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As filed with the Securities and Exchange Commission on December 7, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VIATEL, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3787366
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
685 Third Avenue
New York, New York 10017
(Address of Principal Executive Offices)
EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
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
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CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Maximum Maximum
Title of Amount To Be Offering Aggregate Amount of
Securities Registered Price Per Offering Registration
To Be Registered Share(1) Price(1) Fee
================================================================================
Common stock, 500,000 shares $42.84375 $21,421,875.00 $5,655.38
par value $.01
per share
================================================================================
(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's common stock on November 30, 1999, as
reported by the Nasdaq National Market.
================================================================================
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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, $0.01 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 request of the
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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
trust in an amount sufficient to satisfy any and all expenses reasonably
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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 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).
4.4 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).
4.5 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).
4.6 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
11.15% Senior Notes Due 2008 (including form of 11.15% Senior Note)
4
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(incorporated herein by reference to Exhibit 4.4 to the Registrant's
1998 Form S-4).
4.7 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")).
4.8 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).
*4.9 Viatel, Inc. Employee Stock Purchase Plan.
*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;
(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;
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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.
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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 6th 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 6, 1999
- ----------------------------------- President and Chief
Michael J. Mahoney Executive Officer
/S/ ALLAN L. SHAW Senior Vice President, December 6, 1999
- ----------------------------------- Finance and Chief
Allan L. Shaw Financial Officer
/S/ FRANCIS J. MOUNT Director December 6, 1999
- -----------------------------------
Francis J. Mount
/S/ PAUL G. PIZZANI Director December 6, 1999
- -----------------------------------
Paul G. Pizzani
/S/ JOHN G. GRAHAM Director December 6, 1999
- -----------------------------------
John G. Graham
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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 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).
4.4 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).
4.5 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).
4.6 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
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).
4.7 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")).
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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 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).
*4.9 Viatel, Inc. Employee Stock Purchase Plan.
*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
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VIATEL, INC. EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
Viatel, Inc. Employee Stock Purchase Plan (the "Plan") is designed to
encourage employees of Viatel, Inc. ("Viatel") and its Subsidiaries,
as defined herein (hereinafter collectively referred to as the
"Company"), where permitted by applicable laws and regulations, to
acquire an equity interest in Viatel through the purchase of shares of
the common stock, par value $0.01 per share, of Viatel ("Common
Stock"). These purchases are intended to establish a closer
identification of employee, Company and stockholder interests and to
provide employees with a direct means of participating in the
Company's growth and earnings. It is anticipated that Plan
participation will motivate employees to remain in the employ of the
Company and give greater efforts on behalf of Viatel. It is intended
that this Plan shall constitute an "employee stock purchase plan"
within the meaning of Section 423 of the Internal Revenue Code of
1986, as amended (the "Code").
2. DEFINITIONS
The following words or terms, when used herein, shall have the
following respective meanings:
"Base Salary" shall mean an Employee's pre-tax salary or base wages
for each pay period during any Participation Period as determined from
the payroll records of the Company. Base salary shall not include any
amounts received from the Company as a bonus, as determined by the
Committee in its sole discretion.
"Board" shall mean the Board of Directors of Viatel.
"Closing Market Price" refers to the reported closing sales price for
shares of the Common Stock (or the closing bid, if no sales were
reported) as reported IN THE WALL STREET JOURNAL for that day or such
other source as the Committee deems reliable. In the absence of an
established market for the Common Stock, the Closing Market Price
shall be determined in good faith by the Committee.
"Code" is defined in Section 1 hereof.
"Committee" is defined in Section 3 hereof.
"Common Stock" is defined in Section 1 hereof.
"Effective Date" means the earlier of the date upon which this Plan is
approved by the Board and the date upon which this Plan is approved by
the stockholders of Viatel.
"Employee" refers to any individual who is a full time employee of the
Company for tax purposes and regular (non-temporary) part-time
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employees of the Company whose customary employment with the Company
is at least twenty (20) hours per week. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while
the individual is on sick leave or other leave of absence approved by
the Company. When the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed either by statute
or by contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave. The term Employee shall
include the employees of any Subsidiary incorporated or operating in a
non-U.S. jurisdiction unless the Committee has determined, in its sole
discretion, that the legal, tax or administrative requirements of
affording participation in the Plan to such employees is unduly
burdensome or that the participation of such employees in the Plan
would violate the law of the jurisdiction in which such Subsidiary is
registered or conducts its business.
"Employee Contribution Amounts" refers to the amounts contributed by
employees via payroll deduction.
"Enrollment Period" refers to the period beginning on the Grant Date
for the current Participation Period and ending ten (10) business days
prior to the Grant Date for the upcoming Participation Period, during
which period Employees eligible to participate in the Plan are
provided the opportunity to enroll in the Plan for the upcoming
Participation Period. The exact dates for each Enrollment Period will
be determined by the Committee, in its sole discretion and
communicated to all eligible Employees prior to the Enrollment Period.
"Exercise Date" refers to the last Trading Day in a Participation
Period.
"Fair Market Value" refers to the Closing Market Price on either the
first or last Trading Day in the Participation Period, as determined
in accordance with Section 9 hereof, or on the date shares of Common
Stock are purchased with cash dividends pursuant to Section 14 hereof,
as the case may be.
"Grant Date" refers to the first day of each Participation Period.
"Participant" refers to any employee meeting the eligibility
requirements specified in Section 5 hereof who has enrolled in the
Plan.
"Participation Period" shall mean a period of approximately six (6)
months commencing on the first Trading Day on or after January 15 and
terminating on the last Trading Day on or before the following July
15, or commencing on the first Trading Day on or after July 16 and
terminating on the last Trading Day on or before the following January
14. The duration of Participation Periods may be changed pursuant to
Section 22 hereof.
"Plan" shall refer to this Viatel, Inc. Employee Stock Purchase Plan.
"Plan Administrator" refers to the outside administrator that will
assist the Committee in administering the Plan and which may be
designated from time to time by the Committee. Initially, the Plan
Administrator shall be AST StockPlan, Inc.
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"Purchase Price" for any Participation Period shall mean the lower of:
(a) 85% of the Closing Market Price on the Grant Date and (b) 85% of
the Closing Market Price on the Exercise Date for such Participation
Period. These dates constitute the date of grant and the date of
exercise, respectively, for valuation purposes under Section 423 of
the Code.
"Stock Plan Administrator" shall mean the person or persons designated
by the Committee to provide administrative support for the Plan and
coordinate with the Plan Administrator. Initially, the Stock Plan
Administrator shall be certain of Viatel's Human Resources Department
and Legal Department.
"Subsidiary" shall mean any corporation that is a "subsidiary
corporation" of Viatel within the meaning of Section 424 of the Code.
"Trading Day" shall mean a day on which national stock exchanges and
the Nasdaq National Market are open for trading.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Employee Stock Purchase Plan
Committee (the "Committee") appointed by the Board, which Committee
shall consist of at least three (3) persons, who need not be members
of the Board. The members of the Committee serve at the pleasure of
the Board and may be removed by the Board at any time with or without
cause. The Committee shall supervise the administration and
enforcement of the Plan according to its terms and provisions and
shall have all powers necessary to accomplish these purposes and
discharge its duties hereunder including, but not limited to, the
power to interpret the Plan and resolve issues of eligibility, stock
price determination, or any other issues arising under the Plan or as
a result of participation of Participants in the Plan.
The Committee may act by majority decision of its members at a regular
or special meeting of the Committee or by decision reduced to writing
and signed by all members of the Committee without holding a formal
meeting. Vacancies in the membership of the Committee arising from
death, resignation or other inability to serve shall be filled by
appointment by the Board as soon as possible. All decisions by the
Committee shall be final and conclusive and binding upon all
Participants and the Company.
4. NATURE AND NUMBER OF SHARES
The Common Stock subject to issuance under the terms of the Plan shall
be shares of Viatel authorized but unissued shares or shares acquired
by Viatel through purchases on the open market, as determined in the
sole discretion of the Committee but subject to existing limitations
in Viatel's indentures. The aggregate number of shares that may be
issued under the Plan shall not exceed five hundred thousand (500,000)
shares of Common Stock. If the total number of shares that Employees
elect to purchase under the Plan exceeds the aggregate shares
available, the Committee will allot shares among Employees in such
manner as it shall determine to be equitable.
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In the event of any reorganization, recapitalization, stock split,
reverse stock split, stock dividend, combination of shares, merger,
consolidation, offering of rights or other similar change in the
capital structure of Viatel, the Committee may make such adjustment,
if any, as it deems appropriate in the number, kind and purchase price
of the shares available for purchase under the Plan and in the maximum
number of shares that may be issued under the Plan, subject to the
approval of the Board and in accordance with Section 22 hereof.
If Viatel is acquired in a transaction whereby it is not the surviving
entity or all or substantially all of its assets are acquired, the
Committee shall determine a Plan termination date. This date shall
precede the expected effective date of such acquisition by not more
than sixty (60) days. Employee Contribution Amounts accumulated during
the period between the most recent Grant Date and Plan termination
date shall be used to purchase shares for Participants in the manner
provided in Section 9 hereof utilizing the Plan termination date as
the Exercise Date for determining the purchase price for shares of
Common Stock. In the event the Plan is terminated and the acquisition
transaction is not consummated, the Plan may be reactivated on a date
determined by the Committee.
5. ELIGIBILITY REQUIREMENTS
Each Employee who shall have completed thirty (30) days of continuous
service with the Company prior to the end of any Enrollment Period
shall become eligible to participate in the Plan in accordance with
this Section 5 on the first Grant Date following such completion of
thirty (30) days of continuous service with the Company. Participation
in the Plan is voluntary.
Notwithstanding any other provision of the Plan, no Employee shall be
entitled to participate in the Plan: (1) to the extent that,
immediately after such participation, such Employee (or any other
person whose stock would be attributed to such Employee pursuant to
Section 424(d) of the Code) would own capital stock of Viatel or any
Subsidiary and/or hold outstanding options to purchase such stock
possessing five percent (5%) or more of the total combined voting
power or value of all classes of capital stock of Viatel or any
Subsidiary, or (2) to the extent that his or her rights to purchase
stock under all employee stock purchase plans of the Company accrues
at a rate that exceeds twenty-five thousand dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the
applicable Grant Date) for any calendar year.
Employees of any corporation that may become a Subsidiary after the
Effective Date shall automatically be deemed to be eligible for
participation under this Plan effective as of the Grant Date following
the date (1) the corporation became a Subsidiary, (2) the Employee has
satisfied the continuous service requirements described above
(including the continuous period of employment with such Subsidiary
prior to such Subsidiary becoming a Subsidiary), and (3) if the
Subsidiary is incorporated or operates in a non-U.S. jurisdiction, the
Committee has determined, in its sole discretion, that the legal, tax
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or administrative requirements of affording participation in the Plan
to such Subsidiary's employees is not unduly burdensome and that the
participation of such employees in the Plan would not violate the law
of the jurisdiction in which such Subsidiary is registered or conducts
its business.
6. ENROLLMENT
Each eligible Employee of the Company as of the Effective Date may
enroll in the Plan as of the Effective Date. Each other Employee of
the Company who thereafter becomes eligible to participate may enroll
in the Plan during any Enrollment Period following the date he or she
first meets the eligibility requirements of Section 5 hereof. Any
eligible Employee not enrolling in the Plan when first eligible may,
if still eligible, enroll in the Plan during any succeeding Enrollment
Period. In order to enroll, an eligible Employee must complete, sign
and submit a subscription agreement, or, if the Company in its
discretion implements a telephonic or electronic subscription
mechanism, through the completion and submission of such subscription,
during the applicable Enrollment Period.
Payroll deductions for a Participant shall commence on the first
payroll following the Grant Date and shall end on the last payroll in
the Participation Period to which such authorization is applicable,
unless sooner terminated by the Participant as provided in Section 15
hereof.
Continued enrollment in subsequent periods shall be automatic and no
additional documentation shall be required unless a Participant
notifies the Stock Plan Administrator that he or she elects not to
re-enroll or desires to discontinue such Participant's payroll
deduction during such Participation Period, pursuant to Section 8
hereof. A Participant's payroll deductions shall remain constant if
not terminated at the Participant's request during a subsequent
Enrollment Period. In order to terminate or suspend Plan
participation, at any time, the Participant must complete, sign and
submit a new subscription agreement to the Company's Stock Plan
Administrator in the manner described above. Such request will be
processed effective for the first payroll period that is
administratively feasible. In such case, the Participant's account
balance at the time of such termination or suspension shall be used to
purchase Common Stock at the end of the Participation Period. A
Participant who has suspended payroll deductions during any
Participation Period must re-enroll during a subsequent Enrollment
Period.
7. GRANT OF RIGHT TO PURCHASE SHARES
Enrollment in the Plan by an Employee on a Grant Date will constitute
the grant by Viatel to the Participant of the right to purchase on the
Exercise Date of the applicable Participation Period (at the
applicable Purchase Price) shares of Viatel's Common Stock, pursuant
to Section 9 hereof; provided, however, that such purchase shall be
subject to the limitations set forth in Sections 8 and 9 hereof. Each
exercise of such right shall occur automatically as provided in
Section 9 hereof, unless the Participant has terminated his or her
employment or withdrawn from participation pursuant to Section 10
hereof.
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Each right to purchase shares of Common Stock under the Plan during
any Participation Period shall have the following terms:
i) the right to purchase shares of Common Stock during any
Participation Period shall expire on the earlier of: (A) the
completion of the purchase of shares on the Exercise Date or
(B) the date on which the Participant terminates employment;
ii) in no event shall the right to purchase shares of Common Stock
during any Participation Period extend beyond twenty-seven (27)
months from the Grant Date;
iii) payment for shares purchased shall be made only with amounts
contributed through payroll deductions;
iv) purchase of shares shall be accomplished only in accordance
with Section 9 hereof;
v) the Purchase Price shall be determined as provided in Section 9
hereof; and
vi) the right to purchase shares of Common Stock shall in all
respects be subject to the terms and conditions of the Plan, as
interpreted by the Committee from time to time.
8. METHOD OF PAYMENT
Payment for shares of Common Stock shall be made as of the applicable
Exercise Date with amounts contributed through payroll deductions
collected over the Plan's designated Participation Period, with the
first such deduction commencing with the payroll period ending after
the Grant Date, or, with respect to the first Participation Period
under the Plan, such other payroll period as the Committee shall
determine in its sole discretion. Each Participant will authorize such
deductions from his or her pay for each pay period during the
Participation Period. A Participant may discontinue his or her
participation in the Plan in accordance with Section 6 hereof during
the Participation Period by completing, signing and filing with the
Stock Plan Administrator a new subscription agreement (or telephonic
or electronic indication) authorizing such termination. A termination
shall be effective during the subsequent payroll period following ten
(10) business days after the Company's receipt of the new subscription
agreement unless the Company elects, in its sole discretion, to
process a given change in participation more quickly. No lump sum or
prepayments are permitted and Employees may not make any additional
payments into such Participant's account under the Plan. Employees may
select any Employee Contribution Amount as long as the following
requirements are met:
i) at least $30.00 is deducted each payroll period;
ii) the amount selected is a multiple of $10.00;
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iii) the percentage of an Employee's Base Salary to be deducted is a
whole number (such as 5.0%) and not a fractional amount (such as
5.5%);
iv) the total amount deducted does not exceed 20% of the Employee's
Base Salary; and
v) the aggregate of monthly deduction amounts does not exceed
$12,500 in any Participation Period (under this Plan and under
all other similar stock purchase plans, if any, of the Company).
If for any reason a Participant's contributions to the Plan
exceed $12,500 during any Participation Period, such excess
amounts shall be refunded to the Participant as soon as
practicable after such excess has been determined to exist.
9. PURCHASE OF SHARES
The right to purchase shares of Common Stock granted by the Company
under the Plan is for the term of a Participation Period. The number
of shares of Common Stock, including fractional shares, purchased on
behalf of a Participant shall be recorded in the Plan Administrator
stock trading account established for each Participant as soon as
administratively feasible, but no later than five (5) business days
following the last business day of the preceding Participation Period.
The aggregate number of shares purchased shall be computed by dividing
the aggregate Employee Contribution Amount accumulated as of the
Exercise Date and retained in the Participants' accounts on such date
by the applicable Purchase Price for the Common Stock. Participants
shall then be allocated shares based on their individual Contribution
Amounts. Participants shall be treated as the record owners of the
shares, with all rights of a stockholder, effective as of the date the
shares are posted to the Participant's stock trading account. Any fees
associated with maintaining these stock trading accounts shall be the
obligation of the Company.
No fractional shares shall be purchased and any payroll deductions
accumulated in a Participant's account which are not sufficient to
purchase a full share shall be retained by the Participant's account
for the subsequent Participation Period, subject to earlier withdrawal
by the Participant as provided in Section 10 hereof. Any other monies
remaining in a Participant's account after the Exercise Date shall be
returned to the Participant.
10. WITHDRAWAL FROM PLAN; WITHDRAWAL OF SHARES
A Participant may withdraw all but not less than all of the payroll
deductions credited to his or her account and not yet used to purchase
shares in accordance with the terms hereof at any time by giving
written notice to the Company's Stock Plan Administrator in the form
designated by the Company in its discretion, including a telephonic or
electronic withdrawal mechanism. All of the Participant's payroll
deductions credited to his or her account shall be paid to such
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Participant as soon as administratively feasible after receipt of
notice of the withdrawal and such Participant's rights to purchase
shares during the applicable Participation Period shall be
automatically terminated and no further payroll deduction for the
purchase of shares shall be made for such Participation Period. If a
Participant withdraws from a Participation Period, payroll deductions
shall not resume at the beginning of the succeeding Participation
Period unless the Participant re-enrolls pursuant to Section 6 hereof.
The record of shares of Common Stock purchased under the Plan shall be
maintained by the Plan Administrator and such shares shall remain in
an individual stock trading account maintained by one or more
brokerage firms selected by the Plan Administrator until the shares
are either withdrawn or sold. A Participant may elect to withdraw all
shares held in his or her account at any time (without withdrawing
from the Plan) by giving notice to the Stock Plan Administrator. Upon
receipt of such notice, the Plan Administrator will arrange for either
(a) the issuance and delivery of all shares held in the Participant's
account as soon as administratively feasible or (b) sale of the
shares, as directed by the Participant.
Certificates shall be issued only in the following situations:
i) if the Participant requests a certificate; or
ii) if the Participant terminates employment with the Company
and requests a certificate.
In both of these cases, the Participant will be required to notify the
Plan Administrator and pay an issuance fee. The share certificate will
be issued to the Participant as soon as administratively feasible
after the receipt by the Plan Administrator of the required form and
payment of the issuance fee.
11. INCOME TAX OBLIGATIONS
Participants shall be responsible for all personal income tax
obligations associated with selling shares of Common Stock purchased
through the Plan.
12. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION
By electing to participate in the Plan, EACH PARTICIPANT AGREES TO
NOTIFY THE COMPANY IN WRITING IMMEDIATELY AFTER THE PARTICIPANT SELLS
OR OTHERWISE TRANSFERS COMMON STOCK ACQUIRED UNDER THE PLAN, IF SUCH
SALE OR OTHER TRANSFER OCCURS WITHIN TWO YEARS AFTER THE FIRST
BUSINESS DAY OF THE PARTICIPATION PERIOD IN WHICH SUCH COMMON STOCK
WAS ACQUIRED. Each Participant further agrees to provide any
information about such a sale or other transfer as may be requested by
the Company in order to assist it in complying with the tax laws and
minimizing the Company's obligations thereunder.
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13. WITHHOLDING OF ADDITIONAL INCOME TAXES
By electing to participate in the Plan, each Participant acknowledges
that the Company is required to withhold taxes with respect to the
amounts deducted from the Participant's compensation and accumulated
for the benefit of the Participant under the Plan, and each
Participant agrees that the Company may deduct additional amounts from
the Participant's compensation, when amounts are added to the
Participant's account, used to purchase Common Stock or refunded, in
order to satisfy such withholding obligations.
It is intended that tax withholding will be accomplished in such a
manner that the full amount of payroll deductions elected by the
Participant under Article 8 will be used to purchase Common Stock.
However, if amounts sufficient to satisfy applicable tax withholding
obligations have not been withheld from compensation otherwise payable
to any Participant, then, notwithstanding any other provision of the
Plan, the Company may withhold such taxes from the Participant's
accumulated payroll deductions and apply the net amount to the
purchase of Common Stock, unless the Participant pays the Company,
prior to the Exercise Date, an amount sufficient to satisfy such
withholding obligations. Each Participant further acknowledges that
the Company may be required to withhold taxes in connection with the
disposition of Common Stock acquired under the Plan and agrees that
the Company may take whatever action it considers appropriate to
satisfy such withholding requirements, including deducting from
compensation otherwise payable to such Participant an amount
sufficient to satisfy such withholding requirements or conditioning
any disposition of Common Stock by the Participant upon the payment to
the Company of an amount sufficient to satisfy such withholding
requirements.
14. DIVIDENDS
Cash dividends, if any, for shares of Common Stock in Participants'
accounts under the Plan shall not be distributed to Participants
directly, but shall be automatically invested in shares of Common
Stock at the full Fair Market Value on the date of such investment as
soon as administratively possible after such dividends are paid by the
Company. Such shares of Common Stock will be held in accounts under
the Plan.
15. TERMINATION OF PARTICIPATION
The right to participate in the Plan terminates automatically when a
Participant ceases to be employed by the Company. Employee
Contribution Amounts collected prior to the date of termination of
employment and not theretofore used for the purchase of Common Stock
in accordance with the Plan shall be returned to the Participant (or
in the case of his or her death, to the person or person's entitled
thereto under Section 16 hereof). Such amounts shall be delivered as
soon as administratively feasible following the end of the
Participation Period in which the Participant's employment terminates.
With regard to any shares of Common Stock acquired prior to the date
of termination of employment, such shares may be sold or withdrawn as
provided in Section 10 hereof or may be maintained in the
Participant's stock trading account.
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16. DEATH OF A PARTICIPANT
As soon as administratively feasible after receiving notification of
the death of a Participant, Employee Contribution Amounts collected,
and shares purchased under the Plan but not delivered, prior to the
date of termination of employment shall be distributed in accordance
with this Section 16. No additional shares of Common Stock may be
purchased on behalf of a Participant after notification of death is
received.
A Participant may file a written designation of a beneficiary who is
to receive any shares and cash, if any, from the Participant's account
under the Plan in the event of such Participant's death subsequent to
an Exercise Date on which the right to purchase shares is
automatically exercised pursuant to the terms hereof but prior to the
delivery to such Participant of such shares and cash. In addition, a
Participant may file a written designation of a beneficiary who is to
receive any cash from the Participant's account under the Plan in the
event of such Participant's death prior to the exercise of the right
to purchase shares hereunder. In the absence of such a designation,
the surviving spouse of a married Participant shall be deemed to be
such Participant's beneficiary and, in the case of an unmarried
Participant, the Participant's estate shall be deemed to be such
Participant's beneficiary. Such designation of beneficiary may be
changed by the Participant at any time by written notice.
17. ASSIGNMENT
Neither payroll deductions credited to a Participant's account nor any
rights of a Participant under the Plan shall be assignable or
otherwise transferable by the Participant except by will or the laws
of descent and distribution in accordance with Section 16 hereof. No
purported assignment or transfer of any rights of a Participant under
the Plan, whether voluntary or involuntary, by operation of law or
otherwise, shall vest in the purported assignee or transferee any
interest or right therein whatsoever, but immediately upon such
assignment or transfer, or any attempt to make the same, such rights
shall terminate and become of no further effect. If the foregoing
provisions of this Section 17 are violated, the Participant's election
to purchase Common Stock shall terminate and the only obligation of
the Company remaining under the Plan shall be to pay to the person
entitled thereto the payroll deductions then credited to the
Participant's account. No Participant may create a lien on any funds,
securities, rights or other property held for the account of the
Participant under the Plan, except to the extent permitted by will or
the laws of descent and distribution if beneficiaries have not been
designated. A Participant's right to purchase shares of Common Stock
under the Plan shall be exercisable only during the Participant's
lifetime and only by him or her.
18. COSTS
Viatel will pay all expenses incident to establishing and
administering the Plan. Expenses to be incurred by Participants shall
be limited to brokerage fees relating to sales of stock from the
Participant's account (as described herein), issuance fees (as
described in Section 10 hereof) and any personal income tax
obligations.
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19. REPORTS
At least annually, the Company shall provide or cause to be provided
to each Participant a report of their Employee Contribution Amounts
and the shares of Common Stock purchased with such Employee
Contribution Amounts by that Participant on each Exercise Date.
20. EQUAL RIGHTS AND PRIVILEGES
All eligible Employees shall have equal rights and privileges with
respect to the Plan so that the Plan qualifies as an "employee stock
purchase plan" within the meaning of Section 423 or any successor
provision of the Code and related regulations. Any provision of the
Plan that is inconsistent with Section 423 or any successor provision
of the Code shall without further act or amendment by the Company be
reformed to comply with the requirements of Section 423 of the Code.
This Section 20 shall take precedence over all other provisions in the
Plan.
21. RIGHTS AS STOCKHOLDER
A Participant shall have no rights as a stockholder under his or her
rights to purchase Common Stock until he or she becomes a stockholder
as herein provided. A Participant will become a stockholder with
respect to shares for which payment has been completed as provided in
Section 8 hereof effective as of the date such shares are purchased
for the Participant's stock trading account in accordance with the
provisions of the Plan. Shares purchased by a Participant under the
Plan shall be registered in the name of the Participant or in the name
of the Participant and his or her spouse.
22. MODIFICATION AND TERMINATION
The Board or Committee may amend or terminate the Plan at any time
insofar as permitted by law. No amendment shall be effective unless
within one (1) year after the change is adopted by the Board it is
approved by the holders of a majority of the voting power of Viatel's
outstanding shares if:
i) such amendment is required to be approved by stockholders to
continue the exemption provided for in Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "1934 Act") (or
any successor provision); or
ii) such amendment would cause the rights granted under the Plan to
purchase shares of Common Stock to fail to meet the requirements
of Section 423 of the Code (or any successor provision).
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23. BOARD AND STOCKHOLDER APPROVAL; EFFECTIVE DATE; TERM
The Plan was approved by the Board on December 17, 1999, whereupon the
Plan became effective subject to approval of Viatel stock holders on
or before December 17, 2000. The Plan shall continue in effect for a
term of ten (10) years unless sooner terminated under Section 22
hereof.
24. CONDITIONS UPON ISSUANCE OF SHARES; GOVERNMENTAL APPROVALS OR CONSENTS
Shares shall not be issued with respect to any Participant's right to
purchase shares pursuant to the Plan unless the exercise of such right
and the issuance and delivery of shares pursuant thereto shall comply
with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the 1934
Act, any applicable foreign securities laws, the rules and regulations
promulgated thereunder and the requirements of any stock exchange upon
which the shares may then be listed or quoted. The issuance of any
shares pursuant to the Plan shall be further subject to the approval
of counsel for the Company with respect to such compliance.
As a condition to the purchase of any shares pursuant hereto, the
Company may require the Participant to represent and warrant that the
shares are being acquired only for investment and without any present
intention to sell or distribute such shares.
Without limiting the foregoing, the Plan and any offering or sale made
to Employees under the Plan are subject to any governmental approvals
or consents that may be or become applicable in connection therewith.
Subject to the provisions of Section 22 hereof, the Board may make
such changes in the Plan and include such terms in any offering under
the Plan as may be desirable to comply with the rules or regulations
of any governmental authority.
25. USE OF FUNDS
All payroll deductions received or held by the Company under this Plan
may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such amounts.
26. NO ADDITIONAL PURCHASE RIGHTS OR EMPLOYMENT RIGHTS
Other than for rights to purchase Common Stock under the Plan, the
Plan does not, directly or indirectly, create any right for the
benefit of any Employee or class of Employee to purchase any shares
under the Plan, or create in any Employee or class of Employees any
right with respect to continuation of employment with the Company, and
it shall not be deemed to interfere in any way with the Company's
right to terminate, or otherwise modify, any Employee's employment at
any time.
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27. EFFECT OF PLAN
The provisions of the Plan shall, in accordance with its terms, be
binding upon, and inure to the benefit of, all successors of each
Employee participating in the Plan, including, without limitation,
such Employee's estate and the executors, administrators or trustees
thereof, heirs and legatees, and any receiver, trustee in bankruptcy
or representative of creditors of such Employee.
28. GOVERNING LAW
The laws of the State of New York shall govern all matters relating to
the Plan except to the extent superseded by the laws of the United
States or the property laws of any particular state.
29. NO PAYMENT OF INTEREST
No interest will be paid or allowed on any Employee Contribution
Amounts or amounts credited to the account of any Participant.
30. OTHER PROVISIONS
Any agreement to purchase shares of Common Stock under the Plan may
contain such other provisions as the Committee and the Board shall
deem advisable, provided that no such provision shall in any way
conflict with the terms of the Plan.
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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: THE EMPLOYEE STOCK PURCHASE 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 500,000
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 Employee Stock Purchase Plan
(the "Plan").
In connection with this opinion, we have examined and relied upon copies
certified or otherwise identified to our satisfaction of: (i) the Plan; (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
other representatives of the Company. Our opinion expressed below is subject to
<PAGE>
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 Plan 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 Plan, 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
<PAGE>
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 6, 1999
