<PAGE>
As filed with the Securities and Exchange
Commission on December 6, 1996 Registration No. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
DIGEX, INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 52-1986462
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
6800 Virginia Manor Road
Beltsville, MD 20705
(301) 847-5000 20705
(Address of principal executive offices) (Zip Code)
------------------
DIGEX, INCORPORATED 1995 STOCK OPTION PLAN
DIGEX, INCORPORATED 1996 EQUITY PARTICIPATION PLAN
DIGEX, INCORPORATED 1997 EMPLOYEE STOCK PURCHASE PLAN
(full title of the plans)
------------------
THOMAS M. BRANDT, JR. Copy to:
Senior Vice President and
Chief Financial Officer JOHN D. WATSON, JR.
DIGEX, Incorporated Latham & Watkins
6800 Virginia Manor Road 1001 Pennsylvania Ave., N.W.
Beltsville, Maryland 20705 Suite 1300
(301) 847-5000 Washington, DC 20004-2505
(Name, address, including zip code, and (202) 637-2200
telephone number, including area code,
of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Title of Each Class Amount Maximum Maximum Amount of
of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Share (1) Offering Price Fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par
value (2) 2,850,480 $10.5625 $30,108,195 $9,123.70
================================================================================
</TABLE>
(1) For purposes of computing the registration fee only. Pursuant to Rule
457(h), the Proposed Maximum Offering Price Per Share is based upon the
average of the high and low prices for the Company's Common Stock on the
NASDAQ on December 5, 1996.
(2) The 1995 Stock Option Plan, 1996 Equity Participation Plan and the Employee
Stock Purchase Plan (the "Plans") authorize the issuance of a maximum of
2,850,480 shares in the aggregate (350,000 shares of which are subject to
approval by a vote of the stockholders of the Company). Of such shares
1,099,054 are subject to outstanding options granted under the 1995 Stock
Option Plan as of December 5, 1996, and 1,184,296 are subject to outstan-
ding options granted under the Equity Plan as of December 5, 1996.
<PAGE>
PART I
Item 1. Plan Information
Not required to be filed with this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information
Not required to be filed with this Registration Statement.
PART II
Item 3. Incorporation of Documents by Reference
The documents listed below have been filed by the Company with the
Commission and are incorporated herein by reference listed below:
(a) The Company's Prospectus relating to its initial public offering of
Common Stock, dated October 16, 1996 and filed with the Commission pursuant to
Rule 424(b) under the Securities Act.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the Company's fiscal year ended December 31,
1995.
(c) Description of the Company's Common Stock incorporated by reference
into the Company's Registration Statement on Form 8-A filed on October 8, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934 after the date of this
Prospectus and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Prospectus and to be part hereof from the date of filing 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 Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Item 4. Description of Securities
Not required to be filed with this Registration Statement.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
The Amended and Restated Certificate of Incorporation of DIGEX, Incorpora-
ted, as amended (the "Amended and Restated Certificate of Incorporation"),
provides that the Company shall indemnify to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") any person whom it may indemnify thereunder. The By-laws of the
Company provide that indemnification shall be made by the Company only upon a
determination that indemnification is proper in the circumstances because the
individual met the applicable standard
2
<PAGE>
of conduct. Advances for such indemnification may be made pending such
determination upon receipt of an undertaking by the director or officer to repay
all amounts so advanced in the event that it shall ultimately be determined that
such director or officer is not entitled to be indemnified by the Company. In
addition, the Amended and Restated Certificate of Incorporation provides for the
limitation to the extent permitted by the Delaware Law of personal liability of
directors to the Company and its stockholders for monetary damages for breach of
fiduciary duty as directors of the Company.
The Company is obtaining a directors' and officers' insurance and company
reimbursement policy in the amount of $5,000,000. The policy insures directors
and officers against unindemnified loss arising from certain wrongful acts in
their capacities and reimburses the Company for such loss for which the Company
has lawfully indemnified its directors and officers. The policy contains
various exclusions, none of which will relate to the offering hereunder.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
4.1 DIGEX, Incorporated Stock Option Plan (incorporated by reference to
Exhibit 10.12(a) to the Company's Registration Statement on Form SB-2
which was declared effective by the Commission on October 16, 1996
(No. 333-05871)).
4.2 DIGEX, Incorporated 1996 Equity Participation Plan (incorporated by
reference to Exhibit 10.12(b) to the Company's Registration Statement
on Form SB-2 which was declared effective by the Commission on October
16, 1996 (No. 333-05871)).
4.3 DIGEX, Incorporated 1997 Employee Stock Purchase Plan.
5.1 Opinion of Latham & Watkins.
24.1 Consent of Ernst & Young LLP.
24.2 Consent of Latham & Watkins (included in Exhibit 5.1).
25.1 Power of Attorney (incorporated in the signature page to the
Registration Statement).
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of 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 the
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(ii) and (a)(1)(ii) shall not apply
if the information required to be included in that post-effective amendment by
those paragraphs is contained in
3
<PAGE>
periodic reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Beltsville, State of Maryland on this 4th day of
December, 1996.
DIGEX, INCORPORATED
By: /s/Christopher R. McCleary
---------------------------------
Christopher R. McCleary
Chief Executive Officer
Dated: December 5, 1996
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby authorizes Thomas M. Brandt and John C. Welling, and each of them,
as attorney-in-fact, with full power of substitution, to sign on his or her
behalf, individually and in such capacity stated below, and to file any
amendments, including post-effective amendments or supplements, to this
Registration Statement.
<TABLE>
<CAPTION>
Signature Title Date
--------- ------ ----
<S> <C> <C>
/s/ Christopher R. McCleary
- ----------------------------
Christopher R. McCleary Chairman of the Board, December 4, 1996
President and Chief
Executive Officer
/s/ Michael T. Doughney Vice President, Director December 4, 1996
- ----------------------------
Michael T. Doughney
/s/ John C. Welling Vice President, Controller December 4, 1996
- ----------------------------
John C. Welling
/s/ Thomas M. Brandt
- ---------------------------- Senior Vice President and December 4, 1996
Thomas M. Brandt Chief Financial Officer
/s/ Frank A. Adams
- ---------------------------- Director December 4, 1996
Frank A. Adams
/s/ Thomas H. Cato
- ---------------------------- Director December 4, 1996
Thomas H. Cato
/s/ William F. Earthman III Director December 4, 1996
- ----------------------------
William F. Earthman III
/s/ Douglas E. Humphrey Senior Vice President, Chief December 4, 1996
- ---------------------------- Technology Officer,
Douglas E. Humphrey Director
/s/ Ray A. Rothrock
- ---------------------------- Director December 4, 1996
Ray A. Rothrock
/s/ Robert M. Stewart Director December 4, 1996
- ----------------------------
Robert M. Stewart
/s/John H. Wyant Director December 4, 1996
- ----------------------------
John H. Wyant
</TABLE>
<PAGE>
DIGEX, INCORPORATED
EXHIBIT INDEX
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION OF EXHIBIT NUMBERED PAGE
- ------ ---------------------- -------------
4.1 DIGEX, Incorporated Stock Option Plan (incorporated
by reference to Exhibit 10.12(a) to the Company's
Registration Statement on Form SB-2 which was
declared effective by the Commission on October
16, 1996 (No. 333-05871)).
4.2 DIGEX, Incorporated 1996 Equity Participation Plan
(incorporated by reference to Exhibit 10.12(b) to
the Company's Registration Statement on Form SB-2
which was declared effective by the Commission on
October 16, 1996 (No. 333-05871)).
4.3 DIGEX, Incorporated 1997 Employee Stock Purchase
Plan.
5.1 Opinion of Latham & Watkins.
24.1 Consent of Ernst & Young LLP.
24.2 Consent of Latham & Watkins (included in Exhibit 5.1).
25.1 Power of Attorney (incorporated in the signature
page to the Registration Statement).
6
<PAGE>
EXHIBIT 4.3
DIGEX, INCORPORATED
1997 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
1.1 Purpose
The purpose of the DIGEX, Incorporated 1997 Employee Stock Purchase Plan
is to assist employees of DIGEX, Incorporated and its subsidiaries in acquiring
a stock ownership interest in the Company pursuant to a plan which is intended
to qualify as an "employee stock purchase plan" under Section 423 of the
Internal Revenue Code of 1986, as amended.
1.2 Definitions
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The singular pronoun shall include the plural where the context so indicates.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Stock Purchase Plan Committee of the Company,
which Committee shall administer the Plan as provided in Section 1.3 hereof.
"Common Stock" shall mean shares of common stock of the Company.
"Company" shall mean DIGEX, Incorporated.
"Compensation" shall mean the base salary, bonuses, overtime, and
commissions paid to an Employee by the Company or a Subsidiary in accordance
with established payroll procedures.
"Eligible Employee" shall mean an Employee who (a) is scheduled to work
at least 20 hours per week and (b) whose customary employment is more than five
(5) months in a calendar year.
"Employee" shall mean any employee of the Company or a Subsidiary.
<PAGE>
"Exercise Date" shall mean May 31, 1997, August 31, 1997 and November 30,
1997.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" of a share of Common Stock as of a given date shall
mean (i) the average of the closing prices of the sales of Common Stock on the
trading date previous to such date on all national securities exchanges on which
such securities may at the time be listed, or, if there have been no sales on
any such exchange on the trading date previous to such date, the average of the
highest bid and lowest asked prices on all such exchanges at the close of
business on the trading day previous to such date, or (ii) if on any date no
such shares of Common Stock are so listed, the average of the representative bid
and asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time on
the trading date previous to such date, or (iii) if on any date such securities
are not quoted in the NASDAQ System, the average of the highest bid and lowest
asked prices on the trading date previous to such date in the domestic over-the-
counter market as reported by the National Quotation Bureau Incorporated, or any
similar successor organization, or (iv) if Common Stock is not publicly traded
or quoted or sold in the over-the-counter market, the fair market value of a
share of Common Stock as established by the Committee acting in good faith.
"Offering Date" shall mean December 9, 1996, June 1, 1997 and September
1, 1997.
"Option Period" shall mean the period beginning on an Offering Date and
ending on the next succeeding Exercise Date.
"Option Price" shall mean the purchase price of a share of Common Stock
hereunder as provided in Section 3.1 hereof.
"Participant" shall mean any Eligible Employee who elects to participate.
"Plan" shall mean this DIGEX, Incorporated 1997 Employee Stock Purchase
Plan, as the same may be amended from time to time.
"Plan Account" shall mean an account established and maintained by the
Company in the name of each Participant.
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
2
<PAGE>
1.3 Administration of Plan
The Plan shall be administered by the Committee which shall be composed
of not less than three officers of the Company. Each member of the Committee
shall serve for a term commencing on a date specified by the Board and
continuing until he or she dies or resigns or is removed from office by the
Board. The Committee shall have the power to make, amend and repeal rules and
regulations for the interpretation and administration of the Plan consistent
with the qualification of the plan under Section 423 of the Code, and the
Committee also is authorized to change the Offering Periods, Offering Dates and
Exercise Dates under the Plan by providing written notice to all Employees at
least 15 days prior to the Exercise Date following which such changes will take
effect. The Committee may delegate administrative tasks under the Plan to one or
more agents. The Committee's interpretation and decisions in respect to the Plan
shall be final and conclusive.
ARTICLE II
PARTICIPATION
2.1 Eligibility
An Eligible Employee may participate in the Plan if immediately after the
applicable Offering Date, such Employee would not be deemed for purposes of
Section 423(b)(3) of the Code to possess 5% or more of the total combined voting
power or value of all classes of stock of the Company or any Subsidiary.
2.2 Election to Participate; Payroll Deductions
An Eligible Employee may participate in the Plan only by means of payroll
deduction. An Eligible Employee may elect to participate in the Plan during an
Option Period by delivering to the Company in the calendar month preceding the
Offering Date on which such Option Period commences a written payroll deduction
authorization on a form prescribed by the Company; provided, however that for
the Offering Period commencing December 9, an Eligible Employee may elect to
participate in the Plan at any time on or prior to December 9, 1996. Payroll
deductions (a) shall be equal to at least 1%, but not more than 10%, of the
Participant's Compensation as of the Offering Date; (b) must equal at least five
dollars ($5.00) per pay period; and (c) may be expressed either as (i) a whole
number percentage or (ii) a fixed dollar amount, subject to the provisions of
Sections 3.2 and 3.3 hereof. Amounts deducted from a Participant's Compensation
pursuant to this Section 2.2 shall be credited to the Participant's Plan
Account.
2.3 Leave of Absence
During leaves of absence approved by the Company and meeting the
requirements of Regulation Section 1.421-7(h)(2) under the Code, a Participant
may continue
3
<PAGE>
participation in the Plan by making cash payments to the Company on his or her
normal payday equal to his or her authorized payroll deduction.
ARTICLE III
PURCHASE OF SHARES
3.1 Option Price
The Option Price per share of the Common Stock sold to Participants
hereunder shall be 85% of the Fair Market Value of such share on either the
Offering Date or the Exercise Date of the Option Period, whichever is lower, but
in no event shall the Option Price per share be less than the par value per
share of the Common Stock.
3.2 Purchase of Shares
(a) On each Exercise Date on which he or she is employed, each Participant
will automatically and without any action on his or her part be deemed to have
exercised his or her option to purchase at the Option Price the largest number
of whole shares of Common Stock which can be purchased with the amount in the
Participant's Plan Account; provided, however, that no Participant shall be
permitted to purchase more than 1,000 shares of Common Stock (as adjusted
pursuant to Section 4.2 hereof) pursuant to this Plan. Except as provided in
subsection (c), the balance, if any, remaining in the Participant's Plan Account
(after exercise of his or her option) as of an Exercise Date shall be carried
forward to the next Offering Period, unless the Participant has elected to
withdraw from the Plan pursuant to Section 5.1 hereof.
(b) As soon as practicable following each Exercise Date, the Company will
deliver to the Participant a certificate issued in his or her name for such
number of shares. In the event the Company is required to obtain from any
commission or agency authority to issue any such certificate, the Company will
seek to obtain such authority. Inability of the Company to obtain from any such
commission or agency authority which counsel for the Company deems necessary for
the lawful issuance of any such certificate shall relieve the Company from
liability to any Participant except to refund to him or her the amount withheld.
(c) If, at any Exercise Date, the sum of
(i) the aggregate number of shares of Common Stock, if any, previously
purchased by the Participant pursuant to this Plan, and
(ii) the number of shares that may otherwise be purchased by such
Participant on such Exercise Date
exceeds 1,000, the Company shall refund to such Participant within 21 days of
such Exercise Date, the excess of
4
<PAGE>
(x) the amount in such Participant's Plan Account as of such Exercise
Date, over
(y) the amount necessary to purchase the largest number of whole
shares that when aggregated with the number of shares, if any, previously
purchased by the Participant pursuant to the Plan shall not exceed 1,000.
(d) The balance, if any, remaining in the Participant's Plan Account after
exercise of his or her option on November 30, 1997 shall be refunded to him or
her within 21 days after such Exercise Date.
3.3 Limitations on Purchase
No Employee shall be granted an option under the Plan which permits his
or her rights to purchase Common Stock under the Plan or any other employee
stock purchase plan of the Company or any of its Subsidiaries to accrue at a
rate which exceeds $25,000 (as measured by the Fair Market Value of such Common
Stock at the time the option is granted) for each calendar year such option is
outstanding. For purposes of this Section 3.3, the right to purchase Common
Stock under an option accrues when the option (or any portion thereof) becomes
exercisable, and the right to purchase Common Stock which has accrued under one
option under the Plan may not be carried over to any other option.
3.4 Transferability of Rights
An option granted under the Plan shall not be transferable and is
exercisable only by the Participant. No option or interest or right therein or
part thereof shall be liable for the debts, contracts or engagements of the
Participant or his or her successors in interest or shall be subject to
disposition by alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by operation
of law by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempt at disposition
thereof shall be null and void and of no effect.
ARTICLE IV
PROVISIONS RELATING TO COMMON STOCK
4.1 Common Stock Reserved
There shall be 350,000 authorized but unissued or reacquired shares of
Common Stock reserved for issuance pursuant to this Plan, subject to adjustment
in accordance with Section 4.2 hereof.
4.2 Adjustment for Changes in Common Stock
In the event that adjustments are made in the number of outstanding
shares of Common Stock or the shares are exchanged for a different class of
stock of the Company by
5
<PAGE>
reason of stock dividend, stock split or other subdivision, the Committee shall
make appropriate adjustments in (a) the number and class of shares or other
securities that may be reserved for purchase hereunder and (b) the Option Price.
4.3 Merger, Acquisition or Liquidation
In the event of the merger or consolidation of the Company into another
corporation, the acquisition by another corporation of all or substantially all
of the Company's assets or 80% or more of the Company's then outstanding voting
stock or the liquidation or dissolution of the Company, the date of exercise
with respect to outstanding options shall be the business day immediately
preceding the effective date of such merger, consolidation, acquisition,
liquidation or dissolution unless the Committee administering the Plan shall, in
its sole discretion, provide for the assumption or substitution of such options
in a manner complying with Section 425(a) of the Code.
4.4 Insufficient Shares
If the aggregate funds available for the purchase of Common Stock on any
Exercise Date would cause an issuance of shares in excess of the number provided
for in Section 4.1 hereof, (a) the Committee shall proportionately reduce the
number of shares that would otherwise be purchased by each Participant in order
to eliminate such excess, and (b) the Plan shall automatically terminate
immediately after such Exercise Date.
4.5 Rights as Stockholders
With respect to shares of Common Stock subject to an option, a
Participant shall not be deemed to be a stockholder and shall not have any of
the rights or privileges of a stockholder. A Participant shall have the rights
and privileges of a stockholder when, but not until, a certificate for shares
has been issued to him or her following exercise of his or her option.
ARTICLE V
TERMINATION OF PARTICIPATION
5.1 Cessation of Contributions; Voluntary Withdrawal
(a) A Participant may cease payroll deductions during an Option Period
by delivering written notice of such cessation to the Company. Upon any such
cessation, such Participant may elect either to withdraw from the Plan pursuant
to subsection (b) below or to have amounts credited to his or her Plan Account
held in the Plan for the purchase of Common Stock pursuant to Section 3.2. A
Participant who ceases contributions to the Plan during any Option Period shall
not be permitted to resume contributions to the Plan during such Option Period.
(b) A Participant may withdraw from the Plan at any time by written
notice to the Company prior to the close of business on an Exercise Date. Within
21 days after the
6
<PAGE>
notice of withdrawal is delivered, the Company shall refund the entire amount,
if any, in a Participant's Plan Account to him or her, and thereupon, the
Participant's payroll deduction authorization, his or her interest in the Plan
and his or her option under the Plan shall terminate. Any Eligible Employee who
withdraws from the Plan may again become a Participant in accordance with
Section 2.2 hereof.
5.2 Termination of Eligibility
(a) A Participant whose employment terminates due to disability or
retirement may elect by written notice to the Company either to
(i) withdraw the entire amount, if any, in his or her Plan
Account, in which event such amount shall be refunded to the Participant by
the Company within 21 days of the notice, or
(ii) have the amount used to purchase whole shares of Common
Stock pursuant to Section 3.2 hereof on the next succeeding Exercise Date
and have any remaining balance refunded.
(b) If a Participant ceases to be eligible under Section 2.1 hereof for
any reason other than retirement or disability, the amount in such Participant's
Plan Account will be refunded to the Participant or his or her designated
beneficiary or estate within 21 days of his or her termination of employment or
other cessation of eligibility.
Upon payment by the Company to the Participant or his or her beneficiary
or estate of the remaining balance, if any, in Participant's Plan Account, the
Participant's interest in the Plan and the Participant's option under the Plan
shall terminate.
ARTICLE VI
GENERAL PROVISIONS
6.1 Condition of Employment
Neither the creation of the Plan nor an Employee's participation therein
shall be deemed to create any right of continued employment or in any way affect
the right of the Company or a Subsidiary to terminate an Employee at any time
with or without cause.
6.2 Amendment of the Plan
The Board may amend, suspend or terminate the Plan at any time and from
time to time; provided, however, that without approval of the Company's
stockholders given within 12 months before or after action by the Board, the
Board may not amend the Plan to increase the maximum number of shares subject to
the Plan or change the designation or class of Eligible Employees.
7
<PAGE>
Upon termination of the Plan, the balance in each Participant's Plan
Account shall be refunded within 21 days of such termination.
6.3 Use of Funds; No Interest Paid
All funds received by the Company by reason of purchase of Common Stock
hereunder will be included in the general funds of the Company free of any trust
or other restriction and may be used for any corporate purpose. No interest
will be paid to any Participant or credited under the Plan.
6.4 Term; Approval by Stockholders
The Plan shall terminate on November 30, 1997. No option may be granted
during any period of suspension of the Plan nor after termination of the Plan.
The Plan will be submitted for the approval of the Company's stockholders within
12 months after the date of the Board's initial adoption of the Plan. Options
may be granted prior to such stockholder approval; provided, however, that such
options shall not be exercisable prior to the time when the Plan is approved by
the stockholders; provided further that if such approval has not been obtained
by the end of said 12-month period, all options previously granted under the
Plan shall thereupon be cancelled and become null and void.
6.5 Effect Upon Other Plans
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary. Nothing in this
Plan shall be construed to limit the right of the Company or any Subsidiary (a)
to establish any other forms of incentives or compensation for employees of the
Company or any Subsidiary or (b) to grant or assume options otherwise than under
this Plan in connection with any proper corporate purpose, including, but not by
way of limitation, the grant or assumption of options in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.
6.6 Conformity to Securities Laws
Notwithstanding any other provision of this Plan, this Plan and the
participation in this Plan by any individual who is then subject to Section 16
of the Exchange Act shall be subject to any additional limitations set forth in
any applicable exemptive rule under Section 16 of the Exchange Act (including
any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by applicable law,
the Plan shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule.
6.8 Governing Law
The Plan and all rights and obligations thereunder shall be construed and
enforced in accordance with the laws of the State of Delaware.
8
<PAGE>
I hereby certify that the foregoing DIGEX, Incorporated 1997 Employee
Stock Purchase Plan was duly approved by the Board of Directors of DIGEX,
Incorporated on December 4, 1996.
I hereby certify that the foregoing DIGEX, Incorporated 1997 Employee
Stock Purchase Plan was duly approved by the stockholders of DIGEX, Incorporated
on __________ ___, 1997.
Executed on this 5th day of December, 1996.
---------------------------
Secretary
9
<PAGE>
Exhibit 5.1
[LETTERHEAD OF LATHAM & WATKINS APPEARS HERE]
December 5, 1996
DIGEX, Incorporated
6800 Virginia Manor Drive
Beltsville, Maryland 20705
Re: DIGEX, Incorporated
Registration Statement on Form S-8
----------------------------------
Ladies and Gentleman:
At your request, we have examined the Registration Statement on
Form S-8 (the "Registration Statement"), which you intend to file with the
Securities and Exchange Commission in connection with the registration under the
Securities Act of 1933, as amended, of 2,850,480 shares of Common Stock, par
value $0.01 per share (the "Shares"), to be sold by DIGEX, Incorporated (the
"Company") under the DIGEX, Incorporated Stock Option Plan (the "1995 Option
Plan"), the DIGEX, Incorporated 1996 Equity Participation Plan (the "Equity
Plan") and the DIGEX, Incorporated 1997 Employee Stock Purchase Plan (the "1997
Purchase Plan"). We are familiar with the proceedings undertaken in connection
with the authorization, issuance and sale of the Shares. Additionally, we have
examined such questions of law and fact as we have considered necessary or
appropriate for purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Shares
have been duly authorized, and upon the issuance of the Shares under the terms
of the 1995 Option Plan, the Equity Plan or the 1997 Purchase Plan, as the case
may be, and delivery and payment therefor of legal consideration in excess of
the aggregate par value of the Shares issued, such Shares will be validly
issued, fully paid and nonassessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
<PAGE>
EXHIBIT 24.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333- ) pertaining to the DIGEX, Incorporated 1995 Stock Option Plan,
DIGEX Incorporated 1996 Equity Participation Plan and DIGEX, Incorporated 1997
Employee Stock Purchase Plan of our report dated July 17, 1996 (except for Note
19, as to which the date is October 9, 1996), included in the Registration
Statement (Form SB-2 No. 333-05871) and related Prospectus of DIGEX,
Incorporated dated October 16, 1996 for the registration of 4,500,000 shares of
its common stock.
/s/ Ernst & Young LLP
Baltimore, Maryland
December 5, 1996
