<PAGE>
As filed with the Securities and Exchange Commission on April __, 2000
Registration No. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------
PEREGRINE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-3773312
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
12670 High Bluff Drive
San Diego, California 92130
(858) 481-5000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
BARNHILL MANAGEMENT GROUP, INC.
Amended and Restated 1998 Stock Option Plan
(Full title of the plan(s))
-------------------
ERIC P. DELLER
Vice President and General Counsel
Peregrine Systems, Inc.
12670 High Bluff Drive
San Diego, Ca 92130
(858) 481-5000
(Name, address, and telephone number, including area code, of
agent for service)
-------------------
COPY TO:
CHARLES D. MAGUIRE, JR.
Holme Roberts & Owen LLP
1700 Lincoln Street
Suite 4100
Denver, Colorado 80203
(303) 871-6000
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE FEE
---------- ------------ ------------ --------------- ------------
<S> <C> <C> <C> <C>
Common Stock $0.001 par
value, to be issued under the
Barnhill Management Group,
Inc. Amended and Restated
1998 Stock Option Plan 81,460 Shares $22.047 $1,795,948.60 $474.13
- --------------------------------------------------------------------------------------------------------------
TOTAL 81,460 Shares $22.047 $1,795,948.60 $474.13
==============================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457(h) promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), solely for
the purpose of computing the amount of the registration fee based on the
weighted average exercise price of $22.047 per share covering the
authorized but unissued shares under the Barnhill Management Group, Inc.
Amended and Restated 1998 Stock Option Plan.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Peregrine Systems, Inc. (the "Company") hereby incorporates by
reference in this registration statement the following documents:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 1999 filed pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1999 filed pursuant to Section 13 of the
Exchange Act.
(c) The Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1999 filed pursuant to Section 13 of the
Exchange Act.
(d) The Company's Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 1999 filed pursuant to Section 13 of the
Exchange Act.
(e) The Company's Current Report on Form 8-K/A filed pursuant
to Section 13 of the Exchange Act on May 11, 1999.
(f) The Company's Current Report on Form 8-K/A filed pursuant
to Section 13 of the Exchange Act on May 18, 1999.
(g) The Company's Current Report on Form 8-K filed pursuant to
Section 13 of the Exchange Act on December 21, 1999.
(h) The Company's Current Report on Form 8-K filed pursuant to
Section 13 of the Exchange Act on April 6, 2000.
(i) The description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A filed March 7, 1997 pursuant to
Section 12(g) of the Exchange Act.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15 of the Exchange Act, prior to the filing of a
post-effective amendment to this registration statement which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
II-1
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits a
corporation to include in its charter documents and in agreements between the
corporation and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by current law.
Article IX of the Registrant's Amended and Restated
Certificate of Incorporation provides for the indemnification of directors to
the fullest extent permissible under Delaware law.
Article VI of the Registrant's Bylaws provides for the
indemnification of officers, directors and third parties acting on behalf of the
corporation to the fullest extend permissible under General Corporation Law of
Delaware.
The Registrant has entered into indemnification agreements
with its directors and executive officers, in addition to the indemnification
provided for in the Registrant's Bylaws, and intends to enter into
indemnification agreements with any new directors and executive officers in the
future.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed 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.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
5.1 Opinion of Holme Roberts & Owen LLP
10.25 Barnhill Management Group, Inc.
Amended and Restated 1998 Stock
Option Plan
23.1 Consent of Arthur Andersen, LLP,
Independent Public Accountants
(relating to financial statements of
Peregrine Systems, Inc.)
23.2 Consent of Counsel (included in
Exhibit 5.1)
II-2
<PAGE>
24.1 Power of Attorney (See page II-5)
ITEM 9. UNDERTAKINGS
(a) RULE 415 OFFERING
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
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;
(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) FILING INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY
REFERENCE
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 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 therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) REQUEST FOR ACCELERATION OF EFFECTIVE DATE OR FILING OF
REGISTRATION STATEMENT ON FORM S-8
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
II-3
<PAGE>
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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on this 19th day of
April 2000.
PEREGRINE SYSTEMS, INC.
By: /s/ DAVID A. FARLEY
------------------------------------
David A. Farley
Senior Vice President, Finance and
Administration and Chief Financial Officer
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David A. Farley and Richard T. Nelson,
and each of them, as his or her attorney-in-fact, with full power of
substitution in each, for him or her in any and all capacities to sign any
amendments to this Registration Statement on Form S-8, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact, or his substitutes, may 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:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ STEPHEN P. GARDNER President and Chief Executive Officer April 19, 2000
- ----------------------- (Principal Executive Officer) and Director
Stephen P. Gardner
/s/ DAVID A. FARLEY Senior Vice President, Finance and April 19, 2000
- ----------------------- Administration and Chief Financial Officer
David A. Farley (Principal Financial Officer) and Director
/s/ JOHN J. MOORES Chairman of the Board of Directors April 19, 2000
- ----------------------
John J. Moores
/s/ CHRISTOPHER A. COLE Director April 19, 2000
- ------------------------
Christopher A. Cole
/s/ RICHARD A. HOSLEY, II Director April 19, 2000
- --------------------------
Richard A. Hosley, II
/s/ CHARLES E. NOELL, III Director April 19, 2000
- --------------------------
Charles E. Noell, III
/s/ NORRIS VAN DEN BERG Director April 19, 2000
- ------------------------
Norris Van Den Berg
/s/ THOMAS G. WATROUS, SR. Director April 19, 2000
- --------------------------
Thomas G. Watrous, Sr.
/s/ MATTHEW GLESS Principal Accounting Officer April 19, 2000
- ---------------------------
Matthew Gless
</TABLE>
II-6
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF HOLME ROBERTS AND OWEN]
Peregrine Systems, Inc.
12670 High Bluff Drive
San Diego, CA 92130
Re: PEREGRINE SYSTEMS, INC., (the "Company")
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about April 19, 2000 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, for an aggregate of 81,460 shares of your
Common Stock issuable under the Barnhill Stock Option Plan. Such shares of
Common Stock are referred to herein as "the Shares," and the plan is referred to
herein as "the Plan." As your counsel in connection with this transaction, we
have examined the proceedings taken and are familiar with the proceedings
proposed to be taken by you in connection with the issuance and sale of the
Shares pursuant to the Plan.
It is our opinion that, when issued and sold in the manner described in
the Plan and pursuant to the agreements which accompany each grant under the
Plan, the Shares 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,
Holme Roberts & Owen LLP
<PAGE>
EXHIBIT 10.25
AMENDED AND RESTATED
1998 STOCK OPTION PLAN OF
BARNHILL ASSOCIATES, INC.
1. INTRODUCTION AND PURPOSE. The purpose of this Plan is to advance the
interests of the Corporation by encouraging and enabling the acquisition of a
proprietary interest in the Corporation by Eligible Participants upon whose
judgment and keen interest the Corporation is largely dependent for the
successful conduct of their operations. It is anticipated that the acquisition
of such proprietary interest in the Corporation will stimulate the efforts of
such Eligible Participants on behalf of the Corporation and its Subsidiaries,
and strengthen their desire to continue their relationship with the Corporation
and its Subsidiaries. It is also expected that the opportunity to acquire such a
proprietary interest will foster the efforts of the Corporation and its
Subsidiaries to attract desirable personnel.
2. DEFINITIONS. When used in this Plan, unless the context otherwise
requires:
"Board of Directors" or "Board" means the Board of Directors
of the Corporation as constituted at any time.
"Common Stock" means the no par value common stock of the
Corporation, including both treasury shares and authorized but unissued shares,
or any security of the Corporation issued in substitution, exchange or in lieu
thereof.
"Corporation" means Barnhill Associates, Inc., a Colorado
corporation.
"Eligible Participant" means any employee, officer, director
or independent contractor of the Corporation designated to receive Options
pursuant to this Plan, as provided in Section 4.
"Fair Market Value" on a specified date means (i) the closing
price at which a Share is traded on such date if the Shares are listed as a
National Market security on The Nasdaq Stock Market or on any other national
securities exchange on which Shares are primarily traded; or (ii) if the Shares
are not so quoted on such date, then the average of the bid and asked closing
prices for Shares on the over-the-counter market, as reported by The Nasdaq
Stock Market; but if no quotes exist for such date, then on the last previous
date on which such quotes were available for Shares, or (iii) if none of the
above is applicable, the value of a Share, as established by the Board for such
date using any reasonable method of valuation taking into consideration the
following factors: the company's net worth, prospective earning power,
dividend-paying capacity, the goodwill of the business, the economic outlook of
the industry and the company's position in the industry and its management. The
preceding measure of Fair Market Value is solely for the purpose of determining,
in good faith, the Fair Market Value when issuing Incentive Stock Options under
this Plan. This formula for determining Fair Market Value shall
2
<PAGE>
not apply to the determination of fair market value of Shares pursuant to the
Shareholders' Agreement (as hereinafter defined).
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor thereto.
"Issue Date" means the date designated by the Board with
reference to which the exercisability of an Eligible Participant's Options may
be determined in accordance with Section 6 hereof. Unless otherwise designated
by the Board, the Issue Date of an Option shall be the date that the Option is
awarded to the Eligible Participant.
"Non-Eligible Participant" means anyone other than an Eligible
Participant, as provided in Section 4.
"Options" means the stock options granted pursuant to this
Plan.
"Plan" means this Amended and Restated 1998 Stock Option Plan,
as amended from time to time.
"Rule 16b-3" means Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, or any successor thereto.
"Securities Exchange Act of 1934" means the Securities
Exchange Act of 1934, as amended from time to time, or any successor thereto.
"Share" means a share of Common Stock of the Corporation.
"Shareholders' Agreement" means that certain Shareholders'
Agreement dated as of December 1, 1998 by and among Barnhill Associates, Inc., a
Colorado corporation and the holders of capital stock or options to purchase
capital stock of Barnhill Associates, Inc.
3. ADMINISTRATION OF THE PLAN. The Board shall have the authority to
administer the Plan as provided herein and, in exercising this authority, shall
establish such rules and procedures as the Board deems necessary or advisable to
administer the Plan.
4. PARTICIPANTS. Except as otherwise provided herein, the class of
individuals who are potential recipients of Options to be granted under this
Plan are the Eligible Participants who, in the sole discretion of the Board,
contribute significantly to the success of the Corporation and/or any of its
Subsidiaries. The Eligible Participants to whom Options are granted under this
Plan and the number of Shares subject to each such Option shall be determined by
the Board in its sole discretion, in accordance with the terms and conditions of
this Plan.
5. NUMBER OF SHARES ISSUABLE. The Board may, but shall not be required
to, issue in accordance with this Plan Options to purchase an aggregate of up to
three million five hundred thousand (3,500,000) Shares (subject to adjustment
for stock splits, stock dividends and other
3
<PAGE>
share adjustments described in Section 10 hereof), which Shares may be either
treasury Shares or authorized but unissued Shares.
6. STOCK OPTIONS.
6.1. GRANT AND VESTING OF OPTIONS. Except as otherwise
provided in this Plan, Options granted pursuant to this Plan shall become
exercisable in three annual installments on the first three anniversaries of the
Issue Date of such Options; provided, however, that the Board may in its
discretion specify upon the Option grant and with respect to all or any portion
of the Shares subject to such Options, immediate exercisability or
exercisability vesting over a shorter or longer period in any particular case if
the Option Certificate, as that term is defined herein, evidencing the Option
grant contains such alternative vesting provisions.
Options granted under this Plan may be either non-qualified
stock options or, with respect to Eligible Participants who are employees of the
Corporation, incentive stock options within the meaning of Section 422 of the
Internal Revenue Code. An Option granted under this Plan shall be deemed to be a
non-qualified stock option unless the Board, in its sole discretion, designates
otherwise. Options which are designated or deemed not to be incentive stock
options shall not be treated as such for purposes of this Plan or the Internal
Revenue Code.
The terms of any Option granted to an Eligible Participant
shall, subject to the other terms and provisions of this Plan, be conclusively
determined by the Board, in its sole discretion, at or before the time of grant.
The terms and provisions of the Option shall be set forth in a writing (such
writing being hereinafter referred to as the "Option Certificate") signed on
behalf of the Corporation by the President, any Vice President or the Treasurer
of the Corporation. The Option Certificate shall state whether the Option is an
incentive stock option or a non-qualified stock option. At the time an Option is
granted, the Board may, in its sole discretion, establish one or more conditions
to the exercise of such Option, provided that if such Option is designated as an
incentive stock option, then such condition or conditions shall not be
inconsistent with Section 422 of the Internal Revenue Code. Nothing contained
herein shall be construed to prohibit the grant of Options at different times to
the same Eligible Participant.
6.2. PRICE. Except as otherwise provided herein, the exercise
price per Share of the Shares subject to purchase pursuant to any Option shall
be fixed by the Board at the time an Option is granted and may be less than,
equal to, or greater than the Fair Market Value of the Common Stock on the date
such Option is granted; provided, however, that if the Option is an incentive
stock option, in no event shall the price be less than the Fair Market Value of
a Share on the day on which the Option is granted (110% of the Fair Market Value
of a Share on such date if the grantee is a greater than 10% shareholder within
the meaning of Section 422(b)(6) of the Internal Revenue Code).
6.3. DURATION OF OPTIONS. The duration of any Option granted
under this Plan shall be for a period fixed by the Board, in its sole
discretion, but no more than 10 years from the date upon which the Option is
granted.
4
<PAGE>
6.4. OPTION HOLDER NOT A SHAREHOLDER. An Option holder shall
not be deemed to be the holder of, or to have any rights of a shareholder with
respect to, any Shares subject to such Option, unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Corporation
shall have issued and delivered Shares to the Option holder, (iii) said holder
shall have entered into that certain Shareholders' Agreement, as defined in
Section 2, evidenced by the execution of a counterpart signature page thereto,
and (iv) said holder's name shall have been entered as a shareholder of record
on the books of the Corporation. Thereupon, said holder shall have full voting,
dividend and other ownership rights with respect to such Shares.
6.5. NON-TRANSFERABILITY OF OPTIONS. Options and all rights
thereunder shall be non-transferable and non-assignable by the holder thereof.
6.6. EXERCISE OF OPTIONS. Except as otherwise provided herein,
an Option, after the grant thereof in accordance with the provisions of this
Plan, shall be exercisable by the holder thereof at such rate and at such time
or times as may be fixed by the Board at the time the Option is granted,
provided, however, that no Option granted to an officer or 10% beneficial
holder, as defined in Rule 16a-1(a) of the Securities Exchange Act of 1934,
shall be exercised earlier than six months from the date such Option is granted
(unless otherwise permitted under the Securities Exchange Act of 1934), and,
provided further, that no Option may be exercised in part or in full prior to
the approval of the Plan by a majority vote of the shareholders of the
Corporation as provided in Section 15 hereof.
Notwithstanding any other provisions of this Plan, any Option
granted under the Plan that is an incentive stock option shall not be
exercisable to the extent that the Fair Market Value of the Shares (determined
as of the date of grant), with respect to which such Option (and any other
incentive stock option granted to the holder under this Plan or any other stock
option plan maintained by the Corporation or any Subsidiary) first becomes
exercisable in any calendar year, exceeds $100,000.
An Option shall be exercised by the delivery of a written
notice duly signed by the Option holder (or the representative of the estate or
the heirs of a deceased Option holder), together with (i) cash, (ii) a certified
check payable to the order of the Corporation, (iii) Shares duly endorsed over
to the Corporation (which Shares shall have been owned by the Option holder for
at least six months prior to such exercise and, for purposes of this paragraph,
be valued at their Fair Market Value as of the date preceding the day of such
exercise), (iv) written direction to an authorized broker to sell the Shares
purchased pursuant to such exercise immediately for the account of the Option
holder and pay an appropriate portion of the proceeds thereof to the
Corporation, or (v) any combination of such methods of payment that together
amount to the full exercise price of the Shares purchased pursuant to the
exercise of the Option plus the amount, if any, of any applicable taxes which
the Corporation is required to withhold. Such notice and payment shall be
delivered to the Treasurer or Secretary of the Corporation, or to any other
person designated by the Corporation, in a written notice from the Option holder
(the "Authorized Representative").
5
<PAGE>
No Option may be granted or exercised pursuant to the
provisions hereof when such Option, or the granting or exercise thereof, may
result in the violation of any law or governmental order or regulation.
Within a reasonable time after the exercise of an Option, the
Corporation shall cause to be delivered to the person entitled thereto a
certificate for the Shares purchased pursuant to the exercise of the Option. If
the Option shall have been exercised with respect to less than all of the Shares
subject to such Option, the Corporation shall (i) cause to be delivered to the
person entitled thereto a new Option Certificate in replacement of the Option
Certificate surrendered at the time of the exercise of the Option, indicating
the number of Shares with respect to which the Option remains available to
exercise, or (ii) endorse the original Option Certificate to give effect to the
partial exercise thereof.
An Option that is an incentive stock option granted pursuant
hereto shall be exercisable by an Eligible Participant only if such employee has
been in the employ of the Corporation or its Subsidiaries at all times during
the period beginning on the date such Option was granted and ending three months
before the date of such exercise (or twelve months before the date of exercise
in the case of death or disability, as set forth below in Section 6.9).
6.7. SPECIAL LIMITATIONS ON EXERCISE OF INCENTIVE STOCK
OPTIONS. The aggregate Fair Market Value (determined at the time the Incentive
Stock Option is granted) of the Shares with respect to which any Incentive Stock
Option is first exercisable during any calendar year shall not exceed $100,000.
6.8. LIMITS ON DISPOSITION - INCENTIVE STOCK OPTIONS. If the
Option is an incentive stock option, no Shares acquired pursuant to the exercise
of an Option granted herein may be sold, exchanged, gifted or otherwise disposed
of within two years following the date such Option was granted or one year
following the date such Option was exercised, whichever is later.
6.9. TERMINATION OF SERVICES. All or any part of any Option,
to the extent unexercised, shall terminate immediately if the Option holder
ceases to be an employee, director or independent contractor of the Corporation;
except that the Option holder shall have until the end of three months,
following the date he or she ceases to be an employee, director or independent
contractor of the Corporation or any of its Subsidiaries to exercise any
exercisable Option rights that he or she could have exercised on the day on
which such employment or service terminated; provided, however, that such
exercise must be accomplished prior to the expiration of the term of such
Option.
Notwithstanding the foregoing, if an individual ceases to be an
employee, director or independent contractor of the Corporation due to (i)
retirement on or after attaining the age of 65 years (or such earlier date as
such person shall be permitted under the Corporation's retirement plan), (ii)
disability (as such term is defined in Section 422(c)(6) of the Internal Revenue
Code, the existence of which shall be conclusively determined by the Board in
its sole discretion), (iii) death (iv) voluntary termination of employment by
such employee, director or independent contractor, or (v) termination of
employment by the Corporation other than for-cause, then the
6
<PAGE>
option holder, or the representative of the estate or the heirs of a deceased
Option holder, shall have the privilege of exercising such portion of the Option
as is then exercisable but that remains unexercised at the time of such
retirement, disability, death or termination, but only to the extent that such
exercisable portion of such Option is exercised (i) within three months
following the Option holder's retirement (extendible in the discretion of the
Board, for non-qualified Options, to six months), (ii) within one year following
the Option holder's disability, (iii) within three months following the Option
holder's death, as the case may be, (iv) within three months following the
Option holder's voluntary termination, or (v) within three months following the
Option holder's termination other than for-cause; provided, further, that such
exercise must be accomplished prior to the expiration of the term of such
Option. If an Option holder ceases to be an employee, director or independent
contractor of the Corporation or its Subsidiaries because of the Option holder's
violation of his or her duties to the Corporation and its Subsidiaries, the
existence of such violation to be conclusively determined by the Board in its
sole discretion, all unexercised Options of such Option holder shall immediately
terminate and such Option holder shall have no right to exercise any unexercised
Option he or she might have exercised prior to the date he or she ceased to be
an employee, director or independent contractor of the Corporation or its
Subsidiaries.
In the event that an Option holder's employment is terminated due to
any of the conditions described in this Section 6 and the Options are
transferred to anyone other than an Eligible Participant, including the
representative of the estate or the heirs of a deceased Option holder, if the
Non-Eligible Participant desires to exercise such options within the designated
time period, the Non-Eligible Participant shall do so in accordance with Section
6.6 of this Agreement. Simultaneous with the exercise of an Option by a
Non-Eligible Participant, the Corporation shall purchase from the Non-Eligible
Participant and the Non-Eligible Participant shall sell to the Corporation all
Shares of the Corporation held by the Non-Eligible Participant at Fair Market
Value in accordance with the terms contained within the Shareholders' Agreement.
When an Eligible Participant ceases to be an employee, director or
independent contractor of the Corporation, all Options held by such Eligible
Participant that are not then exercisable shall immediately lapse and be
canceled.
7. GOVERNING LAW. The Plan and all determinations made and actions
taken hereunder, to the extent not otherwise governed by the Internal Revenue
Code or laws of the United States of America, shall be governed by the laws of
the State of Colorado and construed accordingly.
8. FRACTIONAL SHARES. The Corporation shall not be required to issue
fractional Shares pursuant to this Plan and, accordingly, Eligible Participants
may be awarded or required to purchase only a whole Share or Shares.
9. NO RIGHTS OF EMPLOYMENT. Nothing contained herein or in any other
document contemplated hereby shall be construed to confer on any Eligible
Participant any right to continue in the employ or service of the Corporation or
its Subsidiaries or derogate from any right of the Corporation or its
Subsidiaries to request or demand, in its sole discretion, the
7
<PAGE>
retirement, resignation or discharge of such Eligible Participant, at any time,
with or without cause.
10. ADJUSTMENT OF SHARES.
(a) If the Corporation shall effect any subdivision or
consolidation of Shares or other capital readjustment, payment of stock
dividend, stock split, combination of shares or recapitalization or other
increase or reduction of the number of Shares outstanding without receiving
compensation therefor in money, services or property, then the Board shall
adjust (i) the number of Shares available under the Plan; (ii) the number of
Shares subject to outstanding Options (collectively referred to in this Section
10 as "Awards") and (iii) the per-Share price under any outstanding Award to the
extent that the Eligible Participant is required to pay a purchase price per
Share with respect to the Award.
(b) If the Corporation is reorganized, merged or consolidated
or is party to a plan of exchange with another corporation, pursuant to which
reorganization, merger, consolidation or plan of exchange, the shareholders of
the Corporation receive any shares of stock or other securities or property, or
the Corporation shall distribute securities of another corporation to its
shareholders, there shall be substituted for the shares subject to outstanding
Awards an appropriate number of Shares of each class of stock or amount of other
securities or property that were distributed to the shareholders of the
Corporation in respect of such shares, subject to the following:
(i) If the Board determines that the substitution
described in accordance with the foregoing provisions of this paragraph
(b) would not be fully consistent with the purposes of the Plan or the
purposes of the outstanding Awards under the Plan, the Board may make
such other adjustments to the Awards to the extent that the Board
determines such adjustments are consistent with the purposes of the
Plan and of the affected Awards.
(ii) All or any of the Awards may be canceled by the
Board on or immediately prior to the effective date of the applicable
transaction, but only if the Board gives reasonable advance notice of
the cancellation to each affected Eligible Participant, and only if
either: (A) the Eligible Participant is permitted to exercise the Award
for a reasonable period prior to the effective date of the
cancellation; or (B) the Eligible Participant receives payment or other
benefits that the Board determines to be reasonable compensation for
the value of the canceled Awards.
(iii) Upon the occurrence of a reorganization of the
Corporation or any other event described in this paragraph (b), any
successor to the Corporation shall be substituted for the Corporation
to the extent that the Corporation and the successor agree to such
substitution.
(iv) The Option Certificate issued to an Eligible
Participant specifies that the Options issued thereunder are to fully
vest effective as of the date of the applicable transaction.
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The foregoing provisions of this paragraph (b) shall
also apply to the sale of all or substantially all of the assets of the
Corporation to a related party, if the Board determines such
application is appropriate.
11. ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES LAWS. Before
issuing and delivering any Shares to an Eligible Participant, the Corporation
may: (i) require the Eligible Participant to give satisfactory assurances that
the Shares are being purchased for investment and not with a view to resale or
distribution, and will not be transferred in violation of applicable federal and
state securities laws, rules and regulations, including but not limited to Rule
144 promulgated under the Securities Act of 1933 and Section 16(b) of the
Securities Exchange Act of 1934, (ii) restrict the transferability of such
Shares and require a legend to be endorsed on the certificates representing the
Shares, as appropriate to reflect resale restrictions, if any, imposed by the
Board pursuant to the Option when granted, or as appropriate to comply with any
applicable state or federal securities laws, rules or regulations, and (iii)
condition the exercise of an Option or the issuance and delivery of Shares upon
the listing, registration or qualification of such Shares upon a securities
exchange or under applicable securities laws.
Any provision hereof that is inconsistent with Rule 16b-3 under the
Securities Exchange Act of 1934, as now or hereafter in effect, shall be
inoperative and shall not affect the validity of the Plan.
12. RESTRICTIONS ON TRANSFERS OF SHARES. Any holder desiring to sell
any or all of his Shares (the "Disposing Holder") issued pursuant to Options
should they be exercised hereunder must first offer to sell such Shares to the
Corporation and to the Continuing Shareholders (as that term is defined in the
Shareholders' Agreement) as follows:
(a) The Disposing Holder shall give written notice to the
Corporation and the Continuing Shareholders that such Disposing Holder desires
to sell some or all of his Shares and stating the number of Shares offered for
sale (the "Offered Shares"). A copy of such written outside offer shall then be
provided to the Corporation and to the Continuing Shareholders as a part of the
notice required under this paragraph.
(b) The Corporation shall have an option for thirty (30) days
after receipt of the notice described in paragraph (a) of this Section to elect
to purchase all or any part of the Offered Shares at the price and on the terms
specified in Article IV of the Shareholders' Agreement.
(c) If the Corporation's option under paragraph (b) of this
Section is not exercised in full, the Corporation shall notify the Continuing
Shareholders of the number of Shares not purchased (the "Remaining Shares") and
some or all of the Continuing Shareholders shall have options to purchase the
Remaining Shares in accordance with the Continuing Shareholder Purchase
Procedures (as set forth in Article III of the Shareholders' Agreement) and at
the price and on the terms specified in Article IV of the Shareholders'
Agreement.
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(d) All options granted pursuant to paragraphs (b) and (c) of
this Section and the exercise of such options are contingent upon the purchase
of all of the Offered Shares upon exercise thereof. In the event that all of the
Offered Shares are not so purchased, all options granted pursuant to paragraphs
(b) and (c) of this Section and any and all transfers of Shares made pursuant to
the exercise of such options shall be void and of no effect.
(e) An option may be exercised only by giving notice in
accordance with Section 5.5 of the Shareholders' Agreement to the Disposing
Holder and to the Continuing Shareholders or the Corporation, as the case may
be. Such notice shall specify the date of closing, which must be within the
period established in Section 4.3 of the Shareholders' Agreement.
(f) Any attempted transfer of Shares shall be void and of no
effect if conducted in violation of the provisions of this Section 12 or in a
manner that, in the reasonable judgment of the Corporation, would circumvent the
intention of this Section. The restrictions on transfer embodied in this Section
12 shall be contained in each Option Certificate issued to Eligible Participants
hereunder.
13. INCOME TAX WITHHOLDING. If the Corporation or its Subsidiaries
shall be required to withhold any amounts by reason of federal, state or local
tax laws, rules or regulations, in respect of the issuance of Shares pursuant to
the Plan, the Corporation or such Subsidiary shall be entitled to deduct and
withhold such amounts from any cash payments to be made to the Eligible
Participant (or Option holder, if different). In any event, such person shall
promptly make available to the Corporation or such Subsidiary, when requested by
the Corporation or such Subsidiary, sufficient funds to meet the requirements of
such withholding, and the Corporation or such Subsidiary shall be entitled to
take and authorize such steps as it may deem advisable in order to have such
funds made available to the Corporation or such Subsidiary from any funds or
property due or to become due to such person.
14. ADMINISTRATION AND AMENDMENT OF THE PLAN. Except as hereinafter
provided, the Board of Directors and the Board may, (a) at any time, withdraw
or, from time to time, amend the Plan as it relates to the terms and conditions
of any Options not theretofore granted, and (b) from time to time, amend the
Plan as it relates to the terms and conditions of any outstanding Option to the
extent such Option is not then exercisable. The Board of Directors and the
Board, with the consent of each adversely affected Option holder may, at any
time, withdraw or cancel any outstanding Option. Notwithstanding the foregoing,
any amendment that would increase the number of Shares issuable under the Plan
or change the class of persons to whom Options may be granted must be adopted by
the Board of Directors and approved by the shareholders of the Corporation
within one year following such amendment.
Determinations of the Board as to any question that may arise with
respect to the interpretation of the provisions of the Plan and Options shall be
final. The Board may authorize and establish such rules, regulations and
revisions thereof, not inconsistent with the provisions of the Plan, as it may
deem advisable to make the Plan and Options effective or provide for their
administration and may take such other action with regard to the Plan and
Options as it shall deem desirable to effectuate their purposes.
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15. EFFECTIVE DATE OF THE PLAN. This Plan was approved and adopted by
the Board of Directors of the Corporation on January 15, 1999, effective as of
such date, subject to the approval of the Plan by the shareholders of the
Corporation within twelve months following the adoption by the Board of
Directors. Such approval by the shareholders occurred on January 15, 1999.
The Plan shall remain in full force and effect until the close of
business on January 14, 2009 at which time the right to grant Options under the
Plan shall automatically terminate, unless the shareholders of the Corporation
approve an extension or renewal of the Plan for such new or additional term
agreed upon by the shareholders. Any Options granted before the termination of
the right to grant Options under the Plan shall continue to be governed
thereafter by the terms of the Plan.
16. SEVERABILITY. If any provision herein shall be held unlawful or
otherwise invalid or unenforceable in whole or in part, such unlawfulness,
invalidity or unenforceability shall not affect any other provision of the Plan
or part thereof, each of which shall remain in full force and effect. If the
making of any payment required under the Plan shall be held unlawful or
otherwise invalid or unenforceable, such unlawfulness, invalidity or
unenforceability shall not prevent any other payment from being made under the
Plan, and if the making of any payment in full, as required under the Plan,
would be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment from being made in
part, to the extent that it would not be unlawful, invalid, or unenforceable,
and the maximum payment that would not be unlawful, invalid or unenforceable
shall be made under the Plan.
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated April 26, 1999
included in Peregrine Systems, Inc.'s Form 10-K for the year ended March 31,
1999.
ARTHUR ANDERSEN LLP
San Diego, California,
April 24, 2000
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