As filed with the Securities and Exchange Commission on December 8, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
VIATEL, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3787366
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
685 Third Avenue
New York, New York 10017
(Address of Principal Executive Offices)
AMENDED AND RESTATED
1999 FLEXIBLE INCENTIVE PLAN;
AMENDED AND RESTATED
1996 FLEXIBLE INCENTIVE PLAN
(Full Title of the Plan(s))
James P. Prenetta, Esq.
Vice President and General Counsel
Viatel, Inc.
685 Third Avenue
New York, New York 10017
(Name and Address of Agent for Service)
(212) 350-9200
(Telephone Number, Including Area Code, of Agent for Service)
------------------
COPY TO:
Jay R. Schifferli, Esq.
Kelley Drye & Warren LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, CT 06901-3229
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount To Be Offering Price Per Aggregate Offering
To Be Registered Registered Share(1) Price(1) Amount of
====================================================================================================================
<S> <C> <C> <C> <C>
Common stock, 5,117,500 shares $43.125 $220,692,187.50 $58,262.74
par value $.01 per share
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457(c) and (h) under the Securities Act of
1933, as amended. The price per share is estimated based on the
average of the high and low trading prices for Viatel, Inc.'s common
stock on December 1, 1999, as reported by the Nasdaq National Market.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission (the
"Commission") by Viatel, Inc. (the "Registrant") are hereby incorporated by
reference in this Registration Statement:
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1998, as
filed with the Commission on March 31, 1999;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, as
filed with the Commission on May 14, 1999, Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999, as filed with the Commission on August 16, 1999 and
as amended on August 18, 1999 and Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999, as filed with the Commission on November 15, 1999;
(c) Current Reports on Form 8-K, as filed with the Commission on March 12,
1999, March 18, 1999, August 31, 1999 and November 4, 1999;
(d) The description of the Registrant's common stock, $.01 par value,
contained in the Registrant's Registration Statement on Form 8-A (Registration
No. 000-21261) filed with the Commission on August 27, 1996 under Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
(e) All documents and reports filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date hereof and prior
to the filing of a post-effective amendment to the Registration Statement which
indicates that the securities offered hereby have been sold, or which
deregisters all such securities remaining unsold, shall also be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof commencing on the respective dates on which such documents are filed.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporations Law of the State of Delaware
(the "DGCL") provides that a Delaware corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (a "proceeding") (other than an action by or in the right of
the corporation) by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
2
<PAGE>
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. A Delaware
corporation may indemnify any person under such Section in connection with a
proceeding by or in the right of the corporation to procure judgment in its
favor, as provided in the preceding sentence, against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
with the defense or settlement of such action, except that no indemnification
shall be made with respect thereto unless, and then only to the extent that, a
court of competent jurisdiction shall determine upon application that such
person is fairly and reasonably entitled to indemnity for such expenses as the
court shall deem proper. A Delaware corporation must indemnify present or former
directors and officers who are successful on the merits or otherwise in defense
of any action, suit or proceeding or in defense of any claim, issue or matter in
any proceeding, by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation, against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith. A
Delaware corporation may pay for the expenses (including attorneys' fees)
incurred by an officer or director in defending a proceeding in advance of the
final disposition upon receipt of an undertaking by or on behalf of such officer
or director to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the corporation. Article Tenth of the
Registrant's Amended and Restated Certificate of Incorporation, as amended, and
Article X of the Registrant's Third Amended and Restated Bylaws provide for
indemnification of directors and officers to the fullest extent permitted by
Section 145 of the DGCL.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director shall not be personally liable to
the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for any
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) with respect to certain unlawful dividend
payments or stock redemptions or repurchases or (iv) for any transaction from
which the director derived an improper personal benefit. Article Ninth of the
Registrant's Amended and Restated Certificate of Incorporation, as amended,
eliminates the liability of directors to the fullest extent permitted by Section
102(b)(7) of the DGCL.
Section 145 of the DGCL permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other employee against any liability asserted against
such person and incurred by such person in such capacity, or arising out of
their status as such, whether or not the corporation would have the power to
indemnify directors and officers against such liability. The Registrant has
obtained officers' and directors' liability insurance of $15 million for members
of its Board of Directors and executive officers. In addition, the Registrant
has entered into agreements to indemnify its directors and officers from and
against any Expenses (as defined in the indemnity agreement) incurred by such
person in connection with investigating, defending, serving as a witness in,
participating in (including on appeal) or preparing for any of the foregoing in
any threatened, pending or contemplated action, suit or proceeding (including an
action by or in the right of the Registrant), or any inquiry, hearing or
investigation, to the fullest extent permitted by law, as such law may be
amended or interpreted (but only to the extent that such amendment or
interpretation provides for broader indemnification rights). The indemnity
agreement contains certain provisions to ensure that the indemnitee receives the
benefits contemplated by the agreement in the event of a "change in control" (as
defined in the indemnity agreement) such as the establishment and funding of a
3
<PAGE>
trust in an amount sufficient to satisfy any and all expenses reasonably
anticipated to be incurred by the indemnitee in connection with investigating,
preparing for, participating in and/or defending a proceeding.
At present, there is no pending litigation or other proceeding
involving a director or officer of the Registrant as to which indemnification is
being sought, nor is the Registrant aware of any threatened litigation that may
result in claims for indemnification by any officer or director.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
EXHIBIT NO. DESCRIPTION
- ----------- --------------------------------------------------------------
4.1 Amended and Restated Certificate of Incorporation of the
Registrant (incorporated herein by reference to Exhibit
3.1(i)(b) to the Registrant's Registration Statement on Form
S-1, Registration No. 333-09699, filed on August 7, 1996);
Certificate of Designations, Preferences and Rights of 10%
Series A Redeemable Convertible Preferred Stock, $.01 par
value (incorporated herein by reference to Exhibit 3(i)(b) to
the Registrant's Registration Statement on Form S-4, filed on
July 10, 1998, Registration No. 333-58921 ("1998 Form S-4"));
Certificate of Amendment to the Registrant's Amended and
Restated Certificate of Incorporation (incorporated herein by
reference to Exhibit 4.9 to the Registrant's quarterly report
on Form 10-Q for the quarter ended September 30, 1998, File
No. 000-21261); and Second Certificate of Amendment to the
Registrant's Amended and Restated Certificate of Incorporation
(incorporated herein by reference to Exhibit 3.1(i) of the
Registrant's Registration Statement on Form S-4, filed on
October 15, 1999, Registration No. 333-89143 (the "October
1999 Form S-4")).
4.2 Third Amended and Restated Bylaws of the Registrant
(incorporated herein by reference to Exhibit 3.1(ii) of the
Registrant's October 1999 Form S-4).
4.3 Indenture, dated as of July, 1, 1997, between Destia
Communications, Inc. ("Destia") and The Bank of New York, as
Trustee, relating to Destia's 13.50% Senior Notes Due 2007
(incorporated herein by reference to Exhibit 4.5 of Destia's
Registration Statement on Form S-4, filed on August 7, 1997,
Registration No. 333-33117).
4.4 Indenture, dated as of April 8, 1998, between the Registrant
and The Bank of New York, as Trustee, relating to the
Registrant's 12.50% Senior Discount Notes Due 2008 (including
form of 12.50% Senior Discount Note) (incorporated herein by
reference to Exhibit 4.1 to the Registrant's 1998 Form S-4).
4.5 Indenture, dated as of April 8, 1998, between the Registrant
and The Bank of New York, as Trustee, relating to the
Registrant's 11.25% Senior Notes Due 2008 (including form of
11.25% Senior Note) (incorporated herein by reference
to Exhibit 4.2 to the Registrant's 1998 Form S-4).
4.6 Indenture, dated as of April 8, 1998, among the Registrant,
The Bank of New York, as Trustee, and Deutsche Bank,
Aktiengesellschaft, as German Paying Agent and Co-Registrar,
relating to the Registrant's 12.40% Senior Discount Notes
4
<PAGE>
Due 2008 (including form of 12.40% Senior Discount Note)
(incorporated herein by reference to Exhibit 4.3 to the
Registrant's 1998 Form S-4).
4.7 Indenture, dated as of April 8, 1998, among the Registrant,
The Bank of New York, as Trustee, and Deutsche Bank,
Aktiengesellschaft, as German Paying Agent and Co-Registrar,
relating to the Registrant's 11.15% Senior Notes Due 2008
(including form of 11.15% Senior Note) (incorporated herein by
reference to Exhibit 4.4 to the Registrant's 1998 Form S-4).
4.8 Indenture, dated as of March 19, 1999, between the Registrant
and The Bank of New York, as Trustee, relating to the
Registrant's U.S. dollar denominated 11.50% Senior Notes Due
2009 (including form of 11.50% Senior Note) (incorporated
herein by reference to Exhibit 4.9 to Amendment No. 2 to the
Registrant's Registration Statement on Form S-3, filed on
April 5, 1999, File No. 333-72309 (the "Amendment No. 2 to
Form S-3")).
4.9 Indenture, dated as of March 19, 1999, between the Registrant
and The Bank of New York, as Trustee, relating to the
Registrant's Euro denominated 11.50% Senior Notes Due 2009
(including form of 11.50% Senior Note) (incorporated herein by
reference to Exhibit 4.10 to the Registrant's Amendment No. 2
to Form S-3).
4.10 1999 Amended Stock Incentive Plan (incorporated herein by
reference to Exhibit 10.12 to the Registrant's October 1999
Form S-4).
*4.11 Amended and Restated 1999 Flexible Incentive Plan of the
Registrant.
*4.12 Amended and Restated 1996 Flexible Incentive Plan of the
Registrant.
*5 Opinion of Kelley Drye & Warren LLP as to the validity of the
securities being registered.
*23.1 Consent of Kelley Drye & Warren LLP (included in their opinion
filed as Exhibit 5).
*23.2 Consent of KPMG LLP.
*24 Powers of Attorney (See Signature Page).
- ---------------------------
*Filed herewith
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;
5
<PAGE>
(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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement.
(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 paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 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.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on this 8th day of
December, 1999.
VIATEL, INC.
By: /S/ MICHAEL J. MAHONEY
--------------------------------------------
Name: Michael J. Mahoney
Title: Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
Michael J. Mahoney, Allan L. Shaw and James P. Prenetta and each of them, as
attorneys-in-fact, with full power of substitution, to execute in the name and
on behalf of such person, individually and in each capacity stated below, and to
file any and all amendments to this Registration Statement, including any and
all post-effective amendments.
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:
SIGNATURE TITLE DATE
- --------- ----- ----
/S/ MICHAEL J. MAHONEY Chairman of the Board, December 8, 1999
- ------------------------- President and Chief
Michael J. Mahoney Executive Officer
/S/ ALLAN L. SHAW Senior Vice President, December 8, 1999
- ------------------------- Finance and Chief
Allan L. Shaw Financial Officer
/S/ FRANCIS J. MOUNT Director December 8, 1999
- -------------------------
Francis J. Mount
/S/ PAUL G. PIZZANI Director December 8, 1999
- -------------------------
Paul G. Pizzani
/S/ JOHN G. GRAHAM Director December 8, 1999
- -------------------------
John G. Graham
7
<PAGE>
/S/ SHELDON M. GOLDMAN Director December 8, 1999
- -------------------------
Sheldon M. Goldman
- ------------------------- Director
Alfred West
- ------------------------- Director
Alan L. Levy
- ------------------------- Director
Edward C. Schmults
8
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- --------------------------------------------------------------
4.1 Amended and Restated Certificate of Incorporation of the
Registrant (incorporated herein by reference to Exhibit
3.1(i)(b) to the Registrant's Registration Statement on Form
S-1, Registration No. 333-09699, filed on August 7, 1996);
Certificate of Designations, Preferences and Rights of 10%
Series A Redeemable Convertible Preferred Stock, $.01 par
value (incorporated herein by reference to Exhibit 3(i)(b) to
the Registrant's Registration Statement on Form S-4, filed on
July 10, 1998, Registration No. 333-58921 ("1998 Form S-4"));
Certificate of Amendment to the Registrant's Amended and
Restated Certificate of Incorporation (incorporated herein by
reference to Exhibit 4.9 to the Registrant's quarterly report
on Form 10-Q for the quarter ended September 30, 1998, File
No. 000-21261); and Second Certificate of Amendment to the
Registrant's Amended and Restated Certificate of Incorporation
(incorporated herein by reference to Exhibit 3.1(i) of the
Registrant's Registration Statement on Form S-4, filed on
October 15, 1999, Registration No. 333-89143 (the "October
1999 Form S-4")).
4.2 Third Amended and Restated Bylaws of the Registrant
(incorporated herein by reference to Exhibit 3.1(ii) of the
Registrant's October 1999 Form S-4).
4.3 Indenture, dated as of July, 1, 1997, between Destia
Communications, Inc. ("Destia") and The Bank of New York, as
Trustee, relating to Destia's 13.50% Senior Notes Due 2007
(incorporated herein by reference to Exhibit 4.5 of Destia's
Registration Statement on Form S-4, filed on August 7, 1997,
Registration No. 333-33117).
4.4 Indenture, dated as of April 8, 1998, between the Registrant
and The Bank of New York, as Trustee, relating to the
Registrant's 12.50% Senior Discount Notes Due 2008 (including
form of 12.50% Senior Discount Note) (incorporated herein by
reference to Exhibit 4.1 to the Registrant's 1998 Form S-4).
4.5 Indenture, dated as of April 8, 1998, between the Registrant
and The Bank of New York, as Trustee, relating to the
Registrant's 11.25% Senior Notes Due 2008 (including form of
11.25% Senior Note) (incorporated herein by reference to
Exhibit 4.2 to the Registrant's 1998 Form S-4).
4.6 Indenture, dated as of April 8, 1998, among the Registrant,
The Bank of New York, as Trustee, and Deutsche Bank,
Aktiengesellschaft, as German Paying Agent and Co-Registrar,
relating to the Registrant's 12.40% Senior Discount Notes
Due 2008 (including form of 12.40% Senior Discount Note)
(incorporated herein by reference to Exhibit 4.3 to the
Registrant's 1998 Form S-4).
4.7 Indenture, dated as of April 8, 1998, among the Registrant,
The Bank of New York, as Trustee, and Deutsche Bank,
Aktiengesellschaft, as German Paying Agent and Co-Registrar,
relating to the Registrant's 11.15% Senior Notes Due 2008
(including form of 11.15% Senior Note) (incorporated herein by
reference to Exhibit 4.4 to the Registrant's 1998 Form S-4).
4.8 Indenture, dated as of March 19, 1999, between the Registrant
and The Bank of New York, as Trustee, relating to the
Registrant's U.S. dollar denominated 11.50% Senior Notes Due
2009 (including form of 11.50% Senior Note) (incorporated
9
<PAGE>
herein by reference to Exhibit 4.9 to Amendment No. 2 to the
Registrant's Registration Statement on Form S-3, filed on
April 5, 1999, File No. 333-72309 (the "Amendment No. 2 to
Form S-3")).
4.9 Indenture, dated as of March 19, 1999, between the Registrant
and The Bank of New York, as Trustee, relating to the
Registrant's Euro denominated 11.50% Senior Notes Due 2009
(including form of 11.50% Senior Note) (incorporated herein by
reference to Exhibit 4.10 to the Registrant's Amendment No. 2
to Form S-3).
4.10 1999 Amended Stock Incentive Plan (incorporated herein by
reference to Exhibit 10.12 to the Registrant's October 1999
Form S-4).
*4.11 Amended and Restated 1999 Flexible Incentive Plan of the
Registrant.
*4.12 Amended and Restated 1996 Flexible Incentive Plan of the
Registrant.
*5 Opinion of Kelley Drye & Warren LLP as to the validity of the
securities being registered.
*23.1 Consent of Kelley Drye & Warren LLP (included in their opinion
filed as Exhibit 5).
*23.2 Consent of KPMG LLP.
*24 Powers of Attorney (See Signature Page).
- ------------------------
*Filed herewith
10
EXHIBIT 4.11
VIATEL, INC.
AMENDED AND RESTATED
1999 FLEXIBLE INCENTIVE PLAN
(Former Destia Plan)
1. ESTABLISHMENT, PURPOSE, AND DEFINITIONS.
(a) There is hereby adopted the Amended and Restated 1999 Flexible
Incentive Plan (the "Plan") of VIATEL, INC. (the "Company"), effective as of
December 8, 1999. The Plan was originally established by Destia Communications,
Inc. and approved by its stockholders on May 4, 1999.
(b) The purpose of the Plan is to provide a means whereby Eligible
Individuals (as defined in paragraph 4, below) can acquire Common Stock, $.01
par value, of the Company (the "Stock"). The Plan provides employees (including
officers and directors who are employees) of the Company and of its Affiliates
(as defined in subparagraph (c) below) an opportunity to purchase shares of
Stock pursuant to options which may qualify as incentive stock options (referred
to as "Incentive Stock Options") under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), and employees, officers, directors,
independent contractors, and consultants of the Company and of its Affiliates an
opportunity to purchase shares of Stock pursuant to options which are not
described in Sections 422 or 423 of the Code (referred to as "Nonqualified Stock
Options"). The Plan also provides for the sale or bonus of Stock to Eligible
Individuals in connection with the performance of services for the Company or
its Affiliates. Further, the Plan authorizes the grant of stock appreciation
rights ("SARs"), either separately or in tandem with options, entitling holders
to cash compensation measured by appreciation in the value of the Stock.
Finally, the Plan authorizes the grant of any other stock benefit or
stock-related benefit that the Committee (as defined in paragraph 2(a) below)
deems appropriate.
(c) The term "Affiliates" as used in the Plan means parent or subsidiary
corporations, as defined in Sections 424(e) and (f) of the Code (but
substituting "the Company" for "employer corporation"), including parents or
subsidiaries which become such after adoption of the Plan.
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall, unless otherwise determined by the Board of Directors
of the Company, be administered by the Compensation Committee of the Board (the
"Committee"). The Committee shall consist of not less than two non-employee
director members within the meaning of the rules promulgated under Section 16(b)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Members
of the Committee shall serve at the pleasure of the Board. The Committee shall
select one of its members as chairman, and shall hold meetings at such times and
places as it may determine. A majority of the Committee shall constitute a
quorum and acts of the Committee as which a quorum is present, or acts reduced
to or approved in writing by all the members of the Committee, shall be the
<PAGE>
valid acts of the Committee. If the Board does not delegate administration of
the Plan to the Committee, then each reference in this Plan to "the Committee"
shall be construed to refer to the Board.
(b) The Committee shall determine which Eligible Individuals shall be
granted options under the Plan, the timing of such grants, the terms thereof
(including any restrictions on the Stock), and the number of shares subject to
such options.
(c) The Committee may amend the terms of any outstanding option granted
under this Plan, but any amendment which would adversely affect the optionee's
rights under an outstanding option shall not be made without the optionee's
written consent. The Committee may, with the optionee's written consent, cancel
any outstanding option or accept any outstanding option in exchange for a new
option.
(d) The Committee shall also determine which Eligible Individuals shall be
issued Stock, SARs or other stock benefits or stock-related benefits under the
Plan, the timing of such grants, the terms thereof (including any restrictions),
and the number of shares of Stock, SARs or stock benefits or stock-related
benefits to be granted. The Stock, stock benefits or stock-related benefits
shall be issued for such consideration (if any) as the Committee deems
appropriate. Stock issued subject to restrictions shall be evidenced by a
written agreement (the "Restricted Stock Purchase Agreement" or the "Restricted
Stock Bonus Agreement") and stock benefits or stock-related benefits shall be
evidenced by written agreement (the "Stock Benefit Agreement"). The Committee
may amend any Restricted Stock Purchase Agreement, Restricted Stock Bonus
Agreement or Stock Benefit Agreement, but any amendment which would adversely
affect the stockholder's rights to the Stock, stock benefits or stock-related
benefits shall not be made without his or her written consent.
(e) The Committee shall have the sole authority, in its absolute discretion
to adopt, amend, and rescind such rules and regulations as, in its opinion, may
be advisable for the administration of the Plan, to construe and interpret the
Plan, the rules and the regulations, and the instruments evidencing options,
Stock, SARs or stock benefits or stock-related benefits granted under the Plan
and to make all other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations, and interpretations
of the Committee shall be binding on all participants.
3. STOCK SUBJECT TO THE PLAN.
(a) An aggregate of not more than 2,670,000 shares of Stock shall be
available for the grant of options, the issuance of Stock or the issuance of
stock benefits or stock-related benefits under the Plan, provided, however, that
no individual may receive awards of or relating to more than 445,000 shares of
common stock in a calendar year. If an option is surrendered (except surrender
for shares of Stock) or for any other reason ceases to be exercisable in whole
or in part, the shares which were subject to such option but as to which the
option had not been exercised shall continue to be available under the Plan. Any
Stock which is retained by the Company upon exercise of an option in order to
satisfy the exercise price for such option or any withholding taxes due with
respect to such option exercise shall be treated as issued to the optionee and
will thereafter not be available under the Plan.
(b) If there is any change in the Stock subject to either the Plan, an
2
<PAGE>
Option Agreement (as defined below), a Restricted Stock Purchase Agreement, a
Restricted Stock Bonus Agreement, a SAR Agreement (as defined in paragraph 8) or
Stock Benefit Agreement through merger, consolidation, reorganization,
recapitalization, reincorporation, stock split, stock dividend, or other change
in the capital structure of the Company, appropriate adjustments shall be made
by the Committee in order to preserve but not to increase the benefits to the
individual, including adjustments to the aggregate number, kind of shares, and
price per share subject to either the Plan, an Option Agreement, a Restricted
Stock Purchase Agreement, a Restricted Stock Bonus Agreement, a SAR Agreement or
a Stock Benefit Agreement.
4. ELIGIBLE INDIVIDUALS.
Individuals who shall be eligible to have granted to them the options, Stock,
SARs or other stock benefits or stock-related benefits provided for by the Plan
shall be such employees, directors, and consultants of the Company or an
Affiliate as the Committee in its discretion, shall designate from time to time
("Eligible Individuals"). Notwithstanding the foregoing, only employees of the
Company or an Affiliate (including officers and directors who are bona fide
employees) shall be eligible to receive Incentive Stock Options.
5. THE OPTION PRICE.
The exercise price of the Stock covered by each Incentive Stock Option shall be
not less than the per share fair market value of such Stock on the date the
option is granted. The exercise price of the Stock covered by each Nonqualified
Stock Option shall be as determined by the Committee. Notwithstanding the
foregoing, in the case of an Incentive Stock Option granted to a person
possessing more than ten percent of the combined voting power of the Company or
an Affiliate, the exercise price shall be not less than 110 percent of the fair
market value of the Stock on the date the option is granted. The exercise price
of an option shall be subject to adjustment to the extent provided in paragraph
3(b), above.
6. TERMS AND CONDITIONS OF OPTIONS.
(a) Each option granted pursuant to the Plan will be evidenced by a written
agreement (the "Option Agreement") executed by the Company and the person to
whom such option is granted.
(b) The Committee shall determine the term of each option granted under the
Plan; PROVIDED, HOWEVER, that the term of an Incentive Stock Option shall not be
for more than 10 years and that, in the case of an Incentive Stock Option
granted to a person possessing more than ten percent of the combined voting
power of the Company or an Affiliate, the term shall be for no more than five
years.
(c) In the case of Incentive Stock Options, the aggregate fair market value
(determined as of the time such option is granted) of the Stock with respect to
which Incentive Stock Options are exercisable for the first time by an Eligible
Individual in any calendar year (under this Plan and any other plans of the
Company or its Affiliates) shall not exceed $100,000.
(d) The Stock Option Agreement may contain such other terms, provisions and
conditions consistent with this Plan as may be determined by the Committee. If
an option, or any part thereof, is intended to qualify as an Incentive Stock
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Option, the Option Agreement shall contain those terms and conditions which are
necessary to so qualify it.
7. TERMS AND CONDITIONS OF STOCK PURCHASES AND BONUSES.
(a) Each sale or grant of Stock pursuant to the Plan will be evidenced by a
written Restricted Stock Purchase Agreement or Restricted Stock Bonus Agreement
executed by the Company and the person to whom such Stock is sold or granted.
(b) The Restricted Stock Purchase Agreement or Restricted Stock Bonus
Agreement may contain such other terms, provisions and conditions consistent
with this Plan as may be determined by the Committee, including not by way of
limitation, restrictions on transfer, forfeiture provisions, repurchase
provisions and vesting provisions.
8. TERMS AND CONDITIONS OF SARS.
The Committee may, under such terms and conditions as it deems appropriate,
authorize the issuance of SARs evidenced by a written SAR agreement (which, in
the case of tandem options, may be part of the Option Agreement to which the SAR
relates) executed by the Company and the person to whom such SAR is granted (the
"SAR Agreement"). The SAR Agreement may contain such terms, provisions and
conditions consistent with this Plan as may be determined by the Committee.
9. TERMS AND CONDITIONS OF STOCK BENEFITS AND STOCK-RELATED BENEFITS.
The Committee may, under such terms and conditions as it deems appropriate,
authorize the issuance of other forms of stock benefits and stock-related
benefits evidenced by a Stock Benefit Agreement executed by the Company and the
person to whom such stock benefit or stock-related benefit is granted. The Stock
Benefit Agreement may contain such terms, provisions and conditions consistent
with the Plan as may be determined by the Committee.
10. USE OF PROCEEDS.
Cash proceeds realized from the issuance of Stock under the Plan shall
constitute general funds of the Company.
11. AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN.
(a) The Board may at any time amend, suspend or terminate the Plan as it
deems advisable; provided that such amendment, suspension or termination
complies with all applicable requirements of state and federal law, including
any applicable requirement that the Plan or an amendment to the Plan be approved
by the Company's stockholders, and provided further that, except as provided in
paragraph 3(b) above, the Board shall in no event amend the Plan in the
following respects without the consent of stockholders then sufficient to
approve the Plan in the first instance:
(i) To increase the maximum number of shares subject to Incentive Stock
Options issued under the Plan; or
(ii) To change the designation or class of persons eligible to receive
Incentive Stock Options under the Plan.
(b) No option, stock benefit or stock-related benefit may be granted nor
any Stock issued under the Plan during any suspension or after the termination
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of the Plan, and no amendment, suspension, or termination of the Plan shall,
without the affected individual's consent, alter or impair any rights or
obligations under any option, stock benefit or stock-related benefit previously
granted under the Plan. The Plan shall terminate with respect to the grant of
Incentive Stock Options on May 2, 2009, unless previously terminated by the
Board pursuant to this paragraph 11.
12. ASSIGNABILITY.
Each option granted pursuant to this Plan shall, during the optionee's lifetime,
be exercisable only by him, and neither the option nor any right hereunder shall
be transferable by the optionee by operation of law or otherwise other than by
will or the laws of descent and distribution. Stock subject to a Restricted
Stock Purchase Agreement, a Restricted Stock Bonus Agreement or a Stock Benefit
Agreement shall be transferable only as provided in such Agreement.
13. PAYMENT UPON EXERCISE OF OPTIONS.
(a) Payment of the purchase price upon exercise of any option granted under
this Plan shall be made in cash (including for purposes of this Plan the
following cash equivalents: certified check, bank draft, postal or express money
order payable to the order of the Company in lawful money of the United States);
PROVIDED, HOWEVER, that the Committee, in its sole discretion, may permit an
optionee to pay the option price in whole or in part (i) with shares of Stock
owned by the optionee; (ii) by delivery on a form prescribed by the Committee of
an irrevocable direction to a securities broker approved by the Committee to
sell shares and deliver all or a portion of the proceeds to the Company in
payment for the Stock; (iii) by delivery of the optionee's promissory note with
such recourse, interest, security, and redemption provisions as the Committee in
its discretion determines appropriate; or (iv) in any combination of the
foregoing. Any Stock used to exercise options shall be valued at its fair market
value on the date of the exercise of the option. In addition, the Committee, in
its sole discretion, may authorize the surrender by an optionee of all or part
of an unexercised option and authorize a payment in consideration thereof of an
amount equal to the difference between the aggregate fair market value of the
Stock subject to such option and the aggregate option price of such Stock. In
the Committee's discretion, such payment may be made in cash, shares of Stock
with a fair market value on the date of surrender equal to the payment amount,
or some combination thereof.
(b) In the event that the exercise price is satisfied by the Committee
retaining from the shares of Stock otherwise to be issued to the optionee shares
of Stock having a value equal to the exercise price, the Committee may issue the
optionee an additional option, with terms identical to the Option Agreement
under which the option was received, entitling the optionee to purchase
additional Stock in an amount equal to the number of shares so retained.
14. WITHHOLDING TAXES.
(a) No Stock shall be granted or sold under the Plan to any participant,
and no SAR or other stock benefit or stock-related benefit may be exercised,
until the participant has made arrangements acceptable to the Committee for the
satisfaction of federal, state, and local income and employment tax withholding
obligations, including without limitation obligations incident to the receipt of
Stock under the Plan, the lapsing of restrictions applicable to such Stock, the
5
<PAGE>
failure to satisfy the conditions for treatment as Incentive Stock Options under
applicable tax law, or the receipt of cash payments. Upon exercise of a stock
option or lapsing of restrictions on Stock issued under the Plan, the Company
may satisfy its withholding obligations by withholding from the optionee or
requiring the stockholder to surrender shares of Stock sufficient to satisfy
federal, state and local income and employment tax withholding obligations.
(b) In the event that such withholding is satisfied by the Company or the
optionee's employer retaining from the shares of Stock otherwise to be issued to
the optionee shares of Stock having a value equal to such withholding tax, the
Committee may issue the optionee an additional option, with terms identical to
the Option Agreement under which the option was received, entitling the optionee
to purchase additional Stock in an amount equal to the number of shares so
retained.
15. RESTRICTIONS ON TRANSFER OF SHARES.
The Stock acquired pursuant to the Plan shall be subject to such restrictions
and agreements regarding sale, assignment, encumbrances or other transfer as are
in effect among the stockholders of the Company at the time such Stock is
acquired, as well as to such other restrictions as the Committee shall deem
advisable.
16. CORPORATE TRANSACTION.
(a) For purposes of this paragraph 15, a "Corporate Transaction" shall
include any of the following stockholder-approved transactions to which the
Company is a party:
(i) a merger or consolidation in which the Company is not the surviving
entity, except (1) for a transaction the principal purpose of which is to
change the state of the Company's incorporation, or (2) a transaction in
which the Company's stockholders immediately prior to such merger or
consolidation hold (by virtue of securities received in exchange for their
shares in the Company) securities of the surviving entity representing more
than fifty percent (50%) of the total voting power of such entity
immediately after such transaction;
(ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Company unless the Company's stockholders immediately
prior to such sale, transfer or other disposition hold (by virtue of
securities received in exchange for their shares in the Company) securities
of the purchaser or other transferee representing more than fifty (50%) of
the total voting power of such entity immediately after such transaction;
or
(iii) any reverse merger in which the Company is the surviving entity but
in which the Company's stockholders immediately prior to such merger do not
hold (by virtue of their shares in the Company held immediately prior to
such transaction) securities of the Company representing more than fifty
percent (50%) of the total voting power of the Company immediately after
such transaction.
(b) In the event of any Corporate Transaction, any option, restricted
Stock, SAR, stock benefit or stock-related benefit shall vest in its entirety
and become exercisable, or with respect to restricted Stock, be released from
6
<PAGE>
restrictions on transfer and repurchase rights, immediately prior to the
specified effective date of the Corporate Transaction unless assumed by the
successor corporation or its parent company, pursuant to options, restricted
stock agreements, stock appreciation rights or stock benefits or stock-related
benefits providing substantially equal value and having substantially equivalent
provisions as the options, restricted Stock, SARs or stock benefits or
stock-related benefits granted pursuant to this Plan.
17. STOCKHOLDER APPROVAL.
This Plan was approved by stockholders on May 4, 1999.
Date: December 8, 1999 VIATEL, INC.
By: /s/ James P. Prenetta
---------------------
Name: James P. Prenetta
Title: Vice President and General Counsel
7
EXHIBIT 4.12
VIATEL, INC.
AMENDED AND RESTATED
1996 FLEXIBLE INCENTIVE PLAN
(Former Econophone Plan)
1. ESTABLISHMENT, PURPOSE, AND DEFINITIONS.
(a) There is hereby adopted the Amended and Restated 1996 Flexible
Incentive Plan (the "Plan") of VIATEL, INC. (the "Company"), effective as of
December 8, 1999. This Plan was originally established by Econophone, Inc. and
approved by its stockholders on October 31, 1996 . The Plan was subsequently
amended and restated, and the restated plan was approved by the stockholders on
May 4, 1999.
(b) The purpose of the Plan is to provide a means whereby Eligible
Individuals (as defined in paragraph 4, below) can acquire Common Stock, $.01
par value, of the Company (the "Stock"). The Plan provides employees (including
officers and directors who are employees) of the Company and of its Affiliates
(as defined in subparagraph (c) below) an opportunity to purchase shares of
Stock pursuant to options which may qualify as incentive stock options (referred
to as "Incentive Stock Options") under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), and employees, officers, directors,
independent contractors, and consultants of the Company and of its Affiliates an
opportunity to purchase shares of Stock pursuant to options which are not
described in Sections 422 or 423 of the Code (referred to as "Nonqualified Stock
Options"). The Plan also provides for the sale or bonus of Stock to Eligible
Individuals in connection with the performance of services for the Company or
its Affiliates. Further, the Plan authorizes the grant of stock appreciation
rights ("SARs"), either separately or in tandem with options, entitling holders
to cash compensation measured by appreciation in the value of the Stock.
Finally, the Plan authorizes the grant of any other stock benefit or
stock-related benefit that the Committee (as defined in paragraph 2(a) below)
deems appropriate.
(c) The term "Affiliates" as used in the Plan means parent or subsidiary
corporations, as defined in Sections 424(e) and (f) of the Code (but
substituting "the Company" for "employer corporation"), including parents or
subsidiaries which become such after adoption of the Plan.
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall, unless otherwise determined by the Board of Directors
of the Company, be administered by the Compensation Committee of the Board (the
"Committee"). The Committee shall consist of not less than two non-employee
director members within the meaning of the rules promulgated under Section 16(b)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Members
of the Committee shall serve at the pleasure of the Board. The Committee shall
select one of its members as chairman, and shall hold meetings at such times and
places as it may determine. A majority of the Committee shall constitute a
quorum and acts of the Committee as which a quorum is present, or acts reduced
to or approved in writing by all the members of the Committee, shall be the
valid acts of the Committee. If the Board does not delegate administration of
the Plan to the Committee, then each reference in this Plan to "the Committee"
shall be construed to refer to the Board.
<PAGE>
(b) The Committee shall determine which Eligible Individuals shall be
granted options under the Plan, the timing of such grants, the terms thereof
(including any restrictions on the Stock), and the number of shares subject to
such options.
(c) The Committee may amend the terms of any outstanding option granted
under this Plan, but any amendment which would adversely affect the optionee's
rights under an outstanding option shall not be made without the optionee's
written consent. The Committee may, with the optionee's written consent, cancel
any outstanding option or accept any outstanding option in exchange for a new
option.
(d) The Committee shall also determine which Eligible Individuals shall be
issued Stock, SARs or other stock benefits or stock-related benefits under the
Plan, the timing of such grants, the terms thereof (including any restrictions),
and the number of shares of Stock, SARs or stock benefits or stock-related
benefits to be granted. The Stock, stock benefits or stock-related benefits
shall be issued for such consideration (if any) as the Committee deems
appropriate. Stock issued subject to restrictions shall be evidenced by a
written agreement (the "Restricted Stock Purchase Agreement" or the "Restricted
Stock Bonus Agreement") and stock benefits or stock-related benefits shall be
evidenced by written agreement (the "Stock Benefit Agreement"). The Committee
may amend any Restricted Stock Purchase Agreement, Restricted Stock Bonus
Agreement or Stock Benefit Agreement, but any amendment which would adversely
affect the stockholder's rights to the Stock, stock benefits or stock-related
benefits shall not be made without his or her written consent.
(e) The Committee shall have the sole authority, in its absolute discretion
to adopt, amend, and rescind such rules and regulations as, in its opinion, may
be advisable for the administration of the Plan, to construe and interpret the
Plan, the rules and the regulations, and the instruments evidencing options,
Stock, SARs or stock benefits or stock-related benefits granted under the Plan
and to make all other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations, and interpretations
of the Committee shall be binding on all participants.
3. STOCK SUBJECT TO THE PLAN.
(a) An aggregate of not more than 2,447,500 shares of Stock shall be
available for the grant of options, the issuance of Stock or the issuance of
stock benefits or stock-related benefits under the Plan of which 2,336,250
shares may be in the form of voting stock and 111,250 may be in the form of
non-voting stock. If an option is surrendered (except surrender for shares of
Stock) or for any other reason ceases to be exercisable in whole or in part, the
shares which were subject to such option but as to which the option had not been
exercised shall continue to be available under the Plan. Any Stock which is
retained by the Company upon exercise of an option in order to satisfy the
exercise price for such option or any withholding taxes due with respect to such
option exercise shall be treated as issued to the optionee and will thereafter
not be available under the Plan.
(b) If there is any change in the Stock subject to either the Plan, an
Option Agreement (as defined below), a Restricted Stock Purchase Agreement, a
Restricted Stock Bonus Agreement, a SAR Agreement (as defined in paragraph 8) or
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<PAGE>
Stock Benefit Agreement through merger, consolidation, reorganization,
recapitalization, reincorporation, stock split, stock dividend, or other change
in the capital structure of the Company, appropriate adjustments shall be made
by the Committee in order to preserve but not to increase the benefits to the
individual, including adjustments to the aggregate number, kind of shares, and
price per share subject to either the Plan, an Option Agreement, a Restricted
Stock Purchase Agreement, a Restricted Stock Bonus Agreement, a SAR Agreement or
a Stock Benefit Agreement.
4. ELIGIBLE INDIVIDUALS.
Individuals who shall be eligible to have granted to them the options, Stock,
SARs or other stock benefits or stock-related benefits provided for by the Plan
shall be such employees, directors, consultants of the Company or an Affiliate
as the Committee in its discretion, shall designate from time to time ("Eligible
Individuals"). Notwithstanding the foregoing, only employees of the Company or
an Affiliate (including officers and directors who are bona fide employees)
shall be eligible to receive Incentive Stock Options.
5. THE OPTION PRICE.
The exercise price of the Stock covered by each Incentive Stock Option shall be
not less than the per share fair market value of such Stock on the date the
option is granted. The exercise price of the Stock covered by each Nonqualified
Stock Option shall be as determined by the Committee. Notwithstanding the
foregoing, in the case of an Incentive Stock Option granted to a person
possessing more than ten percent of the combined voting power of the Company or
an Affiliate, the exercise price shall be not less than 110 percent of the fair
market value of the Stock on the date the option is granted. The exercise price
of an option shall be subject to adjustment to the extent provided in paragraph
3(b), above.
6. TERMS AND CONDITIONS OF OPTIONS.
(a) Each option granted pursuant to the Plan will be evidenced by a written
agreement (the "Option Agreement") executed by the Company and the person to
whom such option is granted.
(b) The Committee shall determine the term of each option granted under the
Plan; PROVIDED, HOWEVER, that the term of an Incentive Stock Option shall not be
for more than 10 years and that, in the case of an Incentive Stock Option
granted to a person possessing more than ten percent of the combined voting
power of the Company or an Affiliate, the term shall be for no more than five
years.
(c) In the case of Incentive Stock Options, the aggregate fair market value
(determined as of the time such option is granted) of the Stock with respect to
which Incentive Stock Options are exercisable for the first time by an Eligible
Individual in any calendar year (under this Plan and any other plans of the
Company or its Affiliates) shall not exceed $100,000.
(d) The Stock Option Agreement may contain such other terms, provisions and
conditions consistent with this Plan as may be determined by the Committee. If
an option, or any part thereof, is intended to qualify as an Incentive Stock
Option, the Option Agreement shall contain those terms and conditions which are
necessary to so qualify it.
3
<PAGE>
7. TERMS AND CONDITIONS OF STOCK PURCHASES AND BONUSES.
(a) Each sale or grant of Stock pursuant to the Plan will be evidenced by a
written Restricted Stock Purchase Agreement or Restricted Stock Bonus Agreement
executed by the Company and the person to whom such Stock is sold or granted.
(b) The Restricted Stock Purchase Agreement or Restricted Stock Bonus
Agreement may contain such other terms, provisions and conditions consistent
with this Plan as may be determined by the Committee, including not by way of
limitation, restrictions on transfer, forfeiture provisions, repurchase
provisions and vesting provisions.
8. TERMS AND CONDITIONS OF SARS.
The Committee may, under such terms and conditions as it deems appropriate,
authorize the issuance of SARs evidenced by a written SAR agreement (which, in
the case of tandem options, may be part of the Option Agreement to which the SAR
relates) executed by the Company and the person to whom such SAR is granted (the
"SAR Agreement"). The SAR Agreement may contain such terms, provisions and
conditions consistent with this Plan as may be determined by the Committee.
9. TERMS AND CONDITIONS OF STOCK BENEFITS AND STOCK-RELATED BENEFITS.
The Committee may, under such terms and conditions as it deems appropriate,
authorize the issuance of other forms of stock benefits and stock-related
benefits evidenced by a Stock Benefit Agreement executed by the Company and the
person to whom such stock benefit or stock-related benefit is granted. The Stock
Benefit Agreement may contain such terms, provisions and conditions consistent
with the Plan as may be determined by the Committee.
10. USE OF PROCEEDS.
Cash proceeds realized from the issuance of Stock under the Plan shall
constitute general funds of the Company.
11. AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN.
(a) The Board may at any time amend, suspend or terminate the Plan as it
deems advisable; provided that such amendment, suspension or termination
complies with all applicable requirements of state and federal law, including
any applicable requirement that the Plan or an amendment to the Plan be approved
by the Company's stockholders, and provided further that, except as provided in
paragraph 3(b) above, the Board shall in no event amend the Plan in the
following respects without the consent of stockholders then sufficient to
approve the Plan in the first instance:
(i) To increase the maximum number of shares subject to Incentive Stock
Options issued under the Plan; or
(ii) To change the designation or class of persons eligible to receive
Incentive Stock Options under the Plan.
(b) No option, stock benefit or stock-related benefit may be granted nor
any Stock issued under the Plan during any suspension or after the termination
of the Plan, and no amendment, suspension, or termination of the Plan shall,
without the affected individual's consent, alter or impair any rights or
4
<PAGE>
obligations under any option, stock benefit or stock-related benefit previously
granted under the Plan. The Plan shall terminate with respect to the grant of
Incentive Stock Options on October 31, 2006 unless previously terminated by the
Board pursuant to this paragraph 11.
12. ASSIGNABILITY.
Each option granted pursuant to this Plan shall, during the optionee's lifetime,
be exercisable only by him, and neither the option nor any right hereunder shall
be transferable by the optionee by operation of law or otherwise other than by
will or the laws of descent and distribution. Stock subject to a Restricted
Stock Purchase Agreement, a Restricted Stock Bonus Agreement or a Stock Benefit
Agreement shall be transferable only as provided in such Agreement.
13. PAYMENT UPON EXERCISE OF OPTIONS.
(a) Payment of the purchase price upon exercise of any option granted under
this Plan shall be made in cash (including for purposes of this Plan the
following cash equivalents: certified check, bank draft, postal or express money
order payable to the order of the Company in lawful money of the United States);
PROVIDED, HOWEVER, that the Committee, in its sole discretion, may permit an
optionee to pay the option price in whole or in part (i) with shares of Stock
owned by the optionee; (ii) by delivery on a form prescribed by the Committee of
an irrevocable direction to a securities broker approved by the Committee to
sell shares and deliver all or a portion of the proceeds to the Company in
payment for the Stock; (iii) by delivery of the optionee's promissory note with
such recourse, interest, security, and redemption provisions as the Committee in
its discretion determines appropriate; or (iv) in any combination of the
foregoing. Any Stock used to exercise options shall be valued at its fair market
value on the date of the exercise of the option. In addition, the Committee, in
its sole discretion, may authorize the surrender by an optionee of all or part
of an unexercised option and authorize a payment in consideration thereof of an
amount equal to the difference between the aggregate fair market value of the
Stock subject to such option and the aggregate option price of such Stock. In
the Committee's discretion, such payment may be made in cash, shares of Stock
with a fair market value on the date of surrender equal to the payment amount,
or some combination thereof.
(b) In the event that the exercise price is satisfied by the Committee
retaining from the shares of Stock otherwise to be issued to the optionee shares
of Stock having a value equal to the exercise price, the Committee may issue the
optionee an additional option, with terms identical to the Option Agreement
under which the option was received, entitling the optionee to purchase
additional Stock in an amount equal to the number of shares so retained.
14. WITHHOLDING TAXES.
(a) No Stock shall be granted or sold under the Plan to any participant,
and no SAR or other stock benefit or stock-related benefit may be exercised,
until the participant has made arrangements acceptable to the Committee for the
satisfaction of federal, state, and local income and employment tax withholding
obligations, including without limitation obligations incident to the receipt of
Stock under the Plan, the lapsing of restrictions applicable to such Stock, the
failure to satisfy the conditions for treatment as Incentive Stock Options under
5
<PAGE>
applicable tax law, or the receipt of cash payments. Upon exercise of a stock
option or lapsing of restrictions on Stock issued under the Plan, the Company
may satisfy its withholding obligations by withholding from the optionee or
requiring the stockholder to surrender shares of Stock sufficient to satisfy
federal, state and local income and employment tax withholding obligations.
(b) In the event that such withholding is satisfied by the Company or the
optionee's employer retaining from the shares of Stock otherwise to be issued to
the optionee shares of Stock having a value equal to such withholding tax, the
Committee may issue the optionee an additional option, with terms identical to
the Option Agreement under which the option was received, entitling the optionee
to purchase additional Stock in an amount equal to the number of shares so
retained.
15. RESTRICTIONS ON TRANSFER OF SHARES.
The Stock acquired pursuant to the Plan shall be subject to such restrictions
and agreements regarding sale, assignment, encumbrances or other transfer as are
in effect among the stockholders of the Company at the time such Stock is
acquired, as well as to such other restrictions as the Committee shall deem
advisable.
16. CORPORATE TRANSACTION.
(a) For purposes of this paragraph 16, a "Corporate Transaction" shall
include any of the following stockholder-approved transactions to which the
Company is a party:
(i) a merger or consolidation in which the Company is not the surviving
entity, except (1) for a transaction the principal purpose of which is to
change the state of the Company's incorporation, or (2) a transaction in
which the Company's stockholders immediately prior to such merger or
consolidation hold (by virtue of securities received in exchange for their
shares in the Company) securities of the surviving entity representing more
than fifty percent (50%) of the total voting power of such entity
immediately after such transaction;
(ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Company unless the Company's stockholders immediately
prior to such sale, transfer or other disposition hold (by virtue of
securities received in exchange for their shares in the Company) securities
of the purchaser or other transferee representing more than fifty (50%) of
the total voting power of such entity immediately after such transaction;
or
(iii) any reverse merger in which the Company is the surviving entity but
in which the Company's stockholders immediately prior to such merger do not
hold (by virtue of their shares in the Company held immediately prior to
such transaction) securities of the Company representing more than fifty
percent (50%) of the total voting power of the Company immediately after
such transaction.
(b) In the event of any Corporate Transaction, any option, restricted
Stock, SAR, stock benefit or stock-related benefit shall vest in its entirety
and become exercisable, or with respect to restricted Stock, be released from
6
<PAGE>
restrictions on transfer and repurchase rights, immediately prior to the
specified effective date of the Corporate Transaction unless assumed by the
successor corporation or its parent company, pursuant to options, restricted
stock agreements, stock appreciation rights or stock benefits or stock-related
benefits providing substantially equal value and having substantially equivalent
provisions as the options, restricted Stock, SARs or stock benefits or
stock-related benefits granted pursuant to this Plan.
17. STOCKHOLDER APPROVAL.
This Plan was approved by the stockholders on May 4, 1999.
Date: December 8, 1999 VIATEL, INC.
By: /s/ James P. Prenetta
---------------------
Name: James P. Prenetta
Title: Vice President and General Counsel
7
EXHIBIT 5
Kelley Drye & Warren LLP
Two Stamford Plaza
28 Tresser Boulevard
Stamford, CT 06901-3229
December 7, 1999
Viatel, Inc.
685 Third Avenue
New York, New York 10017
Re: Amended and Restated 1999 Flexible Incentive Plan;
Amended and Restated 1996 Flexible Incentive Plan
--------------------------------------------------
Dear Sirs:
We are acting as special counsel to Viatel, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing with the
Securities and Exchange Commission (the "Commission") of a Registration
Statement on Form S-8 (the "Registration Statement") under the Securities Act of
1933, as amended (the "Act"). The Registration Statement relates to 5,117,500
shares of the Company's common stock, $0.01 par value per share (the "Shares"),
which are to be issued pursuant to the Company's Amended and Restated 1999
Flexible Incentive Plan (the "1999 Plan") and the Company's Amended and Restated
1996 Flexible Incentive Plan (the "1996 Plan," and together with the 1999 Plan,
the "Plans").
In connection with this opinion, we have examined and relied upon
copies certified or otherwise identified to our satisfaction of: (i) the Plans;
(ii) an executed copy of the Registration Statement; (iii) the Company's Amended
and Restated Certificate of Incorporation, as amended, and Third Amended and
Restated By-laws; and (iv) the minute books and other records of corporate
proceedings of the Company, as made available to us by officers of the Company.
In addition, we have reviewed such matters of law as we have deemed necessary or
appropriate for the purpose of rendering this opinion.
For purposes of this opinion we have assumed the authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of all documents submitted to us as copies. We
have also assumed the legal capacity of all natural persons, the genuineness of
all signatures on all documents examined by us, the authority of such persons
signing on behalf of the parties thereto other than the Company and the due
authorization, execution and delivery of all documents by the parties thereto
other than the Company. As to certain factual matters material to the opinion
expressed herein, we have relied to the extent we deemed proper upon
representations, warranties and statements as to factual matters of officers and
<PAGE>
other representatives of the Company. Our opinion expressed below is subject to
the qualification that we express no opinion as to any law other than the laws
of the State of New York, the corporate law of the State of Delaware and the
federal laws of the United States of America. Without limiting the foregoing, we
express no opinion with respect to the applicability thereto or effect of
municipal laws or the rules, regulations or orders of any municipal agencies
within any such state.
Based upon and subject to the foregoing qualifications, assumptions and
limitations and the further limitations set forth below, it is our opinion that
the Shares to be issued by the Company pursuant to the Plans have been duly
authorized and reserved for issuance and, when certificates for the Shares have
been duly executed by the Company, countersigned by a transfer agent, duly
registered by a registrar for the Shares and issued and paid for in accordance
with the terms of the Plans, the Shares will be validly issued, fully paid and
non-assessable.
This opinion is limited to the specific issues addressed herein, and no
opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the State of New York, the corporate law of the State of Delaware or the
federal laws of the United States of America be changed by legislative action,
judicial decision or otherwise.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated thereunder.
This opinion is furnished to you in connection with the filing of the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose.
Very truly yours,
/s/ KELLEY DRYE & WARREN LLP
2
EXHIBIT 23.2
Independent Auditors' Consent
-----------------------------
The Board of Directors and Stockholders
Viatel, Inc.:
We consent to the use of our report incorporated herein by reference in the
registration statement.
/s/ KPMG LLP
New York, New York
December 7, 1999
