<PAGE>
As filed with the Securities and Exchange Commission on May 22, 1996
REGISTRATION NO. 33 -
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
---------------
NUMBER NINE VISUAL TECHNOLOGY CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 04-2821358
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
18 HARTWELL AVENUE
LEXINGTON, MASSACHUSETTS 02173
(617) 674-0009
(Address of Principal Executive Offices)
NUMBER NINE VISUAL TECHNOLOGY CORPORATION 1996 EMPLOYEE,
DIRECTOR AND CONSULTANT STOCK OPTION PLAN
(Full title of the plan)
ANDREW NAJDA, PRESIDENT AND CHIEF EXECUTIVE OFFICER
NUMBER NINE VISUAL TECHNOLOGY CORPORATION
18 Hartwell Avenue
Lexington, Massachusetts 02173
(617) 674-0009
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
Proposed Proposed
maximum maximum
Title of Amount to be offering price aggregate Amount of
securities to be registered registered/(1)/ per share/(2)/ offering price/(2)/ registration fee
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 575,000 $6.6875 $3,845,313 $1,325.87
325,000 $6.625 $2,153,125 $ 742.40
------- ---------- ---------
900,000 $5,998,438 $2,068.27
===========================================================================================================
</TABLE>
(1) The number of shares of common stock, par value $.01 per share ("Common
Stock"), stated above consists of the aggregate number of shares which may
be sold upon the exercise of options which have been granted and/or may
hereafter be granted under the Number Nine Visual Technology Corporation
1996 Employee, Director and Consultant Stock Option Plan. The maximum
number of shares which may be sold upon the exercise of such options
granted under the Plans is subject to adjustment in accordance with certain
anti-dilution and other provisions of said Plan. Accordingly, pursuant to
Rule 416 under the Securities Act of 1933, as amended (the "Securities
Act"), this Registration Statement covers, in addition to the number of
shares stated above, an indeterminate number of shares which may be subject
to grant or otherwise issuable after the operation of any such anti-
dilution and other provisions.
(2) This calculation is made solely for the purpose of determining the
registration fee pursuant to the provisions of Rule 457(h) under the
Securities Act as follows: (i) in the case of shares of Common Stock for
which options have not yet been granted and the option price of which is
therefore unknown, the fee is calculated on the basis of the average of the
high and low sale prices per share of the Common Stock in the National
Market of the Nasdaq Stock Market, Inc. as of a date (May 15, 1996) within
5 business days prior to filing this Registration Statement; and (ii) in
the case of shares of Common Stock which may be purchased upon exercise of
outstanding options, the fee is calculated on the basis of the price at
which the options may be exercised.
===============================================================================
<PAGE>
EXPLANATORY NOTE
----------------
In accordance with the instructional Note to Part I of Form S-8 as
promulgated by the Securities and Exchange Commission, the information specified
by Part I of Form S-8 has been omitted from this Registration Statement on Form
S-8 for offers of Common Stock pursuant to the Plan.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT............ II-1
SIGNATURES.............................................................. II-4
INDEX TO EXHIBITS FILED WITH FORM S-8 REGISTRATION STATEMENT............ II-6
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
- ---------------------------------------------------------
The following documents filed by the Registrant with the Commission
are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 30, 1995, as amended by Amendment No. 1 on Form 10-K/A.
(b) The description of the Common Stock contained in the Registrant's
Registration Statement on Form 8-A (File No. 0-25898) filed under the Securities
Exchange Act of 1934, including any amendment or report filed for the purpose of
updating such description.
All reports and other documents filed by the Registrant after the date
hereof pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of filing of such reports
and documents.
Item 4. Description of Securities.
- -----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- ------------------------------------------------
The validity of the issuance of the shares of Common Stock registered
under this Registration Statement has been passed upon for the Company by Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. of Boston, Massachusetts. Attorneys
at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. own an aggregate of
approximately 1,500 shares of Common Stock of the Company.
Item 6. Indemnification of Directors and Officers.
- ---------------------------------------------------
Incorporated herein by reference from the Registrant's Registration
Statement on Form S-1 (File No. 33-91002).
Item 7. Exemption from Registration Claimed.
- ---------------------------------------------
Not applicable.
Item 8. Exhibits.
- ------------------
(4.1) Form of Common Stock Certificate (Filed as Exhibit 4.2 to
Registration Statement on Form S-1, as amended, File No. 33-
91002, and incorporated herein by reference).
(4.2) Article Fourth of Restated Certificate of Incorporation
(Filed as Exhibit 3.2 to the Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1995, and incorporated herein
by reference).
(4.3) Restated By-Laws (Filed as Exhibit 3.4 to Registration
Statement on Form S-1, as amended, File No. 33-91002, and
incorporated herein by reference).
II-1
<PAGE>
(5) Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
as to the legality of shares being registered.
(10.1) Number Nine Visual Technology Corporation 1996 Employee,
Director and Consultant Stock Option Plan.
(23.1) Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C. (included in opinion of counsel filed as Exhibit 5).
(23.2) Consent of Coopers & Lybrand L.L.P.
(24) Power of Attorney to file future amendments (set forth on the
signature page of this Registration Statement).
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, represents 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 this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(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 that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
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
II-2
<PAGE>
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-3
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
--------------
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, on May 22, 1996.
NUMBER NINE VISUAL TECHNOLOGY
CORPORATION
By: /s/ Andrew Najda
-------------------------------
ANDREW NAJDA
CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD
Each person whose signature appears below constitutes and appoints
Andrew Najda and Daniel W. Muehl, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
in each of them, for him and in his name, place and stead, and in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-8 of Number Nine Visual Technology
Corporation, and to file the same, with all exhibits thereto and other 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 or necessary
to be done in or about the premises, as full 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 hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON MAY 22, 1996.
Signature Title
--------- -----
/s/ Andrew Najda Chief Executive Officer (principal
- ----------------------------- executive officer) and
Andrew Najda Chairman of the Board
/s/ Daniel W. Muehl Acting Chief Financial Officer
- ----------------------------- and Controller (principal
Daniel W. Muehl financial and accounting
officer)
/s/ Stanley W. Bialek Director
- -----------------------------
Stanley W. Bialek
/s/ Gill Cogan Director
- -----------------------------
Gill Cogan
II-4
<PAGE>
/s/ Paul R. Low Director
- -----------------------------
Dr. Paul R. Low
/s/ Fouad H. Nader Director
- -----------------------------
Dr. Fouad H. Nader
/s/ William H. Thalheimer Director
- -----------------------------
William H. Thalheimer
II-5
<PAGE>
NUMBER NINE VISUAL TECHNOLOGY CORPORATION
INDEX TO EXHIBITS FILED WITH
FORM S-8 REGISTRATION STATEMENT
Exhibit
Number Description
- ------- -----------
(4.1) Form of Common Stock Certificate (Filed as Exhibit 4.2 to
Registration Statement on Form S-1, as amended, File No.
33-91002, and incorporated herein by reference).
(4.2) Article Fourth of Restated Certificate of Incorporation (Filed
as Exhibit 3.2 to the Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1995, and incorporated herein by
reference).
(4.3) Restated By-Laws (Filed as Exhibit 3.4 to Registration Statement
on Form S-1, as amended, File No. 33-91002, and incorporated
herein by reference).
(5) Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
as to the legality of shares being registered.
(10.1) Number Nine Visual Technology Corporation 1996 Employee,
Director and Consultant Stock Option Plan.
(23.1) Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(included in opinion of counsel filed as Exhibit 5).
(23.2) Consent of Coopers & Lybrand L.L.P.
(24) Power of Attorney to file future amendments (set forth on the
signature page of this Registration Statement).
<PAGE>
EXHIBIT 5
[LETTERHEAD OF MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.]
May 22, 1996
Number Nine Visual Technology Corporation
18 Hartwell Avenue
Lexington, Massachusetts 02173
Gentlemen:
We have acted as counsel to Number Nine Visual Technology Corporation,
a Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission of a Registration Statement
on Form S-8 (the "Registration Statement"), pursuant to which the Company is
registering under the Securities Act of 1933, as amended, the issuance of a
total of 900,000 shares (the "Shares") of its common stock, $.01 par value per
share (the "Common Stock"). This opinion is being rendered in connection with
the filing of the Registration Statement. All capitalized terms used herein and
not otherwise defined shall have the respective meanings given to them in the
Registration Statement.
In connection with this opinion, we have examined the Company's
Restated Certificate of Incorporation and Restated By-Laws, both as currently in
effect; such other records of the corporate proceedings of the Company and
certificates of the Company's officers as we have deemed relevant; and the
Registration Statement and the exhibits thereto.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon the foregoing, we are of the opinion that (i) the Shares
have been duly and validly authorized by the Company and (ii) the Shares, when
sold and paid for, will have been duly and validly issued, fully paid and non-
assessable shares of the Common Stock, free of preemptive rights.
<PAGE>
Our opinion is limited to the General Corporation Laws of the State of
Delaware, and we express no opinion with respect to the laws of any other
jurisdiction. No opinion is expressed herein with respect to the qualification
of the Shares under the securities or blue sky laws of any state or any foreign
jurisdiction.
We understand that you wish to file this opinion as an exhibit to the
Registration Statement, and we hereby consent thereto. We hereby further consent
to all references to us in the Registration Statement.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY AND POPEO, P.C.
<PAGE>
EXHIBIT 10.1
NUMBER NINE VISUAL TECHNOLOGY CORPORATION
1996 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
1. DEFINITIONS.
-----------
Unless otherwise specified or unless the context otherwise requires,
the following terms, as used in this Number Nine Visual Technology
Corporation 1996 Employee, Director and Consultant Stock Option Plan,
have the following meanings:
Administrator means the Board of Directors, unless it has
-------------
delegated power to act on its behalf to a committee. See
Paragraph 4.
Affiliate means a corporation which, for purposes of Section
---------
424 of the Code, is a parent or subsidiary of the Company,
direct or indirect.
Board of Directors means the Board of Directors of the Company.
------------------
Code means the United States Internal Revenue Code of 1986, as
----
amended.
Committee means the Committee to which the Board of Directors
---------
has delegated power to act under or pursuant to the provisions
of the Plan.
Common Stock means shares of the Company's Common Stock, $.01
------------
par value, or shares of any other class of capital stock of the
Company for or into which the Company's Common Stock is
exchanged or re-classified.
Company means Number Nine Visual Technology Corporation, a
-------
Delaware corporation.
Disability or Disabled means permanent and total disability as
---------- --------
defined in Section 22(e)(3) of the Code.
Fair Market Value of a Share of Common Stock means:
-----------------
(1) If the Common Stock is listed on a national securities
exchange or traded in the over-the-counter market and sales
prices are regularly reported for the Common Stock, either (a)
the average of the closing or last prices of the Common Stock
on the Composite Tape or other comparable reporting system for
the ten (10) consecutive trading days immediately preceding the
applicable date or (b) the closing or last price of the Common
Stock on the Composite Tape or other comparable reporting
system for the trading day immediately preceding the applicable
date, as the Administrator shall determine.
(2) If the Common Stock is not traded on a national securities
exchange but is traded on the over-the-counter market, if sales
prices are not regularly reported for the Common Stock for the
trading days or day referred to in clause (1), and if bid and
asked prices for the Common Stock are regularly reported,
either (a) the average of the mean between the bid and the
asked price for the Common Stock at the close of trading in the
over-the-counter market for the ten (10) trading days on which
Common Stock was traded immediately preceding the applicable
date or (b) the mean between the bid and the asked price for
the Common Stock at the close of trading in the over-the-
counter market for the trading day on which Common Stock was
traded immediately preceding the applicable date, as the
Administrator shall determine; and
(3) If the Common Stock is neither listed on a national
securities exchange nor traded in the over-the-counter market,
such value as the Administrator, in good faith, shall
determine.
<PAGE>
ISO means an option meant to qualify as an incentive stock
---
option under Code Section 422.
Key Employee means an employee of the Company or of an
------------
Affiliate (including, without limitation, an employee who is
also serving as an officer or director of the Company or of an
Affiliate), designated by the Administrator to be eligible to
be granted one or more Options under the Plan.
Non-Qualified Option means an option which is not intended to
--------------------
qualify as an ISO.
Option means an ISO or Non-Qualified Option granted under the
------
Plan.
Option Agreement means an agreement between the Company and a
----------------
Participant delivered pursuant to the Plan.
Participant means a Key Employee, director or consultant to
-----------
whom one or more Options are granted under the Plan. As used
herein, "Participant" shall include "Participant's Survivors"
where the context requires.
Participant's Survivors means a deceased Participant's legal
-----------------------
representatives and/or any person or persons who acquired the
Participant's rights to an Option by will or by the laws of
descent and distribution.
Plan means this Number Nine Visual Technology Corporation 1996
----
Employee, Director and Consultant Stock Option Plan.
Shares means shares of the Common Stock as to which Options
------
have been or may be granted under the Plan or any shares of
capital stock into which the Shares are changed or for which
they are exchanged within the provisions of Paragraph 3 of the
Plan. The Shares issued upon exercise of Options granted under
the Plan may be authorized and unissued shares or shares held
by the Company in its treasury, or both.
2. PURPOSES OF THE PLAN.
--------------------
The Plan is intended to encourage ownership of Shares by Key
Employees, directors and certain consultants to the Company in order to attract
such people, to induce them to work for the benefit of the Company or of an
Affiliate and to provide additional incentive for them to promote the success of
the Company or of an Affiliate. The Plan provides for the issuance of ISOs and
Non-Qualified Options.
3. SHARES SUBJECT TO THE PLAN.
--------------------------
The number of Shares subject to this Plan as to which Options may be
granted from time to time shall be 900,000, or the equivalent of such number of
Shares after the Administrator, in its sole discretion, has interpreted the
effect of any stock split, stock dividend, combination, recapitalization or
similar transaction in accordance with Paragraph 16 of the Plan.
If an Option ceases to be "outstanding", in whole or in part, the
Shares which were subject to such Option shall be available for the granting of
other Options under the Plan. Any Option shall be treated as "outstanding" until
such Option is exercised in full, or terminates or expires under the provisions
of the Plan, or by agreement of the parties to the pertinent Option Agreement.
<PAGE>
4. ADMINISTRATION OF THE PLAN.
--------------------------
The Administrator of the Plan will be the Board of Directors, except
to the extent the Board of Directors delegates its authority to a Committee of
the Board of Directors. Subject to the provisions of the Plan, the Administrator
is authorized to:
a. Interpret the provisions of the Plan or of any Option or Option
Agreement and to make all rules and determinations which it deems
necessary or advisable for the administration of the Plan;
b. Determine which employees of the Company or of an Affiliate shall
be designated as Key Employees and which of the Key Employees,
directors and consultants shall be granted Options;
c. Determine the number of Shares for which an Option or Options
shall be granted; and
d. Specify the terms and conditions upon which an Option or Options
may be granted;
provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Code Section 422 of those Options which are designated as ISOs.
Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option granted under it
shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is other than the Board of Directors.
5. ELIGIBILITY FOR PARTICIPATION.
-----------------------------
The Administrator will, in its sole discretion, name the Participants
in the Plan, provided, however, that each Participant must be a Key Employee,
director or consultant of the Company or of an Affiliate at the time an Option
is granted. Notwithstanding any of the foregoing provisions, the Administrator
may authorize the grant of an Option to a person not then an employee, director
or consultant of the Company or of an Affiliate. The actual grant of such
Option, however, shall be conditioned upon such person becoming eligible to
become a Participant at or prior to the time of the execution of the Option
Agreement evidencing such Option. ISOs may be granted only to Key Employees.
Non-Qualified Options may be granted to any Key Employee, director or consultant
of the Company or an Affiliate. The granting of any Option to any individual
shall neither entitle that individual to, nor disqualify him or her from,
participation in any other grant of Options.
6. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------
Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such conditions as the Administrator may deem appropriate
including, without limitation, subsequent approval by the stockholders of the
Company of this Plan or any amendments thereto. The Option Agreements shall be
subject to at least the following terms and conditions:
A. Non-Qualified Options: Each Option intended to be a Non-
---------------------
Qualified Option shall be subject to the terms and conditions
which the Administrator determines to be appropriate and in the
best interest of the Company, subject to the following minimum
standards for any such Non-Qualified Option:
a. Option Price: The option price (per share) of the Shares
covered by each Option shall be determined by the
Administrator but shall not be less than the Fair Market
Value per share of Common Stock;
b. Each Option Agreement shall state the number of Shares to
which it pertains;
<PAGE>
c. Each Option Agreement shall state the date or dates on which
it first is exercisable and the date after which it may no
longer be exercised, and may provide that the Option rights
accrue or become exercisable in installments over a period
of months or years, or upon the occurrence of certain
conditions or the attainment of stated goals or events; and
d. Exercise of any Option may be conditioned upon the
Participant's execution of a Share purchase agreement in
form satisfactory to the Administrator providing for certain
protection for the Company and its other stockholders
including requirements that:
i. The Participant's or the Participant's Survivors' right
to sell or transfer the Shares may be restricted; and
ii. The Participant or the Participant's Survivors may be
required to execute letters of investment intent and
must also acknowledge that the Shares will bear legends
noting any applicable restrictions.
B. ISOs: Each Option intended to be an ISO shall be issued only
----
to a Key Employee and be subject to at least the following terms
and conditions, with such additional restrictions or changes as
the Administrator determines are appropriate but not in conflict
with Code Section 422 and relevant regulations and rulings of the
Internal Revenue Service:
a. Minimum standards: The ISO shall meet the minimum standards
required of Non-Qualified Options, as described above,
except clause (a) thereunder.
b. Option Price: Immediately before the Option is granted, if
the Participant owns, directly or by reason of the
applicable attribution rules in Code Section 424(d):
i. Ten percent (10%) or less of the total combined
-------
voting power of all classes of share capital of the
Company or an Affiliate, the Option price per share of
the Shares covered by each Option shall not be less
than one hundred percent (100%) of the Fair Market
Value per share of the Shares on the date of the grant
of the Option;
ii. More than ten percent (10%) of the total combined
voting power of all classes of share capital of the
Company or an Affiliate, the Option price per share of
the Shares covered by each Option shall not be less
than one hundred ten percent (110%) of the said Fair
Market Value on the date of grant.
c. Term of Option: For Participants who own:
i. Ten percent (10%) or less of the total combined
-------
voting power of all classes of share capital of the
Company or an Affiliate, each Option shall terminate
not more than ten (10) years from the date of the grant
or at such earlier time as the Option Agreement may
provide;
ii. More than ten percent (10%) of the total combined
voting power of all classes of share capital of the
Company or an Affiliate, each Option shall terminate
not more than five (5) years from the date of the grant
or at such earlier time as the Option Agreement may
provide.
d. Limitation on Yearly Exercise: The Option Agreements shall
restrict the amount of Options which may be exercisable in
any calendar year (under this or any other ISO plan of the
Company or an Affiliate) so that the aggregate Fair Market
Value (determined at the time each ISO is granted) of the
stock with respect to which ISOs are exercisable for the
first time by the Participant in any calendar year does not
exceed one hundred thousand dollars ($100,000),
<PAGE>
provided that this subparagraph (d) shall have no force or
effect if its inclusion in the Plan is not necessary for
Options issued as ISOs to qualify as ISOs pursuant to
Section 422(d) of the Code.
e. Limitation on Grant of ISOs: No ISOs shall be granted after
May 14, 2006, the date which is ten (10) years following the
date of the adoption of the Plan by the Company.
7. EXERCISE OF OPTION AND ISSUE OF SHARES.
--------------------------------------
An Option (or any part or installment thereof) shall be exercised by
giving written notice to the Company at its principal office address, together
with provision for payment of the full purchase price in accordance with this
Paragraph for the Shares as to which such Option is being exercised, and upon
compliance with any other condition(s) set forth in the Option Agreement. Such
written notice shall be signed by the person exercising the Option, shall state
the number of Shares with respect to which the Option is being exercised and
shall contain any representation required by the Plan or the Option Agreement.
Payment of the purchase price for the Shares as to which such Option is being
exercised shall be made (a) in United States dollars in cash or by check, or (b)
at the discretion of the Administrator, through delivery of shares of Common
Stock having a fair market value equal as of the date of the exercise to the
cash exercise price of the Option, determined in good faith by the
Administrator, or (c) at the discretion of the Administrator, by delivery of the
grantee's personal recourse note bearing interest payable not less than annually
at no less than 100% of the applicable federal rate, as defined in Section
1274(d) of the Code, or (d) at the discretion of the Administrator, in
accordance with a cashless exercise program established with a securities
brokerage firm, and approved by the Administrator or (e) at the discretion of
the Administrator, by any combination of (a), (b), (c) and (d) above.
Notwithstanding the foregoing, the Administrator shall accept only such payment
on exercise of an ISO as is permitted by Section 422 of the Code.
The Company shall then reasonably promptly deliver the Shares as to
which such Option was exercised to the Participant (or to the Participant's
Survivors, as the case may be). In determining what constitutes "reasonably
promptly," it is expressly understood that the delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation which
requires the Company to take any action with respect to the Shares prior to
their issuance. The Shares shall, upon delivery, be evidenced by an appropriate
certificate or certificates for fully paid, non-assessable Shares.
The Administrator shall have the right to accelerate the date of
exercise of any installment of any Option; provided that the Administrator shall
not accelerate the exercise date of any installment of any Option granted to any
Key Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 19) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph
6.B.d.
The Administrator may, in its discretion, amend any term or condition
of an outstanding Option provided (i) such term or condition as amended is
permitted by the Plan, (ii) any such amendment shall be made only with the
consent of the Participant to whom the Option was granted or in the event of the
death of the Participant, the Participant's Survivors, if the amendment is
adverse to the Participant, and (iii) any such amendment of any ISO shall be
made only after the Administrator, after consulting the counsel for the Company,
determines whether such amendment would constitute a "modification" of any
Option which is an ISO (as that term is defined in Section 424(h) of the Code)
or would cause any adverse tax consequences for the holders of such ISO.
<PAGE>
8. RIGHTS AS A STOCKHOLDER.
-----------------------
No Participant to whom an Option has been granted shall have rights as
a stockholder with respect to any Shares covered by such Option, except after
due exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of the Participant.
9. ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS.
--------------------------------------------
By its terms, an Option granted to a Participant shall not be
transferable by the Participant other than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act or the rules
thereunder, provided, however, that the designation of a beneficiary of an
Option by a Participant shall not be deemed a transfer prohibited by this
Paragraph. Except as provided in the preceding sentence, an Option shall be
exercisable, during the Participant's lifetime, only by such Participant (or by
his or her legal representative) and shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of any Option or of any
rights granted thereunder contrary to the provisions of this Plan, or the levy
of any attachment or similar process upon an Option, shall be null and void.
10. EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE".
-------------------------------------------------------
Except as otherwise provided in the pertinent Option Agreement, in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised all Options, the following rules apply:
a. A Participant who ceases to be an employee, director or
consultant of the Company or of an Affiliate (for any reason
other than termination "for cause", Disability, or death for
which events there are special rules in Paragraphs 11, 12, and
13, respectively), may exercise any Option granted to him or her
to the extent that the Option is exercisable on the date of such
termination of service, but only within such term as the
Administrator has designated in the pertinent Option Agreement.
b. In no event may an Option Agreement provide, if the Option is
intended to be an ISO, that the time for exercise be later than
three (3) months after the Participant's termination of
employment.
c. The provisions of this Paragraph, and not the provisions of
Paragraph 12 or 13, shall apply to a Participant who subsequently
becomes disabled or dies after the termination of employment,
director status or consultancy, provided, however, in the case of
a Participant's death within three (3) months after the
termination of employment, director status or consulting, the
Participant's Survivors may exercise the Option within one (1)
year after the date of the Participant's death, but in no event
after the date of expiration of the term of the Option.
d. Notwithstanding anything herein to the contrary, if subsequent to
a Participant's termination of employment, termination of
director status or termination of consultancy, but prior to the
exercise of an Option, the Board of Directors determines that,
either prior or subsequent to the Participant's termination, the
Participant engaged in conduct which would constitute "cause",
then such Participant shall forthwith cease to have any right to
exercise any Option.
e. A Participant to whom an Option has been granted under the Plan
who is absent from work with the Company or with an Affiliate
because of temporary disability (any disability other than a
permanent and total Disability), or who is on leave of absence
for any purpose, shall not, during the period of any such
absence, be deemed, by virtue of such absence alone, to have
terminated such Participant's employment,
<PAGE>
director status or consultancy with the Company or with an
Affiliate, except as the Administrator may otherwise expressly
provide.
f. Options granted under the Plan shall not be affected by any
change of employment or other service within or among the Company
and any Affiliates, so long as the Participant continues to be an
employee, director or consultant of the Company or any Affiliate,
provided, however, if a Participant's employment by either the
Company or an Affiliate should cease (other than to become an
employee of an Affiliate or the Company), such termination shall
affect the Participant's rights under any Option granted to such
Participant in accordance with the terms of the Plan and the
pertinent Option Agreement.
11. EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".
--------------------------------------------
Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause" prior to the time that all of his or her outstanding Options have been
exercised:
a. All outstanding and unexercised Options as of the date the
Participant is notified his or her service is terminated "for
cause" will immediately be forfeited, unless the Option Agreement
provides otherwise.
b. For purposes of this Paragraph, "cause" shall include (and is not
limited to) dishonesty with respect to the employer,
insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, and conduct
substantially prejudicial to the business of the Company or any
Affiliate. The determination of the Administrator as to the
existence of cause will be conclusive on the Participant and the
Company.
c. "Cause" is not limited to events which have occurred prior to a
Participant's termination of service, nor is it necessary that
the Administrator's finding of "cause" occur prior to
termination. If the Administrator determines, subsequent to a
Participant's termination of service but prior to the exercise of
an Option, that either prior or subsequent to the Participant's
termination the Participant engaged in conduct which would
constitute "cause", then the right to exercise any Option is
forfeited.
d. Any definition in an agreement between the Participant and the
Company or an Affiliate, which contains a conflicting definition
of "cause" for termination and which is in effect at the time of
such termination, shall supersede the definition in this Plan
with respect to such Participant.
12. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.
-----------------------------------------------
Except as otherwise provided in the pertinent Option Agreement, a
Participant who ceases to be an employee, director or consultant of the Company
or of an Affiliate by reason of Disability may exercise any Option granted to
such Participant:
a. To the extent exercisable but not exercised on the date of
Disability; and
b. In the event rights to exercise the Option accrue periodically,
to the extent of a pro rata portion of any additional rights as
would have accrued had the Participant not become Disabled prior
to the end of the accrual period which next ends following the
date of Disability. The proration shall be based upon the number
of days of such accrual period prior to the date of Disability.
A Disabled Participant may exercise such rights only within a period
of not more than one (1) year after the date that the Participant became
Disabled, notwithstanding that the Participant might have been able to exercise
the Option as to some or all of the Shares on a later date if he or she had not
become disabled and had continued to be an employee, director or consultant or,
if earlier, within the originally prescribed term of the Option.
<PAGE>
The Administrator shall make the determination both of whether
Disability has occurred and the date of its occurrence (unless a procedure for
such determination is set forth in another agreement between the Company and
such Participant, in which case such procedure shall be used for such
determination). If requested, the Participant shall be examined by a physician
selected or approved by the Administrator, the cost of which examination shall
be paid for by the Company.
13. EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
---------------------------------------------------------
Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant to whom an Option has been granted while the
Participant is an employee, director or consultant of the Company or of an
Affiliate, such Option may be exercised by the Participant's Survivors:
a. To the extent exercisable but not exercised on the date of death;
and
b. In the event rights to exercise the Option accrue periodically,
to the extent of a pro rata portion of any additional rights
which would have accrued had the Participant not died prior to
the end of the accrual period which next ends following the date
of death. The proration shall be based upon the number of days of
such accrual period prior to the Participant's death.
If the Participant's Survivors wish to exercise the Option, they must
take all necessary steps to exercise the Option within one (1) year after the
date of death of such Participant, notwithstanding that the decedent might have
been able to exercise the Option as to some or all of the Shares on a later date
if he or she had not died and had continued to be an employee, director or
consultant or, if earlier, within the originally prescribed term of the Option.
14. PURCHASE FOR INVESTMENT.
-----------------------
Unless the offering and sale of the Shares to be issued upon the
particular exercise of an Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended (the "1933
Act"), the Company shall be under no obligation to issue the Shares covered by
such exercise unless and until the following conditions have been fulfilled:
a. The person(s) who exercise such Option shall warrant to the
Company, prior to the receipt of such Shares, that such person(s)
are acquiring such Shares for their own respective accounts, for
investment, and not with a view to, or for sale in connection
with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions
of the following legend which shall be endorsed upon the
certificate(s) evidencing their Shares issued pursuant to such
exercise or such grant:
"The shares represented by this certificate have been taken
for investment and they may not be sold or otherwise
transferred by any person, including a pledgee, unless (1)
either (a) a Registration Statement with respect to such
shares shall be effective under the Securities Act of 1933,
as amended, or (b) the Company shall have received an
opinion of counsel satisfactory to it that an exemption from
registration under such Act is then available, and (2) there
shall have been compliance with all applicable state
securities laws.
b. The Company shall have received an opinion of its counsel that
the Shares may be issued upon such particular exercise in
compliance with the 1933 Act without registration thereunder.
The Company may delay issuance of the Shares until completion of any
action or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).
15. DISSOLUTION OR LIQUIDATION OF THE COMPANY.
-----------------------------------------
<PAGE>
Upon the dissolution or liquidation of the Company, all Options
granted under this Plan which as of such date shall not have been exercised will
terminate and become null and void; provided, however, that if the rights of a
Participant or a Participant's Survivors have not otherwise terminated and
expired, the Participant or the Participant's Survivors will have the right
immediately prior to such dissolution or liquidation to exercise any Option to
the extent that the Option is exercisable as of the date immediately prior to
such dissolution or liquidation.
16. ADJUSTMENTS.
-----------
Upon the occurrence of any of the following events, a Participant's
rights with respect to any Option granted to him or her hereunder which have not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the written agreement between the
Participant and the Company relating to such Option:
A. Stock Dividends and Stock Splits. If the shares of Common Stock
--------------------------------
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of such Option shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
B. Consolidations or Mergers. If the Company is to be consolidated
-------------------------
with or acquired by another entity in a merger, sale of all or substantially all
of the Company's assets or otherwise (an "Acquisition"), the Administrator or
the board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board"), shall, as to outstanding Options, either (i)
make appropriate provision for the continuation of such Options by substituting
on an equitable basis for the Shares then subject to such Options either the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition or securities of any successor or acquiring
entity; or (ii) upon written notice to the Participants, provide that all
Options must be exercised (either to the extent then exercisable or, at the
discretion of the Administrator, all Options being made fully exercisable for
purposes of this subparagraph B), within a specified number of days of the date
of such notice, at the end of which period the Options shall terminate; or (iii)
terminate all Options in exchange for a cash payment equal to the excess of the
Fair Market Value of the shares subject to such Options (either to the extent
then exercisable or, at the discretion of the Administrator, all Options being
made fully exercisable for purposes of this subparagraph B) over the exercise
price thereof.
C. Recapitalization or Reorganization. In the event of a
----------------------------------
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph B above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, a Participant upon exercising an Option shall be entitled to
receive for the purchase price paid upon such exercise the securities he or she
would have received if he or she had exercised such Option prior to such
recapitalization or reorganization.
D. Modification of ISOs. Notwithstanding the foregoing, any
--------------------
adjustments made pursuant to subparagraph A, B or C with respect to ISOs shall
be made only after the Administrator, after consulting with counsel for the
Company, determines whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 424(h) of the Code) or would
cause any adverse tax consequences for the holders of such ISOs. If the
Administrator determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making such
adjustments, unless the holder of an ISO specifically requests in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such "modification" on his or her income tax
treatment with respect to the ISO.
17. ISSUANCES OF SECURITIES.
-----------------------
Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Options. Except as
expressly provided herein, no adjustments shall be made for dividends paid in
cash or in property (including without limitation, securities) of the Company.
<PAGE>
18. FRACTIONAL SHARES.
-----------------
No fractional share shall be issued under the Plan and the person
exercising such right shall receive from the Company cash in lieu of such
fractional share equal to the Fair Market Value thereof.
19. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS:
----------------------------------------------
TERMINATION OF ISOs.
-------------------
The Administrator, at the written request of any Participant, may in
its discretion take such actions as may be necessary to convert such
Participant's ISOs (or any portions thereof) that have not been exercised on the
date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the Participant is an employee of
the Company or an Affiliate at the time of such conversion. Such actions may
include, but not be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such Options. At the time of
such conversion, the Administrator (with the consent of the Participant) may
impose such conditions on the exercise of the resulting Non-Qualified Options as
the Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISO's converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such termination.
20. WITHHOLDING.
-----------
In the event that any federal, state, or local income taxes,
employment taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings
or other amounts are required by applicable law or governmental regulation to be
withheld from the Option holder's salary, wages or other remuneration in
connection with the exercise of an Option or a Disqualifying Disposition (as
defined in Paragraph 21), the Option holder shall advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the Option
holder, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock, is
authorized by the Administrator (and permitted by law). For purposes hereof, the
fair market value of the shares withheld for purposes of payroll withholding
shall be determined in the manner provided in Paragraph 1 above, as of the most
recent practicable date prior to the date of exercise. If the fair market value
of the shares withheld is less than the amount of payroll withholdings required,
the Option holder may be required to advance the difference in cash to the
Company or the Affiliate employer. The Administrator in its discretion may
condition the exercise of an Option for less than the then Fair Market Value on
the Participant's payment of such additional withholding.
21. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
----------------------------------------------
Each Key Employee who receives an ISO must agree to notify the Company
in writing immediately after the Key Employee makes a Disqualifying Disposition
of any shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired shares by exercising the
ISO. If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.
22. TERMINATION OF THE PLAN.
-----------------------
The Plan will terminate on May 14, 2006, the date which is ten (10)
years following the date of the adoption of the Plan by the Company. The Plan
may be terminated at an earlier date by vote of the stockholders of the Company;
<PAGE>
provided, however, that any such earlier termination will not affect any Options
granted or Option Agreements executed prior to the effective date of such
termination.
23. AMENDMENT OF THE PLAN AND AGREEMENTS.
------------------------------------
The Plan may be amended by the stockholders of the Company. The Plan
may also be amended by the Administrator, including, without limitation, to the
extent necessary to qualify any or all outstanding Options granted under the
Plan or Options to be granted under the Plan for favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code, and to the extent
necessary to qualify the shares issuable upon exercise of any outstanding
Options granted, or Options to be granted, under the Plan for listing on any
national securities exchange or quotation in any national automated quotation
system of securities dealers. Any amendment approved by the Administrator which
is of a scope that requires stockholder approval in order to ensure favorable
federal income tax treatment for any incentive stock options shall be subject to
obtaining such stockholder approval. Any modification or amendment of the Plan
shall not, without the consent of a Participant, adversely affect his or her
rights under an Option previously granted to him or her. With the consent of the
Participant affected, the Administrator may amend outstanding Option Agreements
in a manner which may be adverse to the Participant but which is not
inconsistent with the Plan. In the discretion of the Administrator, outstanding
Option Agreements may be amended by the Administrator in a manner which is not
adverse to the Participant.
<PAGE>
24. EMPLOYMENT OR OTHER RELATIONSHIP.
--------------------------------
Nothing in this Plan or any Option Agreement shall be deemed to
prevent the Company or an Affiliate from terminating the employment, consultancy
or director status of a Participant, nor to prevent a Participant from
terminating his or her own employment, consultancy or director status or to give
any Participant a right to be retained in employment or other service by the
Company or any Affiliate for any period of time.
25. GOVERNING LAW.
-------------
This Plan shall be construed and enforced in accordance with the laws
of the Commonwealth of Massachusetts.
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of Number Nine Visual Technology Corporation on Form S-8 of our report
dated February 6, 1996 on our audits of the consolidated financial statements of
Number Nine Visual Technology Corporation as of December 30, 1995 and December
31, 1994 and for each of the three years in the period ended December 30, 1995,
which report is included in the Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
May 22, 1996
