanced Voice Technologies, Inc.
369 Lexington Avenue
New York, N.Y. 10017
Ladies and Gentlemen:
This opinion is delivered to you in connection with the
registration on Form S-8 (the "Registration Statement") to be filed on
December 13, 1996, by Advanced Voice Technologies, Inc. (the "Company") under
the Securities Act of 1933, as amended (the "Act"), for registration under said
Act of 4,000,000 shares of common stock, $.0001 par value (the "Common Stock"),
of the Company.
We are familiar with the Company's Certificate of
Incorporation, its By-Laws and its corporate minute book, as well as the
Registration Statement. We have also examined such other documents and made such
further investigations as we have deemed necessary for the purposes of this
opinion.
Based upon and subject to the foregoing, we are of the
opinion that the shares of Common Stock to be sold by the Company under its 1994
Incentive Stock Option and Stock Appreciate Rights Plan and 1994 Non-Qualified
Stock Option Plan (the "Plans"), as in effect on the date hereof, when issued
upon the exercise, in accordance with the terms of the Plans, of options granted
in accordance with the terms of the Plans, and against receipt of the agreed
purchase price therefor, will be legally issued, fully paid and nonassessable;
provided that we are rendering no opinion hereby as to any state "blue sky"
laws.
We understand that this opinion is to be used in
connection with the Registration Statement and to all references to
this firm included therein.
Very truly yours,
Sierchio & Albert, P.C.
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this
registration statement of our report dated March 26, 1996, with respect to the
financial statements of Advanced Voice Technologies, Inc. included in its Annual
Report (Form 10-KSB) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission, and to all references to our Firm included
in this registration statement.
On July 1, 1996, the firm of Mortenson and Associates, P.C.
changed its name to Moore Stephens, P.C.
Moore Stephens, P.C.
Certified Public
Accountants
Cranford, New Jersey
December 10, 1996
DS1-309240
ADVANCED VOICE TECHNOLOGIES, INC.
1994 INCENTIVE STOCK OPTION PLAN
AND STOCK APPRECIATION RIGHTS PLAN
(Adopted by the Board of Directors as of
September 15, 1994 and by the Stockholders
of the Company as of September 15, 1994)
1. Purpose. The purpose of the 1994 Incentive Stock Option Plan (the
"Plan) is to enable Advanced Voice Technologies, Inc. ("Company") to encourage
key employees and Directors to contribute to the success of the Company by
granting such individuals qualified and non-qualified option and stock
appreciation rights. In addition, non-employee directors may participate in the
Plan as provided herein. Options granted pursuant to the Plan shall consist of
qualified and non-qualified stock options and stock appreciation rights.
2. Administration. The Plan shall be administered by the Board of
Directors of the Company or by a Stock Option and Compensation Committee (the
"Committee") appointed by the Board of Directors and consisting of not less than
three (3) members of the Board of Directors, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 (or any successor rule
or regulation) promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"). The Board of Directors may from time to time appoint members of
the Committee in substitution for or in addition to members previously appointed
and may fill vacancies, however caused, on the Committee. No member of the Board
of Directors who is at the time, or within the preceding year was, eligible to
participate in the Plan or in any similar plan of the Committee or any of its
affiliates shall be a member of the Committee.
The Board of Directors shall determine the purchase price of the stock
covered by each option or stock appreciation rights, employees and directors to
whom, and the time or times at which, options shall be granted, the number of
shares to be covered by each option or stock appreciation right, and the term of
each option or stock appreciation right. In addition, the Board of Directors
shall have the power and authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to the Plan, to determine the terms
and provisions of the respective option agreements (which need not be
identical), and to make all other determinations deemed necessary or advisable
for the administration of the Plan. If the Committee is appointed, it shall
exercise such powers and duties, subject to the consent of the Board of
Directors and the provisions of the Plan.
If the Committee is appointed, the Board of Directors shall designate
one of the members of the Committee as chairman and the Committee shall hold
meetings at such times and places as it shall deem advisable. A majority of the
Committee members shall a constitute a quorum. All determinations of the
Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by all the Committee members shall
be fully as effective as if it had been made by a vote at a meeting duly called
and held. The committee shall keep minutes of its meetings and shall make such
rules and regulations for the conduct of its business as it shall
deem advisable.
<PAGE>
3. Grantees. Subject to Section 2 hereof, options and stock
appreciation rights may be granted to such key employees and directors may be
granted to such key employees (including directors and officers) of the Company
and its subsidiaries as determined by the Board of Directors or the Committee
(each such employee a "Grantee").
4. Effectiveness and Termination of Plan. The Plan shall terminate on
the earliest of:
(a) The tenth anniversary of the effective date as determined
under this Section 4;
(b) The date when all shares of the Company's Common Stock,
par value $.0001 per share (the "Shares"), reserved for issuance under the Plan
shall have been acquired through exercise of options granted under the Plan; or
(c) Such earlier date as the Board of Directors may determine.
The Plan shall become effective as of the date of adoption thereof by
the Board of Directors of the Company, or the date the Plan is approved by the
stockholders, whichever is earlier. Any option outstanding under the Plan at the
time of the Plan's termination shall remain in effect in accordance with its
terms and conditions and those of the Plan.
5. The Shares. Subject to the provisions of Section 7, the aggregate
number of Shares which may be issued under the Plan shall be 2,000,000. Such
number of Shares may be set aside out of the authorized but unissued Shares not
reserved for any other purpose or out of Shares held in or acquired for the
treasury of the Company. If all or part of an option or stock appreciation right
is unexercised, the Shares which were not exercised may again be available for
grant under the Plan.
6. Grant, Terms and Conditions of Option. Options may be granted by the
Board of Directors or the Committee at any time and from time to time prior to
the termination of the Plan. Except as hereinafter provided, options or stock
appreciation rights granted pursuant to the Plan shall be subject to the
following terms and conditions.
(a) The purchase price of the Shares subject to an option or
stock appreciation right shall be determined by the Board of Directors or the
Committee whose determination shall be final; it being understood and agreed
that the purchase price need not be the fair market value of the Common Stock on
the date that the option is granted.
The exercise price shall be paid in full in United States dollars in
cash or by check at the time of exercise. At the discretion of the Board of
Directors or the Committee, the exercise price may be paid with (i) Shares
already owned by, and in the possession of, the Grantee or (ii) any combination
of United States dollars or Shares. Anything contained herein to the contrary
notwithstanding, any required withholding tax shall be paid by the Grantee in
full in
2
<PAGE>
United States dollars in cash or by check at the time of exercise of an option
or stock appreciation right. Shares used to satisfy the exercise price of an
option or stock appreciation right shall be valued at their fair market value as
of the close of business on the day immediately preceding the date of exercise.
The exercise price shall be subject to adjustment, but only as provided in
Section 7 hereof. The Company may lend the Grantee funds sufficient to pay the
exercise price, subject to limitations that may be established by the Board of
Directors or the Committee.
(b) Duration and Exercise of Options or Stock Appreciation
Rights. An option or stock appreciation right may be granted for a term not
exceeding ten (10) years from the date of grant; provided, however, that no
grant for more than five (5) years can be made to a holder of ten percent (10%)
or more of the Company's outstanding Common Stock. Further, options may not be
granted to an individual to the extent that in the calendar year in which such
options first becomes exercisable, the Common Stock subject to such options has
a fair market value on the date of grant in excess of $100,000. Options and
stock appreciation rights shall be exercisable at such time and in such amounts
(up to the full amount thereof) as may be determined by the Board of Directors
or the Committee at the time of grant. If an option or stock appreciation right
is exercisable in installments, the Board of Directors or the Committee shall
determine what events, if any, will accelerate the exercise of the option or
stock appreciation right.
The Plan shall be subject to approval by the Company's stockholders
within one (1) year from the date on which it was adopted. Prior co such
stockholder approval, options and stock appreciation rights may be granted under
the Plan, but any such opinion or stock appreciation right shall not be
exercisable prior to such stockholder approval. If the Plan is not approved by
the Company's stockholders, the Plan shall terminate and all options or stock
appreciation rights theretofore granted under the Plan shall terminate and
become null and void.
(c) Termination of Employment or Directorship. Except as
otherwise provided by the Board of Directors or the Committee, upon termination
of the Grantee's employment or resignation or termination from the Board of
Directors, the Grantee's rights to exercise an option shall be as follows:
(i) If the Grantee's employment or directorship is
terminated on account of total and permanent disability, any option or Stock
appreciation right may be exercised, to the extent exercisable on the date of
the Grantee's termination of employment or directorship, by the Grantee (or by
the Grantee's estate if the Grantee dies after termination of employment or
directorship) at any time within one (1) year after termination of employment or
directorship but in no event after the expiration of the term of the option or
stock appreciation right. For purposes of the Plan, total and permanent
disability means a mental or physical condition that prevents a Grantee from
performing his customary duties for the Company for nine consecutive months or
an aggregate of nine months in any 12-month period.
3
<PAGE>
(ii) In the case of a Grantee whose employment or
directorship is terminated by death, the Grantee's estate shall have the right
for a period of one (1) year following the date of such death to exercise the
option or stock appreciation right to the extent the right to exercise had
accrued prior to the date of the Grantee's death but in no event after the
expiration of the term of the option or stock appreciation right.
(iii) in the case of a Grantee whose employment or
directorship is terminated for any reason other than death or disability, the
Grantee (or the Grantee's estate in the event of the Grantee's death after such
termination) may, within the three-month period following such termination,
exercise an option or stock appreciation right to the extent the right to
exercise had accrued prior to such termination but in no event after expiration
of the term of the option or stock appreciation right. Notwithstanding the
foregoing, except as otherwise provided by the Board of Directors or the
Committee, if the Grantee's termination of employment or directorship is on
account of material misconduct or any act that is materially adverse to the
Company, the Grantee's option or stock appreciation right shall expire as of the
date of termination of employment.
(iv) A Grantee's "estate" shall mean the Grantee's
legal representative of any person who acquires the right to exercise an option
by reason of the Grantee's death. The Board of Directors or the Committee may in
its discretion require the transferee of a Grantee to supply it with written
notice of the Grantee's death or disability and to supply it with a copy of the
will (in the case of the Grantee's death) or such other evidence as the Board of
Directors or the Committee deems necessary to establish the validity of the
transfer of an option or stock appreciation right. The Board of Director or the
Committee may also require the agreement of the transferee to be bound by all of
the terms and conditions of the Plan.
(d) Transferability of Options and Stock Appreciation Rights.
Options and stock appreciation rights shall be transferable only by will or the
laws of descent and distribution and shall be exercisable during the Grantee's
lifetime only by the Grantee.
(e) Modification, Extension and Renewal of Options and Stock
Appreciation Rights. Subject to the terms and conditions and within the
limitations of the Plan, the Board of Directors or the Committee may modify,
extend or renew outstanding options and stock appreciation rights granted, under
the Plan, or accept the surrender of outstanding options and stock appreciation
rights (up to the extent not theretofore exercised) and authorize the granting
of new options or stock appreciation rights in substitution therefor (to the
extent no theretofore exercised). Notwithstanding the foregoing, however, no
modification of an option or stock appreciation right shall, without the consent
of the Grantee, alter or impair any rights or obligations under any option or
stock appreciation right theretofore granted under the Plan.
(f) Other Terms and Conditions. Options or stock appreciation
rights may contain such other provisions, which shall not be inconsistent with
any of the foregoing terms of the Plan, as the Board of Directors or the
Committee shall deem appropriate.
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<PAGE>
7. Adjustments in the Shares.
(a) In the event the Shares, as presently constituted, shall
be changed into or exchanged for a different number or kind of stock or other
securities of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, split, reverse split,
combination of shares, or otherwise) or if the number of such Shares shall be
increased through the payment of a stock dividend, there shall be substituted
for or added to each Share theretofore appropriated or thereafter subject or
which may become subject to an option or stock appreciation right under the
Plan, the number of kind of shares of stock or other securities into which each
outstanding Share shall be so changed, or for which each such Share shall be
exchanged, or to which each such Share shall be entitled, as the case may be.
Outstanding options or stock appreciation rights shall also be appropriately
amended as to price and other terms as may be necessary to reflect the foregoing
events. In the event there shall be any other change in the number or kind of
the outstanding Shares, or of any stock or other securities into which such
Shares shall have been changed, or for which such Shares shall have been
exchanged, then, if the Board of Directors shall, in its sole discretion,
determine that such change equitably requires an adjustment in any option or
stock appreciation right theretofore granted or which may be granted under the
Plan, such adjustments shall be made in accordance with such determination.
(b) Fractional Shares resulting from any adjustment in options
or stock appreciation rights pursuant to this Section 7 may be settled in cash
or otherwise as the Board of Directors or the Committee may determine. Notice of
any adjustment shall be given by the Board of Directors or the Committee to each
Grantee whose option or stock appreciation right has been adjusted and such
adjustment (whether or not such notice is given) shall be effective and binding
for all purposes of the Plan.
(c) The Committee or the Board of Directors shall have the
power, in the event of the disposition of all or substantially all of the assets
of the Company, or the dissolution of the Company, or the merger or
consolidation of the Company with or into any other corporation, or the merger
or consolidation of any other corporation into the Company, or the making of a
tender offer to purchase all or a substantial portion of the Shares of the
Company, to amend all outstanding options or stock appreciation rights (upon
such conditions as it shall deem fit) in order to permit the exercise of all
such options or stock appreciation rights prior to the effective date of any
such transaction and to terminate such options and stock appreciation rights as
of such effective date. If the Board of Directors or the Committee shall
exercise such power, all options and stock appreciation rights then outstanding
and subject to such requirement shall be deemed to have been amended to permit
the exercise thereof in whole or in part by the Grantee at any time or from time
to time as determined by the Board of Directors or the Committee prior to the
effective date of such transaction and such options or stock appreciation rights
shall be deemed to terminate upon such effective date.
8. Securities Law Requirements. No option or stock appreciation
right granted pursuant to the Plan shall be exercisable in whole or in part,
nor shall the Company be
5
<PAGE>
obligated to sell any Shares subject to any such option or stock appreciation
right, if such exercise, sale or settlement would, in the opinion of counsel for
the Company, violate the Securities Act of 1933 (or other Federal or State
statutes having similar requirements), as it may be in effect at that time. Each
option or stock appreciation right shall be subject to the further requirement
that, if at any time the Board of Directors shall determine in its discretion
that the listing, registration or qualification of the Shares subject to such
option or stock appreciation right under any securities exchange requirements or
under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary as a condition of, or in connection with, the
granting of such option or stock appreciation right or the issuance of Shares
thereunder, such option or stock appreciation right may not be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors.
9. Amendment of the Plan.
(a) Options and stock appreciation rights shall be evidenced
by such form of agreement as is approved by the Board of Directors or the
Committee. The Board of Directors may amend the Plan, may correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any option
or stock appreciation right in the manner and to the extent it shall deem
desirable; provided, however, except as provided in Section 7 and this Section
9, unless the stockholders of the Company shall have first approved thereof: (i)
no option or stock appreciation right shall be exercisable more than ten years
after the date it is granted; (ii) the expiration date of the Plan shall not be
extended; and (iii) no amendment shall be of any force and effect if such
amendment increases the number of Shares available for the granting of options
or stock appreciation rights may be granted, materially increases the benefits
accruing the Grantees or materially modified the requirements as to eligibility
or participation in the Plan. In addition, no amendment of the Plan shall,
without the consent of a Grantee, adversely affect the Grantee's rights under
any option or stock appreciation right.
(b) The Board of Directors also shall have the power to amend
or terminate the Plan in such respect as the Board of Directors shall deem
advisable in order to ensure favorable Federal income tax treatment for the
Company.
10. Application of Funds. The proceeds received by the Company from the
sale of Shares will be used for general corporate purposes.
11. No Obligation to Exercise Option or Stock Appreciation Right. The
granting of an option or stock appreciation right shall impose no obligation
upon the Grantee (or upon a transferee of a Grantee) to exercise such option or
stock appreciation right.
12. Plan Not a Contract of Employment. The Plan is not a contract of
employment, and the terms of employment of any Grantee shall not be affected in
any way by the Plan or related instruments except as specifically provided
therein. The establishment of the Plan shall not be construed as conferring any
legal rights upon any Grantee for a continuation of
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<PAGE>
employment, nor shall it interfere with the right of the company or any
subsidiary to discharge any Grantee and to treat him without regard to the
effect which such treatment might have upon him as a Grantee.
13. Expenses of the Plan. All of the expenses of the Plan shall be
paid by the Company.
14. Compliance with Applicable Law. Notwithstanding anything herein to
the contrary, the Company shall not be obligated to cause to be issued or
delivered any certificates for Shares pursuant to the exercise of an option or
stock appreciation right, unless and until the Company is advised by its counsel
that the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations or governmental authority and the requirements of
any exchange upon which Shares are traded. The Company shall in no event be
obligated to register any securities pursuant to the Securities Act of 1933 (as
now in effect or as hereafter amended) or to take any other action in order to
cause the issuance and delivery of such certificates to comply with any such
law, regulation or requirement. The Board of Directors or Committee may require,
as a condition of the issuance and delivery of such certificates and in order to
ensure compliance with such laws, regulations and requirements, that the Grantee
make such covenants, agreements and representations as the Board of Directors or
Committee, in its sole discretion, deems necessary or desirable.
15. Governing Law. Except the extent preempted by Federal law, the
Plan shall be construed and enforced in accordance with, and governed by, the
laws of the State of New York.
7
ADVANCED VOICE TECHNOLOGIES, INC.
1994 NON-QUALIFIED STOCK OPTION PLAN
(Adopted by the Board of Directors as of
September 15, 1994 and by the Stockholders
of the Company as of September 15, 1994)
1. Purpose. The purpose of the 1994 Non-Qualified Stock
Option Plan (the "Plan") is to enable Advanced Voice Technologies,
Inc. (the "Company") to encourage key employees, Directors,
consultants, distributors, professionals and independent
contractors to contribute to the success of the Company by granting
such individuals non-qualified options. In addition, nonemployee
directors may participate in the Plan as provided herein. Options
granted pursuant to the Plan shall consist of non-qualified stock
options.
2. Administration. The Plan shall be administered by the Board of
Directors of the Company or by a Stock Option and Compensation Committee (the
"Committee") appointed by the Board of Directors and consisting of not less than
three (3) members of the Board of Directors, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 (or any successor rule
or regulation) promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"). The Board of Directors may from time to time appoint members of
the Committee in substitution for or in addition to members previously appointed
and may fill vacancies, however caused, on the Committee. No member of the Board
of Directors who is at the time, or within the preceding year was, eligible to
participate in the Plan or in any similar plan of the Committee or any of its
affiliates shall be a member of the Committee.
The Board of Directors shall determine the purchase price of the stock
covered by each option, employees and non-employee directors to whom, and the
time or times at which, options shall be granted, the number of shares to be
covered by each option, and the term of each option. In addition, the Board of
Directors shall have the power and authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the respective option agreements (which
need not be identical), and to make all other determinations deemed necessary or
advisable for the administration of the Plan. If the Committee is appointed, it
shall exercise such powers and duties, subject to the consent of the Board of
Directors and the provisions of the Plan.
If the Committee is appointed, the Board of Directors shall designate
one of the members of the Committee as chairman and the Committee shall hold
meetings at such times and places as it shall deem advisable. A majority of the
Committee members shall constitute a quorum. All determinations of the Committee
shall be made by a majority of its members. Any decision or determination
reduced to writing and signed by all the Committee members shall be fully as
effective as if it had been made by a vote at a meeting
<PAGE>
duly called and held. The committee shall keep minutes of its meetings and shall
make such rules and regulations for the conduct of its business as it shall
deem advisable.
3. Grantees. Subject to Section 2 hereof, options may be
granted to such key employees (including directors and officers)
and nonemployee directors of the Company and its subsidiaries as
determined by the Board of Directors or the Committee (each such
employee a "Grantee").
4. Effectiveness and Termination of Plan. The Plan shall
terminate on the earliest of:
(a) The tenth anniversary of the effective date as
determined under this Section 4;
(b) The date when all shares of the Company's Common Stock,
par value $.0001 per share (the "Shares"), reserved for issuance under the Plan
shall have been acquired through exercise of options granted under the Plan; or
(c) Such earlier date as the Board of Directors may
determine.
The Plan shall become effective as of the date of adoption thereof by
the Board of Directors of the Company, or the date the Plan is approved by the
stockholders, whichever is earlier. Any option outstanding under the Plan at the
time of the Plan's termination shall remain in effect in accordance with its
terms and conditions and those of the Plan.
5. The Shares. Subject to the provisions of Section 7, the aggregate
number of Shares which may be issued under the Plan shall be 2,000,000. Such
number of Shares may be set aside out of the authorized but unissued Shares not
reserved for any other purpose or out of Shares held in or acquired for the
treasury of the Company. If all or part of an option is unexercised, the Shares
which were not exercised may again be available for grant under the Plan.
6. Grant, Terms and Conditions of Option. Options may be
granted by the Board of Directors or the Committee at any time and
from time to time prior to the termination of the Plan. Except as
hereinafter provided, options granted pursuant to the Plan shall be
subject to the following terms and conditions.
(a) The purchase price of the Shares subject to an
option shall be determined by the Board of Directors or the
Committee whose determination shall be final.
The exercise price shall be paid in full in United States dollars in
cash or by check at the time of exercise. At the
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<PAGE>
discretion of the Board of Directors or the Committee, the exercise price may he
paid with (i) Shares already owned by, and in the possession of, the Grantee or
(ii) any combination of United States dollars or Shares. Anything contained
herein to the contrary notwithstanding, any required withholding tax shall be
paid by the Grantee in full in United States dollars in cash or by check at the
time of exercise of an option. Shares used to satisfy the exercise price of an
option shall he valued at their fair market value as of the close of business on
the day immediately preceding the date of exercise. The exercise price shall be
subject to adjustment, but only as provided in Section 7 hereof. The Company may
lend the Grantee funds sufficient to pay the exercise price, subject to
limitations that may be established by the Board of Directors or the Committee.
(b) Duration and Exercise of Options. An option may be granted
for a term not exceeding ten (10) years from the date of grant. Options shall be
exercisable at such time and in such amounts (up to the full amount thereof) as
may be determined by the Board of Directors or the Committee at the time of
grant. If an option is exercisable in installments, the Board of Directors or
the Committee shall determine what events, if any, will accelerate the exercise
of the option.
The Plan shall be subject to approval by the Company's stockholders
within one (1) year from the date on which it was adopted. Prior to such
stockholder approval, options may be granted under the Plan, but any such option
shall not be exercisable prior to such stockholder approval. If the Plan is not
approved by the Company's stockholders, the Plan shall terminate and all options
theretofore granted under the Plan shall terminate and become null and void.
(c) Termination of Employment. Except as otherwise provided by
the Board of Directors or the Committee, upon termination of the Grantee's
employment (or service as a nonemployee director), the Grantee's rights to
exercise an option shall be as follows:
(i) If the Grantee's employment (or service as a
nonemployee director) is terminated on account of total and permanent
disability, any option may be exercised, to the extent exercisable on the date
of the Grantee's termination of employment, by the Grantee (or by the Grantee's
estate if the Grantee dies after termination of employment) at any time within
one (1) year after termination of employment but in no event after the
expiration of the term of the option. For purposes of the Plan, total and
permanent disability means a mental or physical condition that prevents a
Grantee from performing his customary duties for the Company for nine
consecutive months or an aggregate of nine months in any 12-month period.
3
<PAGE>
(ii) In the case of a Grantee whose employment (or
service as a nonemployee director) is terminated by death, the Grantee's estate
shall have the right for a period of one (1) year following the date of such
death to exercise the option to the extent the right to exercise had accrued
prior to the date of the Grantee's death but in no event after the expiration of
the term of the option.
(iii) In the case of a Grantee whose employment (or
service as a nonemployee director) is terminated for any reason other than death
or disability, the Grantee (or the Grantee's estate in the event of the
Grantee's death after such termination) may, within the three-month period
following such termination, exercise an option to the extent the right to
exercise had accrued prior to such termination but in no event after the
expiration of the term of the option. Notwithstanding the foregoing, except as
otherwise provided by the Board of Directors or the Committee, if the Grantee's
termination of employment is on account of material misconduct or any act that
is materially adverse to the Company, the Grantee's option shall expire as of
the date of termination of employment.
(iv) A Grantee's "estate" shall mean the Grantee's
legal representative of any person who acquires the right to exercise an option
by reason of the Grantee's death. The Board of Directors or the Committee may in
its discretion require the transferee of a Grantee to supply it with written
notice of the Grantee's death or disability and to supply it with a copy of the
will (in the case of the Grantee's death) or such other evidence as the Board of
Directors or the Committee deems necessary to establish the validity of the
transfer of an option. The Board of Director or the Committee may also require
the agreement of the transferee to be bound by all of the terms and conditions
of the Plan.
(d) Transferability of Options. Options shall be transferable
only by will or the laws of descent and distribution and shall be exercisable
during the Grantee's lifetime only by the Grantee.
(e) Modification, Extension and Renewal of Options. Subject to
the terms and conditions and within the limitations of the Plan, the Board of
Directors or the Committee may modify, extend or renew outstanding options
granted under the Plan, or accept the surrender of outstanding options (up to
the extent not theretofore exercised) and authorize the granting of new options
in substitution therefor (to the extent no theretofore exercised).
Notwithstanding the foregoing, however, no modification of an option shall,
without the consent of the Grantee, alter or impair any rights or obligations
under any option theretofore granted under the Plan.
4
<PAGE>
(f) Other Terms and Conditions. Options may contain
such other provisions, which shall not be inconsistent with any of
the foregoing terms of the Plan, as the Board of Directors or the
Committee shall deem appropriate.
7. Adjustments in the Shares.
(a) In the event the Shares, as presently constituted, shall
be changed into or exchanged for a different number or kind of stock or other
securities of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, split, reverse split,
combination of shares, or otherwise) or if the number of such Shares shall be
increased through the payment of a stock dividend, there shall be substituted
for or added to each Share theretofore appropriated or thereafter subject or
which may become subject to an option under the Plan, the number of kind of
shares of stock or other securities into which each outstanding Share shall be
so changed, or for which each such Share shall be exchanged, or to which each
such Share shall be entitled, as the case may be. Outstanding options shall also
be appropriately amended as to price and other terms as may be necessary to
reflect the foregoing events. In the event there shall be any other change in
the number or kind of the outstanding Shares, or of any stock or other
securities into which such Shares shall have been changed, or for which such
Shares shall have been exchanged, then, if the Board of Directors shall, in its
sole discretion, determine that such change equitably requires an adjustment in
any option theretofore granted or which may be granted under the Plan, such
adjustments shall be made in accordance with such determination.
(b) Fractional Shares resulting from any adjustment in options
pursuant to this Section 7 may be settled in cash or otherwise as the Board of
Directors or the Committee may determine. Notice of any adjustment shall be
given by the Board of Directors or the Committee to each Grantee whose option
has been adjusted and such adjustment (whether or not such notice is given)
shall be effective and binding for all purposes of the Plan.
(c) The Committee or the Board of Directors shall have the
power, in the event of the disposition of all or substantially all of the assets
of the Company, or the dissolution of the Company, or the merger or
consolidation of the Company with or into any other corporation, or the merger
or consolidation of any other corporation into the Company, or the making of a
tender offer to purchase all or a substantial portion of the Shares of the
Company, to amend all outstanding options (upon such conditions as it shall deem
fit) in order to permit the exercise of all such options prior to the effective
date of any such transaction and to terminate such options as of such effective
date. If the Board of Directors or the Committee shall exercise such power, all
options then outstanding and subject to such requirement shall be deemed to have
5
<PAGE>
been amended to permit the exercise thereof in whole or in part by the Grantee
at any time or from time to time as determined by the Board of Directors or the
Committee prior to the effective date of such transaction and such options shall
be deemed to terminate upon effective date.
8. Securities Law Requirements. No option granted pursuant to the Plan
shall be exercisable in whole or in part, nor shall the Company be
obligated to sell any Shares subject to any such option, if such exercise, sale
or settlement would, in the opinion of counsel for the Company, violate the
Securities Act of 1933 (or other Federal or State statutes having similar
requirements), as it may be in effect at that time. Each option shall be subject
to the further requirement that, if at any time the Board of Directors shall
determine in its discretion that the listing, registration or qualification of
the Shares subject to such option under any securities exchange requirements or
under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary as a condition of, or in connection with, the
granting of such option or the issuance of Shares thereunder, such option may
not be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors.
9. Amendment of the Plan.
(a) Options shall be evidenced by such form of agreement as is
approved by the Board of Directors or the Committee. The Board of Directors may
amend the Plan, may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any option in the manner and to the extent it
shall deem desirable; provided, however, except as provided in Section 7 and
this Section 9, unless the stockholders of the Company shall have first approved
thereof: (i) no option shall be exercisable more than ten years after the date
it is granted; (ii) the expiration date of the Plan shall not be extended; and
(iii) no amendment shall be of any force and effect if such amendment increases
the number of Shares available for the granting of options may be granted,
materially increases the benefits accruing the Grantees or materially modifies
the requirements as to eligibility or participation in the Plan. In addition, no
amendment of the Plan shall, without the consent of a Grantee, adversely affect
the Grantee's rights under any option.
(b) The Board of Directors also shall have the power to amend
or terminate the Plan in such respect as the Board of Directors shall deem
advisable in order to ensure favorable Federal income tax treatment for the
Company.
6
<PAGE>
10. Application of Funds. The proceeds received by the
Company from the sale of Shares will be used for general corporate
purposes.
11. No Obligation to Exercise Option. The granting of an
option shall impose no obligation upon the Grantee (or upon a
transferee of a Grantee) to exercise such option.
12. Plan Not a Contract of Employment. The Plan is not a contract of
employment, and the terms of employment of any Grantee shall not be affected in
any way by the Plan or related instruments except as specifically provided
therein. The establishment of the Plan shall not be construed as conferring any
legal rights upon any Grantee for a continuation of
employment, nor shall it interfere with the right of the company or any
subsidiary to discharge any Grantee and to treat him without regard to the
effect which such treatment might have upon him as a Grantee.
13. Expenses of the Plan. All of the expenses of the Plan
shall be paid by the Company.
14. Compliance with Applicable Law. Notwithstanding anything herein to
the contrary, the Company shall not be obligated to cause to be issued or
delivered any certificates for Shares pursuant to the exercise of an option,
unless and until the Company is advised by its counsel that the issuance and
delivery of such certificates is in compliance with all applicable laws,
regulations or governmental authority and the requirements of any exchange upon
which Shares are traded. The Company shall in no event be obligated to register
any securities pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) or to take any other action in order to cause the issuance
and delivery of such certificates to comply with any such law, regulation or
requirements. The Board of Directors or Committee may require, as a condition of
the issuance and delivery of such certificates and in order to ensure compliance
with such laws, regulations and requirements, that the Grantee make such
covenants, agreements and representations as the Board of Directors or
Committee, in its sole discretion, deems necessary or desirable.
15. Governing Law. Except the extent preempted by Federal
law, the Plan shall be construed and enforced in accordance with,
and governed by, the laws of the State of New York.
7
