<PAGE>
As filed with the Securities and Exchange Commission on November 20, 1998
Registration No. 333-_________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-----------------------
PERVASIVE SOFTWARE INC.
(Exact name of registrant as specified in its charter)
DELAWARE 7372 74-2693793
(State or other (Primary Standard Industrial (IRS Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
12365 RIATA TRACE PARKWAY, BUILDING II
AUSTIN, TEXAS 78727
(Address of principal executive offices) (Zip Code)
------------------------
PERVASIVE SOFTWARE INC.
1997 STOCK INCENTIVE PLAN
EMPLOYEE STOCK PURCHASE PLAN
INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
EVERYWARE REPLACEMENT OPTION PLAN
(Full title of the Plans)
-----------------------
RON R. HARRIS
CHIEF EXECUTIVE OFFICER
PERVASIVE SOFTWARE INC.
12365 RIATA TRACE PARKWAY, BUILDING II
AUSTIN, TEXAS 78727
(Name and address of agent for service)
(512) 231-6000
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO PROPOSED MAXIMUM PROPOSED AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED (1) OFFERING PRICE MAXIMUM REGISTRATION
PER SHARE AGGREGATE
OFFERING PRICE
<S> <C> <C> <C> <C>
Employee Stock Purchase Plan:
- -----------------------------
Common Stock, $0.001 par value 500,000 shares(2) $9.875 $4,937,500(3) $1,372.63
International Employee Stock Purchase Plan:
- -------------------------------------------
Common Stock, $0.001 par value 500,000 shares(2) N/A N/A N/A
1997 Stock Incentive Plan:
- --------------------------
Options to purchase Common Stock 795,326 N/A N/A N/A
Common Stock, $0.001 par value 795,326 shares $9.875 $7,853,844.25(3) $2,183.37
EveryWare Replacement Option Plan
- ---------------------------------
Options to purchase Common Stock 45,404 N/A N/A N/A
Common Stock, $0.001 par value 45,404 shares $ 3.85 $ 174,805.40(4) $ 48.59
====================================================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the 1997 Stock Incentive Plan, Employee
Stock Purchase Plan, International Employee Stock Purchase Plan and the
EveryWare Replacement Option Plan by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of the
outstanding shares of Common Stock of Pervasive Software Inc.
(2) The Employee Stock Purchase Plan and International Employee Stock Purchase
Plan share a common reserve, which in the aggregate is being increased by
500,000 shares.
(3) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low prices per share of Common Stock of Pervasive Software Inc. as
reported on the Nasdaq National Market on November 18, 1998.
(4) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the weighted average
exercise price of the outstanding options.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
Pervasive Software Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents
previously filed with the Securities and Exchange Commission (the
"SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1998, as filed with the SEC on September 28, 1998;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1998, as filed with the SEC on November
16, 1998;
(c) The Registrant's Current Report on Form 8-K, as filed with the SEC
on October 6, 1998; and
(d) The description of the Registrant's outstanding Common Stock
contained in the Registrant's Registration Statement No. 0-23043 on
Form 8-A filed with the SEC on September 2, 1997 pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), including any amendment or report filed for the
purpose of updating such description.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the
date of this Registration Statement and prior to the filing of a post-
effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing
of such documents.
Item 4. Description of Securities
-------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
Section 145 of the Delaware General Corporation Law authorizes a court
to award or a corporation's Board of Directors to grant indemnification
to directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act. The
Registrant's Bylaws provide for mandatory indemnification of its
directors and officers and permissible indemnification of employees and
other agents to the maximum extent permitted by the Delaware General
Corporation Law. The Registrant's Certificate of Incorporation provides
that, pursuant to Delaware law, its directors shall not be liable for
monetary damages for breach of their fiduciary duty as directors to the
Registrant and its stockholders. This provision in the Certificate of
Incorporation does not eliminate the fiduciary duty of the directors,
and in appropriate circumstances equitable remedies such as injunctive
or other forms of non-monetary relief will remain available under
Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the
Registrant for acts or omissions not in good faith or involving
intentional misconduct, for knowing violations of law, for actions
leading to improper personal benefit to the director and for payment of
dividends or approval of stock repurchases or redemptions that are
unlawful under Delaware law. The provision also does not affect a
director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Registrant
has entered into Indemnification Agreements with its officers and
directors. The Indemnification Agreements provide the Registrant's
officers and
II-1
<PAGE>
directors with further indemnification to the maximum extent permitted
by the Delaware General Corporation Law.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not Applicable.
Item 8. Exhibits
--------
Exhibit Number Exhibit
- -------------- -------
4 Instruments Defining Rights of Stockholders. Reference is made
to Registrant's Registration Statement No. 0-23043 on Form 8-A,
together with all amendments thereto, which is incorporated
herein by reference pursuant to Item 3(d) of this Registration
Statement.
5 Opinion and consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 EveryWare Replacement Option Plan.
99.2 Form of Notice of Grant and Stock Option Agreement to be
generally used in connection with the EveryWare Replacement
Option Plan.
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement (i) to include any
prospectus required by Section 10(a)(3) of the 1933 Act, (ii) to
reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement and (iii) to include any material information
with respect to the plan of distribution not previously disclosed in
this Registration Statement or any material change to such information
in this Registration Statement; provided, however, that clauses (1)(i)
and (1)(ii) shall not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the 1934 Act that are incorporated by reference into
this Registration Statement; (2) that for the purpose of determining
any liability under the 1933 Act each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the Registrant's 1997 Stock Incentive Plan, Employee
Stock Purchase Plan or International Employee Stock Purchase Plan and
the EveryWare Replacement Option Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the 1934 Act that is incorporated by reference into this
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof .
C. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the indemnification provisions
summarized in Item 6 or otherwise, the Registrant has been advised
that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the 1933 Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the
II-2
<PAGE>
payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Austin, State of Texas on this 19th
day of November, 1998.
PERVASIVE SOFTWARE INC.
By: /s/ Ron R. Harris
------------------------------------------
Ron R. Harris
President and Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Pervasive Software Inc., a
Delaware corporation, do hereby constitute and appoint Ron R. Harris and James
R. Offerdahl, and either of them, the lawful attorneys-in-fact and agents with
full power and authority to do any and all acts and things and to execute any
and all instruments which said attorneys and agents, and either one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and either of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or either one of them, shall do or cause to
be done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Ron R. Harris
- ---------------------- President, Chief Executive November 19, 1998
Ron R. Harris Officer and
Director (Principal Executive
Officer)
/s/ James R. Offerdahl
- ---------------------- Chief Operating Officer and November 19, 1998
James R. Offerdahl Chief Financial Officer and
Secretary (Principal Financial
and Accounting Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Nancy R. Woodward Director November 19, 1998
- ------------------------
Nancy R. Woodward
/s/ Joseph C. Aragona Director November 19, 1998
- ------------------------
Joseph C. Aragona
/s/ David A. Boucher Director November 19, 1998
- ------------------------
David A. Boucher
Director
- ------------------------
David R. Bradford
/s/ Shelby H. Carter, Jr. Director November 19, 1998
- -------------------------
Shelby H. Carter, Jr.
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Number Exhibit
- -------------- -------
4 Instruments Defining Rights of Stockholders. Reference is
made to Registrant's Registration Statement No. 0-23043 on
Form 8-A, together with all amendments thereto, which is
incorporated herein by reference pursuant to Item 3(d) of
this Registration Statement.
5 Opinion and consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 EveryWare Replacement Option Plan.
99.2 Form of Notice of Grant and Stock Option Agreement to be
generally used in connection with the EveryWare Replacement
Option Plan.
<PAGE>
EXHIBIT 5
November 20, 1998
Pervasive Software Inc.
12365 Riata Trace Parkway, Building II
Austin, Texas 78727
Re: Pervasive Software Inc. Registration Statement for Offering
of 1,340,730 Shares of Common Stock
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of (i) 795,326 shares
of Common Stock under the 1997 Stock Incentive Plan, (ii) 500,000 shares of
Common Stock under the Employee Stock Purchase Plan and International Employee
Stock Purchase Plan and (iii) 45,404 shares of Common Stock under the EveryWare
Replacement Option Plan. We advise you that, in our opinion, when such shares
have been issued and sold pursuant to the applicable provisions of the 1997
Stock Incentive Plan, Employee Stock Purchase Plan and International Employee
Stock Purchase Plan and the EveryWare Replacement Option Plan and in accordance
with the Registration Statement, such shares will be validly issued, fully paid
and nonassessable shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
-----------------------------------------------------------------
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
<PAGE>
EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1997 Stock Incentive Plan, Employee Stock Purchase
Plan, International Employee Stock Purchase Plan, and EveryWare Replacement
Option Plan of our report dated July 17, 1998 with respect to the consolidated
financial statements and schedule of Pervasive Software Inc. and Subsidiaries
included in its Annual Report (Form 10-K) for the year ended June 30, 1998.
/s/ Ernst & Young LLP
November 19, 1998
Austin, Texas
<PAGE>
EXHIBIT 99.1
PERVASIVE SOFTWARE INC.
EVERYWARE REPLACEMENT OPTION PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
I. PURPOSE OF THE PLAN............................................ 1
II. ADMINISTRATION OF THE PLAN..................................... 1
III. ELIGIBILITY.................................................... 1
IV. STOCK SUBJECT TO THE PLAN...................................... 2
V. OPTION TERMS................................................... 2
A. Exercise Price........................................... 2
B. Exercise and Term of Options............................. 3
C. Effect of Termination of Service......................... 3
D. Stockholder Rights....................................... 4
E. Limited Transferability of Options....................... 4
VI. CORPORATE TRANSACTION.......................................... 4
VII. CANCELLATION AND REGRANT OF OPTIONS............................ 5
VIII. EFFECTIVE DATE AND TERM OF THE PLAN............................ 6
IX. AMENDMENT OF THE PLAN.......................................... 6
X. USE OF PROCEEDS................................................ 6
XI. REGULATORY APPROVALS........................................... 6
XII. NO EMPLOYMENT/SERVICE RIGHTS................................... 6
</TABLE>
i
<PAGE>
PERVASIVE SOFTWARE INC.
EVERYWARE REPLACEMENT OPTION PLAN
---------------------------------
I. PURPOSE OF THE PLAN
This EveryWare Replacement Option Plan is intended to promote the
interests of Pervasive Software Inc., a Delaware corporation, by providing
eligible persons with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the service of the Corporation.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. ADMINISTRATION OF THE PLAN
A. The Committee shall have authority to administer the Plan.
Members of the Committee shall serve for such period of time as the Board may
determine and shall be subject to removal by the Board at any time. The Board
may also at any time terminate the functions of any committee and reassume all
powers and authority previously delegated to such committee.
B. The Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority to
establish such rules and regulations as it may deem appropriate for proper
administration of the Plan and to make such determinations under, and issue such
interpretations of, the provisions of any program and any outstanding options
thereunder as it may deem necessary or advisable. Decisions of the Plan
Administrator under the Plan shall be final and binding on all parties who have
an interest in the Plan or any option thereunder.
C. Service on the Committee shall constitute service as a Board
member, and members of each such committee shall accordingly be entitled to full
indemnification and reimbursement as Board members for their service on such
committee. No member of the Committee shall be liable for any act or omission
made in good faith with respect to the Plan or any option grants made under the
Plan.
III. ELIGIBILITY
A. The persons eligible to participate in the Plan are as follows:
(i) Employees, and
(ii) consultants who provide services to the Corporation (or
any Parent or Subsidiary).
<PAGE>
B. The Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority to determine
which eligible persons are to receive option grants, the time or times when such
option grants are to be made, the number of shares to be covered by each such
grant, the time or times at which each option is to become exercisable, and the
maximum term for which the option is to remain outstanding.
IV. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed 45,404 shares.
Shares of Common Stock subject to outstanding options shall be available for
subsequent issuance under the Plan to the extent (i) the options expire or
terminate for any reason prior to exercise in full or (ii) the options are
canceled in accordance with the cancellation-regrant provisions of Section VII.
B. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and/or class of securities issuable
under the Plan and (ii) the number and/or class of securities and the exercise
price per share in effect under each outstanding option in order to prevent the
dilution or enlargement of benefits thereunder. The adjustments determined by
the Plan Administrator shall be final, binding and conclusive.
V. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
--------
shall comply with the terms specified below.
A. EXERCISE PRICE.
--------------
1. The exercise price per share shall be fixed by the Plan
Administrator.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the documents evidencing the
option, be payable in one or more of the forms specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date,
2
<PAGE>
(iii) a promissory note payable to the Corporation, but only to
the extent authorized by the Plan Administrator; or
(iv) through a special sale and remittance procedure pursuant
to which the Optionee shall concurrently provide irrevocable written
instructions to (a) a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased shares plus
all applicable income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b) the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm
in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at
----------------------------
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
C. EFFECT OF TERMINATION OF SERVICE.
--------------------------------
1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option, but no such option
shall be exercisable after the expiration of the option term.
(ii) Any option exercisable in whole or in part by the
Optionee at the time of death may be subsequently exercised by the
Optionee's designated beneficiary, the personal representative of the
Optionee's estate or by the person or persons to whom the option is
transferred pursuant to the Optionee's will or in accordance with the laws
of descent and distribution.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding to the extent it is not exercisable for vested shares on
the date of such cessation of Service.
(iv) Should the Optionee's Service be terminated for
Misconduct, then all outstanding options held by the Optionee shall
terminate immediately and cease to be outstanding.
3
<PAGE>
(v) In the event of a Corporate Transaction, the provisions
of Section VI shall govern the period for which the outstanding options are
to remain exercisable following the Optionee's cessation of Service and
shall supersede any provisions to the contrary in this section.
2. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service from the
period otherwise in effect for that option to such greater period of time
as the Plan Administrator shall deem appropriate, but in no event beyond
the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested
shares of Common Stock for which such option is exercisable at the time of
the Optionee's cessation of Service but also with respect to one or more
additional installments in which the Optionee would have vested under the
option had the Optionee continued in Service.
D. STOCKHOLDER RIGHTS. The holder of an option shall have no
------------------
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
----------------------------------
Optionee, the option shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee's death.
VI. CORPORATE TRANSACTION
4
<PAGE>
A. Immediately following the consummation of a Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
B. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such transaction,
to apply to the number and class of securities which would have been issuable to
the Optionee in consummation of such Corporate Transaction had the option been
exercised immediately prior to such transaction. Appropriate adjustments shall
also be made to (i) the number and class of securities available for issuance
under the Plan following the consummation of such Corporate Transaction and (ii)
the exercise price payable per share under each outstanding option, provided the
--------
aggregate exercise price payable for such securities shall remain the same.
C. The grant of options under the Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
VII. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution new options covering the same or different number of shares of
Common Stock but with an exercise price per share based on the Fair Market Value
per share of Common Stock on the new option grant date
5
<PAGE>
VIII. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective on the Plan Effective Date and
options may be granted under the Plan from and after the Plan Effective Date.
B. The Plan shall terminate upon the earliest of (i) September 24,
--------
2008, (ii) the date on which all shares available for issuance under the Plan
shall have been issued pursuant to the exercise of the options or issuance of
shares under the Plan or (iii) the termination of all outstanding options in
connection with a Corporate Transaction. Upon such Plan termination, all options
outstanding on such date shall thereafter continue to have force and effect in
accordance with the provisions of the documents evidencing such options.
IX. AMENDMENT OF THE PLAN
The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. An amendment of the Plan shall
be subject to the approval of the Corporation's stockholders only to the extent
required by applicable laws, regulations or rules.
X. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.
XI. REGULATORY APPROVALS
The implementation of the Plan, the granting of any option under the
Plan and the issuance of any shares of Common Stock shall be subject to the
Corporation's procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the options granted under it and
the shares of Common Stock issued pursuant to it.
XII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee, which rights
are hereby expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.
6
<PAGE>
APPENDIX
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
-----
B. COMMITTEE shall mean the committee of two (2) or more Board
---------
members appointed by the Board to administer the Plan.
C. COMMON STOCK shall mean the Corporation's common stock.
------------
D. CORPORATE TRANSACTION shall mean either of the following
---------------------
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction; or
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of
the Corporation.
E. CORPORATION shall mean Pervasive Software Inc., a Delaware
-----------
corporation.
F. EMPLOYEE shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
A-1
<PAGE>
G. EXERCISE DATE shall mean the date on which the Corporation shall
-------------
have received written notice of the option exercise.
H. FAIR MARKET VALUE per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
(ii) If the Common Stock is at the time listed on the New York Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on such exchange, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock on the
date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
I. MISCONDUCT shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by the Optionee, any unauthorized use or disclosure
by such person of confidential information or trade secrets of the Corporation
(or any Parent or Subsidiary), or any other intentional misconduct by such
person adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or discharge
of any Optionee or other person in the Service of the Corporation (or any Parent
or Subsidiary).
J. OPTIONEE shall mean any person to whom an option is granted under
--------
the Plan.
K. PARENT shall mean any corporation (other than the Corporation) in
------
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other
A-2
<PAGE>
than the Corporation) owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
L. PERMANENT DISABILITY shall mean the inability of the Optionee to
--------------------
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
M. PLAN shall mean the Corporation's EveryWare Replacement Option
----
Plan, as set forth in this document.
N. PLAN ADMINISTRATOR shall mean the particular entity, whether the
------------------
Committee or the Board, which is authorized to administer the Plan with respect
to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under the Plan with respect to the
persons under its jurisdiction.
O. PLAN EFFECTIVE DATE shall mean September 25, 1998.
-------------------
P. SERVICE shall mean the provision of services to the Corporation
-------
(or any Parent or Subsidiary) by a person in the capacity of an Employee, a non-
employee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant.
Q. SUBSIDIARY shall mean any corporation (other than the
----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
A-3
<PAGE>
EXHIBIT 99.2
Option # ________
PERVASIVE SOFTWARE INC.
NOTICE OF GRANT OF STOCK OPTION
-------------------------------
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Pervasive Software Inc. (the
"Corporation"):
Optionee: ____________________________________________________________
--------
Grant Date: __________________________________________________________
----------
Vesting Commencement Date: ___________________________________________
-------------------------
Exercise Price: $___________________________________ per share
--------------
Number of Option Shares: __________________________ shares
-----------------------
Expiration Date: _____________________________________________________
---------------
Type of Option: Non-Statutory Stock Option
--------------
Exercise Schedule: The Option shall become exercisable and vested
-----------------
with respect to __________ percent (__%) of the Option Shares upon
Optionee's completion of each ____ of Service measured from the
Vesting Commencement Date. In no event shall the Option become
exercisable for any additional Option Shares after Optionee's
cessation of Service.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the Pervasive Software Inc. EveryWare
Replacement Option Plan (the "Plan"). Optionee further agrees to be bound by
the terms of the Plan and the terms of the Option as set forth in the Stock
Option Agreement attached hereto as Exhibit A.
Optionee hereby acknowledges receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the
Plan is available upon request to the Corporate Secretary at the Corporation's
principal offices.
No Employment or Service Contract. Nothing in this Notice or in the
---------------------------------
attached Stock Option Agreement shall confer upon Optionee any right to continue
in Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.
<PAGE>
Definitions. All capitalized terms in this Notice shall have the
-----------
meanings assigned to them in this Notice or in the attached Stock Option
Agreement.
_______________, 199__
Date
PERVASIVE SOFTWARE INC.
By:_____________________________________
Title: _________________________________
________________________________________
OPTIONEE
Address: _______________________________
________________________________________
ATTACHMENTS
- -----------
Exhibit A - Stock Option Agreement
Exhibit B - Plan Summary and Prospectus
<PAGE>
PERVASIVE SOFTWARE INC.
STOCK OPTION AGREEMENT
----------------------
RECITALS
- --------
A. The Corporation has granted the Option for the purpose of retaining
the services of selected Employees and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary).
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as
---------------
of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a term of five (5) years
-----------
measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be neither
-----------------------
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.
4. DATES OF EXERCISE. This option shall become exercisable for the
-----------------
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
--------------------
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(a) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability, or Misconduct) while this option is
outstanding, then Optionee shall have a period of 90 days (commencing with the
date of such cessation of Service) during which to exercise this option, but in
no event shall this option be exercisable at any time after the Expiration Date.
Solely for purposes of this Paragraph 5 under this Agreement, Service shall be
deemed to continue while the Optionee is on a bona fide leave of absence, if
such leave
<PAGE>
was approved by the Corporation in writing. However, in no event shall this
option become exercisable for additional Option Shares during a leave of absence
unless continued crediting of Service for vesting purposes is expressly required
by the terms of such leave or by applicable law (as determined by the Plan
Administrator).
(b) Should Optionee die while this option is outstanding, then
the person or persons to whom the option is transferred pursuant to Optionee's
beneficiary designation or, in the absence of a beneficiary designation, the
personal representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution, shall have the right to exercise this option.
Such right shall lapse and this option shall cease to be outstanding upon the
earlier of (i) the expiration of the 180-day period measured from the date of
- -------
Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then Optionee shall have a period
of 180 days (commencing with the date of such cessation of Service) during which
to exercise this option. In no event shall this option be exercisable at any
time after the Expiration Date.
(d) Should Optionee's Service be terminated for Misconduct, then
this option shall terminate immediately and cease to remain outstanding.
(e) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number of
vested Option Shares for which the option is exercisable at the time of
Optionee's cessation of Service. Upon the expiration of such limited exercise
period or (if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding for any vested Option Shares for which the option has
not been exercised. To the extent the Option is not exercisable for Option
Shares at the time of Optionee's cessation of Service and to the extent Optionee
is not vested in the Option Shares at the time of Optionee's cessation of
Service, this option shall immediately terminate and cease to be outstanding
with respect to those shares.
2
<PAGE>
6. CORPORATE TRANSACTION
---------------------
(a) Immediately following a Corporate Transaction, this option,
to the extent not previously exercised, shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof) in connection with the Corporate Transaction.
(b) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately after
such transaction, to apply to the number and class of securities which would
have been issuable to Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such transaction, and appropriate
adjustments shall also be made to the Exercise Price, provided the aggregate
--------
Exercise Price shall remain the same.
(c) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
---------------------------
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
3
<PAGE>
8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
------------------
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
---------------------------
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
(i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) a promissory note payable to the Corporation, but
only to the extent authorized by the Plan Administrator;
(C) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or
(D) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising the
option) shall concurrently provide irrevocable written instructions (a) to
a Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (b) to the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale transaction.
Except to the extent the sale and remittance procedure is utilized in
connection with the option exercise, payment of the Exercise Price must
accompany the Purchase Agreement or Notice of Exercise delivered to the
Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee)
have the right to exercise this option.
4
<PAGE>
(iv) Make appropriate arrangements with the Corporation (or
Parent or Subsidiary employing or retaining Optionee) for the satisfaction
of all Federal, state and local income and employment tax withholding
requirements applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
------------------------------------
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
----------------------
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee, Optionee's assigns and the legal representatives, heirs and
legatees of Optionee's estate.
12. NOTICES. Any notice required to be given or delivered to the
-------
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to
be given or delivered to Optionee shall be in writing and addressed to Optionee
at the address Optionee most recently provided to the Corporation. All notices
shall be deemed effective upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.
13. CONSTRUCTION. This Agreement and the option evidenced hereby are
------------
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
14. GOVERNING LAW. The interpretation, performance and enforcement
-------------
of this Agreement shall be governed with respect to issues of contract law under
the laws of the State of Texas and with respect to issues of corporation law
under the laws of the State of Delaware.
5
<PAGE>
15. MARKET STAND-OFF. In connection with any underwritten public
----------------
offering by the Corporation of its equity securities pursuant to an effective
registration statement filed under the Securities Act of 1933 the Optionee shall
not directly or indirectly sell, make any short sale of, loan, hypothecate,
pledge, offer, grant or sell any option or other contract for the purchase of,
purchase any option or other contract for the sale of, or otherwise dispose of
or transfer, or agree to engage in any of the foregoing transactions with
respect to, any Option Shares acquired under this Agreement without the prior
written consent of the Corporation or its underwriters. Such restriction (the
"Market Stand-Off") shall be in effect for such period of time following the
date of the final prospectus for the offering as may be requested by the
Corporation or such underwriters. In no event, however, shall such period exceed
180 days. The Market Stand-Off shall in any event terminate two years after the
date of the Corporation's initial public offering. In the event of the
declaration of a stock dividend, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the
Corporation's outstanding securities without receipt of consideration, any new,
substituted or additional securities which are by reason of such transaction
distributed with respect to any Option Shares subject to the Market Stand-Off,
or into which such Option Shares thereby become convertible, shall immediately
be subject to the Market Stand-Off. In order to enforce the Market Stand-Off,
the Corporation may impose stop-transfer instructions with respect to the Option
Shares acquired under this Agreement until the end of the applicable stand-off
period. The Corporation's underwriters shall be beneficiaries of the agreement
set forth in this Paragraph 15. This Paragraph 15 shall not apply to Option
Shares registered in the public offering under the Securities Act of 1933.
6
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify Pervasive Software Inc. (the "Corporation") that I
elect to purchase __________ shares of the Corporation's Common Stock (the
"Purchased Shares") at the option exercise price of $___________ per share (the
"Exercise Price") pursuant to that certain option (the "Option") granted to me
by the Corporation on ____________________, 199___.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price. I acknowledge that the Purchased Shares remain subject to market stand-
off restrictions as set forth in my option agreement.
______________________, 199__
Date
___________________________________
Optionee
Address:___________________________
___________________________________
Print name in exact manner
it is to appear on the
stock certificate: ___________________________________
Address to which certificate
is to be sent, if different
from address above: ___________________________________
___________________________________
Social Security Number: ___________________________________
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
---------
B. BOARD shall mean the Corporation's Board of Directors.
-----
C. COMMON STOCK shall mean the Corporation's common stock.
------------
D. CORPORATE TRANSACTION shall mean either of the following stockholder-
---------------------
approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different from the
persons holding those securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of the
Corporation.
E. CORPORATION shall mean Pervasive Software Inc., a Delaware
-----------
corporation.
F. EMPLOYEE shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
A-1
<PAGE>
G. EXERCISE DATE shall mean the date on which the option shall have been
-------------
exercised in accordance with Paragraph 9 of the Agreement.
H. EXERCISE PRICE shall mean the exercise price per share as specified in
--------------
the Grant Notice.
I. EXPIRATION DATE shall mean the date on which the option expires as
---------------
specified in the Grant Notice.
J. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
-----------------
be the closing selling price per share of Common Stock on the date in question,
as the price is reported by the National Association of Securities Dealers on
the Nasdaq National Market or any successor system. If there is no closing
selling price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which
such quotation exists.
K. GRANT DATE shall mean the date of grant of the option as specified in
----------
the Grant Notice.
L. GRANT NOTICE shall mean the Notice of Grant of Stock Option
------------
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
A-2
<PAGE>
M. MISCONDUCT shall mean the commission of any act of fraud, embezzlement
----------
or dishonesty by Optionee, any unauthorized use or disclosure by Optionee of
confidential information or trade secrets of the Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by Optionee adversely affecting
the business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner. The foregoing definition shall not be deemed to be inclusive
of all the acts or omissions which the Corporation (or any Parent or Subsidiary)
may consider as grounds for the dismissal or discharge of Optionee or any other
individual in the Service of the Corporation (or any Parent or Subsidiary).
N. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
--------------------
requirements of Section 422 of the Internal Revenue Code of 1986, as amended.
O. NOTICE OF EXERCISE shall mean the notice of exercise in the form
------------------
attached hereto as Exhibit I or such other form approved by the Corporation.
P. OPTION SHARES shall mean the number of shares of Common Stock subject
-------------
to the option as specified in the Grant Notice.
Q. OPTIONEE shall mean the person to whom the option is granted as
--------
specified in the Grant Notice.
R. PARENT shall mean any corporation (other than the Corporation) in an
------
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
S. PERMANENT DISABILITY shall mean either the Board or a committee of
--------------------
Board members, to the extent the committee is at the time responsible for the
administration of the Plan.
T. PLAN shall mean the Corporation's EveryWare Replacement Option Plan.
----
U. PLAN ADMINISTRATOR shall mean either the Board or a committee of Board
------------------
members, to the extent the committee is at the time responsible for the
administration of the Plan.
V. SERVICE shall mean the Optionee's performance of services for the
-------
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-
employee member of the board of directors or a consultant or independent
advisor.
W. SUBSIDIARY shall mean any corporation (other than the Corporation) in
----------
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
A-3
