<PAGE>
As filed with the Securities and Exchange Commission on March 24, 1998
Registration No. 333-
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
ROGUE WAVE SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
__________________
DELAWARE 93-1064214
(State of Incorporation) (I.R.S. Employer Identification No.)
___________________
5500 Flatiron Parkway
Boulder, CO 80301
(303) 545-3000
(Address and telephone number of principal executive offices)
___________________
STOCK OPTIONS ISSUED OUTSIDE THE 1996 EQUITY INCENTIVE PLAN
(Full title of the plans)
____________________
MICHAEL SCALLY
PRESIDENT AND CHIEF OPERATING OFFICER
ROGUE WAVE SOFTWARE, INC.
5500 Flatiron Parkway
Boulder, CO 80301
(303) 545-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_____________________
COPIES TO:
MARK P. TANOURY, ESQ.
COOLEY GODWARD LLP
3000 SAND HILL ROAD
BUILDING 3, SUITE 230
MENLO PARK, CALIFORNIA 94025-7116
(650) 843-5000
_____________________
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED SHARE PRICE REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and Common Stock
(par value $.001) 49,881 shares $0.89 $44,394 $14
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
<PAGE>
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Rogue Wave Software, Inc., a Delaware
corporation (the "Company" or the "Registrant") with the Securities and
Exchange Commission (the "Commission") are incorporated by reference into
this Registration Statement:
(a) The Company's Annual Report on Form 10-K filed on December 10, 1997
with the Commission pursuant to Rule 14a-3(c) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act");
(b) A description of the Company's Common Stock, which is contained in
the Form 8-A Registration Statement filed by the Company with the Commission
on October 4, 1996, as amended through the date hereof; and
(c) All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act 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 herein and to be a
part of this registration statement from the date of the filing of such
reports and documents.
DESCRIPTION OF SECURITIES
Not applicable.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act.
The Registrant's Certificate of Incorporation provides for the elimination
of liability for monetary damages for breach of the directors' fiduciary duty of
care to the Registrant and its stockholders. These provisions do not eliminate
the directors' duty of care and, in appropriate circumstances, equitable
remedies such an injunctive or other forms of non monetary relief will remain
available under Delaware law. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to the
Registrant, for acts or omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for any transaction from which the
director derived an improper personal benefit, and for payment of dividends or
approval of stock repurchases or redemptions that are unlawful under Delaware
law. The provision does not affect a director's responsibilities under any
other laws, such as the federal securities laws or state or federal
environmental laws.
<PAGE>
The Registrant has entered into agreements with its directors and
executive officers that require the Registrant to indemnify such persons
against expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred (including expenses of a derivative action) in
connection with any proceeding, whether actual or threatened, to which any
such person may be made a party by reason of the fact that such person is or
was a director or officer of the Registrant or any of its affiliated
enterprises, provided such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of
the Registrant and, with respect to any criminal proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The
indemnification agreements also set forth certain procedures that will apply
in the event of a claim for indemnification thereunder.
EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
4.1(1) Amended and Restated Certificate of Incorporation of Registrant.
4.2(1) Bylaws of Registrant.
4.3(1) Specimen Stock Certificate.
4.4(1) Amended and Restated Investors' Rights Agreement between the
Registrant and certain investors, dated November 10, 1995, as
amended June 27, 1996.
4.5(2) Registration Rights Agreement between the Registrant and the former
Shareholders of Stingray Software, Inc., dated February 27, 1998.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to Signature page.
99.1 Form of Stock Option Grant outside the 1996 Equity Incentive Plan.
_______________
(1) Filed as an exhibit to the Form SB-2 Registration Statement (No.
33-13517), as amended through the date hereof and incorporated
herein by reference.
(2) Filed as an exhibit to the Current Report on Form 8-K, filed March 9,
1998 and incorporated herein by reference.
<PAGE>
UNDERTAKINGS
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, as amended (the "Securities Act");
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) (Section 230.424(b) of this chapter) 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 (a)(i) and (a)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the issuer pursuant to section 13 or
section 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
b. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, 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 the securities being registered which remain unsold at the termination
of the offering.
d. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be
a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
e. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act 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, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boulder, State of Colorado, on
March 23, 1998.
ROGUE WAVE SOFTWARE, INC.
By: /s/ Michael Scally
------------------------------------
Michael Scally
President and Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael Scally and Robert M. Holburn,
Jr., and each or any one of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, 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 other
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
requisite and necessary to be done in connection therewith, 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
their or his substitutes or substitute, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Thomas Keffer Chief Executive Officer and March 23, 1998
- ----------------------------- Chairman of the Board
Thomas Keffer (PRINCIPAL EXECUTIVE OFFICER)
/s/ Michael Scally President, Chief Operating March 23, 1998
- ----------------------------- Officer and Director
Michael Scally
/s/ Robert M. Holburn, Jr. Chief Financial Officer and March 23, 1998
- ----------------------------- Secretary (PRINCIPAL
Robert M. Holburn, Jr. FINANCIAL AND ACCOUNTING
OFFICER)
/s/ Thomas M. Atwood Director March 23, 1998
- -----------------------------
Thomas M. Atwood
/s/ Louis Cole Director March 23, 1998
- -----------------------------
Louis Cole
/s/ Richard P. Magnuson Director March 23, 1998
- -----------------------------
Richard P. Magnuson
/s/ Thomas H. Peterson Director March 23, 1998
- -----------------------------
Thomas H. Peterson
<PAGE>
EXHIBIT INDEX
NUMBER DESCRIPTION
- ------ -----------
4.1(1) Amended and Restated Certificate of Incorporation of Registrant.
4.2(1) Bylaws of Registrant.
4.3(1) Specimen Stock Certificate.
4.4(1) Amended and Restated Investors' Rights Agreement between the
Registrant and certain investors, dated November 10, 1995, as
amended June 27, 1996.
4.5(2) Registration Rights Agreement between the Registrant and the former
Shareholders of Stingray Software, Inc., dated February 27, 1998.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to Signature page.
99.1 Form of Stock Option Grant outside the 1996 Equity Incentive Plan.
_______________
(1) Filed as an exhibit to the Form SB-2 Registration Statement (No. 33-13517),
as amended through the date hereof and incorporated herein by reference.
(2) Filed as an exhibit to the Current Report on Form 8-K, filed March 9, 1998
and incorporated herein by reference.
<PAGE>
EXHIBIT 5.1
March 23, 1998
Rogue Wave Software, Inc.
5500 Flatiron Parkway
Boulder, CO 80301
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Rogue Wave Software, Inc. (the "Company") of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission covering the offering of up to 49,881
shares of the Company's Common Stock, $.001 par value, (the "Shares")
issuable outside the 1996 Equity Incentive Plan pursuant to stock option
agreements assumed in connection with the Company's acquisition of Stingray
Software, Inc. (the "Agreements").
In connection with this opinion, we have examined the Registration Statement,
the Agreements, your Certificate of Incorporation and Bylaws, as amended, and
such other documents, records, certificates, memoranda and other instruments
as we deem necessary as a basis for this opinion. We have assumed the
genuineness and authenticity of all documents submitted to us as originals,
the conformity to originals of all documents submitted to us as copies
thereof, and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Agreements and
the Registration Statement, will be validly issued, fully paid, and
nonassessable (except as to shares issued pursuant to certain deferred
payment arrangements, which will be fully paid and nonassessable when such
deferred payments are made in full).
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Yours very truly,
COOLEY GODWARD LLP
By: /s/ Mark P. Tanoury
--------------------------------
Mark P. Tanoury
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to incorporation by reference in this Registration Statement on
Form S-8 of our report dated November 4, 1997, relating to the consolidated
balance sheets of Rogue Wave Software, Inc. as of September 30, 1997 and
1996, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the years in the three-year period ended
September 30, 1997, which appears in Rogue Wave Software Inc.'s annual report
on Form 10-K filed pursuant to the Securities Exchange Act of 1934.
KPMG PEAT MARWICK LLP
Portland, Oregon
March 19, 1998
<PAGE>
INCENTIVE STOCK OPTION AGREEMENT
Pursuant to the
STINGRAY SOFTWARE, INC.
1997 STOCK AWARD PLAN
This Incentive Stock Agreement (this "Agreement"), is made and entered
into as of the 29th day of July, 1997, by and between Stingray Software,
Inc., a North Carolina corporation (the "Company"), and ________, an Employee
of the Company or of any Affiliate of the Company (the "Optionee").
WITNESSETH:
----------
WHEREAS, the Company has adopted the Stingray Software, Inc. 1997 Stock
Award Plan (the "Plan") for the purpose of promoting and increasing the
personal interest in the welfare of the Company of employees of the Company
or its Affiliates by providing incentives and rewards to such employees; and
WHEREAS, the Company desires to encourage the Optionee to remain in the
employment of the company or its Affiliates and to afford the Optionee the
opportunity to acquire or enlarge the Optionee's stock ownership in the
Company so that the Optionee may have a direct proprietary interest in the
Company's success;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties mutually covenant
and agree as follows:
1. SUBJECT TO PLAN. This Agreement is subject to the terms and
conditions contained in the Plan, which is incorporated herein by this
reference. Optionee represents that he has received a copy of the Plan with
this Option. All capitalized terms used herein which are not defined in this
Agreement shall have the respective meaning ascribed to them in the Plan. In
the event of any conflict between the provisions of this Agreement and those
of the Plan, the Plan shall control. This Agreement is subject to
interpretations, amendments, rules and regulations which may from time to
time be promulgated by the Committee administering the Plan and adopted
pursuant to the Plan.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Company grants to Optionee, during the period commencing with the
date of this Agreement and ending July 28, 2007, unless terminated in
accordance with Paragraph 7 or accelerated or terminated in accordance with
Paragraph 10 (the "Option Period"), the option to purchase from the Company
(the "Option"), at a price of sixty-five cents ($0.65) per share (the "Option
Price"), _______ shares of the Company's Common Stock (the "Shares"). The
Option granted hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's
Employees and is intended to comply with the provisions of Rule 701
promulgated by the Securities and Exchange Commission under the Securities
Act. The Option granted herein is also intended to be an "Incentive Stock
Option" under Section 422 of the Code.
<PAGE>
3. EXERCISE OF OPTION.
(a) The Option may be exercised, from time to time, during the
Option Period, to purchase all or any portion of the number of Shares as
follows:
<TABLE>
<CAPTION>
Cumulative Maximum
Percentage of
Shares that
Period from Date of Grant of the Option May Be Purchased
- --------------------------------------- ------------------
<S> <C>
On or before July 28, 1998 0%
After July 28, 1998 but
on or before July 28, 1999 25%
After July 28, 1999 but
on or before July 28, 2000 50%
After July 28, 2000 but
on or before July 28, 2001 75%
After July 28, 2001 100%
</TABLE>
The maximum number of Shares that may be purchased during each time period
specified above shall be reduced by the number of Shares purchased prior to
the beginning of such period, such that the cumulative maximum for each time
period is not exceeded.
(b) No fewer than one hundred (100) Shares may be purchased upon
any one exercise of the Option, unless the number of Shares to be purchased
at such time is the total number of Shares remaining subject to the Option.
Any exercise of less than the total number of Shares identified in the Option
shall be deemed an exercise in part, and the Option may again be exercised at
such time or times determined by Optionee, provided that at such times the
Option is still exercisable.
(c) In no event shall any option be granted hereunder be
exercisable for a fractional share.
(d) The Option is exercised by Optionee delivering to the
Secretary of the Company, on any business day, a written notice signed by
Optionee specifying the number of Shares to be purchased, together with
payment of the Option Price, in the manner specified in Paragraph 4(a).
(e) The Option, or any unexercised part thereof, shall not be
exercisable after expiration or termination of the Option Period.
<PAGE>
4. PAYMENT OF OPTION PRICE AND RELATED TAXES.
(a) Payment in full of the Option Price must be made at the time
the Option is exercised, and shall be paid in U.S. dollars in cash or by
certified or bank check.
(b) To the extent the Optionee (or other person exercising this
Option) recognizes taxable income as a result of the exercise of the Option,
he or she shall pay the Company an amount equal to the federal, state and
local withholding taxes, if any, on the income so recognized within ten (10)
days of the exercise of the Option.
5. ISSUANCE OF SHARES.
(a) Within fifteen (15) business days after receiving notice of
exercise and payment of the aggregate Option Price, and subject to Optionee's
payment or arrangement for payment of the applicable taxes as specified in
Paragraph 4(b), and execution by Optionee of the Restricted Stock Agreement
pursuant to Paragraph 6 of the Agreement, the Company shall issue to Optionee
the number of Shares with respect to which the Option was exercised, and
shall deliver to Optionee, or if applicable under a Restricted Stock
Agreement to the Escrow Agent, a certificate for such Shares.
(b) Notwithstanding anything to the contrary contained in this
Agreement, this Option may not be exercised if at any time the Committee
determines it is necessary or desirable as a condition of, or in connection
with, the issuance of the Shares that (i) the Shares be listed, registered or
qualified upon any securities exchange or under any sate or federal law, or
(ii) the consent or approval of any governmental authority be received, then
the issuance of the Shares may not be consummated in whole or in part unless
such listing, registration, qualification, consent or approval has been
effected or obtained free of any conditions not acceptable to the Committee.
The inability of the Company to obtain from any regulatory body having
jurisdiction the authority deemed by the Company's counsel to be necessary to
the lawful issuance of any shares of its Common Stock hereunder shall relieve
the Company of any liability in respect of the nonissuance or sale of such
stock as to which such requisite authority shall not have been obtained.
Notwithstanding the foregoing, the Company shall not be required to register
under the Securities Act any Common Stock to be issued pursuant to exercise
of the Option.
(c) Notwithstanding anything to the contrary, if any time
specified herein for the issuance of shares to Optionee, any law, or any
regulation or requirement of the Securities and Exchange Commission or any
other federal, state or local governmental authority having jurisdiction,
shall require with the Company or Optionee to take any action in connection
with the shares then to be issued, the issuance of such shares shall be
deferred until such action shall have been taken. The Company shall be under
no obligation to take such action and the Company shall have no liability
whatsoever as a result of the non-issuance of such shares as a result of not
taking such action, except to refund to the Optionee any consideration
tendered in respect of the Option Price.
6. AGREEMENT UPON EXERCISE.
(a) By exercising this Option, in whole or in part, the Optionee
agrees that
<PAGE>
simultaneously with each exercise of the Option, he or she will execute a
Restricted Stock Agreement in the form attached as Exhibit A, and which
provides for certain restrictions on the transfer of the Shares as well as
requires the Shares to be placed in Escrow for a certain period of time.
Notwithstanding the provision of Paragraph 5, no Shares shall be issued to
Optionee until the Restricted Stock Agreement is executed. In the event
Optionee fails to execute the Restricted Stock Agreement within thirty (30)
days after providing notice of exercise, the Company shall returned to
Optionee the Option Price paid and the notice of exercise shall be deemed
void.
(b) The Company (or a representative of the underwriters) may, in
connection with the first underwritten registration of the offering of any
securities of the Company under the Act, require that Optionee not sell or
otherwise transfer or dispose of any of the Shares or other securities of the
Company during such period (not to exceed one hundred eighty (180) days
following the effective date (the "Effective Date") of a registration
statement of the Company filed under the Act as may requested by the Company
or the representative of the underwriters. For purposes of this restriction,
Optionee will be deemed to own securities which (i) are owned directly or
indirectly by Optionee, including securities held for Optionee's benefit by
nominees, custodians, brokers or pledges; (ii) may be acquired by Optionee
within sixty (60) days of the Effective Date; (iii) are owned, directly or
indirectly, by or for Optionee's brothers, sisters (whether by the whole or
half blood), spouse, ancestors or lineal descendants; or (iv) are owned,
directly or indirectly, by or for a corporation, partnership, estate or trust
of which Optionee is a shareholder, partner or beneficiary thereof. Optionee
further agrees that the Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such period.
7. TERMINATION OF EMPLOYMENT. The Optionee hereunder, and the Option
Period shall terminate upon the earlier of the end of the
originally-specified Option Period or the date of Optionee's termination of
employment with the Company or an Affiliate of the Company (termination of
employment meaning cessation of the employment relation between the Company
and Employee for any reason, including without limitation, termination by
death, disability, retirement, for cause, without cause, voluntary or
involuntary. Employment shall not be deemed as terminated if Optionee
changes employment from employment with the Company or an Affiliate to
employment with another Affiliate or the Company provided that Optionee is
working at least fifty percent (50%) of the time for the Company or an
Affiliate). Notwithstanding the foregoing if:
(a) such termination of employment is due to disability (within
the meaning of Section 22(e)(3) of the Code), the Option shall terminate on
the earlier of the originally-specified end of the Option Period or six (6)
months following termination of Optionee's employment due to such disability;
or
such termination of employment is due to death, the Option shall terminate on
the earlier of the originally-specified end of the Option Period or six (6)
months after Optionee's death, but in either such case, this Option may be
exercised during the Option Period following termination of employment only
as to that number of shares as to which it was exercisable on the date of
termination of employment under the provisions of Paragraph 3(a) of this
Agreement.
<PAGE>
8. TRANSFER OF OPTION. This Option is transferable by the Optionee
only by will or by distribution through intestate succession, and is
exercisable during the Optionee's lifetime only by the Optionee. No
assignment or transfer of this Option or of the rights represented thereby,
whether voluntary or involuntary, by operation of law or otherwise, shall
vest in the assignee or transferee this Option except by will or intestate
distribution, this Option shall terminate and be of no force or effect.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGERS.
(a) The Shares with respect to which this Option is granted are
shares of the Common Stock of the Company as constituted on the date of this
Agreement, but if, and whenever, prior to the delivery by the Company of all
of the Shares with respect to which this Option is granted, the Company shall
pay a stock dividend or effect a subdivision or combination of shares, or
other capital readjustment, then (i) in the event of any increase in the
number of shares of common stock outstanding, the number of Shares then
remaining subject to the Option shall be proportionately increased (except
that any fraction of a share resulting from any such adjustment shall be
excluded from the operation of this Agreement), and the Option Price payable
per share shall be proportionately reduced, and (ii) in the event of a
reduction in the number of shares of common stock outstanding, the number of
Shares then remaining subject to the Option shall be proportionately reduced
(except that any fractional share resulting from any such adjustment shall be
excluded from the operation of this Agreement), and the Option Price payable
per share shall be proportionately increased.
(b) Upon a merger or consolidation of the Company with or into or
with one or more other corporations, or any other corporate reorganization of
any form involving the Company as a party and an exchange, conversion,
adjustment or other modification of the outstanding Common Stock, the
Optionee shall thereafter have the right, upon exercise of the Option,
provided that such Option is currently exercisable and has not otherwise been
terminated, to receive the kind and amount of shares of stock or other
securities or property to which the Optionee would have been entitled if the
Optionee had received Shares by exercise of the Option immediately prior to
or simultaneously with such merger or consolidation or similar transaction,
and the Option Price shall be adjusted accordingly. Comparable rights shall
accrue to Optionee in the event of successive transactions of the type
described above. These adjustments and the manner of their application shall
be determined by the Committee in its sole discretion. Any such adjustments
may provide for the elimination of fractional shares.
10. TERMINATION AND ACCELERATION OF OPTION.
(a) Anything contained herein to the contrary notwithstanding,
upon a sale or transfer of all or substantially all of the assets of the
Company to another corporation (other than a wholly-owned subsidiary), person
or entity, or upon a distribution by the Company of its assets as a
liquidating or partial liquidating dividend with respect to the Common Stock,
or the happening of any other similar event affecting the Common Stock, then
following a determination by the Board to effect or proceed with such event
or transaction, the Board or the Committee, in its sole discretion and upon
at least ten (10) days' written notice to the holder of all or any portion of
any Option previously granted and unexercised, may either (i) accelerate the
exercisability of all or any portion of such Option to the date prior to the
effectiveness of such
<PAGE>
event or transaction, even if such Option has been outstanding for less than
one year or if other provisions contained in the respective Stock Option
Agreement require such Option or any portion thereof be outstanding for a
minimum amount of time prior to exercise, or (ii) accelerate the
exercisability of all or any portion of such Option as provided in the
preceding clause (i) and provide that such Option or any unexercised portion
thereof shall terminate as of the effective date of such event or transaction.
(b) Anything contained herein to the contrary notwithstanding,
upon the happening of an Initial Public Offering, then following a
determination by the Board to effect or proceed with an Initial Public
Offering, the Board or the Committee, in its sole discretion and upon at
least ten (10) days' written notice to the holder of all or any portion of
any Option previously granted and unexercised, may either (i) accelerate the
exercisability of all or any portion of such Option to a date prior to the
effective date of the Initial Public Offering, even if such Option has been
outstanding for less than one year or if other provisions contained in the
respective Stock Option Agreement require such Option or any portion thereof
be outstanding for a minimum amount of time prior to exercise, or (ii)
accelerate the exercisability of all or any portion of such Option as
provided in the preceding clause (i) and provide that such Option or any
unexercised portion thereof shall terminate as of the effective date of the
Initial Public Offering.
(c) Anything contained herein to the contrary notwithstanding, in
the event of a merger or consolidation of the Company with or into any other
corporation or organization as a result of which the holders of the voting
capital stock of the Company prior to such merger or consolidation would
receive or hold less than a majority of the shares of voting capital stock of
the resulting or surviving corporation or organization, then, following a
determination by the Board to effect or proceed with such merger of
consolidation, and in any event at least ten (10) days prior to the
effectiveness of such merger or consolidation, all Options granted prior to
the effective date of the merger or consolidation shall be accelerated such
that even if such Option has been outstanding for less than one year or if
other provisions contained in the respective Stock Option Agreement require
the Option or any portion thereof be outstanding for a minimum amount of time
prior to exercise, the Options shall be immediately exercisable. Further, in
the event of such merger or consolidation, the Board or the Committee, upon
at least ten (10) days' written notice to the holder of all or any portion of
any Option previously granted and unexercised, may in its sole discretion,
provided that such Option or any unexercised portion thereof outstanding as
of the effective date of such merger or consolidation shall terminate.
11. OPTIONEE NOT SHAREHOLDER. Neither Optionee, nor any person to whom
an Option is permitted to be transferred, shall be deemed for any purpose to
be a shareholder of the Company, or have any rights of a holder with respect
to any shares covered by this Option, unless this Option shall have been
exercised and the Option Price paid in the manner provided herein. Except as
provided in Paragraph 9, no adjustment will be made for dividends or other
rights where the record date is prior to the date of exercise and payment.
12. NO EFFECT. Neither the Option granted hereunder nor this Agreement
shall affect in any way the right or power of the Company or its shareholders
to make or authorize any or all adjustments, recapitalization,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
bonds,
<PAGE>
debentures, preferred or prior preference stocks ahead of or convertible
into, or otherwise affecting the common stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
13. DETERMINATION BY COMMITTEE. Subject to the provisions of Paragraph
14 hereof, any dispute or disagreement which shall arise under, or as a
result of, or pursuant to, this Agreement shall be determined by the
Committee in its absolute and uncontrolled discretion, and any such
determination or any other determination by the Committee under or pursuant
to this Agreement and any interpretation by the Committee of the terms of
this Agreement shall be final, binding, and conclusive on all persons
affected thereby.
14. BOARD OF DIRECTORS. Until such time as the Company is a Reporting
Company, if ever, the Board of Directors of the Company shall have the right,
in its absolute and uncontrolled discretion, to overrule or modify any
determination or interpretation made by the Committee as contemplated by
Paragraph 13, and in such event the determinations or interpretations by the
Board shall be final, binding and conclusive on all persons affected thereby.
15. AMENDMENT OF THE PLAN. The board of Directors may amend or modify
the Plan at any time provided that no such amendment shall, with the consent
of the Optionee, reduce the amount of any benefit or adversely change the
terms and conditions of this Agreement.
16. NOTICES. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, addressed as follows: President of
the Company, at 3000 Aerial Center Drive, Suite 1100, Morrisville, North
Carolina 27560, or at such other address as the Company, by notice to the
Optionee, may designate in writing from time to time; to the Optionee, at the
Optionee's address as shown on the records of the Company or at such other
address as the Optionee, by notice to the Company, may designate in writing
from time to time.
17. ENTIRE AGREEMENT: RIGHTS AND INTEREST. This Incentive Stock Option
Agreement, including its exhibits, and the Plan pursuant to which it was
issued, constitute the entire agreement of the parties with respect to the
matters covered hereby, and supersede any previous agreements, whether
written or oral. Each party hereby stipulates and acknowledges that there
are no other understandings, expectations or agreements, either written or
oral, respecting Optionee's rights and entitlements as a shareholder or
Option holder of the Company, including, without limitation, any
understandings, expectations, or agreements regarding any employment,
compensation or other benefits, governance of the Company or the payment of
dividends, except as expressly set forth in Optionee's employment agreement
with the Company, if any. Employee hereby covenants and agrees, for himself
and for successors and assigns, that no such understandings, expectations or
agreements which may hereafter arise shall be cognizable or enforceable
unless the same shall be reduced to a writing signed by the parties to be
charged.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized office, and the Optionee has hereunto set his or her
hand and seal, all on the date and year first above written.
STINGRAY SOFTWARE, INC.
(CORPORATE SEAL)
------------------------------------
President
ATTEST:
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Secretary
OPTINEE: