<PAGE> 1
As filed with the Securities and Exchange Commission on May 26, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
---------------
ACT NETWORKS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0152144
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
26707 WEST AGOURA ROAD
CALABASAS, CALIFORNIA 91302
(818) 871-6400
(Address of principal executive offices) (Zip Code)
---------------
1997 STOCK INCENTIVE PLAN
OPTION GRANTED TO MR. SADR
OPTION GRANTED TO MR. WEISMAN
(Full title of the Plans)
---------------
SUSAN N. CAYLEY
V.P., LEGAL AFFAIRS
ACT NETWORKS, INC.
26707 WEST AGOURA ROAD
CALABASAS, CALIFORNIA 91302
(818) 871-6400
(Name and address of agent for service)
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities to be Registered Amount to be Offering Aggregate Amount of
Registered(1) Price Offering Price Registration
per Share Fee
=========================================================================================================
<S> <C> <C> <C> <C>
1997 Stock Incentive Plan 200,000 shares $11.25 $2,250,000 $ 594.00 (2)
Common Stock, $0.001 par value
Option Granted to Mr. Sadr 200,000 shares $8.625 $2,000,000 $ 455.40 (3)
Common Stock, $0.001 par value
Option Granted to Mr. Weisman 90,000 shares $10.00 $ 900,000 $ 237.60 (3)
Common Stock, $0.001 par value
Aggregate Registration Fee $ 1,287.00
=========================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the 1997 Stock Incentive Plan and Option
granted to Mr. Sadr and Option granted to Mr. Weisman by reason of any stock
dividend, stock split, recapitalization or other similar transaction
effected without the Registrant's receipt of consideration which results in
an increase in the number of the outstanding shares of Registrant's Common
Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low selling prices per share of Registrant's Common Stock on May 22,
2000, as reported by the Nasdaq National Market.
(3) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the exercise price of
the option granted to the listed individual.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
ACT Networks, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Forms 10-K for the fiscal
year ended June 30, 1999, filed with the Commission on September
28, 1999;
(b) The Registrant's Quarterly Reports on Form 10-Q for the
fiscal quarters ended September 30, 1999, December 31, 1999,
March 31, 2000 filed with the Commission on November 12, 1999,
February 14, 2000, May 15, 2000, respectively;
(c) The Registrant's Current Report on Form 8-K filed with the
Commission on May 3, 2000; and
(d) The Registrant's Registration Statement No. 000-25740 on
Forms 8-A and 8-A/A, filed with the Commission on March 23, 1995
and April 25, 1995, respectively, in which the terms, rights and
provisions applicable to the Registrant's Common Stock are
described.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act
of 1934, as amended (the "1934 Act") after the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated by reference
into this Registration Statement and to be a part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any subsequently filed document which also is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
II-1
<PAGE> 3
Item 6. Indemnification of Directors and Officers
Under Section 145 of the Delaware General Corporation Law, the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act of 1933, as amended (the "1933 Act"). The Registrant's Bylaws
(the "Bylaws") provide that the Registrant shall indemnify its directors and
officers to the extent any such officer or director acted (i) in good faith,
(ii) in a manner reasonably believed to be in or not opposed to the best
interests of the Registrant, and (iii) with respect to any criminal action or
proceeding, with reasonable cause to believe such conduct was lawful. The
Registrant believes that indemnification under its Bylaws covers at least
negligence and gross negligence and requires the Registrant to advance
litigation expenses in the case of stockholder derivative actions or other
actions, against an undertaking by the director or officer to repay such
advances if it is ultimately determined that such individual is not entitled to
indemnification. The Bylaws further provide that rights conferred under such
Bylaws shall not be deemed to be exclusive of any other right such person may
have or acquire under any agreement, vote of stockholders or disinterested
directors, or otherwise.
In addition, the Registrant's Certificate of Incorporation (the
"Certificate of Incorporation") provides that, pursuant to Delaware law, no
director shall be liable for monetary damages for breach of his or her fiduciary
duty of care to the Registrant and its stockholders. This provision in the
Certificate of Incorporation does not eliminate the duty of care, and in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware law. In addition,
each director will continue to be subject to liability for breach of the
director's duty of loyalty to the Registrant for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. The Certificate of Incorporation further
provides that the Registrant shall indemnify its directors and officers to the
fullest extent permitted by law and requires the Registrant to advance
litigation expenses in the case of stockholder derivative actions or other
actions, against an undertaking by the director to repay such advances if it is
ultimately determined that the director is not entitled to indemnification. The
Certificate of Incorporation also provides that rights conferred under such
Certificate of Incorporation shall not be deemed to be exclusive of any other
right such person may have or acquire under any statute, the Certificate of
Incorporation, the Bylaws or any agreement, vote of stockholders or
disinterested directors, or otherwise.
The Registrant has obtained a liability insurance policy for its
officers and directors that, subject to certain limitations, terms and
conditions, will insure them against losses arising from wrongful acts (as
defined by the policy) in their capacity as directors or officers.
In addition, the Registrant has entered into agreements to indemnify its
directors and certain of its officers in addition to the indemnification
provided for in the Certificate of Incorporation and Bylaws. These agreements,
among other things, indemnify the Registrant's directors and certain of its
officers for certain expenses (including attorneys fees), judgments, fines and
settlement amounts incurred by such person in any action or proceeding,
including any action by or in the right of the Registrant, on account of
services as a director or officer of the Registrant or as a director or officer
of any subsidiary of the Registrant, or as a director or officer of any other
company or enterprise that the person provides services to at the request of the
Registrant.
Item 7. Exemption from Registration Claimed
Not Applicable.
II-2
<PAGE> 4
Item 8. Exhibits
Number Exhibit
- ------ -------
4 Instruments Defining the Rights of Stockholders. Reference is made to
the Registrant's Registration Statement No. 000-25740 on Form 8-A, as
amended, including the exhibits thereto, which is incorporated herein by
reference pursuant to Item 3(c) of this Registration Statement No.
000-25740 on Form 8-A, and the amendment thereto, including the exhibits
thereto, which are incorporated herein by reference pursuant to Item
3(c) of this Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this Registration
Statement.
99.1 1997 Stock Incentive Plan (as amended October 21, 1999).
99.2* Form of Notice of Grant of Stock Option - Installment Option.
99.3* Form of Stock Option Agreement - Installment Option.
99.4* Form of Notice of Grant of Stock Option - Immediately Exercisable
Option.
99.5* Form of Stock Option Agreement - Immediately Exercisable Option.
99.6* Form of Addendum to Stock Option Agreement (Limited Stock Appreciation
Rights).
99.7* Form of Addendum to Stock Option Agreement (Involuntary Termination
following Change in control).
99.8* Form of Stock Purchase Agreement.
99.9* Form of Addendum to Stock Purchase Agreement (Involuntary Termination
Following Change in Control).
99.10* Form of Automatic Notice of Initial Grant.
99.11* Form of Automatic Notice of Annual Grant.
99.12* Form of Automatic Stock Option Agreement.
99.13 Notice of Grant of Stock Option used in connection with the Options
granted to Mr. Sadr.
99.14 Notice of Grant of Stock Option used in connection with the Options
granted to Mr. Weisman.
99.15 Form of Stock Option Agreement used in connection with the Options
granted to Messrs. Sadr and Weisman.
99.16 Form of Written Compensation Agreement for Messrs. Sadr and Weisman.
99.17 Form of Addendum to Stock Option Agreement (Involuntary Termination
following Change in control) for Messrs. Sadr and Weisman.
* Exhibits 99.2 through 99.12 are incorporated herein by
reference to Exhibits 99.2 through 99.12, respectively, to
Registrant's Registration Statement on Form S-8, Registration No.
333-44087, filed with the Commission on January 12, 1998.
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus required
by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts
or events arising after the effective date of this 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 this
Registration Statement and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall
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 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 Act each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and (3) to remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the Registrant's 1997
Stock Incentive Plan or the Option granted to Mr. Sadr or the Option granted to
Mr. Weisman.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into this Registration Statement
shall be deemed to be a new
II-3
<PAGE> 5
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
1933 Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item 6 or
otherwise, the Registrant has been advised that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
1933 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 1933 Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE> 6
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 Calabasas, State of California on this
25th day of May, 2000.
ACT NETWORKS, INC.
By: /s/ ANDRE DE FUSCO
-------------------------------------
Andre de Fusco
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of ACT Networks,
Inc., a Delaware corporation, do hereby constitute and appoint Andre de Fusco
and Robert Faulk and each of them, the lawful attorneys-in-fact and agents with
full power and authority to do any and all acts and things and to execute any
and all instruments which said attorneys and agents, and any one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
that all said attorneys and agents, or any one of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ ANDRE DE FUSCO President, Chief Executive Officer May 25, 2000
- -------------------------------- and Director
Andre de Fusco (Principal Executive Officer)
/s/ ROBERT J. FAULK Vice President, Finance and May 25, 2000
- ------------------------------- Chief Financial Officer
Robert J. Faulk (Principal Financial Officer)
</TABLE>
II-5
<PAGE> 7
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ WILLIAM W. FREDERICK Corporate Controller May 25, 2000
- -------------------------------- (Principal Accounting Officer)
William W. Frederick
/s/ WILLIAM AMBROSE Director May 25, 2000
- --------------------------------
William Ambrose
/s/ ROBERT MUSSELWHITE Director May 25, 2000
- --------------------------------
Robert Musslewhite
/s/ ARCHIE J. MCGILL Director May 25, 2000
- --------------------------------
Archie J. McGill
/s/ FREDERICK W. GLUCK Director May 25, 2000
- --------------------------------
Frederick W. Gluck
</TABLE>
<PAGE> 8
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
ACT NETWORKS, INC.
EXHIBIT INDEX
Exhibit Exhibit
- ------- -------
4 Instruments Defining the Rights of Stockholders. Reference is made to
the Registrant's Registration Statement No. 000-25740 on Form 8-A, as
amended, including the exhibits thereto, which is incorporated herein by
reference pursuant to Item 3(c) of this Registration Statement No.
000-25740 on Form 8-A, and the amendment thereto, including the exhibits
thereto, which are incorporated herein by reference pursuant to Item
3(c) of this Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this Registration
Statement.
99.1 1997 Stock Incentive Plan (as amended October 21, 1999).
99.2* Form of Notice of Grant of Stock Option - Installment Option.
99.3* Form of Stock Option Agreement - Installment Option.
99.4* Form of Notice of Grant of Stock Option - Immediately Exercisable
Option.
99.5* Form of Stock Option Agreement - Immediately Exercisable Option.
99.6* Form of Addendum to Stock Option Agreement (Limited Stock Appreciation
Rights).
99.7* Form of Addendum to Stock Option Agreement (Involuntary Termination
following Change in control).
99.8* Form of Stock Purchase Agreement.
99.9* Form of Addendum to Stock Purchase Agreement (Involuntary Termination
Following Change in Control).
99.10* Form of Automatic Notice of Initial Grant.
99.11* Form of Automatic Notice of Annual Grant.
99.12* Form of Automatic Stock Option Agreement.
99.13 Notice of Grant of Stock Option used in connection with the Options
granted to Mr. Sadr.
99.14 Notice of Grant of Stock Option used in connection with the Options
granted to Mr. Weisman.
99.15 Form of Stock Option Agreement used in connection with the Options
granted to Messrs. Sadr and Weisman.
99.16 Form of Written Compensation Agreement for Messrs. Sadr and Weisman.
99.17 Form of Addendum to Stock Option Agreement (Involuntary Termination
following Change in control) for Messrs. Sadr and Weisman.
* Exhibits 99.2 through 99.12 are incorporated herein by
reference to Exhibits 99.2 through 99.12, respectively, to
Registrant's Registration Statement on Form S-8, Registration No.
333-44087, filed with the Commission on January 12, 1998.
<PAGE> 1
EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
May 25, 2000
ACT Networks, Inc.
26707 West Agoura Road
Calabasas, California 91302
Re: ACT Networks, Inc. Registration Statement for Offering
of an Aggregated of 490,000 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to ACT Networks, Inc., a Delaware
corporation (the "Company"), in connection with the registration statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended, of an (i) additional 200,000 shares of common stock, par value $.001
per share, of the Company ("Common Stock") authorized for issuance under the
Company's 1997 Stock Incentive Plan (the "Incentive Plan") (ii) 200,000 shares
of Common Stock issuable pursuant to the stock option granted to Mr. Sadr on
February 10, 2000 (the "Sadr Option") and (iii) 90,000 shares of Common Stock
issuable pursuant to the stock option granted to Mr. Weisman on February 23,
2000 (the "Weisman Option").
This opinion is being furnished in accordance with the
requirements of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the
corporate proceedings taken by the Company in connection with the amendment of
the Incentive Plan and the grant of the Sadr Option and the Weisman Option.
Based on such review, we are of the opinion that, if, as and when the shares of
the Company's Common Stock are issued and sold (and the consideration therefor
received) pursuant to (i) the provisions of the option agreements duly
authorized under the Incentive Plan or pursuant to the provisions of the Sadr
Option or the Weisman Option and in accordance with the Registration Statement
or (ii) direct stock issuances duly-authorized under the Incentive Plan and in
accordance with the Registration Statement, such shares will be duly authorized,
legally issued, fully paid and non-assessable.
We consent to the filing of this opinion letter as Exhibit 5 to
the Registration Statement.
This opinion letter is rendered as of the date first written
above, and we disclaim any obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and which
may alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above, and we render no opinion,
whether by implication or otherwise, as to any other matters relating to the
Company, the Incentive Plan or the Sadr Option or the Weisman Option or the
shares of the Company's Common Stock issuable under the Plans or the Option.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the registration of 200,000 shares of common stock under the
1997 Stock Incentive Plan, and the registration of 200,000 shares of common
stock pursuant to the option grant to Mr. Sadr and the registration of 90,000
shares of common stock pursuant to the option grant to Mr. Weisman of our report
dated July 26, 1999, with respect to the consolidated financial statements and
schedule of ACT Networks, Inc. included in the Annual Report (Form 10-K) for the
year ended June 30, 1999, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Woodland Hills, California
May 24, 2000
<PAGE> 1
EXHIBIT 99.1
ACT NETWORKS, INC.
1997 STOCK INCENTIVE PLAN
(As Amended and Restated October 21, 1999)
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 1997 Stock Incentive Plan is intended to promote the interests of
ACT Networks, Inc., a Delaware corporation, by providing eligible persons with
the opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation.
This Plan shall supplement the authorized share reserve under the
Corporation's 1995 Stock Option/Stock Issuance Plan (the "1995 Plan"), and share
issuances under this 1997 Plan shall not reduce or otherwise affect the number
of shares of the Corporation's common stock available for issuance under the
1995 Plan. In addition, share issuances under the 1995 Stock Plan shall not
reduce or otherwise affect the number of shares of the Corporation's common
stock available for issuance under this Plan.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into three separate equity programs:
(i) the Discretionary Option Grant Program under which eligible
persons may, at the discretion of the Plan Administrator, be granted
options to purchase shares of Common Stock,
(ii) the Stock Issuance Program under which eligible persons may,
at the discretion of the Plan Administrator, be issued shares of
Common Stock directly, either through the immediate purchase of such
shares or as a bonus for services rendered the Corporation (or any
Parent or Subsidiary), and
(iii) the Automatic Option Grant Program under which Eligible
Directors shall automatically receive option grants at periodic
intervals to purchase shares of Common Stock.
B. The provisions of Articles One and Five shall apply to all equity
programs under the Plan and shall accordingly govern the interests of all
persons under the Plan.
<PAGE> 2
III. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to all Section 16 Insiders. Administration of the Discretionary Option
Grant and Stock Issuance Programs with respect to all other persons eligible to
participate in those programs may, at the Board's discretion, be vested in the
Primary Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to all such persons.
B. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time. The Board may also at any time terminate the functions of
any Secondary Committee and reassume all powers and authority previously
delegated to such committee.
C. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Discretionary Option Grant and
Stock Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of such programs and any outstanding options
or stock issuances thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant or Stock Issuance Program under its jurisdiction or
any option or stock issuance thereunder.
D. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.
E. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the terms of that program, and no Plan
Administrator shall exercise any discretionary functions with respect to option
grants made thereunder.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option
Grant and Stock Issuance Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of directors
of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
2
<PAGE> 3
B. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority (subject to the
provisions of the Plan) to determine, (i) with respect to the option grants
under the Discretionary Option Grant Program, which eligible persons are to
receive option grants, the time or times when such option grants are to be made,
the number of shares to be covered by each such grant, the status of the granted
option as either an Incentive Option or a Non-Statutory Option, the time or
times when each option is to become exercisable, the vesting schedule (if any)
applicable to the option shares and the maximum term for which the option is to
remain outstanding and (ii) with respect to stock issuances under the Stock
Issuance Program, which eligible persons are to receive stock issuances, the
time or times when such issuances are to be made, the number of shares to be
issued to each Participant, the vesting schedule (if any) applicable to the
issued shares and the consideration to be paid for such shares.
C. The Plan Administrator shall have the absolute discretion either to
grant options in accordance with the Discretionary Option Grant Program or to
effect stock issuances in accordance with the Stock Issuance Program.
D. The individuals eligible to participate in the Automatic Option
Grant Program shall be limited to (i) those individuals who are first elected or
appointed as non-employee Board members after the Effective Date, whether
through appointment by the Board or election by the Corporation's stockholders,
and (ii) those individuals who continue to serve as non-employee Board members
after one or more Annual Stockholders Meetings, beginning with the 1997 Annual
Meeting. A non-employee Board member who has previously been in the employ of
the Corporation (or any Parent or Subsidiary) shall not be eligible to receive
an option grant under the Automatic Option Grant Program at the time he or she
first becomes a non-employee Board member, but shall be eligible to receive
periodic option grants under the Automatic Option Grant Program while he or she
continues to serve as a non-employee Board member. In no event, however, shall
any non-employee Board member who is, directly or indirectly, a 5% Stockholder
or who is otherwise affiliated with, or a representative of, a 5% Stockholder be
eligible to receive any option grants under the Automatic Option Grant Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
reserved for issuance over the term of the Plan shall not exceed 860,000 shares.
Such share reserve shall be in addition to the shares of Common Stock reserved
for issuance under the 1995 Plan, and share issuances under the 1995 Plan shall
have no effect upon the number of shares of Common Stock which remain available
issuance under this Plan.
B. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than 100,000 shares of Common Stock in the aggregate per calendar year,
beginning with the 1997 calendar year.
3
<PAGE> 4
C. Shares of Common Stock subject to outstanding options under this
Plan shall be available for subsequent issuance under the Plan to the extent
those options expire or terminate for any reason prior to exercise in full.
Unvested shares issued under the Plan and subsequently cancelled or repurchased
by the Corporation, at the original issue price paid per share, pursuant to the
Corporation's repurchase rights under the Plan, shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option
grants or direct stock issuances under the Plan. However, should the exercise
price of an option under the Plan be paid with shares of Common Stock or should
shares of Common Stock otherwise issuable under the Plan be withheld by the
Corporation in satisfaction of the withholding taxes incurred in connection with
the exercise of an option or the vesting of a stock issuance under the Plan,
then the number of shares of Common Stock available for issuance under the Plan
shall be reduced by the gross number of shares for which the option is exercised
or which vest under the stock issuance, and not by the net number of shares of
Common Stock issued to the holder of such option or stock issuance.
D. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and/or class of securities issuable
under the Plan, (ii) the number and/or class of securities for which any one
person may be granted stock options, separately exercisable stock appreciation
rights and direct stock issuances under this Plan per calendar year, (iii) the
number and/or class of securities for which automatic option grants are to be
subsequently made per Eligible Director under the Automatic Option Grant Program
and (iv) the number and/or class of securities and the exercise price per share
in effect under each outstanding option (including any option incorporated from
the Predecessor Plans) in order to prevent the dilution or enlargement of
benefits thereunder. The adjustments determined by the Plan Administrator shall
be final, binding and conclusive.
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ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form approved by
the Plan Administrator; provided, however, that each such document shall comply
with the terms specified below. Each document evidencing an Incentive Option
shall, in addition, be subject to the provisions of the Plan applicable to such
options.
A. Exercise Price.
1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than eighty-five percent (85%) of the Fair
Market Value per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon exercise
of the option and shall, subject to the provisions of Section I of Article Five
and the documents evidencing the option, be payable in one or more of the forms
specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or
(iii) to the extent the option is exercised for vested shares,
through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable instructions to (a) a
Corporation-designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes
required to be withheld by the Corporation by reason of such exercise
and (b) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale
transaction.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. Exercise and Term of Options. Each option shall be exercisable at
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
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C. Effect of Termination of Service.
1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option,
but no such option shall be exercisable after the expiration of the
option term.
(ii) Any option exercisable in whole or in part by the
Optionee at the time of death may be subsequently exercised by the
personal representative of the Optionee's estate or by the person or
persons to whom the option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number
of vested shares for which the option is exercisable on the date of
the Optionee's cessation of Service. Upon the expiration of the
applicable exercise period or (if earlier) upon the expiration of the
option term, the option shall terminate and cease to be outstanding
for any vested shares for which the option has not been exercised.
However, the option shall, immediately upon the Optionee's cessation
of Service, terminate and cease to be outstanding with respect to any
shares in which the Optionee is not vested on the date of such
cessation of Service.
(iv) Should the Optionee's Service be terminated for
Misconduct, then all outstanding options held by the Optionee shall
terminate immediately and cease to be outstanding.
2. The Plan Administrator shall have the discretion, exercisable
either at the time an option is granted or at any time while the option remains
outstanding, to:
(i) extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service from
the period otherwise in effect for that option to such greater period
of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of
vested shares of Common Stock for which such option is exercisable at
the time of the Optionee's cessation of Service but also with respect
to one or more additional installments in which the Optionee would
have vested under the option had the Optionee continued in Service.
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<PAGE> 7
D. Stockholder Rights. The holder of an option shall have no
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. Repurchase Rights. The Plan Administrator shall have the discretion
to grant options which are exercisable for unvested shares of Common Stock.
Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase, at the exercise price paid per
share, any or all of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall be established
by the Plan Administrator and set forth in the document evidencing such
repurchase right.
F. Limited Transferability of Options. During the lifetime of the
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death. Non-Statutory Options shall be
subject to the same transfer restrictions, except that a Non-Statutory Option
may, in connection with the Optionee's estate plan, be assigned in whole or in
part during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Five shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options when
issued under the Plan shall not be subject to the terms of this Section II.
A. Eligibility. Incentive Options may only be granted to Employees.
B. Exercise Price. The exercise price per share shall not be less than
one hundred percent (100%) of the Fair Market Value per share of Common Stock on
the option grant date.
C. Dollar Limitation. The aggregate Fair Market Value of the shares of
Common Stock (determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any other option
plan of the Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one (1) calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
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D. 10% Stockholder. If any Employee to whom an Incentive Option is
granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each outstanding option
shall automatically accelerate so that each such option shall, immediately prior
to the effective date of the Corporate Transaction, become fully exercisable for
all of the shares of Common Stock at the time subject to such option and may be
exercised for any or all of those shares as fully-vested shares of Common Stock.
However, an outstanding option shall NOT so accelerate if and to the extent: (i)
such option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation (or parent thereof) or to be replaced with
a comparable option to purchase shares of the capital stock of the successor
corporation (or parent thereof) or (ii) such option is to be replaced with a
cash incentive program of the successor corporation which preserves the spread
existing on the unvested option shares at the time of the Corporate Transaction
and provides for subsequent payout in accordance with the same vesting schedule
applicable to those option shares or (iii) the acceleration of such option is
subject to other limitations imposed by the Plan Administrator at the time of
the option grant. The determination of option comparability under clause (i)
above shall be made by the Plan Administrator, and its determination shall be
final, binding and conclusive.
B. All outstanding repurchase rights shall terminate automatically,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent: (i) those repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator at the time the repurchase right is issued.
C. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan on both an aggregate and per
Optionee basis following the consummation of such Corporate Transaction and (ii)
the exercise price payable per share under each outstanding option, provided the
aggregate exercise price payable for such securities shall remain the same.
E. Any options which are assumed or replaced in the Corporate
Transaction and do not otherwise accelerate at that time shall automatically
accelerate (and any of the Corporation's outstanding repurchase rights which do
not otherwise terminate at the time of the
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<PAGE> 9
Corporate Transaction shall automatically terminate and the shares of Common
Stock subject to those terminated rights shall immediately vest in full) in the
event the Optionee's Service should subsequently terminate by reason of an
Involuntary Termination within eighteen (18) months following the effective date
of such Corporate Transaction. Any options so accelerated shall remain
exercisable for fully-vested shares until the earlier of (i) the expiration of
the option term or (ii) the expiration of the one (1)-year period measured from
the effective date of the Involuntary Termination.
F. The Plan Administrator shall have the discretion, exercisable
either at the time the option is granted or at any time while the option remains
outstanding, to provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the shares of Common Stock
subject to those rights) upon the Involuntary Termination of the Optionee's
Service within a specified period (not to exceed eighteen (18) months) following
the effective date of a Change in Control. Any options so accelerated shall
remain fully exercisable until the expiration or sooner termination of the
option term.
G. The portion of any Incentive Option accelerated in connection with
a Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
limitation is not exceeded. To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.
H. The grant of options under the Discretionary Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option
Grant Program (including outstanding options incorporated from the Predecessor
Plans) and to grant in substitution new options covering the same or different
number of shares of Common Stock but with an exercise price per share based on
the Fair Market Value per share of Common Stock on the new option grant date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority to grant
to selected Optionees tandem stock appreciation rights and/or limited stock
appreciation rights.
B. The following terms shall govern the grant and exercise of tandem
stock appreciation rights:
(i) One or more Optionees may be granted the right, exercisable
upon such terms as the Plan Administrator may establish, to elect between
the exercise of the underlying option for shares of Common Stock and
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<PAGE> 10
the surrender of that option in exchange for a distribution from the
Corporation in an amount equal to the excess of (a) the Fair Market Value
(on the option surrender date) of the number of shares in which the
Optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (b) the aggregate exercise price payable for such
shares.
(ii) No such option surrender shall be effective unless it is
approved by the Plan Administrator, either at the time of the option
surrender or at any earlier time. If the surrender is so approved, then the
distribution to which the Optionee shall be entitled may be made in shares
of Common Stock valued at Fair Market Value on the option surrender date,
in cash, or partly in shares and partly in cash, as the Plan Administrator
shall in its sole discretion deem appropriate.
(iii) If the surrender of an option is rejected by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee
had under the surrendered option (or surrendered portion thereof) on the
option surrender date and may exercise such rights at any time prior to the
later of (a) five (5) business days after the receipt of the rejection
notice or (b) the last day on which the option is otherwise exercisable in
accordance with the terms of the documents evidencing such option, but in
no event may such rights be exercised more than ten (10) years after the
option grant date.
C. The following terms shall govern the grant and exercise of limited
stock appreciation rights:
(i) One or more Section 16 Insiders may be granted limited stock
appreciation rights with respect to their outstanding options.
(ii) Upon the occurrence of a Hostile Take-Over, each such
individual holding one or more options with such a limited stock
appreciation right shall have the unconditional right (exercisable for a
thirty (30)-day period following such Hostile Take-Over) to surrender each
such option to the Corporation, to the extent the option is at the time
exercisable for vested shares of Common Stock. In return for the
surrendered option, the Optionee shall receive a cash distribution from the
Corporation in an amount equal to the excess of (A) the Take-Over Price of
the shares of Common Stock which are at the time vested under each
surrendered option (or surrendered portion thereof) over (B) the aggregate
exercise price payable for such shares. Such cash distribution shall be
paid within five (5) days following the option surrender date.
(iii) The grant of such limited stock appreciation right shall
automatically constitute the pre-approval by the Plan Administrator of the
any subsequent exercise of that right in accordance with the terms of this
Paragraph C. Accordingly, no further approval of the Plan Administrator or
the Board shall be required at the time of the actual surrender of such
option and the cash distribution to which the optionee shall thereupon
become entitled.
(iv) The balance of the option (if any) shall continue in full
force and effect in accordance with the documents evidencing such option.
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ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program through
direct and immediate issuances without any intervening option grants. Each such
stock issuance shall be evidenced by a Stock Issuance Agreement which complies
with the terms specified below.
A. Purchase Price.
1. The purchase price per share shall be fixed by the Plan
Administrator, but shall not be less than eighty five percent (85%) of the Fair
Market Value per share of Common Stock on the issuance date.
2. Subject to the provisions of Section I of Article Five, shares
of Common Stock may be issued under the Stock Issuance Program for any of the
following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any Parent
or Subsidiary).
B. Vesting Provisions.
1. Shares of Common Stock issued under the Stock Issuance Program
may, in the discretion of the Plan Administrator, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program, namely:
(i) the Service period to be completed by the Participant or
the performance objectives to be attained,
(ii) the number of installments in which the shares are to
vest,
(iii) the interval or intervals (if any) which are to lapse
between installments, and
(iv) the effect which death, Permanent Disability or other
event designated by the Plan Administrator is to have upon the vesting
schedule,
shall be determined by the Plan Administrator and incorporated into the Stock
Issuance Agreement.
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2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
3. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to such surrendered shares.
5. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of Common Stock (or
other assets attributable thereto) which would otherwise occur upon the
cessation of the Participant's Service or the non-completion of the vesting
schedule applicable to such shares. Such waiver shall result in the immediate
vesting of the Participant's interest in the shares of Common Stock as to which
the waiver applies. Such waiver may be effected at any time, whether before or
after the Participant's cessation of Service or the attainment or non-attainment
of the applicable performance objectives.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the outstanding repurchase rights under the Stock Issuance
Program shall terminate automatically, and all the shares of Common Stock
subject to those terminated rights shall immediately vest in full, in the event
of any Corporate Transaction, except to the extent (i) those repurchase rights
are assigned to the successor corporation (or parent thereof) in connection with
such Corporate Transaction or (ii) such accelerated vesting is precluded by
other limitations imposed in the Stock Issuance Agreement.
B. Any repurchase rights that are assigned in the Corporate
Transaction shall automatically terminate, and all the shares of Common Stock
subject to those terminated rights shall immediately vest in full, in the event
the Participant's Service should subsequently
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terminate by reason of an Involuntary Termination within eighteen (18) months
following the effective date of such Corporate Transaction.
C. The Plan Administrator shall have the discretion, exercisable
either at the time the unvested shares are issued or at any time while the
Corporation's repurchase right remains outstanding, to provide for the automatic
termination of one or more outstanding repurchase rights and the immediate
vesting of the shares of Common Stock subject to those rights upon the
Involuntary Termination of the Participant's Service within a specified period
(not to exceed eighteen (18) months) following the effective date of any Change
in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held in escrow
by the Corporation until the Participant's interest in such shares vests or may
be issued directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.
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ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
I. OPTION TERMS
A. SUCCESSOR PROGRAM. The Automatic Option Grant Program under this
Plan shall, upon stockholder approval of the Plan at the 1997 Annual
Stockholders Meeting, replace the automatic option grant program for
non-employee Board members currently in effect under the 1995 Plan, and no
further option grants shall be made pursuant to that program. All outstanding
options under the automatic option grant program in effect under the 1995 Plan
shall continue to be governed by the terms of the agreements evidencing those
grants, and nothing in this Plan shall affect those options. Stockholder
approval of this Plan at the 1997 Annual Meeting shall also constitute approval
of all option grants made to Eligible Directors pursuant to the provisions of
this Automatic Option Grant Program.
B. GRANT DATES. Option grants shall be made under the Plan on the
dates specified below:
1. Each Eligible Director who is first elected or appointed as a
non-employee Board member after the Effective Date shall automatically be
granted, on the date of such initial election or appointment, a Non-Statutory
Option to purchase 21,000 shares of Common Stock.
2. On the date of each Annual Stockholders Meeting, beginning
with the 1997 Annual Meeting, each individual who is to continue to serve as an
Eligible Director after such meeting, shall automatically be granted, whether or
not such individual is standing for re-election as a Board member at that Annual
Meeting, a Non-Statutory Option to purchase an additional 7,000 shares of Common
Stock, provided such individual has served as a non-employee Board member for at
least six (6) months prior to the date of such Annual Meeting. There shall be no
limit on the number of such 7,000-share option grants any one Eligible Director
may receive over his or her period of Board service.
C. EXERCISE PRICE.
1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
D. OPTION TERM. Each option shall have a term of ten (10) years
measured from the option grant date.
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E. EXERCISE AND VESTING OF OPTIONS. Each option shall be immediately
exercisable for any or all of the option shares. However, any shares purchased
under the option shall be subject to repurchase by the Corporation, at the
exercise price paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares. The shares subject to each initial grant shall
vest, and the Corporation's repurchase right with respect to those shares shall
lapse, in a series of thirty-six (36) successive equal monthly installments over
the Optionee's period of continued service as a Board member, with the first
such installment to vest upon the Optionee's completion of one (1) month of
Board service measured from the option grant date. The shares subject to each
annual grant shall vest, and the Corporation's repurchase right with respect to
those shares shall lapse, on the day immediately preceding the date of the next
Annual Stockholders Meeting following the grant date, provided the Optionee
continues in Board service through such day.
F. EFFECT OF TERMINATION OF BOARD SERVICE. The following provisions
shall govern the exercise of any options held by the Optionee at the time the
Optionee ceases to serve as a Board member:
(i) The Optionee (or, in the event of Optionee's death, the
personal representative of the Optionee's estate or the person or
persons to whom the option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution) shall
have a twelve (12)-month period following the date of such cessation
of Board service in which to exercise each such option.
(ii) During the twelve (12)-month exercise period, the option may
not be exercised in the aggregate for more than the number of vested
shares of Common Stock for which the option is exercisable at the time
of the Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve as a Board member by
reason of death or Permanent Disability, then all shares at the time
subject to the option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following such cessation
of Board service, be exercised for all or any portion of such shares
as fully-vested shares of Common Stock.
(iv) In no event shall the option remain exercisable after the
expiration of the option term. Upon the expiration of the twelve
(12)-month exercise period or (if earlier) upon the expiration of the
option term, the option shall terminate and cease to be outstanding
for any vested shares for which the option has not been exercised.
However, the option shall, immediately upon the Optionee's cessation
of Board service, terminate and cease to be outstanding with respect
to any shares in which the Optionee is not vested on the date of such
cessation of Board service.
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II. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the shares of Common
Stock at the time subject to each outstanding option under the Automatic Option
Grant Program but not otherwise vested shall automatically vest in full so that
each such option shall, immediately prior to the effective date of the Corporate
Transaction, become exercisable for all of the shares of Common Stock at the
time subject to such option and may be exercised for all or any portion of such
shares as fully-vested shares of Common Stock. Immediately following the
consummation of the Corporate Transaction, each automatic option grant shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).
B. In the event of any Change in Control, the shares of Common Stock
at the time subject to each outstanding option but not otherwise vested shall
automatically vest in full so that each such option shall, immediately prior to
the effective date of the Change in Control, become exercisable for all of the
shares of Common Stock at the time subject to such option and may be exercised
for all or any portion of such shares as fully-vested shares of Common Stock.
Each such option shall remain exercisable for such fully-vested option shares
until the expiration or sooner termination of the option term or the surrender
of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have
a thirty (30)-day period in which to surrender to the Corporation each option
grant held by him or her under this Automatic Option Grant Program. The Optionee
shall in return be entitled to a cash distribution from the Corporation in an
amount equal to the excess of (i) the Take-Over Price of the shares of Common
Stock at the time subject to the surrendered option (whether or not the Optionee
is otherwise at the time vested in those shares) over (ii) the aggregate
exercise price payable for such shares. Such cash distribution shall be paid
within five (5) days following the surrender of the option to the Corporation.
Such surrender right shall form a part of each option grant made under this
Automatic Option Grant Program, and stockholder approval of this Plan shall
constitute pre-approval of the subsequent exercise of that right in accordance
with the provisions of this Paragraph C. Accordingly, no approval of the Board
or the Plan Administrator shall be required at the time of the actual option
surrender and the cash distribution to which the optionee shall thereupon become
entitled.
D. The grant of options under the Automatic Option Grant Program shall
in no way affect the right of the Corporation to adjust, reclassify, reorganize
or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for option grants made
under the Discretionary Option Grant Program.
16
<PAGE> 17
ARTICLE FIVE
MISCELLANEOUS
I. FINANCING
A. The Plan Administrator may permit any Optionee or Participant to
pay the option exercise price under the Discretionary Option Grant Program or
the purchase price for shares issued under the Stock Issuance Program by
delivering a promissory note payable in one or more installments. The terms of
any such promissory note (including the interest rate and the terms of
repayment) shall be established by the Plan Administrator in its sole
discretion. Promissory notes may be authorized with or without security or
collateral. In all events, the maximum credit available to the Optionee or
Participant may not exceed the sum of (i) the aggregate option exercise price or
purchase price payable for the purchased shares plus (ii) any Federal, state and
local income and employment tax liability incurred by the Optionee or the
Participant in connection with the option exercise or share purchase.
B. The Plan Administrator may, in its discretion, determine that one
or more such promissory notes shall be subject to forgiveness by the Corporation
in whole or in part upon such terms as the Plan Administrator may deem
appropriate.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock upon
the exercise of options or stock appreciation rights or upon the issuance or
vesting of such shares under the Plan shall be subject to the satisfaction of
all applicable Federal, state and local income and employment tax withholding
requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan (other than the options granted or the shares issued under the Automatic
Option Grant Program) with the right to use shares of Common Stock in
satisfaction of all or part of the Taxes incurred by such holders in connection
with the exercise of their options or the vesting of their shares. Such right
may be provided to any such holder in either or both of the following formats:
(i) Stock Withholding: The election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the
exercise of such Non-Statutory Option or the vesting of such shares, a
portion of those shares with an aggregate Fair Market Value equal to
the percentage of the Taxes (not to exceed one hundred percent (100%))
designated by the holder.
(ii) Stock Delivery: The election to deliver to the Corporation,
at the time the Non-Statutory Option is exercised or the shares vest,
one or more shares of Common Stock previously acquired by such holder
(other than in connection with the option exercise or share vesting
triggering the Taxes) with an aggregate Fair Market Value equal to the
percentage of the Taxes (not to exceed one hundred percent (100%))
designated by the holder.
17
<PAGE> 18
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan became effective on the Effective Date. However, no
options granted under the Plan may be exercised, and no shares shall be issued
under the Plan, until the Plan is approved by the Corporation's stockholders. If
such stockholder approval is not obtained within twelve (12) months after the
Effective Date, then all options previously granted under this Plan shall
terminate and cease to be outstanding, and no further options shall be granted
and no shares shall be issued under the Plan.
B. The Plan was amended and restated by the Board on October 21, 1999
to increase the maximum number of shares of Common Stock authorized for issuance
over the term of the Plan by an additional 200,000 shares from 660,000 shares to
860,000 shares. The increase was approved by the Stockholders at the Annual
meeting on November 23, 1999.
C. The Plan shall terminate upon the earliest of (i) September 22,
2007, (ii) the date on which all shares available for issuance under the Plan
shall have been issued as vested shares pursuant to the exercise of options or
the issuance of shares under the Plan or (iii) the termination of all
outstanding options in connection with a Corporate Transaction. Should this Plan
terminate on September 22, 2007, then all options and unvested stock issuances
outstanding on such date shall thereafter continue to have force and effect in
accordance with the provisions of the documents evidencing such options or
issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options, stock appreciation rights or unvested stock issuances at the time
outstanding under the Plan unless the Optionee or the Participant consents to
such amendment or modification. In addition, certain amendments may require
stockholder approval pursuant to applicable law or regulations.
B. Options to purchase shares of Common Stock may be granted under the
Discretionary Option Grant Program and shares of Common Stock may be issued
under the Stock Issuance Program that are in each instance in excess of the
number of shares then available for issuance under the Plan, provided any excess
shares actually issued under those programs are held in escrow until there is
obtained stockholder approval of an amendment sufficiently increasing the number
of shares of Common Stock available for issuance under the Plan. If such
stockholder approval is not obtained within twelve (12) months after the date
the first such excess issuances are made, then (i) any unexercised options
granted on the basis of such excess shares shall terminate and cease to be
outstanding and (ii) the Corporation shall promptly refund to the Optionees and
the Participants the exercise or purchase price paid for any excess shares
issued under the Plan and held in escrow, together with interest (at the
applicable Short Term Federal Rate) for the period the shares were held in
escrow, and such shares shall thereupon be automatically cancelled and cease to
be outstanding.
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<PAGE> 19
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option or stock
appreciation right under the Plan and the issuance of any shares of Common Stock
(i) upon the exercise of any option or stock appreciation right or (ii) under
the Stock Issuance Program shall be subject to the Corporation's procurement of
all approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options and stock appreciation rights granted under it and
the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant any right
to continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee or the
Participant, which rights are hereby expressly reserved by each, to terminate
such person's Service at any time for any reason, with or without cause.
19
<PAGE> 20
APPENDIX
The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option
grant program in effect under the Plan.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership or control of
the Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members
described in clause (A) who were still in office at the time the Board
approved such election or nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities
immediately prior to such transaction; or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.
G. CORPORATION shall mean ACT Networks, Inc., a Delaware corporation.
20
<PAGE> 21
H. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary
option grant program in effect under the Plan.
I. EFFECTIVE DATE shall mean the date of the 1997 Annual Stockholders
Meeting, provided the Plan is approved by the stockholders at such Annual
Meeting.
J. ELIGIBLE DIRECTOR shall mean a non-employee Board member eligible
to participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Article One.
K. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
L. EXERCISE DATE shall mean the date on which the Corporation shall
have received written notice of the option exercise.
M. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as
such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market. If there is no closing selling
price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last preceding
date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
N. 5% STOCKHOLDER shall mean the owner of securities (as determined
under Code Section 424(d)) possessing more than five percent (5%) of the total
combined voting power of the outstanding securities of the Corporation (or any
Parent or Subsidiary).
O. HOSTILE TAKE-OVER shall mean the acquisition, directly or
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept.
21
<PAGE> 22
P. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
Q. INVOLUNTARY TERMINATION shall mean the termination of the Service
of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a
change in his or her position with the Corporation which materially
reduces his or her duties and responsibilities, (B) a reduction in his
or her level of compensation (including base salary, fringe benefits
and target bonuses under any corporate-performance based bonus or
incentive programs) by more than fifteen percent (15%) or (C) a
relocation of such individual's place of employment by more than fifty
(50) miles, provided and only if such change, reduction or relocation
is effected by the Corporation without the individual's consent.
R. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
S. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
T. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
U. OPTIONEE shall mean any person to whom an option is granted under
the Discretionary Option Grant or Automatic Option Grant Program.
V. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
W. PARTICIPANT shall mean any person who is issued shares of Common
Stock under the Stock Issuance Program.
X. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of
22
<PAGE> 23
continuous duration of twelve (12) months or more. However, solely for the
purposes of the Automatic Option Grant Program, Permanent Disability or
Permanently Disabled shall mean the inability of the non-employee Board member
to perform his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
Y. PLAN shall mean the Corporation's 1997 Stock Incentive Plan, as set
forth in this document.
Z. PLAN ADMINISTRATOR shall mean the particular entity, whether the
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction.
AA. PRIMARY COMMITTEE shall mean the committee of two (2) or more
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders.
BB. SECONDARY COMMITTEE shall mean a committee of one (1) or more
Board members appointed by the Board to administer the Discretionary Option
Grant and Stock Issuance Programs with respect to eligible persons other than
Section 16 Insiders.
CC. SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
DD. SERVICE shall mean the performance of services for the Corporation
(or any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant or stock issuance.
EE. STOCK EXCHANGE shall mean either the American Stock Exchange or
the New York Stock Exchange.
FF. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.
GG. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
effect under the Plan.
HH. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain. For purposes of the grant of Non-Statutory Options
and stock appreciation rights under the Discretionary Option Grant Program and
direct stock issuances under the Stock Issuance Program, the term Subsidiary
shall also include any
23
<PAGE> 24
corporation, partnership, joint venture or other business entity in which the
Corporation owns, directly or indirectly, stock or a capital or profit interest.
II. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.
JJ. TAXES shall mean the Federal, state and local income and
employment tax liabilities incurred by the holder of Non-Statutory Options or
unvested shares of Common Stock in connection with the exercise of those options
or the vesting of those shares.
KK. 10% STOCKHOLDER shall mean the owner of stock (as determined under
Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
24
<PAGE> 1
EXHIBIT 99.13
NOTICE OF GRANT OF STOCK OPTION USED IN CONNECTION
WITH THE OPTION GRANT TO MR. SADR
ACT NETWORKS, INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of ACT Networks, Inc. (the
"Corporation"):
Optionee: Ramin Sadr
-------------------------------------------------------
Grant Date: February 10, 2000
-----------------------------------------------------
Vesting Commencement Date: February 10, 2000
--------------------------------------
Exercise Price: $8.625 per share
------
Number of Option Shares: 200,000 shares
-------
Expiration Date: February 9, 2010
------------------------------------------------
Type of Option: Non-Statutory Stock Option
-------------------------------------------------
Installment Exercise Schedule: The Option shall become
exercisable for twenty-four (24%) of the Option Shares upon the
Optionee's completion of twelve (12) full months of Service
measured from the Vesting Commencement Date. The Option shall
become exercisable for the balance of the Option Shares in a
series of thirty-eight (38) successive equal monthly installments
upon Optionee's completion of each additional full month of
Service over the thirty-eight (38)-month period measured from the
first anniversary of the Vesting Commencement Date. In no event
shall any additional Option Shares vest after Optionee's
cessation of Service.
Although the Option is not granted under ACT Networks, Inc. 1997
Stock Incentive Plan (the "Plan"), the Options shall be governed by terms and
conditions substantially similar to that Plan. Optionee further agrees to be
bound by the terms of the Option as set forth in the Stock Option Agreement
attached hereto as Exhibit A.
Optionee hereby further acknowledges receipt of a copy of the
official prospectus for the Plan in the form attached hereto as Exhibit B. A
copy of the Plan is available upon request made to the Corporate Secretary at
the Corporation's principal offices.
No Employment or Service Contract. Nothing in this Notice or in
the attached Stock Option Agreement shall confer upon Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's Service at any time
for any reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
February 10, 2000
ACT NETWORKS, INC.
<PAGE> 2
By:
--------------------------------------
Title: President and CEO
-----------------------------------------
RAMIN SADR
Address:
---------------------------------
-----------------------------------------
ATTACHMENTS
EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - PLAN SUMMARY AND PROSPECTUS
<PAGE> 1
EXHIBIT 99.14
NOTICE OF GRANT OF STOCK OPTION USED IN CONNECTION
WITH THE OPTION GRANT TO MR. WEISMAN
ACT NETWORKS, INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of ACT Networks, Inc. (the
"Corporation"):
Optionee: David A. Weisman
---------------------------------------------------------------
Grant Date: February 23, 2000
-------------------------------------------------------------
Vesting Commencement Date: February 23, 2000
----------------------------------------------
Exercise Price: $ 10.00 per share
------------
Number of Option Shares: 90,000 shares
---------------
Expiration Date: February 22, 2010
---------------------------------------------------------
Type of Option: Non-Statutory Stock Option
---------------------------------------------------------
Installment Exercise Schedule: The Option shall become
exercisable for twenty-four (24%) of the Option Shares upon the Optionee's
completion of twelve (12) full months of Service measured from the Vesting
Commencement Date. The Option shall become exercisable for the balance of the
Option Shares in a series of thirty-eight (38) successive equal monthly
installments upon Optionee's completion of each additional full month of Service
over the thirty-eight (38)-month period measured from the first anniversary of
the Vesting Commencement Date. In no event shall any additional Option Shares
vest after Optionee's cessation of Service.
Although the Option is not granted under ACT Networks, Inc. 1997
Stock Incentive Plan (the "Plan"), the Options shall be governed by terms and
conditions substantially similar to that Plan. Optionee further agrees to be
bound by the terms of the Option as set forth in the Stock Option Agreement
attached hereto as Exhibit A.
Optionee hereby further acknowledges receipt of a copy of the
official prospectus for the Plan in the form attached hereto as Exhibit B. A
copy of the Plan is available upon request made to the Corporate Secretary at
the Corporation's principal offices.
No Employment or Service Contract. Nothing in this Notice or in
the attached Stock Option Agreement shall confer upon Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's Service at any time
for any reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
February 23, 2000
ACT NETWORKS, INC.
<PAGE> 2
By:
---------------------------------
Title: President and CEO
------------------------------------
DAVID A. WEISMAN
Address:
----------------------------
------------------------------------
ATTACHMENTS
EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - PLAN SUMMARY AND PROSPECTUS
<PAGE> 1
EXHIBIT 99.15
FORM OF STOCK OPTION AGREEMENT USED IN CONNECTION WITH
THE OPTION GRANT TO MESSRS. SADR AND WEISMAN
OFFICER GRANT
ACT NETWORKS, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Compensation Committee of the Board has authorized an option
grant to _____________ (the "Optionee') in connection with the services he is to
perform for the Corporation (or a Parent or Subsidiary), and this Agreement is
intended to evidence the terms and conditions of that option grant.
B. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as
of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10) years
measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee. However, this option may also be assigned
in whole or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.
4. DATES OF EXERCISE. This option shall become exercisable for
the Option Shares in a series of installments as specified in the Grant Notice.
As the option becomes exercisable for such installments, those installments
shall accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in
Service for any reason (other than death, Permanent Disability or
Misconduct) while this option is outstanding, then the period during
which this option may be exercised shall be limited to the one (1)-month
period commencing
<PAGE> 2
with the date of such cessation of Service, but in no event shall this
option be exercisable at any time after the Expiration Date.
(ii) Should Optionee die while holding this option,
then the personal representative of Optionee's estate or the person or
persons to whom the option is transferred pursuant to Optionee's will or
in accordance with the laws of descent and distribution shall have the
right to exercise this option. Such right shall lapse, and this option
shall cease to be outstanding, upon the earlier of (A) the expiration of
the twelve (12)-month period measured from the date of Optionee's death
or (B) the Expiration Date.
(iii) Should Optionee cease Service by reason of
Permanent Disability while this option is outstanding, then the period
during which this option may be exercised shall be limited to the twelve
(12)-month period commencing with the date of such cessation of Service.
In no event shall this option be exercisable at any time after the
Expiration Date.
(iv) Should Optionee's Service be terminated for
Misconduct or should Optionee otherwise engage in any Misconduct while
this option is outstanding, then this option shall terminate immediately
and cease to remain outstanding.
(v) During the limited period of post-Service
exercisability, this option may not be exercised in the aggregate for
more than the number of Option Shares for which this option is
exercisable at the time of Optionee's cessation of Service. Upon the
expiration of such limited exercise period or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be outstanding
for any exercisable Option Shares for which the option has not otherwise
been exercised. To the extent this option is not exercisable for one or
more Option Shares at the time of Optionee's cessation of Service, this
option shall immediately terminate and cease to be outstanding with
respect to those shares.
(vi) In the event of a Corporate Transaction or Change
in Control, the provisions of Paragraph 6 shall govern the period for
which this option is to remain exercisable following Optionee's
cessation of Service and shall supersede any provisions to the contrary
in this Paragraph 5.
<PAGE> 3
6. SPECIAL ACCELERATION OF OPTION.
(a) This option, to the extent outstanding at the time of
a Corporate Transaction but not otherwise fully exercisable for all the Option
Shares, shall automatically accelerate in full so that this option shall,
immediately prior to the effective date of the Corporate Transaction, become
exercisable for all of the Option Shares at the time subject to this option and
may be exercised for any or all of those Option Shares as fully-vested shares.
However, this option shall NOT become exercisable on such an accelerated basis
if and to the extent: (i) this option is assumed by the successor corporation
(or parent thereof) in the Corporate Transaction or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Corporate Transaction on any
Option Shares for which this option is not at that time exercisable (the excess
of the Fair Market Value of those Option Shares over the Exercise Price payable
for such shares) and provides for subsequent payout in accordance with the same
installment Exercise Schedule applicable to those Option Shares as set forth in
the Grant Notice.
(b) Immediately following the Corporate Transaction, this
option shall terminate and cease to be outstanding, except to the extent assumed
by the successor corporation (or parent thereof) in connection with the
Corporate Transaction.
(c) Upon an Involuntary Termination of Optionee's Service
within eighteen (18) months following (i) a Corporate Transaction in which this
option is assumed or (ii) a Change in Control, this option, to the extent
outstanding at that time but not otherwise fully exercisable for all the Option
Shares, shall automatically accelerate in full so that this option shall become
immediately exercisable for all of the Option Shares at the time subject to this
option and may be exercised for any or all of those Option Shares as
fully-vested shares. The option shall remain exercisable for such vested Option
Shares until the earlier of (i) the Expiration Date or (ii) the expiration of
the one (1)-year period measured from the effective date of the Involuntary
Termination, whereupon the option shall terminate and cease to be outstanding.
(d) If this option is assumed in connection with a
Corporate Transaction or otherwise continued in full force and effect following
a Change in Control, then this option shall be appropriately adjusted,
immediately after such Corporate Transaction or Change in Control, to apply to
the number and class of securities which would have been issuable to Optionee in
consummation of such Corporate Transaction or Change in Control had the option
been exercised immediately prior to such Corporate Transaction or Change in
Control, and appropriate adjustments shall also be made to the Exercise Price,
provided the aggregate Exercise Price shall remain the same.
(e) This Agreement shall not in any way affect the right
of the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. STOCKHOLDER RIGHTS. The holder of this option shall not have
any stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all
or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or any other person or persons exercising the option)
must take the following actions:
<PAGE> 4
(i) Execute and deliver to the Corporation
a Notice of Exercise for the Option Shares for which the option is
exercised.
(ii) Pay the aggregate Exercise Price for
the purchased shares in one or more of the following forms:
(A) cash or check made payable to the
Corporation;
(B) shares of Common Stock held by
Optionee (or any other person or persons exercising the option)
for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date; or
(C) through a special sale and remittance
procedure pursuant to which Optionee (or any other person or
persons exercising the option) shall concurrently provide
irrevocable instructions (I) to a Corporation-designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus
all applicable Federal, state and local income and employment
taxes required to be withheld by the Corporation by reason of
such exercise and (II) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise or Purchase
Agreement delivered to the Corporation in connection with the
option exercise.
(iii) Furnish to the Corporation
appropriate documentation that the person or persons exercising the
option (if other than Optionee) have the right to exercise this option.
(iv) Make appropriate arrangements with the
Corporation (or Parent or Subsidiary employing or retaining Optionee)
for the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the option
exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any
fractional shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the
Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market, if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.
<PAGE> 5
(b) The inability of the Corporation to obtain approval
from any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant to this
option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation, however, shall use its best efforts to
obtain all such approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation 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 below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. CONSTRUCTION. This Agreement and the option evidenced hereby
are made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
14. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of February __, 2000.
OPTIONEE ACT NETWORKS, INC.
- -------------------------------------- By:
-------------------------
Title:
----------------------
<PAGE> 6
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify ACT Networks, Inc. (the "Corporation") that I
elect to purchase shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $_____ per share (the "Exercise Price")
pursuant to that certain option (the "Option") granted to me on February __,
2000.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price for one or more Purchased Shares.
- -----------------------------
Date
--------------------------------------------
Address:
------------------------------------
--------------------------------------------
Print name in exact manner
it is to appear on the
stock certificate:
--------------------------------------------
Address to which certificate
is to be sent, if different
from address above:
--------------------------------------------
--------------------------------------------
Social Security Number:
--------------------------------------------
Employee Number:
--------------------------------------------
<PAGE> 7
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean either of the following changes in
control or ownership of the Corporation:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election or
nomination was approved by the Board.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution
of the Corporation.
G. CORPORATION shall mean ACT Networks, Inc., a Delaware corporation.
H. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
I. EXERCISE DATE shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.
J. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.
<PAGE> 8
K. EXERCISE SCHEDULE shall mean the installment schedule specified in
the Grant Notice pursuant to which the option is to become exercisable for the
Option Shares in a series of installments over Optionee's period of Service.
L. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
M. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question, as the price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing selling price per share
of Common Stock on the date in question on the Stock Exchange determined
by the Plan Administrator to be the primary market for the Common Stock,
as such price is officially quoted in the composite tape of transactions
on such exchange. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such
quotation exists.
N. GRANT DATE shall mean the date of grant of the option as specified in
the Grant Notice.
<PAGE> 9
O. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
P. INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service which occurs by reason of:
(i) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Optionee's voluntary resignation following (A) a change in
Optionee's position with the Corporation (or Parent or Subsidiary
employing Optionee) which materially reduces Optionee's duties and
responsibilities, (B) a reduction in Optionee's level of compensation
(including base salary, fringe benefits and target bonuses under any
corporate performance-based bonus or incentive programs) by more than
fifteen percent (15%) or (C) a relocation of Optionee's place of
employment by more than fifty (50) miles, provided and only if such
change, reduction or relocation is effected by the Corporation without
Optionee's consent.
Q. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
Optionee or any other individual in the Service of the Corporation (or any
Parent or Subsidiary).
R. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
S. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.
T. OPTION SHARES shall mean the number of shares of Common Stock subject
to the option as specified in the Grant Notice.
U. OPTIONEE shall mean __________, the person to whom the option is
granted as specified in the Grant Notice.
<PAGE> 10
V. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
W. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
X. PLAN shall mean the this Stock Option Agreement and the Grant Notice.
Y. PLAN ADMINISTRATOR shall mean the Compensation Committee of the Board
acting its capacity as administrator of the Plan.
Z. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
AA. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.
BB. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain. If this option is designated a Non-Statutory Option
in the Grant Notice, Subsidiary shall also include any corporation, partnership,
joint-venture or other business entity in which the Corporation owns, directly
or indirectly, stock or a capital or profit interest.
<PAGE> 1
EXHIBIT 99.16
FORM OF WRITTEN COMPENSATION AGREEMENT FOR MESSRS. SADR AND WEISMAN
COMPENSATION AGREEMENT
Agreement made as of the ___ day of February, 2000 by and
between ____________ ("Executive") and ACT Networks, Inc., a Delaware
corporation (the "Corporation").
W I T N E S S E T H
WHEREAS, Executive is an individual who is to provide valuable
services to the Corporation, and the Corporation wishes to provide an equity
incentive to Executive as an inducement for him to continue in the Corporation's
employ.
NOW, THEREFORE, in consideration of the above premises, the
parties hereto agree as follows:
1. On February __, 2000, Executive was granted an option to
purchase _______________shares of the Corporation's Common
Stock (the "Option") under the terms and conditions set
forth in the Notice of Grant of Stock Option and Stock
Option Agreement attached hereto as Exhibit A.
2. Corporation and Executive acknowledge and agree that the
Option and the shares purchasable under such Option are
granted as compensation for services Executive is to
render the Corporation and not for any capital-raising
purposes or in connection with any capital-raising
activities.
3. This agreement is intended to constitute a written
compensation contract for purposes of the requirements of
the Form S-8 Registration Statement under the Securities
Act of 1933, as amended.
4. Nothing herein or in the Notice of Grant of Stock Option
or Stock Option Agreement is intended to impair the right
of the Corporation or Executive to terminate Executive's
employment with the Corporation at any time in accordance
with applicable law.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the date first above written.
EXECUTIVE: ACT NETWORKS, INC.
By:
- --------------------------------- ---------------------------
Printed Name: Title:
-------------------- ------------------------
<PAGE> 1
EXHIBIT 99.17
FORM OF ADDENDUM TO STOCK OPTION AGREEMENT (INVOLUNTARY TERMINATION
FOLLOWING A CHANGE IN CONTROL) FOR MESSRS. SADR AND WEISMAN
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement dated February __,
2000 (the "Option Agreement") by and between ACT Networks, Inc. (the
"Corporation") and ____________ ("Optionee") evidencing the stock option (the
"Option") granted on such date to Optionee. All capitalized terms in this
Addendum, to the extent not otherwise defined herein, shall have the meanings
assigned to them in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CHANGE IN CONTROL
1. The Option Shares shall not vest, and the Corporation's
repurchase rights shall not lapse, on an accelerated basis upon the occurrence
of a Change in Control, and the Option Shares shall, over Optionee's period of
Service following the Change in Control, continue to vest in one or more
installments in accordance with the provisions of the Option Agreement. However,
immediately upon an Involuntary Termination of Optionee's Service within
eighteen (18) months following the Change in Control, all the Option Shares at
the time subject to the Option but not otherwise vested shall automatically vest
in full and the Corporation's repurchase rights shall immediately lapse so that
the Option shall immediately become exercisable for all of the Option Shares as
fully-vested shares and may be exercised for any or all of those vested Option
Shares. The Option shall remain exercisable for such vested Option Shares until
the earlier of (i) the Expiration Date or (ii) the expiration of the one
(1)-year period measured from the effective date of the Involuntary Termination,
whereupon the Option shall terminate and cease to be outstanding.
2. For purposes of this Addendum, a CHANGE IN CONTROL shall be
deemed to occur in the event of a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election or
nomination was approved by the Board.
3. The provisions of Paragraph 1 of this Addendum shall govern
the period for which the option is to remain exercisable following the
Involuntary Termination of Optionee's Service within eighteen (18) months after
the Change in Control and shall supersede any provisions to the contrary in the
Option Agreement.
<PAGE> 2
IN WITNESS WHEREOF, ACT Networks, Inc. has caused this Addendum
to be executed by its duly-authorized officer as of the Effective Date specified
below.
ACT NETWORKS, INC.
By:
---------------------------------
Title: CEO and President
Optionee:
---------------------------
Address:
----------------------------
------------------------------------
EFFECTIVE DATE: FEBRUARY __, 2000
