<PAGE>
As filed with the Securities and Exchange Commission on July 12, 1999
Registration No. 333-___________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act Of 1933
___________
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
(Exact name of issuer as specified in its charter)
<TABLE>
<S> <C>
California 94-3120525
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
</TABLE>
1155 Market Street, San Francisco, California 94103
(Address of principal executive offices) (Zip Code)
___________________
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
1997 STOCK INCENTIVE PLAN
OPTIONS GRANTED PURSUANT TO
WRITTEN COMPENSATION AGREEMENTS
PLATO SOFTWARE CORPORATION
1998 SHARE OPTION PLAN
NEXT AGE TECHNOLOGIES, INC. 1998 EQUITY INCENTIVE PLAN
(Full title of the plans)
___________________
Ori Sasson
Chief Executive Officer
Genesys Telecommunications Laboratories, Inc.
1155 Market Street, San Francisco, California 94103
(Name and address of agent for service)
(415) 437-1100
(Telephone number, including area code, of agent for service)
_________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share Price Fee
---------- ------------- --------- ----- ---
<S> <C> <C> <C> <C>
1997 Stock Incentive Plan
Common Stock, $0.001 par value: 4,835,686 shares $ 25.91(2) $125,292,624.30(2) 34,831.35(2)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share Price Fee
---------- ------------- --------- ----- ---
<S> <C> <C> <C> <C>
Options Granted Pursuant to
Written Compensation Agreements
- -------------------------------
Common Stock, $0.001 par value
Allen, Vince 60,000 shares $ 11.4375(3) $ 686,250.00(3) $ 190.78(3)
Ang, Edmund 100,000 shares $ 11.4375(3) $ 1,143,750.00(3) $ 317.96(3)
Antonov, Vadim 60,000 shares $ 12.0000(3) $ 720,000.00(3) $ 200.16(3)
Beardsley, Joan 100,000 shares $ 11.4375(3) $ 1,143,750.00(3) $ 317.96(3)
Beardsley, Joan 25,000 shares $ 11.4375(3) $ 285,937.50(3) $ 79.49(3)
Brennan, Christopher 50,000 shares $ 12.0000(3) $ 600,000.00(3) $ 166.80(3)
Brennan, Christopher 300,000 shares $ 12.0000(3) $ 3,600,000.00(3) $ 1,000.80(3)
Carr, John 30,000 shares $ 12.0000(3) $ 360,000.00(3) $ 100.80(3)
Cornelison, Gary Lee 50,000 shares $ 11.4375(3) $ 571,875.00(3) $ 158.98(3)
Dadd, Cyril 110,000 shares $ 11.4375(3) $ 1,258,125.00(3) $ 349.76(3)
Danziger, Elliot 60,000 shares $ 11.4375(3) $ 686,250.00(3) $ 190.78(3)
Heyden, Wesley 100,000 shares $ 12.0000(3) $ 1,200,000.00(3) $ 333.60(3)
Hunt, Don 300,000 shares $ 11.4375(3) $ 3,431,250.00(3) $ 953.89(3)
Hunt, Don 50,000 shares $ 11.4375(3) $ 571,875.00(3) $ 158.98(3)
Marks, Andrew 50,000 shares $ 11.4375(3) $ 571,875.00(3) $ 158.98(3)
Nederloff, Ad 300,000 shares $ 11.4375(3) $ 3,431,250.00(3) $ 953.89(3)
Samanta, Chanchal 100,000 shares $ 20.2500(3) $ 2,025,000.00(3) $ 562.95(3)
Sasson, Ori 900,000 shares $ 14.75(3) $ 13,275,000.00(3) $ 3,690.45(3)
Schreffler, David 125,000 shares $ 11.4375(3) $ 1,429,687.50(3) $ 397.45(3)
Talbott, Nicholas 60,000 shares $ 11.4375(3) $ 686,250.00(3) $ 190.78(3)
Woll, Richard 50,000 shares $ 11.4375(3) $ 571,875.00(3) $ 158.98(3)
Plato Software Corporation
1998 Share Option Plan
- ----------------------
Common Stock, $0.001 par value 42,500 shares $ 0.40(4) $ 17,000.00(4) $ 4.73(4)
Next Age Technologies, Inc. 25,608 shares $ 25.91(2) $ 663,503.28(2) $ 184.45(2)
1998 Equity Incentive Plan
- --------------------------
Total $45,654.75
</TABLE>
- --------------------------------------------------------------------------------
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1997 Stock Incentive Plan, the
options granted pursuant to the Written Compensation Agreement, the Plato
Software Corporation 1998 Share Option Plan or the Next Age Technologies,
Inc. 1998 Equity Incentive Plan by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of the
outstanding shares of Common Stock of Genesys Telecommunications
Laboratories, Inc.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, (the "1933 Act") on the basis of the
average of the high and low selling prices per share of Common Stock of
Genesys Telecommunications Laboratories, Inc. on July 6, 1999, as reported
on the Nasdaq National Market.
(3) Calculated on the basis of the exercise price payable per option share.
(4) Calculated on the basis of the weighted average exercise price of the
option shares being registered.
2
<PAGE>
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
---------------------------------------
Genesys Telecommunications Laboratories, Inc. (the "Registrant")
hereby incorporates by reference into this Registration Statement the following
documents previously filed with the Securities and Exchange Commission (the
"SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1998 filed with the SEC on September 28, 1998,
pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended (the "1934 Act");
(b) The Registrant's Quarterly Reports on Form 10-Q for the periods
ended September 30, 1998, December 31, 1998 and March 31, 1999,
filed with the SEC on November 16, 1998, February 16, 1999 and
May 17, 1999, respectively;
(c) The Registrant's Report on Form 8-K filed with the SEC on January
14, 1999; and
(d) The Registrant's Registration Statement No. 00-022605 on Form 8-A
filed with the SEC on May 27, 1997 pursuant to Section 12 of the
1934 Act in which there is described the terms, rights and
provisions applicable to the Registrant's outstanding Common
Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
-------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not Applicable.
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers
-----------------------------------------
The Registrant's Restated Articles of Incorporation, as amended, and
Amended and Restated Bylaws provide for indemnification of its directors,
officers, employees and other agents to the maximum extent permitted by the
California Corporations Code. This is intended to eliminate the personal
liability of a director for monetary damages in an action brought by or in the
right of the Registrant for breach of a director's duties to the Registrant or
its shareholders, except for liability: (1) for acts or omissions that involve
intentional misconduct or a knowing and culpable violation of law; (2) for acts
or omissions that a director believes to be contrary to the best interests of
the Registrant or its shareholders or that involve the absence of good faith on
the part of the director; (3) for any transaction from which a director derived
an improper personal benefit; (4) for acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the Registrant or its shareholders; (6) with respect to certain
transactions, or the approval of transactions, in which a director has a
material financial interest; and (7) with respect to approval of certain
improper distributions to shareholders or certain loans or guarantees.
In addition, the Registrant has entered into separate indemnification
agreements with each of its directors and officers. These agreements require
the Registrant to indemnify its officer and directors to the fullest extent
permitted by law, including circumstances in which indemnification would
otherwise be discretionary. Among other things, the agreements require the
Registrant to indemnify directors and officers against certain liabilities that
may arise by reason of their status or service as directors and officers and to
advance their expenses incurred as a result of any proceeding against them as to
which they could be indemnified.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not Applicable.
Item 8. Exhibits
--------
<TABLE>
<CAPTION>
Number Exhibit
- ------ -------
<S> <C>
4.0 Instruments Defining Rights of Stockholders. Reference is made to Registrant's Registration
Statement No. 00-022605 on Form 8-A which is incorporated herein by reference pursuant to Item 3(c).
5.0 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP, Independent Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.
24.0 Power of Attorney. Reference is made to page II-4 of this Registration Statement.
99.1 1997 Stock Incentive Plan.
99.2* Form of Notice of Grant of Stock Option.
99.3* Form of Stock Option Agreement.
99.4* Form of Addendum to Stock Option Agreement (Limited Stock Appreciation Right).
99.5* Form of Addendum to Stock Option Agreement (Involuntary Termination Following Change in Control).
99.6* Form of Addendum to Stock Option Agreement (Involuntary Termination Following Corporate Transaction).
99.7* Form of Stock Issuance Agreement.
99.8* Form of Addendum to Stock Issuance Agreement (Involuntary Termination Following Change in Control).
99.9* Form of Addendum to Stock Issuance Agreement (Involuntary Termination Following Corporate
Transaction).
99.10* Form of Notice of Grant of Automatic Stock Option (Initial 30,000-Share Grant).
99.11* Form of Notice of Grant of Automatic Stock Option (Initial 20,000-Share Grant).
99.12* Form of Notice of Grant of Automatic Stock Option (Annual Grant).
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
99.13* Form of Automatic Stock Option Agreement.
99.14 Form of Written Compensation Agreement.
99.15 Form of Notice of Grant of Stock Option (Options granted pursuant to Written Compensation Agreements).
99.16 Form of Stock Option Agreement (Options granted pursuant to Written Compensation Agreements).
99.17 Form of Option Agreement under the Plato Software Corporation 1998 Share Option Plan.
99.18 Form of Stock Option Assumption for options granted under the Plato Software Corporation 1998 Share
Option Plan.
99.19 Next Age Technologies, Inc. 1998 Equity Incentive Plan.
99.20 Form of Stock Option Grant Notice under the Next Age Technologies, Inc. 1998 Equity Incentive Plan.
99.21 Form of Option Agreement under the Next Age Technologies, Inc. 1998 Equity Incentive Plan.
99.22 Form of Stock Option Assumption for options granted under the Next Age Technologies, Inc. 1998 Equity
Incentive Plan.
</TABLE>
* Exhibits 99.2 through 99.13, respectively are incorporated herein by
reference to Exhibits 99.2 through 99.13, of Registrant's Registration
Statement No. 333-3373 on Form S-8 which was filed with the Commission on
August 15, 1997.
Item 9. Undertakings
------------
A. The undersigned Registrant hereby undertakes: (1) to file, during
any period in which offers or sales are being made, a post-effective amendment
to this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement and (iii) 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; provided, however, that clauses (1)(i) and (1)(ii) shall
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement-, (2) that for the
purpose of determining any liability under the 1933 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; and (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 Registrant's 1997
Stock Incentive Plan, the options granted pursuant to Written Compensation
Agreements, the Plato Software Corporation 1998 Share Option Plan or the Next
Age Technologies, Inc. 1998 Equity Incentive Plan.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into 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.
C. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers, or controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the SEC, such indemnification is
against public policy as expressed in the 1933 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 1933 Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8, and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Francisco, State of California, on
this 6th day of July, 1999.
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
By: /s/ Ori Sasson
-------------------------------------------
Ori Sasson
Chief Executive Officer and Director
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Genesys
Telecommunications Laboratories, Inc., a California corporation, do hereby
constitute and appoint Ori Sasson, the lawful attorney-in-fact and agent with
full power and authority to do any and all acts and things and to execute any
and all instruments which said attorney and agent determine may be necessary or
advisable or required to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules or regulations or requirements of the
Securities and Exchange Commission in connection with this Registration
Statement. Without limiting the generality of the foregoing power and authority,
the powers granted include the power and authority to sign the names of the
undersigned officers and directors in the capacities indicated below to this
Registration Statement, to any and all amendments, both pre-effective and post-
effective, and supplements to this Registration Statement, and to any and all
instruments or documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereof, and the undersigned
hereby ratifies and confirms that said attorneys and agents shall do or cause to
be done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Ori Sasson Chief Executive Officer and July 6, 1999
- ---------------------------------
Ori Sasson Director
(Principal Executive Officer)
</TABLE>
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Alec Miloslavsky Vice Chairman of the Board, Chief July 6, 1999
- ------------------------------------
Alec Miloslavsky Technical Officer and Director
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
/s/ Bruce Dunlevie Director July 6, 1999
- -------------------------------
Bruce Dunlevie
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
/s/ Paul D. Levy Director July 6, 1999
- -------------------------------
Paul D. Levy
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
/s/ Gregory Shenkman Director July 6, 1999
- ------------------------------
Gregory Shenkman
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Christopher D. Brennan Chief Financial (Principal July 6, 1999
- -------------------------------------
Christopher D. Brennan Financial and Accounting Officer)
</TABLE>
<PAGE>
EXHIBIT INDEX
-------------
Number Exhibit
- ------ -------
4.0 Instruments Defining Rights of Stockholders. Reference is made to
Registrant's Registration Statement No. 00-022605 on Form 8-A which is
incorporated herein by reference pursuant to Item 3(b).
5.0 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP, Independent Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.
24.0 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1997 Stock Incentive Plan.
99.2* Form of Notice of Grant of Stock Option.
99.3* Form of Stock Option Agreement.
99.4* Form of Addendum to Stock Option Agreement (Limited Stock
Appreciation Right).
99.5* Form of Addendum to Stock Option Agreement (Involuntary
Termination Following Change in Control).
99.6* Form of Addendum to Stock Option Agreement (Involuntary Termination
Following Corporate Transaction).
99.7* Form of Stock Issuance Agreement.
99.8* Form of Addendum to Stock Issuance Agreement (Involuntary
Termination Following Change in Control).
99.9* Form of Addendum to Stock Issuance Agreement (Involuntary
Termination Following Corporate Transaction).
99.10* Form of Notice of Grant of Automatic Stock Option (Initial
30,000-Share Grant).
99.11* Form of Notice of Grant of Automatic Stock Option (Initial
20,000-Share Grant).
99.12* Form of Notice of Grant of Automatic Stock Option (Annual Grant).
99.13* Form of Automatic Stock Option Agreement.
99.14 Form of Written Compensation Agreement (Options granted pursuant
to Written Compensation Agreements).
99.15 Form of Notice of Grant of Stock Option (Options granted pursuant to
Written Compensation Agreements).
99.16 Form of Stock Option Agreement (Options granted pursuant to Written
Compensation Agreements).
99.17 Form of Option Agreement under the Plato Software Corporation 1998
Share Option Plan.
99.18 Form of Stock Option Assumption Agreement for options granted under
the Plato Software Corporation 1998 Share Option Plan.
99.19 Next Age Technologies, Inc. 1998 Equity Incentive Plan.
99.20 Form of Stock Option Grant Notice under the Next Age Technologies,
Inc. 1998 Equity Incentive Plan.
99.21 Form of Option Agreement under the Next Age Technologies, Inc. 1998
Equity Incentive Plan.
99.22 Form of Stock Option Assumption Agreement for options granted under
the Next Age Technologies, Inc. 1998 Equity Incentive Plan.
* Exhibits 99.2 through 99.13, respectively are incorporated herein by
reference to Exhibits 99.2 through 99.13, of Registrant's Registration
Statement No. 333-3373 on Form S-8 which was filed with the Commission
on August 15, 1997.
<PAGE>
EXHIBIT 5.0
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
July 8, 1999
Genesys Telecommunications Laboratories, Inc.
1155 Market Street
San Francisco, CA 94103
Re: Genesys Telecommunications Laboratories, Inc. Registration Statement
--------------------------------------------------------------------
on form S-8 for an aggregate of 7,883,794 Shares of Common Stock
----------------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Genesys Telecommunications Laboratories, Inc., a
California corporation (the "Company"), in connection with the registration on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended, of (i) 4,835,686 shares of the Company's common stock reserved for
issuance under the Company's 1997 Stock Incentive Plan (the "1997 Plan"), (ii)
an aggregate of 2,980,000 shares of Company's common stock to be issued pursuant
to Written Compensation Agreements (the "Non-Plan Options"), (iii) an aggregate
of 42,500 shares of the Company's common stock issuable pursuant to outstanding
options granted under the Plato Software Corporation 1998 Share Option Plan (the
"Plato Plan") and assumed by the Company and (iv) an aggregate of 25,608 shares
of the Company's stock issuable pursuant to options granted under the Next Age
Technologies, Inc. 1998 Equity Incentive Plan (the "Next Age Plan") and assumed
by the Company.
This opinion is being furnished in accordance with the requirements of Item 8
of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the establishment of the
1997 Plan, the grant of the Non-Plan Options and the assumption of the options
granted under the Plato and Next Age Plans. Based on such review, we are of the
opinion that, if, as and when the shares of the Company's common stock are
issued and sold (and the consideration therefor received) pursuant to the
agreements evidencing duly authorized option grants and direct stock issuances
under the 1997 Plan, the agreements evidencing the Non-Plan Options and the
agreements evidencing the options granted under the Plato Plan and the Next Age
Plan, as assumed by the Company, and in accordance with the Registration
Statement, such shares will be duly authorized, legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion letter as Exhibit 5.0 to the
Registration Statement.
This opinion letter is rendered as of the date first written above, and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above, and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
1997 Plan, the Non-Plan Options, the Plato Plan, the Next Age Plan or the shares
of the Company's common stock issuable under such plans and options.
Very truly yours,
/s/ Brobeck, Phleger & Harrison
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 of our report dated July 17, 1998 included in Genesys
Telecommunications Laboratories, Inc.'s Form 10-K for the year ended June 30,
1998 and to all references to our Firm included in this registration statement.
/S/ ARTHUR ANDERSEN LLP
-------------------------------------------
ARTHUR ANDERSEN LLP
San Jose, California
July 9, 1999
<PAGE>
EXHIBIT 99.1
1997 STOCK INCENTIVE PLAN
<PAGE>
EXHIBIT 99.1
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
1997 STOCK INCENTIVE PLAN
-------------------------
ARTICLE ONE
GENERAL PROVISIONS
------------------
I. PURPOSE OF THE PLAN
This 1997 Stock Incentive Plan is intended to promote the interests of
Genesys Telecommunications Laboratories, Inc., a California corporation, by
providing eligible persons with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Corporation
as an incentive for them to remain in the service of the Corporation.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into four separate equity programs:
(i) the Discretionary Option Grant Program under which eligible
persons may, at the discretion of the Plan Administrator, be granted
options to purchase shares of Common Stock,
(ii) the Salary Investment Option Grant Program under which
eligible employees may elect to have a portion of their base salary
invested each year in special option grants,
(iii) the Stock Issuance Program under which eligible persons
may, at the discretion of the Plan Administrator, be issued shares of
Common Stock directly, either through the immediate purchase of such shares
or as a bonus for services rendered the Corporation (or any Parent or
Subsidiary), and
(iv) the Automatic Option Grant Program under which eligible
non-employee Board members shall automatically receive option grants at
periodic intervals to purchase shares of Common Stock.
B. The provisions of Articles One and Six shall apply to all equity
programs under the Plan and shall govern the interests of all persons under the
Plan.
III. ADMINISTRATION OF THE PLAN
A. Prior to the Section 12 Registration Date, the Discretionary Option
Grant and Stock Issuance Programs shall be administered by the Board. Beginning
with the Section 12
<PAGE>
Registration Date, the Primary Committee shall have sole and exclusive authority
to administer the Discretionary Option Grant and Stock Issuance Programs with
respect to Section 16 Insiders and shall have sole and exclusive authority to
administer the Salary Investment Option Grant Program with respect to all
eligible individuals.
B. Administration of the Discretionary Option Grant and Stock Issuance
Programs with respect to all other persons eligible to participate in those
programs may, at the Board's discretion, be vested in the Primary Committee or a
Secondary Committee, or the Board may retain the power to administer those
programs with respect to all such persons.
C. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time. The Board may also at any time terminate the functions
of any Secondary Committee and reassume all powers and authority previously
delegated to such committee.
D. Each Plan Administrator shall, within the scope of its administrative
functions under the Plan, have full power and authority (subject to the
provisions of the Plan) to establish such rules and regulations as it may deem
appropriate for proper administration of the Discretionary Option Grant, Salary
Investment Option Grant and Stock Issuance Programs and to make such
determinations under, and issue such interpretations of, the provisions of such
programs and any outstanding options or stock issuances thereunder as it may
deem necessary or advisable. Decisions of the Plan Administrator within the
scope of its administrative functions under the Plan shall be final and binding
on all parties who have an interest in the Discretionary Option Grant, Salary
Investment Option Grant and Stock Issuance Programs under its jurisdiction or
any option or stock issuance thereunder.
E. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.
F. Administration of the Automatic Option Grant Program shall be self-
executing in accordance with the terms of that program, and no Plan
Administrator shall exercise any discretionary functions with respect to any
option grants or stock issuances made under such program.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option Grant
and Stock Issuance Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of directors
of any Parent or Subsidiary, and
2
<PAGE>
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. Only Employees who are Section 16 Insiders or other highly compensated
individuals shall be eligible to participate in the Salary Investment Option
Grant Program. The Primary Committee shall have the discretion to determine the
calendar years in which the Salary Investment Option Grant Program is to be in
effect, the individuals who may participate in such program and the specific
date on which the option grants thereunder are to be awarded.
C. Each Plan Administrator shall, within the scope of its administrative
jurisdiction under the Plan, have full authority to determine, (i) with respect
to the option grants under the Discretionary Option Grant Program, which
eligible persons are to receive option grants, the time or times when such
option grants are to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an Incentive Option or a Non-
Statutory Option, the time or times when each option is to become exercisable,
the vesting schedule (if any) applicable to the option shares and the maximum
term for which the option is to remain outstanding and (ii) with respect to
stock issuances under the Stock Issuance Program, which eligible persons are to
receive stock issuances, the time or times when such issuances are to be made,
the number of shares to be issued to each Participant, the vesting schedule (if
any) applicable to the issued shares and the consideration for such shares.
D. The Plan Administrator shall have the absolute discretion either to
grant options in accordance with the Discretionary Option Grant Program or to
effect stock issuances in accordance with the Stock Issuance Program.
E. The individuals who shall be eligible to participate in the Automatic
Option Grant Program shall be limited to (i) those individuals who first become
non-employee Board members after the Underwriting Date, whether through
appointment by the Board or election by the Corporation's shareholders, and (ii)
those individuals who continue to serve as non-employee Board members at one or
more Annual Shareholders Meetings held after the Underwriting Date. A non-
employee Board member who has previously been in the employ of the Corporation
(or any Parent or Subsidiary) shall not be eligible to receive an option grant
under the Automatic Option Grant Program at the time he or she first becomes a
non-employee Board member, but shall be eligible to receive periodic annual
option grants under the Automatic Option Grant Program while he or she continues
to serve as a non-employee Board member.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall not exceed
14,862,893 shares. Such authorized share reserve is comprised of (i) the number
of shares which remained available for issuance, as of the Plan Effective Date,
under the Predecessor Plan as last approved by the Corporation's shareholders,
including the shares subject to the outstanding options to be incorporated into
the Plan and the additional shares which would otherwise be available for future
grant, (ii) an increase of 2,400,000 shares authorized by the Board and approved
by the shareholders prior to the Section 12 Registration
3
<PAGE>
Date, (iii) an increase of 1,120,761 shares effected on July 1, 1998 pursuant to
the automatic share increase provision of Section V.B, (iv) an increase of
2,500,000 shares adopted by the Board on March 15, 1999 and approved by the
shareholders at the 1999 Annual Meeting and (v) an increase of 1,214,925 shares
effected on July 1, 1999 pursuant to the automatic share increase provision of
Section V.B.
B. The number of shares of Common Stock available for issuance under the
Plan shall automatically increase on the first trading day of each fiscal year
during the term of the Plan, beginning with the 1999 fiscal year, by an amount
equal to five percent (5%) of the shares of Common Stock outstanding on the last
trading day of the immediately preceding fiscal year. No Incentive Options may
be granted on the basis of the additional shares of Common Stock resulting from
such annual increases.
C. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than 750,000 shares of Common Stock in the aggregate per calendar year,
beginning with the 1997 calendar year.
D. Shares of Common Stock subject to outstanding options (including
options incorporated into this Plan from the Predecessor Plan) shall be
available for subsequent issuance under the Plan to the extent those options
expire or terminate for any reason prior to exercise in full. Unvested shares
issued under the Plan and subsequently cancelled or repurchased by the
Corporation, at the original issue price paid per share, pursuant to the
Corporation's repurchase rights under the Plan shall be added back to the number
of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option
grants or direct stock issuances under the Plan. Shares subject to any stock
appreciation rights exercised under the Plan shall reduce on a share-for-share
basis the number of shares of Common Stock available for subsequent issuance
under the Plan. In addition, should the exercise price of an option under the
Plan be paid with shares of Common Stock or should shares of Common Stock
otherwise issuable under the Plan be withheld by the Corporation in satisfaction
of the withholding taxes incurred in connection with the exercise of an option
or the vesting of a stock issuance under the Plan, then the number of shares of
Common Stock available for issuance under the Plan shall be reduced by the gross
number of shares for which the option is exercised or which vest under the stock
issuance, and not by the net number of shares of Common Stock issued to the
holder of such option or stock issuance.
E. If any change is made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of securities issuable under the
Plan, (ii) the number and/or class of securities for which any one person may be
granted stock options, separately exercisable stock appreciation rights and
direct stock issuances under this Plan per calendar year, (iii) the number
and/or class of securities for which grants are subsequently to be made under
the Automatic Option Grant Program to new and continuing non-employee Board
members, (iv) the number and/or class of securities and the exercise price per
share in effect under each outstanding option under the Plan and (v) the number
and/or class of securities and price per share in effect under each outstanding
option incorporated into this Plan from the Predecessor Plan. Such adjustments
to the outstanding
4
<PAGE>
options are to be effected in a manner which shall preclude the enlargement or
dilution of rights and benefits under such options. The adjustments determined
by the Plan Administrator shall be final, binding and conclusive.
5
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
--------
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. Exercise Price.
--------------
1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section I of Article Six and
the documents evidencing the option, be payable in cash or check made payable to
the Corporation. Should the Common Stock be registered under Section 12(g) of
the 1934 Act at the time the option is exercised, then the exercise price may
also be paid as follows:
(i) in shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date, or
(ii) to the extent the option is exercised for vested shares,
through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable written instructions to (a)
a Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (b) the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. Exercise and Term of Options. Each option shall be exercisable at
----------------------------
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
6
<PAGE>
C. Effect of Termination of Service.
--------------------------------
1. The following provisions shall govern the exercise of any options
held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option, but no such option
shall be exercisable after the expiration of the option term.
(ii) Any option exercisable in whole or in part by the Optionee
at the time of death may be subsequently exercised by the personal
representative of the Optionee's estate or by the person or persons to whom
the option is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding to the extent the option is not otherwise at that time
exercisable for vested shares.
(iv) Should the Optionee's Service be terminated for Misconduct,
then all outstanding options held by the Optionee shall terminate
immediately and cease to be outstanding.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service from the limited
exercise period otherwise in effect for that option to such greater period
of time as the Plan Administrator shall deem appropriate, but in no event
beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested
shares of Common Stock for which such option is exercisable at the time of
the Optionee's cessation of Service but also with respect to one or more
additional installments in which the Optionee would have vested had the
Optionee continued in Service.
7
<PAGE>
D. Shareholder Rights. The holder of an option shall have no shareholder
------------------
rights with respect to the shares subject to the option until such person shall
have exercised the option, paid the exercise price and become a holder of record
of the purchased shares.
E. Repurchase Rights. The Plan Administrator shall have the discretion
-----------------
to grant options which are exercisable for unvested shares of Common Stock.
Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase, at the exercise price paid per
share, any or all of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall be established
by the Plan Administrator and set forth in the document evidencing such
repurchase right.
F. Limited Transferability of Options. During the lifetime of the
----------------------------------
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death. However, a Non-Statutory Option
may, in connection with the Optionee's estate plan, be assigned in whole or in
part during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Six shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall not be subject to the terms of this Section II.
---
A. Eligibility. Incentive Options may only be granted to Employees.
-----------
B. Dollar Limitation. The aggregate Fair Market Value of the shares of
-----------------
Common Stock (determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any other option
plan of the Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one calendar year shall not
exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
C. 10% Shareholder. If any Employee to whom an Incentive Option is
---------------
granted is a 10% Shareholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.
8
<PAGE>
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, the treatment of the
outstanding options shall be as follows:
1. Individuals in Service for at least One Year. If an Optionee has
--------------------------------------------
been in Service for at least one year prior to the effective date of the
Corporate Transaction, then each outstanding option held by such individual
shall automatically accelerate so that each such option shall, immediately prior
to the effective date of the Corporate Transaction, become fully exercisable
with respect to the total number of shares of Common Stock at the time subject
to such option and may be exercised for any or all of those shares as fully-
vested shares of Common Stock. However, an outstanding option shall not so
accelerate if and to the extent: (i) such option is, in connection with the
Corporate Transaction, either to be assumed by the successor corporation (or
parent thereof) or to be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation (or parent thereof), (ii) such
option is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing on the unvested option shares at
the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to those option shares or
(iii) the acceleration of such option is subject to other limitations imposed by
the Plan Administrator at the time of the option grant.
All outstanding repurchase rights shall also terminate automatically,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent: (i) those repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator at the time the repurchase right is issued.
Immediately following the consummation of the Corporate Transaction,
all outstanding options shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent thereof).
2. Individuals in Service for less than One Year. If an Optionee
---------------------------------------------
has been in Service for less than one year prior to the effective date of the
Corporate Transaction, then no acceleration of such individual's outstanding
options shall occur in connection with such Corporate Transaction and each such
outstanding option shall terminate and cease to be outstanding on the effective
date of such Corporate Transaction except to the extent such option is to be
either (i) assumed by the successor corporation (or parent thereof) or replaced
with a comparable option to purchase shares of the capital stock of the
successor corporation (or parent thereof), or (ii) replaced with a cash
incentive program of the successor corporation which preserves the spread
existing on the unvested option shares at the time of the Corporate Transaction
and provides for subsequent payout in accordance with the same vesting schedule
applicable to those option shares.
All outstanding repurchase rights shall be assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction.
9
<PAGE>
3. The determination of option comparability under this Paragraph A
shall be made by the Plan Administrator, and its determination shall be final,
binding and conclusive.
B. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments to reflect such Corporate Transaction shall also be made
to (i) the exercise price payable per share under each outstanding option,
provided the aggregate exercise price payable for such securities shall remain
- --------
the same, (ii) the maximum number and/or class of securities available for
issuance over the remaining term of the Plan and (iii) the maximum number and/or
class of securities for which any one person may be granted stock options,
separately exercisable stock appreciation rights and direct stock issuances
under the Plan per calendar year.
C. The Plan Administrator shall have full power and authority to grant
options under the Discretionary Option Grant Program which will automatically
accelerate in the event the Optionee's Service terminates by reason of an
Involuntary Termination within a designated period (not to exceed eighteen (18)
months) following the effective date of any Corporate Transaction in which those
options are assumed or replaced and do not otherwise accelerate. Any options so
accelerated shall remain exercisable for fully-vested shares until the earlier
-------
of (i) the expiration of the option term or (ii) the expiration of the one (1)-
year period measured from the effective date of the Involuntary Termination. In
addition, the Plan Administrator may provide that one or more of the
Corporation's outstanding repurchase rights with respect to shares held by the
Optionee at the time of such Involuntary Termination shall immediately
terminate, and the shares subject to those terminated repurchase rights shall
accordingly vest in full.
D. The Plan Administrator shall have full power and authority to grant
options under the Discretionary Option Grant Program which will automatically
accelerate in the event the Optionee's Service terminates by reason of an
Involuntary Termination within a designated period (not to exceed eighteen (18)
months) following the effective date of any Change in Control. Each option so
accelerated shall remain exercisable for fully-vested shares until the earlier
-------
of (i) the expiration of the option term or (ii) the expiration of the one (1)-
year period measured from the effective date of the Involuntary Termination. In
addition, the Plan Administrator may provide that one or more of the
Corporation's outstanding repurchase rights with respect to shares held by the
Optionee at the time of such Involuntary Termination shall immediately
terminate, and the shares subject to those terminated repurchase rights shall
accordingly vest in full.
E. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
limitation is not exceeded. To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.
F. The outstanding options shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
10
<PAGE>
F. The outstanding options shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option
Grant Program (including outstanding options incorporated from the Predecessor
Plan) and to grant in substitution new options covering the same or different
number of shares of Common Stock but with an exercise price per share based on
the Fair Market Value per share of Common Stock on the new grant date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority to grant to
selected Optionees tandem stock appreciation rights and/or limited stock
appreciation rights.
B. The following terms shall govern the grant and exercise of tandem
stock appreciation rights:
(i) One or more Optionees may be granted the right, exercisable
upon such terms as the Plan Administrator may establish, to elect between
the exercise of the underlying option for shares of Common Stock and the
surrender of that option in exchange for a distribution from the
Corporation in an amount equal to the excess of (a) the Fair Market Value
(on the option surrender date) of the number of shares in which the
Optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (b) the aggregate exercise price payable for such
shares.
(ii) No such option surrender shall be effective unless it is
approved by the Plan Administrator, either at the time of the actual option
surrender or at any earlier time. If the surrender is so approved, then the
distribution to which the Optionee shall be entitled may be made in shares
of Common Stock valued at Fair Market Value on the option surrender date,
in cash, or partly in shares and partly in cash, as the Plan Administrator
shall in its sole discretion deem appropriate.
(iii) If the surrender of an option is not approved by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee
had under the surrendered option (or surrendered portion thereof) on the
option surrender date and may exercise such rights at any time prior to the
later of (a) five (5) business days after the receipt of the rejection
-----
notice or (b) the last day on which the option is otherwise exercisable in
accordance with the terms of the documents evidencing such option, but in
no event may such rights be exercised more than ten (10) years after the
option grant date.
11
<PAGE>
C. The following terms shall govern the grant and exercise of limited
stock appreciation rights:
(i) One or more Section 16 Insiders may be granted limited
stock appreciation rights with respect to their outstanding options.
(ii) Upon the occurrence of a Hostile Take-Over, each individual
holding one or more options with such a limited stock appreciation right
shall have the unconditional right (exercisable for a thirty (30)-day
period following such Hostile Take-Over) to surrender each such option to
the Corporation, to the extent the option is at the time exercisable for
vested shares of Common Stock. In return for the surrendered option, the
Optionee shall receive a cash distribution from the Corporation in an
amount equal to the excess of (A) the Take-Over Price of the shares of
Common Stock which are at the time vested under each surrendered option (or
surrendered portion thereof) over (B) the aggregate exercise price payable
for such shares. Such cash distribution shall be paid within five (5) days
following the option surrender date.
(iii) The Plan Administrator shall pre-approve, at the time the
limited right is granted or at any time prior to exercise, the subsequent
exercise of that right in accordance with the terms of the grant and the
provisions of this Section V. No additional approval of the Plan
Administrator or the Board shall be required at the time of the actual
option surrender and cash distribution.
(iv) The balance of the option (if any) shall remain outstanding
and exercisable in accordance with the documents evidencing such option.
12
<PAGE>
ARTICLE THREE
SALARY INVESTMENT OPTION GRANT PROGRAM
--------------------------------------
I. OPTION GRANTS
The Primary Committee shall have the sole and exclusive authority to
determine the calendar year or years (if any) for which the Salary Investment
Option Grant Program is to be in effect and to select the Section 16 Insiders
and other highly compensated Employees eligible to participate in the Salary
Investment Option Grant Program for those calendar year or years. Each selected
individual who elects to participate in the Salary Investment Option Grant
Program must, prior to the start of each calendar year of participation, file
with the Plan Administrator (or its designate) an irrevocable authorization
directing the Corporation to reduce his or her base salary for that calendar
year by an amount not less than Ten Thousand Dollars ($10,000.00) nor more than
One Hundred Fifty Thousand Dollars ($150,000.00). The Primary Committee shall
have complete discretion to determine whether to approve the filed authorization
in whole or in part. To the extent the Primary Committee approves the
authorization, the individual who filed that authorization shall be granted an
option under the Salary Investment Grant Program on or before the last trading
day in January for the calendar year for which the salary reduction is to be in
effect. All grants under the Salary Investment Option Grant Program shall be at
the sole discretion of the Primary Committee.
II. OPTION TERMS
Each option shall be a Non-Statutory Option evidenced by one or more
documents in the form approved by the Plan Administrator; provided, however,
--------
that each such document shall comply with the terms specified below.
A. Exercise Price.
--------------
1. The exercise price per share shall be thirty-three and one-third
percent (33-1/3%) of the Fair Market Value per share of Common Stock on the
option grant date.
2. The exercise price shall become immediately due upon exercise of
the option and shall be payable in one or more of the alternative forms
authorized under the Discretionary Option Grant Program. Except to the extent
the sale and remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.
B. Number of Option Shares. The number of shares of Common Stock subject
-----------------------
to the option shall be determined pursuant to the following formula (rounded
down to the nearest whole number):
X = A divided by (B x 66-2/3%), where
X is the number of option shares,
13
<PAGE>
A is the dollar amount of the approved reduction in the
Optionee's base salary for the calendar year, and
B is the Fair Market Value per share of Common Stock on the
option grant date.
C. Exercise and Term of Options. The option shall become exercisable in
----------------------------
a series of twelve (12) successive equal monthly installments upon the
Optionee's completion of each calendar month of Service in the calendar year for
which the salary reduction is in effect. Each option shall have a maximum term
of ten (10) years measured from the option grant date.
D. Effect of Termination of Service. Should the Optionee cease Service
--------------------------------
for any reason while holding one or more options under this Article Three, then
each such option shall remain exercisable, for any or all of the shares for
which the option is exercisable at the time of such cessation of Service, until
the earlier of (i) the expiration of the ten (10)-year option term or (ii) the
-------
expiration of the three (3)-year period measured from the date of such cessation
of Service. Should the Optionee die while holding one or more options under
this Article Three, then each such option may be exercised, for any or all of
the shares for which the option is exercisable at the time of the Optionee's
cessation of Service (less any shares subsequently purchased by Optionee prior
to death), by the personal representative of the Optionee's estate or by the
person or persons to whom the option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution. Such right of
exercise shall lapse, and the option shall terminate, upon the earlier of (i)
-------
the expiration of the ten (10)-year option term or (ii) the three (3)-year
period measured from the date of the Optionee's cessation of Service. However,
the option shall, immediately upon the Optionee's cessation of Service for any
reason, terminate and cease to remain outstanding with respect to any and all
shares of Common Stock for which the option is not otherwise at that time
exercisable.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction while the Optionee remains
in Service, each outstanding option held by such Optionee under this Salary
Investment Option Grant Program shall automatically accelerate so that each such
option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable with respect to the total number of shares
of Common Stock at the time subject to such option and may be exercised for any
or all of those shares as fully-vested shares of Common Stock. Each such
outstanding option shall be assumed by the successor corporation (or parent
thereof) in the Corporate Transaction and shall remain exercisable for the
fully-vested shares until the earlier of (i) the expiration of the ten (10)-year
-------
option term or (ii) the expiration of the three (3)-year period measured from
the date of the Optionee's cessation of Service.
B. In the event of a Change in Control while the Optionee remains in
Service, each outstanding option held by such Optionee under this Salary
Investment Option Grant Program shall automatically accelerate so that each such
option shall immediately become fully exercisable with respect to the total
number of shares of Common Stock at the time subject to such option and may be
exercised for any or all of those shares as fully-vested shares of Common Stock.
The option shall remain so exercisable until the earlier or (i) the expiration
-------
of
14
<PAGE>
the ten (10)-year option term or (ii) the expiration of the three (3)-year
period measured from the date of the Optionee's cessation of Service.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a
thirty (30)-day period in which to surrender to the Corporation each of his or
her outstanding option grants. The Optionee shall in return be entitled to a
cash distribution from the Corporation in an amount equal to the excess of (i)
the Take-Over Price of the shares of Common Stock at the time subject to each
surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such shares.
Such cash distribution shall be paid within five (5) days following the
surrender of the option to the Corporation.
The Plan Administrator shall pre-approve, at the time the surrender
right is granted or at any time prior to exercise, the subsequent exercise of
that right in accordance with the terms of the grant and the provisions of this
Section III. No additional approval of the Plan Administrator or the Board shall
be required at the time of the actual option surrender and cash distribution.
D. The grant of options under the Salary Investment Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
IV. REMAINING TERMS
The remaining terms of each option granted under the Salary Investment
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Option Grant Program.
15
<PAGE>
ARTICLE FOUR
STOCK ISSUANCE PROGRAM
----------------------
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants.
Each such stock issuance shall be evidenced by a Stock Issuance Agreement which
complies with the terms specified below.
A. Purchase Price.
--------------
1. The purchase price per share shall be fixed by the Plan
Administrator, but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the issuance date.
2. Subject to the provisions of Section I of Article Six, shares of
Common Stock may be issued under the Stock Issuance Program for any of the
following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any Parent or
Subsidiary).
B. Vesting Provisions.
------------------
1. Shares of Common Stock issued under the Stock Issuance Program
may, in the discretion of the Plan Administrator, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program, namely:
(i) the Service period to be completed by the Participant or
the performance objectives to be attained,
(ii) the number of installments in which the shares are to vest,
(iii) the interval or intervals (if any) which are to lapse
between installments, and
(iv) the effect which death, Permanent Disability or other event
designated by the Plan Administrator is to have upon the vesting schedule,
shall be determined by the Plan Administrator and incorporated into the Stock
Issuance Agreement.
16
<PAGE>
2. Any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
3. The Participant shall have full shareholder rights with respect
to any shares of Common Stock issued to the Participant under the Stock Issuance
Program, whether or not the Participant's interest in those shares is vested.
Accordingly, the Participant shall have the right to vote such shares and to
receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while holding
one or more unvested shares of Common Stock issued under the Stock Issuance
Program or should the performance objectives not be attained with respect to one
or more such unvested shares of Common Stock, then those shares shall be
immediately surrendered to the Corporation for cancellation, and the Participant
shall have no further shareholder rights with respect to those shares. To the
extent the surrendered shares were previously issued to the Participant for
consideration paid in cash or cash equivalent (including the Participant's
purchase-money indebtedness), the Corporation shall repay to the Participant the
cash consideration paid for the surrendered shares and shall cancel the unpaid
principal balance of any outstanding purchase-money note of the Participant
attributable to the surrendered shares.
5. The Plan Administrator may in its discretion waive the surrender
and cancellation of one or more unvested shares of Common Stock which would
otherwise occur upon the cessation of the Participant's Service or the non-
attainment of the performance objectives applicable to those shares. Such waiver
shall result in the immediate vesting of the Participant's interest in the
shares as to which the waiver applies. Such waiver may be effected at any time,
whether before or after the Participant's cessation of Service or the attainment
or non-attainment of the applicable performance objectives.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. Unless otherwise provided in the Stock Issuance Agreement, all of the
Corporation's outstanding repurchase/cancellation rights under the Stock
Issuance Program shall terminate automatically, and all the shares of Common
Stock subject to those terminated rights shall immediately vest in full in the
event of any Corporate Transaction, except to the extent those
repurchase/cancellation rights are to be assigned to the successor corporation
(or parent thereof) in connection with such Corporate Transaction.
B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued or any time while
the Corporation's repurchase/cancellation rights remain outstanding under the
Stock Issuance Program, to provide that those rights shall automatically
terminate in whole or in part, and the shares of Common Stock subject to those
terminated rights shall immediately vest, in the event the Participant's
17
<PAGE>
Service should terminate by reason of an Involuntary Termination within a
designated period (not to exceed eighteen (18) months) following the effective
date of any Corporate Transaction in which those repurchase/cancellation rights
are assigned to the successor corporation (or parent thereof).
C. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued or any time while
the Corporation's repurchase/cancellation rights remain outstanding under the
Stock Issuance Program, to provide that those rights shall automatically
terminate in whole or in part, and the shares of Common Stock subject to those
terminated rights shall immediately vest, in the event the Participant's Service
should terminate by reason of an Involuntary Termination within a designated
period (not to exceed eighteen (18) months) following the effective date of any
Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.
18
<PAGE>
ARTICLE FIVE
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
I. OPTION TERMS
A. Grant Dates. Option grants shall be made on the dates specified
-----------
below:
1. Initial Grants. Each individual who is first elected or
--------------
appointed as a non-employee Board member at any time after the Underwriting Date
shall automatically be granted, on the date of such initial election or
appointment, two (2) Non-Statutory Options to purchase shares of Common Stock,
one for 30,000 shares of Common Stock and the other for 20,000 shares of Common
Stock, provided such individual has not previously been in the employ of the
Corporation or any Parent or Subsidiary.
2. Annual Grant. On the date of each Annual Shareholders Meeting,
------------
beginning with the 1998 Annual Meeting, each individual who is to continue to
serve as an Eligible Director, whether or not that individual is standing for
re-election to the Board at that particular Annual Meeting, shall automatically
be granted a Non-Statutory Option to purchase 7,500 shares of Common Stock,
provided such individual has served as a non-employee Board member for at least
six (6) months. There shall be no limit on the number of such 7,500-share option
grants any one Eligible Director may receive over his or her period of Board
service, and non-employee Board members who have previously been in the employ
of the Corporation (or any Parent or Subsidiary) shall be eligible to receive
one or more such annual option grants over their period of continued Board
service.
B. Exercise Price.
--------------
1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
C. Option Term. Each option shall have a term of ten (10) years measured
-----------
from the option grant date.
D. Exercisability of Options. Each option shall be immediately
-------------------------
exercisable for any or all of the option shares. However, any shares purchased
under the option shall be subject to repurchase by the Corporation, at the
exercise price paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares.
19
<PAGE>
E. Vesting of Options.
------------------
1. Initial Grants. Each initial 30,000-share grant shall vest, and
--------------
the Corporation's repurchase right shall lapse, in a series of four (4)
successive equal annual installments upon the Optionee's completion of each year
of Board service over the four (4)-year period measured from the option grant
date. Each 20,000-share grant shall vest as to twenty-five percent (25%) of the
option shares on each of the fifth, sixth, seventh and eighth anniversaries of
the option grant date. However, vesting of the shares under the 20,000-share
grant shall be subject to acceleration after the close of each fiscal year,
beginning with the 1998 fiscal year, in the event that the Optionee has served
on a committee of the Board in such fiscal year. Vesting of 2,500 of the option
shares shall accelerate with respect to each committee of the Board on which the
Optionee has served during the fiscal year, up to a maximum of two (2) such
committees, and shall be conditioned upon the Optionee having attended at least
75% of the meetings held by such committee during the fiscal year. The shares to
be accelerated shall be those shares which would otherwise have been the first
shares to vest in accordance with the regular four (4)-year vesting schedule
described above.
2. Annual Grants. Each annual 7,500-share grant shall vest, and the
-------------
Corporation's repurchase right shall lapse, upon the Optionee's completion of
one (1) year of Board service measured from the automatic grant date.
F. Termination of Board Service. The following provisions shall govern
----------------------------
the exercise of any options held by the Optionee at the time the Optionee ceases
to serve as a Board member:
(i) The Optionee (or, in the event of Optionee's death, the
personal representative of the Optionee's estate or the person or persons
to whom the option is transferred pursuant to the Optionee's will or in
accordance with the laws of descent and distribution) shall have a twelve
(12)-month period following the date of such cessation of Board service in
which to exercise each such option.
(ii) During the twelve (12)-month exercise period, the option
may not be exercised in the aggregate for more than the number of vested
shares of Common Stock for which the option is exercisable at the time of
the Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve as a Board member by
reason of death or Permanent Disability, then all shares at the time
subject to the option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following such cessation of
Board service, be exercised for all or any portion of those shares as
fully-vested shares of Common Stock.
(iv) In no event shall the option remain exercisable after the
expiration of the option term. Upon the expiration of the twelve (12)-month
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the
20
<PAGE>
Optionee's cessation of Board service for any reason other than death or
Permanent Disability, terminate and cease to be outstanding to the extent
the option is not otherwise at that time exercisable for vested shares.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the shares of Common Stock
at the time subject to each outstanding option but not otherwise vested shall
automatically vest in full so that each such option shall, immediately prior to
the effective date of the Corporate Transaction, become fully exercisable for
all of the shares of Common Stock at the time subject to such option and may be
exercised for all or any portion of those shares as fully-vested shares of
Common Stock. Immediately following the consummation of the Corporate
Transaction, each automatic option grant shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
B. In connection with any Change in Control, the shares of Common Stock
at the time subject to each outstanding option but not otherwise vested shall
automatically vest in full so that each such option shall, immediately prior to
the effective date of the Change in Control, become fully exercisable for all of
the shares of Common Stock at the time subject to such option and may be
exercised for all or any portion of those shares as fully-vested shares of
Common Stock. Each such option shall remain exercisable for such fully-vested
option shares until the expiration or sooner termination of the option term or
the surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a
thirty (30)-day period in which to surrender to the Corporation each of his or
her outstanding automatic option grants. The Optionee shall in return be
entitled to a cash distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock at the time
subject to each surrendered option (whether or not the Optionee is otherwise at
the time vested in those shares) over (ii) the aggregate exercise price payable
for such shares. Such cash distribution shall be paid within five (5) days
following the surrender of the option to the Corporation. Shareholder approval
of the Plan shall constitute pre-approval of the grant of each such option
surrender right under this Automatic Option Grant Program and the subsequent
exercise of such right in accordance with the terms and provisions of this
Section II.C. No additional approval or consent of the Board or any Plan
Administrator shall be required at the time of the actual option surrender and
cash distribution.
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the exercise price payable per
share under each outstanding option, provided the aggregate exercise price
--------
payable for such securities shall remain the same.
21
<PAGE>
E. The grant of options under the Automatic Option Grant Program shall in
no way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for option grants made
under the Discretionary Option Grant Program.
22
<PAGE>
ARTICLE SIX
MISCELLANEOUS
-------------
I. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest rate
and the terms of repayment) shall be established by the Plan Administrator in
its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee or
the Participant in connection with the option exercise or share purchase.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock upon
the exercise of options or the issuance or vesting of such shares under the Plan
shall be subject to the satisfaction of all applicable Federal, state and local
income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan (other than the options granted or the shares issued under the Automatic
Option Grant or Director Fee Option Grant Program) with the right to use shares
of Common Stock in satisfaction of all or part of the Taxes incurred by such
holders in connection with the exercise of their options or the vesting of their
shares. Such right may be provided to any such holder in either or both of the
following formats:
1. Stock Withholding: The election to have the Corporation withhold,
-----------------
from the shares of Common Stock otherwise issuable upon the exercise of such
Non-Statutory Option or the vesting of such shares, a portion of those shares
with an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.
2. Stock Delivery: The election to deliver to the Corporation, at
--------------
the time the Non-Statutory Option is exercised or the shares vest, one or more
shares of Common Stock previously acquired by such holder (other than in
connection with the option exercise or share vesting triggering the Taxes) with
an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective immediately upon the Plan Effective
Date. However, the Automatic Option Grant Program shall not become effective
until the
23
<PAGE>
Underwriting Date and the Salary Investment Option Grant Program shall not be
implemented until such time as the Primary Committee may deem appropriate.
Options may be granted under the Discretionary Option Grant Program at any time
on or after the Plan Effective Date. However, no options granted under the Plan
may be exercised, and no shares shall be issued under the Plan, until the Plan
is approved by the Corporation's shareholders. If such shareholder approval is
not obtained within twelve (12) months after the Plan Effective Date, then all
options previously granted under this Plan shall terminate and cease to be
outstanding, and no further options shall be granted and no shares shall be
issued under the Plan.
B. The Plan shall serve as the successor to the Predecessor Plan, and no
further option grants or direct stock issuances shall be made under the
Predecessor Plan after the Section 12 Registration Date. All options outstanding
under the Predecessor Plan on the Section 12 Registration Date shall be
incorporated into the Plan at that time and shall be treated as outstanding
options under the Plan. However, each outstanding option so incorporated shall
continue to be governed solely by the terms of the documents evidencing such
option, and no provision of the Plan shall be deemed to affect or otherwise
modify the rights or obligations of the holders of such incorporated options
with respect to their acquisition of shares of Common Stock.
C. One or more provisions of the Plan, including (without limitation) the
option/vesting acceleration provisions of Article Two relating to Corporate
Transactions and Changes in Control, may, in the Plan Administrator's
discretion, be extended to one or more options incorporated from the Predecessor
Plan which do not otherwise contain such provisions.
D. The Plan shall terminate upon the earliest of (i) March 26, 2007, (ii)
--------
the date on which all shares available for issuance under the Plan shall have
been issued as fully-vested shares or (iii) the termination of all outstanding
options in connection with a Corporate Transaction. Upon such plan termination,
all outstanding option grants and unvested stock issuances shall thereafter
continue to have force and effect in accordance with the provisions of the
documents evidencing such grants or issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options or unvested stock issuances at the time outstanding under the Plan
unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require shareholder approval
pursuant to applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted under the
Discretionary Option Grant and Salary Investment Option Grant Programs and
shares of Common Stock may be issued under the Stock Issuance Program that are
in each instance in excess of the number of shares then available for issuance
under the Plan, provided any excess shares actually issued under those programs
shall be held in escrow until there is obtained shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan. If such shareholder approval is not obtained within
24
<PAGE>
twelve (12) months after the date the first such excess issuances are made, then
(i) any unexercised options granted on the basis of such excess shares shall
terminate and cease to be outstanding and (ii) the Corporation shall promptly
refund to the Optionees and the Participants the exercise or purchase price paid
for any excess shares issued under the Plan and held in escrow, together with
interest (at the applicable Short Term Federal Rate) for the period the shares
were held in escrow, and such shares shall thereupon be automatically cancelled
and cease to be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option
under the Plan and the issuance of any shares of Common Stock (i) upon the
exercise of any granted option or (ii) under the Stock Issuance Program shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.
25
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. Automatic Option Grant Program shall mean the automatic option
------------------------------
grant program in effect under the Plan.
B. Board shall mean the Corporation's Board of Directors.
-----
C. Change in Control shall mean a change in ownership or control of
-----------------
the Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's shareholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
D. Code shall mean the Internal Revenue Code of 1986, as amended.
----
E. Common Stock shall mean the Corporation's common stock.
------------
F. Corporate Transaction shall mean either of the following
---------------------
shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
<PAGE>
G. Corporation shall mean Genesys Telecommunications Laboratories,
-----------
Inc., a California corporation, and its successors.
H. Discretionary Option Grant Program shall mean the discretionary
----------------------------------
option grant program in effect under the Plan.
I. Eligible Director shall mean a non-employee Board member eligible
-----------------
to participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Article One.
J. Employee shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
K. Exercise Date shall mean the date on which the Corporation shall
-------------
have received written notice of the option exercise.
L. Fair Market Value per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be deemed equal to the
closing selling price per share of Common Stock on the date in question, as
such price is reported on the Nasdaq National Market or any successor
system. If there is no closing selling price for the Common Stock on the
date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be deemed equal to the closing
selling price per share of Common Stock on the date in question on the
Stock Exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing
selling price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.
(iii) For purposes of any option grants made on the
Underwriting Date, the Fair Market Value shall be deemed to be equal to the
price per share at which the Common Stock is to be sold in the initial
public offering pursuant to the Underwriting Agreement.
(iv) For purposes of any option grants made prior to the
Underwriting Date, the Fair Market Value shall be determined by the Plan
Administrator, after taking into account such factors as it deems
appropriate.
M. Hostile Take-Over shall mean the acquisition, directly or
-----------------
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or
2
<PAGE>
indirectly controls, is controlled by, or is under common control with, the
Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's shareholders which
the Board does not recommend such shareholders to accept.
N. Incentive Option shall mean an option which satisfies the
----------------
requirements of Code Section 422.
O. Involuntary Termination shall mean the termination of the Service
-----------------------
of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by
the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a
change in his or her position with the Corporation which materially reduces
his or her level of responsibility, (B) a reduction in his or her level of
compensation (including base salary, fringe benefits and participation in
any corporate-performance based bonus or incentive programs) by more than
fifteen percent (15%) or (C) a relocation of such individual's place of
employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected by the Corporation without the
individual's consent.
P. Misconduct shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
Q. 1934 Act shall mean the Securities Exchange Act of 1934, as
--------
amended.
R. Non-Statutory Option shall mean an option not intended to satisfy
--------------------
the requirements of Code Section 422.
S. Optionee shall mean any person to whom an option is granted under
--------
the Discretionary Option Grant, Salary Investment Option Grant or Automatic
Option Grant Program.
T. Parent shall mean any corporation (other than the Corporation) in
------
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
3
<PAGE>
U. Participant shall mean any person who is issued shares of Common
-----------
Stock under the Stock Issuance Program.
V. Permanent Disability or Permanently Disabled shall mean the
--------------------------------------------
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for purposes of the Automatic Option Grant
Program, Permanent Disability or Permanently Disabled shall mean the inability
of the non-employee Board member to perform his or her usual duties as a Board
member by reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve (12)
months or more.
W. Plan shall mean the Corporation's 1997 Stock Incentive Plan, as
----
set forth in this document.
X. Plan Administrator shall mean the particular entity, whether the
------------------
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant, Salary Investment Option Grant and
Stock Issuance Programs with respect to one or more classes of eligible persons,
to the extent such entity is carrying out its administrative functions under
those programs with respect to the persons under its jurisdiction.
Y. Plan Effective Date shall mean March 27, 1997, the date on which
-------------------
the Plan was adopted by the Board.
Z. Predecessor Plan shall mean the Corporation's pre-existing 1995
----------------
Stock Option Plan in effect immediately prior to the Plan Effective Date
hereunder.
AA. Primary Committee shall mean the committee of two (2) or more
-----------------
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders and to administer the Salary Investment Option Grant Program with
respect to all eligible individuals.
BB. Salary Investment Option Grant Program shall mean the salary
investment grant program in effect under the Plan.
CC. Secondary Committee shall mean a committee of two (2) or more
-------------------
Board members appointed by the Board to administer the Discretionary Option
Grant and Stock Issuance Programs with respect to eligible persons other than
Section 16 Insiders.
DD. Section 12 Registration Date shall mean the date on which the
----------------------------
Common Stock is first registered under Section 12(g) of Section 16 of the 1934
Act.
EE. Section 16 Insider shall mean an officer or director of the
------------------
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
FF. Service shall mean the performance of services for the
-------
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member
4
<PAGE>
of the board of directors or a consultant or independent advisor, except to the
extent otherwise specifically provided in the documents evidencing the option
grant or stock issuance.
GG. Stock Exchange shall mean either the American Stock Exchange or
--------------
the New York Stock Exchange.
HH. Stock Issuance Agreement shall mean the agreement entered into by
------------------------
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.
II. Stock Issuance Program shall mean the stock issuance program in
----------------------
effect under the Plan.
JJ. Subsidiary shall mean any corporation (other than the
----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
KK. Take-Over Price shall mean the greater of (i) the Fair Market
--------------- -------
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.
LL. Taxes shall mean the Federal, state and local income and
-----
employment tax liabilities incurred by the holder of Non-Statutory Options or
unvested shares of Common Stock in connection with the exercise of those options
or the vesting of those shares.
MM. 10% Shareholder shall mean the owner of stock (as determined
---------------
under Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
NN. Underwriting Agreement shall mean the agreement between the
----------------------
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
OO. Underwriting Date shall mean the date on which the Underwriting
-----------------
Agreement is executed and priced in connection with an initial public offering
of the Common Stock.
5
<PAGE>
EXHIBIT 99.14
FORM OF WRITTEN COMPENSATION AGREEMENT
(OPTIONS GRANTED PURSUANT TO WRITTEN COMPENSATION AGREEMENTS)
<PAGE>
EXHIBIT 99.14
COMPENSATION AGREEMENT
----------------------
This Agreement is made as of the _______ day of ___________, 1999 by
and between Genesys Telecommunications Laboratories, Inc., a California
corporation (the "Corporation"), and _____________________ ("Optionee").
W I T N E S S E T H
-------------------
WHEREAS, in consideration for services performed by Optionee, the
Corporation granted Optionee a stock option on _________________, 1999, to
purchase ___________ shares of the Corporation's Common Stock (the "Option")
upon the terms and conditions set forth in the documentation evidencing such
Option (the "Option Agreement").
NOW, THEREFORE, in consideration of the above premises, the parties
hereto agree as follows:
1. The Corporation and Optionee acknowledge and agree that the
Option is granted solely as compensation for services rendered the Corporation
by Optionee and not for any capital-raising purposes or in connection with any
capital-raising activities.
2. The Option shall not be transferable or assignable except as
permitted pursuant to the terms of the Option Agreement.
3. This Agreement is intended to constitute a written compensation
contract within the meaning of Rule 405 under the Securities Act of 1933, as
amended.
4. This Agreement is intended solely to memorialize the agreement
and understanding which exists between Optionee and the Corporation concerning
the grant of the Option. Nothing herein or in the documentation evidencing the
Option is intended to provide Optionee with the right to remain in the
Corporation's service for any specific period, and Optionee's services may be
terminated at any time by the Corporation, for any reason, with or without
cause.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first above written.
OPTIONEE GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
____________________________________ By: __________________________________
Title:__________________________________
<PAGE>
EXHIBIT 99.15
FORM OF NOTICE OF GRANT OF STOCK OPTION
(OPTIONS GRANTED PURSUANT TO WRITTEN COMPENSATION AGREEMENTS)
<PAGE>
EXHIBIT 99.15
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
NOTICE OF GRANT OF STOCK OPTION
-------------------------------
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Genesys Telecommunications Laboratories,
Inc. (the "Corporation"):
Optionee: _____________________________________________
--------
Grant Date: ___________________________________________
----------
Vesting Commencement Date: ____________________________
-------------------------
Exercise Price: $_____________________________ per share
--------------
Number of Option Shares: _________________________ shares
-----------------------
Expiration Date: ________________________________________
---------------
Type of Option: Non-Statutory Stock Option
--------------
Exercise Schedule: The Option shall become exercisable with respect
-----------------
to twenty-five percent (25%) of the Option Shares upon Optionee's
completion of one (1) year of Service measured from the Vesting
Commencement Date and shall become exercisable for the balance of the
Option Shares in thirty-six (36) successive equal monthly installments
upon Optionee's completion of each additional month of Service over
the thirty-six (36) month period measured from the first anniversary
of the Vesting Commencement Date. In no event shall the Option become
exercisable for any additional Option Shares after Optionee's
cessation of Service.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the Stock Option Agreement attached hereto
as Exhibit A.
---------
No Employment or Service Contract. Nothing in this Notice or in the
---------------------------------
attached Stock Option Agreement shall confer upon Optionee any right to continue
in Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.
<PAGE>
Definitions. All capitalized terms in this Notice shall have the
-----------
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
DATED:________________, 1999
GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
By: _____________________________
Title: __________________________
_________________________________
OPTIONEE
Address: ________________________
_________________________________
ATTACHMENTS
- -----------
Exhibit A - Stock Option Agreement
2
<PAGE>
EXHIBIT A
---------
STOCK OPTION AGREEMENT
----------------------
<PAGE>
EXHIBIT 99.16
FORM OF STOCK OPTION AGREEMENT
(OPTIONS GRANTED PURSUANT TO WRITTEN COMPENSATION AGREEMENTS)
<PAGE>
EXHIBIT 99.16
STOCK OPTION AGREEMENT
----------------------
RECITALS
- --------
A. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and in connection with such services the Corporation has
approved the grant of an option to Optionee.
B. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. The Corporation hereby grants to
---------------
Optionee, as of the Grant Date, a Non-Statutory option to purchase up to the
number of Option Shares specified in the Grant Notice. The Option Shares shall
be purchasable from time to time during the option term specified in Paragraph 2
at the Exercise Price.
2. Option Term. This option shall have a maximum term of ten (10)
-----------
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. Limited Transferability. This option may, in connection with the
-----------------------
Optionee's estate plan, be assigned in whole or in part during Optionee's
lifetime to one or more members of the Optionee's immediate family or to a trust
established for the exclusive benefit of one or more such family members. The
assigned portion shall be exercisable only by the person or persons who acquire
a proprietary interest in the option pursuant to such assignment. The terms
applicable to the assigned portion shall be the same as those in effect for this
option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Compensation Committee may deem
appropriate. This option shall also be transferable and assignable by Optionee
by will or by the laws of descent and distribution following Optionee's death.
4. Dates of Exercise. This option shall become exercisable for the
-----------------
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
5. Cessation of Service. The option term specified in Paragraph 2
--------------------
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in Service for any
reason (other than death, Permanent Disability or Misconduct) while this
option is outstanding, then Optionee shall have a period of thirty (30)
days (commencing with the date of such
<PAGE>
cessation of Service) during which to exercise this option, but in no event
shall this option be exercisable at any time after the Expiration Date.
(ii) If Optionee dies while this option is outstanding,
then the personal representative of Optionee's estate or the person or
persons to whom the option is transferred pursuant to Optionee's will or in
accordance with the laws of descent and distribution shall have the right
to exercise this option. Such right shall lapse, and this option shall
cease to be outstanding, upon the earlier of (A) the expiration of the
twelve (12)-month period measured from the date of Optionee's death or (B)
the Expiration Date.
(iii) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then Optionee shall have a
period of twelve (12) months (commencing with the date of such cessation of
Service) during which to exercise this option. In no event shall this
option be exercisable at any time after the Expiration Date.
(iv) During the limited period of post-Service
exercisability, this option may not be exercised in the aggregate for more
than the number of vested Option Shares for which the option is exercisable
at the time of Optionee's cessation of Service. Upon the expiration of such
limited exercise period or (if earlier) upon the Expiration Date, this
option shall terminate and cease to be outstanding for any vested Option
Shares for which the option has not been exercised. However, this option
shall, immediately upon Optionee's cessation of Service for any reason,
terminate and cease to be outstanding with respect to any Option Shares in
which Optionee is not otherwise at that time vested or for which this
option is not otherwise at that time exercisable.
(v) Should Optionee's Service be terminated for
Misconduct, then this option shall terminate immediately and cease to
remain outstanding.
6. Special Acceleration of Option.
------------------------------
(a) This option, to the extent outstanding at the time of
a Corporate Transaction but not otherwise fully exercisable, shall be subject to
the following provisions:
(i) Service for at least One (1) Year. If Optionee has
been in Service for at least one (1) year prior to the effective date of
the Corporate Transaction, then this option, to the extent outstanding but
not otherwise fully exercisable at the time of such Corporate Transaction,
shall automatically accelerate so that this option shall, immediately prior
to the effective date of the Corporate Transaction, become exercisable for
all of the Option Shares at the time subject to this option and may be
exercised for any or all of those Option Shares as fully-vested shares of
Common Stock. No such acceleration of this option, however, shall occur if
and to the extent: (i) this option is, in connection with the Corporate
Transaction, to be assumed by the successor corporation (or parent thereof)
or to be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation (or parent thereof) or (ii) this
option is to be replaced with a cash incentive program of the successor
corporation which preserves the
<PAGE>
spread existing on the unvested Option Shares at the time of the Corporate
Transaction (the excess of the Fair Market Value of those Option Shares
over the aggregate Exercise Price payable for such shares) and provides for
subsequent pay-out in accordance with the same option exercise/vesting
schedule set forth in the Grant Notice.
(ii) Service for less than One (1) Year. If Optionee has
been in Service for less than one (1) year prior to the effective date of
the Corporate Transaction, then no acceleration of this option shall occur
in connection with such Corporate Transaction and, to the extent not
previously exercised, this option shall terminate and cease to be
outstanding on the effective date of such Corporate Transaction, except to
the extent this option is either (i) assumed by the successor corporation
(or parent thereof) or replaced with a comparable option to purchase shares
of the capital stock of the successor corporation (or parent thereof), or
(ii) replaced with a cash incentive program of the successor corporation
with preserves the spread existing on the unvested Option Shares at the
time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to those option
shares.
(b) Immediately following the Corporate Transaction, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction.
(c) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same.
--------
(d) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
7. Adjustment in Option Shares. Should any change be made to the
---------------------------
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. Shareholder Rights. The holder of this option shall not have
------------------
any shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
<PAGE>
9. Manner of Exercising Option.
---------------------------
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
(i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) a promissory note payable to the Corporation, but
only to the extent authorized by the Compensation Committee in
accordance with Paragraph 13;
(C) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date; or
(D) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising
the option) shall concurrently provide irrevocable written
instructions (I) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate Exercise Price payable
for the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the Corporation
by reason of such exercise and (II) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm
in order to complete the sale transaction.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to the
Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee)
have the right to exercise this option.
(iv) Make appropriate arrangements with the Corporation (or
Parent or Subsidiary employing or retaining Optionee) for the satisfaction
of all Federal, state and local income and employment tax withholding
requirements applicable to the option exercise.
<PAGE>
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10. Compliance with Laws and Regulations.
------------------------------------
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
11. Successors and Assigns. Except to the extent otherwise provided
----------------------
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee, Optionee's assigns and the legal representatives, heirs and
legatees of Optionee's estate.
12. Notices. Any notice required to be given or delivered to the
-------
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. Financing. The Compensation Committee may, in its absolute
---------
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased Option Shares by delivering a full-recourse
promissory note payable to the Corporation. The terms of any such promissory
note (including the interest rate, the requirements for collateral and the terms
of repayment) shall be established by the Compensation Committee in its sole
discretion.
14. Construction. All decisions of the Compensation Committee with
------------
respect to any question or issue arising under this Agreement shall be
conclusive and binding on all persons having an interest in this option.
15. Governing Law. The interpretation, performance and enforcement of
-------------
this Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify Genesys Telecommunications Laboratories, Inc. (the
"Corporation") that I elect to purchase _____________ shares of the
Corporation's Common Stock (the "Purchased Shares") at the option exercise price
of $ _____________ per share (the "Exercise Price") pursuant to that certain
option (the "Option") granted to me on _____________, 199___.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
________________________, 199_
Date
_______________________________
Optionee
Address:_______________________
Print name in exact manner it is
to appear on the stock certificate: ___________________________________
Address to which certificate is to
be sent, if different from address
above: ___________________________________
Social Security Number:
___________________________________
Employee Number:
___________________________________
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Stock Option Agreement.
---------
B. Board shall mean the Corporation's Board of Directors.
-----
C. Code shall mean the Internal Revenue Code of 1986, as amended.
----
D. Common Stock shall mean the Corporation's common stock.
------------
E. Compensation Committee shall mean the Compensation Committee of
----------------------
the Board.
F. Corporate Transaction shall mean either of the following
---------------------
shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation .
G. Corporation shall mean Genesys Telecommunications Laboratories,
-----------
Inc., a California corporation.
H. Employee shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
I. Exercise Date shall mean the date on which the option shall have
-------------
been exercised in accordance with Paragraph 9 of the Agreement.
J. Exercise Price shall mean the exercise price per share as
--------------
specified in the Grant Notice.
K. Expiration Date shall mean the date on which the option expires
---------------
as specified in the Grant Notice.
L. Fair Market Value per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as the price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor
<PAGE>
system. If there is no closing selling price for the Common Stock on the
date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Compensation Committee to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
M. Grant Date shall mean the date of grant of the option as
----------
specified in the Grant Notice.
N. Grant Notice shall mean the Notice of Grant of Stock Option
------------
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
O. Misconduct shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
Optionee or any other individual in the Service of the Corporation (or any
Parent or Subsidiary).
P. Non-Statutory Option shall mean an option not intended to satisfy
--------------------
the requirements of Code Section 422.
Q. Notice of Exercise shall mean the notice of exercise in the form
------------------
attached hereto as Exhibit I.
R. Option Shares shall mean the number of shares of Common Stock
-------------
subject to the option as specified in the Grant Notice.
S. Optionee shall mean the person to whom the option is granted as
--------
specified in the Grant Notice.
T. Parent shall mean any corporation (other than the Corporation) in
------
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
<PAGE>
U. Permanent Disability shall mean the inability of Optionee to
--------------------
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more..
V. Service shall mean the Optionee's performance of services for the
-------
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-
employee member of the board of directors or a consultant or independent
advisor.
W. Stock Exchange shall mean the American Stock Exchange or the New
--------------
York Stock Exchange.
X. Subsidiary shall mean any corporation (other than the
----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
<PAGE>
EXHIBIT 99.17
FORM OF OPTION AGREEMENT UNDER THE
PLATO SOFTWARE CORPORATION 1998 SHARE OPTION PLAN
<PAGE>
EXHIBIT 99.17
PLATO SOFTWARE CORPORATION
1998 SHARE OPTION PLAN
OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.
I. NOTICE OF OPTION GRANT
----------------------
Tikva Schmidt
The undersigned Optionee has been granted an Option to purchase
Shares, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:
Grant Number
Date of Grant September 10, 1998
Vesting Commencement Date September 10, 1998
Exercise Price per Share $ 0.01
Total Number of Shares Granted 20,000
Total Exercise Price $ 200
Type of Option: Option intended to qualify
under Section 3(i) of the
Israeli Income Tax Ordinance
(New Version), 196 1, and
regulations, rules and orders
of procedures promulgated
thereunder (the "Tax
Ordinance").
Term/Expiration Date: September 10, 2008
Vesting Schedule:
-----------------
This Option shall be exercisable, in whole or in part, according to
the following vesting schedule:
One-fourth (1/4th) of the Shares subject to the Option shall vest
twelve months after the Vesting Commencement Date, and 1/48h of the Shares
subject to the Option shall vest each month thereafter, subject to Optionee's
continuing to be a Service Provider on such dates.
Termination Period:
-------------------
This Option shall be exercisable for three months after Optionee
ceases to be a Service Provider. Upon Optionee's death or disability, this
Option may be exercised for one year after Optionee ceases to be a Service
Provider. In no event may Optionee exercise this Option after the
Term/Expiration Date as provided above.
<PAGE>
II. AGREEMENT
---------
1. Grant of Option
---------------
(a) The Plan Administrator of the Company hereby grants to the
Optionee named in the Notice of Grant (the "Optionee"), an option (the "Option")
to purchase the number of Shares set forth in the Notice of Grant, at the
exercise price per Share set forth in the Notice of Grant (the "Exercise
Price").
(b) Subject to Section 13(c) of the Plan, in the event of a conflict
between the terms and conditions of the Plan and this Option Agreement, the
terms and conditions of the Plan shall prevail.
2. Exercise of Option
------------------
(a) Right to Exercise. This Option shall be exercisable during its
-----------------
term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option shall be exercisable by delivery
------------------
of an exercise notice in the form attached as Exhibit (the "Exercise Notice")
which shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by the aggregate Exercise
Price.
No Shares shall be issued pursuant to the exercise of an Option unless
such issuance and such exercise comply with Applicable Laws. If any law or
regulation requires the Company to take any action with respect to the Shares
specified in such notice before the issuance thereof, then the date of their
issuance shall be extended for the period necessary to take such action.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.
3. Optionee's Representation. In the event the Shares have not been
-------------------------
registered under the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and the Company shall have effected an initial public offering of its
securities under the Securities Act at the time this Option is exercised, the
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B.
4. Lock-Up Period. Optionee hereby agrees that, if so requested by the
--------------
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company, not to exceed 180 days) (the "Market
2
<PAGE>
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.
5. Method of Payment. Payment of the aggregate Exercise Price shall be by
-----------------
any of the following, or a combination thereof, at the election of the Optionee:
(a) cash or check; or
(b) consideration received by the Company under a formal cashless
exercise program adopted by the Company in connection with the Plan.
6. Restrictions on Exercise. This Option may not be exercised if the
------------------------
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of Applicable Laws.
7. Non-Transferability of Option. This Option may not be transferred in
-----------------------------
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
8. Term of Option. This Option may be exercised only within the term set
--------------
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
9. Tax Consequences. Set forth below is a brief summary as of the date
----------------
of this Option of some of the Israeli tax consequences of the grant and exercise
of this Option and the disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THEREFORE,-
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
(a) The difference between the Fair Market Value of the Shares on the
date of grant and the Exercise Price, if any, may be taxable as income under the
Tax Ordinance.
(b) Upon exercise of this Option, the difference between the Fair
Market Value of the Shares being exercised and the exercise price, to the extent
not taxed at the time of grant, will be taxable as income under the Tax
Ordinance.
(c) If the Shares are not sold simultaneously with the exercise of
this Option, then upon a subsequent sale of the Shares, any additional gain not
already taxed as income under the Tax Ordinance, will be taxed as a capital
gain.
Any tax consequences arising from the grant or exercise of any Option,
from the payment for Shares or from any other event or act (of the Company or
the Optionee) hereunder,
3
<PAGE>
shall be borne solely by the Optionee. Furthermore, the Optionee shall agree to
indemnify the Company and hold it harmless against and from any and all
liability for any such tax or interest or penalty thereof, including without
limitation, liabilities relating to the necessity to withhold, or to have
withheld, any such tax from any payment made to the Optionee.
10. Entire Agreement; Governing Law. The Plan is incorporated herein by
-------------------------------
reference. The Plan and this 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
Optionee. This agreement is governed by and construed and enforced in accordance
with the laws of the state of Israel applicable to contracts made and to be
performed therein, without giving effect to the principles of conflict of laws.
11. Acknowledgements by Optionee.
----------------------------
(a) No Guarantee of Continued Service. Optionee acknowledges and
---------------------------------
agrees that the vesting of Shares pursuant to the vesting schedule hereof is
earned only by continuing as a Service Provider at the will of the Company or
any Parent or Subsidiary of the Company (not through the act of being hired,
being granted this Option or acquiring Shares hereunder). Optionee further
acknowledges and agrees that this Agreement, the transactions contemplated
hereunder and the vesting schedule set forth herein do not constitute an express
or implied promise of continued engagement as a Service Provider for the vesting
period, for any period, or at all, and shall not interfere in any way with
Optionee's right, or the right of the Company or any Parent or Subsidiary of the
Company, to terminate Optionee's relationship as a Service Provider at any time,
with or without cause.
(b) Satisfaction of all Equity Rights. This Option is intended to
---------------------------------
satisfy in full any and all rights of Optionee to receive an equity interest in
the Company or its Subsidiary, Plato Software Ltd., an Israeli company (the
"Sub"). By acceptance of this Option, Optionee acknowledges that this Option
satisfies in full any and all such rights, and any corollary obligations of the
Company and Sub, including without limitation any such rights arising under
Optionee's offer letter with Sub or arising under Optionee's employment and non-
competition agreement with Sub
(c) Plan Terms Binding. Optionee acknowledges receipt of a copy of
------------------
the Plan and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions arising under the
Plan or this Option. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
4
<PAGE>
OPTIONEE PLATO SOFTWARE CORPORATION
_________________________________ ______________________________
Signature By
Tikva Schmidt
- --------------------------------- ______________________________
Print Name Title
_________________________________
_________________________________
Residence Address
5
<PAGE>
EXHIBIT 99.18
FORM OF STOCK OPTION ASSUMPTION FOR OPTIONS GRANTED
UNDER THE PLATO SOFTWARE CORPORATION 1998 SHARE OPTION PLAN
<PAGE>
EXHIBIT 99.18
GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
-----------------------------------------------------------
STOCK OPTION ASSUMPTION
-----------------------------------------------------------
OPTIONS GRANTED PURSUANT TO
PLATO SOFTWARE CORPORATION
1998 SHARE OPTION PLAN
Optionee: (Name)
STOCK OPTION ASSUMPTION effective as of the 30th day of
December, 1998 by Genesys Telecommunications Laboratories, Inc., a California
corporation ("Genesys").
WHEREAS, the undersigned individual ("Optionee") holds one or
more outstanding options to purchase shares of the common stock of Plato
Software Corporation, a Delaware corporation ("Plato"), which were granted to
Optionee on September 10, 1998 under the Plato Software Corporation 1998 Share
Option Plan (the "Plato Plan") and are evidenced by an Option Agreement (the
"Option Agreement") between Plato and Optionee.
WHEREAS, Plato has been acquired by Genesys through the
purchase by Genesys of all of the issued and outstanding shares of the capital
stock of Plato (the "Acquisition") pursuant to the Agreement and Plan of
Reorganization, dated as of December 9, 1998 (as amended), by and between
Genesys, Plato and Genpla Inc. (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require
Genesys to assume all obligations of Plato with respect to the outstanding
options under the Plato Plan at the timely consummation of the Acquisition.
WHEREAS, pursuant to the provisions of the Merger Agreement,
the exchange ratio (the "Exchange Ratio") in effect for the Acquisition is 0.025
of a share of Genesys common stock ("Genesys Stock") for each outstanding share
of Plato common stock ("Plato Stock").
WHEREAS, this assumption is effective as of December 30, 1998
(the "Effective Time"), and reflects certain adjustments to Optionee's
outstanding options under the Plato Plan, which have become necessary by reason
of the assumption of those options by Genesys in connection with the
Acquisition.
NOW, THEREFORE, it is hereby provided as follows:
1. The number of shares of Plato Stock subject to the options
held by Optionee immediately prior to the effective time (the "Plato Options")
and the exercise price payable per share pursuant to each such option are set
forth in Schedule I hereto. Genesys hereby assumes, as of the effective time,
all the duties and obligations of Plato under each of the Plato Options. In
connection with such assumption, the number of shares of Genesys Stock
<PAGE>
purchasable under each Plato Option hereby assumed, and the exercise price
payable thereunder, have been adjusted to reflect the Exchange Ratio.
Accordingly, the number of shares of Genesys Stock subject to each Plato Option
hereby assumed shall be as specified for that option in attached Schedule I, and
----------
the adjusted exercise price payable per share of Genesys Stock under each such
assumed Plato Option shall also be as indicated for that option in attached
Schedule I.
- ----------
2. The intent of the foregoing adjustments to each assumed Plato
Option is to assure that the spread between the aggregate fair market value of
the shares of Genesys Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this assumption will, immediately after
the consummation of the Acquisition, be not less than the spread which existed,
immediately prior to the Acquisition, between the then aggregate fair market
value of the Plato Stock subject to the Plato Option and the aggregate exercise
price in effect at such time under the Option Agreement. Such adjustments are
also intended to preserve, immediately after the Acquisition, on a per share
basis, the same ratio of exercise price per option share to fair market value
per share which existed under the Plato Option immediately prior to the
Acquisition
3. The following provisions shall govern each Plato Option hereby
assumed by Genesys:
(a) Unless the context otherwise requires, all references in
each Option Agreement and in the Plato Plan (as incorporated into such
Option Agreement) (i) to the "Company" shall mean Genesys, (ii) to "Stock"
and "Shares" shall mean shares of Genesys Stock, (iii) to the "Board" shall
mean the Board of Directors of Genesys, (iv) to the "Committee" shall mean
the Compensation Committee of the Genesys Board of Directors, and (v) to
the "Plan Administrator" shall mean the Compensation Committee of the
Genesys Board of Directors.
(b) The grant date and the expiration date of each assumed
Plato Option and all other provisions which govern either the exercise or
the termination of the assumed Plato Option shall remain the same as set
forth in the Option Agreement applicable to that option, and the provisions
of the Option Agreement shall accordingly govern and control Optionee's
rights under this Agreement to purchase Genesys Stock.
(c) Each Plato Option held by Optionee shall be assumed by
Genesys as of the Effective Time. The shares subject to each such assumed
Plato Option shall continue to vest in accordance with the same installment
vesting schedule in effect under the applicable Option Agreement
immediately prior to the Effective Time, with the number of shares of
Genesys Stock subject to each such installment adjusted to reflect the
Exchange Ratio. Accordingly, no acceleration of vesting under the Plato
Option held by Optionee shall be deemed to occur by reason of the
Acquisition, and the vesting dates under each applicable Option Agreement
shall remain the same following the Acquisition.
2.
<PAGE>
(d) The adjusted exercise price payable for the Genesys Stock
subject to each assumed Plato Option shall be payable in any of the forms
authorized under the Option Agreement applicable to that option, provided
that any shares of Genesys Stock delivered in payment of the exercise price
must have been held for six (6) months. For purposes of determining the
holding period of any shares of Genesys Stock delivered in payment of such
adjusted exercise price, the period for which such shares were held as
Plato Stock prior to the Acquisition shall be taken into account.
(e) In order to exercise each assumed Plato Option, Optionee
must deliver to Genesys a written notice of exercise in which the number of
shares of Genesys Stock to be purchased thereunder must be indicated. The
exercise notice must be accompanied by payment of the adjusted exercise
price payable for the purchased shares of Genesys Stock and should be
delivered to Genesys at the following address:
Genesys Telecommunications Laboratories, Inc.
1155 Market Street
San Francisco, California 94103
Attention: Stock Administrator
4. Except to the extent specifically modified by this Stock Option
Assumption, all of the terms and conditions of each Option Agreement as in
effect immediately prior to the Acquisition shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption.
IN WITNESS WHEREOF, Genesys Telecommunications Laboratories, Inc. has
caused this Stock Option Assumption to be executed on its behalf by its duly-
authorized officer as of the ____ day of _______ _, 1999.
GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
By: ________________________
Title:______________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption and understands that all rights and liabilities with respect to each
of his or her Plato Options hereby assumed by Genesys are as set forth in the
Option Agreement, the Plato Plan and such
3.
<PAGE>
Stock Option Assumption, and no other agreements exist with respect to his or
her Plato Options. The undersigned also acknowledges that except to the extent
specifically modified by this Stock Option Assumption, all of the terms and
conditions of the Option Agreement as in effect immediately prior to the
Effective Time shall continue in full force and effect and shall not in any way
be amended, revised or otherwise affected by this Stock Option Assumption. The
undersigned further acknowledges that the Plato Options described in Schedule I
hereto constitute all of the options or other rights to purchase Plato Stock
that he or she owned immediately prior to the Effective Time.
_________________________________
(Name), OPTIONEE
DATED: __________________,1999
4.
<PAGE>
SCHEDULE I
----------
Number of Shares Exercise Price
Plato Option (Plato_Shares) (Plato_Price)
Genesys Option (Genesys_Shares) (Genesys_Price)
<PAGE>
EXHIBIT 99.19
NEXT AGE TECHNOLOGIES, INC.
1998 EQUITY INCENTIVE PLAN
<PAGE>
EXHIBIT 99.19
NEXT ERA TECHNOLOGIES, INC.
1998 EQUITY INCENTIVE PLAN
Adopted August 13, 1998
Approved By Shareholders ______________, 1998
Termination Date: August 12, 2008
1. PURPOSES.
(a) Eligible Stock Award Recipients. The persons eligible to receive Stock
Awards are the Employees, Directors and Consultants of the Company and its
Affiliates.
(b) Available Stock Awards. The purpose of the Plan is to provide a means
by which eligible recipients of Stock Awards may be given an opportunity to
benefit from increases in value of the Common Stock through the granting of the
following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock
Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.
(c) General Purpose. The Company, by means of the Plan, seeks to retain
the services of the group of persons eligible to receive Stock Awards, to secure
and retain the services of new members of this group and to provide incentives
for such persons to exert maximum efforts for the success of the Company and its
Affiliates.
2. DEFINITIONS.
(a) "Affiliate" means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and respectively, of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a Committee appointed by the Board in accordance with
subsection 3(c).
(e) "Common Stock" means the common stock of the Company.
(f) "Company" means Next Era Technologies, Inc., a California corporation.
(g) "Consultant" means any person, including an advisor, (i) engaged by the
Company or an Affiliate to render consulting or advisory services and who is
compensated for such services or (ii) who is a member of the Board of Directors
of an Affiliate. However, the term "Consultant" shall not include either
Directors of the Company who are not compensated by the Company for their
services as Directors or Directors of the Company who are merely paid a
director's fee by the Company for their services as Directors.
1
<PAGE>
(h) "Continuous Service" means that the Participant's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director of the
Company will not constitute an interruption of Continuous Service. The Board or
the chief executive officer of the Company, in that party's sole discretion, may
determine whether Continuous Service shall be considered interrupted in the case
of any leave of absence approved by that party, including sick leave, military
leave or any other personal leave.
(i) "Covered Employee" means the chief executive officer and the four (4)
other highest compensated officers of the Company for whom total compensation is
required to be reported to shareholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.
(j) "Director" means a member of the Board of Directors of the Company.
(k) "Disability" means (i) before the Listing Date, the inability of a
person, in the opinion of a qualified physician acceptable to the Company, to
perform the major duties of that person's position with the Company or an
Affiliate of the Company because of the sickness or injury of the person and
(ii) after the Listing Date, the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.
(l) "Employee" means any person employed by the Company or an Affiliate.
Mere service as a Director or payment of a director's fee by the Company or an
Affiliate shall not be sufficient to constitute "employment" by the Company or
an Affiliate.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(n) "Fair Market Value" means, as of any date, the value of the Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) 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 Board deems reliable.
(ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.
2
<PAGE>
(iii) Prior to the Listing Date, the value of the Common Stock shall
be determined in a manner consistent with Section 260.140.50 of Title 10 of the
California Code of Regulations.
(o) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(p) "Listing Date" means the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on any
securities exchange or designated (or approved for designation) upon notice of
issuance as a national market security on an interdealer quotation system if
such securities exchange or interdealer quotation system has been certified in
accordance with the provisions of Section 25100(o) of the California Corporate
Securities Law of 1968.
(q) "Non-Employee Director" means a Director of the Company who either (i)
is not a current Employee or Officer of the Company or its parent or a
subsidiary, does not receive compensation (directly or indirectly) from the
Company or its parent or a subsidiary for services rendered as a consultant or
in any capacity other than as a Director (except for an amount as to which
disclosure would not be required under Item 404(a) of Regulation S-K promulgated
pursuant to the Securities Act ("Regulation S-K")), does not possess an interest
in any other transaction as to which disclosure would be required under Item
404(a) of Regulation S-K and is not engaged in a business relationship as to
which disclosure would be required under Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a "non-employee director" for purposes of Rule 16b-3.
(r) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option.
(s) "Officer" means (i) before the Listing Date, any person designated by
the Company as an officer and (ii) on and after the Listing Date, a person who
is an officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.
(t) "Option" means an Incentive Stock Option or a Nonstatutory Stock Option
granted pursuant to the Plan.
(u) "Option Agreement" means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(v) "Optionholder" means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.
(w) "Outside Director" means a Director of the Company who either (i) is
not a current employee of the Company or an "affiliated corporation" (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than
3
<PAGE>
benefits under a tax qualified pension plan), was not an officer of the Company
or an "affiliated corporation" at any time and is not currently receiving direct
or indirect remuneration from the Company or an "affiliated corporation" for
services in any capacity other than as a Director or (ii) is otherwise
considered an "outside director" for purposes of Section 162(m) of the Code.
(x) "Participant" means a person to whom a Stock Award is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding Stock
Award.
(y) "Plan" means this Next Era Technologies, Inc. 1998 Equity Incentive
Plan.
(z) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.
(aa) "Securities Act" means the Securities Act of 1933, as amended.
(bb) "Stock Award" means any right granted under the Plan, including an
Option, a stock bonus and a right to acquire restricted stock.
(cc) "Stock Award Agreement" means a written agreement between the Company
and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.
(dd) "Ten Percent Shareholder" means a person who owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of any of its Affiliates.
3. ADMINISTRATION.
(a) Administration by Board. The Board shall administer the Plan unless
and until the Board delegates administration to a Committee, as provided in
subsection 3(c).
(b) Powers of Board. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:
(i) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; what type or combination of types of Stock Award shall be
granted; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive stock pursuant to a Stock Award; and the number of shares with respect
to which a Stock Award shall be granted to each such person.
(ii) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.
(iii) To amend the Plan or a Stock Award as provided in Section 12.
4
<PAGE>
(iv) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company which are not in conflict with the provisions of the Plan.
(c) Delegation to Committee.
(i) General. The Board may delegate administration of the Plan to
a Committee or Committees of one or more members of the Board, and the term
"Committee" shall apply to any person or persons to whom such authority has been
delegated. If administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
(ii) Committee Composition when Common Stock is Publicly Traded. At
such time as the Common Stock is publicly traded, in the discretion of the
Board, a Committee may consist solely of two or more Outside Directors, in
accordance with Section 162(m) of the Code, and/or solely of two or more Non-
Employee Directors, in accordance with Rule 16b-3. Within the scope of such
authority, the Board or the Committee may (i) delegate to a committee of one or
more members of the Board who are not Outside Directors the authority to grant
Stock Awards to eligible persons who are either (1) not then Covered Employees
and are not expected to be Covered Employees at the time of recognition of
income resulting from such Stock Award or (2) not persons with respect to whom
the Company wishes to comply with Section 162(m) of the Code and/or) (ii)
delegate to a committee of one or more members of the Board who are not Non-
Employee Directors the authority to grant Stock Awards to eligible persons who
are not then subject to Section 16 of the Exchange Act.
4. SHARES SUBJECT TO THE PLAN.
(a) Share Reserve. Subject to the provisions of Section II relating to
adjustments upon changes in stock, the stock that may be issued pursuant, to
Stock Awards shall not exceed in the aggregate four hundred fifty-nine thousand
seven hundred sixty-one (459,761) shares of Common Stock.
(b) Reversion of Shares to the Share Reserve. If any Stock Award shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full (or vested in the case of restricted stock), the stock
not acquired under such Stock Award shall revert to and again become available
for issuance under the Plan. If any Common Stock acquired pursuant to the
exercise of an Option shall for any reason be repurchased by the Company under
an unvested share repurchase option provided under the Plan, the stock
repurchased by the Company under such repurchase option shall not revert to and
again become available for issuance under the Plan.
5
<PAGE>
(c) Source of Shares. The stock subject to the Plan may be unissued shares
or reacquired shares, bought on the market or otherwise.
(d) Share Reserve Limitation. Prior to the Listing Date, at no time shall
the total number of shares issuable upon exercise of all outstanding Options and
the total number of shares provided for under any stock bonus or similar plan of
the Company exceed the applicable percentage as calculated in accordance with
the conditions and exclusions of Section 260.140.45 of Title 10 of the
California Code of Regulations, based on the shares of the Company which are
outstanding at the time the calculation is made.
5. ELIGIBILITY.
(a) Aligibility for Specific Stock Awards. Incentive Stock Options may be
granted only to Employees. Stock Awards other than Incentive Stock Options may
be granted to Employees, Directors and Consultants.
(b) Ten Percent Shareholders. No Ten Percent Shareholder shall be eligible
for the grant of an Incentive Stock Option unless the exercise price of such
Option is at least one hundred ten percent (110%) of the Fair Market Value of
the Common Stock at the date of grant and the Option is not exercisable after
the expiration of five (5) years from the date of grant.
Prior to the Listing Date, no Ten Percent Shareholder shall be
eligible for the grant of a Nonstatutory Stock Option unless the exercise price
of such Option is at least one hundred ten percent (I 10%) of the Fair Market
Value of the Common Stock at the date of grant.
Prior to the Listing Date, no Ten Percent Shareholder shall be
eligible for a restricted stock award unless the purchase price of the
restricted stock is at least one hundred percent (100%) of the Fair Market Value
of the Common Stock at the date of grant.
(c) Section 162(m) Limitation. Subject to the provisions of Section II
relating to adjustments upon changes in stock, no employee shall be eligible to
be granted Options covering more than ninety-one thousand nine hundred fifty-two
(91,952) shares of the Common Stock during any calendar year. This subsection
5(c) shall not apply prior to the Listing Date and, following the Listing Date,
this subsection 5(c) shall not apply until (i) the earliest of (1) the first
material modification of the Plan (including any increase in the number of
shares reserved for issuance under the Plan in accordance with Section 4); (2)
the issuance of all of the shares of Common Stock reserved for issuance under
the Plan; (3) the expiration of the Plan; or (4) the first meeting of
shareholders at which Directors of the Company are to be elected that occurs
after the close of the third calendar year following the calendar year in which
occurred the first registration of an equity security under Section 12 of the
Exchange Act; or (ii) such other date required by Section 162(m) of the Code and
the rules and regulations promulgated thereunder.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and a separate certificate or certificates will be issued for shares
purchased on exercise of each type of Option. The
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provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:
(a) Term. Subject to the provisions of subsection 5(b) regarding Ten
Percent Shareholders, no Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.
(b) Exercise Price of an Incentive Stock Option. Subject to the provisions
of subsection 5(b) regarding Ten Percent Shareholders, the exercise price of
each Incentive Stock Option shall be not less than one hundred percent (100%) of
the Fair Market Value of the stock subject to the Option on the date the Option
is granted. Notwithstanding the foregoing, an Incentive Stock Option may be
granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.
(c) Exercise Price of a Nonstatutory Stock Option. Subject to the
provisions of subsection 5(b) regarding Ten Percent Shareholders, the exercise
price of each Nonstatutory Stock Option granted prior to the Listing Date shall
be not less than eighty-five percent (85%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted. The exercise price of
each Nonstatutory Stock Option granted on or after the Listing Date shall be not
less than eighty-five percent (85%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, a Nonstatutory Stock Option may be granted with an exercise price
lower than that set forth in the preceding sentence if such Option is granted
pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.
(d) Consideration. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised or (ii) at
the discretion of the Board at the time of the grant of the Option (or
subsequently in the case of a Nonstatutory Stock Option) by (1) delivery to the
Company of other Common Stock, (2) according to a deferred payment or other
arrangement (which may include, without limiting the generality of the
foregoing, the use of other Common Stock) with the Participant or (3) in any
other form of legal consideration that may be acceptable to the Board; provided,
however, that at any time that the Company is incorporated in Delaware, payment
of the Common Stock's "par value," as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.
In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
(e) Transferability of an Incentive Stock Option. An Incentive Stock
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing provisions of this
subsection 6(e), the Optionholder may, by delivering written
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notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.
(f) Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock
Option granted prior to the Listing Date shall not be transferable except by
will or by the laws of descent and distribution and shall be exercisable during
the lifetime of the Optionholder only by the Optionholder. A Nonstatutory Stock
Option granted on or after the Listing Date shall be transferable to the extent
provided in the Option Agreement. If the Nonstatutory Stock Option does not
provide for transferability, then the Nonstatutory Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing provisions of this subsection 6(f), the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.
(g) Vesting Generally. The total number of shares of Common Stock subject
to an Option may, but need not, vest and therefore become exercisable in
periodic installments which may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this subsection 6(g) are subject to any Option provisions
governing the minimum number of shares as to which an Option may be exercised.
(h) Minimum Vesting Prior to the Listing Date. Notwithstanding the
foregoing subsection 6(g), Options granted prior to the Listing Date shall
provide for vesting of the total number of shares at a rate of at least twenty
percent (20%) per year over five (5) years from the date the Option was granted,
subject to reasonable conditions such as continued employment. However, in the
case of such Options granted to Officers, Directors or Consultants, the Option
may become fully exercisable, subject to reasonable conditions such as continued
employment, at any time or during any period established by the Company; for
example, the vesting provision of the Option may provide for vesting of less
than twenty percent (20%) per year of the total number of shares subject to the
Option.
(i) Termination of Continuous Service. In the event an Optionholder's
Continuous Service terminates (other than upon the Optionholder's death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise it as of the date of termination) but
only within such period of time ending on the date three (3) months following
the termination of the Optionholder's Continuous Service (or such longer or
shorter period specified in the Option Agreement, which, for Options granted
prior to the Listing Date, shall not be less than thirty (30) days, unless such
termination is for cause), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement. If, after termination, the Optionholder does
not exercise his or her Option within the time specified in the Option
Agreement, the Option shall terminate.
(j) Extension of Termination Date. An Optionholder's Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionholder's Continuous Service (other than upon the Optionholder's death or
Disability) would be prohibited
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at any time solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in subsection
6(a) or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder's Continuous Service (or such longer or shorter
period specified in the Option Agreement, which, for Options granted prior to
the Listing Date, shall not be less than thirty (30) days, unless such
termination is for cause), during which the exercise of the Option would not be
in violation of such registration requirements.
(k) Disability of Optionholder. In the event an Optionholder's Continuous
Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise it as of the date of termination), but only within such
period of time ending on the earlier of (i) the date twelve (12) months
following such termination (or such longer or shorter period specified in the
Option Agreement, which, for Options granted prior to the Listing Date, shall
not be less than six (6) months) or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time specified
herein, the Option shall terminate.
(l) Death of Optionholder. In the event (i) an Optionholder's Continuous
Service terminates as a result of the Optionholder's death or (ii) the
Optionholder dies within the period (if any) specified in the Option Agreement
after the termination of the Optionholder's Continuous Service for a reason
other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise the Option as of the date of death) by the
Optionholder's estate, by a person who acquired the right to exercise the Option
by bequest or inheritance or by a person designated to exercise the option upon
the Optionholder's death pursuant to subsection 6(e) or 6(f), but only within
the period ending on the earlier of (1) the date eighteen (18) months following
the date of death (or such longer or shorter period specified in the Option
Agreement, which, for Options granted prior to the Listing Date, shall not be
less than six (6) months) or (2) the expiration of the term of such Option as
set forth in the Option Agreement. If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate.
(m) Early Exercise. The Option may, but need not, include a provision
whereby the Optionholder may elect at any time before the Optionholder's
Continuous Service terminates to exercise the Option as to any part or a of the
shares subject to the Option prior to the full vesting of the Option. Subject to
the "Repurchase Limitation" in subsection I 0(h), any unvested shares so
purchased may be subject to an unvested share repurchase option in favor of the
Company or to any other restriction the Board determines to be appropriate.
(n) Right of Repurchase. Subject to the "Repurchase Limitation" in
subsection 1 0(h), the Option may, but need not, include a provision whereby the
Company may elect, prior to the Listing Date, to repurchase all or any part of
the vested shares acquired by the Optionholder pursuant to the exercise of the
Option.
(o) Right of First Refusal. The Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, to exercise
a right of first refusal following receipt of notice from the Optionholder of
the intent to transfer all or any part of the
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shares exercised pursuant to the Option. Except as expressly provided in this
subsection 6(o), such right of first refusal shall otherwise comply with any
applicable provisions of the Bylaws of the Company, as amended from time to
time.
(p) Re-Load Options. Without in any way limiting the authority of the
Board to make or not to make grants of Options hereunder, the Board shall have
the authority (but not an obligation) to include as part of any Option Agreement
a provision entitling the Optionholder to a further Option (a "Re-Load Option")
in the event the Optionholder exercises the Option evidenced by the Option
Agreement, in whole or in part, by surrendering other shares of Common Stock in
accordance with this Plan and the terms and conditions of the Option Agreement.
Any such Re-Load Option shall (i) provide for a number of shares equal to the
number of shares surrendered as part or all of the exercise price of such
Option; (ii) have an expiration date which is the same as the expiration date of
the Option the exercise of which gave rise to such Re-Load Option; and (iii)
have an exercise price which is equal to one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Re-Load Option on the date of
exercise of the original Option. Notwithstanding the foregoing, a Re-Load Option
shall be subject to the same exercise price and term provisions heretofore
described for Options under the Plan.
Any such Re-Load Option may be an Incentive Stock Option or a
Nonstatutory Stock Option, as the Board may designate at the time of the grant
of the original Option; provided, however, that the designation of any Re-Load
Option as an Incentive Stock Option shall be subject to the one hundred thousand
dollars ($100,000) annual limitation on exercisability of Incentive Stock
Options described in subsection 10(d) and in Section 422(d) of the Code. There
shall be no Re-Load Options on a Re-Load Option. Any such Re-Load Option shall
be subject to the availability of sufficient shares under subsection 4(a) and
the "Section 162(m) Limitation" on the grants of Options under subsection 5(c)
and shall be subject to such other terms and conditions as the Board may
determine which are not inconsistent with the express provisions of the Plan
regarding the terms of Options.
7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.
(a) Stock Bonus Awards. Each stock bonus agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate.
The terms and conditions of stock bonus agreements may change from time to time,
and the terms and conditions of separate stock bonus agreements need not be
identical, but each stock bonus agreement shall include (through incorporation
of provisions hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:
(i) Consideration. A stock bonus shall be awarded in consideration
for past services actually rendered to the Company for its benefit.
(ii) Vesting. Subject to the "Repurchase Limitation" in subsection
10(h), shares of Common Stock awarded under the stock bonus agreement may, but
need not, be subject to a share repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board.
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(iii) Termination of Participant's Continuous Service. Subject to
the "Repurchase Limitation" in subsection 10(h), in the event a Participant's
Continuous Service terminates, the Company may reacquire any or all of the
shares of Common Stock held by the Participant which have not vested as of the
date of termination under the terms of the stock bonus agreement.
(iv) Transferability. For a stock bonus award made before the
Listing Date, rights to acquire shares under the stock bonus agreement shall not
be transferable except by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Participant only by the
Participant. For a stock bonus award made on or after the Listing Date, rights
to acquire shares under the stock bonus agreement shall be transferable by the
Participant only upon such terms and conditions as are set forth in the stock
bonus agreement, as the Board shall determine in its discretion, so long as
stock awarded under the stock bonus agreement remains subject to the terms of
the stock bonus agreement.
(b) Restricted Stock Awards. Each restricted stock purchase agreement
shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. The terms and conditions of the restricted stock
purchase agreements may change from time to time, and the terms and conditions
of separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) Purchase Price. Subject to the provisions of subsection 5(b)
regarding Ten Percent Shareholders, the purchase price under each restricted
stock purchase agreement shall be such amount as the Board shall determine and
designate in such restricted stock purchase agreement. For restricted stock
awards made prior to the Listing Date, the purchase price shall not be less than
eighty-five percent (85%) of the stock's Fair Market Value on the date such
award is made or at the time the purchase is consummated. For restricted stock
awards made on or after the Listing Date, the purchase price shall not be less
than eighty-five percent (85%) of the stock's Fair Market Value on the date such
award is made or at the time the purchase is consummated.
(ii) Consideration. The purchase price of stock acquired pursuant
to the restricted stock purchase agreement shall be paid either: (i) in cash at
the time of purchase; (ii) at the discretion of the Board, according to a
deferred payment or other arrangement with the Participant; or (iii) in any
other form of legal consideration that may be acceptable to the Board in its
discretion; provided, however, that at any time that the Company is incorporated
in Delaware, then payment of the Common Stock's "par value," as defined in the
Delaware General Corporation Law, shall not be made by deferred payment.
(iii) Vesting. Subject to the "Repurchase Limitation" in subsection
10(h), shares of Common Stock acquired under the restricted stock purchase
agreement may, but need not, be subject to a share repurchase option in favor of
the Company in accordance with a vesting schedule to be determined by the Board.
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(iv) Termination of Participant's Continuous Service. Subject to
the "Repurchase Limitation" in subsection 10(h), in the event a Participant's
Continuous Service terminates, the Company may repurchase or otherwise reacquire
any or all of the shares of Common Stock held by the Participant which have not
vested as of the date of termination under the terms of the restricted stock
purchase agreement.
(v) Transferability. For a restricted stock award made before the
Listing Date, rights to acquire shares under the restricted stock purchase
agreement shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Participant
only by the Participant. For a restricted stock award made on or after the
Listing Date, rights to acquire shares under the restricted stock purchase
agreement shall be transferable by the Participant only upon such terms and
conditions as are set forth in the restricted stock purchase agreement, as the
Board shall determine in its discretion, so long as stock awarded under the
restricted stock purchase agreement remains subject to the terms of the
restricted stock purchase agreement.
8. COVENANTS OF THE COMPANY.
(a) Availability of Shares. During the terms of the Stock Awards, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards.
(b) Securities Law Compliance. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Stock Awards and to issue and sell shares of Common
Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any stock issued or issuable pursuant to any such
Stock Award. If, after reasonable efforts, the Company is unable to obtain from
any such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of stock under the
Plan, the Company shall be relieved from any liability for failure to issue and
sell stock upon exercise of such Stock Awards unless and until such authority is
obtained.
9. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company.
10. MISCELLANEOUS.
(a) Acceleration of Exercisability and Vesting. The Board shall have the
power to accelerate the time at which a Stock Award may first be exercised or
the time during which a Stock Award or any part thereof will vest in accordance
with the Plan, notwithstanding the provisions in the Stock Award stating the
time at which it may first be exercised or the time during which it will vest.
(b) Shareholder Rights. No Participant shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares subject
to such Stock Award unless
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and until such Participant has satisfied all requirements for exercise of the
Stock Award pursuant to its terms.
(c) No Employment or other Service Rights. Nothing in the Plan or any
instrument executed or Stock Award granted pursuant thereto shall confer upon
any Participant or other holder of Stock Awards any right to continue to serve
the Company or an Affiliate in the capacity in effect at the time the Stock
Award was granted or shall affect the right of the Company or an Affiliate to
terminate (i) the employment of an Employee with or without notice and with or
without cause, (ii) the service of a Consultant pursuant to the terms of such
Consultant's agreement with the Company or an Affiliate or (iii) the service of
a Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.
(d) Incentive Stock Option $100,000 Limitation. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of stock with
respect to which Incentive Stock Options are exercisable for the first time by
any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof which exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options.
(e) Investment Assurances. The Company may require a Participant, as a
condition of exercising or acquiring stock under any Stock Award, (i) to give
written assurances satisfactory to the Company as to the Participant's knowledge
and experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Stock Award; and (ii) to give written assurances
satisfactory to the Company stating that the Participant is acquiring the stock
subject to the Stock Award for the Participant's own account and not with any
present intention of selling or otherwise distributing the stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (iii) the issuance of the shares upon the exercise or acquisition
of stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act or (iv) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.
(f) Withholding Obligations. To the extent provided by the terms of a
Stock Award Agreement, the Participant may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of stock
under a Stock Award by any of the following means (in addition to the Company's
right to withhold from any compensation paid to the Participant by the Company)
or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares from the shares of the Common Stock
otherwise issuable to the participant as a result of the exercise or acquisition
of stock under the Stock
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Award; or (iii) delivering to the Company owned and unencumbered shares of the
Common Stock.
(g) Information Obligation. Prior to the Listing Date, to the extent
required by Section 260.140.46 of Title 10 of the California Code of
Regulations, the Company shall deliver financial statements to Participants at
least annually. This subsection I 0(g) shall not apply to key Employees whose
duties in connection with the Company assure them access to equivalent
information.
(h) Repurchase Limitation. The terms of any repurchase option shall be
specified in the Stock Award and may be either at Fair Market Value at the time
of repurchase or at not less than the original purchase price. To the extent
required by Section 260.140.41 and Section 260.140.42 of Title 10 of the
California Code of Regulations, any repurchase option contained in a Stock Award
granted prior to the Listing Date to a person who is not an Officer, Director or
Consultant shall be upon the terms described below:
(i) Fair Market Value. If the repurchase option gives the Company
the right to repurchase the shares upon termination of employment at not less
than the Fair Market Value of the shares to be purchased on the date of
termination of Continuous Service, then (i) the right to repurchase shall be
exercised for cash or cancellation of purchase money indebtedness for the shares
within ninety (90) days of termination of Continuous Service (or in the case of
shares issued upon exercise of Stock Awards after such date of termination,
within ninety (90) days after the date of the exercise) or such longer period as
may be agreed to by the Company and the Participant (for example, for purposes
of satisfying the requirements of Section 1202(c)(3) of the Code regarding
"qualified small business stock") and (ii) the right terminates when the shares
become publicly traded.
(ii) Original Purchase Price. If the repurchase option gives the
Company the right to repurchase the shares upon termination of Continuous
Service at the original purchase price, then (i) the right to repurchase at the
original purchase price shall lapse at the rate of at least twenty percent (20%)
of the shares per year over five (5) years from the date the Stock Award is
granted (without respect to the date the Stock Award was exercised or became
exercisable) and (ii) the right to repurchase shall be exercised for cash or
cancellation of purchase money indebtedness for the shares within ninety (90)
days of termination of Continuous Service (or in the case of shares issued upon
exercise of Options after such date of termination, within ninety (90) days
after the date of the exercise) or such longer period as may be agreed to by the
Company and the Participant (for example, for purposes of satisfying the
requirements of Section 1202(c)(3) of the Code regarding "qualified small
business stock").
11. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) Capitalization Adjustments. If any change is made in the stock subject
to the Plan, or subject to any Stock Award, without the receipt of consideration
by the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and
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maximum number of securities subject to the Plan pursuant to subsection 4(a) and
the maximum number of securities subject to award to any person pursuant to
subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted
in the class(es) and number of securities and price per share of stock subject
to such outstanding Stock Awards. The Board, the determination of which shall be
final, binding and conclusive, shall make such adjustments. (The conversion of
any convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)
(b) Change in Control--Dissolution or Liquidation. In the event of a
dissolution or liquidation of the Company, then such Stock Awards shall be
terminated if not exercised (if applicable) prior to such event.
(c) Change in Control-Asset Sale, Merger, Consolidation or Reverse Merger.
In the event of (i) a sale of substantially all of the assets of the Company,
(ii) a merger or consolidation in which the Company is not the surviving
corporation or (iii) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise, then any surviving corporation or
acquiring corporation shall assume any Stock Awards outstanding under the Plan
or shall substitute similar stock awards (including an award to acquire the same
consideration paid to the shareholders in the transaction described in this
subsection II(c)) for those outstanding under the Plan. In the event any
surviving corporation or acquiring corporation refuses to assume such Stock
Awards or to substitute similar stock awards for those outstanding under the
Plan, then such Stock Awards shall terminate if not exercised (if applicable)
prior to such event.
12. AMENDMENT OF THE PLAN AND STOCK AWARDS.
(a) Amendment of Plan. The Board at any time, and from time to time, may
amend the Plan. However, except as provided in Section II relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the shareholders of the Company to the extent shareholder approval
is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3
or any Nasdaq or securities exchange listing requirements.
(b) Shareholder Approval. The Board may, in its sole discretion, submit
any other amendment to the Plan for shareholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.
(c) Contemplated Amendments. It is expressly contemplated that the Board
may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided
under the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.
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(d) No Impairment of Rights. Rights under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Participant and (ii) the Participant
consents in writing.
(e) Amendment of Stock Awards. The Board at any time, and from time to
time, may amend the terms of any one or more Stock Awards; provided, however,
that the rights under any Stock Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.
13. TERMINATION OR SUSPENSION OF THE PLAN.
(a) Plan Term. The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on the day before the tenth
(10th) anniversary of the date the Plan is adopted by the Board or approved by
the shareholders of the Company, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.
(b) No Impairment of Rights. Suspension or termination of the Plan shall
not impair rights and obligations under any Stock Award granted while the Plan
is in effect except with the written consent of the Participant.
14. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no Stock
Award shall be exercised (or, in the case of a stock bonus, shall be granted)
unless and until the Plan has been approved by the shareholders of the Company,
which approval shall be within twelve (12) months before or after the date the
Plan is adopted by the Board.
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EXHIBIT 99.20
FORM OF STOCK OPTION GRANT NOTICE UNDER
THE NEXT AGE TECHNOLOGIES, INC. 1998 EQUITY INCENTIVE PLAN
<PAGE>
EXHIBIT 99.20
Next Era Technologies, Inc.
Stock Option Grant Notice
(1998 Equity Incentive Plan)
Next Era Technologies, Inc. (the "Company"), pursuant to its 1998 Equity
Incentive Plan (the "Plan"), hereby grants to Optionholder an option to purchase
the number of shares of the Company's Common Stock set forth below. This option
is subject to all of the terms and conditions as set forth herein and in the
Stock Option Agreement, the Plan and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.
Optionholder: ____________________________
Date of Grant: ____________________________
Vesting Commencement Date: ____________________________
Number of Shares Subject to Option: ____________________________
Exercise Price Per Share: ____________________________
Expiration Date: ____________________________
Type of Grant: [_] Incentive Stock Option [_] Nonstatutory Stock Option
Exercise Schedule: [_] Same as Vesting Schedule [_] Early Exercise Permitted
Vesting Schedule: 1/4th of the shares vest one year after the Vesting
Commencement Date.
1/48th of the shares vest monthly thereafter over the next
three years.
Payment: By one or a combination of the following items (described
in the Stock Option Agreement):
By cash or check
Pursuant to a Regulation T Program if the Shares are
publicly traded
By delivery of already-owned shares if the Shares are
publicly traded
Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges
receipt of, and understands and agrees to, this Stock Option Grant Notice, the
Stock Option Agreement and the Plan. Optionholder further acknowledges that as
of the Date of Grant, this Stock Option Grant Notice, the Stock Option Agreement
and the Plan set forth the entire understanding between Optionholder and the
Company regarding the acquisition of stock in the Company and supersede all
prior oral and written agreements on that subject with the exception of (i)
options previously granted and delivered to Optionholder under the Plan, and
(ii) the following agreements only:
OTHER AGREEMENTS: _______________________________
_______________________________
NEXT ERA TECHNOLOGIES, INC. OPTIONHOLDER:
By: _____________________________ _______________________________
Signature Signature
Title: __________________________ Date: _________________________
Date: ___________________________
ATTACHMENTS: Stock Option Agreement, 1998 Equity Incentive Plan and Notice of
Exercise
<PAGE>
Attachment I
Stock Option Agreement
<PAGE>
Attachment II
1998 Equity Incentive Plan
<PAGE>
Attachment III
Notice of Exercise
<PAGE>
EXHIBIT 99.21
FORM OF OPTION AGREEMENT UNDER THE NEXT AGE TECHNOLOGIES, INC.
1998 EQUITY INCENTIVE PLAN
<PAGE>
EXHIBIT 99.21
Next Era Technologies, Inc.
1998 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
(INCENTIVE AND NONSTATUTORY STOCK OPTION)
Pursuant to the Stock Option Grant Notice ("Grant Notice") and this Stock
Option Agreement, Next Era Technologies, Inc. (the "Company") has granted you an
option under its 1998 Equity Incentive Plan (the "Plan") to purchase the number
of shares of the Company's Common Stock indicated in the Grant Notice at the
exercise price indicated in the Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.
The details of your option are as follows:
1. VESTING. Subject to the limitations contained herein, your option
will vest as provided in the Grant Notice, provided that vesting will cease upon
the termination of your Continuous Service.
2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares subject to
your option and your exercise price per share referenced in the Grant Notice may
be adjusted from time to time for Capitalization Adjustments, as provided in the
Plan.
3. EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). If permitted in the
Grant Notice (i.e., the "Exercise Schedule" indicates that "Early Exercise" of
your option is permitted) and subject to the provisions of this option, you may
elect at any time that is both (i) during the period of your Continuous Service
and (ii) during the term of your option, to exercise all or part of your option,
including the nonvested portion of your option; provided, however, that:
(a) a partial exercise of your option shall be deemed to cover first
vested shares and then the earliest vesting installment of unvested shares;
(b) any shares so purchased from installments which have not vested
as of the date of exercise shall be subject to the purchase option in favor of
the Company as described in the Company's form of Early Exercise Stock Purchase
Agreement;
(c) you shall enter into the Company's form of Early Exercise Stock
Purchase Agreement with a vesting schedule that will result in the same vesting
as if no early exercise had occurred; and
(d) if your option is an incentive stock option, then, as provided in
the Plan, to the extent that the aggregate Fair Market Value (determined at the
time of grant) of stock with respect to which your option plus all other
incentive stock options you hold are exercisable for the first time by you
during any calendar year (under all plans of the Company and its Affiliates)
exceeds one hundred thousand dollars ($100,000), the options or portions thereof
that exceed such limit (according to the order in which they were granted) shall
be treated as nonstatutory stock options.
<PAGE>
4. METHOD OF PAYMENT. Payment of the exercise price is due in full upon
exercise of all or any part of your option. You may elect to make payment of the
exercise price in cash or by check or in any other manner permitted by the Grant
----------------------
Notice, which may include one or more of the following:
- ------
(a) In the Company's sole discretion at the time your option is
exercised and provided that at the time of exercise the Common Stock is publicly
traded and quoted regularly in The Wall Street Journal, pursuant to a program
developed under Regulation T as promulgated by the Federal Reserve Board which,
prior to the issuance of Common Stock, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to pay the
aggregate exercise price to the Company from the sales proceeds.
(b) Provided that at the time of exercise the Common Stock is
publicly traded and quoted regularly in The Wall Street Journal, by delivery of
already-owned shares of Common Stock, held for the period required to avoid a
charge to the Company's reported earnings (generally six months) or were not
acquired, directly or indirectly from the Company, owned free and clear of any
liens, claims, encumbrances or security interests, and valued at its Fair Market
Value on the date of exercise. "Delivery" for these purposes, in the sole
discretion of the Company at the time your option is exercised, shall include
delivery to the Company of your attestation of ownership of such shares of
Common Stock in a form approved by the Company. Notwithstanding the foregoing,
your option may not be exercised by tender to the Company of Common Stock to the
extent such tender would constitute a violation of the provisions of any law,
regulation or agreement restricting the redemption of the Company's stock.
5. WHOLE SHARES. Your option may only be exercised for whole shares.
6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, your option may not be exercised unless the shares issuable
upon exercise of your option are then registered under the Securities Act or, if
such shares are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Securities Act. The exercise of your option must also comply with other
applicable laws and regulations governing the option, and the option may not be
exercised if the Company determines that the exercise would not be in material
compliance with such laws and regulations.
7. TERM. The term of your option commences on the Date of Grant and
expires upon the earliest of the following:
(a) thirty (30) days after the termination of your Continuous Service
for any other reason, provided that if during any part of such thirty (30)-day
period the option is not exercisable solely because of the condition set forth
in paragraph 6, the option shall not expire until the earlier of the Expiration
Date or until it shall have been exercisable for an aggregate period of thirty
(30) days after the termination of your Continuous Service;
(b) twelve (12) months after the termination of your Continuous
Service due to Disability;
2
<PAGE>
(c) eighteen (18) months after your death if you die either during
your Continuous Service or within thirty (30) days after your Continuous Service
terminates;
(d) the Expiration Date indicated in the Grant Notice; or
(e) the tenth (10th) anniversary of the Date of Grant.
If your option is an incentive stock option, note that, to obtain the
federal income tax advantages associated with an "incentive stock option," the
Code requires that at all times beginning on the date of grant of the option and
ending on the day three (3) months before the date of the option's exercise, you
must be an employee of the Company or an Affiliate, except in the event of your
death or your Disability. The Company has provided for extended exercisability
of your option under certain circumstances for your benefit, but cannot
guarantee that your option will necessarily be treated as an "incentive stock
option" if you provide services to the Company or an Affiliate as a Consultant
or Director or if you exercise your option more than three (3) months after the
date your employment with the Company or an Affiliate terminates.
8. EXERCISE.
(a) You may exercise the vested portion of your option (and the
unvested portion of your option if the Grant Notice so permits) during its term
by delivering a Notice of Exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.
(b) By exercising your option you agree that, as a condition to any
exercise of your option, the Company may require you to enter an arrangement
providing for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (1) the exercise of your option,
(2) the lapse of any substantial risk of forfeiture to which the shares are
subject at the time of exercise, or (3) the disposition of shares acquired upon
such exercise.
(c) If your option is an incentive stock option, by exercising your
option you agree that you will notify the Company in writing within fifteen (15)
days after the date of any disposition of any of the shares of the Common Stock
issued upon exercise of your option that occurs within two (2) years after the
date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
(d) By exercising your option you agree that the Company (or a
representative of the underwriters) may, in connection with the first
underwritten registration of the offering of any securities of the Company under
the Securities Act, require that you not sell, dispose of, transfer, make any
short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any shares of
Common Stock or other securities of the Company held by you, for a period of
time specified by the underwriter(s) (not to exceed one hundred eighty (180)
days) following the effective date of the registration statement of the Company
filed under the Securities Act. You further agree to execute and deliver such
other agreements as may be reasonably requested by the Company and/or the
underwriter(s) which are consistent with the foregoing or which are necessary to
give further
3
<PAGE>
effect thereto. In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to your Common Stock until the
end of such period.
9. TRANSFERABILITY. Your option is not transferable, except by will or
by the laws of descent and distribution, and is exercisable during your life
only by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise your
option.
10. RIGHT OF REPURCHASE/RIGHT OF FIRST REFUSAL. To the extent provided in
the Company's bylaws as amended from time to time, the Company shall have the
right to repurchase all or any part of the shares received pursuant to the
exercise of your option. Furthermore, the Common Stock issued upon exercise of
your option shall be subject to a right of first refusal in favor of the Company
or its assignees which meets the following requirements:
(a) If you desire to sell or otherwise transfer any of your
shares of Common Stock, then you shall first give written notice thereof to the
Company. The notice shall name the proposed transferee and state the number of
shares of Common Stock to be transferred, the proposed consideration, and all
other terms and conditions of the proposed transfer.
(b) For thirty (30) days following receipt of such notice, the
Company shall have the option to purchase all (but not less than all) of the
shares specified in the notice at the price and upon the terms set forth in such
notice; provided, however, that with your consent, the Company shall have the
option to purchase a lesser portion of the shares specified in said notice at
the price and upon the terms set forth therein. In the event of a gift, property
settlement or other transfer in which the proposed transferee is not paying the
full price for the shares of Common Stock, and that is not otherwise exempted
from the provisions of this paragraph 10, the price shall be deemed to be the
fair market value of the Common Stock at such time as determined in good faith
by the Board of Directors of the Company. In the event the Company elects to
purchase all of the shares of Common Stock or, with your consent, a lesser
portion of the shares of Common Stock, it shall give written notice to you of
its election and settlement for said shares shall be made as provided below in
subparagraph (d).
(c) The Company may assign its rights hereunder.
(d) In the event the Company and/or its assignee(s) elect to acquire
any of the shares of Common Stock as specified in the notice provided by you,
the Secretary of the Company shall so notify you and settlement thereof shall be
made in cash within thirty (30) days after the Secretary of the Company receives
notice from you; provided that if the terms of payment set forth in your notice
were other than cash against delivery, the Company and/or its assignee(s) shall
pay for said shares on the same terms and conditions set forth in your notice.
(e) In the event the Company and/or its assignees(s) do not elect to
acquire all of the shares specified in your notice, you may, within the sixty
(60)-day period following the expiration of the option rights granted to the
Company and/or its assignees(s)
4
<PAGE>
herein, transfer the shares specified in your notice which were not acquired by
the Company and/or its assignees(s) as specified in your notice. All shares so
sold by you shall continue to be subject to the provisions of this paragraph 10
in the same manner as before said transfer.
(f) Notwithstanding anything herein to the contrary, the following
transactions shall be exempt from the provisions of this paragraph 10:
(i) Your transfer of any or all shares of Common Stock held
either during your lifetime or on death by will or intestacy to your immediate
family or to any custodian or trustee for your account or the account of your
immediate family or to any limited partnership of which you, members of your
immediate family or any trust for your account or the account of your immediate
family will be the general or limited partner(s) of such partnership. "Immediate
family" as used herein shall mean your spouse, lineal descendant, father,
mother, brother, or sister.
(ii) Your bona fide pledge or mortgage of any shares of Common
Stock with a commercial lending institution, provided that any subsequent
transfer of said shares by said institution shall be conducted in the manner set
forth in this paragraph 10.
(iii) Your transfer of any or all of your shares of Common Stock
to the Company or to any other shareholder of the Company.
(iv) Your transfer of any or all of your shares of Common Stock
to a person who, at the time of such transfer, is an officer or director of the
Company.
In any such case, the transferee, assignee, or other recipient shall
receive and hold such Common Stock subject to the provisions of this paragraph
10, and there shall be no further transfer of such Common Stock except in accord
with this paragraph 10.
(g) The provisions of this paragraph 10 may be waived with respect to
any transfer either by the Company, upon duly authorized action of its Board of
Directors, or by the shareholders, upon the express written consent of the
owners of a majority of the voting power of the Company (excluding the votes
represented by those shares to be transferred by the transferring shareholder).
(h) Any sale or transfer, or purported sale or transfer, of the
shares of Common Stock by you shall be null and void unless the terms,
conditions, and provisions of this paragraph 10 are strictly observed and
followed.
(i) The foregoing right of first refusal shall terminate upon the
date securities of the Company are first offered to the public pursuant to a
registration statement filed with, and declared effective by, the United States
Securities and Exchange Commission under the Securities Act.
5
<PAGE>
(j) The certificates representing shares of Common Stock shall bear
on their face the following legend so long as the foregoing right of first
refusal remains in effect:
"The shares represented by this Certificate are subject to a right of first
refusal option in favor of the Company and/or its Assignee(s), as set forth in a
stock option agreement between the Company and the registered holder."
11. OPTION NOT A SERVICE CONTRACT. Your option is not an employment
or service contract, and nothing in your option shall be deemed to create in any
way whatsoever any obligation on your part to continue in the employ of the
Company or an Affiliate, or of the Company or an Affiliate to continue your
employment. In addition, nothing in your option shall obligate the Company or
an Affiliate, their respective shareholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.
12. WITHHOLDING OBLIGATIONS.
(a) At the time your option is exercised, in whole or in part, or at
any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise
agree to make adequate provision for (including by means of a "cashless
exercise" pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection
with your option.
(b) Upon your request and subject to approval by the Company, in its
sole discretion, and compliance with any applicable conditions or restrictions
of law, the Company may withhold from fully vested shares of Common Stock
otherwise issuable to you upon the exercise of your option a number of whole
shares having a Fair Market Value, determined by the Company as of the date of
exercise, not in excess of the minimum amount of tax required to be withheld by
law. If the date of determination of any tax withholding obligation is deferred
to a date later than the date of exercise of your option, share withholding
pursuant to the preceding sentence shall not be permitted unless you make a
proper and timely election under Section 83(b) of the Code, covering the
aggregate number of shares of Common Stock acquired upon such exercise with
respect to Which such determination is otherwise deferred, to accelerate the
determination of such tax withholding obligation to the date of exercise of your
option. Notwithstanding the filing of such election, shares shall be withheld
solely from fully vested shares of Common Stock determined as of the date of
exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share
withholding procedure shall be your sole responsibility.
(c) Your option is not exercisable unless the tax withholding
obligations of the Company and/or any Affiliate are satisfied. Accordingly, you
may not be able to exercise your option when desired even though your option is
vested, and the Company shall have no obligation to issue a certificate for such
shares or release such shares from any escrow provided for herein.
6
<PAGE>
13. NOTICES. Any notices provided for in your option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.
14. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your option, and
is further subject to all interpretations, amendments, rules and regulations
which may from time to time be promulgated and adopted pursuant to the Plan. In
the event of any conflict between the provisions of your option and those of the
Plan, the provisions of the Plan shall control.
7
<PAGE>
EXHIBIT 99.22
FORM OF STOCK OPTION ASSUMPTION
FOR OPTIONS GRANTED UNDER
THE NEXT AGE TECHNOLOGIES, INC. 1998 EQUITY INCENTIVE PLAN
<PAGE>
EXHIBIT 99.22
GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
_______________________________________
STOCK OPTION ASSUMPTION
_______________________________________
OPTIONS GRANTED PURSUANT TO
NEXT AGE TECHNOLOGIES, INC.
1998 EQUITY INCENTIVE PLAN
Optionee: (Name)
STOCK OPTION ASSUMPTION effective as of the _____ day of
_____________, 1999 by Genesys Telecommunications Laboratories, Inc., a
California corporation ("Genesys").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Next Age
Technologies, Inc., a California corporation ("Next Age"), which were granted to
Optionee under the Next Age Technologies, Inc. 1998 Equity Incentive Plan (the
"Next Age Plan") and are evidenced by a Stock Option Grant Notice and an Option
Agreement (together, the "Option Agreement") between Next Age and Optionee.
WHEREAS, Next Age has been acquired by Genesys through the purchase by
Genesys of all of the issued and outstanding shares of the capital stock of Next
Age (the "Acquisition") pursuant to the Agreement and Plan of Reorganization,
dated as of June 24, 1999, by and between Genesys, Next Age and Genesys-BP Sub,
Inc. (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Genesys to
assume all obligations of Next Age with respect to the outstanding options under
the Next Age Plan upon the consummation of the Acquisition.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Acquisition is 0.1097 of
a share of Genesys common stock ("Genesys Stock") for each outstanding share of
Next Age common stock ("Next Age Stock").
WHEREAS, this assumption is effective as of June 24, 1999 (the
"Effective Time"), and reflects certain adjustments to Optionee's outstanding
options under the Next Age Plan which have become necessary by reason of the
assumption of those options by Genesys in connection with the Acquisition.
NOW, THEREFORE, it is hereby provided as follows:
1. The number of shares of Next Age Stock subject to the options
held by Optionee immediately prior to the effective time (the "Next Age
Options") and the exercise price
<PAGE>
payable per share pursuant to each such option are set forth in Schedule I
----------
hereto. Genesys hereby assumes, as of the effective time, all the duties and
obligations of Next Age under each of the Next Age Options. In connection with
such assumption, the number of shares of Genesys Stock purchasable under each
Next Age Option hereby assumed, and the exercise price payable thereunder, have
been adjusted to reflect the Exchange Ratio. Accordingly, the number of shares
of Genesys Stock subject to each Next Age Option hereby assumed shall be as
specified for that option in attached Schedule I, and the adjusted exercise
----------
price payable per share of Genesys Stock under each such assumed Next Age Option
shall also be as indicated for that option in attached Schedule I.
----------
2. The intent of the foregoing adjustments to each assumed Next Age
Option is to assure that the spread between the aggregate fair market value of
the shares of Genesys Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this assumption will, immediately after
the consummation of the Acquisition, be not less than the spread which existed,
immediately prior to the Acquisition, between the then aggregate fair market
value of the Next Age Stock subject to the Next Age Option and the aggregate
exercise price in effect at such time under the Option Agreement. Such
adjustments are also intended to preserve, immediately after the Acquisition, on
a per share basis, the same ratio of exercise price per option share to fair
market value per share which existed under the Next Age Option immediately prior
to the Acquisition
3. The following provisions shall govern each Next Age Option hereby
assumed by Genesys:
(a) Unless the context otherwise requires, all references in
each Option Agreement and in the Next Age Plan (as incorporated into such
Option Agreement) (i) to the "Company" shall mean Genesys, and (ii) to
"Stock" and "Shares" shall mean shares of Genesys Stock.
(b) The grant date and the expiration date of each assumed Next
Age Option and all other provisions which govern either the exercise or the
termination of the assumed Next Age Option shall remain the same as set
forth in the Option Agreement applicable to that option, and the provisions
of the Option Agreement shall accordingly govern and control Optionee's
rights under this Agreement to purchase Genesys Stock.
(c) Each Next Age Option held by Optionee shall be assumed by
Genesys as of the Effective Time. The shares subject to each such assumed
Next Age Option shall continue to vest in accordance with the same
installment vesting schedule in effect under the applicable Option
Agreement immediately prior to the Effective Time, with the number of
shares of Genesys Stock subject to each such installment adjusted to
reflect the Exchange Ratio. Accordingly, no acceleration of vesting under
the Next Age Option held by Optionee shall be deemed to occur by reason of
the Acquisition, and the
2.
<PAGE>
vesting dates under each applicable Option Agreement shall remain the same
following the Acquisition.
(d) The adjusted exercise price payable for the Genesys Stock
subject to each assumed Next Age Option shall be payable in any of the
forms authorized under the Option Agreement applicable to that option,
provided that any shares of Genesys Stock delivered in payment of the
exercise price must have been held for six (6) months. For purposes of
determining the holding period of any shares of Genesys Stock delivered in
payment of such adjusted exercise price, the period for which such shares
were held as Next Age Stock prior to the Acquisition shall be taken into
account.
(e) In order to exercise each assumed Next Age Option, Optionee
must deliver to Genesys a written notice of exercise in which the number of
shares of Genesys Stock to be purchased thereunder must be indicated. The
exercise notice must be accompanied by payment of the adjusted exercise
price payable for the purchased shares of Genesys Stock and should be
delivered to Genesys at the following address:
Genesys Telecommunications Laboratories, Inc.
1155 Market Street
San Francisco, California 94103
Attention: Stock Administrator
4. Except to the extent specifically modified by this Stock Option
Assumption, all of the terms and conditions of each Option Agreement as in
effect immediately prior to the Acquisition shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption.
IN WITNESS WHEREOF, Genesys Telecommunications Laboratories, Inc. has
caused this Stock Option Assumption to be executed on its behalf by its duly-
authorized officer as of the ____ day of ________, 1999.
GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
By: ______________________________
Title: ______________________________
3.
<PAGE>
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption and understands that all rights and liabilities with respect to each
of his or her Next Age Options hereby assumed by Genesys are as set forth in the
Option Agreement, the Next Age Plan and such Stock Option Assumption, and no
other agreements exist with respect to his or her Next Age Options. The
undersigned also acknowledges that except to the extent specifically modified by
this Stock Option Assumption, all of the terms and conditions of the Option
Agreement as in effect immediately prior to the Effective Time shall continue in
full force and effect and shall not in any way be amended, revised or otherwise
affected by this Stock Option Assumption. The undersigned further acknowledges
that the Next Age Options described in Schedule I hereto constitute all of the
----------
options or other rights to purchase Next Age Stock that he or she owned
immediately prior to the Effective Time.
__________________________________
(Name), OPTIONEE
DATED: __________________, 1999
4.
<PAGE>
SCHEDULE I
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Number of Shares Exercise Price
Next Age Option (NextAgeShares) (NextAgePrice)
Genesys Option (GenesysShares) (GenesysPrice)
