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EXHIBIT 99.1
ARIS CORPORATION
2000 STOCK OPTION PLAN
This 2000 Stock Option Plan (the "Plan") provides for the grant of
options to acquire shares of common stock, without par value (the "Common
Stock") of ARIS CORPORATION, a Washington corporation (the "Company"). Stock
options granted under this Plan are referred to herein as "Options." Options
that qualify under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), are referred to in this Plan as "Incentive Stock Options." Options
granted under this Plan that do not qualify under Section 422 of the Code are
referred to as "Non-Statutory Stock Options."
1. PURPOSES.
The purposes of this Plan are (i) to retain the services of valued
key employees of the Company and non-employee advisors or consultants as the
Plan Administrator shall select in accordance with Section 3 below; (ii) to
retain the services of valued non-employee directors; (iii) to encourage such
persons to acquire a greater proprietary interest in the Company, thereby
strengthening their incentive to achieve the objectives of the shareholders of
the Company, and (iv) to serve as an aid and inducement in the hiring or
recruitment of new employees, consultants, non-employee directors and other
persons selected by the Plan Administrator.
2. ADMINISTRATION.
This Plan shall be administered by the Board of Directors of the
Company (the "Board"), except that the Board may, in its discretion, establish a
committee composed of members of the Board to administer this Plan, which
committee (the "Committee") may be an executive, compensation or other
committee, including a separate committee especially created for this purpose.
The Committee shall have such of the powers and authority vested in the Board
hereunder as the Board may delegate to it (including the power and authority to
interpret any provision of this Plan or of any Option). The members of any such
Committee shall serve at the pleasure of the Board. The Board, and/or the
Committee if one has been established by the Board, are referred to in this Plan
as the "Plan Administrator."
The Plan Administrator shall not take any action which is not in
full compliance with the exemption from Section 16(b) of the Exchange Act
provided by Rule 16b-3, as amended, or any successor rule or rules, and any
other rules or regulations of the Securities and Exchange Commission, the Nasdaq
National Market or any other applicable regulatory authorities, and any such
action shall be void and of no effect.
Subject to the provisions of this Plan, and with a view to effecting
its purpose, the Plan Administrator shall have sole authority, in its absolute
discretion, to (i) construe and interpret this Plan; (ii) define the terms used
in this Plan; (iii) prescribe, amend and rescind rules and regulations relating
to this Plan; (iv) correct any defect, supply any omission or reconcile any
inconsistency in this Plan; (v) determine the individuals to whom Options shall
be granted under this Plan and whether the Option is an Incentive Stock Option
or a Non-Statutory Stock Option; (vi) determine the time or times at which
Options shall be granted under this Plan; (vii) determine the number of shares
of Common Stock subject to each Option, the exercise price of each Option, the
duration of each Option and the times at which each Option shall become
exercisable; (viii) determine all other terms and conditions of Options; and
(ix) make all other determinations necessary or advisable for the administration
of this Plan. All decisions, determinations and interpretations made by the Plan
Administrator shall be binding and conclusive on all participants in this Plan
and on their legal representatives, heirs and beneficiaries.
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3. ELIGIBILITY.
Incentive Stock Options may be granted to any individual who, at the
time the Option is granted, is an employee of the Company or any Related
Corporation (as defined below), including employees who are directors of the
Company ("Employees"). Non-Statutory Stock Options may be granted to Employees
and non-employee advisors and consultants as the Plan Administrator shall
select, and to non-employee directors of the Company pursuant to the formula
determined by the Company's Board of Directors. Options may be granted in
substitution for outstanding Options of another corporation in connection with
the merger, consolidation, acquisition of property or stock or other
reorganization between such other corporation and the Company or any subsidiary
of the Company. Options also may be granted in exchange for outstanding Options.
Any person to whom an Option is granted under this Plan is referred to as an
"Optionee."
As used in this Plan, the term "Related Corporation," when referring
to a subsidiary corporation, shall mean any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock of one of the other
corporations in such chain. When referring to a parent corporation, the term
"Related Corporation" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of
granting of the Option, each of the corporations other than the Company owns
stock possessing 50 percent or more of the total combined voting power of all
classes of stock of one of the other corporations in such chain.
4. STOCK.
The Plan Administrator is authorized to grant Options to acquire up
to a total of Two Million Five Hundred Thousand (2,500,000) shares of the
Company's authorized but unissued, or reacquired, Common Stock. The number of
shares with respect to which Options may be granted hereunder is subject to
adjustment as set forth in Section 5(m) hereof. If any outstanding Option
expires or is terminated for any reason, the shares of Common Stock allocable to
the unexercised portion of such Option may again be subject to an Option to the
same Optionee or to a different person eligible under Section 3 of this Plan.
5. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted under this Plan shall be evidenced by a written
agreement approved by the Plan Administrator (the "Agreement"). Agreements may
contain such additional provisions, not inconsistent with this Plan, as the Plan
Administrator in its discretion may deem advisable. All Options also shall
comply with the following requirements:
(a) Number of Shares and Type of Option.
Each Agreement shall state the number of shares of Common Stock
to which it pertains and whether the Option is intended to be an Incentive Stock
Option or a Non-Statutory Stock Option. In the absence of action to the contrary
by the Plan Administrator in connection with the grant of an Option, all Options
shall be Non-Statutory Stock Options. The aggregate fair market value
(determined at the Date of Grant, as defined below) of the stock with respect to
which Incentive Stock Options are exercisable for the first time by the Optionee
during any calendar year (granted under this Plan and all other Incentive Stock
Option plans of the Company, a Related Corporation or a predecessor
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corporation) shall not exceed $100,000, or such other limit as may be prescribed
by the Code as it may be amended from time to time. Any Option which exceeds the
annual limit shall not be void but rather shall be a Non-Statutory Stock Option.
(b) Date of Grant.
Each Agreement shall state the date the Plan Administrator has
deemed to be the effective date of the Option for purposes of, and in accordance
with, this Plan (the "Date of Grant").
(c) Option Price.
Each Agreement shall state the price per share of Common Stock
at which it is exercisable. The exercise price shall be fixed by the Plan
Administrator at whatever price the Plan Administrator may determine in the
exercise of its sole discretion; provided, that the per share exercise price for
any Option granted shall not be less than the fair market value per share of the
Common Stock at the Date of Grant as determined by the Plan Administrator in
good faith; provided further, that the per share exercise price for an Incentive
Stock Option shall not be less than the fair market value per share of the
Common Stock at the Date of Grant as determined by the Plan Administrator in
good faith; provided further, that with respect to Incentive Stock Options
granted to greater-than-10 percent shareholders of the Company (as determined
with reference to Section 424(d) of the Code), the exercise price per share
shall not be less than 110 percent of the fair market value per share of the
Common Stock at the Date of Grant; and, provided further, that Incentive Stock
Options granted in substitution for outstanding Options of another corporation
in connection with the merger, consolidation, acquisition of property or stock
or other reorganization involving such other corporation and the Company or any
subsidiary of the Company may be granted with an exercise price equal to the
exercise price for the substituted Option of the other corporation, subject to
any adjustment consistent with the terms of the transaction pursuant to which
the substitution is to occur.
(d) Duration of Options.
At the time of the grant of the Option, the Plan Administrator
shall designate, subject to paragraph 5(g) below, the expiration date of the
Option, which date shall not be later than 10 years from the Date of Grant in
the case of Incentive Stock Options; provided, that the expiration date of any
Incentive Stock Option granted to a greater-than-10 percent shareholder of the
Company (as determined with reference to Section 424(d) of the Code) shall not
be later than five years from the Date of Grant. In the absence of action to the
contrary by the Plan Administrator in connection with the grant of a particular
Option, and except in the case of Incentive Stock Options as described above,
all Options granted under this Plan shall expire 10 years from the Date of
Grant.
(e) Vesting Schedule.
No Option shall be exercisable until it has vested. The vesting
schedule for each Option shall be specified by the Plan Administrator at the
time of grant of the Option; provided, that if no vesting schedule is specified
at the time of grant, the entire Option shall vest according to the following
schedule:
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<TABLE>
<CAPTION>
NUMBER OF YEARS PERCENTAGE OF TOTAL OPTION
FOLLOWING DATE OF GRANT TO BE EXERCISABLE
<S> <C>
1 20%
2 40%
3 70%
4 100%
</TABLE>
(f) Acceleration of Vesting.
The vesting of one or more outstanding Options may be
accelerated by the Plan Administrator at such times and in such amounts as it
shall determine in its sole discretion. The vesting of Options also shall be
accelerated under the circumstances described in Section 5(m) below.
(g) Term of Option.
Vested Options shall terminate, to the extent not previously
exercised, upon the occurrence of the first of the following events: (i) the
expiration of the Option, as designated by the Plan Administrator in accordance
with Section 5(d) above; (ii) the expiration of 90 days from the date of an
Optionee's termination of employment, contractual or director relationship with
the Company or any Related Corporation for any reason whatsoever other than
death or Disability (as defined below) unless, in the case of a Non-Statutory
Stock Option, the exercise period is extended by the Plan Administrator until a
date not later than the expiration date of the Option; or (iii) the expiration
of one year from (A) the date of death of the Optionee or (B) cessation of an
Optionee's employment, contractual or director relationship with the Company or
any Related Corporation by reason of Disability (as defined below) unless, in
the case of a Non-Statutory Stock Option, the exercise period is extended by the
Plan Administrator until a date not later than the expiration date of the
Option. If an Optionee's employment, contractual or director relationship with
the Company or any Related Corporation is terminated by death, any Option held
by the Optionee shall be exercisable only by the person or persons to whom such
Optionee's rights under such Option shall pass by the Optionee's will or by the
laws of descent and distribution of the state or county of the Optionee's
domicile at the time of death. "Disability" shall mean that a person is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than 12 months. The Plan Administrator shall determine whether an
Optionee has incurred a Disability on the basis of medical evidence acceptable
to the Plan Administrator. Upon making a determination of Disability, the
Committee shall, for purposes of the Plan, determine the date of an Optionee's
termination of employment, contractual or director relationship.
Unless accelerated in accordance with Section 5(f) above,
unvested Options shall terminate immediately upon termination of Optionee's
employment, contractual or director relationship with the Company or any Related
Corporation for any reason whatsoever, including death or Disability. If, in the
case of an Incentive Stock Option, an Optionee's relationship with the Company
changes (e.g., from an employee to a non-employee, such as a consultant, or a
non-employee director), such change shall not necessarily constitute a
termination of an Optionee's contractual relationship with the Company but
rather the Optionee's Incentive Stock Option shall automatically be converted
into a Non-Statutory Stock Option. For purposes of this Plan, transfer of
employment between or among the Company and/or any Related Corporation shall not
be deemed to constitute a termination of employment with the Company or any
Related Corporation. For purposes of this subsection with respect to Incentive
Stock Options, employment shall be deemed to continue while the Optionee is on
military leave, sick leave or
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other bona fide leave of absence (as determined by the Plan Administrator). The
foregoing notwithstanding, employment shall not be deemed to continue beyond the
first 90 days of such leave, unless the Optionee's re-employment rights are
guaranteed by statute or by contract.
Unvested Options shall terminate immediately upon any material
breach (as determined by the Plan Administrator) by Optionee of any employment,
non-competition, non-disclosure or similar agreement by and between the Company
and Optionee.
(h) Exercise of Options.
Options shall be exercisable, either all or in part, at any time
after vesting, until termination. If less than all of the shares included in the
vested portion of any Option are purchased, the remainder may be purchased at
any subsequent time prior to the expiration of the Option term. No portion of
any Option for less than fifty (50) shares (as adjusted pursuant to Section 5(m)
below) may be exercised; provided, that if the vested portion of any Option is
less than fifty (50) shares, it may be exercised with respect to all shares for
which it is vested. Only whole shares may be issued pursuant to an Option, and
to the extent that an Option covers less than one share, it is unexercisable.
Options or portions thereof may be exercised by giving written notice to the
Company, which notice shall specify the number of shares to be purchased, and be
accompanied by payment in the amount of the aggregate exercise price for the
Common Stock so purchased, which payment shall be in the form specified in
Section 5(i) below. The Company shall not be obligated to issue, transfer or
deliver a certificate of Common Stock to any Optionee, or to his personal
representative, until the aggregate exercise price has been paid for all shares
for which the Option shall have been exercised and adequate provision has been
made by the Optionee for satisfaction of any tax withholding obligations
associated with such exercise. During the lifetime of an Optionee, Options are
exercisable only by the Optionee.
(i) Payment upon Exercise of Option.
Upon the exercise of any Option, the aggregate exercise price
shall be paid to the Company in cash or by certified or cashier's check. In
addition, upon approval of the Plan Administrator, an Optionee may pay for all
or any portion of the aggregate exercise price by (i) delivering to the Company
shares of Common Stock previously held by such Optionee, (ii) having shares
withheld from the amount of shares of Common Stock to be received by the
Optionee or (iii) delivery of an irrevocable subscription agreement obligating
the Optionee to take and pay for the shares of Common Stock to be purchased
within one year of the date of such exercise. The shares of Common Stock
received or withheld by the Company as payment for shares of Common Stock
purchased upon the exercise of Options shall have a fair market value at the
date of exercise (as determined by the Plan Administrator) equal to the
aggregate exercise price (or portion thereof) to be paid by the Optionee upon
such exercise.
(j) Rights as a Shareholder.
An Optionee shall have no rights as a shareholder with respect
to any shares covered by an Option until such Optionee becomes a record holder
of such shares, irrespective of whether such Optionee has given notice of
exercise. Subject to the provisions of Section 5(m) hereof, no rights shall
accrue to an Optionee and no adjustments shall be made on account of dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights declared on, or created in, the Common Stock for
which the record date is prior to the date the Optionee becomes a record holder
of the shares of Common Stock covered by the Option, irrespective of whether
such Optionee has given notice of exercise.
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(k) Transfer of Option.
Options granted under this Plan and the rights and privileges
conferred by this Plan may not be transferred, assigned, pledged or hypothecated
in any manner (whether by operation of law or otherwise) other than by will or
by applicable laws of descent and distribution or, with respect to Non-Statutory
Stock Options, pursuant to a domestic relations order, and shall not be subject
to execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of any Option or of any right
or privilege conferred by this Plan contrary to the provisions hereof, or upon
the sale, levy or any attachment or similar process upon the rights and
privileges conferred by this Plan, such Option shall thereupon terminate and
become null and void.
(l) Securities Regulation and Tax Withholding.
(1) Shares shall not be issued with respect to an Option unless
the exercise of such Option and the issuance and delivery of such shares shall
comply with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations thereunder and the requirements of any
stock exchange upon which such shares may then be listed, and such issuance
shall be further subject to the approval of counsel for the Company with respect
to such compliance, including the availability of an exemption from registration
for the issuance and sale of such shares. The inability of the Company to obtain
from any regulatory body the authority deemed by the Company to be necessary for
the lawful issuance and sale of any shares under this Plan, or the
unavailability of an exemption from registration for the issuance and sale of
any shares under this Plan, shall relieve the Company of any liability with
respect to the non-issuance or sale of such shares.
As a condition to the exercise of an Option, the Plan
Administrator may require the Optionee to represent and warrant in writing at
the time of such exercise that the shares are being purchased only for
investment and without any then-present intention to sell or distribute such
shares. At the option of the Plan Administrator, a stop-transfer order against
such shares may be placed on the stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold or otherwise
transferred unless an opinion of counsel is provided stating that such transfer
is not in violation of any applicable law or regulation, may be stamped on the
certificates representing such shares in order to assure an exemption from
registration. The Plan Administrator also may require such other documentation
as may from time to time be necessary to comply with federal and state
securities laws. THE COMPANY HAS NO OBLIGATION TO UNDERTAKE REGISTRATION OF
OPTIONS OR THE SHARES OF STOCK ISSUABLE UPON THE EXERCISE OF OPTIONS.
(2) As a condition to the exercise of any Option granted under
this Plan, the Optionee shall make such arrangements as the Plan Administrator
may require for the satisfaction of any federal, state or local withholding tax
obligations that may arise in connection with such exercise.
(3) The issuance, transfer or delivery of certificates of Common
Stock pursuant to the exercise of Options may be delayed, at the discretion of
the Plan Administrator, until the Plan Administrator is satisfied that the
applicable requirements of the federal and state securities laws and the
withholding provisions of the Code have been met.
(m) Stock Dividend, Reorganization or Liquidation.
(1) If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or any successor provision)
or any "corporate transaction" described in the regulations thereunder; (ii) the
Company shall declare a dividend payable in, or shall
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subdivide or combine, its Common Stock or (iii) any other event with
substantially the same effect shall occur, the Plan Administrator shall, with
respect to each outstanding Option, proportionately adjust the number of shares
of Common Stock and/or the exercise price per share so as to preserve the rights
of the Optionee substantially proportionate to the rights of the Optionee prior
to such event, and to the extent that such action shall include an increase or
decrease in the number of shares of Common Stock subject to outstanding Options,
the number of shares available under Section 4 of this Plan shall automatically
be increased or decreased, as the case may be, proportionately, without further
action on the part of the Plan Administrator, the Company or the Company's
shareholders.
(2) If the Company is liquidated or dissolved, the Plan
Administrator shall allow the holders of any outstanding Options to exercise all
or any part of the unvested portion of the Options held by them; provided,
however, that such Options must be exercised prior to the effective date of such
liquidation or dissolution. If the Option holders do not exercise their Options
prior to such effective date, each outstanding Option shall terminate as of the
effective date of the liquidation or dissolution.
(3) The foregoing adjustments in the shares subject to Options
shall be made by the Plan Administrator, or by any successor administrator of
this Plan, or by the applicable terms of any assumption or substitution
document.
(4) The grant of an Option shall not affect in any way the right
or power of the Company to make adjustments, reclassifications, reorganizations
or changes of its capital or business structure, to merge, consolidate or
dissolve, to liquidate or to sell or transfer all or any part of its business or
assets.
6. EFFECTIVE DATE; TERM.
This Plan shall be effective as of April 27, 2000, subject to the
approval of a majority of the Company's shareholders. Incentive Stock Options
may be granted by the Plan Administrator from time to time thereafter until
April 27, 2010. Non-Statutory Stock Options may be granted until this Plan is
terminated by the Board in its sole discretion. Termination of this Plan shall
not terminate any Option granted prior to such termination. Any Incentive Stock
Options granted by the Plan Administrator prior to the approval of this Plan by
a majority of the shareholders of the Company shall be granted subject to
ratification of this Plan by the shareholders of the Company within 12 months
after this Plan is adopted by the Board.
7. NO OBLIGATIONS TO EXERCISE OPTION.
The grant of an Option shall impose no obligation upon the Optionee
to exercise such Option.
8. NO RIGHT TO OPTIONS OR TO EMPLOYMENT, CONTRACTUAL OR DIRECTOR
RELATIONSHIP.
Whether or not any Options are to be granted under this Plan shall
be exclusively within the discretion of the Plan Administrator, and nothing
contained in this Plan shall be construed as giving any person any right to
participate under this Plan. The grant of an Option shall in no way constitute
any form of agreement or understanding binding on the Company or any Related
Corporation, express or implied, that the Company or any Related Corporation
will employ, contract with, or use any efforts to cause to continue service as a
director by, an Optionee for any length of time.
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9. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common Stock
issued upon the exercise of Options shall be used for general corporate
purposes, unless otherwise directed by the Board.
10. INDEMNIFICATION OF PLAN ADMINISTRATOR.
In addition to all other rights of indemnification they may have as
members of the Board, members of the Plan Administrator shall be indemnified by
the Company for all reasonable expenses and liabilities of any type or nature,
including attorneys' fees, incurred in connection with any action, suit or
proceeding to which they or any of them are a party by reason of, or in
connection with, this Plan or any Option granted under this Plan, and against
all amounts paid by them in settlement thereof (provided that such settlement is
approved by independent legal counsel selected by the Company), except to the
extent that such expenses relate to matters for which it is adjudged that such
Plan Administrator member is liable for willful misconduct; provided, that
within 15 days after the institution of any such action, suit or proceeding, the
Plan Administrator member involved therein shall, in writing, notify the Company
of such action, suit or proceeding, so that the Company may have the opportunity
to make appropriate arrangements to prosecute or defend the same.
11. AMENDMENT OF PLAN.
The Plan Administrator may, at any time, modify, amend or terminate
this Plan and Options granted under this Plan; provided, that no amendment with
respect to an outstanding Option shall be made over the objection of the
Optionee thereof; and provided further, that if required in order to keep the
Plan in full compliance with the exemption from Section 16(b) of the Exchange
Act provided by Rule 16b-3, as amended, or any successor rule or rules, or any
other rules or regulations of the Securities and Exchange Commission, the Nasdaq
National Market, or other regulatory authorities, amendments to this Plan shall
be subject to approval by the Corporation's shareholders in compliance with the
requirements of any such rules or regulations.
Without limiting the generality of the foregoing, the Plan
Administrator may modify grants to persons who are eligible to receive Options
under this Plan who are foreign nationals or employed outside the United States
to recognize differences in local law, tax policy or custom.
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