<PAGE>
As filed with the Securities and Exchange Commission on June 16, 1998
Registration No. 333-_____
========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------
HELLO DIRECT, INC.
(Exact name of Registrant as specified in its charter)
--------------
DELAWARE 94-3043208
- - ----------------------- --------------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
5893 Rue Ferrari
San Jose, California 95138
(Address, including zip code, of Registrant's principal executive offices)
--------------
1995 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
--------------
Raymond E. Nystrom
Vice President of Operations and
Chief Financial Officer
Hello Direct, Inc.
5893 Rue Ferrari
San Jose, California 95138
(408) 972-1990
(Name, address, and telephone number, including area code, of agent for service)
--------------
Copy to:
BARRY E. TAYLOR, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(415) 493-9300
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CALCULATION OF REGISTRATION FEE
========================================================================
Proposed
Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities to to be Price Offering Registration
be Registered Registered Per Share Price Fee
- - ----------------------------------------------------------------------
Common Stock, $0.001
par value to be
issued under
1995 Employee
Stock Purchase
Plan....... 150,000 shares $5.00703125(1) $751,054.69 $222.00
========================================================================
(1) Computed in accordance with Rule 457 under the Securities
Act of 1933, as amended for purposes of calculating the registration fee on
the basis of 85% of the average of the high and low prices of Hello Direct,
Inc. Common Stock on the Nasdaq National Market on June 12, 1998.
========================================================================
<PAGE>
HELLO DIRECT, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
There are hereby incorporated by reference in this Registration
Statement the following documents and information heretofore filed by Hello
Direct, Inc.(the "Company") with the Securities and Exchange Commission (the
"Commission"):
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 filed pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 filed pursuant to Section 13 of the Exchange Act.
(3) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on February 7,
1995 pursuant to Section 12(g) of the Exchange Act, and declared
effective on April 6, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act on or after the date of this Registration
Statement and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be part hereof from the date
of filing of such documents.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
The Company's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a company will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except
for liability (i) for any breach of their duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments or dividends or unlawful stock repurchases or redemptions
as provided in Section 174 of Delaware General Corporation Law or (iv) for
transactions from which the director derived an improper personal benefit.
<PAGE>
The Company's Bylaws provide that the Company shall indemnify its
officers and directors and may indemnify its employees and other agents to
the fullest extent provided by Delaware law, including those circumstances
where indemnification would otherwise be discretionary under Delaware law.
The Company believes that indemnification under its Bylaws covers at least
negligence on the part of indemnified parties.
In addition, the Company has entered into contractual agreements (the
"Agreements ") with each director and certain officers of the Company
designated by the Board, to indemnify such individuals to the full extent
permitted by law.
The Company carries officer and director liability insurance with
respect to certain matters, including matters arising under the Securities
Act of 1933, as amended (the "Securities Act").
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
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Exhibit
Number Description
------- --------------------------------------------------------
4.1 1995 Employee Stock Purchase Plan and related agreements.
5.1 Opinion of counsel as to legality of securities being
registered.
23.1 Consent of counsel (contained in Exhibit 5.1).
23.2 Consent of Independent Auditors.
24.1 Power of Attorney (see 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 to
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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-2
<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, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in 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 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Jose, State of California,
on June 16, 1998.
HELLO DIRECT, INC.
By: /s/ Raymond E. Nystrom
__________________________
Raymond E. Nystrom
Vice President of Operations
and Chief Financial Officer
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints E. Alexander Glover and Raymond E.
Nystrom and each of them, as his attorney-in-fact, with full power of
substitution in each, for him in any and all capacities to sign any amendments
to this Registration Statement on Form S-8, 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 attorney-in-fact, or his 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 below by the following persons in
their capacities on June 16, 1998.
Signature Capacity
- -------------------------- -----------------------------------
/s/ E. Alexander Glover President, Chief Executive Officer
- ------------------------- and Director (Principal Executive
(E. Alexander Glover) Officer)
/s/ Raymond E. Nystrom Vice President of Operations and
- ------------------------- Chief Financial Officer
(Raymond E. Nystrom) (Principal Financial and Accounting
Officer)
/s/ John B. Mumford Chairman of the Board
- -------------------------
(John B. Mumford)
/s/ John W. Combs Director
- -------------------------
(John W. Combs)
/s/ Deepak Kamra Director
- -------------------------
(Deepak Kamra)
/s/ William P. Sousa Director
- -------------------------
(William P. Sousa)
II-5
<PAGE>
<PAGE>
Exhibit 4.1
HELLO DIRECT, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1995 Employee
Stock Purchase Plan of Hello Direct, Inc.
1. Purpose. The purpose of the Plan is to provide employees
of the Company and its Designated Subsidiaries with an opportunity to
purchase Common Stock of the Company through accumulated payroll
deductions. It is the intention of the Company to have the Plan
qualify as an "Employee Stock Purchase Plan" under Section 423 of the
Internal Revenue Code of 1986, as amended. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation
in a manner consistent with the requirements of that section of the
Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(c) "Common Stock" shall mean the Common Stock of the
Company.
(d) "Company" shall mean Hello Direct, Inc. and any
Designated Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time
gross earnings, including commissions, but exclusive of payments for
overtime, shift premium, incentive compensation, incentive payments,
bonuses, and other compensation.
(f) "Designated Subsidiaries" shall mean the Subsidiaries
which have been designated by the Board from time to time in its sole
discretion as eligible to participate in the Plan.
(g) "Employee" shall mean any individual who is an
Employee of the Company for tax purposes whose customary employment
with the Company is at least twenty (20) hours per week and more than
five (5) months in any calendar year. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed either by statute
or by contract, the employment relationship will be deemed to have
terminated on the 91st day of such leave.
(h) "Enrollment Date" shall mean the first day of each
Offering Period.
(i) "Exercise Date" shall mean the last day of each
Offering Period.
(j) "Fair Market Value" shall mean, as of any date, the
value of Common Stock determined as follows:
(1) If the Common Stock is listed on any estab-
lished stock exchange or a national market system, including without
limitation the Nasdaq National Market of the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, its
Fair Market Value shall be the closing sale price for the Common Stock
(or the mean of the closing bid and asked prices, if no sales were
reported), as quoted on such exchange (or the exchange with the
greatest volume of trading in Common Stock) or system on the date of
such determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable, or;
(2) If the Common Stock is quoted on the NASDAQ
System (but not on the Nasdaq National Market thereof) or is regularly
quoted by a recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean of the closing bid
and asked prices for the Common Stock on the date of such
determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable, or;
(3) In the case of the first Offering Period, the
Fair Market Value may be determined by the Board to be the initial
price to the public of shares of Common Stock in the Company's initial
public offering.
(4) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.
(k) "Offering Period" shall mean the period of approxi-
mately six (6) months, commencing on the first Trading Day on or after
March 1 and terminating on the last Trading Day in the period ending
the following August 31, or commencing on the first Trading Day on or
after September 1 and terminating on the last Trading Day in the period
ending the following February 28 (February 29 in leap years) of each
year, during which an option granted pursuant to the Plan may be
exercised. The first Offering Period shall begin on the effective date
of the Company's initial public offering of its Common Stock that is
registered with the Securities and Exchange Commission and shall end on
the last Trading Day on or before August 31, 1995. The duration and
timing of Offering Periods may be changed pursuant to Section 4 of this
Plan.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Purchase Price" shall mean an amount equal to 85% of
the Fair Market Value of a share of Common Stock on the Enrollment Date
or on the Exercise Date, whichever is lower.
(n) "Reserves" shall mean the number of shares of Common
Stock covered by each option under the Plan which have not yet been
exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but not yet placed under option.
(o) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by
the Company or a Subsidiary, whether or not such corporation now exists
or is hereafter organized or acquired by the Company or a Subsidiary.
(p) "Trading Day" shall mean a day on which national
stock exchanges and the Nasdaq System are open for trading.
3. Eligibility.
(a) Any Employee (as defined in Section 2(g)), who shall
be employed by the Company on a given Enrollment Date shall be eligible
to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwith-
standing, no Employee shall be granted an option under the Plan (i) if,
immediately after the grant, such Employee (or any other person whose
stock would be attributed to such Employee pursuant to Section 424(d)
of the Code) would own capital stock of the Company and/or hold
outstanding options to purchase such stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of
the capital stock of the Company or of any Subsidiary, or (ii) which
permits his or her rights to purchase stock under all employee stock
purchase plans of the Company and its subsidiaries to accrue at a rate
which exceeds twenty-five thousand dollars ($25,000) worth of stock
(determined at the fair market value of the shares at the time such
option is granted) for each calendar year in which such option is
outstanding at any time.
4. Offering Periods. The Plan shall be implemented by
consecutive Offering Periods with a new Offering Period commencing on
the first Trading Day on or after March 1 and September 1 each year, or
on such other date as the Board shall determine, and continuing
thereafter until terminated in accordance with Section 19 hereof. The
Board shall have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future
offerings without shareholder approval if such change is announced at
least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.
5. Participation.
(a) An eligible Employee may become a participant in the
Plan by completing a subscription agreement authorizing payroll deduc-
tions in the form of Exhibit A to this Plan and filing it with the
Company's payroll office prior to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence
on the first payroll following the Enrollment Date and shall end on the
last payroll in the Offering Period to which such authorization is
applicable, unless sooner terminated by the participant as provided in
Section 10 hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her subscrip-
tion agreement, he or she shall elect to have payroll deductions made
on each pay day during the Offering Period in an amount not exceeding
fifteen percent (15%) of the Compensation which he or she receives on
each pay day during the Offering Period, and the aggregate of such
payroll deductions during the Offering Period shall not exceed fifteen
percent (15%) of the participant's Compensation during said Offering
Period.
(b) All payroll deductions made for a participant shall
be credited to his or her account under the Plan and will be withheld
in whole percentages only. A participant may not make any additional
payments into such account.
(c) A participant may discontinue his or her participa-
tion in the Plan as provided in Section 10 hereof, or may increase or
decrease the rate of his or her payroll deductions during the Offering
Period by completing or filing with the Company a new subscription
agreement authorizing a change in payroll deduction rate. The Board
may, in its discretion, limit the number of participation rate changes
during any Offering Period. The change in rate shall be effective with
the first full payroll period following five (5) business days after
the Company's receipt of the new subscription agreement unless the
Company elects to process a given change in participation more quickly.
A participant's subscription agreement shall remain in effect for
successive Offering Periods unless terminated as provided in Section 10
hereof.
(d) Notwithstanding the foregoing, to the extent
necessary to comply with Section 423(b)(8) of the Code and Section 3(b)
hereof, a participant's payroll deductions may be decreased to 0% at
such time during any Offering Period which is scheduled to end during
the current calendar year (the "Current Offering Period") that the
aggregate of all payroll deductions which were previously used to
purchase stock under the Plan in a prior Offering Period which ended
during that calendar year plus all payroll deductions accumulated with
respect to the Current Offering Period equal $21,250. Payroll
deductions shall recommence at the rate provided in such participant's
subscription agreement at the beginning of the first Offering Period
which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued
under the Plan is disposed of, the participant must make adequate
provision for the Company's federal, state, or other tax withholding
obligations, if any, which arise upon the exercise of the option or the
disposition of the Common Stock. At any time, the Company may, but
will not be obligated to, withhold from the participant's compensation
the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to
the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering
Period, each eligible Employee participating in such Offering Period
shall be granted an option to purchase on each Exercise Date during
such Offering Period (at the applicable Purchase Price) up to a number
of shares of the Company's Common Stock determined by dividing such
Employee's payroll deductions accumulated prior to such Exercise Date
and retained in the Participant's account as of the Exercise Date by
the applicable Purchase Price; provided that in no event shall an
Employee be permitted to purchase during each Offering Period more than
a number of Shares determined by dividing $25,000 by the Fair Market
Value of a share of the Company's Common Stock on the Enrollment Date,
and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. Exercise of the
option shall occur as provided in Section 8 hereof, unless the
participant has withdrawn pursuant to Section 10 hereof, and shall
expire on the last day of the Offering Period.
8. Exercise of Option. Unless a participant withdraws from
the Plan as provided in Section 10 hereof, his or her option for the
purchase of shares will be exercised automatically on the Exercise
Date, and the maximum number of full shares subject to option shall be
purchased for such participant at the applicable Purchase Price with
the accumulated payroll deductions in his or her account. No
fractional shares will be purchased; any payroll deductions accumulated
in a participant's account which are not sufficient to purchase a full
share shall be retained in the participant's account for the subsequent
Offering Period or Offering Period, subject to earlier withdrawal by
the participant as provided in Section 10 hereof. Any other monies
left over in a participant's account after the Exercise Date shall be
returned to the participant. During a participant's lifetime, a
participant's option to purchase shares hereunder is exercisable only
by him or her.
9. Delivery. As promptly as practicable after each Exercise
Date on which a purchase of shares occurs, the shares shall be credited
to an account in the participant's name with a brokerage firm selected
by the Board to hold the shares in its street name.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all
the payroll deductions credited to his or her account and not yet used
to exercise his or her option under the Plan at any time by giving
written notice to the Company in the form of Exhibit B to this Plan.
All of the participant's payroll deductions credited to his or her
account will be paid to such participant promptly after receipt of
notice of withdrawal and such participant's option for the Offering
Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made for such Offering
Period. If a participant withdraws from an Offering Period, payroll
deductions will not resume at the beginning of the succeeding Offering
Period unless the participant delivers to the Company a new
subscription agreement.
(b) Upon a participant's ceasing to be an Employee (as
defined in Section 2(g) hereof), for any reason, he or she will be
deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the Offering
Period but not yet used to exercise the option will be returned to such
participant or, in the case of his or her death, to the person or
persons entitled thereto under Section 14 hereof, and such
participant's option will be automatically terminated. The preceding
sentence notwithstanding, a participant who receives payment in lieu of
notice of termination of employment shall be treated as continuing to
be an Employee for the participant's customary number of hours per week
of employment during the period in which the participant is subject to
such payment in lieu of notice.
11. Interest. No interest shall accrue on the payroll
deductions of a participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common
Stock which shall be made available for sale under the Plan shall be
one hundred and fifty-five thousand (155,000) shares, subject to
adjustment upon changes in capitalization of the Company as provided in
Section 18 hereof. If, on a given Exercise Date, the number of shares
with respect to which options are to be exercised exceeds the number of
shares then available under the Plan, the Company shall make a pro rata
allocation of the shares remaining available for purchase in as uniform
a manner as shall be practicable and as it shall determine to be
equitable.
(b) The participant will have no interest or voting right
in shares covered by his option until such option has been exercised.
13. Administration.
(a) Administrative Body. The Plan shall be administered
by the Board or a committee of members of the Board appointed by the
Board. The Board or its committee shall have full and exclusive
discretionary authority to construe, interpret and apply the terms of
the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan. Every finding, decision and determination
made by the Board or its committee shall, to the full extent permitted
by law, be final and binding upon all parties.
(b) Rule 16b-3 Limitations. Notwithstanding the provis-
ions of Subsection (a) of this Section 13, in the event that Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor provision ("Rule 16b-3") provides
specific requirements for the administrators of plans of this type, the
Plan shall be only administered by such a body and in such a manner as
shall comply with the applicable requirements of Rule 16b-3. Unless
permitted by Rule 16b-3, no discretion concerning decisions regarding
the Plan shall be afforded to any committee or person that is not
"disinterested" as that term is used in Rule 16b-3.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's
death subsequent to an Exercise Date on which the option is exercised
but prior to delivery to such participant of such shares and cash. In
addition, a participant may file a written designation of a beneficiary
who is to receive any cash from the participant's account under the
Plan in the event of such participant's death prior to exercise of the
option. If a participant is married and the designated beneficiary is
not the spouse, spousal consent shall be required for such designation
to be effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death
of a participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such participant's death,
the Company shall deliver such shares and/or cash to the executor or
administrator of the estate of the participant, or if no such executor
or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to
the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an
option or to receive shares under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by
will, the laws of descent and distribution or as provided in Section 14
hereof) by the participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds from an
Offering Period in accordance with Section 10 hereof.
16. Use of Funds. All payroll deductions received or held by
the Company under the Plan may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such
payroll deductions.
17. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to
participating Employees at least annually, which statements will set
forth the amounts of payroll deductions, the Purchase Price, the number
of shares purchased and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization or Change of
Control.
(a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the Reserves as well as the
price per share of Common Stock covered by each option under the Plan
which has not yet been exercised shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration".
Such adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an
option.
(b) Change in Control. In the event of a "Change in
Control" of the Company, as defined in paragraph (c) below, then the
following provisions shall apply:
(1) Any Option outstanding on the date of
such Change in Control ("Outstanding Option") that is not yet
exercisable and vested on such date (in accordance with Section 4
above) shall become fully exercisable and vested;
(2) Each Outstanding Option shall be assumed
by the successor corporation (if any) or by a Parent or Subsidiary of
the successor corporation (if any);
(3) Each Outstanding Option shall remain
exercisable by the Optionee for a period of at least ninety (90) days
from the date of the Change in Control;
(4) Each Optionee with an Outstanding Option
shall be provided with written notice of the period of exercisability
provided for in subsection (b)(iii) above promptly after the date of
the Change in Control by the Company or by the entity surviving after
the Change in Control.
(c) Definition of "Change in Control". For purposes of
this Section 10, a "Change in Control" means the happening of any of
the following:
(1) when any "person" or "group" of persons,
as such terms are used in Sections 13(d) and 14(d) of the Exchange Act
(other than the Company, a Subsidiary or a Company employee benefit
plan, including any trustee of such plan acting as trustee) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power
of the Company's then outstanding securities entitled to vote generally
in the election of directors; provided that "person" shall not include
any person (or any person acting as a group) which, as of the date of
the adoption of this 1995 Director Option Plan, is the "beneficial
owner" of securities of the Company representing more than fifty
percent (50%) of the combined voting power of the Company's outstanding
securities entitled to vote generally in the election of directors; or
(2) a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; or
(3) the shareholders of the Company approve
an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets; or
(4) a change in the composition of the Board
occurring as a result of any one meeting of the shareholders of the
Company, as a result of which fewer than a majority of the Directors
are Incumbent Directors. "Incumbent Directors" shall mean Directors
who either are (A) Directors as of the date the Plan is approved by the
shareholders, or (B) elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not
include an individual who is not otherwise an Incumbent Director whose
election or nomination is in connection with an actual or threatened
proxy contest relating to the election of Directors to the Company).
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any time
and for any reason terminate or amend the Plan. Except as provided in
Section 18 hereof, no such termination can affect options previously
granted, provided that an Offering Period may be terminated by the
Board of Directors on any Exercise Date if the Board determines that
the termination of the Plan is in the best interests of the Company and
its shareholders. Except as provided in Section 18 hereof, no
amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent
necessary to comply with Rule 16b-3 or under Section 423 of the Code
(or any successor rule or provision or any other applicable law or
regulation), the Company shall obtain shareholder approval in such a
manner and to such a degree as required.
(b) Without shareholder consent and without regard to
whether any participant rights may be considered to have been
"adversely affected," the Board (or its committee) shall be entitled to
change the Offering Periods, limit the frequency and/or number of
changes in the amount withheld during an Offering Period, establish the
exchange ratio applicable to amounts withheld in a currency other than
U.S. dollars, permit payroll withholding in excess of the amount
designated by a participant in order to adjust for delays or mistakes
in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or
accounting and crediting procedures to ensure that amounts applied
toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant's Compensation,
and establish such other limitations or procedures as the Board (or its
committee) determines in its sole discretion advisable which are
consistent with the Plan.
20. Notices. All notices or other communications by a partici-
pant to the Company under or in connection with the Plan shall be
deemed to have been duly given when received in the form specified by
the Company at the location, or by the person, designated by the
Company for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to an option unless the exercise of such option and
the issuance and delivery of such shares pursuant thereto shall comply
with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon
which the shares may then be listed, and shall be further subject to
the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company
may require the person exercising such option to represent and warrant
at the time of any such exercise that the shares are being purchased
only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned
applicable provisions of law.
22. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its
approval by the shareholders of the Company. It shall continue in
effect for a term of ten (10) years unless sooner terminated under
Section 19 hereof.
EXHIBIT A
HELLO DIRECT, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. hereby elects to
participate in the Hello Direct, Inc. 1995 Employee Stock
Purchase Plan (the "Employee Stock Purchase Plan") and subscribes
to purchase shares of the Company's Common Stock in accordance
with this Subscription Agreement and the Employee Stock Purchase
Plan.
2. I hereby authorize payroll deductions from each paycheck in the
amount of ____% of my Compensation on each payday (1-15%) during
the Offering Period in accordance with the Employee Stock
Purchase Plan. (Please note that no fractional percentages are
permitted.)
3. I understand that said payroll deductions shall be accumulated
for the purchase of shares of Common Stock at the applicable
Purchase Price determined in accordance with the Employee Stock
Purchase Plan. I understand that if I do not withdraw from an
Offering Period, any accumulated payroll deductions will be used
to automatically exercise my option.
4. I have received a copy of the complete "Hello Direct, Inc. 1995
Employee Stock Purchase Plan." I understand that my par-
ticipation in the Employee Stock Purchase Plan is in all respects
subject to the terms of the Plan. I understand that my ability
to exercise the option under this Subscription Agreement is
subject to obtaining shareholder approval of the Employee Stock
Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan
should be issued in the name(s) of (Employee or Employee and
spouse only):
6. I understand that if I dispose of any shares received by me
pursuant to the Plan within 2 years after the Enrollment Date
(the first day of the Offering Period during which I purchased
such shares) or one year after the Exercise Date, I will be
treated for federal income tax purposes as having received
ordinary income at the time of such disposition in an amount
equal to the excess of the fair market value of the shares at the
time such shares were purchased over the price which I paid for
the shares. I hereby agree to notify the Company in writing
within 30 days after the date of any disposition of my shares and
I will make adequate provision for Federal, state or other tax
withholding obligations, if any, which arise upon the disposition
of the Common Stock. The Company may, but will not be obligated
to, withhold from my compensation the amount necessary to meet
any applicable withholding obligation including any withholding
necessary to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Common
Stock by me. If I dispose of such shares at any time after the
expiration of the 2-year and 1-year holding periods, I understand
that I will be treated for federal income tax purposes as having
received income only at the time of such disposition, and that
such income will be taxed as ordinary income only to the extent
of an amount equal to the lesser of (1) the excess of the fair
market value of the shares at the time of such disposition over
the purchase price which I paid for the shares, or (2) 15% of the
fair market value of the shares on the first day of the Offering
Period. The remainder of the gain, if any, recognized on such
disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock
Purchase Plan. The effectiveness of this Subscription Agreement
is dependent upon my eligibility to participate in the Employee
Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under
the Employee Stock Purchase Plan:
NAME: (Please print)______________________________________________
(First) (Middle) (Last)
_______________________________
Relationship
_______________________________
(Address)
Employee's Social
Security Number: ___________________________________
Employee's Address: ___________________________________
___________________________________
___________________________________
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT
THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:_________________________ ___________________________________
Signature of Employee
___________________________________
Spouse's Signature (If beneficiary
other than spouse)
EXHIBIT B
HELLO DIRECT, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of
the Hello Direct, Inc. 1995 Employee Stock Purchase Plan which
began on ____________, 19____ (the "Enrollment Date") hereby
notifies the Company that he or she hereby withdraws from the
Offering Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll
deductions credited to his or her account with respect to such
Offering Period. The undersigned understands and agrees that
his or her option for such Offering Period will be
automatically terminated. The undersigned understands further
that no further payroll deductions will be made for the
purchase of shares in the current Offering Period and the
undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new
Subscription Agreement.
Name and Address of
Participant:
________________________________
________________________________
________________________________
Signature:_______________________
Date:____________________________
<PAGE>
EXHIBIT 5.1
-----------
June 16, 1998
Hello Direct, Inc.
5893 Rue Ferrari
San Jose, California 95138
Re: Registration Statement on Form S-8
Gentlemen:
We have examined the Registration Statement on Form S-8 to be
filed by you with the Securities and Exchange Commission on or about
June 16, 1998 (the "Registration Statement"), in connection with the
registration under the Securities Act of 1933, as amended, of 150,000
shares of your Common Stock (the "Shares") which are to be issued
pursuant to the 1995 Employee Stock Purchase Plan (the "ESPP"). As
your legal counsel, we have examined the proceedings taken and are
familiar with the proceedings proposed to be taken by you in
connection with the sale and issuance of the Shares under the ESPP
and pursuant to the agreements which accompany the ESPP (the
"Agreements").
It is our opinion that, when issued and sold in the manner
referred to in the Plans and pursuant to the Agreements, the Shares
will be legally and validly issued, fully-paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name
wherever appearing in the Registration Statement, including any
Prospectus constituting a part thereof, and any amendments thereto.
Sincerely yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
<PAGE>
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to incorporation by reference in the registration
statement on Form S-8 of Hello Direct, Inc. of our report dated
January 26, 1998, relating to the balance sheets of Hello Direct,
Inc. as of December 31, 1997 and 1996, and the related statements of
operations, stockholders' equity, and cash flows for each of the
years in three-year period ended December 31, 1997, and the related
schedule, which report appears in the December 31, 1997, annual
report on Form 10-K of Hello Direct, Inc.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Mountain View, California
June 11, 1998
