<PAGE> 1
As filed with the Securities and Exchange Commission on December 1, 1998
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
NEW ERA OF NETWORKS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 84-1234845
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
7400 EAST ORCHARD ROAD, SUITE 230
ENGLEWOOD, COLORADO 80111
(ADDRESS, INCLUDING ZIP CODE OF PRINCIPAL EXECUTIVE OFFICES)
CENTURY ANALYSIS, INC.
1996 EQUITY INCENTIVE PLAN
(FULL TITLE OF THE PLAN)
---------------------------
GEORGE F. (RICK) ADAM, JR.
CHIEF EXECUTIVE OFFICER
NEW ERA OF NETWORKS, INC.
7400 EAST ORCHARD ROAD, SUITE 230
ENGLEWOOD, CO 80111
(303) 694-3933
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
---------------------------
Copies to:
MARK A. BERTELSEN, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
---------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (3) PRICE FEE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reserved under the Century
Analysis, Inc. 1996 Equity
Incentive Plan. Common Stock,
$.0001 par value (1)(2) 51,475 shares $ 13.17 $ 677,925.75 $ 188.46
TOTAL: 51,475 shares $ 13.17 $ 677,925.75 $ 188.46
===============================================================================================
</TABLE>
(1) Pursuant to a Share Acquisition Agreement dated as of September 30, 1998
(the "Agreement"), among the Registrant, Century Analysis, Inc. ("CAI")
and the shareholders of CAI, the Registrant assumed all of the
outstanding options to purchase common stock of CAI under its 1996
Equity Incentive Plan (the "CAI Assumed Options"), with appropriate
adjustments to the number of shares and exercise price of each CAI
Assumed Option to reflect the ratio at which the common stock of CAI was
converted into common stock of the Registrant under the Agreement.
(2) Includes associated rights to purchase shares of Series A Preferred
Stock, par value $0.0001 per share, of the Registrant.
(3) Such shares are issuable upon exercise of outstanding options with fixed
exercise prices. Pursuant to Rule 457(h), the aggregate offering price
and the fee have been computed upon the basis of the price at which the
options may be exercised. The offering price per share set forth for
such shares is the weighted average exercise price per share at which
such options are exercisable.
<PAGE> 2
NEW ERA OF NETWORKS, INC.
REGISTRATION STATEMENT ON FORM S-8
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
ITEM 1. PLAN INFORMATION
The documents containing the information specified in this Item 1 will
be sent or given to employees, officers, directors or others as specified by
Rule 428(b)(1). In accordance with the rules and regulations of the Securities
and Exchange Commission (the "Commission") and the instructions to Form S-8,
such documents are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
ITEM 2. REGISTRATION INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The documents containing the information specified in this Item 2 will
be sent or given to employees, officers, directors or others as specified by
Rule 428(b)(1). In accordance with the rules and regulations of the Commission
and the instructions to Form S-8, such documents are not being filed with the
Commission either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information heretofore filed with the
Commission by the Registrant are incorporated herein by reference:
1. The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997 filed pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act");
2. The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1998, June 30, 1998 and September 30,
1998 filed pursuant to the Exchange Act;
3. The description of Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A dated June 4,
1997, filed pursuant to Section 12(g) of the Exchange Act
which was declared effective on June 17, 1997, including any
amendment or report filed for the purpose of updating such
description;
4. The description of Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the
Commission on August 14, 1998, as amended by the Company's
Registration Statement on Form 8-A/A, filed with the
Commission on August 17, 1998, pursuant to Section 12(g) of
the Exchange Act, including any amendment or report filed for
the purpose of updating such description;
5. The Registrant's Current Report on Form 8-K, dated June 12,
1998, filed with the Commission pursuant to the Exchange Act
on June 26, 1998;
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<PAGE> 3
6. The Registrant's Current Report on Form 8-K, dated August 5,
1998, filed with the Commission pursuant to the Exchange Act
on August 14, 1998, as amended by Form 8-K/A dated August 5,
1998, filed with the Commission pursuant to the Exchange Act
on August 17, 1998;
7. The Registrant's Current Report on Form 8-K, dated September
30, 1998, filed with the Commission pursuant to the Exchange
Act on October 14, 1998.
All documents subsequently filed with the Commission by the Registrant
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 hereunder have been sold or which deregisters all securities then
remaining unsold under this Registration Statement, 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. Any statement contained herein or in
a document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such earlier statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Amended and Restated Certificate of Incorporation limits
the liability of directors to the maximum extent permitted by Delaware law.
Delaware law provides that a corporation's certificate of incorporation may
contain, and the Company's Amended and Restated Certificate of Incorporation
does contain, a provision eliminating or limiting the personal liability of a
director for monetary damages for breach of their fiduciary duties as directors,
except for liability (i) for any breach of their duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
for which involve intentional misconduct or a knowing violation of law, (iii)
for unlawful payments of dividend or unlawful stock repurchases or redemptions
as provided in Section 174 of the Delaware General Corporation Law or (iv) for
any transaction from which the director derived an improper personal benefit.
The Company's Amended and Restated Bylaws provide that the Company
shall indemnify its directors, officers, employees and agents to the fullest
extent permitted by law. The Company believes that the indemnification under its
Amended and Restated Bylaws covers at least negligence and gross negligence on
the part of indemnified parties.
The Company has entered into agreements to indemnify its directors and
officers, in addition to the indemnification provided for in the Company's
Amended and Restated Bylaws. These agreements, among other things, indemnify the
Company's directors and officers for certain expenses (including attorney fees),
judgments, fines and settlement amounts incurred by any such person in any
action or proceeding, including any action by or in the right of the Company,
arising out of such person's services as a director or officer of the company,
any subsidiary of the Company or any other company or enterprise to which the
person provides services at the request of the Company. The Company believes
that these provisions and agreements are necessary to attract and retain
qualified directors and officers.
-3-
<PAGE> 4
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of the Company where indemnifications will
be required or permitted. The Company is not aware of any threatened litigation
or proceeding that might result in a claim for such indemnification.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
<S> <C>
4.1 Specimen stock certificate representing the Common Stock of
the Company (which is incorporated herein by reference to
Exhibit 4.1 to Registrant's Registration Statement on Form
S-1 (File No. 333-20189)).
4.2 Amended and Restated Bylaws of Registrant, as amended
through February 2, 1998 (which are incorporated herein by
reference to Exhibit 3.2 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1997).
4.3 Amended and Restated Certificate of Incorporation of
Registrant, as amended through May 21, 1997 (which is
incorporated herein by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997).
4.4 Preferred Shares Rights Agreement dated as of August
5, 1998, between New Era of Networks, Inc. and
BankBoston, N.A., including the Certificate of
Designation, the form of Rights Certificate and the
Summary of Rights thereto as Exhibits A, B and C,
respectively (all of which are incorporated herein by
reference to Exhibit 1 to the Registrant's
Registration Statement on Form 8-A/A filed August 17,
1998).
4.5 Century Analysis Inc. 1996 Equity Incentive Plan.
4.6 Form of Notice of Exercise.
4.7 Form of Century Analysis Inc. Incentive Stock Option Agreement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 Powers of Attorney (see page 6).
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
-4-
<PAGE> 5
(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% 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)(1)(i) and (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 Commissioner by the Registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or 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 shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 of 1933 and will be governed by the final adjudication of such issue.
-5-
<PAGE> 6
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 Englewood, State of Colorado, on December 1, 1998.
NEW ERA OF NETWORKS, INC..
By: /s/ LEONARD M.GOLDSTEIN
---------------------------------------------------
Leonard M. Goldstein
Senior Vice President, Senior Counsel and Secretary
-6-
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints George F. Adam, Jr. and Leonard M.
Goldstein, and each of them, his or her true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to (i)
act on, sign and file with the Securities and Exchange Commission any and all
amendments (including post-effective amendments) to this Registration Statement
on Form S-8 together with all schedules and exhibits thereto (ii) act on, sign
and file such certificates, instruments, agreements and other documents as may
be necessary or appropriate in connection therewith, and (iii) take any and all
actions that may be necessary or appropriate to be done, as fully for all
intents and purposes as he or she might or could do in person, hereby approving,
ratifying and confirming all that such agent, proxy and attorney-in-fact or any
of his substitutes may lawfully do or cause to be done by virtue thereof.
IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE STATED:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ GEORGE F. ADAM, JR. Chairman of the Board, President, Chief November 25, 1998
- ------------------------------- Executive Officer, and Director
George F. Adam, Jr.
/s/ LEONARD M. GOLDSTEIN Senior Vice President, Senior Counsel November 23, 1998
- -------------------------------
Leonard M. Goldstein
/s/ STEPHEN E. WEBB Senior Vice President and Chief Financial November 25, 1998
- ------------------------------- Officer
Stephen E. Webb
/s/ JAMES C. PARKS Vice President of Finance and Controller November 23, 1998
- -------------------------------
James C. Parks
/s/ HAROLD A. PISKIEL Executive Vice President, Chief Technical November 23, 1998
- ------------------------------- Officer and Director
Harold A. Piskiel
/s/ STEVE LAZARUS Director November 23, 1998
- -------------------------------
Steve Lazarus
/s/ MARK L. GORDON Director November 24, 1998
- -------------------------------
Mark L. Gordon
Director
- -------------------------------
James Reep
/s/ ELISABETH W. IRELAND Director November 23, 1998
- -------------------------------
Elisabeth W. Ireland
/s/ PATRICK J. FORTUNE Director November 24, 1998
- -------------------------------
Patrick J. Fortune
Director
- -------------------------------
Joseph E. Kasputys
</TABLE>
-7-
<PAGE> 8
Index to Exhibits
- -----------------
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
<S> <C>
4.1 Specimen stock certificate representing the Common Stock of the
Company (which is incorporated herein by reference to Exhibit
4.1 to Registrant's Registration Statement on Form S-1 (File
No. 333-20189)).
4.2 Amended and Restated Bylaws of Registrant, as amended through
February 2, 1998 (which are incorporated herein by reference to
Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997).
4.3 Amended and Restated Certificate of Incorporation of
Registrant, as amended through May 21, 1997 (which is
incorporated herein by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997).
4.4 Preferred Shares Rights Agreement dated as of August 5, 1998,
between New Era of Networks, Inc. and BankBoston, N.A.,
including the Certificate of Designation, the form of Rights
Certificate and the Summary of Rights thereto as Exhibits A, B
and C, respectively (all of which is incorporated herein by
reference to Exhibit 1 to the Registrant's Registration
Statement on Form 8-A/A filed August 17, 1998).
4.5 Century Analysis Inc. 1996 Equity Incentive Plan.
4.6 Form of Notice of Exercise.
4.7 Form of Century Analysis Inc. Incentive Stock Option Agreement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 Powers of Attorney (see page 6).
</TABLE>
-8-
<PAGE> 1
EXHIBIT 4.5
CENTURY ANALYSIS, INC.
1996 EQUITY INCENTIVE PLAN
1. PURPOSE.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company, and its Affiliates,
may be given an opportunity to benefit from increases in value of the stock of
the Company through the granting of (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses, (iv) rights to purchase
restricted stock, and (v) stock appreciation rights, all as defined below.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Directors of or Consultants to the Company or
its Affiliates, to secure and retain the services of new Employees, Directors
and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.
(c) The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board or any Committee to which responsibility
for administration of the Plan has been delegated pursuant to subsection 3(c),
be either (i) Options granted pursuant to Section 6 hereof, including Incentive
Stock Options and Nonstatutory Stock Options, (ii) stock bonuses or rights to
purchase restricted stock granted pursuant to Section 7 hereof, or (iii) stock
appreciation rights granted pursuant to Section 8 hereof. All Options shall be
separately designated Incentive Stock Options or Nonstatutory Stock Options at
the time of grant, and in such form as issued pursuant to Section 6, and a
separate certificate or certificates will be issued for shares purchased on
exercise of each type of Option.
1.
<PAGE> 2
2. DEFINITIONS.
(a) "AFFILIATE" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(e) "COMPANY" means Century Analysis Incorporated, a California
corporation.
(f) "CONCURRENT STOCK APPRECIATION RIGHT" or "Concurrent Right" means a
right granted pursuant to subsection 8(b)(2) of the Plan.
(g) "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render services and who is compensated for such
services, provided that the term "Consultant" shall not include Directors who
are paid only a director's fee by the Company or who are not compensated by the
Company for their services as Directors.
(h) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means
the employment or relationship as a Director or Consultant is not interrupted or
terminated by the Company or any Affiliate. The Board, in its sole discretion,
may determine whether Continuous Status as an Employee, Director or Consultant
shall be considered interrupted in the case of: (i) any leave of absence
approved by the Board, including sick leave, military leave, or any other
personal leave; or (ii) transfers between locations of the Company or between
the Company, Affiliates or their successors.
(i) "DIRECTOR" means a member of the Board.
2.
<PAGE> 3
(j) "DISINTERESTED PERSON" means a Director: (i) who was not during the
one year prior to service as an administrator of the Plan granted or awarded
equity securities pursuant to the Plan or any other plan of the Company or any
of its affiliates entitling the participants therein to acquire equity
securities of the Company or any of its affiliates except as permitted by Rule
16b-3(c)(2)(i); or (ii) who is otherwise considered to be a "disinterested
person" in accordance with Rule 16b-3(c)(2)(i), or any other applicable rules,
regulations or interpretations of the Securities and Exchange Commission.
(k) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(m) "FAIR MARKET VALUE" means the value of the common stock as
determined in good faith by the Board in a manner consistent with Section
260.140.50 of Title 10 of the California Code of Regulations.
(n) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "INDEPENDENT STOCK APPRECIATION RIGHT" or "Independent Right" means
a right granted under subsection 8(b)(3) of the Plan.
(p) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an Incentive Stock Option.
(q) "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
3.
<PAGE> 4
(r) "OPTION" means a stock option granted pursuant to the Plan.
(s) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.
(t) "OPTIONED STOCK" means the common stock of the Company subject to
an Option.
(u) "OPTIONEE" means an Employee, Director or Consultant who holds an
outstanding Option.
(v) "PLAN" means this 1996 Equity Incentive Plan.
(w) "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.
(x) "STOCK APPRECIATION RIGHT" means any of the various types of rights
which may be granted under Section 8 of the Plan.
(y) "STOCK AWARD" means any right granted under the Plan, including any
Option, any stock bonus, any right to purchase restricted stock, and any Stock
Appreciation Right.
(z) "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.
(aa) "TANDEM STOCK APPRECIATION RIGHT" or "Tandem Right" means a right
granted under subsection 8(b)(1) of the Plan.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a Committee, as provided in subsection 3(c).
4.
<PAGE> 5
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how Stock Awards
shall be granted; whether a Stock Award will be an Incentive Stock Option, a
Nonstatutory Stock Option, a stock bonus, a right to purchase restricted stock,
a Stock Appreciation Right, or a combination of the foregoing; the provisions of
each Stock Award granted (which need not be identical), including the time or
times when a person shall be permitted to receive stock pursuant to a Stock
Award; whether a person shall be permitted to receive stock upon exercise of an
Independent Stock Appreciation Right; and the number of shares with respect to
which Stock Awards shall be granted to each such person.
(ii) To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.
(iii) To amend the Plan as provided in Section 14.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of such Committee shall be Disinterested Persons, if required under subsection
3(d). If administration is delegated to a Committee, the Committee shall have,
in connection with the administration of the Plan, the powers theretofore
possessed by the Board (and references in this Plan to the Board shall
thereafter be to the Committee), subject, however, to such resolutions, not
inconsistent with the
5.
<PAGE> 6
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan. Additionally, prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, and notwithstanding anything to the contrary contained herein, the
Board may delegate administration of the Plan to any person or persons and the
term "Committee" shall apply to any person or persons to whom such authority has
been delegated.
(d) Any requirement that an administrator of the Plan be a
Disinterested Person shall not apply (1) prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, or (2) if the Board or the Committee expressly declares that such
requirement shall not apply. Any Disinterested Person shall otherwise comply
with the requirements of Rule 16b-3.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 13 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to Stock Awards shall
not exceed in the aggregate One Million (1,000,000) shares of the Company's
common stock. If any Stock Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the stock
not acquired under such Stock Award shall revert to and again become available
for issuance under the Plan. Shares subject to Stock Appreciation Rights
exercised in accordance with Section 8 of the Plan shall not be available for
subsequent issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
6.
<PAGE> 7
5. ELIGIBILITY.
(a) Incentive Stock Options and Stock Appreciation Rights appurtenant
thereto may be granted only to Employees. Stock Awards other than Incentive
Stock Options and Stock Appreciation Rights appurtenant thereto may be granted
only to Employees, Directors or Consultants.
(b) A Director shall in no event be eligible for the benefits of the
Plan unless at the time discretion is exercised in the selection of the Director
as a person to whom Stock Awards may be granted, or in the determination of the
number of shares which may be covered by Stock Awards granted to the Director:
(1) the Board has delegated its discretionary authority over the Plan to a
Committee which consists solely of Disinterested Persons; or (2) the Plan
otherwise complies with the requirements of Rule 16b-3. The Board shall
otherwise comply with the requirements of Rule 16b-3. This subsection 5(b) shall
not apply (i) prior to the date of the first registration of an equity security
of the Company under Section 12 of the Exchange Act, or (ii) if the Board or
Committee expressly declares that it shall not apply.
(c) No person shall be eligible for the grant of an Option if, at the
time of grant, such person owns (or is deemed to own pursuant to Section 424(d)
of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates
unless the exercise price of such Option is at least one hundred ten percent
(110%) of the Fair Market Value of such stock at the date of grant and the
Option is not exercisable after the expiration of five (5) years from the date
of grant.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each
7.
<PAGE> 8
Option shall include (through incorporation of provisions hereof by reference in
the Option or otherwise) the substance of each of the following provisions:
(a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.
(b) PRICE. The exercise price of each Incentive Stock Option shall be
not less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted. The exercise price of
each Nonstatutory Stock Option shall be not less than eighty-five percent (85%)
of the Fair Market Value of the stock subject to the Option on the date the
Option is granted.
(c) CONSIDERATION. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (1) in cash at the time the option is exercised, or (2) at
the discretion of the Board or the Committee, either at the time of the grant or
exercise of the Option, (a) by delivery to the Company of other common stock of
the Company, (b) according to a deferred payment or other arrangement (which may
include, without limiting the generality of the foregoing, the use of other
common stock of the Company) with the person to whom the Option is granted or to
whom the Option is transferred pursuant to subsection 6(d), or (C) in any other
form of legal consideration that may be acceptable to the Board.
In the case of any deferred payment arrangement, interest shall be
payable at least annually and shall be charged at the minimum rate of interest
necessary to avoid the treatment as interest, under any applicable provisions of
the Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement.
8.
<PAGE> 9
(d) TRANSFERABILITY. An Option shall not be transferable except by will
or by the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the Option is granted only by such person.
(e) VESTING. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the Option may become exercisable ("vest")
with respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The vesting provisions of individual Options may vary but in each
case will provide for vesting of at least twenty-percent (20%) per year of the
total number of shares subject to the Option. During the remainder of the term
of the Option (if its term extends beyond the end of the installment periods),
the option may be exercised from time to time with respect to any shares then
remaining subject to the Option. The provisions of this subsection 6(e) are
subject to any Option provisions governing the minimum number of shares as to
which an Option may be exercised.
(f) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT. In the event an Optionee's Continuous Status as an Employee,
Director or Consultant terminates (other than upon the Optionee's death or
Disability), the Optionee may exercise his or her Option only within the period
ending on the earlier of (i) the date thirty (30) days after the termination of
the Optionee's Continuous Status as an Employee, Director or Consultant (or such
later date specified in the Option Agreement), or (ii) the expiration of the
term of the Option as set forth in the Option Agreement.
9.
<PAGE> 10
(g) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous
Status as an Employee, Director or Consultant terminates as a result of the
Optionee's disability, the Optionee may exercise his or her Option only within
the period ending on the earlier of (i) the date twelve (12) months following
such termination (or such longer or shorter period, which in no event shall be
less than six (6) months, specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement.
(h) DEATH OF OPTIONEE. In the event of the death of an Optionee, the
Option may be exercised only within the period ending on the earlier of (i) the
date eighteen (18) months following the date of death (or such longer or shorter
period, which in no event shall be less than six (6) months, specified in the
Option Agreement), or (ii) the expiration of the term of such Option as set
forth in the Option Agreement.
(i) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject to
the Option prior to the full vesting of the Option. Any unvested shares so
purchased shall be subject to a repurchase right in favor of the Company, with
the repurchase price to be equal to the original purchase price of the stock, or
to any other restriction the Board determines to be appropriate provided,
however, that the right to repurchase at the original purchase price shall lapse
at a minimum rate of twenty percent (20%) per year over five (5) years from the
date the Option was granted and such right shall be exercised within ninety (90)
days of termination of employment for cash or cancellation of purchase money
indebtedness for the shares. Should the right of repurchase be assigned by the
Company, the assignee shall pay the Company cash equal to the difference between
the original purchase price
10.
<PAGE> 11
and the stock's Fair Market Value if the original purchase price is less than
the stock's Fair Market Value.
7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
Each stock bonus or restricted stock purchase agreement shall be in
such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate. The terms and conditions of stock bonus or
restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate agreements need not be identical, but each stock
bonus or restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions as appropriate:
(a) PURCHASE PRICE. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board or Committee shall
determine and designate in such agreement, but in no event shall the purchase
price be less than eighty-five percent (85%) of the stock's Fair Market Value on
the date such award is made. In the case of any purchase made by holder who owns
stock of the Company possessing more than 10% of the total combined voting power
of all classes of stock of the Company, the purchase price shall be equal to
100% of the Fair Market Value of the stock purchased. Notwithstanding the
foregoing, the Board or the Committee may determine that eligible participants
in the Plan may be awarded stock pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or for its
benefit.
(b) TRANSFERABILITY. No rights under a stock bonus or restricted stock
purchase agreement shall be transferable except by will or by the laws of
descent and distribution so long as stock awarded under such agreement remains
subject to the terms of the agreement.
11.
<PAGE> 12
(c) CONSIDERATION. The purchase price of stock acquired pursuant to a
stock purchase agreement shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board or the Committee, according to a
deferred payment or other arrangement with the person to whom the stock is sold;
or (iii) in any other form of legal consideration that may be acceptable to the
Board or the Committee in their discretion. Notwithstanding the foregoing, the
Board or the Committee to which administration of the Plan has been delegated
may award stock pursuant to a stock bonus agreement in consideration for past
services actually rendered to the Company or for its benefit.
(d) VESTING. Shares of stock sold or awarded under the Plan may, but
need not, be subject to a repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board or the
Committee; provided, however, that (i) the right to repurchase at the original
purchase price shall lapse at a minimum rate of twenty percent (20%) per year
over five (5) years from the date the Stock Award was granted, and (ii) such
right shall be exercisable only (a) within the ninety (90) day period following
the termination of employment or the relationship as a Director or Consultant,
or (b) such longer period as may be agree to by the Company and the holder of
the Stock Award, and (iii) such right shall be exercisable only for cash or
cancellation of purchase money indebtedness for the shares.
(e) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT. In the event a Participant's Continuous Status as an Employee,
Director or Consultant terminates, the Company may repurchase or otherwise
reacquire any or all of the shares of stock held by that person which have not
vested as of the date of termination under the terms of the stock bonus or
restricted stock purchase agreement between the Company and such person.
12.
<PAGE> 13
8. STOCK APPRECIATION RIGHTS.
(a) The Board or Committee shall have full power and authority,
exercisable in its sole discretion, to grant Stock Appreciation Rights to
Employees or Directors of or Consultants to the Company or its Affiliates under
the Plan. To exercise any outstanding Stock Appreciation Right, the holder must
provide written notice of exercise to the Company in compliance with the
provisions of the Stock Award Agreement evidencing such right. If a Stock
Appreciation Right is granted to an individual who is at the time subject to
Section 16(b) of the Exchange Act (a "Section 16(b) Insider"), the Stock Award
Agreement of grant shall incorporate all the terms and conditions at the time
necessary to assure that the subsequent exercise of such right shall qualify for
the safe-harbor exemption from short-swing profit liability provided by Rule
16b-3 promulgated under the Exchange Act (or any successor rule or regulation).
No limitation shall exist on the aggregate amount of cash payments the Company
may make under the Plan in connection with the exercise of a Stock Appreciation
Rights.
(b) Three types of Stock Appreciation Rights shall be authorized for
issuance under the Plan:
(i) Tandem Stock Appreciation Rights. Tandem Stock
Appreciation Rights will be granted appurtenant to an Option, and if Tandem
Stock Appreciation Rights are granted appurtenant to an Incentive Stock Option,
they shall satisfy any applicable Treasury Regulations so as not to disqualify
such Option as an Incentive Stock Option under the Code. Tandem Stock
Appreciation Rights will require the holder to elect between the exercise of the
underlying Option for shares of stock and the surrender, in whole or in part, of
such Option for an appreciation distribution. The appreciation distribution
payable on the exercised Tandem Right shall be in cash in an amount equal to the
excess of (A) the Fair Market Value (on the date of the
13.
<PAGE> 14
Option surrender) of the number of shares of stock covered by that portion of
the surrendered Option in which the optionee is vested over (B) the aggregate
exercise price payable for such vested shares.
(ii) Concurrent Stock Appreciation Rights. Concurrent Rights
will be granted appurtenant to an Option and may apply to all or any portion of
the shares of stock subject to the underlying Option and shall, except as
specifically set forth in this Section 8, be subject to the same terms and
conditions applicable to the particular Option grant to which it pertains. A
Concurrent Right shall be exercised automatically at the same time the
underlying Option is exercised with respect to the particular shares of stock to
which the Concurrent Right pertains. The appreciation distribution payable on an
exercised Concurrent Right shall be in cash in an amount equal to such portion
as shall be determined by the Board or the Committee at the time of the grant of
the excess of (A) the aggregate Fair Market Value (on the Exercise Date) of the
vested shares of stock purchased under the underlying Option which have
Concurrent Rights appurtenant to them over (B) the aggregate exercise price paid
for such shares.
(iii) Independent Stock Appreciation Rights. Independent
Rights will be granted independently of any Option and shall, except as
specifically set forth in this Section, be subject to the same terms and
conditions applicable to Nonstatutory Stock Options as set forth in Section 6.
They shall be denominated in share equivalents. The appreciation distribution
payable on the exercised Independent Right shall be not greater than an amount
equal to the excess of (A) the aggregate Fair Market Value (on the date of the
exercise of the Independent Right) of a number of shares of Company stock equal
to the number of share equivalents in which the holder is vested under such
Independent Right, and with respect to which the holder is exercising the
Independent Right on such date, over (B) the aggregate Fair Market Value (on the
14.
<PAGE> 15
date of the grant of the Independent Right) of such number of shares of Company
stock. The appreciation distribution payable on the exercised Independent Right
may be paid, in the discretion of the Board or the Committee, in cash, in shares
of stock or in a combination of cash and stock. Any shares of stock so
distributed shall be valued at fair market value on the date the Independent
Right is exercised.
9. CANCELLATION AND RE-GRANT OF OPTIONS.
The Board or the Committee shall have the authority to effect, at any
time and from time to time, with the consent of the affected holders of Options
and/or Stock Appreciation Rights, (i) the repricing of any outstanding Options
and/or any Stock Appreciation Rights under the Plan and/or (ii) the cancellation
of any outstanding Options and/or any Stock Appreciation Rights under the Plan
and the grant in substitution therefor of new Options and/or Stock Appreciation
Rights under the Plan covering the same or different numbers of shares of stock,
but having an exercise price per share not less than eighty-five percent (85%)
of the Fair Market Value (one hundred percent (100%) of the Fair Market Value in
the case of an Incentive Stock Option or, in the case of a 10% stockholder (as
described in subsection 5(c)), not less than one hundred ten percent (110%) of
the Fair Market Value) per share of stock on the new grant date.
10. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of stock required to satisfy such
Stock Awards.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Stock Awards; provided,
however, that this undertaking shall not require the Company to register under
the Securities Act either the Plan, any Stock Awards or
15.
<PAGE> 16
any stock issued or issuable pursuant to any such Stock Awards. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such Stock Awards unless and until such authority is obtained.
11. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Stock Awards shall
constitute general funds of the Company.
12. MISCELLANEOUS.
(a) Neither an Optionee nor any person to whom an Option is transferred
under subsection 6(d) shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to such Option unless and
until such person has satisfied all requirements for exercise of the Option
pursuant to its terms.
(b) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Employee, Director, Consultant,
Optionee or other holder of Stock Awards any right to continue in the employ of
the Company or any Affiliate (or to continue acting as a Director or Consultant)
or shall affect the right of the Company or any Affiliate to terminate the
employment or relationship as a Director or Consultant of any Employee,
Director, Consultant or Optionee with or without cause.
(c) To the extent that the aggregate Fair Market Value (determined at
the time of grant) of stock with respect to which Incentive Stock Options
granted after 1986 are exercisable for the first time by any Optionee during any
calendar year under all plans of the Company and its Affiliates exceeds one
hundred thousand dollars ($100,000), the Options or portions thereof
16.
<PAGE> 17
which exceed such limit (according to the order in which they were granted)
shall be treated as Nonstatutory Stock Options.
(d) The Company may require any person to whom a Stock Award is
granted, or any person to whom a Stock Award is transferred under subsection
6(d) or 7(b), as a condition of exercising or acquiring stock under any Stock
Award, i. to give written assurances satisfactory to the Company as to such
person's knowledge and experience in financial and business matters and/or to
employ a purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising or acquiring stock under the
Stock Award; and ii. to give written assurances satisfactory to the Company
stating that such person is acquiring the stock subject to the Stock Award for
such person's own account and not with any present intention of selling or
otherwise distributing the stock. These requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (1) the issuance of the
shares upon the exercise or acquisition of stock under the Stock Award has been
registered under a then currently effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), or (2) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of stock.
(e) To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or local
tax withholding obligation
17.
<PAGE> 18
relating to the exercise or acquisition of stock under a Stock Award by any of
the following means or by a combination of such means: (1) tendering a cash
payment; (2) authorizing the Company to withhold shares from the shares of the
common stock otherwise issuable to the participant as a result of the exercise
or acquisition of stock under the Stock Award; or (3) delivering to the Company
owned and unencumbered shares of the common stock of the Company.
(f) Throughout the term of any Option, the Company shall deliver to the
holder of such Option, not later than one hundred twenty (120) days after the
close of each of the Company's fiscal years during the Option term, (i) a
balance sheet and income statement for the preceding year; and (ii) any other
information regarding the Company as comprises the annual report to the
stockholders of the Company provided for in the bylaws of the Company.
(g) Any stock of the Company that is received by an Optionee upon
exercise of an Option or that is purchased pursuant to this Plan by any
Employee, Director or Consultant shall be subject to a repurchase right in favor
of the Company, with the repurchase price to be equal to the original purchase
price of the stock, or to any other restriction the Board determines to be
appropriate provided, however, that the right to repurchase at the original
purchase price shall lapse at a minimum rate of twenty percent (20%) per year
over five (5) years from the date the Option was granted and such right shall be
exercised within ninety (90) days of termination of employment for cash or
cancellation of purchase money indebtedness for the shares.
13. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any Stock Award (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of
18.
<PAGE> 19
shares, change in corporate structure or otherwise), the Plan and outstanding
Stock Awards will be appropriately adjusted in the class(es) and maximum number
of shares subject to the Plan and the class(es) and number of shares and price
per share of stock subject to outstanding Stock Awards.
(b) In the event of: (1) a merger or consolidation in which the Company
is not the surviving corporation or (2) a reverse merger in which the Company is
the surviving corporation but the shares of the Company's common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or otherwise
then to the extent permitted by applicable law: (i) any surviving corporation
shall assume any Stock Awards outstanding under the Plan or shall substitute
similar Stock Awards for those outstanding under the Plan, or (ii) such Stock
Award shall continue in full force and effect. In the event any surviving
corporation refuses to assume or continue such Stock Awards, or to substitute
similar Stock Awards for those outstanding under the Plan, then such Stock
Awards shall be terminated if not exercised prior to such event. In the event of
a dissolution or liquidation of the Company, any Stock Awards outstanding under
the Plan shall terminate if not exercised prior to such event.
14. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 13 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) Increase the number of shares reserved for Stock Awards
under the Plan;
19.
<PAGE> 20
(ii) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422 of the
Code); or
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to satisfy the requirements
of Section 422 of the Code or to comply with the requirements of Rule 16b-3.
(b) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible
Employees, Directors or Consultants with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(c) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan unless (i) the Company requests the consent of the person to whom the Stock
Award was granted and (ii) such person consents in writing.
15. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on December 15, 2003, which shall be
within ten (10) years from the date the Plan is adopted by the Board or approved
by the stockholders of the Company, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.
20.
<PAGE> 21
(b) Rights and obligations under any Stock Award granted while the Plan
is in effect shall not be altered or impaired by suspension or termination of
the Plan, except with the consent of the person to whom the Stock Award was
granted.
16. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
Stock Awards granted under the Plan shall be exercised unless and until the Plan
has been approved by the stockholders of the Company within twelve (12) months
of the adoption of the Plan by the Board, and, if required, an appropriate
permit has been issued by the Commissioner of Corporations of the State of
California.
21.
<PAGE> 1
EXHIBIT 4.6
NOTICE OF EXERCISE
Century Analysis Inc.
114 Center Avenue
Pacheco, CA 94553 Date of Exercise:
--------------
Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase
the number of shares for the price set forth below.
Type of option (check one): Incentive [ ] Nonstatutory [ ]
Stock option dated:
-------------------------
Number of shares as
to which option is
exercised:
-------------------------
Certificates to be
issued in name of:
-------------------------
Total exercise price: $
------------------------
Cash payment delivered
herewith: $
------------------------
Promissory note delivered
herewith: $
------------------------
By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms of the 1996 Equity Incentive Plan, (ii) to
provide for the payment by me to you (in the manner designated by you) of your
withholding obligation, if any, relating to the exercise of this option, and
(iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any shares
of Common Stock issued upon exercise of this option that occurs within two (2)
years after the date of grant of this option or within one (1) year after such
shares of Common Stock are issued upon exercise of this option.
I hereby make the following certifications and representations with
respect to the number of shares of Common Stock of the Company listed above (the
"Shares"), which are being acquired by me for my own account upon exercise of
the Option as set forth above:
I acknowledge that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are deemed to constitute
"restricted securities" under Rule 701 and
1.
<PAGE> 2
"control securities" under Rule 144 promulgated under the Act. I warrant and
represent to the Company that I have no present intention of distributing or
selling said Shares, except as permitted under the Act and any applicable state
securities laws.
I further acknowledge that I will not be able to resell the Shares for
at least ninety days after the stock of the Company becomes publicly traded
(i.e., subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934) under Rule 701 and that more restrictive
conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the
Shares subject to the provisions of the Option shall have endorsed thereon
appropriate legends reflecting the foregoing limitations, as well as any legends
reflecting restrictions pursuant to the Company's Articles of Incorporation,
Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative
of the underwriters) in connection with the first underwritten registration of
the offering of any securities of the Company under the Act, I will not sell or
otherwise transfer or dispose of any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed
under the Act (the "Effective Date") as may be requested by the Company or the
representative of the underwriters. I further agree that the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
Very truly yours,
---------------------------------------
2.
<PAGE> 1
EXHIBIT 4.7
IS UNLAWFUL TO CONSUMMATE A SALE OR
TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY
CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S
RULES.
INCENTIVE STOCK OPTION
_____________, Optionee:
CENTURY ANALYSIS INC. (the "Company"), pursuant to its 1996 Equity
Incentive Plan (the "Plan"), has granted to you, the optionee named above, an
option to purchase shares of the common stock of the Company ("Common Stock").
This option is intended to qualify as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants and is intended to comply with
the provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"). Defined terms not
explicitly defined in this agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of
shares of Common Stock subject to this option is ______________.
2. VESTING. Subject to the limitations contained herein, _______ of the
shares will vest (become exercisable) on ______________ and ________ of the
shares will then vest each year thereafter until either (i) you cease to provide
services to the Company for any reason, or (ii) this option becomes fully
vested.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) EXERCISE PRICE. The exercise price of this option is ___________
per share, being not less than the fair market value of the Common Stock on the
date of grant of this option.
(b) METHOD OF PAYMENT. Payment of the exercise price per share is
due in full upon exercise of all or any part of each installment which has
accrued to you. You may elect, to the extent permitted by applicable statutes
and regulations, to make payment of the exercise price under one of the
following alternatives:
1.
<PAGE> 2
(i) Payment of the exercise price per share in cash (including
check) at the time of exercise; or
(ii) Payment pursuant to a program developed under Regulation T
as promulgated by the Federal Reserve Board which, prior to the issuance of
Common Stock, results in either the receipt of cash (or check) by the Company or
the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds.
4. WHOLE SHARES. This option may not be exercised for any number of
shares which would require the issuance of anything other than whole shares.
5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, this option may not be exercised unless the shares issuable
upon exercise of this option are then registered under the Act or, if such
shares are not then so registered, the Company has determined that such exercise
and issuance would be exempt from the registration requirements of the Act.
6. TERM. The term of this option commences on _____________, the date
of grant, and expires on _______________ (the "Expiration Date," which date
shall be no more than ten (10) years from the date this option is granted),
unless this option expires sooner as set forth below or in the Plan. In no event
may this option be exercised on or after the Expiration Date. This option shall
terminate prior to the Expiration Date as follows: three (3) months after the
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or an Affiliate of the Company unless one of the following
circumstances exists:
(a) Your termination of Continuous Status as an Employee, Director
or Consultant is due to your permanent and total disability. This option will
then expire on the earlier of the Expiration Date set forth above or twelve (12)
months following such termination of Continuous Status as an Employee, Director
or Consultant. You should be aware that if your disability is not considered a
permanent and total disability within the meaning of Section 422(c)(6) of the
Code, and you exercise this option more than three (3) months following the date
of your termination of employment, your exercise will be treated for tax
purposes as the exercise of a "nonstatutory stock option" instead of an
"incentive stock option."
(b) Your termination of Continuous Status as an Employee, Director
or Consultant is due to your death or your death occurs within three (3) months
following your termination of Continuous Status as an Employee, Director or
Consultant for any other reason. This option will then expire on the earlier of
the Expiration Date set forth above or twelve (12) months after your death.
(c) If during any part of such three (3) months period you may not
exercise your option solely because of the condition set forth in paragraph 5
above, then your option will not expire until the earlier of the Expiration Date
set forth above or until this option shall have been exercisable for an
aggregate period of three (3) months after your termination of Continuous Status
as an Employee, Director or Consultant.
2.
<PAGE> 3
(d) If your exercise of the option within three (3) months after
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or with an Affiliate of the Company would result in liability
under section 16(b) of the Securities Exchange Act of 1934, then your option
will expire on the earlier of (i) the Expiration Date set forth above, (ii) the
tenth (10th) day after the last date upon which exercise would result in such
liability or (iii) six (6) months and ten (10) days after the termination of
your Continuous Status as an Employee, Director or Consultant with the Company
or an Affiliate of the Company.
However, this option may be exercised following termination of Continuous Status
of an Employee, Director or Consultant only as to that number of shares as to
which it was exercisable on the date of termination of Continuous Status of an
Employee, Director or Consultant under the provisions of paragraph 2 of this
option.
In order to obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or an
Affiliate of the Company, except in the event of your death or permanent and
total disability. The Company has provided for continued vesting or extended
exercisability of your option under certain circumstances for your benefit, but
cannot guarantee that your option will necessarily be treated as an "incentive
stock option" if you provide services to the Company or an Affiliate of the
Company as a consultant or exercise your option more than three (3) months after
the date your employment with the Company and all Affiliates of the Company
terminates.
7. REPRESENTATIONS. By executing this option agreement, you hereby
warrant and represent that you are acquiring this option for your own account
and that you have no intention of distributing, transferring or selling all or
any part of this option except in accordance with the terms of this option
agreement and Section 25102(f) of the California Corporations Code. You also
hereby warrant and represent that you have either (i) preexisting personal or
business relationships with the Company or any of its officers, directors or
controlling persons, or (ii) the capacity to protect your own interests in
connection with the grant of this option by virtue of the business or financial
expertise of any of your professional advisors who are unaffiliated with and who
are not compensated by the Company or any of its affiliates, directly or
indirectly.
8. EXERCISE.
(a) This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require pursuant to the Plan.
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any exercise of this
option, the Company may require you to enter an arrangement providing for the
payment by you to the
3.
<PAGE> 4
Company of any tax withholding obligation of the Company arising by reason of
(A) the exercise of this option; (B) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or (C) the
disposition of shares acquired upon such exercise;
(ii) you will notify the Company in writing within fifteen (15)
days after the date of any disposition of any of the shares of the Common Stock
issued upon exercise of this option that occurs within two (2) years after the
date of this option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of this option; and
(iii) 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 you not sell or otherwise
transfer or dispose of any shares of Common Stock 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 the registration
statement of the Company filed under the Act as may be requested by the Company
or the representative of the underwriters. You further agree that the Company
may impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such period.
9. TRANSFERABILITY. This option is not transferable, except by will or
by the laws of descent and distribution, and is exercisable during your life
only by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise this
option.
10. OPTION NOT A SERVICE CONTRACT. This option is not an employment
contract and nothing in this option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company,
or of the Company to continue your employment with the Company. In addition,
nothing in this option shall obligate the Company or any Affiliate of the
Company, or their respective, shareholders, Board of Directors, officers or
employees to continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
11. NOTICES. Any notices provided for in this option or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after deposit
in the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you hereafter designate by written
notice to the Company.
12. GOVERNING PLAN DOCUMENT. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its provisions
are hereby made a part of this option, including without limitation the
provisions of Section 6 of the Plan relating to option provisions, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of this option and those of the
Plan, the provisions of the Plan shall control.
4.
<PAGE> 5
Dated the ___________ day of ________________________, 19_____.
Very truly yours,
CENTURY ANALYSIS INC.
By
-------------------------------------
Duly authorized on behalf of the
Board of Directors
ATTACHMENTS:
Century Analysis Inc. 1996 Equity Incentive Plan
Regulation 260.141.11
Notice of Exercise
5.
<PAGE> 6
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it
sets forth the entire understanding between the undersigned optionee and the
Company and its Affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the undersigned
under stock option plans of the Company, and (ii) the following agreements only:
NONE
---------------
(Initial)
OTHER
---------------------------------------------
---------------------------------------------
---------------------------------------------
(c) Acknowledges receipt of a copy of Section 260.141.11 of Title 10
of the California Code of Regulations.
---------------------------------------
OPTIONEE
Address:
----------------------------
----------------------------
6.
<PAGE> 1
EXHIBIT 5.1
December 1, 1998
New Era of Networks, Inc.
7400 East Orchard Road, Suite 230
Englewood, CO 80111
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by New Era of Networks, Inc., a Delaware
corporation (the "Registrant" or "you"), with the Securities and Exchange
Commission on or about December 1, 1998, in connection with the registration
under the Securities Act of 1933, as amended, of an aggregate of 51,475 shares
of your Common Stock, $.0001 par value (the "Shares"), outstanding or reserved
for issuance pursuant to the Century Analysis Inc. 1996 Equity Incentive Plan
(the "Plan"). As your legal counsel, we have reviewed the actions proposed to be
taken by you in connection with the proposed sale and issuance of the Shares by
the Registrant under the Plan. We assume that the consideration received by you
in connection with each issuance of Shares will include an amount in the form of
cash, services rendered or property that exceeds the greater of (i) the
aggregate par value of such Shares or (ii) the portion of such consideration
determined by the Company's Board of Directors to be "capital" for purposes of
the Delaware General Corporation Law.
It is our opinion that, upon completion of the proceedings being taken,
or contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares pursuant to the Registration Statement and the Plan, including the
proceedings being taken in order to permit such transaction to be carried out in
accordance with applicable state securities laws, the Shares, when issued and
sold in the manner described in the Registration Statement and in accordance
with the resolutions adopted by the Board of Directors of the Company, will be
legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our report dated January
27, 1998 included in the New Era of Networks, Inc. Form 10-K for the year ended
December 31, 1997 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Denver, Colorado
December 1, 1998
