<PAGE>
As filed with the Securities and Exchange Commission on October 24, 1997
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
NETVANTAGE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-4324525
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 CONTINENTAL BOULEVARD, SUITE 201
EL SEGUNDO, CALIFORNIA 90245
(Address of principal executive offices) (Zip code)
1992 INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN
(Full title of plan)
--------------------
MR. THOMAS G. IWANSKI
CHIEF FINANCIAL OFFICER, VICE PRESIDENT OF FINANCE AND SECRETARY
NETVANTAGE, INC.
201 CONTINENTAL BOULEVARD, SUITE 201
EL SEGUNDO, CALIFORNIA 90245
(Name and address of agent for service)
(310) 726-4130
(Telephone number, including area code, of agent for service)
--------------------
With a Copy to:
VICTOR A. HEBERT, ESQ.
HELLER EHRMAN WHITE & MCAULIFFE
601 SOUTH FIGUEROA STREET, 40TH FLOOR
LOS ANGELES, CALIFORNIA 90017
(213) 689-0200
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Proposed Proposed
Maximum Maximum Amount of
Title of Securities Amount to Offering Price Aggregate Registration
to be Registered be Registered(1) Per Share(2) Offering Price(2) Fee(2)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS B COMMON STOCK,
$.001 PAR VALUE PER SHARE 133,333 $9.25 $1,233,331 $374
CLASS B COMMON STOCK,
$.001 PAR VALUE PER SHARE 66,667(3) $0 $0 $0(4)
CLASS E COMMON STOCK,
$.001 PAR VALUE PER SHARE 66,667 $9.25 $616,670 $187
CLASS A COMMON STOCK,
$.001 PAR VALUE PER SHARE 200,000(5) $0 $0 $0(4)
=========================================================================================================================
</TABLE>
(1) Includes an indeterminate number of additional shares that may be issued to
adjust the number of shares to be issued pursuant to such employee benefit
plan as the result of any future stock split, stock dividend or similar
adjustment of the Registrant's outstanding common stock.
(2) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(c) of the Securities Act of 1933, as amended, based upon the
closing sale price of the Class A Common Stock as reported on the Nasdaq
National Market on October 17, 1997.
(3) Issuable upon conversion of the shares of Class E Common Stock into Class B
Common Stock.
(4) No additional consideration is to be paid upon conversion; therefore,
pursuant to Rule 457(i), no separate registration fee is required.
(5) Issuable upon conversion of the shares of Class B Common Stock into Class A
Common Stock.
===============================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
- ------ ---------------------------------------
All documents filed by Registrant pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), subsequent to the date of the filing of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration Statement
which indicates that all securities offered under this Registration Statement
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference into this Registration Statement and
to be a part hereof from the date of the filing of such documents.
The following documents filed with the Securities and Exchange Commission
(the "Commission") are also incorporated herein by reference:
1. The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, filed pursuant to the Exchange Act;
2. The Registrant's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1997, filed pursuant to the Exchange Act; and
3. The Registrant's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1997, filed pursuant to the Exchange Act.
The description of the Class A Common Stock contained in Registrant's
Registration Statement on Form 8-A filed with the Commission on May 3, 1995,
under the Exchange Act is also incorporated by reference in this Registration
Statement.
Item 4. Description of Securities.
- ------ -------------------------
The Registrant's 1992 Incentive and Nonstatutory Stock Option Plan
authorizes the grant of incentive and nonstatutory stock options to purchase up
to 200,000 shares of the Registrant's Class B and Class E Common Stock
(currently issuable two-thirds in Class B Common Stock and one-third in Class E
Common Stock). Neither the Class B nor the Class E Common Stock has been
registered under Section 12 of the Exchange Act, and shares of such Class B and
Class E Common Stock are not freely transferable. Under Registrant's Restated
Certificate of Incorporation, the rights, preferences, privileges and
restrictions on its Class A, Class B and Class E Common Stock are substantially
identical, except as indicated below. The holders of Class A Common Stock have
the right to cast one vote, and the holders of Class B and Class E Common Stock
have the right to cast five votes, for each share held of record on all matters
submitted to a vote of the holders of the Common Stock. The holders of the
Class A, Class B and Class E Common Stock vote together as a single class on all
such matters, except when class voting is required by the Delaware General
Corporation Law (the "DGCL"). Holders of the Class A and Class B Common Stock
have equal rights to dividends from funds legally available therefor, when, as
and if declared by the Board of Directors and are entitled to share ratably, as
a single class, in all of the assets of the Registrant available for
distribution to holders of Common Stock upon the liquidation, dissolution or
winding up of the affairs of the Registrant. Holders of Class E Common Stock
have no
II-1
<PAGE>
right to receive any such dividends or distributions. Holders of shares of
Class A, Class B and Class E Common Stock have no preemptive rights.
Each share of Class B Common Stock is currently convertible, at the
option of the holder, into one share of Class A Common Stock. Shares of Class B
Common Stock also automatically convert into an equivalent number of shares of
Class A Common Stock upon the transfer or other disposition of such shares
(other than a transfer to another holder of shares of Class B Common Stock) or
upon the death of the holder.
Each share of Class E Common Stock will automatically convert into one
share of Class B Common Stock in the event that the Registrant's Minimum Pretax
Income (as defined in the Restated Certificate of Incorporation) amounts to at
least $7.1 million or $8.9 million for the fiscal year ended December 31, 1997
or 1998, respectively, or the Bid Price (as defined in the Restated Certificate
of Incorporation) averages in excess of $23.50 per share (subject to adjustment
in the event of any stock splits, reverse stock splits or other similar events)
for 30 consecutive trading days at any time between November 3, 1996 and May 3,
1998. At any time after March 31, 1999, shares of Class E Common Stock that have
not been converted into Class B Common Stock may be redeemed by the Registrant
(subject to the provisions of the DGCL and any other applicable restriction on
the right of Registrant to redeem its shares) at a redemption price of $.01 per
share. Shares of Class E Common Stock may not be transferred or otherwise
disposed of without the prior written consent of the Registrant, except in the
event of the death of a holder (and the transfer is to the estate, heirs or
descendants of the holder by operation of law), or the transferee is another
holder of Class E Common Stock or an intervivos grantor trust controlled by the
transferor (subject to certain exceptions). Any permitted transferee will
continue to be subject to the same restrictions as the transferor.
Item 5. Interests of Named Experts and Counsel.
- ------ --------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers.
- ------ -----------------------------------------
Pursuant to Section 102(b)(7) of the DGCL, the Registrant's Restated
Certificate of Incorporation contains a provision which eliminates the personal
liability of its directors to the Registrant and its stockholders for monetary
damages resulting from breaches of their fiduciary duty as directors, other than
liability for breaches of the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
violations under Section 174 of the DGCL or any transaction from which the
director derived an improper personal benefit.
Section 145 of the DGCL permits, and under certain circumstances
requires, Registrant to indemnify its directors, officers, employees and agents
subject to certain conditions and limitations. Registrant's Bylaws contain
provisions to indemnify its directors and officers to the full extent permitted
by applicable law. In addition, Registrant maintains officers' and directors'
liability insurance which insures against certain liabilities that its officers
and directors may incur in such capacities and has entered into indemnification
agreements with such officers and directors.
II-2
<PAGE>
Item 7. Exemption from Registration Claimed.
- ------ -----------------------------------
Not Applicable.
Item 8. Exhibits.
- ------ --------
4 1992 Incentive and Nonstatutory Stock Option Plan
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe (included in Exhibit 5)
23.2 Consent of Price Waterhouse LLP
24 Power of Attorney of Certain Officers and Directors (included on
Page II-5)
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 of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the Registration Statement;
(iii) 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;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
-----------------
not apply if the registration statement is on Form S-3 or Form S-8
and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
(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 undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
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 whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
II-4
<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 El Segundo, California, on October 24, 1997.
NETVANTAGE, INC.
By /s/ STEPHEN R. RIZZONE
-------------------------------------
Stephen R. Rizzone
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints STEPHEN R. RIZZONE and THOMAS G. IWANSKI, or
either of them, his attorneys-in-fact, with full power of substitution, for him
in any and all capacities, to sign any amendments to this Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorneys-in-fact, or their substitutes,
may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------ ---------------------------------- ----------------
<S> <C> <C>
/s/ STEPHEN R. RIZZONE
- ------------------------- Chairman of the Board, President October 24, 1997
Stephen R. Rizzone and Chief Executive Officer
(Principal Executive Officer)
/s/ THOMAS G. IWANSKI
- ------------------------- Chief Financial Officer, Vice October 24, 1997
Thomas G. Iwanski President of Finance and Secretary
(Principal Financial Officer and
Principal Accounting Officer)
/s/ CARLOS A. TOMASZEWSKI
- ------------------------- Director October 24, 1997
Carlos A. Tomaszewski
/s/ RICHARD N. TINSLEY
- ------------------------ Director October 24, 1997
Richard N. Tinsley
/s/ JOHN E. MARMAN
- ------------------------ Director October 24, 1997
John E. Marman
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibits
- --------
4 1992 Incentive and Nonstatutory Stock
Option Plan
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe
(included in Exhibit 5)
23.2 Consent of Price Waterhouse LLP
24 Power of Attorney of Certain Officers
and Directors (included on Page II-5)
<PAGE>
EXHIBIT 4
---------
NETVANTAGE, INC.
1992 INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN
-------------------------------------------------
1. Purpose
-------
This Incentive and Nonstatutory Stock Option Plan (the "Plan") is intended
to further the growth and financial success of NETVANTAGE, INC. (the
"Corporation") by providing additional incentives to selected employees of and
consultants to the Corporation or parent corporation or subsidiary corporation
of the Corporation as those terms are defined in Sections 425(e) and 425(f) of
the Internal Revenue Code of 1986, as amended (the "Code") (such parent
corporations and subsidiary corporations hereinafter collectively referred to as
"Affiliates") so that such employees may acquire or increase their proprietary
interest in the Corporation. Stock options granted under the Plan (hereinafter
"Options") may be either "Incentive Stock Options", as defined in Section 422A
of the Code and any regulations promulgated under said Section, or "Nonstatutory
Options" at the discretion of the Board of Directors of the Corporation (the
"Board") and as reflected in the respective written stock option agreements
granted pursuant hereto.
2. Administration
--------------
The Plan shall be administered by the Board; provided however, that the
Board may delegate such administration to a committee of not fewer than three
(3) members (the "Committee"), at least two (2) of whom are members of the Board
and all of whom are disinterested administrators, as contemplated by Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended ("Rule 16b-
3"); and provided further, that the foregoing requirement for disinterested
administrators shall not apply prior to the date of the first registration of
any of the securities of the Corporation under Securities Act of 1933, as
amended.
Subject to the provisions of the Plan, the Board and/or the Committee shall
have authority to (a) grant, in its discretion, Incentive Stock Options in
accordance with Section 422A of the Code or Nonstatutory Options; (b) determine
in good faith the fair market value of the stock covered by an Option; (c)
determine which eligible persons shall be granted Options and the number of
shares to be covered thereby and the term thereof; (d) construe and interpret
the Plan; (e) promulgate, amend and rescind rules and regulations relating to
its administration, and correct defects, omissions and, inconsistencies in the
Plan or any Option; (f) consistent with the Plan and with the consent of the
optionee, as appropriate, amend any outstanding Option or amend the exercise
date or dates thereof; (g) determine the duration and purpose of leaves of
absence which may be granted to optionholders without constituting termination
of their employment for the purpose of the Plan; and (h) make all other
determinations necessary or advisable for the Plan's administration. The
interpretation and construction by the Board of any provisions of the Plan or of
any Option shall be conclusive and final. No member of the Board or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option.
<PAGE>
3. Eligibility
-----------
The persons who shall be eligible to receive Options shall be key employees
of or consultants to the Corporation or any of its Affiliate ("Optionees"). The
term consultant shall mean any person who is engaged by the Corporation to
render services and is compensated for such services, and any director of the
Corporation whether or not compensated for such services; provided that, if the
Corporation registers any of its securities pursuant to the Securities Exchange
Act of 1934, the term consultant shall thereafter not include directors who are
not compensated for their services or are paid only a director fee by the
Corporation.
(a) Incentive Stock Options. Incentive Stock Options may only be
-----------------------
issued to employees of the Corporation or its Affiliates. Incentive Stock
Options may be granted to officers, whether or not they are directors, but a
director shall not be granted an Incentive Stock Option unless such director is
also an employee of the Corporation. Payment of a director fee shall not be
sufficient to constitute employment by the Corporation. Any grant of option to
an officer or director of the Corporation subsequent to the first registration
of any of the securities of the Corporation under Securities Act of 1933, as
amended, shall comply with the requirements of Rule 16b-3. An optionee may hold
more than one Option.
The Corporation shall not grant an Incentive Stock Option under the
Plan to any employee if such grant would result in such employee holding the
right to exercise for the first time in any one calendar year, under all options
granted to such employee under the Plan or any other stock option plan
maintained by the Corporation or any Affiliate, with respect to shares of stock
having an aggregate fair market value, determined as of the date of the Option
is granted, in excess of $100,000. Should it be determined that an Incentive
Stock Option granted under the Plan exceeds such maximum for any reason other
than a failure in good faith to value the stock subject to such option, the
excess portion of such option shall be considered a Nonstatutory Option. If,
for any reason, an entire option does not qualify as an Incentive Stock Option
by reason of exceeding such maximum, such option shall be considered a
Nonstatutory Option.
(b) Nonstatutory Option. The provisions of the foregoing Section
-------------------
3(a) shall not apply to any option designated as a "Nonstatutory Stock Option
Agreement" or which sets forth the intention of the parties that the option be a
Nonstatutory Option.
4. Stock
-----
The stock subject to Options shall be shares of the Corporation's
authorized but unissued or reacquired Class B and Class E Common Stock (the
"Stock").
(a) Number of Shares. Subject to adjustment as provided in Paragraph
----------------
5(i) of this Plan, the total number of shares of Stock which may be purchased
through exercise of Options granted under this Plan shall not exceed Two Hundred
Thousand (200,000). If any Option shall for any reason terminate or expire, any
shares allocated thereto but remaining unpurchased upon such expiration or
termination shall again be available for the grant of Options with respect
thereto under this Plan as though no Option had been granted with respect to
such shares.
2
<PAGE>
(b) Reservation of Shares. The Corporation shall reserve and keep
---------------------
available at all times during the term of the Plan such number of shares as
shall be sufficient to satisfy the requirements of the Plan. If, after
reasonable efforts, which efforts shall not include the registration of the Plan
or Options under the Securities Act of 1933, the Corporation is unable to obtain
authority from any applicable regulatory body, which authorization is deemed
necessary by legal counsel for the Corporation for the lawful issuance of shares
hereunder, the Corporation shall be relieved of any liability with respect to
its failure to issue and sell the shares for which such requisite authority was
so deemed necessary unless and until such authority is obtained.
5. Terms and Conditions of Options
-------------------------------
Options granted hereunder shall be evidenced by agreements between the
Corporation and the respective Optionees, in such form and substance as the
Board or Committee shall from time to time approve. Such agreements need not be
identical, and in each case may include such provisions as the Board or
Committee may determine, but all such agreements shall be subject to and limited
by the following terms and conditions:
(a) Number of Shares: Each Option shall state the number of shares to
----------------
which it pertains.
(b) Option Price: Each Option shall state the Option Price, which
------------
shall be determined as follows:
(i) Any Option granted to a person who at the time the Option is
granted owns (or is deemed to own pursuant to Section 425(d) of the Code)
stock possessing more than ten percent (10%) of the total combined voting
power or value of all classes of stock of the Corporation, or of any
Affiliate, ("Ten Percent Holder") shall have an Option Price of no less
than 110% of the fair market value of the Stock as of the date of grant.
(ii) Incentive Stock Options granted to a person who at the time
the Option is granted is not a Ten Percent Holder shall have an Option
Price of no less than 100% of the fair market value of the Stock as of the
date of grant.
(iii) Nonstatutory Options granted to a person who at the time
the Option is granted is not a Ten Percent Holder shall have an Option
Price of no less than 85% of the fair market value of the Stock as of the
date of grant.
For the purposes of this Paragraph 5(b), the fair market value shall
be as determined by the Board, in good faith, which determination shall be
conclusive and binding; provided however, that if there is a public market for
the such Stock, the fair market value per share shall be the average of the bid
and asked prices (or may be the closing price if such Stock is listed on the
Nasdaq National Market System) on the date of grant of the Option, or if listed
on a stock exchange, the closing price on such exchange on such date of grant.
(c) Medium and Time of Payment: To the extent permissible by
--------------------------
applicable law, the Option price shall be paid, at the discretion of the Board,
at either the time of grant or the time of exercise of the Option (i) in cash or
by check, (ii) by delivery of other common stock of the
3
<PAGE>
Corporation, provided such tendered stock was not acquired directly or
indirectly from the Corporation, or, if acquired from the Corporation, has been
held by the Optionee for more than six (6) months, (iii) by the Optionee's
promissory note in a form satisfactory to the Corporation and bearing interest
at a rate determined by the Board, in its sole discretion, but in no event less
than 6% per annum, or (iv) such other form of legal consideration permitted by
the California Corporations Code as may be acceptable to the Board.
(d) Term and Exercise of Options: Any Option granted to an Employee of
----------------------------
the Corporation shall become exercisable over a period of no longer than five
(5) years, and no less than twenty percent (20%) of the shares covered thereby
shall become exercisable annually. No Option shall be exercisable, in whole or
in part, prior to one (1) year from the date it is granted unless the Board
shall specifically determine otherwise, as provided herein. In no event shall
any Option be exercisable after the expiration of ten (10) years from the date
it is granted, and no Incentive Stock Option granted to a Ten Percent Holder
shall, by its terms, be exercisable after the expiration of five (5) years from
the date of the Option. Unless otherwise specified by the Board or the
Committee in the resolution authorizing such option, the date of grant of an
Option shall be deemed to be the date upon which the Board or the Committee
authorizes the granting of such Option.
Each Option shall be exercisable to the nearest whole share, in
installments or otherwise, as the respective option agreements may provide.
During the lifetime of an Optionee, the Option shall be exercisable only by the
Optionee and shall not be assignable or transferable by the Optionee, and no
other person shall acquire any rights therein. To the extent not exercised,
installments (if more than one) shall accumulate, but shall be exercisable, in
whole or in part, only during the period for exercise as stated in the option
agreement, whether or not other installments are then exercisable.
(e) Termination of Status as Employee or Consultant: If Optionee's
-----------------------------------------------
status as an employee or consultant shall terminate for any reason other than
Optionee's disability or death, then the Optionee (or if the Optionee shall die
after such termination, but prior to exercise, Optionee's personal
representative or the person entitled to succeed to the Option) shall have the
right to exercise the portions of any of Optionee's Options which were
exercisable as of the date of such termination, in whole or in part, at any time
within three (3) months after such termination (or in the event of "termination
for good cause" as that term is defined under the California Labor Code and case
law related thereto, such shorter period as the option agreement may specify,
but not less than 30 days) or the remaining term of the Option, whichever is the
lesser; provided, however, that with respect to Nonstatutory Options, the Board
may specify such longer period, not to exceed six (6) months, for exercise
following termination as the Board deems reasonable and appropriate. The Option
may be exercised only with respect to installments that the Optionee could have
exercised at the date of termination of employment. Nothing contained herein or
in any Option granted pursuant hereto shall be construed to affect or restrict
in any way the right of the Corporation to terminate the employment of an
Optionee with or without cause.
(f) Disability of Optionee: If an Optionee is disabled (within the
----------------------
meaning of Section 22(e)(3) of the Code) at the time of termination, the three
(3) month period set forth in Paragraph 5(e) shall be a period, as determined by
the Board and set forth in the Option, of not less than six months nor more than
one year.
4
<PAGE>
(g) Death of Optionee: If an Optionee dies while employed or engaged
-----------------
as a consultant by the Corporation or an Affiliate, the portion of such
Optionee's Option or Options which were exercisable at the date of death may be
exercised, in whole or in part, by the estate of the decedent or by a person
succeeding to the right to exercise such Option or Options, at any time within
(i) a period, as determined by the Board and set forth in the Option, of not
less than six (6) months nor more than one (1) year after Optionee's death,
which period shall not be less, in the case of a Nonstatutory Option, than the
period for exercise following termination, or (ii) during the remaining term of
the Option, whichever is the lesser. The Option may be so exercised only with
respect to installments exercisable at the time of Optionee's death and not
previously exercised by the Optionee.
(h) Nontransferability of Option: No Option shall be transferable by
----------------------------
the Optionee, except by will or by the laws of descent and distribution.
(i) Recapitalization: Subject to any required action by the
----------------
stockholders, the number of shares of Stock covered by each outstanding Option,
and the price per share thereof set forth in each such Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock of the Corporation resulting from a subdivision or consolidation
of shares or the payment of a stock dividend, or any other increase or decrease
in the number of such shares affected without receipt of consideration by the
Corporation.
Subject to any required action by the stockholders, if the Corporation
shall be the surviving entity in any merger or consolidation, each outstanding
Option thereafter shall pertain to and apply to the securities to which a holder
of shares of Stock equal to the shares subject to the Option would have been
entitled by reason of such merger or consolidation. A dissolution or
liquidation of the Corporation or a merger or consolidation in which the
Corporation is not the surviving entity shall cause each outstanding Option to
terminate on the effective date of such dissolution, liquidation, merger or
consolidation. In such event, if the entity which shall be the surviving entity
does not tender to Optionee an offer, for which it has no obligation to do so,
to substitute for any unexercised Option a stock option or capital stock of such
surviving entity, as applicable, which on an equitable basis shall provide the
Optionee with substantially the same economic benefit as such unexercised
Option, then the Board may grant to such Optionee, but shall not be obligated to
do so, the right for a period commencing thirty (30) days prior to and ending
immediately prior to such dissolution, liquidation, merger or consolidation or
during the remaining term of the Option, whichever is the lesser, to exercise
any unexpired Option or Options, without regard to the installment provisions of
Paragraph 5(d) of this Plan; provided, that any such right granted shall be
granted to all Optionees not receiving an offer to substitute on a consistent
basis, and provided further, that any such exercise shall be subject to the
consummation of such dissolution, liquidation, merger or consolidation.
In the event of a change in the Stock of the Corporation as presently
constituted, which is limited to a change of all of its authorized shares
without par value into the same number of shares with a par value, the shares
resulting from any such change shall be deemed to be the Stock within the
meaning of this Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the Board,
whose determination in that respect
5
<PAGE>
shall be final, binding and conclusive. Except as expressly provided in this
Paragraph 5(i), the Optionee shall have no rights by reason of any subdivision
or consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class, and the number or price of shares of Stock subject to any Option
shall not be affected by, and no adjustment shall be made by reason of, any
dissolution, liquidation, merger or consolidation, or any issue by the
Corporation of shares of stock of any class or securities convertible into
shares of stock of any class.
The grant of an Option pursuant to the Plan shall not affect in any
way the right or power of the Corporation to make any adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve, or liquidate or to sell or
transfer all or any part of its business or assets.
(j) Rights as a Stockholder: An Optionee shall have no rights as a
-----------------------
stockholder with respect to any shares covered by an Option until the date of
the issuance of a stock certificate to Optionee for such shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
expressly provided in Paragraph 5(i) hereof.
(k) Modification, Acceleration, Extension, and Renewal of Options:
-------------------------------------------------------------
Subject to the terms and conditions and within the limitations of the Plan, the
Board may modify an Option, or once an Option is exercisable, accelerate the
rate at which it may be exercised, and may extend or renew outstanding Options
granted under the Plan or accept the surrender of outstanding Options (to the
extent not theretofore exercised) and authorize the granting of new Options in
substitution for such Options, provided such action is permissible under Section
422A of the Code.
Notwithstanding the foregoing provisions of this Paragraph 5(k),
however, no modification of an Option shall, without the consent of the
Optionee, alter to the Optionee's detriment or impair any rights or obligations
under any Option theretofore granted under the Plan.
(l) Investment Intent: Unless and until the issuance and sale of the
-----------------
shares subject to the Plan are registered under the Securities Act of 1933, as
amended (the "Act"), each Option under the Plan shall provide that the purchases
of Stock thereunder shall be for investment purposes and not with a view to, or
for resale in connection with, any distribution thereof. Further, unless the
issuance and sale of the Stock have been registered under the Act, each Option
shall provide that no shares shall be purchased upon the exercise of such Option
unless and until (i) any then applicable requirements of state and federal laws
and regulatory agencies shall have been fully complied with to the satisfaction
of the Corporation and its counsel, and (ii) if requested to do so by the
Corporation, the person exercising the Option shall (i) give written assurances
as to knowledge and experience of such person (or a representative employed by
such person) in financial and business matters and the ability of such person
(or representative) to evaluate the merits and risks of exercising the Option,
and (ii) execute and deliver to the Corporation a letter of investment intent,
all in such form and substance as the Corporation may require. If shares are
issued upon exercise of an Option without registration under the Act, subsequent
registration of such shares shall relieve the purchaser thereof of any
investment restrictions or representations made upon the exercise of such
Options.
6
<PAGE>
(m) Exercise Before Exercise Date: At the discretion of the Board, the
-----------------------------
Option may, but need not, include a provision whereby the Optionee may elect to
exercise all or any portion of the Option prior to the stated exercise date of
the Option or any installment thereof. Any shares so purchased prior to the
stated exercise date shall be subject to repurchase by the Corporation upon
termination of Optionee's employment as contemplated by Paragraphs 5(e), 5(f)
and 5(g) hereof prior to the exercise date stated in the Option and such other
restrictions and conditions as the Board or Committee may deem advisable.
(n) Other Provisions: The Option agreements authorized under this Plan
----------------
shall contain such other provisions, including, without limitation, restrictions
upon the exercise of the Options, as the Board or the Committee shall deem
advisable. Shares shall not be issued pursuant to the exercise of an Option, if
the exercise of such Option or the issuance of shares thereunder would violate,
in the opinion of legal counsel for the Corporation, the provisions of any
applicable law or the rules or regulations of any applicable governmental or
administrative agency or body, such as the Act, the Securities Exchange Act of
1934, the rules promulgated under the foregoing or the rules and regulations of
any exchange upon which the shares of the Corporation are listed.
6. Availability of Information
---------------------------
During the term of the Plan and any additional period during which an
Option granted pursuant to the Plan shall be exercisable, the Corporation shall
make available, upon request, not later than one hundred and twenty (120) days
following the close of each of its fiscal years such financial and other
information regarding the Corporation as is required by the bylaws of the
Corporation and applicable law to be furnished in an annual report to the
stockholders of the Corporation
7. Effectiveness of Plan; Expiration
---------------------------------
Subject to approval by the stockholders of the Corporation, this Plan shall
be deemed effective as of the date it is adopted by the Board. The Plan shall
expire on April 30, 2002, but such expiration shall not affect the validity of
outstanding Options.
8. Amendment and Termination of the Plan
-------------------------------------
The Board may, insofar as permitted by law, from time to time, with respect
to any shares at the time not subject to Options, suspend or terminate the Plan
or revise or amend it in any respect whatsoever, except that without the
approval of the stockholders of the Corporation, no such revision or amendment
shall (i) increase the number of shares subject to the Plan, (ii) decrease the
price at which Options may be granted, (iii) materially increase the benefits to
Optionees, or (iv) change the class of persons eligible to receive Options under
this Plan; provided, however, no such action shall alter or impair the rights
and obligations under any Option outstanding as of the date thereof without the
written consent of the Optionee thereunder. No Option may be granted while the
Plan is suspended or after it is terminated, but the rights and obligations
under any Option granted while the Plan is in effect shall not be impaired by
suspension or termination of the Plan.
7
<PAGE>
9. Indemnification of Board
------------------------
In addition to such other rights or indemnifications as they may have as
directors or otherwise, and to the extent allowed by applicable law, the members
of the Board and the Committee shall be indemnified by the Corporation against
the reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any claim, action, suit or
proceeding, or in connection with any appeal thereof, to which they or any of
them may be a party by reason of any action taken, or failure to act, under or
in connection with the Plan or any Option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Corporation) or paid by them in
satisfaction of a judgment in any such claim, action, suit or proceeding, except
in any case in relation to matters as to which it shall be adjudged in such
claim, action, suit or proceeding that such Board member is liable for
negligence or misconduct in the performance of his or her duties; provided that
within sixty (60) days after institution of any such action, suit or Board
proceeding the member involved shall offer the Corporation, in writing, the
opportunity, at its own expense, to handle and defend the same.
10. Application of Funds
--------------------
The proceeds received by the Corporation from the sale of Stock pursuant to
the exercise of Options will be used for general corporate purposes.
11. No Obligation to Exercise Option
--------------------------------
The granting of an Option shall impose no obligation upon the Optionee to
exercise such Option.
12. Notices
-------
All notice, requests, demands, and other communications pursuant this Plan
shall be in writing and shall be deemed to have been duly given on the date of
service if served personally on the party to whom notice is to be given, or on
the third day following the mailing thereof to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid.
* * * * *
The foregoing 1992 Incentive and Nonstatutory Stock Option Plan (the
"Plan") was duly adopted and approved by the Board of Directors of NetVantage, a
California corporation and the Corporation's predecessor, on June 15, 1992, and
approved by the shareholders of NetVantage on June 30, 1992. The Plan was
assumed by the Corporation in connection with a duly approved merger of
NetVantage into the Corporation on December 12, 1994. The foregoing Plan has
been restated to generally reflect the terms and conditions of the merger.
/s/ THOMAS G. IWANSKI
____________________________________
Thomas G. Iwanski, Secretary
8
<PAGE>
[LETTERHEAD OF HELLER EHRMAN WHITE & McAULIFFE]
EXHIBIT 5
---------
October 24, 1997
23057-0001
NetVantage, Inc.
201 Continental Boulevard
Suite 201
El Segundo, California 90245
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to NetVantage, Inc., a Delaware corporation
(the "Company"), in connection with the Registration Statement on Form S-8 (the
"Registration Statement") which the Company proposes to file on or about October
24, 1997, for the purpose of registering under the Securities Act of 1933, as
amended, an aggregate of 200,000 shares of the Company's Class A Common Stock,
$.001 par value per share, 200,000 shares of the Company's Class B Common Stock,
$.001 par value per share, and 66,667 shares of Class E Common Stock, $.001 par
value per share (collectively, the "Shares"). The Shares are issuable upon
exercise of options granted or to be granted under the Company's 1992 Incentive
and Nonstatutory Stock Option Plan (the "Plan").
We have assumed the authenticity of all records, documents and
instruments submitted to us as originals, the genuineness of all signatures,
the legal capacity of natural persons and the conformity to the originals of all
records, documents and instruments submitted to us as copies. We have based our
opinion upon our review of the following records, documents, instruments and
certificates and such additional certificates relating to factual matters as we
have deemed necessary or appropriate for our opinion:
(a) The Restated Certificate of Incorporation, as amended, of the
Company certified by the Secretary of State of the State of
Delaware as of October 22, 1997, and certified to us by an
officer of the Company as being complete and in full force and
effect as of the date of this opinion;
(b) The Bylaws of the Company certified to us by an officer of the
Company as being complete and in full force and effect as of the
date of this opinion;
<PAGE>
NetVantage, Inc.
October 24, 1997
Page 2
(c) A Certificate of the Chief Financial Officer of the Company (i)
attaching records certified to us as constituting all records of
proceedings and actions of the Board of Directors of the Company
and the Board of Directors and shareholders of the Company's
predecessor relating to the adoption of the Plan, and (ii)
certifying as to certain other factual matters;
(d) The Registration Statement;
(e) The Plan;
(f) A letter from Continental Stock Transfer & Trust, the Company's
transfer agent, dated October 23, 1997 as to the number of
shares of Class A and Class B Common Stock of the Company
outstanding as of October 21, 1997; and
(g) A letter from Wilshire Escrow Company, the escrow holder of the
Company's Class E Common Stock, dated October 24, 1997 as to the
number of shares of Class E Common Stock of the Company in escrow
as of October 24, 1997.
This opinion is limited to the Delaware General Corporation Law
(without review of the rules, regulations or case law application to such
statute) and we disclaim any opinion as to the laws of any other jurisdiction.
We further disclaim any opinion as to any statute, rule, regulation, ordinance,
order or other promulgation of any regional or local governmental body or as to
any related judicial or administrative opinion.
Based upon the foregoing and our examination of such questions of law
as we have deemed necessary or appropriate for the purpose of this opinion, and
assuming that (i) the Registration Statement becomes and remains effective
during the period when the Shares are offered and issued, (ii) appropriate
certificates evidencing the Shares will be executed and delivered upon issuance
of the Shares, (iii) the full consideration stated in the Plan is paid for each
Share, and (iv) all applicable securities laws are complied with, it is our
opinion that when issued by the Company, after payment therefor in the manner
provided in the Plan, the Shares will be legally issued, fully paid and
nonassessable.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon
by you for any other purpose, or relied upon by any other person, firm,
corporation or other entity without our prior written consent. We disclaim any
obligation to advise you of any change of law that occurs, or any facts of which
we become aware, after the date of this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
HELLER EHRMAN WHITE & McAULIFFE
<PAGE>
EXHIBIT 23.2
------------
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated March 31, 1997 appearing on page 15 of
the NetVantage, Inc. Annual Report on Form 10-K for the year ended December 31,
1996.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Costa Mesa, California
October 22, 1997
