<PAGE> 1
As filed with the Securities and Exchange Commission on March 30, 1999
Registration No. 333-______
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------------
BINDVIEW DEVELOPMENT CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 76-0306721
(State or other jurisdiction of incorporation or I.R.S Employer
organization) Identification No.)
5151 SAN FELIPE, 22ND FLOOR
HOUSTON, TEXAS 77056
(Address of Principal Executive Offices) (Zip Code)
NETECT LTD. EMPLOYEE SHARE OPTION PLAN
(AS AMENDED AND ASSUMED BY BINDVIEW DEVELOPMENT CORPORATION);
NETECT LTD. 1998 INTERNATIONAL EMPLOYEE STOCK PLAN
(AS AMENDED AND ASSUMED BY BINDVIEW DEVELOPMENT CORPORATION);
(Full title of the plans)
------------------------------------
SCOTT R. PLANTOWSKY
CHIEF FINANCIAL OFFICER
BINDVIEW DEVELOPMENT CORPORATION
5151 SAN FELIPE, 22ND FLOOR
HOUSTON, TEXAS 77056
(Name and address of agent for service)
713/561-4000
(Telephone number, including area code, of agent for service)
With Copy to:
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
ATTENTION: ROBERT F. GRAY, JR.
------------------------------------
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
TITLE OF SECURITIES TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
REGISTERED AMOUNT TO BE REGISTERED PRICE PER SHARE (1) AGGREGATE OFFERING PRICE (1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par 250,514 shares $24.13 $6,043,650.20 $1,681
value per share
==================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low sale prices of such security on April 8,
1999, as reported by The Nadsaq Stock Market, Inc..
(2) Includes an indeterminable number of shares of Common Stock issuable as a
result of the anti-dilution provisions of such plans.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
Registration Statement:
1. The Annual Report on Form 10-K of BindView Development Corporation,
a Texas corporation (the "Registrant"), filed with the Securities and Exchange
Commission (the "Commission") on February 23, 1999; and
2. The description of the Registrant's Common Stock, no par value per
share, contained in the Registration Statement on Form S-1of the Registrant
(Reg. No. 333-52883), originally filed with the Commission on May 15, 1998.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), subsequent to the date of the filing hereof and prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be 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.
Article 2.02-1 of the Texas Business Corporation Act ("Article
2.02-1") provides that any director or officer of a Texas corporation may be
indemnified against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by him in connection with or in defending any
action, suit or proceeding in which he is a party by reason of his position.
With respect to any proceeding arising from actions taken in his official
capacity as a director or officer, he may be indemnified so long as it shall be
determined that he conducted himself in good faith and that he reasonably
believed that his conduct was not opposed to the corporation's best interests.
In cases not concerning conduct in his official capacity as a director or
officer, a director or officer may be indemnified as long as he reasonably
believed that his conduct was not opposed to the corporation's best interests.
In the case of any criminal proceeding, such indemnification is mandatory. The
Registrant's Bylaws provide for indemnification of its present and former
directors to the fullest extent provided by Article 2.02-1. The Registrant
currently maintains directors' and officers' insurance to reimburse the
Registrant in the event that indemnification of a director or officer is
required.
The Registrant's Bylaws further provide for indemnification of
directors and officers against reasonable expenses incurred in connection with
the defense of any such action, suit or proceeding in advance of the final
disposition of the proceeding.
The Registrant's Articles of Incorporation eliminate the liability of
directors for monetary damages for an act or omission committed in the
director's capacity as a director, except to the extent a director is found
liable for (i) a breach of such director's duty of loyalty to the Registrant or
its shareholders, (ii) an act or omission not in good faith that constitutes a
breach of duty of such director to the Registrant or an act or omission that
involves intentional misconduct or a knowing violation of the law, (iii) a
transaction from which such director received an improper benefit, whether or
not the benefit resulted from an action taken within the scope of the
director's office or (iv) an act or omission for which the liability of a
director is expressly provided by an applicable statute.
II-1
<PAGE> 3
The Registrant's Articles of Incorporation further limit a director's
liability if the Texas Business Corporation Act, the Texas Miscellaneous
Corporation Laws Act or any other applicable Texas statute is hereafter amended
to authorize the further elimination or limitation of the liability of the
directors of the Registrant. If such applicable statute does hereafter
eliminate or limit a director's liability, then the liability of a director of
the Registrant shall be limited to the fullest extent permitted by the Texas
Business Corporation Act, the Texas Miscellaneous Corporation Laws Act and such
other applicable Texas statute, as so amended, and such limitation of liability
shall be in addition to, and not in lieu of, the limitation on the liability of
a director of the Registrant provided by the Articles of Incorporation.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 - Amended and Restated Articles of Incorporation of
the Registrant (incorporated by reference to Exhibit
3.1 to the Registrant's Registration Statement on
Form S-1 (Reg. No. 333-52883), filed with the
Commission on May 15, 1998).
4.2 - Bylaws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 333-52883), filed
with the Commission on May 15, 1998).
4.3 - Form of Common Stock Certificate (incorporated by
reference to Exhibit 4.2 to the Registrant's
Registration Statement on Form S-1 (Reg. No.
333-52883), filed with the Commission on May 15,
1998).
4.4 - Netect Ltd. Employee Share Option Plan (as amended
and assumed by BindView Development Corporation).
4.5 - Netect Ltd. 1998 International Employee Stock Plan
(as amended and assumed by BindView Development
Corporation).
5.1 - Opinion of Fulbright & Jaworski L.L.P.
23.1 - Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 - Consent of Grant Thornton LLP, Independent
Accountants.
23.3 - Consent of Fulbright & Jaworski L.L.P. (included in
Exhibit 5.1 to this Registration Statement).
24.1 - Powers of Attorney (contained on page II-4).
II-2
<PAGE> 4
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities 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 hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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 paragraphs (i) and (ii) do 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 Securities Exchange Act of 1934,
as amended (the "Exchange Act"), that are incorporated by reference in this
Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Houston, Texas on March 30, 1999.
BINDVIEW DEVELOPMENT CORPORATION
/s/ ERIC J. PULASKI
--------------------------------------
Eric J. Pulaski
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints each of Eric J. Pulaski and Scott R.
Plantowsky his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
and all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his or their substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ ERIC J. PULASKI Chairman of the Board, President and March 30, 1999
- -------------------------------------------- Chief Executive Officer
Eric J. Pulaski (Principle Executive Officer)
/s/ SCOTT R. PLANTOWSKY Director, Vice President and March 30, 1999
- -------------------------------------------- Chief Financial Officer
Scott R. Plantowsky (Principle Financial and
Accounting Officer)
/s/ PETER L. BLOOM Director March 30, 1999
- --------------------------------------------
Peter L. Bloom
/s/ JOHN J. MOORES Director March 30, 1999
- --------------------------------------------
John J. Moores
/s/ RICHARD A. HOSLEY II Director March 30, 1999
- --------------------------------------------
Richard A. Hosley II
</TABLE>
II-4
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
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<S> <C>
4.1 - Amended and Restated Articles of Incorporation of
the Registrant (incorporated by reference to Exhibit
3.1 to the Registrant's Registration Statement on
Form S-1 (Reg. No. 333-52883), filed with the
Commission on May 15, 1998).
4.2 - Bylaws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 333-52883), filed
with the Commission on May 15, 1998).
4.3 - Form of Common Stock Certificate (incorporated by
reference to Exhibit 4.2 to the Registrant's
Registration Statement on Form S-1 (Reg. No.
333-52883), filed with the Commission on May 15,
1998).
4.4 - Netect Ltd. Employee Share Option Plan (as amended
and assumed by BindView Development Corporation).
4.5 - Netect Ltd. 1998 International Employee Stock Plan
(as amended and assumed by BindView Development
Corporation).
5.1 - Opinion of Fulbright & Jaworski L.L.P.
23.1 - Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 - Consent of Grant Thornton LLP, Independent
Accountants.
23.3 - Consent of Fulbright & Jaworski L.L.P. (included in
Exhibit 5.1 to this Registration Statement).
24.1 - Powers of Attorney (contained on page II-4).
</TABLE>
<PAGE> 1
EXHIBIT 4.4
NETECT LTD.
-----------
THE 1997
SECTION 102 SHARE OPTION PLAN
-----------------------------
1. NAME
This Plan, as amended from time to time, shall be known as the NETECT LTD.
1997 Section 102 Share Option Plan.
2. PURPOSE OF THE OPTION PLAN
The NETECT LTD. 1997 section 102 Share Option Plan (the "Option Plan") is
intended as an incentive to retain, in the employ of NETECT LTD. (the
"Company") and its subsidiaries, persons of training, experience, and ability,
to attract new employees, whose services are considered valuable, to encourage
the sense of proprietorship of such persons, and to stimulate the active
interest of such persons in the development and financial success of the
Company by providing them with opportunities to purchase shares in the Company,
pursuant to the Option Plan approved by the Board of Directors of the Company,
which is to benefit from, and is made pursuant to, the provisions of
Section 102 of the Israeli Income Tax Ordinance (New Version) 1961 ("Section
102") and any regulations, rules, orders of procedures promulgated thereunder
with respect to Options granted to employees or the Company pursuant to the
Option Plan (The "Option").
3. ADMINISTRATION OF THE OPTION PLAN
The Board of Directors (the "Board") or a Share Option Committee (the
"Committee") appointed and maintained by the Board shall have the power to
administer the Option Plan, nonetheless the Board shall automatically have a
residual authority if no Committee shall be consisted for any reason
whatsoever. The Committee shall consist of such number of members (not less
than two (2) in number) as may be fixed by the Board, and any member of such
Committee shall be eligible to receive Options under the Option Plan while
serving on the Committee, unless otherwise specified herein.
NETECT LTD.
/s/ [ILLEGIBLE]
-12-
<PAGE> 2
The Committee shall have full power and authority (i) to designate participants,
(ii) to determine the terms and provisions of respective Option agreements
(which need not be identical) including, but not limited to, the number of
Shares in the Company to be covered by each Option, provisions concerning the
time or times when and the extent to which the Options may be exercised and the
nature and duration of restrictions as to transferability or restrictions
constituting substantial risk of forfeiture (iii) to accelerate the rights of an
Optionee to exercise, in whole or in part, any previously granted Option (iv) to
interpret the provisions and supervise the administration of the Option Plan;
and (v) to determine any other matter which is necessary or desirable for, or
incidental to administration of the Option Plan.
The Committee shall have the authority to grant, in its discretion, to the
holder of an outstanding Option, in exchange for the surrender and cancellation
of such Option, a new Option having a purchase price lower than provided in the
Option so surrendered and canceled, and containing such other terms and
conditions as the Committee may prescribe in accordance with the provisions of
the Option Plan.
All decisions and selections made by the Board or the committee pursuant to the
provisions of the Option Plan, shall be made by a majority of its members
except that no member of the Board or the Committee shall vote on, or be
counted for quorum purposes, with respect to any proposed action of the Board
or the Committee relating to any Option to be granted to that member. Any
decision reduced to writing and signed by a majority of the members who are
authorized to make such decision shall be fully effective as if it had been
made by a majority at a meeting duly held.
Subject to the Company decision, each member of the Board or the Committee
shall be indemnified and held harmless by the Company against any cost or
expense (including counsel fees) reasonably incurred by him, or any liability
(including any sum paid in settlement of a claim with the approval of the
Company) arising out of any act or omission to act in connection with the
Option Plan unless arising out of such member's own fraud or bad faith, to the
extent permitted by applicable law. Such indemnification shall be in addition
to any rights of indemnification the member may have as a Director or otherwise
under the Company's Articles of Association, any agreement, any vote of
shareholders or disinterested directors, or otherwise.
DESIGNATION OF PARTICIPANTS
The persons eligible for participation in the Option Plan as recipients of
Options shall include any employees of the Company or of any subsidiary of the
Company. The grant of an Option hereunder shall neither entitle the recipient
thereof to participate nor disqualify him from participating in, any other grant
of Options pursuant to this Option Plan or any other option or stock plan of
the Company or any of its affiliates.
NETECT LTD.
/s/ [ILLEGIBLE]
-13-
<PAGE> 3
5. TRUSTEE
The Options which shall be granted to employees of the Company and/or any
Shares issued upon exercise of such Options and/or other shares received
subsequently following any realization of rights, shall be issued to a
Trustee (the "Trustee") nominated by the committee (and approved in
accordance with the provisions of Section 102) and held for the benefit of
the Optionees for a period of not less than two years (24 months) from the
date of grant.
Anything to the contrary notwithstanding, the Trustee shall not release
any Shares issued upon exercise of Options prior to the full payment of
the Optionee's tax liabilities arising from Options which were granted to
him and/or any Shares issued upon exercise of such Options.
6. SHARES RESERVED FOR THE OPTION PLAN; RESTRICTION THEREON
6.1 Subject to adjustments as provided in Paragraph 8 hereof, a total of
Three million and two hundred nineteen thousand (3,219,000) Ordinary
Shares, NIS 0.001 par value per Share of the Company (the "Shares")
shall be subject to the Option Plan. The Shares subject to the Option
Plan are hereby reserved for sale for such purpose. Any of such
Shares which may remain unsold and which are not subject to
outstanding Options at the termination of the Option Plan shall cease
to be reserved for the purpose of the Option Plan, but until
termination of the Option Plan the Company shall at all times reserve
sufficient number of Shares to meet the requirements of the Option
Plan. Should any Option for any reason expire or be canceled prior to
its exercise or relinquishment in full, the Shares therefore subject
to such Option may again be subjected to an Option under the Option
Plan.
6.2 An employee who purchased Shares hereunder upon exercise of Options
shall have no voting rights as a shareholder (in any and all matters
whatsoever) until the consummation of a public offering of the
Company's shares (the "IPO"). Until an IPO, such Shares shall be
voted by a proxy pursuant to the directions of the Board, such proxy
to be to the person or persons designated by the Board. All Shares
issued upon exercise of the Options shall entitle the holder thereof
to receive dividends and other distributions thereon.
7. OPTION PRICE
7.1 The purchase price of each Share subject to an Option or any portion
thereof shall be determined by the Committee in its sole and absolute
discretion in accordance with applicable law, subject to guidelines
as shall be suggested by the Board from time to time.
7.2 The Option price shall be payable upon the exercise of the Option in
cash, by check, or other from satisfactory to the Committee. The
Committee shall have the authority to postpone the date of payment on
such terms as it may determine.
NETECT LTD
/s/ [ILLEGIBLE]
-14-
<PAGE> 4
8. ADJUSTMENTS
Upon the occurrence of any of the following described events,
Optionee's rights to purchase Shares under the Option Plan shall be
adjusted as hereafter provided:
8.1 If the Company is separated, reorganized, merged, consolidated
or amalgamated with or into another corporation while
unexercised Options remain outstanding under the Option Plan,
there shall be substituted for the Shares subject to the
unexercised portions of such outstanding Options an
appropriate number of shares of each class of shares or other
securities of the separated, reorganized, merged, consolidated
or amalgamated corporation which were distributed to the
shareholders of the Company in respect of such shares, and
appropriate adjustments shall be made in the purchase price
per share to reflect such action, all as will be determined by
the Committee who's determination shall be final.
8.2 If the Company is liquidated or dissolved while unexercised
Options remain outstanding under the Option Plan, then all
such outstanding Options may be exercised in full by the
Optionees as of the effective date of any such liquidation or
dissolution of the Company without regard to the installment
exercise provisions of Paragraphs 9(2), by the Optionees
giving notice in writing to the Company of their intention to
so exercise.
8.3 If the outstanding shares of the Company shall at any time be
changed or exchanged by declaration of a stock dividend,
stock split, combination or exchange of shares,
recapitalization, or any other like event by or of the
Company, and as often as the same shall occur, then the
number, class and kind of Shares subject to this Option Plan
or subject to any Options therefore granted, and the Option
prices, shall be appropriately and equitably adjusted so as
to maintain the proportionate number of Shares without
changing the aggregate Option price, provided, however, that
no adjustment shall be made by reason of the distribution of
subscription rights on outstanding stock. Upon happening of
any of the foregoing, the class and aggregate number of
Shares issuable pursuant to the Option Plan (as set forth in
paragraph 6 hereof), in respect of which Options have not yet
been exercised, shall be appropriately adjusted, all as will
be determined by the Board who's determination shall be
final.
8.4 Anything herein to the contrary notwithstanding, if prior to
the completion of an IPO of shares of the Company, all or
substantially all of the shares of the Company are to be
sold, or upon a merger or reorganization or the like, the
shares of the Company, or any class thereof, are to be
exchanged for securities of another Company, then in such
event, each Optionee shall be obliged to sell or exchange, as
the case may be, the shares such Optionee purchased under the
Option Plan, in accordance with the instructions then issued
by the Board whose determination shall be final.
/s/ [ILLEGIBLE]
NETECT LTD.
-15-
<PAGE> 5
9. TERM AND EXERCISE OF OPTIONS
9.1 Options shall be exercised by the Optionee by giving written
notice to the Company, in such form and method as may be determined by
the Company and the Trustee, which exercise shall be effective upon
receipt of such notice by the Company at its principal office. The
notice shall specify the number of Shares with respect to which the
Option is being exercised.
9.2 Each Option granted under this Option Plan shall be exercisable on
the date and for the number of Shares as shall be provided in the
Option agreement evidencing the Option and setting forth the terms
thereof. However, no Option shall be exercisable after the expiration
of five years from the date of grant.
9.3 Options granted under the Option Plan shall not be transferable by
Optionees other than by will or laws of descent and distribution, and
during an Optionee's lifetime shall be exercisable only by that
Optionee.
9.4 The Options may be exercised by the Optionee in whole at any time or
in part from time to time to the extent that the Options become
exercisable and prior to the Expiration Date, provided that the
Optionee is an employee of the Company or any of its subsidiaries, at
all times during the period beginning with the granting of the Options
and ending upon the date of exercise.
In the event of termination of optionee's employment with the Company
or any of its subsidiaries, all Options granted to him will
immediately be expired. A notice of termination of employment shall be
deemed to constitute termination of employment.
9.5 Notwithstanding the above, an Option may be exercised after the date
of termination of Optionee's employment with the Company or any
subsidiary of the Company during an additional period of time beyond
the date of such termination, but only with respect to the number of
Shares purchasable at the time of such termination according to the
vesting periods of the Options, if: (i) prior to the date of such
termination, the Committee shall authorize, in the relevant Option
Agreement or otherwise, an extension of the terms of all or part of
the Options beyond the date of such termination for a period not to
exceed the period during which the Options by their terms would
otherwise have been exercisable, (ii) termination is without cause, in
which event any Options still in force and unexpired may be exercised
within a period of ninety (90) days from the date of such termination,
but only with respect to the number of shares purchasable at the time
of such termination, according to the vesting periods of the Options,
(iii) termination is the result of death or disability, in which event
any Options still in force and unexpired may be exercised within a
period of three (3) months from the date of termination, but only with
respect to the number of shares purchasable at the time of such
termination according to the vesting periods of the Options
-16-
<PAGE> 6
9.6 The holders of Options shall not have any of the rights or
privileges of shareholders of the Company in respect of any Shares
purchasable upon the exercise of any part of an Option unless and
until, following exercise but subject always to the provisions of
Section 5 above, certificates representing such Shares shall have
been issued by the Company and delivered to such holders.
9.7 Any form of Option agreement authorized by the Option Plan may
contain such other provisions as the Committee may, from time to
time, deem advisable. Without limiting the foregoing, the
Committee may, with the consent of the Optionee, from time to time
cancel all or any portion of any Option then subject to exercise,
and the Company's obligation in respect of such Option may be
discharged by (i) payment to the Optionee of an amount in cash
equal to the excess, if any, of the Fair Market Value of the
Shares at the date of such cancellation subject to the portion of
the Option so canceled over the aggregate purchase price of such
Shares, (ii) the issuance or transfer to the Optionee of Shares of
the Company with a Fair Market Value at the date of such transfer
equal to any such excess, or (iii) a combination of cash and
shares with a combined value equal to any such excess, all as
determined by the Committee in its sole discretion.
10. SHARES SUBJECT TO RIGHT OF FIRST REFUSAL
Unless otherwise provided by the Board, until such time as the Company
shall effectuate an IPO, the sale of Shares issuable upon exercise of an
Option, shall be subject to a right of first refusal on the part of the
Company's existing shareholders, pro rata in accordance with their
shareholding, by the Optionee giving a notice of sale (the "Notice") to the
Company who will forward the Notice to the existing shareholders.
The notice shall specify the Number of Shares offered for sale, the price
per Share and the payment terms. The existing shareholders will be entitled
for 30 days from the day of receipt of the Notice (the "Option Period"), to
purchase all or part of the offered Shares, pro rata in accordance with
their shareholding. If by the end of the Option Period not all of the
offered Shares have been purchased by the existing shareholders, the
Optionee will be entitled to sell such Shares at any time during the 90
days following the end of the Option Period on terms not more favorable
than those set out in the Notice.
11. ASSIGNABILITY AND SALE OF OPTIONS
No Option, purchasable hereunder, whether fully paid or not, shall be
assignable, transferable or given as collateral or any right with respect
to them given to any third party whatsoever, and during the lifetime of the
Optionee each and all of such Optionee's rights to purchase Shares
hereunder shall be exercisable only by the Optionee.
NETECT LTD.
/s/ [ILLEGIBLE]
-17-
<PAGE> 7
As long as the Shares are held by the Trustee in favor of the optionee,
than all rights the last possesses over the Shares are personal, can not
be transferred, assigned, pledged or mortgaged, other than by will or laws
of descent and distribution.
12. TERM OF THE OPTION PLAN
The Option Plan shall be effective as of the day it was adopted by the
Board and shall terminate at the end of five years from the day of
adoption.
13. AMENDMENTS OR TERMINATION
The Board may, at any time and from time to time, subject to the written
consent of the Trustee, amend, alter or discontinue the Option Plan, except
that no amendment or alteration shall be made which would impair the rights
of the holder of any Option therefore granted, without his consent.
14. GOVERNMENT REGULATIONS
The Option Plan, and the granting and exercise of Options hereunder, and
the obligation of the Company to sell and deliver Shares under such
Options, shall be subject to all applicable laws, rules, and regulations,
whether of the State of Israel or of the United States or any
other State having jurisdiction over the Company and the Optionee,
including the registration of the Shares under the United States Securities
Act of 1933, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
15. CONTINUANCE OF EMPLOYMENT
Neither the Option Plan nor the Option agreement with the Optionee shall
impose any obligation on the Company or a subsidiary thereof, to continue
any Optionee in its employ, and nothing in the Option Plan or in any Option
granted pursuant thereto shall confer upon any Optionee any right to
continue in the employ of the Company or a subsidiary thereof or restrict
the right of the Company or a subsidiary thereof to terminate such
employment at any time.
16. GOVERNING LAW
This Option Plan shall be governed by and construed and enforced in
accordance with the laws of the State of Israel, without giving effect to
the principles of conflict of laws.
NETECT LTD.
/s/ [ILLEGIBLE]
-18-
<PAGE> 8
17. TAX CONSEQUENCES
Any tax consequences arising from the grant or exercise of any Option, from
the payment for Shares covered thereby or from any other event or act (of
the Company, the Trustee or the Optionee), hereunder, shall be borne solely
by the Optionee. The Company and/or the Trustee shall withhold taxes
according to the requirements under the applicable laws, rules, and
regulations, including withholding taxes at source. Furthermore, the
Optionee shall agree to indemnify the Company and the Trustee and hold them
harmless against and from any and all liability for any such tax or
interest or penalty thereon, including without limitation, liabilities
relating to the necessity to withhold, or to have withheld, any such tax
from any payment made to the Optionee.
The Committee and/or the Trustee shall not be required to release any Share
certificate to an optionee until all required payments have been fully
made.
18. NON-EXCLUSIVITY OF THE OPTION PLAN
The adoption of the Option Plan by the Board shall not be construed as
amending, modifying or rescinding any previously approved incentive
arrangement or as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock Options otherwise than
under the Option Plan, and such arrangements may be either applicable
generally or only in specific cases.
19. MULTIPLE AGREEMENTS
The terms of each Option may differ from other Options granted under the
Option Plan at the same time, or at any other time. The Committee may also
grant more than one Option to a given Optionee during the term of the
Option Plan, either in addition to, or in substitution for, one or more
Options previously granted to that Optionee.
-19-
<PAGE> 9
EXHIBIT B
PROXY
______________ and _______________, or any of them, with power of substitution
in each, are hereby authorized to represent the undersigned at any and all
general meetings of NETECT LTD. (the "Company") (including general meetings
convened for the purpose of adopting extraordinary resolutions) and to vote
thereat on any and all matters the same number of Ordinary Shares of the Company
as the undersigned would be entitled to vote if then personally present.
- ---------------------------- ----------------------------
NAME DATE
--------------------------
SIGNATURE
-20-
<PAGE> 1
EXHIBIT 4.5
NETECT LTD.
1998 INTERNATIONAL EMPLOYEE STOCK PLAN
1. PURPOSE. The purpose of the Netect Ltd. 1998 International Employee
Stock Plan (the "Plan") is to encourage key employees of all current and future
non-Israeli subsidiaries (herein collectively referred to as "Related
Corporations") of Netect Ltd., an Israeli corporation (the "Company") and other
non-Israeli individuals who render services to the Company or a Related
Corporation, by providing opportunities to participate in the ownership of the
Company and its future growth through (a) the grant of options which qualify as
"incentive stock options" ("ISOs") under Section 422(b) of the Internal Revenue
Code of 1986, as amended (the "Code"); (b) the grant of options which do not
qualify as ISOs ("Non-Qualified Options"); (c) awards of stock in the Company
("Awards"); and (d) opportunities to make direct purchases of stock in the
Company ("Purchases"). Both ISOs and Non-Qualified Options are referred to
hereafter individually as an "Option" and collectively as "Options." Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation,"
respectively, as those terms are defined in Section 424 of the Code.
2. ADMINISTRATION OF THE PLAN.
A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall
be administered by the Board of Directors of the Company (the
"Board") or, subject to paragraph 2(D) (relating to
compliance with Section 162(m) of the Code), by a committee
appointed by the Board (the "Committee"). Hereinafter, all
references in this Plan to the "Committee" shall mean the
Board if no Committee has been appointed. Subject to
ratification of the grant or authorization of each Stock
Right by the Board (if so required by applicable state law),
and subject to the terms of the Plan, the Committee shall
have the authority to (i) determine to whom (from among the
class of employees eligible under paragraph 3 to receive
ISOs) ISOs shall be granted, and to whom (from among the
class of individuals and entities eligible under paragraph 3
to receive Non-Qualified Options and Awards and to make
Purchases) Non-Qualified Options, Awards and authorizations
to make Purchases may be granted; (ii) determine the time or
times at which Options or Awards shall be granted or
Purchases made; (iii) determine the purchase price of shares
subject to each Option or Purchase, which prices shall not be
less than the minimum price specified in paragraph 6; (iv)
determine whether each Option granted shall be an ISO or a
Non-Qualified Option; (v) determine (subject to paragraph 7)
the time or times when each Option shall become exercisable
and the duration of the exercise period; (vi) extend the
period during which outstanding Options may be exercised;
(vii) determine whether restrictions such as repurchase
options are to be imposed on shares subject to Options,
Awards and Purchases
<PAGE> 2
2
and the nature of such restrictions, if any; and (viii)
interpret the Plan and prescribe and rescind rules and
regulations relating to it. If the Committee determines to
issue a Non-Qualified Option, it shall take whatever actions
it deems necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such
Option is not treated as an ISO. The interpretation and
construction by the Committee of any provisions of the Plan
or of any Stock Right granted under it shall be final unless
otherwise determined by the Board. The Committee may from
time to time adopt such rules and regulations for carrying
out the Plan as it may deem advisable. No member of the Board
or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or
any Stock Right granted under it.
B. COMMITTEE ACTIONS. The Committee may select one
of its members as its chairman, and shall hold meetings at
such time and place as it may determine. A majority of the
Committee shall constitute a quorum and acts of a majority of
the members of the Committee at a meeting at which a quorum
is present, or acts reduced to or approved in writing by all
the members of the Committee (if consistent with applicable
state law), shall be the valid acts of the Committee. From
time to time the Board may increase the size of the Committee
and appoint additional members thereof, remove members (with
or without cause) and appoint new members in substitution
therefor, fill vacancies however caused, or remove all
members of the Committee and thereafter directly administer
the Plan.
C. GRANT OF STOCK RIGHTS TO BOARD MEMBERS.
1) Stock Rights may be granted to members of the Board.
All grants of Stock Rights to members of the Board shall in
all respects be made in accordance with the provisions of
this Plan applicable to other eligible persons. Members of
the Board who either (i) are eligible to receive grants of
Stock Rights pursuant to the Plan or (ii) have been granted
Stock Rights may vote on any matters affecting the
administration of the Plan or the grant of any Stock Rights
pursuant to the Plan, except that no such member shall act
upon the granting to himself or herself of Stock Rights, but
any such member may be counted in determining the existence
of a quorum at any meeting of the Board during which action
is taken with respect to the granting to such member of Stock
Rights.
2) No Options shall be awarded to directors or
shareholders or other interested parties, directly or
indirectly, other than: (i) an employee of the company or
subsidiary; (ii) members of Advisory Committee if
established, (iii) directors who do not hold equity or rights
convertible or exercisable into equity, except by a unanimous
vote of the Board of Directors
<PAGE> 3
3
D. PERFORMANCE-BASED COMPENSATION. The Board, in its
discretion, may take such action as may be necessary to
ensure that Stock Rights granted under the Plan qualify as
"qualified performance-based compensation" within the meaning
of Section 162(m) of the Code and applicable regulations
promulgated thereunder ("Performance-Based Compensation").
Such action may include, in the Board's discretion, some or
all of the following (i) if the Board determines that Stock
Rights granted under the Plan generally shall constitute
Performance-Based Compensation, the Plan shall be
administered, to the extent required for such Stock Rights to
constitute Performance-Based Compensation, by a Committee
consisting solely of two or more "outside directors" (as
defined in applicable regulations promulgated under Section
162(m) of the Code), (ii) if any Non-Qualified Options with
an exercise price less than the fair market value per
Ordinary Share are granted under the Plan and the Board
determines that such Options should constitute
Performance-Based Compensation, such options shall be made
exercisable only upon the attainment of a pre-established,
objective performance goal established by the Committee, and
such grant shall be submitted for, and shall be contingent
upon shareholder approval and (iii) Stock Rights granted
under the Plan may be subject to such other terms and
conditions as are necessary for compensation recognized in
connection with the exercise or disposition of such Stock
Right or the disposition of Ordinary Shares acquired pursuant
to such Stock Right, to constitute Performance-Based
Compensation.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to
employees of the Company or any Related Corporation. Non-Qualified Options,
Awards and authorizations to make Purchases may be granted to any employee,
officer or director (whether or not also an employee) or consultant of the
Company or any Related Corporation. The Committee may take into consideration a
recipient's individual circumstances in determining whether to grant a Stock
Right. The granting of any Stock Right to any individual or entity shall
neither entitle that individual or entity to, nor disqualify such individual or
entity from, participation in any other grant of Stock Rights.
4. STOCK. The stock subject to Stock Rights shall be authorized but
unissued Ordinary Shares of the Company, NIS .01 par value per share (the
"Ordinary Shares"). The aggregate number of shares which may be issued pursuant
to the Plan is 770,000, subject to adjustment as provided in paragraph 13. If
any Option granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, the unpurchased Ordinary Shares subject to
such Option shall again be available for grants of Stock Rights under the Plan.
No employee of the Company or any Related Corporation may be granted
Options to acquire, in the aggregate, more 364,000 Ordinary Shares under the
Plan during any fiscal year of the Company. If any Option granted under the
Plan shall expire or terminate for any reason without having been exercised in
full or shall cease for any reason to be exercisable in whole or in part, the
shares subject to such Option shall be included in the determination of the
aggregate number of Ordinary Shares deemed to have been granted to such
employee under the Plan.
<PAGE> 4
4
5. GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the
Plan at any time on or after February 19, 1998 and prior to February 18, 2008.
The date of grant of a Stock Right under the Plan will be the date specified by
the Committee at the time it grants the Stock Right; provided, however, that
such date shall not be prior to the date on which the Committee acts to approve
the grant.
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
A. PRICE FOR NON-QUALIFIED OPTIONS, AWARDS AND
PURCHASES. Subject to paragraph 2(D) (relating to compliance
with Section 162(m) of the Code), the exercise price per
share specified in the agreement relating to each
Non-Qualified Option granted, and the purchase price per
share of stock granted in any Award or authorized as a
Purchase, under the Plan may be less than the fair market
value of an Ordinary Share of the Company on the date of
grant; provided that, in no event shall such exercise price
or such purchase price be less than the minimum legal
consideration required therefor under the laws of any
jurisdiction in which the Company or its successors in
interest may be organized.
B. PRICE FOR ISOS. The exercise price per share
specified in the agreement relating to each ISO granted under
the Plan shall not be less than the fair market value per
Ordinary Share on the date of such grant. In the case of an
ISO to be granted to an employee owning stock possessing more
than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Related
Corporation, the price per share specified in the agreement
relating to such ISO shall not be less than one hundred ten
percent (110%) of the fair market value per Ordinary Share on
the date of grant. For purposes of determining stock
ownership under this paragraph, the rules of Section 424(d)
of the Code shall apply.
C. $100,000 ANNUAL LIMITATION ON ISO VESTING. Each
eligible employee may be granted Options treated as ISOs only
to the extent that, in the aggregate under this Plan and all
incentive stock option plans of the Company and any Related
Corporation, ISOs do not become exercisable for the first
time by such employee during any calendar year with respect
to stock having a fair market value (determined at the time
the ISOs were granted) in excess of $100,000. The Company
intends to designate any Options granted in excess of such
limitation as Non-Qualified Options, and the Company shall
issue separate certificates to the optionee with respect to
Options that are Non-Qualified Options and Options that are
ISOs.
D. DETERMINATION OF FAIR MARKET VALUE. If, at the
time an Option is granted under the Plan, the Company's
Ordinary Shares are publicly traded, "fair market value"
shall be determined as of the date of grant or, if the prices
or quotes discussed in this sentence are unavailable for such
date, the last business day for
<PAGE> 5
5
which such prices or quotes are available prior to the date
of grant and shall mean (i) the average (on that date) of the
high and low prices of an Ordinary Share on the principal
national securities exchange on which the Ordinary Shares are
traded, if the Ordinary Shares are then traded on a national
securities exchange; or (ii) the last reported sale price (on
that date) of an Ordinary Share on the Nasdaq National
Market, if the Ordinary Shares are not then traded on a
national securities exchange; or (iii) the closing bid price
(or average of bid prices) last quoted (on that date) by an
established quotation service for over-the-counter
securities, if the Ordinary Shares are not reported on the
Nasdaq National Market. If the Ordinary Shares are not
publicly traded at the time an Option is granted under the
Plan, "fair market value" shall mean the fair value of an
Ordinary Share as determined by the Committee after taking
into consideration all factors which it deems appropriate,
including, without limitation, recent sale and offer prices
of an Ordinary Share in private transactions negotiated at
arm's length.
7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years from the date of grant in the case of Options generally and (ii) five
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as
determined under paragraph 6(B). Subject to earlier termination as provided in
paragraphs 9 and 10, the term of each ISO shall be the term set forth in the
original instrument granting such ISO, except with respect to any part of such
ISO that is converted into a Non-Qualified Option pursuant to paragraph 16.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9
through 12, each Option granted under the Plan shall be exercisable as follows:
A. VESTING. The Option shall either be fully
exercisable on the date of grant or shall become exercisable
thereafter in such installments as the Committee may specify.
B. FULL VESTING OF INSTALLMENTS. Once an installment
becomes exercisable, it shall remain exercisable until
expiration or termination of the Option, unless otherwise
specified by the Committee.
C. PARTIAL EXERCISE. Each Option or installment may
be exercised at any time or from time to time, in whole or in
part, for up to the total number of shares with respect to
which it is then exercisable, provided, however, that each
installment (other than the final exercise for shares subject
to the Option) may be exercised only in lots of five (5)
shares.
<PAGE> 6
6
D. ACCELERATION OF VESTING. The Committee shall have
the right to accelerate the date that any installment of any
Option becomes exercisable. In the event of merger or
consolidation which results in a change in more than 50% of
the members of the Board (a "Change in Control"), any
unexercised Options granted under the plan to an Officer of
the Company (an employee whose title is vice president or
above), shall have vesting accelerated by 1 year upon the
effective date of the Change in Control. However, if any
Officer is terminated for any reason other than for cause
within six months of such Change in Control, any unvested
Options granted to such Officer shall immediately vest on the
date of termination. As used herein, "cause" shall mean
conduct involving one or more of the following: (i) the
substantial and continuing failure of the Employee, after
notice thereof, to render services to the Company or Related
Corporation in accordance with the terms or requirements of
his or her employment; (ii) disloyalty, gross negligence,
willful misconduct, dishonesty or breach of fiduciary duty to
the Company or Related Corporation; (iii) the commission of
an act of embezzlement or fraud; (iv) deliberate disregard of
the rules or policies of the Company or Related Corporation
which results in direct or indirect loss, damage or injury to
the Company or Related Corporation; (v) the unauthorized
disclosure of any trade secret or confidential information of
the Company or Related Corporation; or (vi) the commission of
an act which constitutes unfair competition with the Company
or Related Corporation or which induces any customer or
supplier to breach a contract with the Company or Related
Corporation. Notwithstanding the foregoing, the Committee
shall not, without the consent of an optionee, accelerate the
permitted exercise date of any installment of any Option
granted to any employee as an ISO (and not previously
converted into a Non-Qualified Option pursuant to paragraph
16) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as
described in paragraph 6(C).
9. TERMINATION OF EMPLOYMENT. Unless otherwise specified in the
agreement relating to such ISO, if an ISO optionee ceases to be employed by the
Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his or her
ISOs shall become exercisable, and his or her ISOs shall terminate on the
earlier of (a) three months after the date of termination of his or her
employment, or (b) their specified expiration dates, except to the extent that
such ISOs (or unexercised installments thereof) have been converted into
Non-Qualified Options pursuant to paragraph 16. For purposes of this paragraph
9, employment shall be considered as continuing uninterrupted during any bona
fide leave of absence (such as those attributable to illness, military
obligations or governmental service) provided that the period of such leave
does not exceed 90 days or, if longer, any period during which such optionee's
right to reemployment is guaranteed by statute or by contract. A bona fide
leave of absence with the written approval of the Committee shall not be
considered an interruption of employment under this paragraph 9, provided that
such written approval contractually obligates the Company or any Related
Corporation to continue the employment of the optionee after the approved
period of absence. ISOs granted under the Plan shall not be affected by any
change of employment within or among the Company and Related
<PAGE> 7
7
Corporations, so long as the optionee continues to be an employee of the
Company or any Related Corporation. Nothing in the Plan shall be deemed to give
any grantee of any Stock Right the right to be retained in employment or other
service by the Company or any Related Corporation for any period of time.
10. DEATH; DISABILITY.
A. DEATH. If an ISO optionee ceases to be employed
by the Company and all Related Corporations by reason of his
or her death, any ISO owned by such optionee may be
exercised, to the extent otherwise exercisable on the date of
death, by the estate, personal representative or beneficiary
who has acquired the ISO by will or by the laws of descent
and distribution, until the earlier of (i) the specified
expiration date of the ISO or (ii) six months from the date
of the optionee's death.
B. DISABILITY. If an ISO optionee ceases to be
employed by the Company and all Related Corporations by
reason of his or her disability, such optionee shall have the
right to exercise any ISO held by him or her on the date of
termination of employment, for the number of shares for which
he or she could have exercised it on that date, until the
earlier of (i) the specified expiration date of the ISO or
(ii) six months from the date of the termination of the
optionee's employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as
defined in Section 22(e)(3) of the Code or any successor
statute.
11. ASSIGNABILITY. No Stock Right shall be assignable or transferable
by the optionee except by will or by the laws of descent and distribution, and
during the lifetime of the optionee shall be exercisable only by such optionee.
Except as set forth in the previous sentence, during the lifetime of a grantee
each Stock Right shall be exercisable only by such grantee.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to Ordinary Shares issuable
upon exercise of Options. The Committee may specify that any Non-Qualified
Option shall be subject to the restrictions set forth herein with respect to
ISOs, or to such other termination and cancellation provisions as the Committee
may determine. The Committee may from time to time confer authority and
responsibility on one or more of its own members and/or one or more officers of
the Company to execute and deliver such instruments. The proper officers of the
Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.
<PAGE> 8
8
13. ADJUSTMENTS. Upon the occurrence of any of the following events,
an optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
A. STOCK DIVIDENDS AND STOCK SPLITS. If the Ordinary
Shares shall be subdivided or combined into a greater of
smaller number of shares or if the Company shall issue any
Ordinary Shares as a stock dividend on its outstanding
Ordinary Shares, the number of Ordinary Shares deliverable
upon the exercise of Options shall be appropriately increased
or decreased proportionately, and appropriate adjustments
shall be made in the purchase price per share to reflect such
subdivision, combination or stock dividend.
B. CONSOLIDATIONS OR MERGERS. If the Company is to
be consolidated with or acquired by another entity in a
merger or other reorganization in which the holders of the
outstanding voting stock of the Company immediately preceding
the consummation of such event, shall, immediately following
such event, hold, as a group, less than a majority of the
voting securities of the surviving or successor entity, or in
the event of a sale of all or substantially all of the
Company's assets or otherwise (each, an "Acquisition"), the
Committee or the board of directors of any entity assuming
the obligations of the Company hereunder (the "Successor
Board"), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by
substituting on an equitable basis for the shares then
subject to such Options either (a) the consideration payable
with respect to the outstanding Ordinary Shares in connection
with the Acquisition, (b) shares of stock of the surviving or
successor corporation or (c) such other securities as the
Successor Board deems appropriate, the fair market value of
which shall not materially exceed the fair market value of
Ordinary Shares subject to such Options immediately preceding
the Acquisition; or (ii) upon written notice to the
optionees, provide that all Options must be exercised, to the
extent then exercisable or to be exercisable as a result of
the Acquisition, within a specified number of days of the
date of such notice, at the end of which period the Options
shall terminate; or (iii) terminate all Options in exchange
for a cash payment equal to the excess of the fair market
value of the shares subject to such Options (to the extent
then exercisable or to be exercisable as a result of the
Acquisition) over the exercise price thereof.
C. RECAPITALIZATION OR REORGANIZATION. In the event
of a recapitalization or reorganization of the Company (other
than a transaction described in subparagraph B above)
pursuant to which securities of the Company or of another
corporation are issued with respect to the outstanding
Ordinary Shares, an optionee upon exercising an Option shall
be entitled to receive for the
<PAGE> 9
9
purchase price paid upon such exercise the securities he or
she would have received if he or she had exercised such
Option prior to such recapitalization or reorganization.
D. MODIFICATION OF ISOS. Notwithstanding the
foregoing, any adjustments made pursuant to subparagraphs A,
B or C with respect to ISOs shall be made only after the
Committee, after consulting with counsel for the Company,
determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in
Section 424 of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs
would constitute a modification of such ISOs or would cause
adverse tax consequences to the holders, it may refrain from
making such adjustments.
E. DISSOLUTION OR LIQUIDATION. In the event of the
proposed dissolution or liquidation of the Company, each
Option will terminate immediately prior to the consummation
of such proposed action or at such other time and subject to
such other conditions as shall be determined by the
Committee.
F. ISSUANCES OF SECURITIES. 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 subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities
of the Company.
G. FRACTIONAL SHARES. No fractional shares shall be
issued under the Plan and the optionee shall receive from the
Company cash in lieu of such fractional shares.
H. ADJUSTMENTS. Upon the happening of any of the
events described in subparagraphs A, B or C above, the class
and aggregate number of shares set forth in paragraph 4
hereof that are subject to Stock Rights which previously have
been or subsequently may be granted under the Plan shall also
be appropriately adjusted to reflect the events described in
such subparagraphs. The Committee or the Successor Board
shall determine the specific adjustments to be made under
this paragraph 13 and, subject to paragraph 2, its
determination shall be conclusive.
14. MEANS OF EXERCISING OPTIONS. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify
the number of shares as to which such Option is being exercised, accompanied by
full payment of the purchase price therefor either (a) in cash or by check, (b)
at
<PAGE> 10
10
the discretion of the Committee, through delivery of Ordinary Shares having a
fair market value equal as of the date of the exercise to the cash exercise
price of the Option, (c) at the discretion of the Committee, by delivery of the
grantee's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable Federal rate, as defined
in Section 1274(d) of the Code, (d) at the discretion of the Committee and
consistent with applicable law, through the delivery of an assignment to the
Company of a sufficient amount of the proceeds from the sale of the Ordinary
Shares acquired upon exercise of the Option and an authorization to the broker
or selling agent to pay that amount to the Company, which sale shall be at the
participant's direction at the time of exercise, or (e) at the discretion of
the Committee, by any combination of (a), (b), (c) and (d) above. If the
Committee exercises its discretion to permit payment of the exercise price of
an ISO by means of the methods set forth in clauses (b), (c), (d) or (e) of the
preceding sentence, such discretion shall be exercised in writing at the time
of the grant of the ISO in question. The holder of an Option shall not have the
rights of a shareholder with respect to the shares covered by such Option until
the date of issuance of a stock certificate to such holder for such shares.
Except as expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends
or similar rights for which the record date is before the date such stock
certificate is issued.
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board on
February 19, 1998, subject, with respect to the validation of ISOs granted
under the Plan, to approval of the Plan by the stockholders of the Company at
the next Meeting of Stockholders or, in lieu thereof, by written consent. If
the approval of stockholders is not obtained prior to February 19, 1999, any
grants of ISOs under the Plan made prior to that date will be rescinded. The
Plan shall expire at the end of the day on February 18, 2008 (except as to
Options outstanding on that date). Subject to the provisions of paragraph 5
above, Options may be granted under the Plan prior to the date of stockholder
approval of the Plan. The Board may terminate or amend the Plan in any respect
at any time, except that, without the approval of the stockholders obtained
within 12 months before or after the Board adopts a resolution authorizing any
of the following actions: (a) the total number of shares that may be issued
under the Plan may not be increased (except by adjustment pursuant to paragraph
13); (b) the provisions of paragraph 3 regarding eligibility for grants of ISOs
may not be modified; (c) the provisions of paragraph 6(B) regarding the
exercise price at which shares may be offered pursuant to ISOs may not be
modified (except by adjustment pursuant to paragraph 13); and (d) the
expiration date of the Plan may not be extended. Except as otherwise provided
in this paragraph 15, in no event may any action of the Board or stockholders
alter or impair the rights of a grantee, without such grantee's consent, under
any Stock Right previously granted to such grantee.
16. MODIFICATIONS OF ISOS; CONVERSION OF ISOS INTO NON-QUALIFIED
OPTIONS. Subject to paragraph 13(D), without the prior written consent of the
holder of an ISO, the Committee shall not alter the terms of such ISO
(including the means of exercising such ISO) if such alteration would
constitute a modification (within the meaning of Section 424(h)(3) of the
Code). The Committee, at the written request or with the written consent of any
optionee, may in its discretion take such actions as may be necessary to
convert such optionee's ISOs (or any installments or portions of installments
thereof) that have not been exercised on the date of
<PAGE> 11
11
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the optionee is an employee of the Company or
a Related Corporation at the time of such conversion. Such actions may include,
but shall not be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such ISOs. At the time of
such conversion, the Committee (with the consent of the optionee) may impose
such conditions on the exercise of the resulting Non-Qualified Options as the
Committee in its discretion may determine, provided that such conditions shall
not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give
any optionee the right to have such optionee's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Committee takes appropriate action. Upon the taking of such action, the Company
shall issue separate certificates to the optionee with respect to Options that
are Non-Qualified Options and Options that are ISOs.
17. APPLICATION OF FUNDS. The proceeds received by the Company from
the sale of shares pursuant to Options granted and Purchases authorized under
the Plan shall be used for general corporate purposes.
18. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. By accepting an
ISO granted under the Plan, each optionee agrees to notify the Company in
writing immediately after such optionee makes a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and regulations thereunder)
of any stock acquired pursuant to the exercise of ISOs granted under the Plan.
A Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the transfer of a Non-Qualified Stock Option pursuant to
an arm's-length transaction, the grant of an Award, the making of a Purchase of
Ordinary Shares for less than its fair market value, the making of a
Disqualifying Disposition (as defined in paragraph 18), the vesting or transfer
of restricted stock or securities acquired on the exercise of an Option
hereunder, or the making of a distribution or other payment with respect to
such stock or securities, the Company may withhold taxes in respect of amounts
that constitute compensation includible in gross income. The Committee in its
discretion may condition (i) the exercise of an Option, (ii) the transfer of a
Non-Qualified Stock Option, (iii) the grant of an Award, (iv) the making of a
Purchase of Ordinary Shares for less than its fair market value, or (v) the
vesting or transferability of restricted stock or securities acquired by
exercising an Option, on the grantee's making satisfactory arrangement for such
withholding. Such arrangement may include payment by the grantee in cash or by
check of the amount of the withholding taxes or, at the discretion of the
Committee, by the grantee's delivery of previously held Ordinary Shares or the
withholding from the Ordinary Shares otherwise deliverable upon exercise of any
Option having an aggregate fair market value equal to the amount of such
withholding taxes.
20. GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver the Ordinary Shares under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
<PAGE> 12
12
Government regulations may impose reporting or other obligations on
the Company with respect to the Plan. For example, the Company may be required
to send tax information statements to employees and former employees that
exercise ISOs under the Plan, and the Company may be required to file tax
information returns reporting the income received by grantees of Options in
connection with the Plan.
21. GOVERNING LAW. With respect to each grantee of a Stock Right, the
validity and construction of the Plan and the instruments evidencing Options
shall be governed by the laws of the jurisdiction whose laws govern the terms
of employment of said grantee.
Amendments
1) 100 for 1 stock split 6/25/98
2) re granting of options to directors 7/19/98 shareholders meeting
3) increase in option pool 10/15/98
<PAGE> 1
EXHIBIT 5.1
[FULBRIGHT & JAWORSKI L.L.P. LETTERHEAD]
March 30, 1999
BindView Development Corporation
5151 San Felipe, 22nd Floor
Houston, Texas 77056
Gentlemen:
We have acted as counsel for BindView Development Corporation, a Texas
corporation (the "Registrant"), in connection with the registration under the
Securities Act of 1933 of 250,514 shares of the Registrant's common stock, no
par value per share (the "Shares"), which are to be offered upon the terms and
subject to the conditions set forth in the Netect Ltd. Employee Share Option
Plan (as amended and assumed by BindView Development Corporation) and the
Netect Ltd. 1998 International Employee Stock Plan (as amended and assumed by
BindView Development Corporation) (collectively, the "Plans").
In connection therewith, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Amended and
Restated Articles of Incorporation of the Registrant, the Bylaws of the
Registrant, the Plans, the records of relevant corporate proceedings with
respect to the offering of the Shares and such other documents and instruments
as we have deemed necessary or appropriate for the expression of the opinions
contained herein. We also have examined the Registrant's Registration Statement
on Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission with respect to the Shares.
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments submitted to us as copies
and the correctness of all statements of fact contained in all records,
certificates and other instruments that we have examined.
Based on the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
Shares have been duly and validly authorized for issuance and, when issued in
accordance with the terms of the Plans, will be duly and validly issued, fully
paid and nonassessable.
The opinions expressed herein relate solely to, are based solely upon
and are limited exclusively to the laws of the State of Texas and the federal
laws of the United States of America, to the extent applicable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ FULBRIGHT & JAWORSKI L.L.P.
Fulbright & Jaworski L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated January 28, 1999, which
appears on page 27 of BindView Development Corporation's Annual Report on Form
10-K for the year ended December 31, 1998.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Houston, Texas
March 30, 1999.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 4, 1997, accompanying the
financial statements of BindView Development Corporation included in the Annual
Report on Form 10-K of BindView Development Corporation for the year ended
December 31, 1998, which is incorporated by reference in this Registration
Statement on Form S-8 relating to Netect Ltd. Employee Share Option Plan (as
amended and assumed by BindView Development Corporation) and the Netect Ltd.
1998 International Employee Stock Plan (as amended and assumed by BindView
Development Corporation). We consent to the incorporation by reference in this
Registration Statement of the aforementioned report.
/s/ GRANT THORNTON LLP
Grant Thornton LLP
Houston, Texas
March 30, 1999.
