SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Indus International, Inc.
-------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee Required
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
INDUS INTERNATIONAL, INC.
Notice of Annual Meeting of Stockholders
To Be Held May 5, 1998
To The Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Indus International, Inc.
(the "Company"), a Delaware corporation, will be held on May 5, 1998 at 2:00
p.m., local time, at the Company's headquarters located at 60 Spear Street, San
Francisco, California, for the following purposes:
1. To elect the following directors to serve for the ensuing year and
until their successors are duly elected and qualified: Robert W. Felton,
Christopher R. Lane, John W. Blend, III, Richard W. MacAlmon, Alan G. Merten,
William H. Janeway and Joseph P. Landy.
2. To approve an amendment to the Company's 1997 Stock Plan to increase
the number of shares reserved for issuance thereunder by 2,500,000 shares to
7,500,000 shares.
3. To ratify the appointment by the Board of Directors of Ernst & Young
LLP as independent auditors of the Company for the year ending December 31,
1998.
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 11, 1998 are
entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, you are
urged to mark, sign and return the enclosed proxy card as promptly as possible
in the postage-prepaid envelope enclosed for that purpose. Any stockholder
attending the Annual Meeting may vote in person even if he or she returned a
proxy.
By Order of the Board of Directors
Anna Ng-Borden
Corporate Secretary
San Francisco, California
April 10, 1998
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YOUR VOTE IS IMPORTANT
To assure your representation at the Annual Meeting, you are requested to
complete, sign and date the enclosed proxy as promptly as possible and return
it in the enclosed envelope, which requires no postage if mailed in the
United States.
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<PAGE>
INDUS INTERNATIONAL, INC.
PROXY STATEMENT
FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
Indus International, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held May 5, 1998 at 2:00 p.m., local time, or at any
adjournment of postponement thereof, for the purposes set forth in this Proxy
Statement and in the accompanying Notice of Annual Meeting of Stockholders. The
Annual Meeting will be held at the Company's headquarters located at 60 Spear
Street, San Francisco, California.
These proxy solicitation materials were mailed on or about April 10, 1998
to all stockholders entitled to vote at the Annual Meeting.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to ChaseMellon Shareholder
Services, LLC, Attention: Joseph W. Thatcher, Inspector of Elections, 235
Montgomery Street, 23rd Floor, San Francisco, CA 94104, a written notice of
revocation or a duly executed proxy bearing a later date or by attending the
Annual Meeting and voting in person. The presence at the Annual Meeting of the
stockholder who has appointed a proxy will not of itself revoke the prior
appointment. If not revoked, the proxy will be voted at the Annual Meeting in
accordance with the instructions indicated on the proxy card, or if no
instructions are indicated, will be voted FOR the slate of directors described
herein, FOR Proposals Two and Three, and as to any other matter that may be
properly brought before the Annual Meeting, in accordance with the judgment of
the proxy holders.
Voting at the Annual Meeting; Record Date
Only holders of record of the Company's common stock ("Common Stock") at
the close of business on March 11, 1998 (the "Record Date") are entitled to
notice of and to vote at the Annual Meeting. Such stockholders are entitled to
cast one vote for each share of Common Stock held as of the Record Date and to
vote on all matters properly submitted for the vote of stockholders at the
Annual Meeting. As of the Record Date, 30,244,163 shares of the Company's Common
Stock were issued and outstanding. No shares of Preferred Stock were
outstanding. For information regarding security ownership by management and by
the beneficial owners of more than 5% of the Company's Common Stock, see
"Security Ownership of Management; Principal Stockholders."
Quorum; Required Vote
The presence, in person or by proxy, of the holders of a majority of the
shares of Common Stock outstanding as of the Record Date is necessary to
constitute a quorum at the Annual Meeting. A plurality of the votes duly cast is
required for the election of directors. The affirmative vote of a majority of
the votes duly cast is required to approve the amendment of the 1997 Stock Plan
and to ratify the appointment of auditors.
Abstentions and broker non-votes will be included for purposes of
determining whether a quorum of shares is present at the Annual Meeting.
However, abstentions and broker non-votes will not be included in the tabulation
of the voting results on the election of directors or on issues requiring
approval of a majority of the votes cast.
Expenses of Solicitation
All expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be borne by the Company. The Company may
reimburse brokerage firms, custodians, nominees, fiduciaries and other persons
representing beneficial owners of Common Stock for their reasonable expenses in
forwarding solicitation material to such beneficial owners, directors, officers
and employees of the
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Company may also solicit proxies in person or by telephone, telegram, letter or
facsimile. Such directors, officers and employees will not be additionally
compensated, but they may be reimbursed for reasonable out-of-pocket expenses in
connection with such solicitation.
Procedure for Submitting Stockholder Proposals
Stockholders may present proper proposals for inclusion in the Company's
proxy materials for consideration at the next Annual Meeting of its stockholders
by submitting their proposals to the Secretary of the company in a timely
manner. In order to be included in the Company's proxy materials for the 1999
Annual Meeting, stockholder proposals must be received by the Secretary of the
Company no later than December 3, 1998, and must otherwise comply with the
requirements of Rule 14a-8 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A board of seven directors will be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the Company's seven nominee's named below, all of whom are presently
directors of the Company. If any nominee of the Company is unable or declines to
serve as a director at the time of the Annual Meeting, the proxies will be voted
for any nominee designated by the present Board of Directors to fill the
vacancy. Management has no reason to believe that any of the nominees will be
unable or unwilling to serve if elected. The term of office of each person
elected as a director will continue until the next Annual Meeting of
Stockholders or until his successor has been elected and qualified.
<TABLE>
All nominees are presently directors of the Company. The names of the
nominees, their ages as of the date of this proxy statement and certain
information about them are set forth below:
<CAPTION>
Name of Nominee Age Principal Occupation
- --------------- ----- ----------------------
<S> <C> <C>
Robert W. Felton 59 Chief Executive Officer and Chairman of the Board
Christopher R. Lane 42 President of Strategy and Product Development and
Vice Chairman of the Board
John W. Blend, III 51 President of Worldwide Sales and Marketing
Richard W. MacAlmon 48 Senior Vice President
Alan G. Merten 56 President, George Mason University, a public university
William H. Janeway 54 Managing Director and the head of the Venture Capital High
Technology Team of E.M. Warburg, Pincus & Co., LLC
Joseph P. Landy 36 Managing Director of E.M. Warburg, Pincus & Co., LLC
</TABLE>
There are no family relationships between or among any directors or
executive officers of the Company.
Mr. Felton is a founder of The Indus Group, Inc. and has been the Chief
Executive Officer and Chairman of the Board of Directors since the Company was
formed pursuant to the merger of The Indus Group, Inc. and TSW International,
Inc. (the "Merger") which was consummated on August 25, 1997. From 1988 until
August 25, 1997, he was the Chairman, President and Chief Executive Officer of
The Indus Group, Inc.
Mr. Lane has served as the President of Strategy and Product Development
and Vice Chairman of the Board of Directors since the consummation of the Merger
on August 25, 1997. From May 1994 to August 25, 1997, he served as President of
TSW International, Inc. and was its Chief Executive Officer since June 1994, and
a director since 1993. From June 1994 to July 1996, he served as Chairman of the
Board of TSW International, Inc. Prior to joining TSW International, Inc. in May
1994, he served as a Vice President at E.M. Warburg, Pincus & Co., Inc., a
diversified financial services firm ("EMW Inc."), from 1993 to 1994. From 1987
to 1993, he held various positions at Oracle Corporation, a provider of
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software for information management ("Oracle"), in both the United States and
Europe. Mr. Lane developed Oracle's strategic market divisions in the United
Kingdom, was Vice President of its U.S. consulting business and was responsible
for European product development.
Mr. Blend has served as the President of Worldwide Sales and Marketing and
a director since the consummation of the Merger on August 25, 1997. From 1986 to
August 25, 1997, he served as TSW International, Inc.'s Executive Vice
President, Worldwide Distribution. He also served as a director of TSW
International, Inc. since 1987. Prior to joining TSW International, Inc., he
served as Area Vice President for the eastern field operations of HBO & Company,
a provider of enterprise-wide patient care, clinical, financial and strategic
management software solutions, from 1980 to 1985. Prior to his tenure at HBO &
Company, he was employed in various positions by IBM Corporation; a provider of
customer solutions through the use of advanced information technologies.
Mr. MacAlmon is a founder of The Indus Group, Inc. and has been a Senior
Vice President and director of the Company since the consummation of the Merger
on August 25, 1997. Prior to August 25, 1997, he served as Vice President of
Marketing and as a director of The Indus Group, Inc. since January 1990 and a
Senior Vice President of The Indus Group, Inc. since June 1995. From January
1988 to December 1989, Mr. MacAlmon served as a Product Developer for The Indus
Group, Inc.
Mr. Merten has served as a director of the Company since the consummation
of the Merger on August 25, 1997 and prior to the Merger had served as a
director of The Indus Group, Inc. since December 1995. Mr. Merten is currently
President of George Mason University, a position he has held since July 1996.
From August 1989 to June 1996, Mr. Merten was Dean and Professor of Information
Systems at the S.C. Johnson Graduate School of Management at Cornell University.
Mr. Merten is also a director of Comshare, Inc., BTG, Inc. and the Smith Barney
Concert Series Trust.
Mr. Janeway has been a director of the Company since the consummation of
the Merger on August 25, 1997. From 1994 to August 25, 1997, he served as a
director of TSW International, Inc. Since 1988, he has been a managing director
and the head of the Venture Capital High Technology Team of E.M. Warburg, Pincus
& Co., LLC ("EMW LLC") and its predecessor, EMW Inc. Mr. Janeway serves on the
Board of Directors as a nominee of Warburg. Mr. Janeway also serves as a
director of BEA Systems, Inc., an on-line transaction processing software and
services company, Industri-Matematik International Corp., a client/server
application software company, Veritas Software, a Unix system software company,
and Zilog, Inc., a manufacturer of microcontroller-based integrated circuits,
and several privately-held companies.
Mr. Landy has served as a director of the Company since the consummation of
the Merger on August 25, 1997. From 1992 to August 25, 1997, he served as a
director of TSW International, Inc. Since 1994, Mr. Landy has been a managing
director of EMW LLC and its predecessor; EMW Inc. Mr. Landy has been employed in
various capacities by EMW LLC and EMW Inc. since 1985. Mr. Landy also serves on
the Board of Directors as a nominee of Warburg. Mr. Landy also serves as a
director of CN Biosciences, Inc., Level One Communications, Inc., Nova
Corporation and several privately-held companies.
Board Meeting and Committees
The Board of Directors of the Company held a total of two meetings in 1997
since the Merger between The Indus Group, Inc. and TSW International, Inc. was
consummated on August 25, 1997. The Board of Directors has two committees, an
Audit Committee and a Compensation Committee, which were established in June
1997. During the last fiscal year, all directors attended 100% of the meetings
of the Board of Directors and the meetings of all committees of the Board of
Directors on which such directors served.
The Audit Committee of the Board of Directors currently consists of Richard
W. MacAlmon, Joseph P. Landy and Alan G. Merten. The Audit Committee recommends
engagement of the Company's independent accountants and is primarily responsible
for approving the services performed by the Company's independent accountants
and for reviewing and evaluating the Company's accounting principles and its
system of internal accounting controls. The Audit Committee held one meeting
during fiscal 1997.
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The Compensation Committee of the Board of Directors currently consists of
Messrs. Robert W. Felton, William H. Janeway and Alan G. Merten and held one
meeting. The Compensation Committee establishes the Company's executive
compensation policy, determines the salary and bonuses of the Company's
executive officers and recommends to the Board of Directors stock option grants
for executive officers. The Compensation Committee held one meeting during
fiscal 1997.
Director Compensation
Directors currently receive no cash fees for services provided in that
capacity but are reimbursed for out-of-pocket expenses they incur in connection
with their attendance at meetings of the Board of Directors. The Company's 1997
Director Option Plan (the "Director Option Plan") was adopted by the Board of
Directors and approved by the stockholders of the Company on July 17, 1997.
Under the Director Option Plan, the Company reserved 200,000 shares of Common
Stock for issuance to the directors of the Company pursuant to nonstatutory
stock options. As of March 11, 1998, options to purchase an aggregate of 30,000
shares were outstanding under the Director Option Plan at an exercise price of
$15.38 per share, of which options to purchase 3,750 shares were fully vested
and immediately exercisable; no options had been exercised pursuant to the Plan;
and 170,000 shares remained available for future grant.
Each director who is not an employee of the Company is automatically
granted a nonstatutory option to purchase 10,000 shares of Common Stock of the
Company (the "First Option") on the date such person becomes a director or, if
later, on the effective date of the Director Option Plan. Thereafter, each such
person will automatically be granted an option to acquire 2,500 shares of the
Company's Common Stock (the "Subsequent Option") upon such outside director's
re-election at each Annual Meeting of Stockholders, provided that on such date
such person has served on the Board of Directors for at least six months. Each
option granted under the Director Option Plan will become exercisable as to 25%
of the Shares subject to such option on each anniversary of its date of grant.
Messrs. Merten, Janeway and Landy were each granted First Options upon the
closing of the Merger on August 25, 1997, at an exercise price of $15.38 per
share.
1995 Director Option Plan
Prior to the Merger, The Indus Group, Inc. had implemented a 1995 Director
Option Plan (the "1995 Director Plan"). Under the 1995 Director Plan each
director who is not an employee of the Company was automatically granted a
nonstatutory option to purchase 10,000 shares of Common Stock of the Company on
the date such person becomes a director or, if later, on the effective date of
the 1995 Director Plan. Thereafter, each such person would automatically be
granted an option to acquire 2,500 shares of the Company's Common Stock upon
such outside director's re-election at each Annual Meeting of Stockholders,
provided that on such date such director had served on the Board of Directors
for at least six months. Each option granted under the 1995 Director Plan would
become exercisable as to 25% of the Shares subject to such option on each
anniversary of its date of grant.
As of March 11, 1998, an option to purchase an aggregate of 12,500 shares
had been granted to Mr. Merten under the 1995 Director Plan at a weighted
average exercise price of $15.20 per share, of which options to purchase 5,250
shares were fully vested and immediately exercisable and no shares had been
exercised. No further options shall be granted under the 1995 Director Plan.
Each option outstanding prior to the Merger under the 1995 Director Plan has
been converted into an option to purchase the equivalent number of shares of
Indus International Common Stock.
Required Vote
The seven nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted for them shall be elected
as directors. Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
but they have no legal effect under Delaware law.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED ABOVE.
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PROPOSAL TWO
AMENDMENT TO 1997 STOCK PLAN
On February 17, 1998, the Board of Directors of the Company approved an
amendment to the 1997 Stock Plan (the "Stock Plan") to increase the number of
shares of Common Stock available for issuance under the Plan from 5,000,000 to
7,500,000 shares. The Board of Directors believed that increasing the number of
shares available under the Stock Plan would enable the Company to continue to
attract, retain and motivate its employees and consultants through equity
incentives.
Of the 5,000,000 shares authorized under the Stock Plan prior to the
amendment described above, as of March 11, 1998, no options to purchase shares
had been exercised, options to purchase an aggregate of 3,465,500 shares were
outstanding, and 1,534,500 shares remained available for future grant.
At the Annual Meeting, the stockholders are being asked to approve the
amendment to the Stock Plan to increase the number of shares of Common Stock
reserved thereunder.
Summary of Stock Plan
The principal features of the Stock Plan are described below:
Purpose. The purposes of the Stock Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to employees and consultants of the Company and its
subsidiaries and to promote the success of the Company's business.
Administration. With respect to grants of options or stock rights to
employees who are also officers or directors of the Company, the Stock Plan
shall be administered by (i) the Board of Directors of the Company if the Board
of Directors may administer the Stock Plan in compliance with Rule 16b-3 with
respect to a plan intended to qualify under Rule 16b-3 as a discretionary plan
or (ii) a committee designated by the Board of Directors to administer the Stock
Plan, which committee shall be constituted in such a manner as to permit the
plan to comply with Rule 16b-3 with respect to a plan intended to qualify
thereunder as a discretionary plan. With respect to grants of options or stock
rights to employees or consultants who are neither officers nor directors of the
Company, the Stock Plan shall be administered by (i) the Board of Directors or
(ii) a committee designated by the Board of Directors, which committee shall be
constituted in such a manner as to satisfy the legal requirements relating to
the administration of stock and option plans, if any, of California corporate
and securities laws and of the Internal Revenue Code of 1986 as amended (the
"Code"). If permitted by Rule 16b-3, the Stock Plan may be administered by
different bodies with respect to directors, non-director officers and employees
who are neither officers nor directors and consultants who are not directors.
The administrator of the Stock Plan has full power to select, from among
the officers, employees, directors and consultants of the Company eligible for
awards, the individuals to whom awards will be granted, to make any combination
of awards to any participants and to determine the specific terms of each grant,
subject to the provisions of the Stock Plan. The interpretation and construction
of any provision of the Stock Plan by the administrator is final and conclusive.
Members of the Board of Directors receive no additional compensation for their
services in connection with the administration of the Stock Plan.
Eligibility. The Stock Plan provides that non-statutory stock options and
stock rights may be granted to employees, including officers and directors, and
consultants of the Company or any subsidiary of the Company. Directors of the
Company who are not employees or consultants are not eligible to participate in
the Stock Plan. Incentive stock options may be granted only to employees,
including officers and directors, of the Company or any subsidiary of the
Company. No employee can be granted options covering more than 500,000 shares
under the Stock Plan in any fiscal year. In addition, there is a $100,000 limit
on the total market value of shares subject to all incentive stock options which
are granted by the Company or any parent or subsidiary of the Company to any
employee which are exercisable for the first time in any one calendar year.
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Reserved Shares. A total of 5,000,000 shares of Common Stock have been
reserved for issuance under the Stock Plan and also subject to adjustment for
future stock splits, stock dividends and similar events.
Subject to the provisions of the Stock Plan, if any shares of Common Stock
that have been optioned cease to be subject to an option, or if any shares of
restricted stock or shares that are subject to any stock purchase right or
incentive stock right granted under the Stock Plan are forfeited or any such
award otherwise terminates without a payment being made to the participant in
the form of Common Stock, such shares will again be available for distribution
in connection with future awards or option grants under the Stock Plan.
Stock Options. The Stock Plan permits the granting of nontransferable stock
options that either qualify as incentive stock options under Section 422 of the
Code ("Incentive Stock Options" or "ISOs") or do not so qualify ("Non-Statutory
Stock Options" or "NSOs").
The term of each option will be fixed by the administrator but may not
exceed ten years from the date of grant in the case of ISOs, or five years from
the date of grant in the case of ISOs granted to the owner of Common Stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any subsidiary. The administrator will determine the
time or times each option may be exercised. Options may be made exercisable in
installments, and the exercisability of options may be accelerated by the
administrator.
The option exercise price for each share covered by a non-statutory option
shall be determined by the administrator of the Stock Plan. The option exercise
price of an ISO may not be less than 100% of the fair market value of a share of
Common Stock on the date of grant. In the case of ISOs granted to the owner of
Common Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any subsidiary, the option exercise price for
each share covered by such option may not be less than 110% of the fair market
value of a share of Common Stock on the date of grant of such option. The
administrator of the Stock Plan determines such fair market value. As long as
the Common Stock of the Company is traded on the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotation ("Nasdaq")
System, the fair market value of a share of Common Stock of the Company shall be
the closing sales price for such stock (or the closing bid, if no sales were
reported, as quoted on such system) for the last market trading date before the
time of determination, as reported in The Wall Street Journal or such other
source as is deemed reliable.
The consideration to be paid for shares issued upon exercise of options
granted under the Stock Plan, including the method of payment, will be
determined by the administrator (and, in the case of ISOs, such determination
shall be made at the time of grant) and may consist entirely of cash, check,
promissory note or shares of Common Stock which, in the case of shares acquired
upon exercise of an option, have been beneficially owned for at least six months
or which were not acquired directly or indirectly from the Company, with a fair
market value on the exercise date equal to the aggregate exercise price of the
shares being purchased. The administrator may also authorize as payment the
delivery of a properly executed notice and irrevocable instructions to a broker
to deliver promptly to the Company the amount of sale or loan proceeds required
to pay the exercise price or the delivery of an irrevocable subscription
agreement for the shares which irrevocably obligates the optionee to take and
pay for the shares not more than 12 months after delivery of the subscription
agreement. The administrator may also authorize payments by any combination of
the foregoing methods or by any other method permitted by applicable laws.
Under the Stock Plan, in the event of termination of an optionee's
employment or consulting relationship for any reason (other than death or
permanent disability), an option may thereafter be exercised (to the extent it
was exercisable at the date of such termination) for thirty days (or such other
period as determined by the administrator not to exceed six months or three
months in the case of an ISO). If the optionee's employment or consulting
relationship is terminated as a result of the optionee's permanent disability,
the option may be exercised for a period of six months after the date of
termination. If an optionee's employment or consulting relationship is
terminated by reason of the optionee's death, the options held by such
individual can be exercised by the optionee's estate or successor for twelve
months following death. However, in no case can an option be exercised after the
expiration of its term.
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All options granted under the Stock Plan shall be evidenced by a stock
option agreement between the Company and the optionee to whom such option is
granted. Each agreement shall contain in substance the terms and conditions
described above.
Stock Purchase Rights. The Stock Plan permits the granting of stock
purchase rights to purchase Common Stock of the Company either alone, in
addition to, or in tandem with other awards under the Stock Plan. Upon the
granting of a stock purchase right under the Stock Plan, the offeree is advised
in writing of the terms, conditions and restrictions related to the offer,
including the number of shares of Common Stock that such person is entitled to
purchase, the price to be paid and the time within which such person must accept
such offer (which in no event may exceed six months from the date the purchase
right was granted). The offer shall be accepted by execution of a restricted
stock purchase agreement between the Company and the offeree. Stock purchase
rights granted to persons subject to Section 16 of the Securities Exchange Act
of 1934 shall be subject to any restrictions necessary to comply with Rule
16b-3.
Nontransferability of Options and Stock Rights. Options and stock rights
granted pursuant to the Stock Plan are nontransferable by the participant, other
than by will or by the laws of descent and distribution and may be exercised,
during the lifetime of the participant, only by the participant.
Withholding Under the Stock Plan. The administrator of the Stock Plan may
also permit participants to satisfy their withholding tax obligations using
Common Stock when appropriate.
Acceleration of Options and Stock Rights. In the event of a proposed sale
of all or substantially all of the assets of the Company, or the Merger of the
Company with or into another corporation, each outstanding option and stock
right shall be assumed or substituted by an equivalent option or right by such
successor corporation. In the event the successor corporation refuses to assume
or substitute the option or stock purchase right, the participant will have the
right to exercise the option or stock right as to all shares subject to such
option or stock right, including shares as to which the option or stock right
would not otherwise be exercisable. If an option or stock purchase right is
exercisable in lieu of assumption or substitution, the Company shall notify the
participant that the option or stock right shall be fully exercisable for a
period of 15 days from the date of such notice and the option or stock right
will terminate upon the expiration of such period.
Adjustment upon Changes in Capitalization. In the event any change, such as
a stock split or dividend, is made in the Company's capitalization which results
in an increase or decrease in the number of outstanding shares of Common Stock
without receipt of consideration by the Company, an appropriate adjustment shall
be made in the number of shares which have been reserved for issuance under the
Stock Plan and the price per share covered by each outstanding option or stock
right. In the event of the proposed dissolution or liquidation of the Company,
all outstanding options and stock rights will terminate immediately before the
consummation of such proposed action, unless otherwise provided by the Board of
Directors. The Board of Directors may, in its discretion, make provision for
accelerating the exercisability of shares subject to options or stock rights
under the Stock Plan in such event.
Amendment and Termination. The Board of Directors may amend, alter, suspend
or discontinue the Stock Plan at any time, but such amendment, alteration,
suspension or discontinuation shall not adversely affect any incentive stock
rights, stock options, stock appreciation rights or stock purchase rights then
outstanding under the Stock Plan, without the participant's consent. To the
extent necessary and desirable to comply with Rule 16b-3 or Section 422 of the
Code (or any other applicable law or regulation), the Company will obtain
stockholder approval of any amendment to the Stock Plan in such a manner and to
such a degree as required. Subject to the specific terms of the Stock Plan, the
administrator may accelerate any award or option or waive any conditions or
restrictions pertaining to such award or option or shares of stock relating
thereto at any time. The administrator may also substitute new stock options for
previously granted stock options, including previously granted stock options
having higher option prices, and may reduce the exercise price of any option to
the then current fair market value if the fair market value of the Common Stock
covered by such option shall have declined since the date the option was
granted. The Stock Plan shall continue in effect for a term of ten years unless
sooner terminated as described above.
7
<PAGE>
Federal Income Tax Aspects of the Stock Plan
The following is a brief summary of the federal income tax consequences of
transactions under the Stock Plan. This summary is not intended to be exhaustive
and does not discuss the tax consequences of a participant's death or provisions
of the income tax laws of any municipality, state or foreign country in which an
optionee may reside.
Incentive Stock Options. An optionee who is granted an ISO will not
recognize taxable income either at the time the option is granted or upon its
exercise, although the exercise may subject the optionee to the alternative
minimum tax. Upon the sale or exchange of the shares more than two years after
grant of the option and one year after exercising the option, any gain or loss
will be treated as long-term capital gain or loss. If these holding periods are
not satisfied, the optionee will recognize ordinary income at the time of sale
or exchange equal to the difference between the exercise price and the lower of
(i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. A different rule for measuring ordinary
income upon such a premature disposition may apply in the case of optionees who
are subject to Section 16 of the Securities Exchange Act of 1934, as amended.
The Company will be entitled to a deduction in the same amount as the ordinary
income recognized by the optionee. Any gain or loss recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income will be characterized as long-term or short-term capital gain or loss,
depending on the holding period.
Non-Statutory Stock Options. All other options, which do not qualify as
ISOs, are referred to as Non-Statutory Stock Options. An optionee will not
recognize any taxable income at the time he is granted a Non-Statutory Stock
Option. However, upon exercise of the option, the optionee will recognize
taxable income generally measured as the excess of the then fair market value of
the shares purchased over the purchase price. Any taxable income recognized in
connection with an option exercise by an optionee who is also an employee of the
Company will be subject to tax withholding by the Company. Upon resale of such
shares by the optionee, any difference between the sales price and the
optionee's purchase price, to the extent not recognized as taxable income as
described above, will be treated as long-term or short-term capital gain or
loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the Optionee with respect to shares acquired upon
exercise of a Non-Statutory Stock Option.
Different rules may apply in the case of optionees who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended.
Stock Purchase Rights. Stock purchase rights will generally be taxed in the
same manner as Non-Statutory Stock Options. However, restricted stock is usually
purchased upon exercise of a stock purchase right. At the time of purchase,
restricted stock is subject to a "substantial risk of forfeiture" within the
meaning of Section 83 of the Code. As a result, the purchaser will not recognize
ordinary income at the time of purchase. Instead, the purchaser will recognize
ordinary income on the dates when the stock ceases to be subject to substantial
risk of forfeiture. The stock will generally cease to be subject to a
substantial risk of forfeiture when it is no longer subject to the Company's
right to repurchase the stock upon the purchaser's termination of employment
with the Company (i.e., as it "vests"). At such times, the purchaser will
recognize the ordinary income measured as the difference between the purchase
price and the fair market value of the stock on the date the stock is no longer
subject to a substantial risk of forfeiture. However, a purchaser may accelerate
to the date of purchase his or her recognition of ordinary income, if any, and
the beginning of any capital gain holding period by timely filing an election
pursuant to Section 83(b) of the Code. In such event, the ordinary income
recognized, if any, would be equal to the difference between the purchase price
and the fair market value of the stock on the date of purchase, and the capital
gain holding period would commence on the purchase date. The ordinary income
recognized by a purchaser who is an employee will be treated as wages and will
be subject to tax with holding by the Company. Generally, the Company will be
entitled to a tax deduction in the amount and at the time the purchaser
recognizes ordinary income.
Different rules may apply in the case of purchasers who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended.
8
<PAGE>
Payments in Respect of a Change in Control. The Stock Plan authorizes the
acceleration of options and stock purchase rights under certain conditions in
the event of a Merger or sale of substantially all of the assets of the Company.
Such acceleration or payment may cause part or all of the consideration involved
to be treated as a "parachute payment" under the Code, which may subject the
recipient thereof to a 20% excise tax and which may not be deductible by the
participant's employer.
The foregoing is only a summary of the effect of federal income taxation
upon optionees and the Company with respect to the grant and exercise of options
under the Stock Plan. It does not purport to be complete, and does not discuss
the tax consequences of the employee's or consultant's death or the provisions
of the income tax laws of any municipality, state or foreign country in which
the employee or consultant may reside.
Stock Plan Benefits
The Company cannot now predict the amount of benefits that will be received
by or allocated to any particular participant under the Stock Plan. The
following table sets forth the number of options granted under the Stock Plan to
(i) each of the Named Executive Officers; (ii) all executive officers as a
group; (iii) all non-executive directors as a group; and (iv) all employees
other than executive officers as a group.
<TABLE>
<CAPTION>
Number of
Dollar Options
Value of Granted in
Name and Principal Position Grants(1) 1997
- --------------------------- --------- ------
<S> <C> <C>
Robert W. Felton
Chairman and Chief Executive Officer ............................ $ -- 130,000
Christopher R. Lane
Vice Chairman and President of Strategy and
Product Development ............................................. -- 105,000
John W. Blend, III
President of Worldwide Sales and Marketing and Director ......... -- 90,000
Richard W. MacAlmon
Senior Vice President and Director .............................. -- 50,000
Frank M. Siskowski
Chief Financial Officer and Executive Vice President
of Investor Relations ........................................... -- 85,000
All Executive Officers as a Group (5 persons) .................... -- 460,000
Non-Executive Directors as a Group (0 persons) ................... -- --
All Employees Other than Executive Officers ...................... -- 3,033,750
<FN>
- ------------
(1) The dollar value of option grants under the Stock Plan was computed based on
the closing price of the Company's Common Stock on December 31, 1997 on the
Nasdaq National market of $7.25 minus the exercise price. On such date, all
options granted under the Stock Plan were "out-of-the-money."
</FN>
</TABLE>
Required Vote
The approval of amendment to the Stock Plan requires the affirmative vote
of the holders of a majority of the shares of the Company's Common Stock
represented in person or by proxy and entitled to vote on the proposal. See
"Quorum; Required Vote" above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE 1997
STOCK PLAN.
9
<PAGE>
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as independent
auditors of the Company, to audit the financial statements of the Company for
the current year ending December 31, 1998 and recommends that the stockholders
ratify this selection. Representatives of Ernst & Young LLP are expected to be
available at the meeting with the opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate questions.
Required Vote
The Board of Directors has conditioned its appointment of the Company's
independent auditors upon the receipt of the affirmative vote of a majority of
the votes cast on the proposal at the Annual Meeting. In the event that the
stockholders do not approve the selection of Ernst & Young LLP, the Board of
Directors will reconsider its selection.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
10
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company during
1995, 1996 and 1997 to its Chief Executive Officer and the four other most
highly compensated executive officers who were serving as executive officers
during the year ended December 31, 1997 (the "Named Executive Officers"):
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation
-------------------------------
All Other
Name and Principal Position Year Salary ($) Bonus Compensation ($)(1)
----------------------------- ---- ------------ ------- -------------------
<S> <C> <C> <C> <C>
Robert W. Felton(2) 1997 $ 240,000 $ 4,307 $ 2,027
Chairman and 1996 195,000 7,334 4,435
Chief Executive Officer 1995 180,000 12,055 3,919
Christopher R. Lane(3) 1997 250,000 -- 286,265
Vice Chairman and 1996 250,000 -- 600
President of Strategy 1995 250,000 -- 510
and Product Development
John W. Blend, III(4) 1997 200,000 -- 296,810
President of Worldwide Sales 1996 200,000 -- 12,155
and Marketing and Director 1995 200,000 -- 408
Richard W. MacAlmon(5) 1997 200,000 4,307 2,027
Senior Vice President 1996 185,000 7,334 2,789
and Director 1995 180,000 12,055 4,720
Frank M. Siskowski(6) 1997 180,000 50,000 801
Chief Financial Officer and 1996 52,500 -- 338
Executive Vice President 1995 N/A N/A N/A
of Investor Relations
<FN>
- ------------
(1) "All Other Compensation" is itemized as follows:
* In 1997, Mr. Felton received $1,226 in payment pursuant to the
Company's profit sharing plan and $801 in payment of life insurance
premiums. In 1996, he received $2,519 in payment to his profit sharing
plan and $1,916 in payment of life insurance premiums. In 1995, he
received $3,033 in payments to his profit sharing plan and $886 in
payment life insurance premiums.
* In 1997, Mr. Lane received $600 in payment of life insurance premiums;
$171,903 in loan and accrued interest forgiveness; and $113,762 in
housing and relocation payments. In 1996, he received $600 in payment
of life insurance premiums. In 1995, he received $510 in payment of
life insurance premiums
* In 1997, Mr. Blend received $12,155 in payment in payment of split
dollar life insurance premiums and $284,655 in loan and accrued
interest forgiveness. In 1996, he received $12,155 in payment of split
dollar life insurance premiums. In 1995, he received $408 in payment of
life insurance premiums.
* In 1997, Mr. MacAlmon received $1,226 in payment pursuant to the
Company's profit sharing plan; $801 in payment of life insurance
premiums. In 1996, he received $2,519 in payment to his profit sharing
plan and $270 in payment of life insurance premiums. In 1995, he
received $4,562 in payment to his profit sharing plan and $158 in
payment of life insurance premiums.
* In 1997, Mr. Siskowski received $801 in payment of life insurance
premiums. In 1996, he received $338 in payment of life insurance
premiums. Mr. Siskowski's date of hire with the Company was September
1996.
(2) Robert W. Felton was previously Chairman, Chief Executive Officer and
President of The Indus Group, Inc. Subsequent to the Merger, he became
Chairman and Chief Executive Officer of the Company. The compensation
described in this Summary Compensation Table for 1995, 1996 and 1997
11
<PAGE>
includes amounts paid by both the Company and The Indus Group, Inc. and has
been reported on a calendar year basis. The Merger was accounted for as a
pooling-of-interests, therefore all revenues and expenses for the Company
have been combined retroactively.
(3) Christopher R. Lane was previously President and Chief Executive Officer of
TSW International, Inc. Subsequent to the Merger, he became Vice Chairman
and President of Strategy and Product Development. The compensation
described in this Summary Compensation Table reflects certain amounts paid
by TSW International, Inc. prior to the Merger when TSW International, Inc.
was an independent private company. TSW International, Inc. reported its
results based on a March 31 year-end, while the Company reports on a
calendar year basis. Accordingly, the amounts reflected in the Summary
Compensation Table for 1995, 1996 and 1997 include amounts paid by both the
Company and TSW International, Inc. and have been reported on a calendar
year basis. The Merger was accounted for as a pooling-of-interests;
therefore all revenues and expenses for the Company have been combined
retroactively.
(4) John W. Blend, III was previously Executive Vice President, Worldwide
Distribution of TSW International, Inc. Subsequent to the Merger, he became
President of Worldwide Sales and Marketing and director. The compensation
described in this Summary Compensation Table reflects certain amounts paid
by TSW International, Inc. prior to the Merger when TSW International, Inc.
was an independent private company. TSW International, Inc. reported its
results based on a March 31 year-end, while the Company reports on a
calendar year basis. Accordingly, the amounts reflected in the Summary
Compensation Table for 1995, 1996 and 1997 include amounts paid by both the
Company and TSW International, Inc. and have been reported on a calendar
year basis. The Merger was accounted for as a pooling-of-interests;
therefore all revenues and expenses for the Company have been combined
retroactively.
(5) Richard W. MacAlmon was previously Senior Vice President, Vice President of
Marketing and director of The Indus Group, Inc. Subsequent to the Merger, he
became Senior Vice President and director of the Company effective August
25, 1997. The compensation described in this Summary Compensation Table for
1995, 1996 and 1997 include amounts paid by both the Company and The Indus
Group, Inc. and have been reported on a calendar year basis. The Merger was
accounted for as a pooling-of-interests, therefore all revenues and expenses
for the Company have been combined retroactively.
(6) Frank M. Siskowski was Chief Financial Officer and Senior Vice President of
The Indus Group, Inc. Subsequent to the Merger, he became Chief Financial
Officer and Executive Vice President of Investor Relations of the Company
effective August 25, 1997. The compensation described in this Summary
Compensation Table for 1995 and 1996 include amounts paid by both the
Company and The Indus Group, Inc. and have been reported on a calendar year
basis. The Merger was accounted for as a pooling-of-interests, therefore all
revenues and expenses for the Company have been combined retroactively.
</FN>
</TABLE>
12
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
The following table sets forth certain information with respect to the
value of stock options held by Named Executive Officers as of December 31, 1997.
<CAPTION>
Individual Grants
----------------------------------------------------------- Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Price Appreciation For
Underlying Granted to Exercise Option Term(2)
Options Employees in Price per Expiration ---------------------------
Name Granted Fiscal Year Share Date(1) 5% 10%
------ --------- ------------- ------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Felton(3)(6) ............ 130,000 3.0% $ 15.13 11/6/07 $946,725 $2,662,725
Christopher R. Lane(4)(6) ......... 105,000 2.4% 13.75 11/6/07 909,563 2,295,563
John W. Blend, III(4)(6) .......... 90,000 2.1% 13.75 11/6/07 779,625 1,967,625
Frank M. Siskowski(4)(6) .......... 85,000 1.9% 13.75 11/6/07 736,313 1,858,313
John W. Blend, III(5)(7) .......... 71,104 1.6% 3.94 2/21/07 176,494 445,438
Richard W. MacAlmon(4)(6) ......... 50,000 1.1% 13.75 11/6/07 433,125 1,093,125
<FN>
- ------------
(1) Options may terminate before their expiration upon the termination of
optionee's status as an employee or consultant or upon the optionee's death
or disability.
(2) Potential realizable value is based on the assumption that the Common Stock
of the Company appreciates at the annual rate shown (compounded annually)
from the date of grant until the expiration of the option term. These
potential realizable value numbers are calculated based on Securities and
Exchange Commission requirements and do not reflect the Company's estimate
of future stock price growth.
(3) Options were granted under Indus International, Inc. 1997 Stock Option Plan
at an exercise price equal to 110% of the fair market value on the date of
grant.
(4) Options were granted under Indus International. Inc. 1997 Stock Option Plan
at an exercise price equal to the fair market value of the Company's Common
Stock on the date of grant.
(5) Options were granted under former TSW International, Inc. 1994 Employee
Stock Option Plan at an exercise price equal to the fair market value of TSW
International, Inc.'s Common Stock, as determined by the Board of Directors
on the date of grant.
(6) Options become exercisable as to 25% of the option shares on each
anniversary of the vesting commencement date, with full vesting occurring on
the fourth anniversary of the vesting commencement date.
(7) Options become exercisable as to 33% of the option shares upon grant and on
each anniversary of the vesting commencement date, with full vesting
occurring on the second anniversary of the vesting commencement date.
</FN>
</TABLE>
13
<PAGE>
AGGREGATE OPTION EXERCISES IN 1997 AND YEAR-END VALUES
The following table sets forth information concerning the shares acquired
and the value realized upon the exercise of stock options during 1997, the
number of shares of Common Stock underlying exercisable and unexercisable
options held by each of the Named Officers as of December 31, 1997 and the
values of unexercised "in-the-money" options as of that date.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised in-the-
Options at Money Options at Fiscal
Shares December 31, 1997 (#) Year-End ($)(1)
Acquired on Value ----------------------------- ------------------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable ($) Unexercisable ($)
------ -------------- -------------- ------------- --------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Felton ............... -- $ -- 17,500 182,500 $ -- $ --
John W. Blend, III(2) .......... 140,000 1,774,200 512,472 175,689 3,133,269 305,071
Christopher R. Lane(2) ......... 50,000 570,750 517,078 437,138 2,518,877 1,486,803
Frank M. Siskowski ............. -- -- 12,500 122,500 -- --
Richard W. MacAlmon ............ -- -- 2,500 57,500 -- --
<FN>
- ------------
(1) Represents the positive spread between the respective exercise prices of
outstanding stock options and the closing price of the Common Stock on
December 31, 1997 of $7.25 per share, as reported by the Nasdaq National
Stock Market at the close of business.
(2) Exercise of Common Stock options issued under TSW International, Inc. stock
plans.
</FN>
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
Merger between The Indus Group, Inc. and TSW International, Inc.
Effective August 25, 1997, a new company, Indus International, Inc., was
formed, and The Indus Group, Inc. and TSW International, Inc. each merged into
wholly-owned subsidiaries of Indus International, Inc. (the "Merger"). In
connection with the Merger, the Compensation Committee reviewed the compensation
of the executive officers of two entities that would now be managing the
combined company. Prior to the Merger, the Compensation Committee consisted of
Robert W. Felton, Alan G. Merten and Donald F. Robertson. Subsequent to the
Merger, the Compensation Committee consisted of Robert W. Felton, Alan G. Merten
and William H. Janeway.
Overview and Philosophy
The Compensation Committee (the "Committee") of the Board of Directors
regularly reviews and approves all executive officer pay plans and develops
recommendations for stock option grants for approval by the Board of Directors.
These include the following compensation elements: base salaries, annual
incentives, stock options and various benefit plans.
The Committee is comprised of two independent, non-employee directors and
one director who is an executive officer of the Company. It is the Committee's
objective that executive compensation be directly determined by achievement of
the Company's planned business performance. Specifically, the Company's
executive compensation program is designed to reward exceptional executive
performance that results in enhanced corporate and stockholder values.
Published industry pay salary data is reviewed and relied upon in the
Committee's assessment of appropriate compensation levels, specifically the
analysis of proxies of certain public software companies, two executive
compensation surveys of companies with average revenues of $250 million and the
Culpepper High Tech Survey. The Committee also retains independent compensation
consultants to provide objective and expert advice in the review of the
Company's stock option plans.
The Committee recognizes that the industry sector in which the Company
operates is both highly competitive and undergoing significant globalization
with the result that there is substantial demand for
14
<PAGE>
qualified, experienced executive personnel. The Committee considers it crucial
that the Company be assured of retaining and rewarding its top caliber
executives who are essential to the attainment of the Company's ambitious
long-term, strategic goals.
For these reasons, the Committee believes the Company's executive
compensation arrangements must remain competitive with those offered by other
companies of similar size, scope, performance levels and complexity of
operations, including some, but not all, of the companies comprising the
Nasdaq--100 Index and the Nasdaq Computer Index.
Annual Cash Compensation (Base Salary, Plus Performance Incentives)
The Committee believes that annual cash compensation should be paid
commensurate with attained performance. The Company's executive cash
compensation consists of base compensation (salary) and an annual performance
incentive (bonus). Base salaries for executive officers are established by
considering a number of factors, including the Company's continued profitable
growth; the executive's individual performance and measurable contribution to
the Company's success; and pay levels of similar positions with comparable
companies in the industry. The Committee supports the Company's compensation
philosophy of moderation for elements such as base salary and benefits. Base
salary decisions are made as part of the Company's formal annual review process.
In September 1997, the Committee approved raises in the base salary of the
Company's executive officers (excluding the Chief Executive Officer) which
averaged 13%. These raises were intended to reflect the salary levels for
similar positions in the information technology industry and the anticipated
additional responsibilities of each executive officer in the upcoming year.
Long-Term Incentive: Stock Options
The Committee recommends executive stock options under the Stock Plan to
foster executive officer ownership of the Company's Common Stock, to stimulate a
long-term orientation in decisions and to provide direct linkage with
stockholder interests. The Committee considers the total compensation package,
industry practices and trends, the executive's accountability level, and assumed
potential stock value in the future when granting stock options. The Committee
recommends option amounts to provide retention considering projected earnings to
be derived from option gains based upon relatively conservative assumptions
relating to planned growth and earnings. Therefore, the stock option program is
intended to serve as an effective and competitive long-term incentive and
retention tool for the Company's executives, as well as other key employees. The
exercise prices of stock options granted to executive officers are equal to the
fair market value of the Company's Common Stock on the date of grant. Therefore,
stock options provide an incentive to maximize the Company's profitable growth
that ordinarily, over time, should be reflected in the price of the Company's
Common Stock. The Committee believes that the Company's stock option plan has
been administered in a manner comparable to its peer group and other high
performing companies in the high technology sector.
Benefits
The Company provides benefits to the named executive officers that are
generally available to all employees of the Company. The amount of executive
level benefits and perquisites, as determined in accordance with the rules of
the Securities and Exchange Commission relating to executive compensation, did
not exceed 10% of total salary and bonus for the calendar year 1997 for any
executive officer.
Chief Executive Officer Compensation
Compensation for the Chief Executive Officer is determined by a process
similar to that discussed above for executive officers however the inside
director was excluded from participating in this process. In September 1997, the
Compensation Committee (excluding Mr. Felton) raised Mr. Felton's base salary by
35%. This increase was designed to bring Mr. Felton's salary in line with other
chief executive officers in the information technology industry and to reflect
the Company's achievement of its goals for 1997 in terms of revenues and
earnings per share.
15
<PAGE>
It is the opinion of the Committee that the aforementioned compensation
policies and structures provide the necessary discipline to properly align the
Company's corporate economic performance and the interest of the Company's
stockholders with progressive, balanced and competitive executive total
compensation practices in an equitable manner.
The Compensation Committee of the Board of Directors
Robert W. Felton
William H. Janeway
Alan G. Merten
16
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return for the Company's
Common Stock with the cumulative total return of The Stock Market--U.S. Index
and the Nasdaq Computer Index. The graph assumes that $100 was invested on
August 25, 1997 in the Company's Common Stock, The Nasdaq Stock Market--U.S.
Index and the Nasdaq Computer Index, including reinvestment of dividends. No
dividends have been declared or paid on the Company's Common Stock. Note that
historic stock price performance is not necessarily indicative of future stock
price performance.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
Indus The Stock Market Nasdaq
Date International, Inc. U.S. Index Computer Index
- ------------ ------------------- ---------------- --------------
8/26/97 100 100 100
9/10/97 103 103 101
9/24/97 106 106 103
10/8/97 100 109 105
10/22/97 113 107 101
11/11/97 83 100 92
11/25/97 90 100 94
12/9/97 91 102 95
12/23/97 45 95 85
17
<PAGE>
CERTAIN TRANSACTIONS WITH MANAGEMENT
In September 1992, TSW International, Inc. loaned $230,000 to John W.
Blend, then an executive officer, director, and shareholder of TSW
International, Inc. In June 1997, TSW International, Inc. forgave the aggregate
amount of indebtedness including accrued interest of $284,655. TSW
International, Inc. loaned Mr. Blend an additional $100,910 in June 1997, which
remains outstanding and bears no interest, for payment of taxes in conjunction
with the note forgiveness. The largest aggregate amount of indebtedness
outstanding at any time in 1997 was $284,655, and the amount of outstanding
indebtedness as of March 11, 1998 was $100,910.
In December 1996, TSW International, Inc. loaned $166,000 to Christopher R.
Lane, then an executive officer, director and shareholder of TSW International,
Inc. In June 1997, TSW International, Inc. forgave the aggregate amount of
indebtedness including accrued interest of $171,903. TSW International, Inc.
loaned Mr. Lane an additional $60,940 in June 1997, which remains outstanding
and bears no interest, for payment of taxes in conjunction with the note
forgiveness. The largest aggregate amount of indebtedness outstanding at any
time in 1997 was $171,903, and the amount of outstanding indebtedness as of
March 11, 1998 was $60,940.
Prior to the Merger, in private placement transactions, TSW International,
Inc. issued subordinated long-term notes to Warburg, Pincus Investors, LP in the
principal amount of $18,065 million. The notes bore an interest rate of prime
plus 1.5% with varying maturity dates from July 31, 1999 to October 13, 2000.
Pursuant to the Merger, the outstanding principal balance of the subordinated
floating rate notes of TSW International, Inc. (including accrued interest) was
exchanged for an aggregate of 1,235,879 shares of the Company's Common Stock.
In August 1997, the Company paid housing and relocation costs for Mr. Lane,
which totaled $113,762.
In December 1997, the Board of Directors approved a contract with Valour,
Inc. to provide human resource consulting services. The services to be provided
under the agreement commence in January 1998 with a monthly fixed fee of
$10,000. Robert W. Felton, Chairman of the Board and Chief Executive Officer of
the Company, is a director and shareholder of Valour, Inc.
SECURITY OWNERSHIP OF MANAGEMENT; PRINCIPAL STOCKHOLDERS
<TABLE>
The table below sets forth, as of March 11, 1998, certain information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially more than five percent (5%) of
the outstanding shares of Common Stock; (ii) each Named Executive Officer; (iii)
each director of the Company; and (iv) all current directors and executive
officers as a group.
<CAPTION>
Shares Approximate
Beneficially Percentage of
Name and Address Owned(1) Ownership
------------------ ---------- -----------
<S> <C> <C>
Warburg, Pincus Investors, LP(2) ...................... 12,952,609 35.4%
William H. Janeway(2)(3) .............................. 12,953,859 35.4%
Joseph P. Landy(2)(3) ................................. 12,953,859 35.4%
Robert W. Felton(4) ................................... 9,515,061 26.0%
Richard W. MacAlmon(5) ................................ 1,175,000 3.2%
John W. Blend, III(6) ................................. 535,011 1.5%
Christopher R. Lane(7) ................................ 417,078 1.1%
Frank M. Siskowski(8) ................................. 12,500 *
Alan G. Merten(9) ..................................... 8,500 *
All current directors and executive officers as a group
(8 persons)(10) ...................................... 24,618,259 67.2%
<FN>
- ------------
* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission that deem shares to be beneficially
owned by any person who has or shares voting
18
<PAGE>
power or investment power with respect to such shares. Unless otherwise
indicated below, the persons and entities named in the table have sole
voting and sole investment power with respect to all shares beneficially
owned, subject to community property laws where applicable. Shares of the
Company's Common Stock that will be issuable to the identified person or
entity pursuant to assumed stock options that are either immediately
exercisable or exercisable within sixty days of March 11, 1998 are deemed to
be outstanding and to be beneficially owned by the person holding such
options for the purpose of computing the percentage ownership of such person
but are not treated as outstanding for the purpose of computing the
percentage ownership of any other person.
(2) Represents shares held by Warburg, Pincus Investors, LP ("Warburg").
Warburg, Pincus & Co. is the sole General Partner of Warburg and has a 20%
interest in the profits of Warburg. E.M. Warburg, Pincus & Co. LLC manages
Warburg. Lionel I. Pincus is the managing partner of Warburg, Pincus & Co.
and the managing member of E.M. Warburg, Pincus & Co., LLC and may be deemed
to control both such entities. The members of E.M. Warburg, Pincus & Co.,
LLC are substantially the same as the partners of Warburg, Pincus & Co., LLC
are substantially the same as the partners of Warburg, Pincus & Co. Messrs.
Janeway and Landy, who will be directors of the combined company, are
Managing Directors and members of E.M. Warburg, Pincus & Co., LLC, and
general partners of Warburg, Pincus & Co. Messrs. Landy and Janeway may be
deemed to have an indirect pecuniary interest (within the meaning of Rule
16a-1 under the Exchange Act) in an indeterminate portion of the shares
beneficially owned by Warburg. Messrs. Janeway and Landy each disclaim
beneficial ownership, for purposes of Section 16 of the Exchange Act or
otherwise, of such shares. The address of Warburg is 466 Lexington Avenue,
New York, New York 10017. Includes 3,702,877 shares issuable upon the
exercise of currently exercisable warrants held by Warburg.
(3) Includes 1,250 shares subject to options exercisable within 60 days of March
11, 1998 granted to each of Messrs. Janeway and Landy in their capacity as
directors.
(4) Includes 17,500 shares subject to options exercisable within 60 days of
March 11, 1998. The address of Mr. Felton is c/o Indus International, Inc.,
60 Spear Street, San Francisco, CA 94105.
(5) Includes 2,500 shares subject to options for which are presently exercisable
or will become exercisable within 60 days of March 11, 1998.
(6) Includes 382,173 shares subject to options exercisable within 60 days of
March 11, 1998.
(7) Includes 417,078 shares subject to options exercisable within 60 days of
March 11, 1998.
(8) Includes 12,500 shares subject to options exercisable within 60 days of
March 11, 1998.
(9) Includes 6,500 shares subject to options exercisable within 60 days of March
11, 1998.
(10)Includes 4,543,628 shares subject to options and warrants exercisable
within 60 days of March 11, 1998.
</FN>
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee currently consists of Robert W.
Felton, William H. Janeway and Alan G. Merten. Mr. Felton is an executive
officer and director of the Company. No interlocking relationship exists between
any member of the Company's Compensation Committee and any member of the
compensation committee of any other company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16 (a)")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and persons who own
greater than ten percent of a registered class of the Company's equity
securities (a "10% Stockholders") are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
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To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1997, all officers,
directors and 10% Stockholders complied with all Section 16(a) filing
requirements.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed Proxy to vote the shares they
represent as the Board of Directors may recommend.
THE BOARD OF DIRECTORS
San Francisco, California
April 10, 1998
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INDUS INTERNATIONAL, INC.
1997 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are:
* to attract and retain the best available personnel for
positions of substantial responsibility,
* to provide additional incentive to Employees, Directors and
Consultants, and
* to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means Indus International, Inc., a Delaware
corporation.
(h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and
Directors, who is employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider shall not cease to be an Employee in the case of
(i) any leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any Subsidiary, or
any successor. For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value
21
<PAGE>
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system for the last market trading
day prior to the time of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for 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 Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement.
(q) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
(s) "Option Agreement" means an agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(t) "Option Exchange Program" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.
(u) "Optioned Stock" means the Common Stock subject to an Option
or Stock Purchase Right.
(v) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
(w) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this 1997 Stock Plan.
(y) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan.
(z) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.
(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(bb) "Section 16(b)" means Section 16(b) of the Exchange Act.
(cc) "Service Provider" means an Employee, Director or
Consultant.
(dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
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<PAGE>
(ff) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 5,000,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, such Shares shall become available for
future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iv) Other Administration. Other than as provided above, the
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and
Stock Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock to
be covered by each Option and Stock Purchase Right granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right of the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;
(vi) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and
23
<PAGE>
regulations relating to sub-plans established for the purpose of qualifying for
preferred tax treatment under foreign tax laws;
(x) to modify or amend each Option or Stock Purchase Right
(subject to Section 15(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights
may be granted to Service Providers. Incentive Stock Options may be granted only
to Employees.
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year
of the Company, Options to purchase more than 500,000 Shares.
(ii) In connection with his or her initial service, a
Service Provider may be granted Options to purchase up to an additional 500,000
Shares which shall not count against the limit set forth in subsection (i)
above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.
(iv) If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the canceled Option will be counted against the limits
set forth in subsections (i) and (ii) above. For this purpose, if the exercise
price of an Option is reduced, the transaction will be treated as a cancellation
of the Option and the grant of a new Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or
24
<PAGE>
any Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant or such shorter term as may be provided in the
Option Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions, which must be satisfied before the
Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of payment;
or
(viii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.
25
<PAGE>
An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number
of Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, upon the date of such
termination, the Optionee shall fully vest in and have the right to exercise the
Option as to all of the Optioned Stock, including Shares as to which the Option
would not otherwise be vested or exercisable, within such period of time as is
specified in the Option Agreement (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for twelve (12) months following the Optionee's termination. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant) by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance as to all of the Optioned Stock, including Shares as to which it
would not otherwise be vested or exercisable. In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee's termination. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically, by means of a Notice of Grant,
of the terms, conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase, the price to be
paid, and the time within which the offeree must accept such offer. The offer
shall be accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.
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<PAGE>
(c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders
27
<PAGE>
of Common Stock in the merger or sale of assets.
14. Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
16. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of
an Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
17. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
18. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
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INDUS INTERNATIONAL, INC.
1997 STOCK PLAN
STOCK 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 STOCK OPTION GRANT
[Optionee's Name and Address]
You have been granted an option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:
Grant Number _________________________
Date of Grant _________________________
Vesting Commencement Date _________________________
Exercise Price per Share $_________________________
Total Number of Shares Granted _________________________
Total Exercise Price $_________________________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: _________________________
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
[Twenty-five percent (25%) of the Shares subject to the Option shall
vest twelve (12) months after the Vesting Commencement Date, and twenty-five
percent (25%) of the Shares subject to the Option shall vest at the end of each
subsequent twelve-month period thereafter, so that all of the Shares shall be
vested four (4) years after the Vesting Commencement Date.]
Termination Period:
This Option may be exercised for ninety days after Optionee ceases to
be a Service Provider. Upon the death or Disability of the Optionee, this Option
may be exercised for one year after Optionee ceases to be a Service Provider. In
no event shall this Option be exercised later than the Term/Expiration Date as
provided above.
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<PAGE>
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 15(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of
an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to Stock Administrator of 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
such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.
3. 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;
(b) check;
(c) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; or
(d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
4. 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 the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. 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 Agreement.
6. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
(a) Exercising the Option.
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<PAGE>
(i) Nonstatutory Stock Option. The Optionee may incur
regular federal and state income tax liability upon exercise of a NSO. The
Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised Shares on the date of exercise over their aggregate Exercise
Price. If the Optionee is an Employee or a former Employee, the Company will be
required to withhold from his or her compensation or collect from Optionee and
pay to the applicable taxing authorities an amount in cash equal to a percentage
of this compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(ii) Incentive Stock Option. If this Option qualifies as an
ISO, the Optionee will have no regular federal income tax liability upon its
exercise, although the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price will be
treated as an adjustment to alternative minimum taxable income for federal tax
purposes and may subject the Optionee to alternative minimum tax in the year of
exercise. In the event that the Optionee ceases to be an Employee but remains a
Service Provider, any Incentive Stock Option of the Optionee that remains
unexercised shall cease to qualify as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory Stock Option on the date three (3)
months and one (1) day following such change of status.
(b) Disposition of Shares.
(i) NSO. If the Optionee holds NSO Shares for at least one
year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(ii) ISO. If the Optionee holds ISO Shares for at least one
year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period that the ISO
Shares were held.
(c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.
7. 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 the internal substantive laws, but not
the choice of law rules, of California.
8. 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 (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING 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 WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
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<PAGE>
OPTIONEE: INDUS INTERNATIONAL, INC.
___________________________________ ____________________________________
Signature By
____________________________________ ____________________________________
Print Name Title
____________________________________
Residence Address
____________________________________
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<PAGE>
CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option Agreement. In consideration of
the Company's granting his or her spouse the right to purchase Shares as set
forth in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
_______________________________________
Spouse of Optionee
33
<PAGE>
EXHIBIT A
1997 STOCK PLAN
EXERCISE NOTICE
Indus International, Inc.
60 Spear Street
San Francisco, CA 94105
Attention: Stock Administrator
1. Exercise of Option. Effective as of today, ________________, 199__,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Indus International, Inc. (the "Company")
under and pursuant to the 1997 Stock Plan (the "Plan") and the Stock Option
Agreement dated ________, 19___ (the "Option Agreement"). The purchase price for
the Shares shall be $______ , as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 13 of the
Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
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<PAGE>
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.
Submitted by: Accepted by:
PURCHASER: INDUS INTERNATIONAL, INC.
__________________________________ ____________________________________
Signature By
__________________________________ ____________________________________
Print Name Its
Address: Address:
_________________________________ 60 Spear Street
_________________________________ San Francisco, CA 94105
_______________________________
Date Received
35
<PAGE>
APPENDIX A
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PROXY INDUS INTERNATIONAL, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
MAY 5, 1998
The undersigned stockholder(s) of Indus International, Inc., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated April 10, 1998, and hereby appoints
Robert W. Felton and Frank M. Siskowski as Proxies, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 1998 Annual Meeting of Stockholders of Indus International,
Inc. (the "Company") to be held on May 5, 1998 at 2:00 p.m., local time, at the
Company's headquarters, located at 60 Spear Street, San Francisco, California
94105 and at any adjournment or postponement thereof, and to vote all shares of
Common Stock which the undersigned would be entitled to vote if personally
present on any of the following matters and with discretionary authority as to
any and all other matters that may properly come before the meeting.
(Continued, and to be signed on the other side)
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE>
<TABLE>
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<CAPTION>
[ X ] Please mark
your votes
as this
<S> <C> <C> <C>
WITHHOLD FOR AGAINST ABSTAIN
1. Election of Directors FOR FOR ALL 2. To approve an amendment to the [ ] [ ] [ ]
To withhold authority to vote for any Company's 1997 Stock Plan to increase
individual nominee, strike a line [ ] [ ] the number of shares reserved for
through the nominee's name in the issuance thereunder by 2,500,000
list below: shares to 7,500,000 shares.
Robert W. Felton, Christopher R. Lane, John W. Blend, III,
Richard W. MacAlmon, Alan G. Merten, William H. Janeway, 3. To ratify the appointment of Ernst & [ ] [ ] [ ]
Joseph P. Landy Young LLP as independent auditors of
the Company for the fiscal year
ending December 31, 1998.
THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE. IF NO SPECIFICATION
IS MADE, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED FOR EACH OF THE
ABOVE PERSONS AND PROPOSALS, AND FOR
SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING AS THE PROXY HOLDERS
DEEM ADVISABLE.
(This proxy should be marked, dated and
signed by each stockholder exactly as
such stockholder's name appears hereon,
and returned promptly in the enclosed
envelope. Persons signing in a fiduciary
capacity should so indicate. A
corporation is requested to sign its
name by its President or other
authorized officer, with the office held
designated. If shares are held by joint
tenants or as community property, both
holders should sign.)
Signature(s) _________________________________________________________________ Dated ____________________________________ , 1998
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT AS PROMPTLY AS
POSSIBLE.
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- FOLD AND DETACH HERE -
</TABLE>
