SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
The Indus Group, Inc.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
The Indus Group, Inc.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee Required
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
- ----------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- ----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
THE INDUS GROUP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1997
To The Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The Indus
Group, Inc. (the "Company"), a California corporation, will be held on May 6,
1997 at 2:00 p.m., local time, at the Grand Hyatt on Union Square located at 345
Stockton Street, San Francisco, California, for the following purposes:
1. To elect the following directors to serve for the ensuing year and
until their successors are duly elected and qualified: Robert W. Felton,
Richard W. MacAlmon, Michael E. Percy, Alan C. Merten, and Donald F.
Robertson.
2. To approve amendment to the Company's 1995 Stock Plan to increase the
number of shares reserved for issuance thereunder by 2,500,000 to 4,000,000
shares.
3. To ratify and approve the appointment of Ernst & Young as the
independent public accountants of the Company for the year ended December
31, 1997.
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying the Notice.
Only shareholders of record at the close of business on March 11, 1997 are
entitled to notice of and to vote at the Annual Meeting.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, you are
urged to mark, sign and return the enclosed proxy card as promptly as possible
in the postage-prepaid envelope enclosed for that purpose. Any shareholder
attending the Annual Meeting may vote in person even if he or she returned a
proxy.
By Order of the Board of Directors
Anna Ng-Borden
Secretary
San Francisco, California
April 4, 1997
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND RETURN IT
IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE>
THE INDUS GROUP, INC.
PROXY STATEMENT
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of The
Indus Group, Inc. (the "Company") for use of the Annual Meeting of Shareholders
to be held May 6, 1997 at 2:00 p.m., local time, or at any adjournment of
postponement thereof, for the purposes set forth in this Proxy Statement and in
the accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting
will be held at the Grant Hyatt on Union Square located at 345 Stockton Street,
San Francisco, California.
These proxy solicitation materials were mailed on or about April 4, 1997 to
all shareholders entitled to vote at the Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to ChaseMellon Shareholder
Services, LLC, Attention: Joe Thatcher, Inspector of Elections, 50 California
Street, Tenth Floor, San Francisco, CA 94111, a written notice of revocation or
a duly executed proxy bearing a later date or by attending the Annual Meeting
and voting in person. The mere presence at the Annual Meeting of the shareholder
who has appointed a proxy will not revoke the prior appointment. If not revoked,
the proxy will be voted at the Annual Meeting in accordance with the
instructions indicated on the proxy card, or if no instructions are indicated,
will be voted FOR the slate of directors described herein, for Proposals Two and
Three, and as to any other matter that may be properly brought before the Annual
meeting, in accordance with the judgment of the proxy holders.
VOTING AND SOLICITATION
Every shareholder voting for the election of directors may cumulate such
shareholder's votes and either give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of shares held by
such shareholder or distribute the shareholder's votes on the same principle
among as many candidates as the shareholder thinks fit, provided that votes
cannot be cast for more than five candidates. However, no shareholder shall be
entitled to cumulate votes unless the candidate's name has been placed in
nomination before the voting and the shareholder, or any other shareholder, has
given notice at the Annual Meeting, prior to the voting, of the intention to
cumulate the shareholder's votes. If any one shareholder gives such notice, all
shareholders may cumulate their votes. On all other matters, each share has one
vote.
The five nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to vote shall be elected as
directors. On each other matter, the affirmative vote of a majority of the votes
cast is required under California law for approval. For this purpose, the "votes
cast" are defined under California law to be the shares of the Company's Common
Stock represented and voting in person or by proxy at the Annual Meeting. In
addition, the affirmative votes must constitute at least a majority of the
required quorum, which quorum is a majority of the shares outstanding on the
record date for the meeting. Votes that are cast against a proposal will be
counted for purposes of determining (i) the presence or absence of a quorum and
(ii) the number of votes cast with respect to the proposal. While there is no
definitive statutory or case law authority in California as to the proper
treatment of abstentions in the counting of votes with respect to a proposal,
the Company believes that abstentions should be counted for purposes of
determining both (i) the presence or absence of a quorum for the transaction of
business and (ii) the total number of votes cast with respect to the proposal.
In the absence of controlling precedent to the contrary, the Company intends to
treat abstentions in this manner. Accordingly, abstentions will have the same
effect as a vote against the proposal. Broker non-votes will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, but will not be counted for purposes of determining the number of
votes cast with respect to a proposal. An automated system administered by the
Company's transfer agent tabulates the votes. Each proposal is tabulated
separately.
Only shareholders of record at the close of business on March 11, 1997 are
entitled to notice of and to vote at the Annual Meeting. As of March 11, 1997,
18,645,401 shares of the Company's Common Stock were issued and outstanding.
1
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
The Board of Directors of the Company currently consists of six directors.
One of those directors, Katherine C. Holland, has indicated that she will not be
standing for re-election. The Board of Directors, therefore, has approved an
amendment to the Company's Bylaws which, effective immediately prior to the
Annual Meeting, reduces the number of directors to five. A board of five
directors will be elected at the Annual Meeting. Unless otherwise instructed,
the proxy holders will vote the proxies received by them for the Company's five
nominees names below, all of whom are presently directors of the Company. If any
nominee of the Company is unable or declines to serve as a director at the time
of the Annual Meeting, the proxies will be voted for any nominee designated by
the present Board of Directors to fill the vacancy. Management has no reason to
believe that any of the nominees will be unable or unwilling to serve if
elected. If additional persons are nominated for election as directors, the
proxy holders intend to vote all proxies received by them so that the election
of as many of the nominees listed below as possible is assured under cumulative
voting. In this event, the specific nominees to be voted for will be determined
by the proxy holders. The term of office of each person elected as a director
will continue until the next Annual Meeting of Shareholders or until his/her
successor has been elected and qualified.
All nominees are presently directors of the Company. Messrs. Felton,
MacAlmon, Percy, Merten and Robertson were last elected via Written Consent of
the Shareholders in Lieu of Annual Meeting, dated February 27, 1996. The names
of the nominees, their ages as of the date of this proxy statement and certain
information about them are set forth below.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NOMINEES
LISTED BELOW:
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- ---------------- ----- -------------------- --------------
Robert W. Felton 58 President, Chief Executive Officer 1990
Richard W. MacAlmon 47 Senior Vice President, Vice President of 1990
Marketing
Michael E. Percy 50 Senior Vice President, Vice President of 1990
Education and Methodologies
Alan G. Merten 54 President, George Mason University, 1995
a public university
Donald F. Robertson 58 Senior Tax Partner for Frank, Rimerman & 1993
Company, a CPA firm
Except as set forth below, each of the nominees has been engaged in his/her
principal occupation described above during the past five years. There is no
family relationship between any director or executive officer of the Company.
Robert W. Felton was a founder of the Company and has been the Chairman,
President and Chief Executive Officer of the Company since its inception in
1988.
Richard W. MacAlmon was a founder of the Company and has been the Vice
President of Marketing and a director of the Company since January 1990 and a
Senior Vice President of the Company since June 1995. From January 1988 to
December 1989, Mr. MacAlmon served as a Product Developer for the Company.
Michael E. Percy has served as Vice President of Education and Methodologies
of the Company since January 1995 and was Vice President of Operations from
January 1990 to December 1994. Mr. Percy has been a director of the Company
since January 1990 and a Senior Vice President since June 1995. From July 1989
to June 1992, Mr. Percy served as a Project Manager for the Company.
Alan G. Merten has served as a director of the Company since December 1995.
Mr. Merten is currently President of George Mason University, a position he has
held since July, 1996. From August 1989 to April 1996, Mr. Merten was Dean and
Professor of Information Systems at the S.C. Johnson Graduate School of
Management at Cornell University. Mr. Merten is also a director of Comshare,
Inc.,
2
<PAGE>
Tompkins County Trust Company, American Capital Bond Fund, American Capital
Convertible Securities, American Capital Investment Trust, and Common Sense
Trust.
Donald F. Robertson has served as a director of the Company since July 1993
and has been a financial advisor to the Company since its formation. From
October 1995 to August 1996, Mr. Robertson served as Senior Vice President and
Treasurer of the Company. Mr. Robertson has served as a Senior Tax Partner of
Frank, Rimerman & Co., an accounting firm, from November 1977 to the present.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of five meetings during
the year ended December 31, 1996. The Board of Directors has an Audit Committee
and a Compensation Committee.
During 1996, the Audit Committee of the Board of Directors consisted of Mr.
Merten and Katherine C. Holland. The Audit Committee recommends engagement of
the Company's independent accounts and is primarily responsible for approving
the services performed by the Company's independent accountants and for
reviewing and evaluating the Company's accounting principles and its system of
internal accounting controls.
During 1996, the Compensation Committee of the Board of Directors consisted
of Messrs. Felton and Merten and Ms. Holland and held two meetings. The
Compensation Committee establishes the Company's executive compensation policy,
determines the salary and bonuses of the Company's executive officers and
recommends to the Board of Directors stock option grants for executive officers.
No director attended fewer than 75% of the sum of the total number of
meetings of the Board of Directors or the total number of meetings of all
committees of the Board of Directors on which that director served.
DIRECTOR COMPENSATION
CASH COMPENSATION
Directors currently receive no cash fees for services provided in that
capacity but are reimbursed for out-of-pocket expenses they incur in connection
with their attendance at meetings of the Board of Directors.
1995 Director Option Plan
The Company's 1995 Director Option Plan (the "Director Option Plan") was
adopted by the Board of Directors and approved by the shareholders of the
Company in December 1995. The plan became effective upon the close of the
Company's initial public offering. Under the Director Option Plan, the Company
reserved 100,000 shares of Common Stock for issuance to the directors of the
Company pursuant to nonstatutory stock options. As of December 31, 1996, (i)
options to purchase an aggregate of 20,000 shares were outstanding under the
Director Option Plan at a weighted average exercise price of $15.00 per share,
of which options to purchase 3,750 shares are fully vested and immediately
exercisable; (ii) no options had been exercised pursuant to the Plan; and (iii)
80,000 shares were available for future grant.
Each director who is not an employee of the Company automatically receives a
nonstatutory option to purchase 10,000 shares of Common Stock of the Company
(the "First Option") on the date such person becomes a director or, if later, on
the effective date of the Director Option Plan. Thereafter, each such person
receives an option to acquire 2,500 shares of the Company's Common Stock (the
"Second Option") upon such outside director's reelection at each Annual Meeting
of Shareholders, provided that on such date such director shall have served on
the Board of Directors for at least six months. Each option granted under the
Director Option Plan shall be exercisable at 100% of the fair market value of
the Company's Common Stock on the date such option was granted. Six and one
quarter percent of the First Option and each Second Option shall vest three
months after their dates of grant, with an additional six and one quarter
percent vesting at the end of each subsequent three month period. The Plan shall
be in effect for a term of ten years unless sooner terminated.
Directors Holland and Merten were each issued an option to purchase 10,000
shares of Common Stock under the Director Option Plan upon the closing of the
Company's initial public offering of its Common Stock in March 1996 at an
exercise price of $15.00 per share.
3
<PAGE>
PROPOSAL TWO
AMENDMENT TO 1995 STOCK PLAN
The Company is seeking shareholder approval for an amendment to the
Company's 1995 Stock Plan (the "Stock Plan") which would increase by 2,500,000
to 4,000,000 the number of shares issuable under the Stock Plan. A summary of
the Stock Plan is attached as Appendix A. This amendment to the Stock Plan was
approved by the Board of Directors of the Company on February 6, 1997.
The Stock Plan was adopted by the Board of Directors in December 1995. A
total of 1,500,000 shares of Common Stock are currently reserved for issuance
under the Stock Plan. As no options granted under the Stock Plan have vested,
there have been no option exercises under the Stock Plan.
PURPOSE AND EFFECT OF AMENDMENTS
The purpose of the proposed amendment to the Stock Plan is to increase the
number of shares available for issuance under the Stock Plan. The Board believes
the proposed amendment is in the best interests of the Company and its
shareholders for a number of reasons. First, the Board believes that options
grants serve to incentivize current employees and to align their interests with
those of the Company's shareholders. Second, the Board believes that options
grants are an important element of the Company's strategy to attract and retain
qualified employees. Competition for qualified employees in the information
technology market is extremely intense, and, due to the rapid growth of many
successful companies in this sector, such competition is increasing. The Board
believes in order to remain competitive with other technology companies with
regard to its long term incentive plans, the Company must continue to offer
stock options. Without the proposed amendment, the Company will deplete the
options available for grant within the next year.
<TABLE>
AMENDED PLAN BENEFITS
The following table sets forth the number of options granted under the 1995
Stock Plan to (i) each of the Named Executive Officers; (ii) all executive
officers as a group; (iii) all non-executive officers directors as a group; and
(iv) all non-executive officer employees as a group.
<CAPTION>
NUMBER OF OPTIONS
NAME AND PRINCIPAL POSITION RECEIVED IN 1996
- -------------------------------------------------------------------------------- ----------------
<S> <C>
Robert W. Felton ............................................................... 70,000
Chairman, Chief Executive Officer and President
Richard W. MacAlmon ............................................................ 10,000
Senior Vice President, Vice President of Marketing and Director
Michael E. Percy ............................................................... 10,000
Senior Vice President, Vice President of Education and Methodologies and
Director
Douglas R. Piper ............................................................... 10,000
Senior Vice President and Vice President of Information Technologies
Charles J. Rosselle ............................................................ --
Senior Vice President, Vice President of Operations
All Executive Officers as a group .............................................. 150,000
Non-Executive Directors as a group ............................................. --
All Non-Executive Officer Employees as a group ................................. 677,350
</TABLE>
REQUIRED VOTE
The amendment to the 1995 Stock Plan to increase the number of shares
issuable thereunder by 2,500,000 shares requires the affirmative vote of the
holders of a majority of the shares of the Company's Common Stock represented in
person or by proxy and entitled to vote on the proposal, which shares voting
affirmatively must also constitute a majority of the required quorum. See
"Voting and Solicitation" above.
4
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE 1995 STOCK
PLAN.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected Ernst & Young,
independent public accountants, to audit the financial statements of the Company
for the current year ending December 31, 1997 and recommends that the
shareholders ratify this selection. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection.
Representatives of Ernst & Young LLP are expected to be available at the meeting
with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.
5
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth the compensation paid by the Company during
1994, 1995 and 1996 to its Chief Executive Officer and the four other most
highly compensated executive officers who were serving as executive officers
during the year ended December 31, 1996 (the "Named Executive Officers"):
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION
----------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS COMPENSATION($) COMPENSATION ($)(1)
- ----------------------------- ------ ---------- -------- -------------- --------------------
<S> <C> <C> <C> <C> <C>
Robert W. Felton 1996 195,000 $ 7,334 -- 4,435
Chairman, Chief Executive 1995 180,000 12,055 -- 3,919
Officer and President 1994 166,183 3,647 -- 7,611
Richard W. MacAlmon 1996 185,000 7,334 -- 2,789
Senior Vice President, Vice 1995 180,000 12,055 -- 4,720
President of Marketing and 1994 166,183 89,236 -- 2,611
Director
Michael E. Percy 1996 157,287 5,806 -- 2,778
Senior Vice President, Vice 1995 165,000 11,092 -- 3,201
President of Education and 1994 152,175 18,187 -- 2,422
Methodologies and Director
Douglas R. Piper 1996 148,750 5,102 -- 2,789
Senior Vice President and 1995 145,000 8,845 -- 2,812
Vice President of Information 1994 124,013 24,612 -- 2,043
Technologies
Charles J. Rosselle 1996 119,626 4,348 -- 31,269
Senior Vice President, Vice 1995 165,000 70,673 125,346(2) 158
President of Operations 1994 136,352 0 -- 526
- ----------
<FN>
(1) In 1996, represents payments to profit sharing plans of $2,519 for Messrs.
Felton, MacAlmon, Percy and Piper, and payments of life insurance premiums
of $1,916 for Mr. Felton, $270 for Messrs. MacAlmon and Piper and $259 for
Mr. Percy and $169 for Mr. Rosselle and $31,100 for loan forgiveness for Mr.
Rosselle. In 1995, represents payments to profit sharing plans of $3,033 for
Mr. Felton, $4,562 for Mr. MacAlmon, $3,043 for Mr. Percy and $2,654 for Mr.
Piper, and payments of life insurance premiums of $158 for Messrs. MacAlmon,
Percy, Piper and Rosselle, and $886 for Mr. Felton. In 1994, represents
payments to profit sharing plans of $2,085 for Mr. Felton, $2,085 for Mr.
MacAlmon, $1,896 for Mr. Percy and $1,517 for Mr. Piper, and payments of
life insurance premiums of $526 for Messrs. Felton, MacAlmon, Percy, Piper
and Rosselle.
(2) Reflects the sale by the Company of 42,500 shares of Common Stock at a price
below the fair market value.
</FN>
</TABLE>
6
<PAGE>
The following table sets forth certain information with respect to the value
of stock options held by Named Executive Officers as of December 31, 1996.
<TABLE>
OPTION GRANTS IN FISCAL 1996
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SECURITIES GRANTED TO EXERCISE ANNUAL RATES OF STOCK
UNDERLYING EMPLOYEES PRICE PER PRICE APPRECIATION FOR
OPTIONS IN FISCAL SHARE EXPIRATION OPTION TERM(4)
-------------------------
NAME GRANTED YEAR (1)(2) DATE(3) 5% 10%
- -------------------- ------------ ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Felton ...70,000 8.7% $18.15 9/16/2001 $1,547,810 $2,046,153
Richard W. MacAlmon 10,000 1.2% 16.50 9/16/2006 282,206 470,764
Michael E. Percy ...10,000 1.2% 16.50 9/16/2006 282,206 470,764
Douglas R. Piper ...10,000 1.2% 16.50 9/16/2006 282,206 470,764
Charles J. Rosselle -- -- -- -- -- --
- ----------
<FN>
(1) Options were granted at an exercise price equal to the fair market value of
the Company's Common Stock, as determined by the Board of Directors on the
date of grant.
(2) Exercise price may be paid in cash, check, promissory note, by delivery of
already-owned shares of the Company's Common Stock subject to certain
conditions, or any combination of the foregoing methods of payment or such
other consideration or method of payment to the extent permitted under
applicable law.
(3) Options become exercisable as to 25% of the option shares on each
anniversary of the vesting commencement date, with full vesting occurring on
the fourth anniversary of the vesting commencement date.
(4) Potential realizable value is based on the assumption that the Common Stock
of the Company appreciates at the annual rate shown (compounded annually)
from the date of grant until the expiration of the option term. Mr. Felton's
options have a 5-year term, and options of Messrs. MacAlmon, Percy and Piper
have 10-year terms. These potential realizable value numbers are calculated
based on Securities and Exchange Commission requirements and do not reflect
the Company's estimate of future stock price growth.
</FN>
The following tables sets forth information concerning the shares acquired
and the value realized upon the exercise of stock options during 1996, the
number of shares of Common Stock underlying exercisable and unexercisable
options held by each of the Named Officers at December 31, 1996 and the values
of unexercised "in-the-money" options as of that date.
AGGREGATE OPTION EXERCISES IN 1996 AND YEAR-END VALUES
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS AT MONEY OPTIONS AT FISCAL
ACQUIRED ON VALUE DECEMBER 31, 1996 (#) YEAR-END(1)
----------------------------- -----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ------------- ------------ ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Felton ... 51,000 $ 828,968 -- 70,000 -- $532,000
Richard W. MacAlmon 51,000 907,718 -- 10,000 -- 92,500
Michael E. Percy ... 35,000 649,675 16,000 10,000 $406,480 92,500
Douglas R. Piper ... 51,000 1,008,780 -- 10,000 -- 92,500
Charles J. Rosselle -- -- -- -- -- --
<FN>
(1) Represents the positive spread between the respective exercise prices of
outstanding stock options and the fair market value of the Common Stock as
of December 31, 1996 ($25.75 per share), as reported by the Nasdaq Stock
Market at the close of business.
</FN>
</TABLE>
7
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
OVERVIEW AND PHILOSOPHY
The Compensation Committee (the "Committee") of the Board of Directors
regularly reviews and approves all executive officer pay plans and develops
recommendations for stock option grants for approval by the Board of Directors.
Executive officer pay plans include the following compensation elements: base
salaries, performance incentives, stock options and various benefit plans.
The Committee is comprised of two independent, outside directors and one
inside director, Robert W. Felton, President and CEO of the Company. It is the
Committee's objective that executive compensation be directly determined by
achievement of the Company's planned business performance. The Company's
executive compensation program is designed to reward exceptional executive
performance that results in enhanced corporate and shareholder values.
The Committee reviews and relies on published industry pay salary data in
its assessment of appropriate compensation levels, specifically the Culpepper
Survey of Executive Compensation. The Committee also retains independent
compensation consultants to provide objective and expert advice in the review of
the Company's stock option plans.
The Committee recognizes that the industry sector in which the Company
operates is both highly competitive and undergoing significant globalization,
with the result that there is substantial demand for qualified, experienced
executive personnel. The Committee considers it crucial that the Company be
assured of retaining and rewarding its top caliber executives who are essential
to the attainment of the Company's ambitious long-term, strategic goals.
For these reasons, the Committee believes the Company's executive
compensation arrangements must remain competitive with those offered by other
companies of similar size, scope, performance levels and complexity of
operations, including some, but not all, of the companies comprising the
Nasdaq--100 Index and the Nasdaq Computer & DP Index.
ANNUAL CASH COMPENSATION (BASE SALARY, PLUS PERFORMANCE INCENTIVES)
The Committee believes that annual cash compensation should be paid
commensurate with attained performance. The Company's executive cash
compensation consists of base compensation (salary) and quarterly performance
incentives (bonus). Base salaries for executive officers are established
considering a number of factors, including the Company's continued, profitable
growth; the executive's individual performance and measurable contribution to
the Company's success; and pay levels of similar positions with comparable
companies in the industry. The Committee supports the Company's compensation
philosophy of moderation for elements such as base salary and benefits. Base
salary decisions are made as part of the Company's formal annual review process.
In August 1996, the Committee approved aggregate raises in the base salary of
the Company's executive officers (excluding the Chief Executive Officer) of 8%.
These raises were intended to reflect the salary levels for similar positions in
the information technology industry and the anticipated additional
responsibilities of each executive officer in the upcoming year.
Executive officers are eligible for quarter bonuses in the same manner as
other employees of the Company. The Company's quarterly bonuses are based on
performance (as determined by the employee's supervisor) and are in the form of
a set percentage of the employee's salary. The Chief Executive Officer
determines the bonus paid to the executive officers.
LONG-TERM INCENTIVE: STOCK OPTIONS
The Committee recommends executive stock options under the Stock Plan to
foster executive officer ownership, to stimulate a long-term orientation in
decisions and to provide direct linkage with shareholder interests. The
Committee considers the total compensation package, industry practices and
trends, the executive's accountability level, and assumed, potential stock value
in the future when granting stock options. The Committee recommends option
amounts to provide retention considering projected earnings to be derived from
option gains based upon relatively conservative assumptions relating to planned
8
<PAGE>
growth and earnings. As a result, the stock option program is an effective and
competitive long-term incentive and retention tool for the Company's executives,
as well as other key employees. The Committee believes that the Company's stock
option plan has been administered in a manner comparable to its peer group and
other high performing companies in the high technology sector.
BENEFITS
The Company provides benefits to the named executive officers that are
generally available to all Company employees. The amount of executive level
benefits and perquisites, as determined in accordance with the rules of the
Securities and Exchange Commission relating to executive compensation, did not
exceed 10% of total salary and bonus for the calendar year 1996, for any
executive officer.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
Compensation for the Chief Executive Officer is determined by a process
similar to that discussed above for executive officers. In August 1996, the
Compensation Committee (excluding Mr. Felton) raised Mr. Felton's base salary by
33%. This increase was designed to bring Mr. Felton's salary in line with other
chief executive officers in the information technology industry and to reflect
the Company's achievement of its goals for 1996 in terms of revenue and earnings
per share. Mr. Felton automatically receives a quarterly bonus of a percentage
of his base salary in the same manner as other employees of the Company deemed
to be performing satisfactorily.
The Compensation Committee
Robert W. Felton
Katherine C. Holland
Alan G. Merten
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee during 1996 consisted of Robert W.
Felton, Katherine C. Holland and Alan G. Merten. Mr. Felton is a member of the
Company's Compensation Committee as well as an executive officer and director of
the Company. Katherine C. Holland is an executive officer of PECO Energy
Company, a significant customer of the Company. See "Certain Transactions with
Management."
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PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total return for the
Company's Common Stock, the Nasdaq Stock Market--U.S. Index and the Nasdaq
Computer & DP Index. In preparing the graph it was assumed that (i) $100 was
invested on February 29, 1996, in the Company's Common Stock (at an initial
public offering price of $15.00 per share), the Nasdaq Stock Market--U.S. Index
and the Nasdaq Computer & DP Index and (ii) all dividends were reinvested.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
Feb-96 Apr-96 Jun-96 Sep-96 Dec-96
------ ------ ------ ------ ------
The Indus Group, Inc. 100 130 135 133.33 171.67
Nasdaq Stock Market--U.S. 100 108.65 108.52 112.39 117.91
Nasdaq Computer & DP 100 111.22 110.69 112.89 117.46
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities and Exchange
Act of 1934 that might incorporate future filings, including this proxy
statement, in whole or in part, the preceding Report of the Compensation
Committee and the preceding Performance Graph shall not be incorporated by
reference into any such filings; nor shall such Report or Graph be incorporated
by reference into any such filings; nor shall such Report or Graph by
incorporated by reference into any future filings.
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CERTAIN TRANSACTIONS WITH MANAGEMENT
During 1996, the Company retained Frank, Rimerman & Co. to provide tax and
consulting services. Donald F. Robertson, a director of the Company and formerly
the Treasurer and a Senior Vice President of the Company is a partner of Frank,
Rimerman & Co. The Company paid Frank, Rimerman & Co. approximately $300,000
during 1996.
During 1996, the Company recognized approximately $9.2 million in revenue
from the sale of products and services to PECO Energy Company and its
subsidiaries. Katherine C. Holland, a director of the Company, is an executive
officer of PECO Energy Company.
In March 1996, the Company purchased all of the assets and assumed all of
the liabilities of Indus International, Inc. The shareholders of Indus
International, Inc. included Robert W. Felton, President and Chief Executive
Officer of the Company, Richard W. Mac Almon, Senior Vice President and Vice
President of Marketing of the Company, and Anna Ng-Borden, Vice President of
Finance of the Company. The price for the assets net of the assumed liabilities
was approximately $100,000 which represented the net book value of Indus
International, Inc.
SECURITY OWNERSHIP OF MANAGEMENT; PRINCIPAL SHAREHOLDERS
The table below sets forth as of December 31, 1996 certain information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially more than five percent (5%) of
the outstanding shares of Common Stock; (ii) each Named Executive Officer; (iii)
each director of the Company; and (iv) all current directors and executive
officers as a group.
SHARES
BENEFICIALLY APPROXIMATE
NAME OF PERSON OWNED PERCENT OWNED
-------------- ----- -------------
Robert W. Felton .............................. 9,497,561 51.0%
The Indus Group, Inc.
60 Spear St
San Francisco, CA 94105
Richard W. MacAlmon ........................... 1,402,500 7.5%
The Indus Group, Inc.
60 Spear St
San Francisco, CA 94105
Michael E. Percy (1) .......................... 297,432 1.6%
Douglas R. Piper .............................. 374,000 2.0%
Charles J. Rosselle ........................... 37,500 *
Katherine C. Holland(1) ....................... 1,875 *
Alan G. Merten(1) ............................. 1,875 *
Donald F. Robertson ........................... -- --
All current directors and executive officers
as a group (7 persons) ........................ 11,575,243 63%
- ---------------
* Less than 1%
(1) Amounts shown include the following number of shares, option for which are
exercisable within 60 days of December 31, 1996: Percy, 16,000; Holland,
1,875; and Merten, 1,875.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
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To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1996, all officers,
directors and greater than ten percent beneficial owners complied with all
Section 16(a) filing requirements.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS--1998 ANNUAL MEETING
Proposals of shareholders of the Company which are intended to be presented
by such shareholders at the Company's 1998 Annual Meeting must be received by
the Company no later than November 21, 1997, in order that they may be included
in the proxy statement and proxy relating to that meeting.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Annual Meeting.
If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed Proxy to vote the shares they
represent as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
Anna Ng-Borden
Secretary
Dated: April 4, 1997
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APPENDIX A
SUMMARY OF 1995 STOCK PLAN
The essential features of the Stock Plan are summarized below.
Purpose. The purposes of the Stock Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to employees and consultants of the Company and its
subsidiaries and to promote the success of the Company's business.
Administration. With respect to grants of options or stock rights to
employees who are also officers or directors of the Company, the Stock Plan
shall be administered by (i) the Board of Directors of the Company if the Board
of Directors may administer the Stock Plan in compliance with Rule 16b-3 with
respect to a plan intended to qualify under Rule 16b-3 as a discretionary plan
or (ii) a committee designated by the Board of Directors to administer the Stock
Plan, which committee shall be constituted in such a manner as to permit the
plan to comply with Rule 16b-3 with respect to a plan intended to qualify
thereunder as a discretionary plan. With respect to grants of options or stock
rights to employees or consultants who are neither officers nor directors of the
Company, the Stock Plan shall be administered by (i) the Board of Directors or
(ii) a committee designated by the Board of Directors, which committee shall be
constituted in such a manner as to satisfy the legal requirements relating to
the administration of stock and option plans, if any, of California corporate
and securities laws and of the Internal Revenue Code of 1986 as amended (the
"Code"). If permitted by Rule 16b-3, the Stock Plan may be administered by
different bodies with respect to directors, non-director officers and employees
who are neither officers nor directors and consultants who are not directors.
The administrator of the Stock Plan has full power to select, from among the
officers, employees, directors and consultants of the Company eligible for
awards, the individuals to whom awards will be granted, to make any combination
of awards to any participants and to determine the specific terms of each grant,
subject to the provisions of the Stock Plan. The interpretation and construction
of any provision of the Stock Plan by the administrator is final and conclusive.
Members of the Board of Directors receive no additional compensation for their
services in connection with the administration of the Stock Plan.
Eligibility. The Stock Plan provides that non-statutory stock options and
stock rights may be granted to employees, including officers and directors, and
consultants of the Company or any subsidiary of the Company. Directors of the
Company who are not employees or consultants are not eligible to participate in
the Stock Plan. Incentive stock options may be granted only to employees,
including officers and directors, of the Company or any subsidiary of the
Company. No employee can be granted options covering more than 500,000 shares
under the Stock Plan in any fiscal year. In addition, there is a $100,000 limit
on the total market value of shares subject to all incentive stock options which
are granted by the Company or any parent or subsidiary of the Company to any
employee which are exercisable for the first time in any one calendar year.
Reserved Shares. 1,500,000 shares of Common Stock have been reserved for
issuance under the Stock Plan and also subject to adjustment for future stock
splits, stock dividends and similar events.
Subject to the provisions of the Stock Plan, if any shares of Common Stock
that have been optioned cease to be subject to an option, or if any shares of
restricted stock or shares that are subject to any stock purchase right or
incentive stock right granted under the Stock Plan are forfeited or any such
award otherwise terminates without a payment being made to the participant in
the form of Common Stock, such shares will again be available for distribution
in connection with future awards or option grants under the Stock Plan.
Stock Options. The Stock Plan permits the granting of nontransferable stock
options that either qualify as incentive stock options under Section 422 of the
Code ("Incentive Stock Options" or "ISOs") or do not so qualify ("Non-Statutory
Stock Options" or "NSOs").
The term of each option will be fixed by the administrator but may not exceed
ten years from the date of grant in the case of ISOs, or five years from the
date of grant in the case of ISOs granted to the owner
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of Common Stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any subsidiary. The administrator will
determine the time or times each option may be exercised. Options may be made
exercisable in installments, and the exercisability of options may be
accelerated by the administrator.
The option exercise price for each share covered by a non-statutory option
shall be determined by the administrator of the Stock Plan. The option exercise
price of an ISO may not be less than 100% of the fair market value of a share of
Common Stock on the date of grant. In the case of ISOs granted to the owner of
Common Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any subsidiary, the option exercise price for
each share covered by such option may not be less than 110% of the fair market
value of a share of Common Stock on the date of grant of such option. The
administrator of the Stock Plan determines such fair market value. As long as
the Common Stock of the Company is traded on the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ")
System, the fair market value of a share of Common Stock of the Company shall be
the closing sales price for such stock (or the closing bid, if no sales were
reported, as quoted on such system) for the last market trading date before the
time of determination, as reported in the Wall Street Journal or such other
source as is deemed reliable.
The consideration to be paid for shares issued upon exercise of options
granted under the Stock Plan, including the method of payment, will be
determined by the administrator (and, in the case of ISOs, such determination
shall be made at the time of grant) and may consist entirely of cash, check,
promissory note or shares of Common Stock which, in the case of shares acquired
upon exercise of an option, have been beneficially owned for at least six months
or which were not acquired directly or indirectly from the Company, with a fair
market value on the exercise date equal to the aggregate exercise price of the
shares being purchased. The administrator may also authorize as payment the
delivery of a properly executed notice and irrevocable instructions to a broker
to deliver promptly to the Company the amount of sale or loan proceeds required
to pay the exercise price or the delivery of an irrevocable subscription
agreement for the shares which irrevocably obligates the optionee to take and
pay for the shares not more than 12 months after delivery of the subscription
agreement. The administrator may also authorize payments by any combination of
the foregoing methods or by any other method permitted by applicable laws.
Under the Stock Plan, in the event of termination of an optionee's employment
or consulting relationship for any reason (other than death or permanent
disability), an option may thereafter be exercised (to the extent it was
exercisable at the date of such termination) for thirty days (or such other
period as determined by the administrator not to exceed six months or three
months in the case of an ISO). If the optionee's employment or consulting
relationship is terminated as a result of the optionee's permanent disability,
the option may be exercised for a period of six months after the date of
termination. If an optionee's employment or consulting relationship is
terminated by reason of the optionee's death, the options held by such
individual can be exercised by the optionee's estate or successor for twelve
months following death. However, in no case can an option be exercised after the
expiration of its term.
All options granted under the Stock Plan shall be evidenced by a stock option
agreement between the Company and the optionee to whom such option is granted.
Each agreement shall contain in substance the terms and conditions described
above.
Stock Purchase Rights. The Stock Plan permits the granting of stock purchase
rights to purchase Common Stock of the Company either alone, in addition to, or
in tandem with other awards under the Stock Plan. Upon the granting of a stock
purchase right under the Stock Plan, the offeree is advised in writing of the
terms, conditions and restrictions related to the offer, including the number of
shares of Common Stock that such person is entitled to purchase, the price to be
paid and the time within which such person must accept such offer (which in no
event may exceed six months from the date the purchase right was granted). The
offer shall be accepted by execution of a restricted stock purchase agreement
between the Company and the offeree. Stock purchase rights granted to persons
subject to Section 16 of the Securities Exchange Act of 1934 shall be subject to
any restrictions necessary to comply with Rule 16b-3.
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Nontransferability of Options and Stock Rights. Options and stock rights
granted pursuant to the Stock Plan are nontransferable by the participant, other
than by will or by the laws of descent and distribution and may be exercised,
during the lifetime of the participant, only by the participant.
Withholding Under the Stock Plan. The administrator of the Stock Plan may
also permit participants to satisfy their withholding tax obligations using
Common Stock when appropriate.
Acceleration of Options and Stock Rights. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each outstanding option and stock
right shall be assumed or substituted by an equivalent option or right by such
successor corporation. In the event the successor corporation refuses to assume
or substitute the option or stock purchase right, the participant will have the
right to exercise the option or stock right as to all shares subject to such
option or stock right, including shares as to which the option or stock right
would not otherwise be exercisable. If an option or stock purchase right is
exercisable in lieu of assumption or substitution, the Company shall notify the
participant that the option or stock right shall be fully exercisable for a
period of 15 days from the date of such notice and the option or stock right
will terminate upon the expiration of such period.
Adjustment Upon Changes in Capitalization. In the event any change, such as a
stock split or dividend, is made in the Company's capitalization which results
in an increase or decrease in the number of outstanding shares of Common Stock
without receipt of consideration by the Company, an appropriate adjustment shall
be made in the number of shares which have been reserved for issuance under the
Stock Plan and the price per share covered by each outstanding option or stock
right. In the event of the proposed dissolution or liquidation of the Company,
all outstanding options and stock rights will terminate immediately before the
consummation of such proposed action, unless otherwise provided by the Board of
Directors. The Board of Directors may, in its discretion, make provision for
accelerating the exercisability of shares subject to options or stock rights
under the Stock Plan in such event.
AMENDMENT AND TERMINATION
The Board of Directors may amend, alter, suspend or discontinue the Stock
Plan at any time, but such amendment, alteration, suspension or discontinuation
shall not adversely affect any incentive stock rights, stock options, stock
appreciation rights or stock purchase rights then outstanding under the Stock
Plan, without the participant's consent. To the extent necessary and desirable
to comply with Rule 16b-3 or Section 422 of the Code (or any other applicable
law or regulation), the Company will obtain shareholder approval of any
amendment to the Stock Plan in such a manner and to such a degree as required.
Subject to the specific terms of the Stock Plan, the administrator may
accelerate any award or option or waive any conditions or restrictions
pertaining to such award or option or shares of stock relating thereto at any
time. The administrator may also substitute new stock options for previously
granted stock options, including previously granted stock options having higher
option prices, and may reduce the exercise price of any option to the then
current fair market value if the fair market value of the Common Stock covered
by such option shall have declined since the date the option was granted. The
Stock Plan shall continue in effect for a term of ten years unless sooner
terminated as described above.
FEDERAL INCOME TAX ASPECTS OF THE STOCK PLAN
The following is a brief summary of the Federal income tax consequences of
transactions under the Stock Plan. This summary is not intended to be exhaustive
and does not discuss the tax consequences of a participant's death or provisions
of the income tax laws of any municipality, state or foreign country in which an
optionee may reside.
Incentive Stock Options. An optionee who is granted an ISO will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and
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the lower of (i) the fair market value of the shares at the date of the option
exercise or (ii) the sale price of the shares. A different rule for measuring
ordinary income upon such a premature disposition may apply in the case of
optionees who are subject to Section 16 of the Securities Exchange Act of 1934,
as amended. The Company will be entitled to a deduction in the same amount as
the ordinary income recognized by the optionee. Any gain or loss recognized on
such a premature disposition of the shares in excess of the amount treated as
ordinary income will be characterized as long-term or short-term capital gain or
loss, depending on the holding period.
NonStatutory Stock Options. All other options which do not qualify as ISOs
are referred to as Non-Statutory Stock Options. An optionee will not recognize
any taxable income at the time he is granted a Non-Statutory Stock Option.
However, upon exercise of the option, the optionee will recognize taxable income
generally measured as the excess of the then fair market value of the shares
purchased over the purchase price. Any taxable income recognized in connection
with an option exercise by an optionee who is also an employee of the Company
will be subject to tax withholding by the Company. Upon resale of such shares by
the optionee, any difference between the sales price and the optionee's purchase
price, to the extent not recognized as taxable income as described above, will
be treated as long-term or short-term capital gain or loss, depending on the
holding period.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the Optionee with respect to shares acquired upon
exercise of a Non-Statutory Stock Option.
Different rules may apply in the case of optionees who are subject to Section
16 of the Securities Exchange Act of 1934, as amended.
Stock Purchase Rights. Stock purchase rights will generally be taxed in the
same manner as Non- Statutory Stock Options. However, restricted stock is
usually purchased upon exercise of a stock purchase right. At the time of
purchase, restricted stock is subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code. As a result, the purchaser will
not recognize ordinary income at the time of purchase. Instead, the purchaser
will recognize ordinary income on the dates when the stock ceases to be subject
to substantial risk of forfeiture. The stock will generally cease to be subject
to a substantial risk of forfeiture when it is no longer subject to the
Company's right to repurchase the stock upon the purchaser's termination of
employment with the Company (i.e., as it "vests"). At such times, the purchaser
will recognize the ordinary income measured as the difference between the
purchase price and the fair market value of the stock on the date the stock is
no longer subject to a substantial risk of forfeiture. However, a purchaser may
accelerate to the date of purchase his or her recognition of ordinary income, if
any, and the beginning of any capital gain holding period by timely filing an
election pursuant to Section 83(b) of the Code. In such event, the ordinary
income recognized, if any, would be equal to the difference between the purchase
price and the fair market value of the stock on the date of purchase, and the
capital gain holding period would commence on the purchase date. The ordinary
income recognized by a purchaser who is an employee will be treated as wages and
will be subject to tax with holding by the Company. Generally, the Company will
be entitled to a tax deduction in the amount and at the time the purchaser
recognizes ordinary income.
Different rules may apply in the case of purchasers who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended.
Payments in Respect of a Change in Control. The Stock Plan authorizes the
acceleration of options and stock purchase rights under certain conditions in
the event of a merger or sale of substantially all of the assets of the Company.
Such acceleration or payment may cause part or all of the consideration involved
to be treated as a "parachute payment" under the Code, which may subject the
recipient thereof to a 20% excise tax and which may not be deductible by the
participant's employer.
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THE INDUS GROUP, INC.
1995 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are:
o to attract and retain the best available personnel for positions
of substantial responsibility,
o to provide additional incentive to Employees and Consultants, and
o to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under state corporate and securities
laws and the Code.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means The Indus Group, Inc., a California
corporation.
(h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services and who is
compensated for such services. The term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.
(i) "Continuous Status as an Employee or Consultant" means that
the employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved
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by the Company shall include sick leave, military leave, or any other personal
leave approved by an authorized representative of the Company. For purposes of
Incentive Stock Options, no such leave may exceed ninety days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option.
(j) "Director" means a member of the Board.
(k) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(n) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(o) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.
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(p) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(q) "Notice of Grant" means a written notice evidencing certain
terms and conditions of an individual Option or Stock Purchase Right grant. The
Notice of Grant is part of the Option Agreement.
(r) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(s) "Option" means a stock option granted pursuant to the Plan.
(t) "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.
(u) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.
(v) "Optioned Stock" means the Common Stock subject to an Option
or Stock Purchase Right.
(w) "Optionee" means an Employee or Consultant who holds an
outstanding Option or Stock Purchase Right.
(x) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(y) "Plan" means this 1995 Stock Plan.
(z) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.
(aa) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.
(bb) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(cc) "Section 16(b)" means Section 16(b) of the Securities
Exchange Act of 1934, as amended.
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(dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(ff) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 1,500,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, and the original purchaser of such
Shares did not receive any benefits of ownership of such Shares, such Shares
shall become available for future grant under the Plan. For purposes of the
preceding sentence, voting rights shall not be considered a benefit of Share
ownership.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. If permitted by Rule
16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are neither
Directors nor Officers.
(ii) Administration With Respect to Directors and
Officers Subject to Section 16(b). With respect to Option or Stock Purchase
Right grants made to Employees who are also Officers or Directors subject to
Section 16(b) of the Exchange Act, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan in a manner complying with the rules
under Rule 16b-3 relating to the disinterested administration of employee
benefit plans under which Section 16(b) exempt discretionary grants and awards
of equity securities are to be made, or (B) a committee designated by the Board
to administer the Plan, which committee shall be constituted to comply with the
rules under Rule 16b-3 relating to the disinterested administration of employee
benefit plans under which Section 16(b) exempt discretionary grants and awards
of equity securities are to be made. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
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appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.
(iii) Administration With Respect to Other Persons. With
respect to Option or Stock Purchase Right grants made to Employees or
Consultants who are neither Directors nor Officers of the Company, the Plan
shall be administered by (A) the Board or (B) a committee designated by the
Board, which committee shall be constituted to satisfy Applicable Laws. Once
appointed, such Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(n) of the Plan;
(ii) to select the Consultants and Employees to whom
Options and Stock Purchase Rights may be granted hereunder;
(iii) to determine whether and to what extent Options and
Stock Purchase Rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock to
be covered by each Option and Stock Purchase Right granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Purchase Rights may be exercised (which may
be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option
or Stock Purchase Right or the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;
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(vii) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;
(viii) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
(x) to modify or amend each Option or Stock Purchase
Right (subject to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options longer
than is otherwise provided for in the Plan;
(xi) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xii) to institute an Option Exchange Program;
(xiii) to determine the terms and restrictions applicable
to Options and Stock Purchase Rights and any Restricted Stock; and
(xiv) to make all other determinations deemed necessary
or advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights
may be granted to Employees and Consultants. Incentive Stock Options may be
granted only to Employees. If otherwise eligible, an Employee or Consultant who
has been granted an Option or Stock Purchase Right may be granted additional
Options or Stock Purchase Rights.
6. Limitations.
(a) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year
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(under all plans of the Company and any Parent or Subsidiary) exceeds $100,000,
such Options shall be treated as Nonstatutory Stock Options. For purposes of
this Section 6(a), Incentive Stock Options shall be taken into account in the
order in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
employment or consulting relationship with the Company, nor shall they interfere
in any way with the Optionee's right or the Company's right to terminate such
employment or consulting relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options
and Stock Purchase Rights to Employees:
(i) No Employee shall be granted, in any fiscal year of
the Company, Options and Stock Purchase Rights to purchase more than 500,000
Shares.
(ii) In connection with his or her initial employment, an
Employee may be granted Options and Stock Purchase Rights to purchase up to an
additional 500,000 Shares which shall not count against the limit set forth in
subsection (i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.
(iv) If an Option or Stock Purchase Right is cancelled in
the same fiscal year of the Company in which it was granted (other than in
connection with a transaction described in Section 13), the cancelled Option or
Stock Purchase Right will be counted against the limits set forth in subsections
(i) and (ii) above. For this purpose, if the exercise price of an Option or
Stock Purchase Right is reduced, the transaction will be treated as a
cancellation of the Option or Stock Purchase Right and the grant of a new Option
or Stock Purchase Right.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall
become effective upon the earlier to occur of its adoption by the Board or its
approval by the shareholders of the Company as described in Section 19 of the
Plan. It shall continue in effect for a term of ten (10) years unless terminated
earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Notice
of Grant; provided, however, that in the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Notice of Grant. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the date of grant or
such shorter term as may be provided in the Notice of Grant.
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9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;
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(v) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;
(vi) a reduction in the amount of any Company liability
to the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of
payment; or
(viii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company
receives: (i) written notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the stock certificate evidencing such Shares is issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 13 of the Plan.
Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Employment or Consulting Relationship. Upon
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is
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specified in the Notice of Grant, and only to the extent that the Optionee was
entitled to exercise it at the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Notice of Grant).
In the absence of a specified time in the Notice of Grant, the Option shall
remain exercisable for three (3) months following the Optionee's termination. In
the case of an Incentive Stock Option, such period of time for exercise shall
not exceed three (3) months from the date of termination. If, on the date of
termination, the Optionee is not entitled to exercise the Optionee's entire
Option, the Shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
Notwithstanding the above, in the event of an Optionee's change
in status from Consultant to Employee or Employee to Consultant, an Optionee's
Continuous Status as an Employee or Consultant shall not automatically terminate
solely as a result of such change in status. However, in such event, an
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option three months and one day following such change of status.
(c) Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee,
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Rule 16b-3. Options granted to individuals subject to Section
16 of the Exchange Act ("Insiders") must comply with the applicable provisions
of Rule 16b-3 and shall contain such additional conditions or restrictions as
may be required thereunder to qualify for the maximum exemption from Section 16
of the Exchange Act with respect to Plan transactions.
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<PAGE>
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the number of Shares
that the offeree shall be entitled to purchase, the price to be paid, and the
time within which the offeree must accept such offer, which shall in no event
exceed six (6) months from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the
Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.
(c) Rule 16b-3. Stock Purchase Rights granted to Insiders, and
Shares purchased by Insiders in connection with Stock Purchase Rights, shall be
subject to any restrictions applicable thereto in compliance with Rule 16b-3. An
Insider may only purchase Shares pursuant to the grant of a Stock Purchase
Right, and may only sell Shares purchased pursuant to the grant of a Stock
Purchase Right, during such time or times as are permitted by Rule 16b-3.
(d) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.
(e) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. An Option
or Stock Purchase Right may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
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13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Stock
Purchase Right has not been previously exercised, it will terminate immediately
prior to the consummation of such proposed action. The Board may, in the
exercise of its sole discretion in such instances, declare that any Option or
Stock Purchase Right shall terminate as of a date fixed by the Board and give
each Optionee the right to exercise his or her Option or Stock Purchase Right as
to all or any part of the Optioned Stock, including Shares as to which the
Option or Stock Purchase Right would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall have the right to exercise the Option
or Stock Purchase Right as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable. If an Option or Stock Purchase
Right is exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Administrator shall notify the Optionee that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the
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merger or sale of assets by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets was not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
14. Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
16. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, Applicable Laws, and the requirements of any stock
exchange or quotation system upon which the Shares may then be listed or quoted,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
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(b) Investment Representations. As a condition to the exercise of
an Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
17. Liability of Company.
(a) Inability to Obtain Authority. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock
covered by an Option or Stock Purchase Right exceeds, as of the date of grant,
the number of Shares which may be issued under the Plan without additional
shareholder approval, such Option or Stock Purchase Right shall be void with
respect to such excess Optioned Stock, unless shareholder approval of an
amendment sufficiently increasing the number of Shares subject to the Plan is
timely obtained in accordance with Section 15(b) of the Plan.
18. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law.
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THE INDUS GROUP, INC.
1995 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
Optionee's Name: ______________________________________
Address: ______________________________________
______________________________________
______________________________________
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Grant Number _________________________
Date of Grant _________________________
Vesting Commencement Date _________________________
Exercise Price per Share $________________________
Total Number of Shares Granted _________________________
Total Exercise Price $________________________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: _________________________
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
20% of the Shares subject to the Option shall vest twelve (12) months
after the Vesting Commencement Date, and twenty percent (20%) of the Shares at
the end of each subsequent
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twelve-month period thereafter, so that all of the Shares shall be vested five
(5) years after the Vesting Commencement Date.
Termination Period:
This Option may be exercised for _____ [days/months] after termination
of the Optionee's employment or consulting relationship with the Company. Upon
the death or Disability of the Optionee, this Option may be exercised for such
longer period as provided in the Plan. In the event of the Optionee's change in
status from Employee to Consultant or Consultant to Employee, this Option
Agreement shall remain in effect. In no event shall this Option be exercised
later than the Term/Expiration Date as provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 15(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, Disability or other termination of Optionee's employment or
consulting relationship, the exercisability of the Option is governed by the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of
an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be signed by
the Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This
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Option shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions of law
and the requirements of any stock exchange or quotation service upon which the
Shares are then listed. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the
Option is exercised with respect to such Exercised Shares.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash; or
(b) check;
(c) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price: or
(d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
6. Tax Consequences. Some of the federal and California tax
consequences relating to this Option, as of the date of this Option, are set
forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
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(a) Exercising the Option.
(i) Nonstatutory Stock Option. The Optionee may incur
regular federal income tax and California income tax liability upon exercise of
a NSO. The Optionee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price. If the Optionee is an Employee or a former Employee,
the Company will be required to withhold from his or her compensation or collect
from Optionee and pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the time of exercise, and
may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.
(ii) Incentive Stock Option. If this Option qualifies as
an ISO, the Optionee will have no regular federal income tax or California
income tax liability upon its exercise, although the excess, if any, of the Fair
Market Value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price will be treated as an adjustment to alternative minimum
taxable income for federal tax purposes and may subject the Optionee to
alternative minimum tax in the year of exercise. In the event that the Optionee
undergoes a change of status from Employee to Consultant, any Incentive Stock
Option of the Optionee that remains unexercised shall cease to qualify as an
Incentive Stock Option and will be treated for tax purposes as a Nonstatutory
Stock Option on the ninety-first (91st) day following such change of status.
(b) Disposition of Shares.
(i) NSO. If the Optionee holds NSO Shares for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(ii) ISO. If the Optionee holds ISO Shares for at least
one year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price.
(c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.
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7. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by California law except for that body of
law pertaining to conflict of laws.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: THE INDUS GROUP, INC.
_________________________________ By: _________________________________
Signature
_________________________________ Title: ______________________________
Print Name
_________________________________
Residence Address
_________________________________
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CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option Agreement. In consideration of
the Company's granting his or her spouse the right to purchase Shares as set
forth in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
_______________________________________
Spouse of Optionee
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EXHIBIT A
THE INDUS GROUP, INC.
1995 STOCK PLAN
EXERCISE NOTICE
The Indus Group, Inc.
60 Spear Street
San Francisco, CA 94105
Attention: Secretary
1. Exercise of Option. Effective as of today, ________________, 199__,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of The Indus Group, Inc. (the "Company")
under and pursuant to the 1995 Stock Plan (the "Plan") and the Stock Option
Agreement dated , 19___ (the "Option Agreement"). The purchase price for the
Shares shall be $ , as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in [Section 13] of the
Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all
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prior undertakings and agreements of the Company and Purchaser with respect to
the subject matter hereof, and may not be modified adversely to the Purchaser's
interest except by means of a writing signed by the Company and Purchaser. This
agreement is governed by California law except for that body of law pertaining
to conflict of laws.
Submitted by: Accepted by:
PURCHASER: THE INDUS GROUP, INC.
_________________________________ By: _________________________________
Signature
_________________________________ Its: ________________________________
Print Name
Address: Address:
- ------- -------
_________________________________ 60 Spear Street
_________________________________ San Francisco, CA 94105
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EXHIBIT B
SECURITY AGREEMENT
This Security Agreement is made as of __________, 19___ between The
Indus Group, Inc., a California corporation ("Pledgee"), and
_________________________ ("Pledgor").
Recitals
Pursuant to Pledgor's election to purchase Shares under the Option
Agreement dated ________ (the "Option"), between Pledgor and Pledgee under
Pledgee's 1995 Stock Plan, and Pledgor's election under the terms of the Option
to pay for such shares with his promissory note (the "Note"), Pledgor has
purchased _________ shares of Pledgee's Common Stock (the "Shares") at a price
of $________ per share, for a total purchase price of $__________. The Note and
the obligations thereunder are as set forth in Exhibit C to the Option.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration of
the transfer of the Shares to Pledgor under the Option Agreement, Pledgor,
pursuant to the California Commercial Code, hereby pledges all of such Shares
(herein sometimes referred to as the "Collateral") represented by certificate
number ______, duly endorsed in blank or with executed stock powers, and
herewith delivers said certificate to the Secretary of Pledgee ("Pledgeholder"),
who shall hold said certificate subject to the terms and conditions of this
Security Agreement.
The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Option, and the
Pledge holder shall not encumber or dispose of such Shares except in accordance
with the provisions of this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
a. Payment of Indebtedness. Pledgor will pay the principal sum of
the Note secured hereby, together with interest thereon, at the time and in the
manner provided in the Note.
b. Encumbrances. The Shares are free of all other encumbrances,
defenses and liens, and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.
c. Margin Regulations. In the event that Pledgee's Common Stock
is now or later becomes margin-listed by the Federal Reserve Board and Pledgee
is classified as a "lender" within the
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meaning of the regulations under Part 207 of Title 12 of the Code of Federal
Regulations ("Regulation G"), Pledgor agrees to cooperate with Pledgee in making
any amendments to the Note or providing any additional collateral as may be
necessary to comply with such regulations.
3. Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
4. Stock Adjustments. In the event that during the term of the pledge
any stock dividend, reclassification, readjustment or other changes are declared
or made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Options and Rights. In the event that, during the term of this
pledge, subscription Options or other rights or options shall be issued in
connection with the pledged Shares, such rights, Options and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:
a. Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
b. Pledgor fails to perform any of the covenants set forth in the
Option or contained in this Security Agreement for a period of 10 days after
written notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the California
Commercial Code.
7. Release of Collateral. Subject to any applicable contrary rules
under Regulation G, there shall be released from this pledge a portion of the
pledged Shares held by Pledgeholder hereunder upon payments of the principal of
the Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
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Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.
8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
9. Term. The within pledge of Shares shall continue until the payment
of all indebtedness secured hereby, at which time the remaining pledged stock
shall be promptly delivered to Pledgor, subject to the provisions for prior
release of a portion of the Collateral as provided in paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.
11. Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted and
governed under the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"PLEDGOR" By:______________________________
_________________________________
Print Name
Address: _________________________________
_________________________________
"PLEDGEE" The Indus Group, Inc.,
a California corporation
By:______________________________
Title:___________________________
"PLEDGEHOLDER" _________________________________
Secretary of
The Indus Group, Inc.
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EXHIBIT C
NOTE
$_____________ _____________________
City, State
____________, 19___
FOR VALUE RECEIVED, _______________ promises to pay to The Indus Group,
Inc., a California corporation (the "Company"), or order, the principal sum of
_______________________ ($_____________), together with interest on the unpaid
principal hereof from the date hereof at the rate of _______________ percent
(____%) per annum, compounded semiannually.
Principal and interest shall be due and payable on __________, 19___.
Should the undersigned fail to make full payment of principal or interest for a
period of 10 days or more after the due date thereof, the whole unpaid balance
on this Note of principal and interest shall become immediately due at the
option of the holder of this Note. Payments of principal and interest shall be
made in lawful money of the United States of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of the Option, dated as of
________________. This Note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith and
is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event the undersigned shall cease to be an employee or
consultant of the Company for any reason, this Note shall, at the option of the
Company, be accelerated, and the whole unpaid balance on this Note of principal
and accrued interest shall be immediately due and payable.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
_________________________________
_________________________________
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1995 STOCK PLAN
NOTICE OF GRANT OF STOCK PURCHASE RIGHT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Notice of Grant.
Grantee's Name: _________________________________
Address: _________________________________
_________________________________
You have been granted the right to purchase Common Stock of the
Company, subject to the Company's Repurchase Option and your ongoing Continuous
Status as an Employee or Consultant (as described in the Plan and the attached
Restricted Stock Purchase Agreement), as follows:
Grant Number _________________________________
Date of Grant _________________________________
Price Per Share $ _________________________________
Total Number of Shares Subject _________________________________
to This Stock Purchase Right
Expiration Date: _________________________________
YOU MUST EXERCISE THIS STOCK PURCHASE RIGHT BEFORE THE EXPIRATION DATE
OR IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES.
By your signature and the signature of the Company's representative below, you
and the Company agree that this Stock Purchase Right is granted under and
governed by the terms and conditions of the 1995 Stock Plan and the Restricted
Stock Purchase Agreement, attached hereto as Exhibit A-1, both of which are made
a part of this document. You further agree to execute the attached Restricted
Stock Purchase Agreement as a condition to purchasing any shares under this
Stock Purchase Right.
GRANTEE: The Indus Group, Inc.
_________________________________ By:_________________________________
Signature
_________________________________ Title:______________________________
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Print Name
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EXHIBIT A-1
1995 STOCK PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Restricted Stock Purchase Agreement.
WHEREAS the Purchaser named in the Notice of Grant, (the "Purchaser")
is an Employee or Consultant of the Company, and the Purchaser's continued
participation is considered by the Company to be important for the Company's
continued growth; and
WHEREAS in order to give the Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for the Purchaser to participate
in the affairs of the Company, the Admin istrator has granted to the Purchaser a
Stock Purchase Right subject to the terms and conditions of the Plan and the
Notice of Grant, which are incorporated herein by reference, and pursuant to
this Restricted Stock Purchase Agreement (the "Agreement").
NOW THEREFORE, the parties agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to the Purchaser
and the Purchaser hereby agrees to purchase shares of the Company's Common Stock
(the "Shares"), at the per Share purchase price and as otherwise described in
the Notice of Grant.
2. Payment of Purchase Price. The purchase price for the Shares may be
paid by delivery to the Company at the time of execution of this Agreement of
cash, a check, or some combination thereof.
3. Repurchase Option.
(a) In the event the Purchaser's Continuous Status as an Employee
or Consultant terminates for any or no reason (including death or disability)
before all of the Shares are released from the Company's Repurchase Option (see
Section 4), the Company shall, upon the date of such termination (as reasonably
fixed and determined by the Company) have an irrevocable, exclusive option (the
"Repurchase Option") for a period of sixty (60) days from such date to
repurchase up to that number of shares which constitute the Unreleased Shares
(as defined in Section 4) at the original purchase price per share (the
"Repurchase Price"). The Repurchase Option shall be exercised by the Company by
delivering written notice to the Purchaser or the Purchaser's executor (with a
copy to the Escrow Holder) AND, at the Company's option, (i) by delivering to
the Purchaser or the Purchaser's executor a check in the amount of the aggregate
Repurchase Price, or (ii) by cancelling an amount of the Purchaser's
indebtedness to the Company equal to the aggregate Repurchase Price, or (iii) by
a combination of (i) and (ii) so that the combined payment and cancellation of
indebtedness equals the aggregate Repurchase Price. Upon delivery of such notice
and the payment of the aggregate Repurchase Price, the Company shall become the
legal and beneficial owner of the Shares being
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repurchased and all rights and interests therein or relating thereto, and the
Company shall have the right to retain and transfer to its own name the number
of Shares being repurchased by the Company.
(b) Whenever the Company shall have the right to repurchase
Shares hereunder, the Company may designate and assign one or more employees,
officers, directors or shareholders of the Company or other persons or
organizations to exercise all or a part of the Company's purchase rights under
this Agreement and purchase all or a part of such Shares. If the Fair Market
Value of the Shares to be repurchased on the date of such designation or
assignment (the "Repurchase FMV") exceeds the aggregate Repurchase Price of such
Shares, then each such designee or assignee shall pay the Company cash equal to
the difference between the Repurchase FMV and the aggregate Repurchase Price of
such Shares.
4. Release of Shares From Repurchase Option.
(a) _______________________ percent (______%) of the Shares shall
be released from the Company's Repurchase Option [one year] after the Date of
Grant and __________________ percent (______%) of the Shares [at the end of each
month thereafter], provided that the Purchaser's Continuous Status as an
Employee or Consultant has not terminated prior to the date of any such release.
(b) Any of the Shares that have not yet been released from the
Repurchase Option are referred to herein as "Unreleased Shares."
(c) The Shares that have been released from the Repurchase Option
shall be delivered to the Purchaser at the Purchaser's request (see Section 6).
5. Restriction on Transfer. Except for the escrow described in Section
6 or the transfer of the Shares to the Company or its assignees contemplated by
this Agreement, none of the Shares or any beneficial interest therein shall be
transferred, encumbered or otherwise disposed of in any way until such Shares
are released from the Company's Repurchase Option in accordance with the provi
sions of this Agreement, other than by will or the laws of descent and
distribution.
6. Escrow of Shares.
(a) To ensure the availability for delivery of the Purchaser's
Unreleased Shares upon repurchase by the Company pursuant to the Repurchase
Option, the Purchaser shall, upon execution of this Agreement, deliver and
deposit with an escrow holder designated by the Company (the "Escrow Holder")
the share certificates representing the Unreleased Shares, together with the
stock assignment duly endorsed in blank, attached hereto as Exhibit A-2. The
Unreleased Shares and stock assignment shall be held by the Escrow Holder,
pursuant to the Joint Escrow Instructions of the Company and Purchaser attached
hereto as Exhibit A-3, until such time as the Company's Repurchase Option
expires. As a further condition to the Company's obligations under this
Agreement, the
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Company may require the spouse of Purchaser, if any, to execute and deliver to
the Company the Consent of Spouse attached hereto as Exhibit A-4.
(b) The Escrow Holder shall not be liable for any act it may do
or omit to do with respect to holding the Unreleased Shares in escrow while
acting in good faith and in the exercise of its judgment.
(c) If the Company or any assignee exercises the Repurchase
Option hereunder, the Escrow Holder, upon receipt of written notice of such
exercise from the proposed transferee, shall take all steps necessary to
accomplish such transfer.
(d) When the Repurchase Option has been exercised or expires
unexercised or a portion of the Shares has been released from the Repurchase
Option, upon request the Escrow Holder shall promptly cause a new certificate to
be issued for the released Shares and shall deliver the certificate to the
Company or the Purchaser, as the case may be.
(e) Subject to the terms hereof, the Purchaser shall have all the
rights of a shareholder with respect to the Shares while they are held in
escrow, including without limitation, the right to vote the Shares and to
receive any cash dividends declared thereon. If, from time to time during the
term of the Repurchase Option, there is (i) any stock dividend, stock split or
other change in the Shares, or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of the Purchaser's ownership of the Shares shall be immediately subject
to this escrow, deposited with the Escrow Holder and included thereafter as
"Shares" for purposes of this Agreement and the Repurchase Option.
7. Legends. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legend (in addition to any legend
required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT
BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
8. Adjustment for Stock Split. All references to the number of Shares
and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
9. Tax Consequences. The Purchaser has reviewed with the Purchaser's
own tax advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contem plated by this Agreement. The Purchaser
is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents. The Purchaser understands that the
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Purchaser (and not the Company) shall be responsible for the Purchaser's own tax
liability that may arise as a result of the transactions contemplated by this
Agreement. The Purchaser understands that Section 83 of the Internal Revenue
Code of 1986, as amended (the "Code"), taxes as ordinary income the difference
between the purchase price for the Shares and the Fair Market Value of the
Shares as of the date any restrictions on the Shares lapse. In this context,
"restriction" includes the right of the Company to buy back the Shares pursuant
to the Repurchase Option. The Purchaser understands that the Purchaser may elect
to be taxed at the time the Shares are purchased rather than when and as the
Repurchase Option expires by filing an election under Section 83(b) of the Code
with the IRS within 30 days from the date of purchase. The form for making this
election is attached as Exhibit A-5 hereto.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE
THIS FILING ON THE PURCHASER'S BEHALF.
10. General Provisions.
(a) This Agreement shall be governed by the laws of the State of
California. This Agreement, subject to the terms and conditions of the Plan and
the Notice of Grant, represents the entire agreement between the parties with
respect to the purchase of the Shares by the Purchaser. Subject to Section 15(c)
of the Plan, in the event of a conflict between the terms and conditions of the
Plan and the terms and conditions of this Agreement, the terms and conditions of
the Plan shall prevail. Unless otherwise defined herein, the terms defined in
the Plan shall have the same defined meanings in this Agreement.
(b) Any notice, demand or request required or permitted to be
given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end of
this Agreement or such other address as a party may request by notifying the
other in writing.
Any notice to the Escrow Holder shall be sent to the Company's
address with a copy to the other party hereto.
(c) The rights of the Company under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of the Purchaser
under this Agreement may only be assigned with the prior written consent of the
Company.
(d) Either party's failure to enforce any provision of this
Agreement shall not in any way be construed as a waiver of any such provision,
nor prevent that party from thereafter enforcing
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any other provision of this Agreement. The rights granted both parties hereunder
are cumulative and shall not constitute a waiver of either party's right to
assert any other legal remedy available to it.
(e) The Purchaser agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.
(f) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO SECTION 4 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE
OR CONSULTANT AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED
OR PURCHASING SHARES HEREUNDER). PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE
SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD,
OR AT ALL, AND SHALL NOT INTERFERE WITH PURCHASER'S RIGHT OR THE COMPANY'S RIGHT
TO TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING RELATIONSHIP AT ANY TIME, WITH
OR WITHOUT CAUSE.
By Purchaser's signature below, Purchaser represents that he or she is
familiar with the terms and provisions of the Plan, and hereby accepts this
Agreement subject to all of the terms and provisions thereof. Purchaser has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Purchaser agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.
Purchaser further agrees to notify the Company upon any change in the residence
indicated in the Notice of Grant.
DATED:___________________________
PURCHASER: THE INDUS GROUP, INC.
_________________________________ By:_________________________________
Signature
_________________________________ Title:______________________________
Print Name
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<PAGE>
EXHIBIT A-2
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________________, hereby sell, assign
and transfer unto (__________) shares of the Common Stock of The Indus Group,
Inc. standing in my name of the books of said corporation represented by
Certificate No. _____ herewith and do hereby irrevocably constitute and appoint
to transfer the said stock on the books of the within named corporation with
full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the
Restricted Stock Purchase Agreement (the "Agreement")
between________________________ and the undersigned dated ______________, 19__.
Dated: _______________, 19
Signature:______________________________
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<PAGE>
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise the
Repurchase Option, as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
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<PAGE>
EXHIBIT A-3
JOINT ESCROW INSTRUCTIONS
___________, 19__
Corporate Secretary
The Indus Group, Inc.
60 Spear Street
San Francisco, CA 94105
Dear _________________ :
As Escrow Agent for both The Indus Group, Inc., a California
corporation (the "Company"), and the undersigned purchaser of stock of the
Company (the "Purchaser"), you are hereby authorized and directed to hold the
documents delivered to you pursuant to the terms of that certain Restricted
Stock Purchase Agreement ("Agreement") between the Company and the undersigned,
in accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively as the "Company") exercises the Company's Repurchase
Option set forth in the Agreement, the Company shall give to Purchaser and you a
written notice specifying the number of shares of stock to be purchased, the
purchase price, and the time for a closing hereunder at the principal office of
the Company. Purchaser and the Company hereby irrevocably authorize and direct
you to close the transaction contemplated by such notice in accordance with the
terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's Repurchase Option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a shareholder of the Company while the
stock is held by you.
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's Repurchase Option has been exercised, you
shall deliver to Purchaser a certificate or
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<PAGE>
certificates representing so many shares of stock as are not then subject to the
Company's Repurchase Option. Within 90 days after cessation of Purchaser's
continuous employment by or services to the Company, or any parent or subsidiary
of the Company, you shall deliver to Purchaser a certificate or certificates
representing the aggregate number of shares held or issued pursuant to the
Agreement and not purchased by the Company or its assignees pursuant to exercise
of the Company's Repurchase Option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Escrow Agent.
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<PAGE>
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
COMPANY: The Indus Group, Inc.
60 Spear Street
San Francisco, CA 94105
PURCHASER: _________________________________
_________________________________
_________________________________
ESCROW AGENT: Corporate Secretary
The Indus Group, Inc.
60 Spear Street
San Francisco, CA 94105
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
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<PAGE>
18. These Joint Escrow Instructions shall be governed by, and construed
and enforced in accordance with, the laws of the State of California.
Very truly yours,
The Indus Group, Inc.
By: _________________________________
Title: ______________________________
PURCHASER:
_____________________________________
(Signature)
_____________________________________
(Typed or Printed Name)
ESCROW AGENT:
_________________________________
Corporate Secretary
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<PAGE>
EXHIBIT A-4
CONSENT OF SPOUSE
I, ____________________, spouse of ___________________, have read and
approve the foregoing Restricted Stock Purchase Agreement (the "Agreement"). In
consideration of the Company's grant to my spouse of the right to purchase
shares of The Indus Group, Inc., as set forth in the Agreement, I hereby appoint
my spouse as my attorney-in-fact in respect to the exercise of any rights under
the Agreement and agree to be bound by the provisions of the Agreement insofar
as I may have any rights in said Agreement or any shares issued pursuant thereto
under the community property laws or similar laws relating to marital property
in effect in the state of our residence as of the date of the signing of the
foregoing Agreement.
Dated: _______________, 19
_________________________________
Signature of Spouse
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<PAGE>
EXHIBIT A-5
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
for the current taxable year the amount of any compensation taxable to taxpayer
in connection with his or her receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of
the undersigned are as follows:
NAME: TAXPAYER: SPOUSE:
ADDRESS:
IDENTIFICATION NO.: TAXPAYER: SPOUSE:
TAXABLE YEAR:
2. The property with respect to which the election is made is described as
follows: shares (the "Shares") of the Common Stock of The Indus Group,
Inc. (the "Company").
3. The date on which the property was transferred is: __________ , 19__.
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, upon
certain events. This right lapses with regard to a portion of the Shares
based on the continued performance of services by the taxpayer over
time.
5. The fair market value at the time of transfer, determined without regard
to any restriction other than a restriction which by its terms will
never lapse, of such property is:
$_______________.
6. The amount (if any) paid for such property is:
$_______________.
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated: ___________________, 19____ ______________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: ___________________, 19____ ______________________________
Spouse of Taxpayer
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<PAGE>
APPENDIX A
<PAGE>
PROXY THE INDUS GROUP, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR 1997 ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1997
The undersigned shareholder(s) of The Indus Group, Inc., a California
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated March 21, 1997, and hereby appoints
Robert W. Felton and Frank W. Siskowski as Proxies, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 1997 Annual Meeting of Shareholders of The Indus Group, Inc.
to be held on May 6, 1997 at 2:00 p.m., local time, at the Grand Hyatt Hotel on
Union Square located at 345 Stockton Street, San Francisco, California and at
any adjournment or postponement thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote if personally present on any of
the following matters and with discretionary authority as to any and all other
matters that may properly come before the meeting.
(Continued, and to be signed on the other side)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Please mark
[ X ] your votes
as this
FOR AGAINST ABSTAIN
2. To approve an amendment to the
Company's 1995 Stock Plan to increase [ ] [ ] [ ]
WITHHOLD the number of shares reserved for
1. Election of Directors: FOR FOR ALL issuance thereunder by 2,500,000 to
To withhold authority for any 4,000,000.
individual nominee, strike [ ] [ ]
a line through the nominee's 3. To ratify and approve the appointment
name in the list below: of Ernst & Young LLP as the
Robert W. Felton, Richard W. MacAlmon, Alan G. Merten, independent public accountants of the [ ] [ ] [ ]
Michael E. Percy, Donald F. Robertson Company for the fiscal year ending
Decemeber 31, 1997.
I PLAN TO ATTEND THE MEETING [ ]
4. To transact such other business as
may properly come before the meeting
or any postponements or adjournments
thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE
ABOVE PERSONS AND PROPOSALS, AND FOR SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING AS THE PROXY HOLDERS DEEM
ADVISABLE.
Signature(s)_______________________________________________________ Dated ________________, 1997
(This proxy should be marked, dated and signed by each shareholder exactly as such shareholder's name appears hereon, and returned
promptly in the enclosed envelope. Persons signing in a fiduciary capacity should so indicate. A corporation is requested to sign
its name by its President or other authorized officer, with the office held designated. If shares are held by joint tenants or as
community property, both holders should sign.)
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT AS PROMPTLY AS POSSIBLE.
</TABLE>
