As filed with the Securities and Exchange Commission on January 15, 1999
Registration No. 333-___________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PREMISYS COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3153847
(State of incorporation) (I.R.S. employer
identification no.)
48664 Milmont Drive
Fremont, California 94538
(Address, including zip code, of principal executive offices)
1994 Stock Option Plan
(Full title of the plan)
John J. Hagedorn
Chief Financial Officer
Premisys Communications, Inc.
48664 Milmont Drive
Fremont, California 94538
(510) 353-7600
(Name, address and telephone number of agent for service)
Copies to:
William L. Hughes, Esq.
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California 94306
(650) 494-0600
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------
Amount Proposed Proposed Amount of
to be Maximum Maximum Registration
Title of Securities to be Registered Offering Aggregate Fee
Registered Price Per Offering Price
Share
- -----------------------------------------------------------------------------
Common Stock, $0.01 930,492(1) $ 10.50(2) $9,770,166(2) $ 2,716
par value
Common Stock, $0.01 329,508(1) $ 10.44(2) $3,440,064(2) $ 957
par value
- ------------------------------------------------------------------===========
- ------------------------------------------------------------------===========
(1)Additional shares registered pursuant to this Registration Statement as of
December 23, 1998 under the 1994 Stock Option Plan.
(2)Based on the average of the high and low prices of the Company's Common Stock
as reported on the Nasdaq National Market as of December 16, 1998 pursuant
to Rule 457(c) solely for the purpose of calculating the registration fee.
(3)Based on the exercise price of options granted from the shares being
registered pursuant to this Registration Statement under the 1994 Stock
Option Plan as of December 23, 1998 pursuant to Rule 457(h) solely for the
purpose of calculating the registration fee.
<PAGE>
PREMISYS COMMUNICATIONS, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended June 26, 1998 filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934 (the "Exchange Act"), which
Annual Report contains audited financial statements for the year
ended June 26, 1998.
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 25, 1998 filed pursuant to Section 13(a) of the
Exchange Act.
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed on March
14, 1995 with the Commission under Section 12(g) of the Exchange
Act, including any amendment or report filed for the purpose of
updating such description.
(d) The description of the Registrant's Preferred Stock Purchase
Rights contained in the Registrant's Registration Statement on
Form 8-A filed on September 22, 1998 with the Commission under
Section 12(g) of the Exchange Act, including any amendment or
report filed for the purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed incorporated by reference herein and to be a part hereof from the date
of the filing of such 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 offered
hereby will be passed upon for the Company by Fenwick & West LLP, Palo Alto,
California. Certain partners of Fenwick & West LLP own an aggregate of 6,000
shares of Common Stock of the Company.
Item 6. Indemnification of Directors and Officers.
As permitted by Section 145 of the Delaware General Corporation Law,
the Registrant's Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, the Bylaws of
the Registrant provide that: (i) the Registrant is required to indemnify its
directors and executive officers to the fullest extent permitted by the Delaware
General Corporation Law; (ii) the Registrant may, in its discretion, indemnify
other officers, employees and agents as set forth in the Delaware General
Corporation Law; (iii) upon receipt of an undertaking to repay such advances if
indemnification is determined to be unavailable, the Registrant is required to
advance expenses, as incurred, to its directors and executive officers to the
fullest extent permitted by the Delaware General Corporation Law in connection
with a proceeding (except if a determination is reasonably and promptly made by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to the proceeding or, in certain circumstances, by
independent legal counsel in a written opinion that the facts known to the
decision-making party demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation); (iv) the rights conferred
in the Bylaws are not exclusive and the Registrant is authorized to enter into
indemnification agreements with its directors, officers and employees and
agents; (v) the Registrant may not retroactively amend the Bylaw provisions
relating to indemnity; and (vi) to the fullest extent permitted by the Delaware
General Corporation Law, a director or executive officer will be deemed to have
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Registrant, and, with respect to any
criminal action or proceeding, to have had no reasonable cause to believe that
his or her conduct was unlawful, if his or her action is based on the records or
books of account of the corporation or on information supplied to him or her by
officers of the corporation in the course of their duties or on the advice of
legal counsel for the corporation or on information or records given or reports
made to the corporation by independent certified public accountants or
appraisers or other experts. This provision does not affect the availability of
equitable remedies such as injunctive relief or rescission. Further, such
limitation of liability also does not affect a director's responsibilities under
any other laws, including federal securities laws or state or federal
environmental laws.
The Registrant's policy is to enter into indemnity agreements with
each of its directors and executive officers. The indemnity agreements provide
that directors and executive officers will be indemnified and held harmless to
the fullest possible extent permitted by law including against all expenses
(including attorneys' fees), judgments, fines and settlement amounts paid or
reasonably incurred by them in any action, suit or proceeding, including any
derivative action by or in the right of the Registrant, on account of their
services as directors, officers, employees or agents of the Registrant or as
directors, officers, employees or agents of any other company or enterprise when
they are serving in such capacities at the request of the Registrant. The
Registrant will not be obligated pursuant to the agreements to indemnify or
advance expenses to an indemnified party with respect to proceedings or claims
(i) initiated by the indemnified party and not by way of defense, except with
respect to a proceeding authorized by the Board of Directors and successful
proceedings brought to enforce a right to indemnification under the Indemnity
Agreement; (ii) for any amounts paid in settlement of a proceeding unless the
Registrant consents to such settlement; (iii) on account of any suit in which
judgment is rendered against the indemnified party for an accounting of profits
made from the purchase or sale by the indemnified party of securities of the
Registrant pursuant to the provisions of 16(b) of the Securities Exchange Act of
1934 and related laws; (iv) on account of conduct by the indemnified party which
is finally adjudged to have been in bad faith; (v) on account of any criminal
action or proceeding arising out of conduct that the indemnified party had
reasonable cause to believe was unlawful; or (vi) if a final decision by a court
having jurisdiction in the matter shall determine that such indemnification is
not lawful.
The indemnity agreement requires a director or executive officer to
reimburse the Registrant for all expenses advanced only to the extent it is
ultimately determined that the director or executive officer is not entitled,
under Delaware law, the Bylaws, the indemnity agreement or otherwise to be
indemnified for such expenses. The indemnity agreement provides that it is not
exclusive of any rights a director or executive officer may have under the
Certificate of Incorporation, Bylaws, other agreements, any majority-in-interest
vote of the stockholders or vote of disinterested directors, the Delaware law or
otherwise.
The indemnification provision in the Bylaws, and the indemnity
agreements entered into between the Registrant and its directors and executive
officers, may be sufficiently broad to permit indemnification of the
Registrant's executive officers and directors for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act").
As authorized by the Registrant's Bylaws, the Registrant, with
approval by the Board, has purchased director and officer liability insurance.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits
4.01 Registrant's Amended and Restated Certificate of Incorporation
filed with the Secretary of State of Delaware on April 12, 1995.
(Incorporated herein by reference to Exhibit 3.01 of the
Registrant's Form 10-Q (No. 0-25684) for the Quarter ended March
31, 1995.)
4.02 Registrant's Certificate of Amendment to Registrant's Amended and
Restated Certificate of Incorporation filed with the Secretary of
State of Delaware on December 15, 1995. (Incorporated herein by
reference to Exhibit 3.05 of the Registrant's Form 10-Q (No.
0-25684) for the Quarter ended December 29, 1995 filed with the
SEC on February 12, 1996.)
4.03 Registrant's Bylaws, as amended and restated effective September
17, 1998. (Incorporated herein by reference to Exhibit 3.04 of
the Registrant's Registration Statement on Form 8-A (No. 0-25684)
filed with the Securities and Exchange Commission on
September 22, 1998.)
4.04 Registrant's 1994 Stock Option Plan, as amended, and related
documents.
4.05 Form of specimen certificate for Registrant's Common Stock.
(Incorporated herein by reference to Exhibit 4.01 of the
Registrant's Registration Statement on Form S-1 (No. 33-89598)
declared effective April 15, 1995.)
4.06 Investors' Rights Agreement, dated as of March 12, 1992, as
amended June 15, 1992, October 22, 1993, December 14, 1993,
February 18, 1994 and May 9, 1994 among Registrant and various
investors. (Incorporated herein by reference to Exhibit 4.02 of
the of the Registrant's Registration Statement on Form S-1 (No.
33-95266) filed August 1, 1995.)
4.07 Waiver Relating to and Amendment of Investors' Rights Agreement
dated as of July 24, 1995 among Registrant and various investors.
(Incorporated herein by reference to Exhibit 4.03 of the
Registrant's Registration Statement on Form S-1 (No. 33-95266)
filed August 1, 1995.)
4.08 Certificate of Designation specifying the rights, preferences and
privileges of the Series A Junior Participating Preferred Stock
of Registrant. (Incorporated herein by reference to Exhibit 3.03
of the Registrant's Registration Statement on Form 8-A (No.
0-25684) filed with the Securities and Exchange Commission on
September 22, 1998.)
4.09 Form of specimen of Right Certificate. (Incorporated herein by
reference to Exhibit B to Exhibit 4.04 of the Registrant's
Registration Statement on Form 8-A (No. 0-25684) filed with the
Securities and Exchange Commission on September 22, 1998.)
4.10 Rights Agreement dated September 18, 1998, between the Registrant
and Chase Mellon Shareholder Services L.L.C. as Rights Agent,
which includes as Exhibit A the form of Certificate of
Designations of Series A Junior Participating Preferred Stock, as
Exhibit B the Form of Right Certificate and as Exhibit C the
Summary of Rights to Purchase Preferred Shares. (Incorporated by
reference to Exhibit 4.04 of the Registrant's Registration
Statement on Form 8-A (No. 0-25684) filed with the Securities and
Exchange Commission on September 22, 1998.)
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
24.01 Power of Attorney (see page 8).
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statements;
(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 (1)(i) and (1)(ii) above do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference 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.
(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.
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.
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 provisions discussed in Item 6 hereof, 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 hereby, 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.
[The rest of this page has been intentionally left blank.]
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Fremont, State of California, on the 15th day of
January, 1999.
PREMISYS COMMUNICATIONS, INC.
By: /s/ John Hagedorn
John Hagedorn
Senior Vice President, Finance and Administration,
Chief Financial Officer and Secretary
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints Nicholas J. Williams and John Hagedorn,
and each of them, his true and lawful attorneys-in-fact and agents with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-8, and to file the same with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or it might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or his or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
Principal Executive Officer:
/s/ Nicholas J. Williams Chief Executive Officer January 15, 1999
Nicholas J. Williams and a Director
Principal Financial Officer:
/s/ John Hagedorn Senior Vice President, Finance and January 15, 1999
John Hagedorn Administration, Chief Financial
Officer and Secretary
Principal Accounting Officer:
/s/ Robert W. Dilfer Vice President and Controller January 15, 1999
Robert W. Dilfer
<PAGE>
Additional Directors:
/s/ Boris J. Auerbuch Director January 15, 1999
Boris J. Auerbuch
/s/ Lip-Bu Tan Director January 15, 1999
Lip-Bu Tan
/s/ Marino R. Polestra Director January 15, 1999
Marino R. Polestra
/s/ Edward A. Keible, Jr. Director January 15, 1999
Edward A. Keible, Jr.
/s/ Raymond C. Lin Director January 15, 1999
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Raymond C. Lin
<PAGE>
Exhibit Index
Exhibit No. Description
4.01 Registrant's Amended and Restated Certificate of Incorporation filed
with the Secretary of State of Delaware on April 12, 1995. (Incorporated
herein by reference to Exhibit 3.01 of the Registrant's Form 10-Q (No.
0-25684) for the Quarter ended March 31, 1995.)
4.02 Registrant's Certificate of Amendment to Registrant's Amended and
Restated Certificate of Incorporation filed with the Secretary of State
of Delaware on December 15, 1995. (Incorporated herein by reference to
Exhibit 3.05 of the Registrant's Form 10-Q (No. 0-25684) for the Quarter
ended December 29, 1995 filed with the SEC on February 12, 1996.)
4.03 Registrant's Bylaws, as amended and restated effective September 17,
1998. (Incorporated herein by reference to Exhibit 3.04 of the
Registrant's Registration Statement on Form 8-A (No. 0-25684) filed with
the Securities and Exchange
Commission on September 22, 1998.)
4.04 Registrant's 1994 Stock Option Plan, as amended, and related
documents.
4.05 Form of specimen certificate for Registrant's Common Stock.
(Incorporated herein by reference to Exhibit 4.01 of the Registrant's
Registration Statement on Form S-1 (No. 33-89598) declared effective
April 15, 1995.)
4.06 Investors' Rights Agreement, dated as of March 12, 1992, as amended June
15, 1992, October 22, 1993, December 14, 1993, February 18, 1994 and May
9, 1994 among Registrant and various investors. (Incorporated herein by
reference to Exhibit 4.02 of the of the Registrant's Registration
Statement on Form S-1 (No. 33-95266) filed August 1, 1995.)
4.07 Waiver Relating to and Amendment of Investors' Rights Agreement dated as
of July 24, 1995 among Registrant and various investors. (Incorporated
herein by reference to Exhibit 4.03 of the Registrant's Registration
Statement on Form S-1 (No. 33-95266) filed August 1, 1995.)
4.08 Certificate of Designation specifying the rights, preferences and
privileges of the Series A Junior Participating Preferred Stock of
Registrant. (Incorporated herein by reference to Exhibit 3.03 of the
Registrant's Registration Statement on Form 8-A (No. 0-25684) filed with
the Securities and Exchange Commission on September 22, 1998.)
4.09 Form of specimen of Right Certificate. (Incorporated herein by reference
to Exhibit B to Exhibit 4.04 of the Registrant's Registration Statement
on Form 8-A (No. 0-25684) filed with the Securities and Exchange
Commission on September 22, 1998.)
4.10 Rights Agreement dated September 18, 1998, between the Registrant and
Chase Mellon Shareholder Services L.L.C. as Rights Agent, which includes
as Exhibit A the form of Certificate of Designations of Series A Junior
Participating Preferred Stock, as Exhibit B the Form of Right
Certificate and as Exhibit C the Summary of Rights to Purchase Preferred
Shares. (Incorporated by reference to Exhibit 4.04 of the Registrant's
Registration Statement on Form 8-A (No. 0-25684) filed with the
Securities and Exchange Commission on September 22, 1998.)
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
24.01 Power of Attorney (see page 8).
<PAGE>
Exhibit 4.04
Registrant's 1994 Stock Option Plan, as amended, and related documents
<PAGE>
PREMISYS COMMUNICATIONS, INC.
1994 STOCK OPTION PLAN
As Adopted November 16, 1994
As Amended September 13, 1995
As Amended September 18, 1997
As Amended October 13, 1997
As Amended September 17, 1998
1. PURPOSE. This 1994 Stock Option Plan (this "Plan") is established
as a compensatory plan to attract, retain and provide equity incentives to
selected persons to promote the financial success of Premisys Communications,
Inc., a Delaware corporation, (the "Company"). Capitalized terms not previously
defined herein are defined in Section 21 of this Plan.
2. TYPES OF OPTIONS AND SHARES. Options granted under this Plan (the
"Options") may be either (a) incentive stock options ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Revenue
Code"), or (b) nonqualified stock options ("NQSOs"), as designated at the time
of grant. The shares of stock that may be purchased upon exercise of Options
granted under this Plan (the "Shares") are shares of the common stock of the
Company $0.01 par value per share.
3. NUMBER OF SHARES. The aggregate number of Shares that may be issued
pursuant to Options granted under this Plan is 6,460,000.* Shares, subject to
adjustment as provided in this Plan. If any Option expires or is terminated
without being exercised in whole or in part, the unexercised or released Shares
from such Options shall be available for future grant and purchase under this
Plan. At all times during the term of this Plan, the Company shall reserve and
keep available such number of Shares as shall be required to satisfy the
requirements of outstanding Options under this Plan.
4. ELIGIBILITY. Options may be granted to employees, officers,
directors, consultants and advisers (provided such consultants and advisers
render bona fide services not in connection with the offer and sale of
securities in a capital-raising transaction) of the Company or any Parent,
Subsidiary or Affiliate of the Company. ISOs may be granted only to employees
(including officers and directors who are also employees) of the Company or a
Parent or Subsidiary of the Company. The Committee (as defined in Section 16) in
its sole discretion shall select the recipients of Options ("Optionees"). An
Optionee may be granted more than one Option under this Plan. No Optionee shall
be eligible to receive more than 1,000,000** Shares at any time during the term
of this Plan pursuant to the grant of Options hereunder. The Company may also,
from time to time, assume outstanding options granted by another company,
whether in connection with an acquisition of such other company or otherwise, by
either (i) granting an Option under this Plan in replacement of the option
assumed by the Company, or (ii) treating the assumed option as if it had been
granted under this Plan if the terms of such assumed option could be applied to
an Option granted under this Plan. Such assumption shall be permissible if the
holder of the assumed option would have been eligible to be granted an Option
hereunder if the other company had applied the rules of this Plan to such grant.
__________________________
* On March 13, 1995 a one-for-four reverse split of the Company's
outstanding Common Stock (the "Reverse Split") was effected,
reducing the number of shares reserved for issuance under the Plan
to 1,000,000. On September 13, 1995, the Board approved an
increase in the number of shares reserved for issuance under the
Plan to 2,000,000, which increase was later approved by the
Company's stockholders. On December 12, 1995, a two-for-one stock
split in the form of a 100% stock dividend was paid to the
Company's stockholders of record as of November 22, 1995,
increasing the number of shares reserved for issuance under the
Plan to 4,000,000. On September 18, 1997, the Board approved an
increase in the number of shares reserved for issuance under the
Plan to 5,200,000, which increase was later approved by the
Company's stockholders. On September 17, 1998, the Board approved
an increase in the number of shares reserved for issuance under
the Plan to 6,460,000, which increase was later approved by the
Company's stockholders.
** Due to the one-for-four Reverse Split and the 100% Stock Dividend, the number
of shares an Optionee shall be eligible to receive is no more than 1,000,000.
____________________________________
5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine
whether each Option is to be an ISO or an NQSO, the number of Shares subject to
the Option, the exercise price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject to
the following:
(a) Form of Option Grant. Each Option granted under this Plan
shall be evidenced by a written Stock Option Grant (the "Grant") in such form
(which need not be the same for each Optionee) as the Committee shall from time
to time approve, which Grant shall comply with and be subject to the terms and
conditions of this Plan.
(b) Date of Grant. The date of grant of an Option shall be the
date on which the Committee makes the determination to grant such Option unless
otherwise specified by the Committee. The Grant representing the Option will be
delivered to each Optionee with a copy of this Plan within a reasonable time
after the granting of the Option.
(c) Exercise Price. The exercise price of an NQSO shall be not
less than 85% of the Fair Market Value of the Shares on the date the Option is
granted. The exercise price of an ISO shall be not less than 100% of the Fair
Market Value of the Shares on the date the Option is granted. The exercise price
of any Option granted to a person owning more than l0% of the total combined
voting power of all classes of stock of the Company or any Parent or Subsidiary
of the Company ("Ten Percent Stockholder") shall not be less than 110% of the
Fair Market Value of the Shares on the date the Option is granted.
Notwithstanding any section of this Plan, the exercise price of an Option shall
not be less than the par value of the Shares.
(d) Exercise Period. Options shall be exercisable within the
times or upon the events determined by the Committee as set forth in the Grant;
provided, however, that no Option shall be exercisable after the expiration of
ten (10) years from the date the Option is granted, and provided further that no
Option granted to a Ten Percent Stockholder shall be exercisable after the
expiration of five (5) years from the date the Option is granted. The Committee
also may provide for the exercise of Options to become exercisable at one time
or from time to time, periodically or otherwise, in such number or percentage as
the Committee determines.
(e) Limitations on ISOs. The aggregate Fair Market Value
(determined as of the time an Option is granted) of stock with respect to which
ISOs are exercisable for the first time by an Optionee during any calendar year
(under this Plan or under any other incentive stock option plan of the Company
or any Parent or Subsidiary of the Company) shall not exceed $100,000. If the
Fair Market Value of Shares with respect to which ISOs are exercisable for the
first time by an Optionee during any calendar year exceeds $100,000, the Options
for the first $100,000 worth of Shares to become exercisable in such year shall
be ISOs and the Options for the amount in excess of $100,000 that becomes
exercisable in that year shall be NQSOs. In the event that the Revenue Code or
the regulations promulgated thereunder are amended after the effective date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be incorporated
herein and shall apply to any Options granted after the effective date of such
amendment.
(f) Options Non-Transferable. Options granted under this Plan,
and any interest therein, shall not be transferable or assignable by Optionee,
and may not be made subject to execution, attachment or similar process,
otherwise than by will or by the laws of descent and distribution, or as
consistent with the specific Plan and Grant provisions relating thereto. During
the lifetime of the Optionee an Option shall be exercisable only by Optionee and
any elections with respect to an Option, may be made only by the Optionee.
(g) Assumed Options. In the event the Company assumes an option
granted by another company, the terms and conditions of such option shall remain
unchanged (except the exercise price and the number and nature of shares
issuable upon exercise, which will be adjusted appropriately pursuant to Section
424(c) of the Revenue Code). In the event the Company elects to grant a new
option rather than assuming an existing option (as specified in Section 4), such
new option need not be granted at Fair Market Value on the date of grant and may
instead be granted with a similarly adjusted exercise price.
6. EXERCISE OF OPTIONS.
(a) Notice. Options may be exercised only by delivery to the
Company of a written stock option exercise agreement (the "Exercise Agreement")
in a form approved by the Committee (which need not be the same for each
Optionee), stating the number of Shares being purchased, the restrictions
imposed on the Shares, if any, and such representations and agreements regarding
Optionee's investment intent and access to information, if any, as may be
required by the Company to comply with applicable securities laws, together with
payment in full of the exercise price for the number of Shares being purchased.
(b) Payment. Payment for the Shares may be made in cash (by
check) or, where approved by the Committee in its sole discretion at the time of
grant and where permitted by law: (i) by cancellation of indebtedness of the
Company to the Optionee; (ii) by surrender of shares of common stock of the
Company having a Fair Market Value equal to the applicable exercise price of the
Options, that have been owned by Optionee for more than six (6) months (and
which have been paid for within the meaning of the Securities and Exchange
Commission ("SEC") Rule 144 and, if such shares were purchased from the Company
by use of a promissory note, such note has been fully paid with respect to such
shares), or were obtained by Optionee in the open public market; (iii) by tender
of a full recourse promissory note having such terms as may be approved by the
Committee and bearing interest at a rate sufficient to avoid imputation of
income under Sections 483 and 1274 of the Revenue Code; provided, however, that
Optionees who are not employees of the Company shall not be entitled to purchase
Shares with a promissory note unless the note is adequately secured by
collateral other than the Shares; provided, further, that the portion of the
Purchase Price equal to the par value of the Shares must be paid in cash; (iv)
by waiver of compensation due or accrued to Optionee for services rendered; (v)
provided that a public market for the Company's stock exists, through a "same
day sale" commitment from Optionee and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD Dealer") whereby Optionee
irrevocably elects to exercise the Option and to sell a portion of the Shares so
purchased to pay for the exercise price and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the exercise price directly to
the Company; (vi) provided that a public market for the Company's stock exists,
through a "margin" commitment from Optionee and an NASD Dealer whereby Optionee
irrevocably elects to exercise the Option and to pledge the Shares so purchased
to the NASD Dealer in a margin account as security for a loan from the NASD
Dealer in the amount of the exercise price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; or (vii) by any combination of the foregoing. Optionees
who are not employees or directors of the Company shall not be entitled to
purchase Shares with a promissory note unless the note is adequately secured by
collateral other than the Shares.
(c) Withholding Taxes. Prior to issuance of the Shares upon
exercise of an Option, Optionee shall pay or make adequate provision for any
federal or state withholding obligations of the Company, if applicable. Where
approved by the Committee in its sole discretion, Optionee may provide for
payment of withholding taxes upon exercise of the Option by requesting that the
Company retain Shares with a Fair Market Value equal to the minimum amount of
taxes required to be withheld. In such case, the Company shall issue the net
number of Shares to Optionee by deducting the Shares retained from the Shares
exercised. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
in accordance with Section 83 of the Revenue Code (the "Tax Date"). All
elections by Optionees to have Shares withheld for this purpose shall be made in
writing in a form acceptable to the Committee.
(d) Limitations on Exercise. Notwithstanding the exercise periods
set forth in the Grant, exercise of an Option shall always be subject to the
following:
(i) If Optionee is Terminated for any reason except death or
permanent, partial or total disability, as determined by the Committee
("Disability"), Optionee may exercise such Optionee's Options to the extent (and
only to the extent) that such Options would have been exercisable upon the
Termination Date, within three (3) months after the Termination Date (or such
shorter time period as may be specified in the Grant), but in any event no later
than the expiration date of the Options.
(ii) If Optionee is Terminated because of the death of
Optionee or Disability of Optionee (or the Optionee dies within three (3) months
of such Termination), then Optionee's Options may be exercised to the extent
(and only to the extent) that such Options would have been exercisable by
Optionee on the Termination Date, by Optionee (or Optionee's legal
representative) within twelve (12) months after the Termination Date (or such
shorter time period as may be specified in the Grant), but in any event no later
than the expiration date of the Options; provided, however, that in the event of
Termination due to Disability other than as defined in Section 22(e)(3) of the
Revenue Code, any ISO, or portion thereof, that remains exercisable after three
(3) months after the Termination Date shall be deemed an NQSO.
(iii)The Committee shall have discretion to determine
whether Optionee has ceased to be employed by the Company or any Parent,
Subsidiary or Affiliate of the Company and the effective date on which such
employment terminated.
(iv) In the case of an Optionee who is a director,
independent consultant, contractor or adviser, the Committee will have the
discretion to determine whether Optionee is "employed by the Company or any
Parent, Subsidiary or Affiliate of the Company" pursuant to the foregoing
Sections.
(v) The Committee may specify a reasonable minimum number of
Shares that may be purchased on any exercise of an Option, provided that such
minimum number will not prevent Optionee from exercising the full number of
Shares as to which the Option is then exercisable.
(vi) An Option shall not be exercisable unless such exercise
is in compliance with the Securities Act of 1933, as amended (the "Securities
Act"), all applicable state securities laws and the requirements of any stock
exchange or national market system upon which the Shares may then be listed, as
they are in effect on the date of grant or on the date of exercise or other
issuance. Notwithstanding any other provision in the Plan, the Company shall
have no obligation to issue or deliver certificates for Shares under the Plan
prior to (a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable, and/or (b) completion of any registration
or other qualification of such shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company shall be under no obligation to register the Shares with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or national market
system, and the Company shall have no liability for any inability or failure to
do so.
7. CERTIFICATES. All certificates for Shares or other securities
delivered under the Plan shall be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed.
8. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Grant a right to
repurchase a portion of or all Shares that are not "vested" (as defined in the
Grant) held by an Optionee following such Optionee's Termination at any time
within ninety (90) days after the later of Optionee's Termination Date and the
date Optionee purchases Shares under the Plan, for cash or cancellation of
purchase money indebtedness, at the Optionee's original purchase price.
9. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on an
Optionee's Shares, the Committee may require the Optionee to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Optionee who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under the Plan shall be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Optionee's obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company shall have full recourse
against the Optionee under the promissory note notwithstanding any pledge of the
Optionee's Shares or other collateral. In connection with any pledge of the
Shares, Optionee shall be required to execute and deliver a written pledge
agreement in such form as the Committee shall from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
prorata basis as the promissory note is paid.
10. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Committee
shall have the power to modify, extend or renew outstanding Options and to
authorize the grant of new Options in substitution therefor, provided that any
such action may not, without the written consent of Optionee, impair any rights
under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered shall be treated in accordance with
Section 424(h) of the Revenue Code. The Committee shall have the power to reduce
the exercise price of outstanding Options without the consent of Optionees by a
written notice to the Optionees affected; provided, however, that the exercise
price per Share may not be reduced below the minimum exercise price that would
be permitted under Section 5(c) of this Plan for Options granted on the date the
action is taken to reduce the exercise price.
11. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the
rights of a stockholder with respect to any Shares subject to an Option until
such Option is properly exercised. After Shares are issued to the Optionee, the
Optionee shall be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the rights to vote and receive all dividends
made or paid with respect to such Shares; provided, that the Optionee shall have
no right to retain such stock dividends on stock distributions with respect to
Shares that are repurchased at the Optionee's original Purchase Price pursuant
to Section 8. No adjustment shall be made for dividends or distributions or
other rights for which the record date is prior to such date of exercise, except
as provided in this Plan. The Company shall provide to each Optionee a copy of
the annual financial statements of the Company at such time after the close of
each fiscal year of the Company as such statements are released by the Company
to its common stockholders generally.
12. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option
granted under this Plan shall confer on any Optionee any right to continue in
the employ of, or other relationship with, the Company or any Parent, Subsidiary
or Affiliate of the Company or limit in any way the right of the Company or any
Parent, Subsidiary or Affiliate of the Company to terminate Optionee's
employment or other relationship at any time, with or without cause.
13. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of common stock of the Company is changed by a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without consideration, or
if a substantial portion of the assets of the Company are distributed, without
consideration in a spin-off or similar transaction, to the stockholders of the
Company, the number of Shares available under this Plan and the number of Shares
subject to outstanding Options and the exercise price per Share of such Options
shall be proportionately adjusted, subject to any required action by the Board
of Directors of the Company (the "Board") or stockholders of the Company and
compliance with applicable securities laws; provided, however, that a fractional
share shall not be issued upon exercise of any Option and any fractions of a
Share that would have resulted shall either be cashed out at Fair Market Value
or the number of Shares issuable under the Option shall be rounded up to the
nearest whole number, as determined by the Committee; and provided further that
the exercise price may not be decreased to below the par value for the Shares.
14. ASSUMPTION OF OPTIONS BY SUCCESSORS.
(a) In the event of (i) a merger or consolidation in which the
Company is not the surviving corporation (other than a merger or consolidation
with a wholly owned subsidiary, a reincorporation, or other transaction in which
there is no substantial change in the stockholders of the corporation and the
Options granted under this Plan are assumed by the successor corporation, which
assumption shall be binding on all Optionees), (ii) a dissolution or liquidation
of the Company, (iii) the sale of substantially all of the assets of the
Company, or (iv) any other transaction which qualifies as a "corporate
transaction" under Section 424(a) of the Revenue Code wherein the stockholders
of the Company give up all of their equity interest in the Company (except for
the acquisition of all or substantially all of the outstanding shares of the
Company), any or all outstanding Options may be assumed by the successor
corporation, which assumption shall be binding on all Optionees. In the
alternative, the successor corporation may substitute an equivalent option or
provide substantially similar consideration to Optionees as was provided to
stockholders (after taking into account the existing provisions of Optionee's
options, such as the exercise price and the vesting schedule). The successor
corporation may also issue, in place of outstanding shares of the Company held
by Optionee as a result of the exercise of an Option that is subject to
repurchase, substantially similar shares or other property subject to similar
repurchase restrictions no less favorable to Optionee.
(b) In the event such successor corporation, if any, refuses to
assume or substitute Options, as provided above, pursuant to a transaction
described in Subsections 14(a)(ii), (iii) or (iv) above, or there is no
successor corporation, and if the Company is ceasing to exist as a separate
corporate entity, the Options shall, notwithstanding any contrary terms in the
Grant, expire on a date at least twenty (20) days after the Board gives written
notice to Optionees specifying the terms and conditions of such termination.
(c) In the event such successor corporation refuses to assume or
substitute Options, as provided above, pursuant to a transaction described in
Subsection 14(a)(i) above, such Options shall expire on (and, if the Company has
reserved to itself a right to repurchase Shares issued on exercise of Options at
the original purchase price of such Shares, such right shall terminate on), the
consummation of such transaction at such time and on such conditions as the
Board shall determine.
(d) Subject the foregoing provisions of this Section 14, in the
event of the occurrence of any transaction described in Section 14(a), any
outstanding Option shall be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction," provided that under no circumstances shall unvested
options be accelerated.
15. ADOPTION AND STOCKHOLDER APPROVAL. This Plan shall become
effective on the date that it is adopted by the Board. This Plan shall be
approved by the stockholders of the Company, in any manner permitted by
applicable corporate law, within twelve (12) months before or after the date
this Plan is adopted by the Board. Upon the effective date of the Plan, the
Board may grant Options pursuant to this Plan; provided that, in the event that
stockholder approval is not obtained within the time period provided herein, all
Options granted hereunder shall terminate. No Option that is issued as a result
of any increase in the number of shares authorized to be issued under this Plan
shall be exercised prior to the time such increase has been approved by the
stockholders of the Company and all such Options granted pursuant to such
increase shall similarly terminate if such stockholder approval is not obtained.
16. ADMINISTRATION. This Plan may be administered by the Board or a
committee appointed by the Board (the "Committee"). As used in this Plan,
references to the "Committee" shall mean either the committee appointed by the
Board to administer this Plan or the Board if no committee has been established.
If, at the time the Company registers under the Securities Exchange Act of 1934,
as amended, two or more members of the Board are Outside Directors, the
Committee shall be comprised of at least two members of the Board, all of whom
are Outside Directors. The interpretation by the Committee of any of the
provisions of this Plan or any Option granted under this Plan shall be final and
binding upon the Company and all persons having an interest in any Option or any
Shares purchased pursuant to an Option. The Committee may delegate to officers
of the Company the authority to grant Options under this Plan to Optionees who
are not Insiders of the Company.
17. TERM OF PLAN. Options may be granted pursuant to this Plan from
time to time within a period of ten (10) years from the date on which this Plan
is adopted by the Board.
18. AMENDMENT OR TERMINATION OF PLAN. The Committee may at any time
terminate or amend this Plan in any respect including (but not limited to)
amendment of any form of Grant, Exercise Agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Committee shall not, without
the approval of the stockholders of the Company, amend this Plan in any manner
that requires such stockholder approval pursuant to the Revenue Code or the
regulations promulgated thereunder as such provisions apply to ISO plans.
19. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board, the submission of the Plan to the stockholders of the Company for
approval, nor any provision of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
20. GOVERNING LAW. The Plan and all agreements, documents and
instruments entered into pursuant to the Plan shall be governed by and construed
in accordance with the internal laws of the State of California, excluding that
body of law pertaining to conflict of laws.
21. CERTAIN DEFINITIONS. As used in this Plan, the following terms
shall have the following meanings:
(a) "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of such corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
(b) "Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
(c) "Affiliate" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, another corporation, where "control" (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.
(d) "Fair Market Value" shall mean the fair market value of the
Shares as determined by the Committee from time to time in good faith. If a
public market exists for the Shares, the Fair Market Value shall be the average
of the last reported bid and asked prices for common stock of the Company on the
last trading day prior to the date of determination (or the average closing
price over the number of consecutive working days preceding the date of
determination as the Committee shall deem appropriate) or, in the event the
common stock of the Company is listed on a stock exchange or on the Nasdaq
National Market, the Fair Market Value shall be the closing price on such
exchange or quotation system on the last trading day prior to the date of
determination (or the average closing price over the number of consecutive
working days preceding the date of determination as the Committee shall deem
appropriate).
(e) "Outside Director" shall mean any director who is not (i) a
current employee of the Company or any Parent, Subsidiary or Affiliate of the
Company, (ii) a former employee of the Company or any Parent, Subsidiary or
Affiliate of the Company who is receiving compensation for prior services (other
than benefits under a tax-qualified pension plan), (iii) a current or former
officer of the Company or any Parent, Subsidiary or Affiliate of the Company or
(iv) currently receiving compensation for personal services in any capacity,
other than as a director, from the Company or any Parent, Subsidiary or
Affiliate of the Company; provided, however, that at such time as the term
"Outside Director", as used in Section 162(m) of the Revenue Code, is defined in
regulations promulgated under Section 162(m), "Outside Director" shall have the
meaning set forth in such regulations, as amended from time to time and as
interpreted by the Internal Revenue Service.
(f) "Termination" or "Terminated" shall mean, for purposes of the
Plan with respect to an Optionee, that the Optionee ceased to provide services
as an employee, officer, director, consultant, independent contractor or adviser
to the Company or a Parent, Subsidiary or Affiliate of the Company, except in
the case of sick leave, military leave, or any other leave of absence approved
by the Committee, provided, that such leave is for a period of not more than
ninety (90) days, or reinstatement upon the expiration of such leave is
guaranteed by contract or statute. The Committee shall have the sole discretion
to determine whether an Optionee has ceased to provide services and the
effective date on which the Optionee ceased to provide services (the
"Termination Date").
<PAGE>
PREMISYS COMMUNICATIONS, INC.
STOCK OPTION GRANT
Optionee: (First) (Last)
Address: (Street)
(City) (State) (Zip)
Total Shares Subject to Option:_________________________(Shares)
Exercise Price per Share: (Price)
Date of Grant: (Grant)
Vesting Commencement Date (Date of hire)
Expiration Date: (Expire)
Type of Option: [ ]Incentive Stock Option
[ ]Nonqualified Stock Option
1. Grant of Option. Premisys Communications, Inc., a Delaware
corporation (the "Company"), hereby grants to the optionee named above
("Optionee") an option (this "Option") to purchase the total number of shares of
common stock of the Company, par value $0.01 per share, set forth above (the
"Shares") at the exercise price per share set forth above (the "Exercise
Price"), subject to all of the terms and conditions of this Stock Option Grant
(this "Grant") and the Company's 1994 Stock Option Plan, as amended to the date
hereof (the "Plan"). If designated as an Incentive Stock Option above, this
Option is intended to qualify as an "incentive stock option" ("ISO") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Revenue Code"). Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to them in the Plan.
2. Exercise Period of Option. Subject to the terms and conditions of
the Plan and this Grant, this Option shall become exercisable as to portions of
the Shares as follows: (a) This Option shall not be exercisable with respect to
any of the Shares until one year following the Vesting Commencement Date; (b) if
Optionee has been continuously employed by the Company, or any Parent or
Subsidiary, at all times during the time period beginning on the Vesting
Commencement Date set forth above, until one year following the Vesting
Commencement Date, then this Option shall become exercisable as to twenty-five
percent (25%) of the Shares; and (c) thereafter this Option shall become
exercisable as to an additional 2.083 percent of the Shares each succeeding
month up to 100% of the Shares so long as Optionee remains continuously employed
by the Company, or any Parent or Subsidiary, at all times; provided that
Optionee shall in no event be entitled under this Option to purchase a number of
shares of the Company's common stock greater than the "Total Shares Subject to
Option" indicated above. Notwithstanding anything herein to the contrary, this
Option shall expire on the Expiration Date set forth above and must be
exercised, if at all, on or before the Expiration Date; and provided further
that this Option must become exercisable as to at least 20% of the Shares for
each full year since the Date of Grant.
3. Restriction on Exercise. This Option may not be exercised unless
such exercise is in compliance with the Securities Act and all applicable state
securities laws as they are in effect on the date of exercise, and the
requirements of any stock exchange or national market system on which the
Company's common stock may be listed at the time of exercise. Optionee
understands that the Company is under no obligation to register, qualify or list
the Shares with the SEC, any state securities commission or any stock exchange
to effect such compliance.
4. Termination of Option. Except as provided below in this Section,
this Option shall terminate and may not be exercised if Optionee ceases to be
employed by the Company or any Parent or Subsidiary of the Company (or, in the
case of a nonqualified stock option, an Affiliate of the Company). Optionee
shall be considered to be employed by the Company for all purposes under this
Section 4 if Optionee is an officer, director or full-time employee of the
Company or any Parent, Subsidiary or Affiliate of the Company or if the
Committee determines that Optionee is rendering substantial services as a
part-time employee, consultant, independent contractor or adviser to the Company
or any Parent, Subsidiary or Affiliate of the Company. The Committee shall have
discretion to determine whether Optionee has ceased to be employed by the
Company or any Parent, Subsidiary or Affiliate of the Company and the effective
date on which such employment terminated (the "Termination Date").
(a) Termination Generally. If Optionee ceases to be employed by
the Company or any Parent, Subsidiary or Affiliate of the Company for any reason
except death or Disability, this Option, to the extent (and only to the extent)
that it would have been exercisable by Optionee on the Termination Date, may be
exercised by Optionee within three (3) months after the Termination Date, but in
no event later than the Expiration Date.
(b) Death or Disability. If Optionee ceases to be employed by the
Company or any Parent, Subsidiary or Affiliate of the Company because of the
death of Optionee or the Disability of Optionee, this Option, to the extent (and
only to the extent) that it would have been exercisable by Optionee on the
Termination Date, may be exercised by Optionee (or Optionee's legal
representative) within twelve (12) months after the Termination Date, but in no
event later than the Expiration Date; provided, however, that if the Optionee's
Termination is due to Disability other than as defined in Section 22(e)(3) of
the Revenue Code, any ISO, or portion thereof, that remains exercisable after
three (3) months after the Optionee's Termination Date shall be deemed an NQSO.
(c) No Right to Employment. Nothing in the Plan or this
Grant shall confer on Optionee any right to continue in the employ of, or other
relationship with, the Company or any Parent, Subsidiary or Affiliate of the
Company or limit in any way the right of the Company or any Parent, Subsidiary
or Affiliate of the Company to terminate Optionee's employment or other
relationship at any time, with or without cause.
5. Manner of Exercise.
(a) Exercise Agreement. This Option shall be exercisable by
delivery to the Company of an executed written Stock Option Exercise Agreement
in the form attached hereto as Exhibit A, or in such other form as may be
approved by the Company, which shall set forth Optionee's election to exercise
some or all of this Option, the number of Shares being purchased, any
restrictions imposed on the Shares and such other representations and agreements
as may be required by the Company to comply with applicable securities laws. If
someone other than Optionee exercises this Option, then such person must submit
documentation reasonably acceptable to the Company that such person has the
right to exercise the Option.
(b) Exercise Price. Such notice shall be accompanied by full
payment of the Exercise Price for the Shares being purchased. Payment for the
Shares may be made in cash (by check) or, where permitted by law: (i) by
cancellation of indebtedness of the Company to Optionee; (ii) by surrender of
shares of common stock of the Company having a Fair Market Value equal to the
exercise price of the Option that have been owned by Optionee for more than six
(6) months (and which have been paid for within the meaning of SEC Rule 144 and,
if such Shares were purchased from the Company by use of a promissory note, such
note has been fully paid with respect to such shares), or were obtained by
Optionee in the open public market; (iii) by waiver of compensation due or
accrued to Optionee for services rendered; (iv) provided that a public market
for the Company's stock exists, through a "same day sale" commitment from
Optionee and a broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD Dealer") whereby Optionee irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased to pay for
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company; (v)
provided that a public market for the Company's stock exists, through a "margin"
commitment from Optionee and an NASD Dealer whereby Optionee irrevocably elects
to exercise the Option and to pledge the Shares so purchased to the NASD Dealer
in a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company; (vi) by
tender of a full recourse promissory note having such terms as may be approved
by the Committee and bearing interest at a rate sufficient to avoid imputation
of income under Sections 483 and 1274 of the Revenue Code; provided that the
portion of the Exercise Price equal to the par value of the Shares must be paid
in cash (by check); or (vii) by any combination of the foregoing. Optionees who
are not employees or directors of the Company shall not be entitled to purchase
Shares with a promissory note unless the note is adequately secured by
collateral other than the Shares.
(c) Withholding Taxes. Prior to the issuance of the Shares upon
exercise of this Option, Optionee must pay or make adequate provision for any
applicable federal or state withholding obligations of the Company. Optionee may
(subject to the Company's approval) provide for payment of Optionee's minimum
statutory withholding taxes upon exercise of the Option by requesting that the
Company retain Shares with a Fair Market Value equal to the minimum amount of
taxes required to be withheld, all as set forth in Section 6(c) of the Plan.
Insuch case, the Company shall issue the net number of Shares to Optionee by
deducting the Shares retained from the Shares exercised.
(d) Issuance of Shares. Provided that such notice and payment are
in form and substance satisfactory to counsel for the Company, the Company shall
cause the Shares to be issued in the name of Optionee, Optionee's legal
representative or Optionee's assignee.
6. Notice of Disqualifying Disposition of ISO Shares. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO within (1) the date
two years after the Date of Grant, or (2) the date one year after exercise of
the ISO, Optionee shall immediately notify the Company in writing of such
disposition. Optionee acknowledges and agrees that Optionee may be subject to
income tax withholding by the Company on the compensation income recognized by
Optionee from any such early disposition by payment in cash (or in Shares, to
the extent permissible under Section 5(c)) or out of the current wages or other
earnings payable to Optionee.
7. Nontransferability of Option. If this Option is an ISO, or if
Optionee is an Insider subject to Section 16(b) of the Exchange Act, then this
Option may not be transferred in any manner other than by will or by the law of
descent and distribution and may be exercised during the lifetime of Optionee
only by Optionee. Otherwise, this Option may only be transferred to Optionee's
immediate family, to a trust for the benefit of Optionee or Optionee's immediate
family, or to a charitable entity qualified under Section 501(c) of the Revenue
Code, where "immediate family" shall mean spouse, lineal descendant or
antecedent, brother or sister. The terms of this Option shall be binding upon
the executors, administrators, successors and assigns of Optionee.
8. Tax Consequences. Set forth below is a brief summary as of the date
this form of Grant was adopted of some of the federal and California tax
consequences of exercise of this Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.
(a) Exercise of ISO. If this Option qualifies as an ISO, there
will be no regular federal income tax liability or California income tax
liability upon the exercise of the Option, although the excess, if any, of the
Fair Market Value of the Shares on the date of exercise over the Exercise Price
will be treated as an adjustment to alternative minimum taxable income for
federal income tax purposes and may subject Optionee to an alternative minimum
tax liability in the year of exercise.
(b) Exercise of Nonqualified Stock Option. If this Option does
not qualify as an ISO, there may be a regular federal income tax liability and a
California income tax liability upon the exercise of the Option. Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares
on the date of exercise over the Exercise Price. The Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(c) Disposition of Shares. In the case of an NQSO, if Shares are
held for more than one year before disposition, any gain on disposition of the
Shares will be treated as long-term capital gain for federal and California
income tax purposes. In the case of an ISO, if Shares are held for more than one
year after the date of exercise and more than two years after the Date of Grant,
any gain on disposition on the Shares will be treated as long-term capital gain
for federal and California income tax purposes. If Shares acquired pursuant to
an ISO are disposed of within such one year or two year periods (a
"disqualifying disposition"), gain on such disqualifying disposition will be
treated as compensation income (taxable at ordinary income rates) to the extent
of the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price (the "Spread"), or, if less, the difference
between the amount realized on the sale of such Shares and the Exercise Price.
Any gain in excess of the Spread shall be treated as capital gain.
9. Interpretation. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company to the Company's Board of
Directors or the Committee thereof that administers the Plan, which shall review
such dispute at its next regular meeting. The resolution of such a dispute by
the Board or Committee shall be final and binding on the Company and on
Optionee.
10. Entire Agreement. The Plan and the Stock Option Exercise Agreement
attached as Exhibit A are incorporated herein by this reference. This Grant, the
Plan and the Stock Option Exercise Agreement constitute the entire agreement of
the parties hereto and supersede all prior undertakings and agreements with
respect to the subject matter hereof.
11. Privileges of Stock Ownership. Optionee shall not have any of the
rights of a stockholder with respect to any Shares until Optionee exercises the
Option and pays the Exercise Price.
12. Notices. Any notice required to be given or delivered to the
Company under the terms of this Grant shall be in writing and addressed to the
Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated above or to such other address as
such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by rapifax or telecopier.
13. Successors and Assigns. The Company may assign any of its rights
under this Grant. This Grant shall be binding upon and inure to the benefit of
the successors and assigns of the Company.
14. Governing Law. This Grant shall be governed by and construed in
accordance with the laws of the State of California, excluding that body of law
pertaining to conflict of laws.
PREMISYS COMMUNICATIONS, INC.
By: _________________________________
Raymond Lin, President
<PAGE>
ACCEPTANCE
Optionee hereby acknowledges receipt of a copy of the Plan, represents that
Optionee has read and understands the terms and provisions thereof, and accepts
this Option subject to all the terms and conditions of the Plan and this Stock
Option Grant. Optionee acknowledges that there may be adverse tax consequences
upon exercise of this Option or disposition of the Shares and that Optionee
should consult a tax adviser prior to such exercise or disposition.
________________ ____________________________
Date (First) (Last)
----------------------------
Print Name
<PAGE>
PREMISYS COMMUNICATIONS, INC.
STOCK OPTION EXERCISE FORM
Complete, sign and return this form along with payment to the Premisys Stock
Administrator. If you have questions regarding the number of vested shares, how
to complete the form or any other part of the exercise process call
510/353-4586.
NAME: __________ ADDRESS: __________
SOCIAL SECURITY # ____________
============================================================================
I, the undersigned, hereby irrevocably elect to exercise my options to
purchase shares of common stock of Premisys Communications, Inc. under and
pursuant to the options granted to me under the Premisys' Communications
Stock Option Plan, as follows:
Grant Grant Grant Total # Shares # Shares Option Total
Type No. Date Granted Exercisable Exercised Price due
Premisys
- --------- -------- ------- -------- ----------- ---------- ------- --------
- --------- -------- ------- -------- ----------- ---------- ------- --------
- --------- -------- ------- -------- ----------- ---------- ------- --------
- --------- -------- ------- -------- ----------- ---------- ------- --------
- --------- -------- ------- -------- ----------- ---------- ------- --------
============================================================================
If you have a Non-Qualified (NQ) option, Premisys is obligated by law to
withhold federal and state income taxes and payroll taxes from the gain on the
exercise whether or not the shares are sold. Additional federal and state income
tax may be withheld at your
request. The tax rates for 1998 are:
Federal Income Tax 28% of the gain
State Income Tax 6% of the gain for CA or as required by
the state of residence
Social Security 6.2% of the first $65,400 in earnings
MHI (Medicare) 1.45% of all earnings
SDI ______ 0.5% of the first $31,767 in earnings
(California Residents only)
If you have an Incentive Stock Option (ISO) you may have Federal and State
income tax withheld upon request.
I request additional withholding: Federal Income Tax ________ (% or total amount
to be withheld)
State Income Tax ________ (% or total amount
to be withheld)
============================================================================
PLEASE DELIVER MY SHARES TO: PAYMENT METHOD:
( ) Broker Acct. Name ( ) Check payable to Premisys
Communications
( ) Home Address as shown above ( ) Same-Day Sale
( ) Other__ ( ) Other (See other side or
Administrator)
If I have an Incentive Stock Option (ISO) grant, I am aware that
exercising options results in tax preference income and that I may be
subject to Alternative Minimum Tax and that adverse tax consequences
may result from this exercise. I assume responsibility for seeking
tax advice and am not relying on the company for tax advice.
______________________________________ __________________
Optionee Signature Date
______________________________________ __________________
Premisys Stock Administrator Signature Date
<PAGE>
Definitions and Entire Agreement Unless otherwise defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the company's 1992
Stock Option Plan and 1994 Stock Option Plan, as applicable (each, a "Plan").
The applicable Plan and Stock Option Grant are incorporated herein by reference.
This Stock Option exercise Agreement, the applicable plan and the Stock Option
Grant constitute the entire agreement of the parties and supersede in their
entirety all prior undertakings and agreement of the Company and Optionee with
respect to the subject matter hereof, and is governed by California law except
for that body of law pertaining to conflict of laws.
Market Standoff Agreement Optionee agrees in connection with any registration of
the Company's securities that, upon the request of the company or the
underwriters managing any public offering of the company's securities, Optionee
will not sell or other wise dispose of any Shares without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time from the effective date of such registration as the Company or the
underwriters may specify for employee shareholders generally.
Other Payment Methods The Company policy is to accept payment for option
exercises by check or same-day-sale. However, in certain instances with the
approval of the Company, other payment methods, as allowed by the Plan, maybe
accepted by the Company.
These are:
By delivery of fully-paid, nonasessable and vested shares of the common
stock of the Company owned by the Optionee for at least six (6) months
prior to the date hereof (and which have been paid for within the meaning
of the SEC Rule 144), or obtained by Optionee in the open public market,
and owned free and clear of all liens, claims, encumbrances or security
interests, valued at the current Fair Market Value.
By cancellation of indebtedness of the Company to Optionee
By waiver of compensation due or accrued to Options for services rendered
to the Company.
<PAGE>
Exhibit 5.01
Opinion of Fenwick & West LLP
<PAGE>
EXHIBIT 5.01
January 14, 1999
Premisys Communications, Inc.
48664 Milmont Drive
Fremont, CA 94538
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement") to be filed by you with the Securities and
Exchange Commission (the "Commission") on or about January 15, 1999 in
connection with the registration under the Securities Act of 1933, as amended,
of an aggregate of 1,260,000 shares of your Common Stock (the "Stock"), subject
to issuance by you upon the exercise of stock options granted or to be granted
by you under your 1994 Stock Option Plan, as amended (the "1994 Plan"). In
rendering this opinion, we have examined the following:
(1) your registration statement on Form 8-A (File Number 0-25684) filed
with the Commission on March 14, 1995, together with the order of
effectiveness issued by the Commission therefor on April 5, 1995;
(2) Your Registration Statement on Form 8-A (File Number 0-25684) filed
with the Commission on September 22, 1998[, together with the order
of effectiveness issued by the Commission therefor on _________,
1998;]
(3) the Registration Statement, together with the Exhibits filed as a
part thereof including the 1994 Plan and related stock option grant
and exercise agreement;
(4) the Prospectus prepared in connection with the
Registration Statement;
(5) the minutes of meetings and actions by written consent of the
stockholders and Board of Directors that are contained in your minute
books and the minute books of your predecessor, Premisys
Communications Holdings, Inc., a California corporation ("Premisys
California"), that are in our possession;
(6) the stock records that you have provided to us (consisting of a
certificate from your transfer agent of even date herewith verifying
the number of your issued and outstanding shares of capital stock as
of the date hereof and a list of option and warrant holders
respecting your capital and of any rights to purchase capital stock
that was prepared by you and dated January 13, 1999 verifying the
number of such issued and outstanding securities); and
(7) a Management Certificate addressed to us and dated of even date
herewith executed by the Company containing certain factual and other
representations.
We have also confirmed the continued effectiveness of your registrations
under the Securities Exchange Act of 1934, as amended, by telephone call to the
offices of the Commission.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies, the legal capacity of all natural persons executing the same, the lack
of any undisclosed terminations, modifications, waivers or amendments to any
documents reviewed by us and the due execution and delivery of all documents
where due execution and delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely upon
our examination of the documents referred to above and have assumed the current
accuracy and completeness of the information obtained from public officials and
records referred to above. We have made no independent investigation or other
attempt to verify the accuracy of any of such information or to determine the
existence or non-existence of any other factual matters; however, we are not
aware of any facts that would cause us to believe that the opinion expressed
herein is not accurate.
We are admitted to practice law in the State of California, and we express
no opinion herein with respect to the application or effect of the laws of any
jurisdiction other than the existing laws of the United States of America and
the State of California and (without reference to case law or secondary sources)
the existing Delaware General Corporation Law.
Based upon the foregoing, it is our opinion that the 1,260,000 shares of Stock
that may be issued and sold by you upon the exercise of stock options granted or
to be granted under the 1994 Plan, when issued and sold in accordance with the
1994 Plan and stock option or purchase agreements to be entered into thereunder,
and in the manner referred to in the relevant Prospectus associated with the
Registration Statement, will be 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 all references to us, if any, in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and we assume no obligation to
update this opinion should circumstances change after the date hereof. This
opinion is intended solely for your use as an exhibit to the Registration
Statement for the purpose of the above sale of the Stock and is not to be relied
upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
By: _/s/ Eileen Duffy Robinett ____
Eileen Duffy Robinett, a Partner
<PAGE>
Exhibit 23.02
Consent of PricewaterhouseCoopers LLP
<PAGE>
Exhibit 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 23, 1998, except for Note 10
which is as of September 24, 1998, appearing on page 30 of Premisys
Communications, Inc.'s Annual Report on Form 10-K for the year ended June 26,
1998.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
San Jose, California
January 12, 1999
