UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
|X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended June 30, 1997
or
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition Period From _______________ to
________________.
Commission file number 0-27074
SECURE COMPUTING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-1637226
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2675 Long Lake Road
Roseville, Minnesota 55113
(Address of principal executive offices) (Zip code)
(612) 628-2700
Registrant's telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X| No |_|
Indicate the number of shares outstanding of each of the issueris classes
of common stock, as of the latest practical date: Common Stock, $.01 par value
- -- 15,575,616 issued and outstanding as of August 4, 1997, which number includes
(i) 3,071,817 Exchangeable Shares that have the same voting and other
rights as Common Stock and are immediately exercisable for shares of Common
Stock and (ii) securities that are immediately convertible into
7,273 Exchangeable Shares.
<PAGE>
SECURE COMPUTING CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SECURE COMPUTING CORPORATION
DATE: August 14, 1997 By: \s\ Timothy P. McGurran
--------------------------
Timothy P. McGurran,
Vice President of Operations
and Chief Financial Officer
(Duly authorized officer and
Principal Financial Officer)
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INDEX TO EXHIBITS
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EXHIBIT DESCRIPTION PAGE
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10 Secure Computing Corporation 1997 Non-Officer Stock Option FILED ELECTRONICALLY
Plan
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EXHIBIT 10
SECURE COMPUTING CORPORATION
1997 NON-OFFICER STOCK OPTION PLAN
1. PURPOSE. The purpose of this Secure Computing Corporation 1997
Non-Officer Stock Option Plan (the "Plan") is to motivate personnel (other than
officers and directors) to produce a superior return to the stockholders of the
Company by offering such personnel an opportunity to realize Stock appreciation,
by facilitating Stock ownership and by rewarding them for achieving a high level
of corporate financial performance. The Plan is also intended to facilitate
recruiting and retaining personnel of outstanding ability by providing an
attractive capital accumulation opportunity.
2. DEFINITIONS AND RULES OF CONSTRUCTION. The capitalized terms used in
this Plan have the meanings, and certain rules of construction are, set forth in
the list of defined terms attached to this Plan as Exhibit A.
3. ADMINISTRATION.
3.1 AUTHORITY OF COMMITTEE. The Committee shall administer the
Plan. Solely for purposes of determining and administering Awards to
Employees who are not then subject to the reporting requirements of
Section 16 of the Exchange Act, the Committee may delegate all or any
portion of its authority under the Plan to persons who are not
Non-Employee Directors. The Committee shall have exclusive power to
make Awards, to determine when and to whom Awards will be granted, the
amount of each Award, and any other terms or conditions of each Award.
Each Award shall be subject to an Agreement authorized by the
Committee. The Committee's interpretation of the Plan and of any Awards
made under the Plan shall be final and binding on all persons with an
interest therein. The Committee shall have the power to establish
regulations to administer the Plan and to change such regulations.
3.2 INDEMNIFICATION. To the full extent permitted by law, (i)
no member of the Committee or any person to whom the Committee
delegates authority under the Plan shall be liable for any action or
determination taken or made in good faith with respect to the Plan or
any Award made under the Plan, and (ii) the members of the Committee
and each person to whom the Committee delegates authority under the
Plan shall be entitled to indemnification by the Company with regard to
such actions and determinations.
4. SHARES AVAILABLE UNDER THE PLAN. The number of Shares that may be
made subject to Awards granted under this Plan available for distribution shall
not exceed 250,000 (subject to adjustment pursuant to Section 11 hereof). Any
Shares subject to the terms and conditions of an Award under this Plan which are
not issued because the Award is not exercised may again be used for an Award
under the Plan.
5. ELIGIBILITY. The granting of Awards to Employees is solely at the
discretion of the Committee.
<PAGE>
6. TERMS OF AWARDS.
6.1 AGREEMENT; PURCHASE PRICE. An Option shall be granted
pursuant to an Agreement in such form as the Committee may approve. The
purchase price of each Share subject to an Option shall be determined
by the Committee and set forth in the Agreement, but shall not be less
than 50% of the Fair Market Value of a Share as of the date the Option
is granted. The purchase price of the Shares with respect to which an
Option is exercised shall be payable in full at the time of exercise,
provided that to the extent permitted by law, the Agreement may permit
some or all Participants to simultaneously exercise Options and sell
the Shares thereby acquired pursuant to a brokerage or similar
relationship and use the proceeds from such sale as payment of the
purchase price of such Shares. The purchase price may be payable in
cash, in Stock having a Fair Market Value as of the date the Option is
exercised equal to the purchase price of the Stock being purchased
pursuant to the Option, or a combination thereof, as determined by the
Committee and provided in the Agreement. Provided, however, that a
person exercising an Option shall not be permitted to pay any portion
of the purchase price with Stock if, in the opinion of the Committee,
payment in such manner could have adverse financial accounting
consequences for the Company. Each Option shall be exercisable in whole
or in part on the terms provided in the Agreement. In no event shall
any Option be exercisable at any time after its expiration date. When
an Option is no longer exercisable, it shall be deemed to have lapsed
or terminated.
6.2 AMOUNT. Each Agreement shall set forth the number of
Shares to which the Option subject to such Agreement applies.
6.3 TERM. Each Agreement shall set forth the Term of the
Option. An Agreement may permit acceleration of the commencement of the
applicable Term upon such terms and conditions as shall be set forth in
the Agreement, which may, but need not, include without limitation
acceleration resulting from the occurrence of an Event, Fundamental
Change, or in the event of the Participant's death or Retirement.
6.4 TRANSFERABILITY. During the lifetime of a Participant to
whom an Award is granted, only such Participant (or such Participant's
legal representative) may exercise the Option. No Award may be sold,
assigned, transferred, exchanged or otherwise encumbered other than
pursuant to a qualified domestic relations order as defined in the Code
or Title 1 of the Employee Retirement Income Security Act ("ERISA") or
the rules thereunder, and any attempt to do so shall be of no effect;
provided, however, that any Participant may transfer an Option granted
under this Plan to a member or members of his or her immediate family
(i.e., his or her children, grandchildren and spouse) or to one or more
trusts for the benefit of such family members or partnerships in which
such family members are the only partners, if (i) the Agreement with
respect to such Option expressly so provides either at the time of
initial grant or by amendment to an outstanding Agreement and (ii) the
Participant does not receive any consideration for the transfer. Any
Option held by any such transferee shall continue to be subject to the
same terms and conditions that were applicable to such Option
immediately prior to its transfer and may be exercised by such
transferee as and to the extent that such Option has become exercisable
<PAGE>
and has not terminated in accordance with the provisions of the Plan
and the applicable Agreement. For purposes of any provision of this
Plan relating to notice to a Participant or to vesting or termination
of an Option upon the death, Total and Permanent Disability or
termination of employment of a Participant, the references to
"Participant" shall mean the original grantee of an Option and not any
transferee. Notwithstanding the immediately preceding sentence, an
Agreement may provide that the Award subject to the Agreement shall be
transferable to a Successor in the event of a Participant's death.
6.5 TERMINATION OF EMPLOYMENT. No Option may be exercised by
any Participant, after (i) the expiration of the three-month period (or
such other time period as the Committee may, in its sole discretion,
determine) following the date the Participant's employment by the
Company ceases, including cessation of employment because of death,
Retirement, or Total and Permanent Disability, or (ii) if applicable,
the date of breach by a Participant of any provision of any employment
agreement between the Company and Participant. An Award may be
exercised by, or paid to, the Successor of a Participant following the
death of such Participant to the extent, and during the period of time,
if any, provided in the applicable Agreement.
7. EFFECTIVE DATE OF THE PLAN.
7.1 EFFECTIVE DATE. The Plan shall become effective as of
August 5, 1997.
7.2 DURATION OF THE PLAN. The Plan shall remain in effect
until all Stock subject to it shall be distributed or until all Awards
have expired or lapsed, or the Plan is terminated pursuant to Section
10.
8. RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan shall confer upon
any Participant the right to continue in the employment of the Company or any
Affiliate or affect any right which the Company or any Affiliate may have to
terminate the employment of the Participant with or without cause.
9. TAX WITHHOLDING. The Company shall have the right to require a
Participant or other person receiving Stock under the Plan to pay the Company a
cash amount sufficient to cover any required withholding taxes. In lieu of all
or any part of such a cash payment from a person receiving Stock under the Plan,
the Committee may permit the individual to elect to cover all or any part of the
required withholdings, and to cover any additional withholdings up to the amount
needed to cover the individual's full FICA and Medicare, and federal, state and
local income tax with respect to income arising from payment of the Award,
through a reduction of the number of Shares delivered to him or a subsequent
return to the Company of Shares held by the Participant or other person, in each
case valued in the same manner as used in computing the withholding taxes under
the applicable laws.
10. AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The Board may
at any time terminate, suspend or modify the Plan. No termination, suspension,
or modification of the Plan will materially and adversely affect any right
acquired by any Participant (or his legal representative) or any Successor under
an Award granted before the date of termination,
<PAGE>
suspension, or modification, unless otherwise agreed to by the Participant in
the Agreement or otherwise or required as a matter of law; but it will be
conclusively presumed that any adjustment for changes in capitalization provided
for in Section 11 does not adversely affect any right.
11. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. Appropriate adjustments
in the aggregate number and type of Shares available for Awards under the Plan,
in the number and type of Shares subject to Awards then outstanding and in the
Option price as to any outstanding Options may be made by the Committee in its
sole discretion to give effect to adjustments made in the number or type of
Shares of the Company through a Fundamental Change (subject to Section 12),
recapitalization, reclassification, stock dividend, stock split, stock
combination or other relevant change, provided that fractional Shares shall be
rounded to the nearest whole share.
12. FUNDAMENTAL CHANGE. In the event of a proposed Fundamental Change,
the Committee may, but shall not be obligated to:
a. if the Fundamental Change is a merger or consolidation or
statutory share exchange, make appropriate provision for the protection
of the outstanding Options by the substitution of options and
appropriate voting common stock of the corporation surviving any merger
or consolidation or, if appropriate, the parent corporation of the
Company or such surviving corporation to be issuable upon the exercise
of Options, in lieu of options and capital stock of the Company; or
b. at least 30 days prior to the occurrence of the Fundamental
Change, declare, and provide written notice to each holder of an Option
of the declaration, that each outstanding Option, whether or not then
exercisable, shall be canceled at the time of, or immediately prior to
the occurrence of the Fundamental Change in exchange for payment to
each holder of an Option, within ten days after the Fundamental Change,
of cash equal to, for each Share covered by the canceled Option, the
amount, if any, by which the Fair Market Value (as hereinafter defined
in this Section) per Share exceeds the exercise price per Share covered
by such Option. At the time of the declaration provided for in the
immediately preceding sentence, each Option shall immediately become
exercisable in full and each person holding an Option shall have the
right, during the period preceding the time of cancellation of the
Option, to exercise such Option as to all or any part of the Shares
covered thereby. In the event of a declaration pursuant to this Section
12(b), each outstanding Option granted pursuant to the Plan that shall
not have been exercised prior to the Fundamental Change shall be
canceled at the time of, or immediately prior to, the Fundamental
Change, as provided in the declaration. Notwithstanding the foregoing,
no person holding an Option shall be entitled to the payment provided
for in this Section 12(b) if such Option shall have expired pursuant to
the Agreement. For purposes of this Section only, "Fair Market Value"
per Share shall mean the cash plus the fair market value, as determined
in good faith by the Committee, of the non-cash consideration to be
received per Share by the stockholders of the Company upon the
occurrence of the Fundamental Change, notwithstanding anything to the
contrary provided in the Plan.
<PAGE>
13. UNFUNDED PLAN. The Plan shall be unfunded and the Company shall not
be required to segregate any assets that may at any time be represented by
Awards under the Plan.
14. OTHER BENEFIT AND COMPENSATION PROGRAMS. Payments and other
benefits received by a Participant under an Award made pursuant to the Plan
shall not be deemed a part of a Participant's regular, recurring compensation
for purposes of the termination, indemnity or severance pay law of any country
and shall not be included in, nor have any effect on, the determination of
benefits under any other employee benefit plan, contract or similar arrangement
provided by the Company or an Affiliate unless expressly so provided by such
other plan, contract or arrangement, or unless the Committee expressly
determines that an Award or portion of an Award should be included to accurately
reflect competitive compensation practices or to recognize that an Award has
been made in lieu of a portion of competitive cash compensation.
15. BENEFICIARY UPON PARTICIPANT'S DEATH. To the extent that the
transfer of a Participant's Award at his death is permitted under an Agreement,
(i) a Participant's Award shall be transferable at his death to the beneficiary,
if any, designated on forms prescribed by and filed with the Committee and (ii)
upon the death of the Participant, such beneficiary shall succeed to the rights
of the Participant to the extent permitted by law. If no such designation of a
beneficiary has been made, the Participant's legal representative shall succeed
to the Awards which shall be transferable by will or pursuant to laws of descent
and distribution to the extent permitted under an Agreement.
16. GOVERNING LAW. To the extent that Federal laws do not otherwise
control, the Plan and all determinations made and actions taken pursuant to the
Plan shall be governed by the laws of Delaware and construed accordingly.
<PAGE>
EXHIBIT A
SECURE COMPUTING CORPORATION
1997 NON-OFFICER STOCK OPTION PLAN
DEFINED TERMS AND RULES OF CONSTRUCTION
1. DEFINITIONS.
Set forth below are the meanings of certain terms used in this Plan.
a. "Affiliate" means any corporation that is a "parent
corporation" or "subsidiary corporation" of the Company, as those terms
are defined in Section 424(e) and (f) of the Code, or any successor
provision.
b. "Agreement" means a written contract entered into between
the Company or an Affiliate and a Participant containing the terms and
conditions of an Award in such form and not inconsistent with this Plan
as the Committee shall approve from time to time, together with all
amendments thereto, which amendments may be unilaterally made by the
Company (with the approval of the Committee) unless such amendments are
deemed by the Committee to be materially adverse to the Participant and
are not required as a matter of law.
c. "Award" means a grant made under this Plan in the form of
Options.
d. "Board" means the Board of Directors of the Company.
e. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
f. "Committee" means three or more Disinterested Persons
designated by the Board to administer the Plan under Section 3.
g. "Company" means Secure Computing Corporation, a Delaware
corporation, or any successor to substantially all of its businesses.
h. "Effective Date" means the date specified in Section 7.1
hereof.
i. "Employee" means (i) any full-time employee of the Company
who is not an officer or director of the Company or any parent
corporation of the Company and (ii) any contractor or advisor to or
representative of the Company or any Affiliate thereof, notwithstanding
that such person is an not an employee of the Company within the
meaning of the Code. References in this Plan to "employment" and
related terms shall include the providing of services in the capacity
as contractor or other advisor to or representative of the Company.
<PAGE>
j. "Event" means any of the following; provided, however, that
no Event shall be deemed to have occurred unless and until a majority
of the directors constituting the Incumbent Board (as defined below)
shall have declared that an Event has occurred:
(1) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) of beneficial ownership (within the meaning
of Exchange Act Rule 13d-3) of 20% (except for acquisitions by
any individual, entity or group that, prior to the
effectiveness of this Plan, owns 20 % or more of any class of
capital stock of the Company) or more of either (i) the then
outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of the
Board (the "Outstanding Company Voting Securities"); provided,
however, that the following acquisitions shall not constitute
an Event:
(A) any acquisition of voting securities of
the Company directly from the Company,
(B) any acquisition of voting securities of
the Company by the Company or any of its wholly owned
Subsidiaries,
(C) any acquisition of voting securities of
the Company by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
of its Subsidiaries, or
(D) any acquisition by any corporation with
respect to which, immediately following such
acquisition, more than 60% of respectively, the then
outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of
directors is then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities immediately prior to such acquisition in
substantially the same proportions as was their
ownership, immediately prior to such acquisition, of
the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be;
(2) Individuals who, as of the Effective Date,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director of
the
<PAGE>
Board subsequent to the Effective Date whose election, or
nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered a
member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest which was (or, if threatened, would have been) subject
to Exchange Act Rule 14a-11;
(3) Approval by the stockholders of the Company of a
reorganization, merger, consolidation or statutory exchange of
Outstanding Company Voting Securities, unless immediately
following such reorganization, merger, consolidation or
exchange, all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such reorganization,
merger, consolidation or exchange beneficially own, directly
or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such reorganization,
merger, consolidation or exchange in substantially the same
proportions as was their ownership, immediately prior to such
reorganization, merger, consolidation or exchange, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be; or
(4) Approval by the stockholders of the Company of
(i) a complete liquidation or dissolution of the Company or
(ii) the sale or other disposition of all or substantially all
of the assets of the Company, other than to a corporation with
respect to which, immediately following such sale or other
disposition, more than 60% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as was their
ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be.
Notwithstanding the above, an Event shall not be deemed to occur with
respect to a recipient of an Award if the acquisition of the 20% or
greater interest referred to in paragraph (1) is by a group, acting in
concert, that includes that recipient or if at least 40% of the then
outstanding common stock or combined voting power of the then
outstanding voting securities (or voting equity interests) of the
surviving corporation or
<PAGE>
of any corporation (or other entity) acquiring all or substantially all
of the assets of the Company shall be beneficially owned, directly or
indirectly, immediately after a reorganization, merger, consolidation,
statutory share exchange or sale or other disposition of assets
referred to in paragraphs (3) or (4) by a group, acting in concert,
that includes that recipient.
k. "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time.
l. "Fair Market Value" as of any date means, unless otherwise
expressly provided in the Plan:
(i) the closing price of a Share on the date
immediately preceding that date or, if no sale of Shares shall
have occurred on that date, on the next preceding day on which
a sale of Shares occurred,
(A) on the composite tape for New York Stock
Exchange listed shares, or
(B) if the Shares are not quoted on the
composite tape for New York Stock Exchange listed
shares, on the principal United States Securities
Exchange registered under the Exchange Act on which
the Shares are listed, or
(C) if the Shares are not listed on any such
exchange, on the Nasdaq National Market, or
(ii) if clause (i) is inapplicable, the mean between
the closing "bid" and the closing "asked" quotation of a Share
on the date immediately preceding that date, or, if no closing
bid or asked quotation is made on that date, on the next
preceding day on which a quotation is made, on the NASDAQ
System or any system then in use, or
(iii) if clauses (i) and (ii) are inapplicable, what
the Committee determines in good faith to be 100% of the fair
market value of a Share on that date.
However, if the applicable securities exchange or system has closed for
the day at the time the event occurs that triggers a determination of
Fair Market Value, whether the grant of an Award, the exercise of an
Option or Stock Appreciation Right or otherwise, all references in this
paragraph to the "date immediately preceding that date" shall be deemed
to be references to "that date". In the case of an Incentive Stock
Option, if such determination of Fair Market Value is not consistent
with the then current regulations of the Secretary of the Treasury,
Fair Market Value shall be
<PAGE>
determined in accordance with said regulations. The determination of
Fair Market Value shall be subject to adjustment as provided in Section
16.
m. "Fundamental Change" shall mean a dissolution or
liquidation of the Company, a sale of substantially all of the assets
of the Company, a merger or consolidation of the Company with or into
any other corporation, regardless of whether the Company is the
surviving corporation, or a statutory share exchange involving capital
stock of the Company.
n. "Non-Employee Director" means a member of the Board who is
considered a non-employee director within the meaning of Exchange Act
Rule 16b-3(b)(3)(i) or any successor definition.
o. "Option" means a non-statutory right (which is not intended
to meet the requirements of Code Section 422 or any successor to said
section relating to "incentive stock options") to purchase Stock
pursuant to an Award under the Plan.
p. "Participant" means an Employee to whom an Award is made.
q. "Plan" means this Secure Computing Corporation 1997
Non-Officer Stock Option Plan, as amended from time to time.
r. "Retirement" as applied to a Participant, means (i) until
such time as the Company adopts an employee pension benefit plan (as
that term is defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974), termination of employment with the Company at
any time upon or after attaining age 65; (ii) after adoption by the
Company of an employee pension benefit plan, termination of employment
with the Company at a time when the Participant is eligible for normal
retirement under such a plan, as amended from time to time, or any
successor plan thereto.
s. "Share" means a share of Stock.
t. "Stock" means the common stock, $.01 par value per share
(as such par value may be adjusted from time to time), of the Company.
u. "Subsidiary" means a "subsidiary corporation", as that term
is defined in Code Section 424(f) or any successor provision.
v. "Successor" means the legal representative of the estate of
a deceased Participant or the person or persons who may, by bequest or
inheritance, or pursuant to the terms of an Award or of forms submitted
by the Participant to the Committee pursuant to Section 15, acquire the
right to exercise an Option in the event of a Participant's death.
<PAGE>
w. "Term" means the period during which an Option may be
exercised.
x. "Total and Permanent Disability" as applied to a
Participant, means disability within the meaning of Section 22(e)(3) of
the code or any successor provision.
2. GENDER AND NUMBER.
Except when otherwise indicated by context, reference to the masculine
gender shall include, when used, the feminine gender and any term used in the
singular shall also include the plural.
