<PAGE>
As filed with the Securities and Exchange Commission on December 8, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
ILOG S.A.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------------
REPUBLIC OF FRANCE NONE
- --------------------------------------------------------------------------------
(STATE OR OTHER (I.R.S. EMPLOYER
JURISDICTION OF IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
9, RUE DE VERDUN
94253 GENTILLY, FRANCE
(33-1) 49 08 35 00
(ADDRESS, INCLUDING ZIP CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------------
THE 1996 STOCK OPTION PLAN
THE 1998 STOCK OPTION PLAN
THE 1996 INTERNATIONAL EMPLOYEES STOCK PURCHASE PLAN
(FULL TITLE OF THE PLANS)
----------------------
STUART S. BAGSHAW
ILOG, INC.
1901 LANDINGS DRIVE
MOUNTAIN VIEW, CA 94043
(650) 390-9000
(NAME, ADDRESS, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPIES TO:
FRANCIS S. CURRIE, ESQ.
ANTON T. COMMISSARIS, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF SECURITIES OFFERING PRICE PER MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED AMOUNT TO BE REGISTERED SHARE (1) OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Ordinary shares, nominal value four
French francs per share............... 2,074,172 (2) $ 8.79 (3) $ 18,231,971.88 (4) $ 5,068.49
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Ordinary shares, nominal value four
French francs per share............... 25,828 (5) $ 9.81 (11) $ 253,372.68 (6) $ 70.44
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Ordinary shares, nominal value four
French francs per share............... 572,300 (7) $ 7.75 (3) $ 4,435,325.00 (8) $ 1,233.02
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Ordinary shares, nominal value four
French francs per share............... 427,700 (9) $ 9.81 (11) $ 4,195,737.00 (10) $ 1,166.41
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</TABLE>
- 1 -
<PAGE>
<TABLE>
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<S> <C> <C> <C> <C>
Ordinary shares, nominal value four
French francs per share............... 200,000 (12) $ 9.81 (11) $ 1,962,000 (13) $ 545.44
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TOTAL 3,300,000 $ 45.97 $ 29,078,406.56 $ 8,083.80
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</TABLE>
(1) Amounts represented on an as converted basis from French francs to U.S.
dollars. The Noon Buying Rate for the French franc used for such
conversion was 5.689 francs per U.S. dollar on November 30, 1998.
(2) For the sole purpose of calculating the registration fee, the number of
shares to be registered under this Registration Statement has been broken
down into subtotals. This subtotal represents the 2,074,172 shares
issuable upon exercise of outstanding options (options that have been
granted as of the date of this Registration Statement) issued under the
1996 Stock Option Plan.
(3) Estimated in accordance with Rule 457(h) under the Securities Act of 1933
solely for the purpose of calculating the total registration fee.
Computation based on the weighted average exercise price (rounded to the
nearest cent) at which the options whose exercise will result in the
issuance of the shares being registered may be exercised.
(4) Calculated in accordance with Rule 457(h) based on the aggregate exercise
price for all presently outstanding options described in Note 2 above.
(5) This subtotal represents the 25,828 shares issuable upon exercise of
options that have been reserved for issuance but have not been granted
under the 1996 Stock Option Plan.
(6) Calculated in accordance with Rule 457(c) based upon the closing price of
the Company's shares as reported on the Nasdaq National Market on
December 1, 1998 because the price at which they may be exercised in the
future is not currently determinable.
(7) This sub-total represents the 572,300 shares issuable upon exercise of
outstanding options (options that have been granted as of the date of
this Registration Statement) issued under the 1998 Stock Option Plan.
(8) Calculated in accordance with Rule 457(h) based on the aggregate exercise
price for all presently outstanding options described in Note 7 above.
(9) This sub-total represents the 427,700 shares issuable upon exercise of
options that have been reserved for issuance but have not been granted
under the 1998 Stock Option Plan.
(10) Calculated in accordance with Rule 457(c) based upon the closing price
of the Company's shares as reported on the Nasdaq National Market on
December 1, 1998 because the price at which they may be exercised in the
future is not currently determinable.
(11) Estimated in accordance with Rule 457(c) under the Securities Act of 1933
solely for the purpose of calculating the registration fee. The
computation is based upon the closing price of the Company's shares as
reported on the Nasdaq National Market on December 1, 1998 because the
price at which they may be exercised in the future is not currently
determinable.
(12) This subtotal represents the 200,000 shares issuable under the 1996
International Employee Stock Purchase Plan.
(13) Calculated in accordance with Rule 457(c) based upon the closing price of
the Company's shares as reported on the Nasdaq National Market on
December 1, 1998 because the price at which they may be exercised in the
future is not currently determinable.
- 2 -
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference the following
documents and information heretofore filed with the Securities and Exchange
Commission (the "Commission"):
Item 3(a).
The Company's Annual Report on Form 20-F for the fiscal year
ended June 30, 1998 filed pursuant to Section 13(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") on October 1, 1998.
Item 3(b).
The Company's Quarterly Report on Form 6-K filed pursuant to
Section 13(a) of the Exchange Act on November 9, 1998.
Item 3(c).
The description of Registrant's Ordinary Shares to be offered
hereby contained in the Company's Registration Statement on Form F-1, as
declared effective by the Commission on February 13, 1997, filed pursuant to
Section 12 of the Exchange Act and any amendment or report filed for the purpose
of updating such description.
All documents, reports and definitive proxy or information
statements subsequently filed by 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 have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be part hereof
from the date of filing such documents.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
French Law prohibits the Company from entering into
indemnification agreements with its directors and officers providing for
limitations on personal liability for damages and other costs and expenses that
may be incurred by directors and officers arising out of or related to acts or
omissions in such capacity. French Law also prohibits the STATUTS of the Company
from providing for limitation of liability of a member of
- 1 -
<PAGE>
the Board of Directors. Generally, under French Law, directors and officers will
not be held personally liable for decisions taken diligently and in the
corporate interest of the Company.
The Company has contracted with respect to each of its directors,
officers and other members of senior management designated by the Board of
Directors, for liability insurance against liabilities that may be incurred by
such persons in their respective capacities, including liabilities that may be
incurred under the U.S. federal and state securities laws, subject to certain
limitations. The Company believes that entering into such agreements and
maintaining appropriate liability insurance for its directors and officers will
assist the Company in attracting and retaining qualified individuals to serve as
directors and officers.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Document
----------------------------------------
<C> <S>
4.1(a)* The 1996 Stock Option Plan
4.1(b) The 1998 Stock Option Plan
4.1(c)* The 1996 International Employee Stock Purchase Plan
5.1 Opinion of Stibbe Simont Monahan Duhot & Giroux
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (see page II-4)
</TABLE>
- ------------------------
*Incorporated by reference to exhibits 10.3, 10.4 and 10.5 filed with the
Company's Registration Statement on Form F-1 (file No. 333-6322), which was
declared effective on February 13, 1997.
Item 9. UNDERTAKINGS.
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 this
registration statement or any material change to such
information in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered 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 post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
- 2 -
<PAGE>
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 this 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
- 3 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
ILOG S.A., 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 Gentilly, Republic of France, on this 7th day of
December, 1998.
ILOG S.A.
By: /s/ Pierre Haren
------------------------------------------
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each such person whose signature
appears below constitutes and appoints, jointly and severally, Pierre Haren and
Roger Friedberger, his or her attorneys-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Registration Statement on Form S-8 (including post-effective
amendments), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or 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 on Form S-8 has been signed by the following persons
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------------------------------------------------------------------------------
/s/ Pierre Haren Chairman, President and December 7, 1998
------------------------------ Chief Executive Officer
Pierre Haren
/s/ Roger Friedberger Chief Financial Officer December 7, 1998
------------------------------
Roger Friedberger
------------------------------ Chief Technology Officer December __, 1998
Patrick Albert
/s/ Stuart Bagshaw Chief Operating Officer December 3, 1998
------------------------------
Stuart Bagshaw
Director and Technology December __, 1998
------------------------------ Fellow
Dr. Robert Bixby
/s/ Todd Lowe Director and Executive December 3, 1998
------------------------------ Vice President, CPLEX and
Todd Lowe ILOG Direct
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<PAGE>
SIGNATURE TITLE DATE
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/s/ Jean Pommier Vice President, Worldwide December 4, 1998
------------------------------ Professional Services
Jean Pommier
/s/ William Scull Vice President of December 7, 1998
------------------------------ Worldwide Marketing
William Scull
/s/ Edouard Efira Executive Vice President, December 3, 1998
------------------------------ International Strategic
Edouard Efira Alliances
Director December __, 1998
------------------------------
Pascal Brandys
Director December __, 1998
------------------------------
Philippe Claude
/s/ Marc Fourier Director December 7, 1998
------------------------------
Marc Fourier
/s/ Jean-Francois Abramatic Director December 4, 1998
------------------------------
Jean-Francois Abramatic
/s/ Fredric Harman Director December 7, 1998
------------------------------
Fredric Harman
/s/ Stuart Bagshaw Authorized Representative December 3, 1998
------------------------------ in the U.S.
Stuart Bagshaw
[ SIGNATURE PAGE TO S-8 ]
- 5 -
<PAGE>
Exhibit 4.1(b)
ILOG S.A.
1998 STOCK OPTION PLAN
1. PURPOSES OF THE PLAN
The purposes of this Stock Option Plan are:
- to attract and retain the best available personnel for positions of
substantial responsibility;
- to provide additional incentive to Beneficiaries; and
- to promote the success of the Company's business.
Options granted under the Plan to U.S. Beneficiaries are intended to be
Incentive Stock Options or Non-Statutory Stock Options, as determined by the
Administrator at the time of grant of an Option, and shall comply in all
respects with Applicable U.S. Laws in order that they may benefit from available
fiscal advantages.
2. DEFINITIONS As used herein, the following definitions shall apply:
(a) "Administrator" means the board of directors of the Company as
shall administer the Plan in accordance with Section 4 of the Plan,
excluding however, any board member who is a Beneficiary.
(b) "ADR" means an American Depositary Receipt if any, evidencing
American Depositary Shares if any, corresponding to Shares of Common Stock.
(c) "Applicable U. S. Laws" means the legal requirements relating to
the administration of stock option plans under state corporate and
securities laws and the Code in force in the United States of America.
(d) "Affiliated Company" means a company which conforms with the
criteria set forth in Article 208-4 of the Law as follows:
- companies of which at least one tenth (1/10) of the share
capital or voting rights is held directly or indirectly by
the Company;
- companies which own directly or indirectly at least one
tenth (1/10) of the share capital or voting rights of the
Company; and
2
<PAGE>
- companies of which at least fifty percent (50%) of the share
capital or voting rights is held directly or indirectly by a
company which owns directly or indirectly at least fifty
percent (50%) of the share capital or voting rights of the
Company.
"Beneficiary" means the Chief Executive Officer (President Directeur General)
Managing directors (Directeurs generaux) and any Officers or other person
employed by the Company or any Affiliated Company under the terms and conditions
of an employment contract. Neither service as a Director nor payment of a
director's fee by the Company shall be deemed to constitute an employment
relationship.
(f) "Board" means the board of directors of the Company.
(g) "Code" means the United States Internal Revenue Code of 1986, as
amended.
(h) "Common Stock" means shares of common stock of the Company.
(i) "Company" means ILOG S.A., a corporation organized under the laws
of the Republic of France.
(j) "Continuous Status as a Beneficiary" means as regards the Chief
Executive Officer and Managing directors that the term of their office has
not terminated and as regards an Officer or an Employee that the employment
relationship between the Beneficiary and the Company or any Affiliated
Company is neither interrupted nor terminated. Continuous Status as a
Beneficiary shall not be considered interrupted in the case of (i) any
leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company or any Affiliated Company,
or any successor. A leave of absence approved by the Company shall include
sick leave, military leave, or any other personal leave. For purposes of
U.S. Beneficiaries and Incentive Stock Options, no such leave may exceed
ninety (90) days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract, including Company policies. If
reemployment upon expiration of a leave of absence approved by the Company
is not so guaranteed, on the 91st day of such leave any Incentive Stock
Option held by a U.S. Beneficiary shall cease to be treated as an Incentive
Stock Option and shall be treated for U.S. tax purposes as a Non-statutory
Stock Option.
(k) "Director" means a member of the Board.
(1) "Disability" means total and permanent disability.
(m) "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
(n) "Fair Market Value" means the value for one share as determined in
good faith by the Administrator.
From the date on which the Company shall be listed on the Nasdaq National Market
of the National Association of Securities Dealer Inc. Automated Quotation
("NASDAQ") System, Fair
3
<PAGE>
Market Value shall mean the French franc value of the U.S. $ value of one ADR
divided by the number of Share(s) of Common Stock to which it corresponds, such
French franc value to be calculated on the basis of the noon buying rates
reported by the Federal Reserve Bank of New York (expressed in francs per
$1.00).
The U.S. $ value of one ADR shall be determined as follows:
(i) if the ADRs corresponding to Common Stock are listed on any
established stock exchange or a national market system, including
without limitation NASDAQ, the Fair Market Value of an ADR shall be
the closing sales price for such ADR (or the closing bid, if no sales
were reported) as quoted on such system or exchange (or the exchange
with the greatest volume of trading ADRs) on the last market trading
day prior to the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;
(ii) if the ADRs corresponding to Common Stock are quoted on the
NASDAQ System (but not on the Nasdaq National Market thereof) or are
regularly quoted by a renowned securities dealer but selling prices
are not reported, the Fair Market value of an ADR shall be the mean
between the high bid and low asked prices for the ADRs on the last
market trading day prior to the day of determination, as reported in
The Wall Street Journal or such other source as the Administrator
deems reliable;
(iii) in the absence of an established market for the ADRs or the
Common Stock, the Fair Market Value shall be determined in good faith
by the Administrator.
(o) "Incentive Stock Option" means an Option granted only to U.S.
Beneficiaries and intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.
(p) "Law" means French law no. 66-537 dated July 24, 1966 concerning
commercial companies.
(q) "Non-statutory Stock Option" means an Option which does not
qualify as an Incentive Stock Option.
(r) "Notice of Grant" means a written notice evidencing certain terms
and conditions of an individual Option grant. The Notice of Grant is part
of the Option Agreement.
(s) "Officer" means a U.S. Beneficiary who is an officer of the
Company or an Affiliated Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.
(t) "Option" means a stock option granted pursuant to the Plan.
(u) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the
Plan.
(v) "Option Exchange Program" means a program whereby outstanding
Options are surrendered in exchange for options with a lower exercise
price.
(w) "Optionee" means a Beneficiary who holds at least one outstanding
Option.
(x) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(y) "Plan" means this 1998 Stock Option Plan.
(z) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
(aa) "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 U.S. Beneficiaries under the Plan.
(bb) "Share" means a share with a par value of FF 4.00 of the Common
Stock, as adjusted from time to time in accordance with Section 11 of the
Plan.
(cc) "Shareholder Authorization" means the authorization given by the
shareholders of the Company in an ordinary and extraordinary general
meeting held on November 4, 1998, permitting the Board to grant Stock
Options under the Plan.
(dd) "U.S. Beneficiary" means a Beneficiary of the Company or an
Affiliated Company residing in the United States or otherwise subject to
the United States' laws and regulations.
(ee) "U.K. Beneficiary" means a Beneficiary of the Company or an
Affiliated Company residing in the United Kingdom or otherwise subject to
the United Kingdom's laws and regulations.
3. STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 11 of the Plan, the maximum aggregate
number of Shares which may be optioned and issued under the Plan is 1,000,000
Shares with a par value of FF 4 which is to encompass any number of Shares that
the Board may dispose of from time to time pursuant to further authorizations by
an extraordinary meeting of shareholders.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unsubscribed Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
4. ADMINISTRATION OF THE PLAN
4
<PAGE>
(a) Procedure. The Plan shall be administered by the Administrator.
(b) Powers of the Administrator. Subject to the provisions of the Law, the
Shareholder Authorization, the Plan and U.S. Applicable Laws, the Administrator
shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Shares, in accordance
with Section 2(n) of the Plan;
(ii) to determine the Beneficiaries to whom Options may be granted
hereunder;
(iii) to select the Beneficiaries and determine whether and to what
extent Options are granted hereunder;
(iv) to decide the number of Shares to be covered by each Option
granted hereunder;
(v) to approve or amend forms of agreement for use under the Plan;
(vi) to determine the terms and conditions of any Options granted
hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Options
may be exercised (which may be based on performance criteria),
any acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Option or the Shares of
Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall
determine;
(vii) to construe and interpret the terms of the Plan and Options
granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations relating
to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for
preferred tax treatment under foreign tax laws;
(ix) to modify or amend each Option (subject to the provisions of
Section 13(c) of the Plan), including the discretionary
authority to extend the termination exercisability period of
Options after the termination of the employment agreement or the
end of the term of office, longer than is otherwise provided for
in the Plan;
(x) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option previously
granted by the Administrator;
5
<PAGE>
(xi) to decide and institute an Option Exchange Program;
(xii) to determine the terms and restrictions applicable to Options;
and
(xiii) to make all other determinations deemed necessary or appropriate
for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees.
5. LIMITATIONS
(a) In the case of U.S. Beneficiaries, each Option shall be designated in
the Notice of Grant either as an incentive Stock Option or as a Non-Statutory
Stock Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to an Optionee's Incentive Stock
Options granted by the Company or any parent or subsidiary, which become
exercisable for the first time during any calendar year (under all plans of the
Company or any parent or subsidiary), exceeds $100,000, such excess Options
shall be treated as Non-statutory Stock Options. For purposes of this Section
5(a), Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of the Shares shall be determined
as of the time of the grant.
(b) Neither the Plan nor any Option shall confer upon an Optionee any right
with respect to continuing the Optionee's employment or his term of office with
the Company or any Affiliated Company, nor shall they interfere in any way with
the Optionee's right or the Company's or Affiliated Company's right, as the case
may be, to terminate such employment or such term of office at any time, with or
without cause.
(c) The following limitations shall apply to grants of Options to
Beneficiaries:
(i) No Beneficiary shall be granted, in any fiscal year of the
Company, Options to purchase more than 125,000 Shares.
(ii) Notwithstanding the foregoing, the Company may also make
additional one-time grants of up to 250,000 Shares to newly-hired
or nominated Beneficiaries.
or
(iii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as
described in Section 11 of the Plan.
(d) Other than as expressly provided hereunder, no member of the Board of
Directors shall be as such eligible to receive an Option under the Plan.
6. TERM OF PLAN
6
<PAGE>
Subject to the approval of the shareholders of the Company in accordance
with Section 16 of the Plan, the Plan shall be effective and Options may be
granted as of September 24, 1998, the date of the Plan's adoption by the Board.
It shall continue in effect until August 31, 2003 unless terminated earlier
under Section 13 of the Plan, so that Options may be granted hereunder until
August 31, 2003.
7. TERM OF OPTION
The term of each Option shall be stated in the Notice of Grant, as ten (10)
years from the date of grant, except for U.K. Beneficiaries for whom the term of
each option shall be seven (7) years less one (1) day from the date of grant, in
accordance with the Shareholder Authorization.
8. OPTION EXERCISE PRICE AND CONSIDERATION
(a) Exercise Price
The per Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be determined by the Administrator on the basis of
the Fair Market Value, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to a U.S. Beneficiary who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%) of
the voting rights of all classes of stock of the Company or any Parent or
Subsidiary and, to the extent such U.S. Beneficiary is permitted by the Law
to receive Option grants, the per Share exercise price shall be no less
than 110% of the Fair Market Value per Share on the date of grant;
(B) granted to any Beneficiary other than a U.S. Beneficiary described
in paragraph (A) immediately above, the per Share exercise price shall be
no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Non-Statutory Stock Option
(A) granted to a U.S. Beneficiary who, at the time of the grant of
such Option owns stock representing more than ten percent (10%) of the
voting rights of all classes of stock of the Company or any Parent or
Subsidiary and, to the extent such U.S. Beneficiary is permitted by law to
receive Option grants, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant;
(B) granted to any Beneficiary, the per Share exercise price shall be
no less than 95% of the Fair Market Value per Share on the date of grant.
(b) Waiting Period and Exercise Dates
7
<PAGE>
At the time an Option is granted, the Administrator shall fix the period
within which the Option may be exercised and shall determine any conditions
which must be satisfied before the Option may be exercised. In so doing, the
Administrator may specify that an Option may not be exercised until the
completion of a service period.
(c) Form of Consideration
The consideration to be paid for the Shares to be issued upon exercise of
Options, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration shall consist entirely of
an amount in French francs corresponding to the exercise price which shall be
paid either by:
(1) wire transfer;
(2) check;
(3) offset of receivables;
(4) delivery of a properly executed notice together with such other
documentation as the Administrator and the broker, if applicable,
shall require to effect exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the
exercise price; or
(5) any combination of the foregoing methods of payment.
9. EXERCISE OF OPTION
(a) Procedure for Exercise; Rights as a Shareholder
Any Option granted hereunder shall be exercisable according to the terms of
the Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement, but in no case at a rate of
less than 20% per annum over five (5) years from the date of grant.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i) written
notice of exercise (in accordance with the provisions of the Option Agreement)
together with a share subscription form (bulletin de souscription) duly executed
by the person entitled to exercise the Option, and (ii) full payment for the
Shares with respect to which the Option is exercised. Full payment may consist
of any consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse.
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Upon exercise of an Option, the Shares issued to the Optionee shall be
assimilated with all other Shares of the Company and shall be entitled to
dividends for the fiscal year in course during which the Option is exercised.
Granting of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available for purposes of the Plan, by
the number of Shares as to which the Option may be exercised.
(b) Termination of the Optionee's Continuous Status as Beneficiary
Upon termination of an Optionee's Continuous Status as a Beneficiary, other
than upon the Optionee's death or Disability, the Optionee may exercise his or
her Option, but only within such period of time as is specified in the Notice of
Grant, and only to the extent that the Optionee was entitled to exercise it at
the date of termination (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant). In the absence of a
specified time in the Notice of Grant, the Option shall remain exercisable for
three (3) months following the Optionee's termination of Continuous Status as a
Beneficiary. In the case of an Incentive Stock Option, such period of time shall
not exceed three (3) months from the date of termination. If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option,
the Shares covered by the unexercisable portion of the option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee
In the event that an Optionee's Continuous Status as a Beneficiary
terminates as a result of the Optionee's Disability, the Optionee may exercise
his or her Option at any time within twelve (12) months from the date of such
termination, but only to the extent that the Optionee was entitled to exercise
it at the date of such termination (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant). If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option,
the Shares covered by the unexercised portion of the Option shall revert to the
Plan. If, after termination, the Optionee does not exercise his or her Option
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(d) Death of Optionee
In the event of the death of an Optionee during the term of the Option, the
Option may be exercised at any time within six (6) months following the date of
death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent that the
Optionee was entitled to exercise the Option at the date of death. If, at the
time of death, the Optionee was not entitled to exercise his or her entire
Option, the Shares covered by the unexercised portion of the Option shall
immediately revert to the Plan. If, after death, the Optionee's estate or a
person who acquired the right to exercise the
9
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Option by bequest or inheritance does not exercise the Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(e) Rule 16b-3
Options granted to U.S. Beneficiaries subject to Section 16 of the Exchange
Act ("Insiders"), if such Act is applicable to the Company, must comply with the
applicable provisions of Rule 16b-3 and shall contain such additional conditions
or restrictions as may be required thereunder to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan transactions.
10. NON-TRANSFERABILITY OF OPTIONS
An Option may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by
the Optionee.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET
SALE
(a) Changes in capitalization
In the event of the carrying out by the Company of any of the financial
operations pursuant to Article 208-5 of the Law as follows:
- the issuance of shares to be subscribed for in cash or by set-off of
existing indebtedness offered exclusively to the shareholders;
- capitalization of reserves, profits, issuance premiums or the
distribution of free shares;
- the issuance of bonds convertible or exchangeable into shares offered
exclusively to shareholders;
- distribution of reserves in cash or portfolio securities; and
- capital reduction motivated by losses;
the Administrator shall, in accordance with the conditions provided for in
Articles 174-8 et. seq. of the decree NO. 67-236 of March 23, 1967 concerning
commercial companies, effect an adjustment of the number and the price of the
Shares subject to Option grants.
(b) Dissolution or Liquidation
In the event of the proposed dissolution or liquidation of the Company, to
the extent that an Option has not been previously exercised, it will terminate
immediately prior to the consummation of such proposed action. The Administrator
may, in the exercise of its sole
10
<PAGE>
discretion in such instances, declare that any Option shall terminate as of a
date fixed by the Administrator and give each Optionee the right to exercise his
or her Option as to which the Option would not otherwise be exercisable.
(c) Merger or Asset Sale
In the event of a merger of the Company with or into another corporation,
or the sale of substantially all of the assets of the Company or of the sale by
one or several shareholders of the Company to one or several third parties of a
number of Shares resulting in a transfer of control (within the meaning of
Article 355-1 of the Law) of the Company to said third parties, each outstanding
Option shall be assumed or an equivalent option or right shall be substituted by
the successor corporation or an affiliated company of the successor corporation.
In the event that the successor corporation or an affiliated company of the
successor corporation refuses to assume or substitute for the Option, the
Administrator shall provide for the Optionee to have the right to exercise the
Option as to the corresponding Shares as to which it would not otherwise be
exercisable. If the Administrator makes an Option exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option will terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the Option or right confers the right to purchase, for
each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely common stock of the successor corporation, or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
12. DATE OF GRANT
The date of grant of an Option shall be, for all purposes, the date on
which the Administrator makes the determination granting such Option, or such
other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN
(a) Amendment and Termination
The Administrator may at any time amend, alter, suspend or terminate the
Plan.
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(b) Shareholder Approval
The Company shall obtain shareholder approval of any Plan amendment to the
extent necessary and desirable to comply with Rule 16b-3 or with Section 422 of
the Code (or any successor rule or statute or other applicable law, rule or
regulation, including the requirements of any exchange or quotation system on
which the Common Stock is listed or quoted). Such shareholder approval, if
required, shall be obtained in such a manner and to such a degree as is required
by the applicable law, rule or regulation.
(c) Effect of amendment or termination
No amendment, alteration, suspension or termination of the Plan shall
impair the rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed by
the Optionee and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES
(a) Legal Compliance
Shares shall not be issued pursuant to the exercise of an Option unless the
exercise of such Option and the issuance and delivery of such Shares shall
comply with all relevant provisions of law including, without limitation, the
Law, the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, Applicable U.S. Laws and the requirements of
any stock exchange or quotation system upon which the Shares may then be listed
or quoted.
(b) Investment Representations
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being subscribed only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required.
15. LIABILITY OF COMPANY
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by any counsel to the Company to
be necessary to the lawful issuance of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue such Shares as to
which such requisite authority shall not have been obtained.
16. SHAREHOLDER APPROVAL
Continuance of the Plan shall be subject to approval by the shareholders of
the Company within 12 months of the date the Plan is adopted by the Board. Such
shareholder
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<PAGE>
approval shall be obtained in the manner and to the degree required
under the Law and Applicable U.S. Laws.
17. LAW AND JURISDICTION AND LANGUAGE
This Plan shall be governed by and construed in accordance with the laws of
France. The Tribunal de Grande Instance of Creteil shall be exclusively
competent to determine any claim or dispute arising in connection herewith.
The Company, the Board and the Optionees recognize that the Plan has been
prepared both in the French and the English language. The French version is the
version that binds the parties; notwithstanding this, the English version
represents an acceptable translation and, consequently, no official translation
will be required for the interpretation of the Plan.
18. INFORMATION TO OPTIONEES AND PURCHASERS
The Company shall provide to each Optionee, not less frequently than
annually, copies of annual financial statements. The Company shall also provide
such statements to each individual who acquires Shares pursuant to the Plan
while such individual owns such shares. The Company shall not be required to
provide such statements to key employees whose duties in connection with the
Company assure their access to equivalent information.
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EXHIBIT A
ILOG S.A.
Societe Anonyme having a share capital of ___________ francs
Registered office: 9 rue de Verdun, 94253 Gentilly
R.C.S. Creteil B 340 852 458
1998 STOCK OPTION PLAN
EXERCISE NOTICE
(Share subscription form)
ILOG S.A.
9 rue de Verdun
94253 Gentilly
Date:
Attention:
1. Exercise of Option. Effective as of today, ___________________________199_,
the undersigned hereby elects to subscribe____________________ (________) shares
(the "Shares") of the Common Stock of ILOG S.A. (the "Company") under and
pursuant to the Company's 1998 Stock Option Plan (the "Plan") adopted by the
Board of directors on September 24, 1998 and the Stock Option Agreement dated
__________________, 199_, (the "Option Agreement"). The subscription price for
the Shares shall be FF________, as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the full
subscription price for the Shares.
3. Representation of Optionee. The Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the appropriate
entry on the books of the Company) of the Shares, the Optionee shall have, as an
Optionee, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned
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<PAGE>
Stock, except those the Optionee may have as a shareholder of the Company. No
adjustment will be made for rights in respect of which the record date is prior
to the issuance date for the Shares, except as provided in Section 11 of the
Plan.
5. Tax consultation. The Optionee understands that Optionee may suffer adverse
tax consequences as a result of Optionee's subscription or disposition of the
Shares. Optionee represents that Optionee has consulted with any tax consultants
Optionee deems advisable in connection with the subscription or disposition of
the Shares. The Optionee is not relying on the Company for any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Exercise Notice, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the laws of the Republic of France.
This Exercise notice is delivered in two originals, one of which shall be
returned to the Optionee.
Submitted by: Accepted by:
OPTIONEE (*) ILOG S.A.
By: Pierre Haren
- -----------------------------
Signature
- ----------------------------- Its: CEO
Print Name
Address: Address:
- ----------------------------- ILOG S.A.
9 rue de Verdun
- ----------------------------- 94253 Gentilly
France
- -----------------------------
- -----------------------------
- --------
(*) The signature of the Optionee must be preceded by the following manuscript
mention "accepted for formal and irrevocable subscription of ________
Shares".
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<PAGE>
ILOG S.A.
9 rue de Verdun
94253 Gentilly Cedex
France December 7, 1998
Ladies and Gentlemen:
In connection with the registration under the Securities Act of
1933, as amended (the "Act"), of up to a maximum number of 3,300,000 ordinary
shares, nominal value four French francs per ordinary share ("Shares"), of
ILOG S.A., a societe anonyme organized under the laws of the Republic of
France (the "Company"), we, as your French counsel, have examined copies of
the following documents:
(i) a copy of the text of the first resolution of the meeting of the
shareholders of the Company held on November 24, 1994, a copy of the text of
the fourth resolution of the meeting of the shareholders of the Company held
on May 30, 1996, a copy of the text of the twenty-second resolution of the
meeting of the shareholders of the Company held on October 17, 1996, a copy
of the text of the seventh resolution of the meeting of the shareholders of
the Company held on August 20, 1997, a copy of the text of the eleventh
resolution of the meeting of the shareholders of the Company held on December
17, 1997, and a copy of the text of the seventh resolution of the meeting of
the shareholders of the Company held on August 31, 1998 relating, inter alia,
to the authorizations granted to the board of directors to grant options to
subscribe for up to 3,400,000 Shares pursuant to the terms and conditions of
the ILOG S.A. 1996 Stock Option Plan;
(ii) a copy of the text of the tenth resolution of the meeting of
the Shareholders of the Company held on November 4, 1998, relating, inter
alia, to the authorization granted to the board of directors to grant options
to subscribe for up to 1,000,000 shares pursuant to the terms and conditions
of the ILOG S.A. 1998 Stock Option Plan;
(iii) a copy of the text of the twenty-seventh resolution of the
meeting of the shareholders of the Company held on October 17, 1996, and a
copy of the text of the twentieth resolution of the meeting of the
Shareholders of the Company held on November 4, 1998 relating, inter alia, to
the authorization granted to the board of directors to implement the 1996
International Employee Stock Purchase Plan and to issue a maximum of 200,000
new Shares reserved to the ILOG S.A. Employees Benefit Trust, for the benefit
of group employees, pursuant to the terms and conditions of the 1996
International Employee Stock Purchase Plan;
(iv) a copy of the text of the twenty-eighth resolution of the
meeting of the shareholders of the Company held on October 17, 1996, and a
copy of the text of the twenty-second resolution of the meeting of the
Shareholders of the Company held on November 4, 1998 relating, inter alia, to
the authorization granted to the board of directors to implement the 1996
French Employee Savings Plan and to issue a maximum of 200,000 new Shares
reserved to salaried employees of the Company and
<PAGE>
companies related thereto pursuant to article 208-4 of the Law No. 66-537 of
July 24, 1966 pursuant to the terms and conditions of the 1996 French
Employee Savings Plan;
(v) the updated by-laws ("status") of the Company dated as of
November 4, 1998 (the "Status");
(vi) the terms and conditions of the ILOG S.A. 1996 Stock Option
Plan and the ILOG S.A. 1998 Stock Option Plan (the "Option Plans", and
together with the 1996 International Employee Stock Purchase Plan and the
1996 French Employee Savings Plan, "the Plans");
together with such other corporate documents and such questions of law, as we
have considered necessary or appropriate for the purpose of this opinion.
In the context of such examination we have assumed:
(a) that the definitive terms and conditions of the 1996
International Employee Stock Purchase Plan and the 1996 French Employee
Savings Plan (the "1996 Employee Plans") have been determined respectively in
accordance with the terms of the twenty-seventh and twenty-eighth resolutions
of the meeting of the shareholders of the Company held on October 17, 1996,
and the twentieth and twenty-second resolutions of the meeting of the
Shareholders of the Company held on November 4, 1998 the Statuts and
applicable law;
(b) that the options were, with respect to the outstanding
options, or shall, with respect to those remaining available for grant, be
granted by the board of directors of the Company under the Option Plans in
accordance with the terms and conditions of such Option Plans, the conditions
decided by the relevant shareholders' authorizations referred to in
paragraphs (i) to (iii) inclusive above, the Statuts and applicable law;
(c) the genuineness of all signatures and the authenticity of
all documents submitted to us as originals and the conformity with the
originals of all documents submitted to us as copies;
(d) that the persons to whom the Shares will be issued
pursuant to the Plans have, with respect to the outstanding options, or will,
with respect to those remaining available for grant or with respect to the
Shares to be subscribed pursuant to the 1996 Employee Plans, have validly
adhered to the terms and conditions of the Plans; and
(e) that the definitive terms and conditions of the issue of
the Shares including the issue price, have been, with respect to the
outstanding options, or will, with respect to those remaining available for
grant or with respect to the Shares to be subscribed pursuant to the 1996
Employee Plans, have been determined by the board of directors in accordance
with the terms of the shareholders' authorizations granted at the meeting of
the shareholders of the Company referred to in paragraphs (i) to (iv)
inclusive above.
Upon the basis of such examination and subject to any matter not
disclosed to us by the parties concerned, we advise you that, in our opinion,
any Shares to be issued upon exercise of any
2
<PAGE>
of the options granted under the Option Plans or as a result of a
subscription pursuant to the 1996 Employee Plans, to the extent they are
issued in compliance with the Plans the Statuts and the then applicable law,
and are fully paid up in accordance with the terms of the Plans, will be
validly issued, fully paid up and nonassessable.
The foregoing opinion is limited to the laws of the Republic of
France, and we are expressing no opinion as to the effect of the laws under
any other jurisdiction.
We have relied as to certain matters on information obtained from
officials of the Company and other sources believed by us to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
/s/ Olivier Edwards
--------------------------------
Olivier Edwards
/s/ Patrick Singer
--------------------------------
Patrick Singer
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EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 to be filed December 8, 1998 pertaining to the 1996 Stock Option
Plan, the 1998 Stock Option Plan, and the International Employee Stock
Purchase Plan of ILOG S.A. of our reports dated July 31, 1998, with respect
to the consolidated financial statements and schedule of ILOG S.A. included
in the Annual Report (Form 20-F No. 000-29144) dated October 1, 1998, filed
with the Securities and Exchange Commission.
/s/ John Mackey
--------------------------
ERNST & YOUNG Audit
Represented by John Mackey
Paris, France
December 8, 1998
