<PAGE>
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ALLAIRE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 41-1830792
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE ALEWIFE CENTER, CAMBRIDGE, MASSACHUSETTS 02140
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
LIVE SOFTWARE, INC. 1999 STOCK OPTION/STOCK ISSUANCE PLAN
LIVE SOFTWARE, INC. STOCK OPTION AGREEMENT WITH MICHAEL HOGARTH
LIVE SOFTWARE, INC. STOCK OPTION AGREEMENT WITH JAMES DELAPA
(FULL TITLES OF THE PLANS)
--------------------
DAVID J. ORFAO
President and Chief Executive Officer
Allaire Corporation
One Alewife Center
Cambridge, Massachusetts 02140
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(617) 761-2000
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
-------------------
WITH COPIES TO:
Robert L. Birnbaum, Esquire
William R. Kolb, Esquire
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, Massachusetts 02109
(617) 832-1000
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Title of Proposed Maximum Amount
Securities Amount Maximum Aggregate of
to be to be Offering Price Offering Registration
Registered Registered Per Share Price Fee
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 19,048 shares(1) $4.44(2) $84,573.12(2) $23.51
($.01 par value)
Common Stock 845 shares(3) $.43(2) $363.35(2) $.10
($.01 par value)
Common Stock 1690 shares(4) $.43(2) $726.70(2) $.20
($.01 par value)
Totals 21,583 shares $85,663.17 $24.00
</TABLE>
<PAGE>
(1) Represents shares of Allaire common stock issuable upon exercise of
outstanding stock options granted pursuant to the Live Software, Inc. 1999 Stock
Option/Stock Issuance Plan as of June 25, 1999.
(2) Calculated pursuant to Rule 457(h)(1) based on the weighted average
exercise price per share of the options.
(3) Represents shares of Allaire common stock issuable upon exercise of
outstanding stock options granted pursuant to the Stock Option Agreement
between Live Software, Inc. and Michael Hogarth dated as of October 1, 1998.
(4) Represents shares of Allaire common stock issuable upon exercise of
outstanding stock options granted pursuant to the Stock Option Agreement
between Live Software, Inc. and Jim DeLapa dated as of January 1, 1999.
-------------------------------------------
<PAGE>
AVAILABILITY OF DOCUMENTS INCORPORATED BY REFERENCE
This document constitutes part of a prospectus under Section 10(a) of
the Securities Act. The Section 10(a) prospectus incorporates by reference
certain other documents listed in Item 3 of Part II of the registration
statement to which this prospectus relates. These other documents include:
- - the latest annual report that we filed under Section 13 or 15(d) of the
Exchange Act, or the latest prospectus that we filed under Rule 424(b)
under the Securities Act that contained audited financial statements
for the latest fiscal year for which we have filed financial
statements; and
- - all other quarterly, current and other reports that we have filed under
Section 13 or 15(d) of the Exchange Act since the end of the latest
fiscal year covered by such annual report or prospectus.
We are also required to deliver certain other documents to you under
Rule 428(b) under the Securities Act. All of these documents are available to
you without charge upon written or oral request. To obtain a copy of any or all
of these documents, you should call our Chief Financial Officer at (617)
761-2000 or write to the following address:
Allaire Corporation
One Alewife Center
Cambridge, Massachusetts 02140
Attention: Chief Financial Officer
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated in this registration statement by
reference:
(a) Allaire's Prospectus dated January 22, 1999 included in Allaire's
registration statement on Form S-1, File Number 333-68639, as declared effective
by the Commission on January 22, 1999;
(b) the description of Allaire's common stock contained in the
registration statement on Form 8-A filed with the Commission on January 15, 1999
under Section 12 of the Securities Exchange Act of 1934, including any amendment
or report filed for the purpose of updating such description;
(c) Allaire's Annual Report on Form 10-K for the fiscal year ended on
December 31, 1998, as filed with the Commission on March 31, 1999;
(d) Allaire's Current Report on Form 8-K as filed with the Commission
on April 27, 1999;
(e) Allaire's Quarterly Report on Form 10-Q, as filed with the
Commission on May 17, 1999; and
(f) Allaire's Current Report on Form 8-K/A, as filed with the
Commission on June 15, 1999.
All documents subsequently filed by Allaire pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the securities registered hereby is being passed upon
for Allaire Corporation by Foley, Hoag & Eliot LLP, Boston, Massachusetts.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law affords a Delaware
corporation the power to indemnify its present and former directors and officers
under certain conditions. Article Six of Allaire's Amended and Restated
Certificate of Incorporation provides that Allaire will indemnify each person
who at any time is, or has been, a director or officer of Allaire and was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a director or
officer of Allaire or is or was serving at our request as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees), judgments, fines
and amounts paid in
<PAGE>
settlement incurred in connection with any such action, suit or proceeding, to
the maximum extent permitted by the Delaware General Corporation Law, as the
same exists or may hereafter be amended. No amendment to or repeal of the
provisions of Article Six of the Amended and Restated Certificate of
Incorporation will deprive a director or officer of the benefit thereof with
respect to any act or failure occurring prior to such amendment or repeal.
Section 102(b)(7) of the Delaware General Corporation Law gives a
Delaware corporation the power to adopt a charter provision eliminating or
limiting the personal liability of directors to the corporation or its
stockholders for breach of fiduciary duty as directors, provided that such
provision may not eliminate or limit the liability of directors for: (a) any
breach of the director's duty of loyalty to the corporation or its stockholders;
(b) any acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (c) any payment of a dividend or
approval of a stock purchase that is illegal under Section 174 of the Delaware
General Corporation Law; or (d) any transaction from which the director derived
an improper personal benefit.
Article Eight of Allaire's Amended and Restated Certificate of
Incorporation provides that to the maximum extent permitted by the Delaware
General Corporation Law, no director will be personally liable to Allaire or to
any of its stockholders for monetary damages arising out of such director's
breach of fiduciary duty as a director. No amendment to or repeal of the
provisions of Article Eight will apply to or have any effect on the liability or
the alleged liability of any director with respect to any act or failure to act
of such director occurring prior to such amendment or repeal. A principal effect
of Article Eight is to limit or eliminate the potential liability of Allaire's
directors for monetary damages arising from breaches of their duty of care,
unless the breach involves one of the four exceptions described in (a) through
(d) above.
Section 145 of the Delaware General Corporation Law also affords a
Delaware corporation the power to obtain insurance on behalf of its directors
and officers against liabilities incurred by them in those capacities. Allaire
has obtained a directors' and officers' liability and company reimbursement
liability insurance policy that: (a) insures directors and officers against
losses (above a deductible amount) arising from certain claims made against them
by reason of certain acts done or attempted by such directors or officers; and
(b) insures Allaire against losses (above a deductible amount) arising from any
such claims, but only if Allaire is required or permitted to indemnify such
directors or officers for such losses under statutory or common law or under
provisions of its Amended and Restated Certificate of Incorporation or Amended
and Restated By-Laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Amended and Restated Certificate of Incorporation of Allaire
Corporation (filed as Exhibit 3.3 to Allaire's registration statement
on Form S-1, File Number 333-68639, and incorporated herein by
reference).
4.2 Amended and Restated By-Laws of Allaire Corporation (filed as Exhibit
3.5 to Allaire's registration statement on Form S-1, File Number
333-68639, and incorporated herein by reference).
4.3 Live Software, Inc. 1999 Stock Option/Stock Issuance Plan.
4.4 Stock Option Agreement between Live Software, Inc. and Michael Hogarth,
dated as of October 1, 1998.
4.5 Stock Option Agreement between Live Software, Inc. and James DeLapa,
dated as of
<PAGE>
January 1, 1999.
5.1 Opinion of Foley, Hoag & Eliot LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1).
24.1 Power of Attorney (contained on the signature page).
ITEM 9. UNDERTAKINGS.
1. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement will be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time will be deemed to be the initial BONA FIDE offering
thereof.
2. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that paragraphs 2 (a)(1)(i) and 2 (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference herein.
(b) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment will be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of
<PAGE>
the securities being registered which remain unsold at the termination of the
offering.
3. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, Commonwealth of Massachusetts, on this
23rd day of July, 1999.
ALLAIRE CORPORATION
By: /S/ DAVID J. ORFAO
----------------------------------
David J. Orfao
President and Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints David J. Orfao and David A. Gerth, and
each of them, his true and lawful attorneys-in-fact and agents with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing which
they, or any of them, may deem necessary or advisable to be done in connection
with this registration statement, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or any substitute or substitutes
for any or all of them, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIGNATURE TITLE DATE
/S/ JOSEPH J. ALLAIRE Chairman of the board of Directors, July 23, 1999
---------------------- Chief Technology Officer and
Joseph J. Allaire Executive Vice President, Products
/S/ DAVID J. ORFAO President, Chief Executive Officer July 23, 1999
---------------------- and Director(principal executive
David J. Orfao officer)
/S/ DAVID A. GERTH Vice President, Finance and July 23, 1999
---------------------- Operations, Treasurer and Chief
David A. Gerth Financial Officer (principal
financial and accounting officer)
/S/ JONATHAN A. FLINT Director July 23, 1999
-----------------------
Jonathan A. Flint
/S/ JOHN J. GANNON Director July 23, 1999
-----------------------
John J. Gannon
/S/ THOMAS A. HERRING Director July 23, 1999
-----------------------
Thomas A. Herring
/S/ MITCHELL KAPOR Director July 23, 1999
-----------------------
Mitchell Kapor
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
NO. DESCRIPTION
4.1 Amended and Restated Certificate of Incorporation of
Allaire Corporation (filed as Exhibit 3.3 to
Allaire's registration statement on Form S-1, File
Number 333-68639, and incorporated herein by
reference).
4.2 Amended and Restated By-Laws of Allaire Corporation
(filed as Exhibit 3.5 to Allaire's registration
statement on Form S-1, File Number 333-68639, and
incorporated herein by reference).
4.3 Live Software, Inc. 1999 Stock Option/Stock Issuance
Plan.
4.4 Stock Option Agreement between Live Software, Inc.
and Michael Hogarth, dated as of October 1, 1998.
4.5 Stock Option Agreement between Live Software, Inc.
and James DeLapa, dated as of January 1, 1999.
5.1 Opinion of Foley, Hoag & Eliot LLP.
23.1 Consent of PricewaterhouseCoopers LLP,
Independent Accountants.
23.2 Consent of Foley, Hoag & Eliot LLP
(included in Exhibit 5.1).
24.1 Power of Attorney (contained on the signature
page).
<PAGE>
Exhibit 4.3
LIVE SOFTWARE, INC.
1999 STOCK OPTION/STOCK ISSUANCE PLAN
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 1999 Stock Option/Stock Issuance Plan is intended to promote
the interests of Live Software, Inc., a California corporation, by providing
eligible persons in the Corporation's employ or service with the opportunity
to acquire a proprietary interest, or otherwise increase their proprietary
interest, in the Corporation as an incentive for them to continue in such
employ or service.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into two (2) separate equity programs:
(i) the Option Grant Program under which eligible persons
may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock, and
(ii) the Stock Issuance Program under which eligible persons
may, at the discretion of the Plan Administrator, be issued shares of Common
Stock directly, either through the immediate purchase of such shares or as a
bonus for services rendered the Corporation (or any Parent or Subsidiary).
B. The provisions of Articles One and Four shall apply to both
equity programs under the Plan and shall accordingly govern the interests of
all persons under the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board. However, any or
all administrative functions otherwise exercisable by the Board may be
delegated to the Committee. Members of the Committee shall serve for such
period of time as the Board may determine and shall be subject to removal by
the Board at any time. The Board may also at any time terminate the functions
of the Committee and reassume all powers and authority previously delegated
to the Committee.
<PAGE>
B. The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for proper administration of the Plan
and to make such determinations under, and issue such interpretations of, the
Plan and any outstanding options or stock issuances thereunder as it may deem
necessary or advisable. Decisions of the Plan Administrator shall be final
and binding on all parties who have an interest in the Plan or any option
grant or stock issuance thereunder.
IV. ELIGIBILITY
A. The persons eligible to participate in the Plan are as follows:
(i) Employees,
(ii) non-employee members of the Board or the non-employee
members of the board of directors of any Parent or Subsidiary; and
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. The Plan Administrator shall have full authority to determine,
(i) with respect to the grants made under the Option Grant Program, which
eligible persons are to receive the option grants, the time or times when
those grants are to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an Incentive Option or a
Non-Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the option shares
and the maximum term for which the option is to remain outstanding, and (ii)
with respect to stock issuances made under the Stock Issuance Program, which
eligible persons are to receive such stock issuances, the time or times when
those issuances are to be made, the number of shares to be issued to each
Participant, the vesting schedule (if any) applicable to the issued shares
and the consideration to be paid by the Participant for such shares.
C. The Plan Administrator shall have the absolute discretion
either to grant options in accordance with the Option Grant Program or to
effect stock issuances in accordance with the Stock Issuance Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock. The maximum number of shares of
Common Stock which may be issued over the term of the Plan shall not exceed
2,000,000 shares.
B. Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) the
options expire or terminate for any reason prior to exercise in full or (ii)
the options are cancelled in accordance with the cancellation-regrant
provisions of Article Two. Unvested shares issued under the Plan and
subsequently repurchased by the Corporation, at the option exercise or direct
issue price paid
2.
<PAGE>
per share, pursuant to the Corporation's repurchase rights under the Plan
shall be added back to the number of shares of Common Stock reserved for
issuance under the Plan and shall accordingly be available for reissuance
through one or more subsequent option grants or direct stock issuances under
the Plan.
C. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as
a class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan and (ii) the number and/or class of
securities and the exercise price per share in effect under each outstanding
option in order to prevent the dilution or enlargement of benefits
thereunder. The adjustments determined by the Plan Administrator shall be
final, binding and conclusive. In no event shall any such adjustments be made
in connection with the conversion of one or more outstanding shares of the
Corporation's preferred stock into shares of Common Stock.
3.
<PAGE>
ARTICLE TWO
OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such
document shall comply with the terms specified below. Each document
evidencing an Incentive Option shall, in addition, be subject to the
provisions of the Plan applicable to such options.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the Plan
Administrator in accordance with the following provisions:
(i) The exercise price per share shall not be less than
eighty-five percent (85%) of the Fair Market value per share of Common Stock
on the option grant date.
(ii) If the person to whom the option is granted is a 10%
Shareholder, then the exercise price per share shall not be less than one
hundred ten percent (110%) of the Fair Market Value per share of Common Stock
on the option grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Four and the documents evidencing the option, be payable in cash or
check made payable to the Corporation. Should the Common Stock be registered
under Section 12 of the 1934 Act at the time the option is exercised, then
the exercise price may also be paid as follows:
(i) in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date, or
(ii) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable instructions (A) to a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement
4.
<PAGE>
date, sufficient funds to cover the aggregate exercise price payable for the
purchased shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Corporation by reason of such
exercise and (B) to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the
sale.
Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares must be made
on the Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable
at such time or times, during such period and for such number of shares as
shall be determined by the Plan Administrator and set forth in the documents
evidencing the option grant. However, no option shall have a term in excess
of ten (10) years measured from the option grant date.
C. EFFECT OF TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Should the Optionee cease to remain in Service for
any reason other than death, Disability or Misconduct, then the Optionee
shall have a period of three (3) months following the date of such cessation
of Service during which to exercise each outstanding option held by such
Optionee.
(ii) Should Optionee's Service terminate by reason of
Disability, then the Optionee shall have a period of twelve (12) months
following the date of such cessation of Service during which to exercise each
outstanding option held by such Optionee.
(iii) If the Optionee dies while holding an outstanding
option, then the personal representative of his or her estate or the person
or persons to whom the option is transferred pursuant to the Optionee's will
or the laws of inheritance shall have a twelve (12)-month period following
the date of the Optionee's death to exercise such option.
(iv) Under no circumstances, however, shall any such
option be exercisable after the specified expiration of the option term.
(v) During the applicable post-Service exercise period,
the option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if
5.
<PAGE>
earlier) upon the expiration of the option term, the option shall terminate
and cease to be outstanding for any vested shares for which the option has
not been exercised. However, the option shall, immediately upon the
Optionee's cessation of Service, terminate and cease to be outstanding with
respect to any and all option shares for which the option is not otherwise at
the time exercisable or in which the Optionee is not otherwise at that time
vested.
(vi) Should Optionee's Service be terminated for
misconduct, then all outstanding options held by the Optionee shall terminate
immediately and cease to remain outstanding.
2. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the option is to
remain exercisable following Optionee's cessation of Service or death from
the limited period otherwise in effect for that option to such greater period
of time as the Plan Administrator shall deem appropriate, but in no event
beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the
applicable post-Service exercise period, not only with respect to the number
of vested shares of Common Stock for which such option is exercisable at the
time of the Optionee's cessation of Service but also with respect to one or
more additional installments in which the Optionee would have vested under
the option had the Optionee continued in Service.
D. SHAREHOLDER RIGHTS. The holder of an option shall have no
shareholder rights with respect to the shares subject to the option until
such person shall have exercised the option, paid the exercise price and
become the recordholder of the purchased shares.
E. UNVESTED SHARES. The Plan Administrator shall have the
discretion to grant options which are exercisable for unvested shares of
Common Stock. Should the Optionee cease Service while holding such unvested
shares, the Corporation shall have the right to repurchase, at the exercise
price paid per share, any or all of those unvested shares. The terms upon
which such repurchase right shall be exercisable (including the period and
procedure for exercise and the appropriate vesting schedule for the purchased
shares) shall be established by the Plan Administrator and set forth in the
document evidencing such repurchase right. The Plan Administrator may not
impose a vesting schedule upon any option grant or the shares of Common Stock
subject to that option which is more restrictive than twenty percent (20%)
per year vesting, with the initial vesting to occur not later than one (1)
year after the option grant date. However, such limitation shall not be
applicable to any option grants made to individuals who are officers of the
Corporation, non-employee Board members or independent consultants.
6.
<PAGE>
F. FIRST REFUSAL RIGHTS. Until such time as the Common Stock is
first registered under Section 12 of the 1934 Act, the Corporation shall have
the right of first refusal with respect to any proposed disposition by the
Optionee (or any successor in interest) of any shares of Common Stock issued
under the Plan. Such right of first refusal shall be excercisable in
accordance with the terms established by the Plan Administrator and set forth
in the document evidencing such right.
G. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
Optionee, the option shall be excercisable only by the Optionee and shall not
be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Four shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
shall not be subject to the terms of this Section II.
A. ELIGIBILITY. Incentive Options may only be granted to Employees.
B. EXERCISE PRICE. The exercise price per share shall not be less
than one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the option grant date.
C. DOLLAR LIMITATION. The aggregate Fair Market Value of the
shares of Common Stock (determined as of the respective date or dates of
grant) for which one or more options granted to any Employee under the Plan
(or any other option plan of the Corporation or any Parent or Subsidiary) may
for the first time become excercisable as Incentive Options during any one
(1) calendar year shall not exceed the sum of One Hundred Thousand Dollars
($100,000). To the extent the Employee holds two (2) or more such options
which become exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability of such options as Incentive
Options shall be applied on the basis of the order in which such options are
granted.
D. 10% SHAREHOLDER. If any Employee to whom an Incentive Option is
granted is a 10% Shareholder, then the option term shall not exceed five (5)
years measured from the option grant date.
III. CORPORATE TRANSACTION
A. The shares subject to each option outstanding under the Plan at
the time of a Corporate Transaction shall automatically vest in full so that
each such option shall, immediately prior to the effective date of the
Corporate Transaction, become fully exercisable for all of the shares of
Common Stock at the time subject to that option and may be exercised for any
or all of those shares as fully-vested shares of Common Stock. However, the
shares subject to an outstanding option shall not vest on such an accelerated
basis if and to the extent;
7.
<PAGE>
(i) such option is to be assumed by the successor corporation (or parent
thereof) in the Corporate Transaction and any repurchase rights of the
Corporation with respect to the unvested option shares are concurrently to be
assigned to such successor corporation (or parent thereof) or (ii) such
option is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing on the unvested option shares
at the time of the Corporate Transaction and provides for subsequent payout
in accordance with the same vesting schedule applicable to those unvested
option shares or (iii) the acceleration of such option is subject to other
limitations imposed by the Plan Administrator at the time of the option grant.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated
rights shall immediately vest in full, in the event of any Corporate
Transaction, except to the extent: (i) those repurchase rights are assigned
to the successor corporation (or parent thereof) in connection with such
Corporate Transaction or (ii) such accelerated vesting is precluded by other
limitations imposed by the Plan Administrator at the time the repurchase
rights is issued.
C. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction,
had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to (i) the number and
class of securities available for issuance under the Plan following the
consummation of such Corporate Transaction and (ii) the exercise price
payable per share under each outstanding option, PROVIDED the aggregate
exercise price payable for such securities shall remain the same.
E. The Plan Administrator shall have the discretion, exercisable
either at the time the option is granted or at any time while the option
remains outstanding, to structure one or more options so that those options
shall automatically accelerate and vest in full (and any repurchase rights of
the Corporation with respect to the unvested shares subject to those options
shall immediately terminate) upon the occurrence of a Corporate Transaction,
whether or not those options are to be assumed in the Corporate Transaction.
F. The Plan Administrator shall also have full power and
authority, exercisable either at the time the option is granted or at any
time while the option remains outstanding, to structure such option so that
the shares subject to that option will automatically vest on an accelerated
basis should the Optionee's Service terminate by reason of an Involuntary
Termination within a designated period (not to exceed (18) months) following
the effective date of any Corporate Transaction in which the option is
assumed and the repurchase
8.
<PAGE>
rights applicable to those shares do not otherwise terminate. Any option so
accelerated shall remain exercisable for the fully-vested option shares until
the expiration or sooner termination of the option term. In addition, the
Plan Administrator may provide that one or more of the Corporation's
outstanding repurchase rights with respect to shares held by the Optionee at
the time of such Involuntary Termination shall immediately terminate on an
accelerated basis, and the shares subject to those terminated rights shall
accordingly vest at that time.
G. The portion of any Incentive Option accelerated in connection
with a Corporate Transaction shall remain exercisable as an Incentive Option
only to the extent the applicable One Hundred Thousand Dollar limitation is
not exceeded. To the extent such dollar limitation is exceeded, the
accelerated portion of such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.
H. The grant of options under the Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected option holders,
the cancellation of any or all outstanding options under the Plan and to
grant in substitution therefor new options covering the same or different
number of shares of Common Stock but with an exercisable price per share
based on the Fair Market Value per share of Common Stock on the new option
grant date.
9.
<PAGE>
ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance
Program through direct and immediate issuances without any intervening option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below.
A. PURCHASE PRICE.
1. The purchase price per share shall be fixed by the
Plan Administrator but shall not be less than eighty-five percent (85%) of the
Fair Market Value per share of Common Stock on the issue date. However, the
purchase price per share of Common Stock issued to a 10% Shareholder shall not
be less than one hundred and ten percent (110%) of such Fair Market Value.
2. Subject to the provisions of Section I of Article
Four, shares of Common Stock may be issued under the Stock Issuance Program
for any of the following items of consideration which the Plan Administrator
may deem appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
B. VESTING PROVISIONS.
1. Shares of Common Stock issued under the Stock
Issuance Program may, in the discretion of the Plan Administrator, be fully
and immediately vested upon issuance or may vest in one or more installments
over the Participant's period of Service or upon attainment of specified
performance objectives. However, the Plan Administrator may not impose a
vesting schedule upon any stock issuance effected under the Stock Issuance
Program which is more restrictive than twenty percent (20%) per year
vesting, with initial vesting to occur not later than one (1) year after the
issuance date. Such limitation shall not apply to any Common Stock issuances
made to the officers of the Corporation, non-employee Board members or
independent consultants.
10
<PAGE>
2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash divided) which
the Participant may have the right to receive with respect to the
Participant's unvested shares of Common Stock by reason of any stock
dividend, stock split, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration shall be issued subject to
(i) the same vesting requirements applicable to the Participant's unvested
shares of Common Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.
3. The Participant shall have full shareholder rights with
respect to any shares of Common Stock issued to the Participant under the
Stock Issuance Program, whether or not the Participant's interest in those
shares is vested. Accordingly, the Participant shall have the right to vote
such shares and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further shareholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to
the Participant the cash consideration paid for the surrendered shares and
shall cancel the unpaid principal balance of any outstanding purchase-money
note of the Participant attributable to such surrendered shares.
5. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested share of Common Stock (or
other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to those shares. Such waiver
shall result in the immediate vesting of the Participant's interest in the
shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.
C. FIRST REFUSAL RIGHTS. Until such time as the Common Stock is
first registered under Section 12 of the 1934 Act, the Corporation shall have
the right of first refusal with respect to any proposed disposition by the
Participant (or any successor in interest) of any shares of Common Stock
issued under the Stock Issuance Program. Such right of first refusal shall be
exercisable in accordance with the terms established by the Plan
Administrator and set forth in the document evidencing such right.
11
<PAGE>
II. CORPORATE TRANSACTION
A. Upon the occurrence of a Corporate Transaction, all
outstanding repurchase rights under the Stock Issuance Program shall
terminate automatically, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, except to the extent:
(i) those repurchase rights are assigned to the successor corporation (or
parent thereof) in connection with such Corporate Transaction or (ii) such
accelerated vesting is precluded by other limitations imposed by the Plan
Administrator at the time the repurchase right is issued.
B. The Plan Administrator shall have the discretionary
authority, exercisable either at the time the unvested shares are issued or
any time while the Corporation's repurchase rights with respect to those
shares remain outstanding, to provide that those rights shall automatically
terminate on an accelerated basis, and the shares of Common Stock subject to
those terminated rights shall immediately vest, in the event the Participant's
Service should subsequently terminate by reason of an Involuntary Termination
within a designated period (not to exceed eighteen (18) months) following the
effective date of any Corporate Transaction in which those repurchase rights
are assigned to the successor corporation (or parent thereof).
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be
held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.
12
<PAGE>
ARTICLE FOUR
MISCELLANEOUS
I. FINANCING
The Plan Administrator may permit any Optionee or Participant to
pay the option exercise price under the Option Grant Program or the purchase
price for shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments and secured by the purchased shares. However, any promissory
note delivered by a consultant must be secured by collateral in addition to
the purchased shares of Common Stock. The terms of any such promissory note
(including the interest rate and the terms of repayment) shall be established
by the Plan Administrator in its sole discretion. In no event may the maximum
credit available to the Optionee or Participant exceed the sum of (i) the
aggregate option exercise price or purchase price payable for the purchased
shares (less the par value of those shares) plus (ii) any Federal, state and
local income and employment tax liability incurred by the Optionee or the
Participant in connection with the option exercise or share purchase.
II. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan shall become effective when adopted by the Board, but
no option granted under the Plan may be exercised, and no shares shall be
issued under the Plan, until the Plan is approved by the Corporation's
shareholders. If such shareholder approval is not obtained within twelve (12)
months after the date of the Board's adoption of the Plan, then all options
previously granted under the Plan shall terminate and cease to be
outstanding, and no further options shall be granted and no shares shall be
issued under the Plan. Subject to such limitation, the Plan Administrator may
grant options and issue shares under the Plan at any time after the effective
date of the Plan and before the date fixed herein for termination of the Plan.
B. The Plan shall terminate upon the EARLIEST of (i) the
expiration of the ten (10)-year period measured from the date the Plan is
adopted by the Board, (ii) the date on which all shares available for
issuance under the Plan shall have been issued as vested shares or (iii) the
termination of all outstanding options in connection with a Corporate
Transaction. All options and unvested stock issuances outstanding at the time
of a clause (i) termination event shall continue to have full force and
effect in accordance with the provisions of the documents evidencing those
options or issuances.
13
<PAGE>
III. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects. However, no such
amendment or modification shall adversely affect the rights and obligations
with respect to options or unvested stock issuances at the time outstanding
under the Plan unless the Optionee or the Participant consents to such
amendment or modification. In addition, certain amendments may require
shareholder approval pursuant to applicable laws and regulations.
B. Options may be granted under the Option Grant Program and
shares may be issued under the Stock Issuance Program which are in each
instance in excess of the number of shares of Common Stock then available for
issuance under the Plan, provided any excess shares actually issued under
those programs shall be held in escrow until there is obtained shareholder
approval of an amendment sufficiently increasing the number of shares of
Common Stock available for issuance under the Plan. If such shareholder
approval is not obtained within twelve (12) months after the date the first
such excess grants or issuances are made, then (i) any unexercised options
granted on the basis of such excess shares shall terminate and cease to be
outstanding and (ii) the Corporation shall promptly refund to the Optionees
and the Participants the exercise or purchase price paid for any excess
shares issued under the Plan and held in escrow, together with interest (at
the applicable Short Term Federal Rate) for the period the shares were held
in escrow, and such shares shall thereupon be automatically cancelled and
cease to be outstanding.
IV. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.
V. WITHHOLDING
The Corporation's obligation to deliver shares of Common Stock upon
the exercise of any options granted under the Plan or upon the direct
issuance or vesting of any shares issued under the Plan shall be subject to
the satisfaction of all applicable Federal, state and local income and
employment tax withholding requirements.
VI. REGULATORY APPROVALS
The implementation of the Plan, the granting of any options under
the Plan and the issuance of any shares of Common Stock (i) upon the exercise
of any option or (ii) under the Stock Issuance Program shall be subject to
the Corporation's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the options granted
under it and the shares of Common Stock issued pursuant to it.
14
<PAGE>
VII. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Parent or Subsidiary employing or retaining such person)
or of the Optionee or the participant, which rights are hereby expressly
reserved by each, to terminate such person's Service at any time for any
reason, with or without cause.
VIII. FINANCIAL REPORTS
The Corporation shall deliver a balance sheet and an income
statement at least annually to each individual holding an outstanding option
under the Plan, unless such individual is a key Employee whose duties in
connection with the Corporation (or any Parent or Subsidiary) assure such
individual access to equivalent information.
15
<PAGE>
APPENDIX
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
B. CODE shall mean the Internal Revenue Code of 1986, as amended.
C. COMMITTEE shall mean a committee of two (2) or more Board
members appointed by the Board to exercise one or more administrative
functions under the Plan.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
F. CORPORATION shall mean Live Software, Inc., a California
corporation, and any successor corporation to all or substantially all of the
assets or voting stock of Live Software, Inc., which shall by appropriate
action adopt the Plan.
G. DISABILITY shall mean the inability of the Optionee or the
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment and shall be determined
by the Plan Administrator on the basis of such medical evidence as the Plan
Administrator deems warranted under the circumstances.
H. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the
manner and method of performance.
I. EXERCISE DATE shall mean the date on which the Corporation
shall have received written notice of the option exercise.
A-1.
<PAGE>
J. FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as such
price is reported by the National Association of Securities Dealers on
the Nasdaq National Market. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted in the composite
tape of transactions on such exchange. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
(iii) If the Common Stock is at the time neither listed
on any Stock Exchange nor traded on the Nasdaq National Market, then the
Fair Market Value shall be determined by the Plan Administrator after
taking into account such factors as the Plan Administrator shall deem
appropriate.
K. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
L. INVOLUNTARY TERMINATION shall mean the termination of the
Service of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or
discharge by the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following
(A) a change in his or her position with the Corporation which
materially reduces his or her duties and responsibilities or the level
of management to which he or she reports, (B) a reduction in his or her
level of compensation (including base salary, fringe benefits and target
bonuses under any corporate-performance based bonus or incentive
programs) by more than fifteen percent (15%) or (C) a relocation of such
individual's place of employment by more than fifty (50) miles, provided
and only if such change, reduction or relocation is effected without the
individual's consent.
A-2.
<PAGE>
M. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized
use or disclosure by such person of confidential information or trade secrets
of the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by such person adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The foregoing
definition shall not be deemed to be inclusive of all the acts or omissions
which the Corporation (or any Parent or Subsidiary) may consider as grounds
for the dismissal or discharge of any Optionee, Participant or other person
in the Service of the Corporation (or any Parent or Subsidiary).
N. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
O. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
P. OPTION GRANT PROGRAM shall mean the option grant program in
effect under the Plan.
Q. OPTIONEE shall mean any person to whom an option is granted under
the Plan.
R. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
S. PARTICIPANT shall mean any person who is issued shares of Common
Stock under the Stock Issuance Program.
T. PLAN shall mean the Corporation's 1999 Stock Option/Stock
Issuance Plan, as set forth in this document.
U. PLAN ADMINISTRATOR shall mean either the Board or the Committee
acting in its capacity as administrator of the Plan.
V. SERVICE shall mean the provision of services to the Corporation
(or any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the
documents evidencing the option grant.
W. STOCK EXCHANGE shall mean either the American Stock Exchange or
the New York Stock Exchange.
X. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by
the Corporation and the Participant at the time of issuance of shares of
Common Stock under the Stock Issuance Program.
A-3.
<PAGE>
Y. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
effect under the Plan.
Z. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
AA. 10% SHAREHOLDER shall mean the owner of stock (as determined
under Code Section 424(d)) possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation (or
any Parent or Subsidiary).
A-4.
<PAGE>
Exhibit 4.4
LIVE SOFTWARE, INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is made as of October 1,
1998 (the "Grant Date") by and between Live Software, Inc. (the "Corporation")
and Michael Hogarth (the "Optionee").
RECITALS
A. Optionee is to render valuable services to the Corporation, and this
Agreement is executed in order to provide Optionee with the opportunity to
acquire a proprietary interest in the Corporation as an incentive for
Optionee to accept and continue in such employ.
B. All capitalized terms in this Agreement not defined herein shall
have the meaning assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as
of the Grant Date, a Non-Statutory Option (the "Option") to purchase up to
12,000 shares of the Common Stock of the Corporation (the "Option Shares")
at an exercise price of $.03 per share (the "Exercise Price"). The Option
shall be immediately exercisable for all of the Option Shares. The rights of
the Optionee shall be subject to vesting in accordance with the Vesting
Schedule attached hereto as EXHIBIT A.
2. OPTION TERM. This option term of ten (10) years measured from
the Grant Date and shall accordingly expire at the close of business on the
Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. During Optionee's lifetime, this
option shall be exercisable only by Optionee and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following Optionee's death.
4. STOCK PURCHASE AGREEMENT. Optionee understands that any Option
Shares purchased under the Option will be subject to the terms set forth in
the stock Purchase Agreement attached hereto as EXHIBIT B.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
<PAGE>
(a) Should Optionee cease to remain in Service for any reason
(other than death, Disability or Misconduct) while this option is
outstanding, then Optionee shall have a period of three (3) months
(commencing with the date of such cessation of Service) during which to
exercise this option, but in no event shall this option be exercisable at any
time after the Expiration Date.
(b) Should Optionee die while this option is outstanding, then
the personal representative of Optionee's estate or the person or persons to
whom the option is transferred pursuant to Optionee's will or in accordance
with the laws of inheritance shall have the right to exercise this option.
Such right shall lapse, and this option shall cease to be outstanding, upon
the EARLIER of (i) the expiration of the twelve (12)-month period measured
from the date of Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Disability while
this option is outstanding, then Optionee shall have a period of twelve (12)
months (commencing with the date of such cessation of Service) during which
to exercise this option. In no event shall this option be exercisable at any
time after the Expiration Date.
(d) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number of
Option Shares in which Optionee is, at the time of Optionee's cessation of
Service, vested pursuant to the Vesting Schedule or the special vesting
acceleration provisions of Paragraph 6. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any vested Option Shares for which
the option has not been exercised. To the extent Optionee is not vested in
one or more Option Shares at the time of Optionee's cessation of service,
this option shall immediately terminate and cease to be outstanding with
respect to those shares.
(e) Should Optionee's Service be terminated for Misconduct,
then this option shall terminate immediately and cease to remain outstanding.
NOTHING IN THIS STOCK OPTION AGREEMENT OR THE STOCK PURCHASE AGREEMENT SHALL
CONFER UPON OPTIONEE ANY RIGHT TO CONTINUE IN SERVICE FOR ANY PERIOD OF
SPECIFIC DURATION OR INTERFERE WITH OR OTHERWISE RESTRICT IN ANY WAY THE
RIGHTS OF THE CORPORATION (OR ANY PARENT OR SUBSIDIARY EMPLOYING OR RETAINING
OPTIONEE) OR OF OPTIONEE, WHICH RIGHTS ARE HEREBY EXPRESSLY RESERVED BY EACH,
TO TERMINATE OPTIONEE'S SERVICE AT ANY TIME FOR ANY REASON, WITH OR WITHOUT
CAUSE.
6. ACCELERATED VESTING.
(a) In the event of any Corporate Transaction, the Option
Shares at the time subject to this option but not otherwise vested shall
automatically vest in full so that this option shall, immediately prior to
the effective date of the Corporate Transaction, become exercisable for all
of the Option Shares as fully-vested shares and may be exercised for any or
all of those Option Shares as vested shares. However, the Option Shares
shall NOT vest on such an accelerated basis if and to the extent: (i) this
option is assumed by the successor corporation (or
2.
<PAGE>
parent thereof) in the Corporate Transaction and the Corporation's repurchase
rights with respect to the unvested Option Shares are assigned to such
successor corporation (or parent thereof) or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing on the unvested Option Shares at the time of
the Corporate Transaction (the excess of the Fair Market Value of those
Option Shares over the Exercise Price payable for such shares) and provides
for subsequent payout in accordance with the same Vesting Schedule applicable
to those unvested Option Shares under this Stock Option Agreement.
(b) Immediately following the Corporate Transaction, this
option shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) in connection with
the Corporate Transaction.
(c) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply to the number and class of
securities which would have been issuable to Optionee in consummation of such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, PROVIDED the aggregate Exercise Price shall remain the same.
(d) The Option Shares may also vest upon an accelerated basis
in accordance with the terms and conditions of any special addendum attached
to this Agreement.
(e) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve, liquidate or sell
or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price
in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
8. SHAREHOLDER RIGHTS. The holder of this option shall not have
any shareholder rights with respect to the Option Shares until such person
shall have exercised the option, paid the Exercise Price and become the
record holder of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable
Optionee (or any other person or persons exercising the option) must take the
following actions:
3.
<PAGE>
(i) Execute and deliver to the Corporation a Stock
Purchase Agreement for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A)cash or check made payable to the Corporation;
or
(B)a promissory note payable to the Corporation, but
only to the extent authorized by the Board in accordance with
Paragraph 14.
Should the Common Stock be registered under Section 12 of the
1934 act at the time the option is exercised, then the Exercise
Price may also be paid as follows:
(C)in shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date; or
(D)to the extent the option is exercised for vested
Option Shares, through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable
instructions (a) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate Exercise Price payable
for the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b) to the Corporation to
deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Purchase Agreement delivered to
the Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than
Optionee) have the right to exercise this option.
4.
<PAGE>
(iv) Execute and deliver to the Corporation such written
representations as may be requested by the Corporation in order for
it to comply with the applicable requirements of Federal and state
securities laws.
(v) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all Federal, state and local income and employment
tax withholding requirements applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option
Shares, with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10.REPURCHASE RIGHTS. ALL OPTION SHARES ACQUIRED UPON THE EXERCISE
OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE CORPORATION AND ITS
ASSIGNS TO REPURCHASE THOSE SHARES IN ACCORDANCE WITH THE TERMS SPECIFIED IN
THE STOCK PURCHASE AGREEMENT.
11.COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation
and Optionee with all applicable requirement of law relating thereto and with
all applicable regulations of any stock exchange (or the Nasdaq National
Market, if applicable) on which the Common Stock may be listed for trading at
the time of such exercise and issuance.
(b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to
the non-issuance or sale of the Common Stock as to which such approval shall
not have been obtained. The Corporation, however, shall use its best efforts
to obtain all such approvals.
12.SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
13.NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee's signature
hereto.
5.
<PAGE>
All notices shall be deemed effective upon personal delivery or upon deposit
in the U.S. mail, postage prepaid and properly addressed to the party to be
notified.
14.FINANCING. The Board may, in its absolute discretion and without
any obligation to do so, permit Optionee to pay the Exercise Price for the
purchased Option Shares by delivering a full-recourse, interest-bearing
promissory note secured by those Option shares. The payment schedule in
effect for any such promissory note shall be established by the Board in its
sole discretion.
15.GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.
6.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first indicated above.
LIVE SOFTWARE, INC.
By: /s/ Paul Colton
----------------------------
Title: President & CEO
----------------------------
Address: 20245 Stevens Creek Blvd.
----------------------------
Cupertino, CA 95014
----------------------------
/s/ Michael Hogarth
----------------------------
Michael Hogarth
Address: 381 FISHER COURT
----------------------------
FOLSOM, CA 95630
----------------------------
SPOUSAL ACKNOWLEDGMENT
The undersigned spouse of Optionee has read and hereby approves the
foregoing Stock Option Agreement. In consideration of the Corporation's
granting Optionee the right to acquire the Purchased Shares in accordance
with the terms of such Agreement, the undersigned hereby agrees to be
irrevocably bound by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to purchase any
Purchased Shares in which Optionee is not vested at time of his or her
cessation of Service in accordance with the Stock Purchase Agreement.
/s/ Cheryl Hogarth
----------------------------
OPTIONEE'S SPOUSE
Address: 381 Fisher Ct
----------------------------
Folsom, CA 95630
----------------------------
7.
<PAGE>
EXHIBIT A
VESTING SCHEDULE
11/1/98 2,000
12/1/98 2,000
1/1/99 2,000
2/1/99 2,000
3/1/99 2,000
4/1/99 2,000
2.
<PAGE>
EXHIBIT B
STOCK PURCHASE AGREEMENT
3.
<PAGE>
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:
(i)a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction,or
(ii)the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
F. CORPORATION shall mean Live Software, Inc., a California corporation.
G. DISABILITY shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment and shall be determined by the Board on the basis of such
medical evidence as the Board deems warranted under the circumstances.
Disability shall be deemed to constitute PERMANENT DISABILITY in the event
that such Disability is expected to result in death or has lasted or can be
expected to last for a continuous period of twelve (12) months or more.
H. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the
manner and method of performance.
I. EXERCISE DATE shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.
J. EXERCISE PRICE shall mean the exercise price payable per Option Share
as specified in the Stock Option Agreement.
K. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Stock Option Agreement.
A-1
<PAGE>
L. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i)If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as the price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.
(ii)If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Board to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock
on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
(iii)If the Common Stock is at the time neither listed on any
Stock Exchange nor traded on the Nasdaq National Market, then the Board
shall determine the Fair Market Value after taking into account such
factors as the Board shall deem appropriate.
M. GRANT DATE shall mean the date of grant of the option as specified in
the Stock Option Agreement.
N. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or
any Parent or Subsidiary), or any other intentional misconduct by Optionee
adversely affecting the business or affairs of the Corporation (or any Parent
or Subsidiary) in a material manner. The foregoing definition shall not be
deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or subsidiary) may consider as grounds for the dismissal or
discharge of Optionee or any other individual in the Service of the
Corporation (or any Parent or Subsidiary).
O. 1934 ACT shall mean the Securities Exchange of Act of 1934, as
amended.
P. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
Q. OPTION SHARES shall mean the number of shares of Common Stock subject
to the option.
R. OPTIONEE shall mean the person to whom the option is granted.
A-2
<PAGE>
S. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
T. PURCHASE AGREEMENT shall mean the stock purchase agreement
substantially as set forth in the form of EXHIBIT B to the Stock Option
Agreement.
U. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant.
V. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
Stock Exchange.
W. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain
owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
X. VESTING SCHEDULE shall mean the vesting schedule specified in EXHIBIT
A to the Stock Option Agreement pursuant to which the Optionee is to vest in
the Option Shares in a series of installments over his or her period of
Service.
A-3.
<PAGE>
Exhibit 4.5
LIVE SOFTWARE, INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is made as of January 1,
1999 (the "Grant Date") by and between Live Software, Inc. (the
"Corporation") and Jim DeLapa (the "Optionee").
RECITALS
A. Optionee is to render valuable services to the Corporation, and
this Agreement is executed in order to provide Optionee with the opportunity
to acquire a proprietary interest in the Corporation as an incentive for
Optionee to accept and continue in such employ.
B. All capitalized terms in this Agreement not defined herein
shall have the meaning assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as
of the Grant Date, a Non-Statutory Option (the "Option") to purchase up to
24,000 shares of the Common Stock of the Corporation (the "Option Shares") at
an exercise price of $.03 per share (the "Exercise Price"). The Option shall
be immediately exercisable for all of the Option Shares. The rights of the
Optionee shall be subject to vesting in accordance with the Vesting Schedule
attached hereto as EXHIBIT A.
2. OPTION TERM. This option shall have a term of ten (10) years
measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. During Optionee's lifetime, this
option shall be exercisable only by Optionee and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following Optionee's death.
4. STOCK PURCHASE AGREEMENT. Optionee understands that any Option
Shares purchased under the Option will be subject to the terms set forth in
the Stock Purchase Agreement attached hereto as EXHIBIT B.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
<PAGE>
(a) Should Optionee cease to remain in Service for any reason
(other than death, Disability or Misconduct) while this option is
outstanding, then Optionee shall have a period of three (3) months
(commencing with the date of such cessation of Service) during which to
exercise this option, but in no event shall this option be exercisable at any
time after the Expiration Date.
(b) Should Optionee die while this option is outstanding, then
the personal representative of Optionee's estate or the person or persons to
whom the option is transferred pursuant to Optionee's will or in accordance
with the laws of inheritance shall have the right to exercise this option.
Such right shall lapse, and this option shall cease to be outstanding, upon
the EARLIER of (i) the expiration of the twelve (12)-month period measured
from the date of Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Disability
while this option is outstanding, then Optionee shall have a period of twelve
(12) months (commencing with the date of such cessation of Service) during
which to exercise this option. In no event shall this option be exercisable
at any time after the Expiration Date.
(d) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number of
Option Shares in which Optionee is, at the time of Optionee's cessation of
Service, vested pursuant to the Vesting Schedule or the special vesting
acceleration provisions of Paragraph 6. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any vested Option Shares for which
the option has not been exercised. To the extent Optionee is not vested in
one or more Option Shares at the time of Optionee's cessation of Service,
this option shall immediately terminate and cease to be outstanding with
respect to those shares.
(e) Should Optionee's Service be terminated for Misconduct,
then this option shall terminate immediately and cease to remain outstanding.
NOTHING IN THIS STOCK OPTION AGREEMENT OR THE STOCK PURCHASE AGREEMENT SHALL
CONFER UPON OPTIONEE ANY RIGHT TO CONTINUE IN SERVICE FOR ANY PERIOD OF
SPECIFIC DURATION OR INTERFERE WITH OR OTHERWISE RESTRICT IN ANY WAY THE
RIGHTS OF THE CORPORATION (OR ANY PARENT OR SUBSIDIARY EMPLOYING OR RETAINING
OPTIONEE) OR OF OPTIONEE, WHICH RIGHTS ARE HEREBY EXPRESSLY RESERVED BY EACH,
TO TERMINATE OPTIONEE'S SERVICE AT ANY TIME FOR ANY REASON, WITH OR WITHOUT
CAUSE.
6. ACCELERATED VESTING.
(a) In the event of any Corporate Transaction, the Option
Shares at the time subject to this option but not otherwise vested shall
automatically vest in full so that this option shall, immediately prior to
the effective date of the Corporate Transaction, become exercisable for all
of the Option Shares as fully-vested shares and may be exercised for any or
all of those Option Shares as vested shares. However, the Option Shares shall
NOT vest on such an accelerated basis if and to the extent: (i) this option
is assumed by the successor corporation (or
2.
<PAGE>
parent thereof) in the Corporate Transaction and the Corporation's repurchase
rights with respect to the unvested Option Shares are assigned to such
successor corporation (or parent thereof) or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing on the unvested Option Shares at the time of
the Corporate Transaction (the excess of the Fair Market Value of those
Option Shares over the Exercise Price payable for such shares) and provides
for subsequent payout in accordance with the same Vesting Schedule applicable
to those unvested Option Shares under this Stock Option Agreement.
(b) Immediately following the Corporate Transaction, this
option shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) in connection with
the Corporate Transaction.
(c) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply to the number and class of
securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, PROVIDED the aggregate Exercise Price shall remain the same.
(d) The Option Shares may also vest upon an accelerated basis
in accordance with the terms and conditions of any special addendum attached
to this Agreement.
(e) This Agreement shall not in any way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price
in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
8. SHAREHOLDER RIGHTS. The holder of this option shall not have
any shareholder rights with respect to the Option Shares until such person
shall have exercised the option, paid the Exercise Price and become the
record holder of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time
exercisable, Optionee (or any other person or persons exercising the option)
must take the following actions:
3.
<PAGE>
(i) Execute and deliver to the Corporation a Stock
Purchase Agreement for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Corporation;
or
(B) a promissory note payable to the Corporation,
but only to the extent authorized by the Board in accordance with
Paragraph 14.
Should the Common Stock be registered under Section 12 of the
1934 Act at the time the option is exercised, then the Exercise
Price may also be paid as follows:
(C) in shares of Common Stock held by Optionee (or
any other person or persons exercising the option) for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date; or
(D) to the extent the option is exercised for
vested Option Shares, through a special sale and remittance
procedure pursuant to which Optionee (or any other person or
persons exercising the option) shall concurrently provide
irrevocable instructions (a) to a Corporation-designated brokerage
firm to effect the immediate sale of the purchased shares and remit
to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate Exercise
Price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld
by the Corporation by reason of such exercise and (b) to the
Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Purchase Agreement delivered to
the Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if other than
Optionee) have the right to exercise this option.
4.
<PAGE>
(iv) Execute and deliver to the Corporation such written
representations as may be requested by the Corporation in order for it to
comply with the applicable requirements of Federal and state securities laws.
(v) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option
Shares, with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any
fractional shares.
10. REPURCHASE RIGHTS. ALL OPTION SHARES ACQUIRED UPON THE EXERCISE
OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE CORPORATION AND ITS
ASSIGNS TO REPURCHASE THOSE SHARES IN ACCORDANCE WITH THE TERMS SPECIFIED IN
THE STOCK PURCHASE AGREEMENT.
11. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation
and Optionee with all applicable requirements of law relating thereto and
with all applicable regulations of any stock exchange (or the Nasdaq National
Market, if applicable) on which the Common Stock may be listed for trading at
the time of such exercise and issuance.
(b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to
the non-issuance or sale of the Common Stock as to which such approval shall
not have been obtained. The Corporation, however, shall use its best efforts
to obtain all such approvals.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
5.
<PAGE>
13. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee's signature
hereto. All notices shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail, postage prepaid and properly addressed to the party
to be notified.
14. FINANCING. The Board may, in its absolute discretion and
without any obligation to do so, permit Optionee to pay the Exercise Price
for the purchased Option Shares by delivering a full-recourse,
interest-bearing promissory note secured by those Option Shares. The payment
schedule in effect for any such promissory note shall be established by the
Board in its sole discretion.
GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.
6.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first indicated above.
LIVE SOFTWARE, INC.
By: /s/ Paul Colton
-------------------------------
Title: President & CEO
-------------------------------
Address: 20245 Stevens Creek Blvd.
-------------------------------
Cupertino, CA 95014
-------------------------------
-------------------------------
JIM DELAPA
Address:
-------------------------------
-------------------------------
SPOUSAL ACKNOWLEDGMENT
The undersigned spouse of Optionee has read and hereby approves the
foregoing Stock Option Agreement. In consideration of the Corporation's
granting Optionee the right to acquire the Purchased Shares in accordance
with the terms of such Agreement, the undersigned hereby agrees to be
irrevocably bound by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to purchase any
Purchased Shares in which Optionee is not vested at time of his or her
cessation of Service in accordance with the Stock Purchase Agreement.
-------------------------------
OPTIONEE'S SPOUSE
Address:
-------------------------------
-------------------------------
7.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first indicated above.
LIVE SOFTWARE, INC.
By:
-------------------------------
Title:
-------------------------------
Address:
-------------------------------
-------------------------------
/s/ Jim DeLapa
-------------------------------
JIM DELAPA
Address: 4453 Ocean Valley Ln
-------------------------------
San Diego, CA 92130
-------------------------------
SPOUSAL ACKNOWLEDGMENT
The undersigned spouse of Optionee has read and hereby approves the
foregoing Stock Option Agreement. In consideration of the Corporation's
granting Optionee the right to acquire the Purchased Shares in accordance
with the terms of such Agreement, the undersigned hereby agrees to be
irrevocably bound by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to purchase any
Purchased Shares in which Optionee is not vested at time of his or her
cessation of Service in accordance with the Stock Purchase Agreement.
/s/ Kimberly DeLapa
-------------------------------
OPTIONEE'S SPOUSE
Address: 4453 Ocean Valley Ln
-------------------------------
San Diego, CA 92130
-------------------------------
8.
<PAGE>
EXHIBIT A
VESTING SCHEDULE
2/1/99 2,000
3/1/99 2,000
4/1/99 2,000
5/1/99 2,000
6/1/99 2,000
7/1/99 2,000
8/1/99 2,000
9/1/99 2,000
10/1/99 2,000
11/1/99 2,000
12/1/99 2,000
1/1/00 2,000
<PAGE>
EXHIBIT B
STOCK PURCHASE AGREEMENT
<PAGE>
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
F. CORPORATION shall mean Live Software, Inc., a California
corporation.
G. DISABILITY shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment and shall be determined by the Board on the basis of
such medical evidence as the Board deems warranted under the circumstances.
Disability shall be deemed to constitute PERMANENT DISABILITY in the event
that such Disability is expected to result in death or has lasted or can be
expected to last for a continuous period of twelve (12) months or more.
H. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the
manner and method of performance.
I. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
J. EXERCISE PRICE shall mean the exercise price payable per Option
Share as specified in the Stock Option Agreement.
K. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Stock Option Agreement.
A-1
<PAGE>
L. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as the price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Board to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(iii) If the Common Stock is at the time neither listed on
any Stock Exchange nor traded on the Nasdaq National Market, then the Board
shall determine the Fair Market Value after taking into account such factors
as the Board shall deem appropriate.
M. GRANT DATE shall mean the date of grant of the option as
specified in the Stock Option agreement.
N. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or
any Parent or subsidiary), or any other intentional misconduct by Optionee
adversely affecting the business or affairs of the Corporation (or any Parent
or Subsidiary) in a material manner. The foregoing definition shall not be
deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or subsidiary) may consider as grounds for the dismissal or
discharge of Optionee or any other individual in the service of the
Corporation (or any Parent or Subsidiary).
O. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
P. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
Q. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option.
R. OPTIONEE shall mean the person to whom the option is granted.
A-2
<PAGE>
S. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
T. PURCHASE AGREEMENT shall mean the stock purchase agreement
substantially as set forth in the form of EXHIBIT B to the Stock Option
Agreement.
U. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant.
V. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.
W. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
X. VESTING SCHEDULE shall mean the vesting schedule specified in
EXHIBIT A to the Stock Option Agreement pursuant to which the Optionee is to
vest in the Option Shares in a series of installments over his or her period of
Service.
A-3
<PAGE>
Exhibit 5.1
[Foley Hoag & Eliot LLP Letterhead]
July 23, 1999
Allaire Corporation
One Alewife Center
Cambridge, Massachusetts 02140
Ladies and Gentlemen:
We are familiar with the Registration Statement on Form S-8 (the "S-8
Registration Statement") filed today by Allaire Corporation, a Delaware
corporation (the "Company"), with the Securities and Exchange Commission under
the Securities Act of 1933, as amended. The S-8 Registration Statement relates
to the proposed offering by the Company of 21,583 shares (the "Shares") of its
common stock, par value $0.01 per share (the "Common Stock"), issuable upon
exercise of stock options granted pursuant to the Live Software, Inc. 1999 Stock
Option/Stock Issuance Plan (the "Stock Option Plan"), the Stock Option Agreement
between Live Software, Inc. and Michael Hogarth (the "Hogarth Agreement"), and
the Stock Option Agreement between Live Software, Inc. and James DeLapa (the
"DeLapa Agreement") (collectively, the "Plans"). The Company acquired Live
Software, Inc. ("Live Software") on June 24, 1999, and in connection with this
acquisition the Company assumed Live Software's obligations under the Plans and
options issued under the Plans.
In arriving at the opinion expressed below, we have examined and relied
on the following documents:
1. The Amended and Restated Certificate of
Incorporation, and the Amended and Restated By-Laws
of the Company;
2. The records of meetings and consents of the Board of
Directors and stockholders of the Company provided to
us by the Company; and
3. The Stock Option Plan, the Hogarth Agreement, and the
DeLapa Agreement.
In addition, we have examined and relied on the originals or copies certified or
otherwise identified to our satisfaction of all such corporate records of the
Company and such other instruments and other certificates of public officials,
officers and representatives of the Company and such other persons, and we have
made such investigations of law, as we have deemed appropriate as a basis for
the opinions expressed below.
<PAGE>
Allaire Corporation
July 23, 1999
Page 2
Based upon the foregoing, it is our opinion that:
1. The Company has corporate power adequate for the issuance of the
Shares in accordance with the S-8 Registration Statement.
2. The Company has taken all necessary corporate action required to
authorize the issuance and sale of the Shares.
3. When certificates for the Shares have been duly executed and
countersigned, and delivered against due receipt of the consideration for the
Shares as described in the Plans and the option agreements or other agreements
related to the Stock Option Plan, the Shares will be legally issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
S-8 Registration Statement.
Very truly yours,
FOLEY, HOAG & ELIOT LLP
By: /S/ WILLIAM R. KOLB
----------------------
a Partner
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 3, 1999 relating to the
financial statements and financial statement schedule, which appears in
Allaire Corporation's Annual Report on Form 10-K for the year ended December 31,
1998.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
July 23, 1999
