Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
SOFTWORKS, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1092916
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5845 Richmond Highway, Suite 400, Alexandria, VA 22303 (Address of
principal executive offices) (Zip Code)
SOFTWORKS, INC. 1998 LONG-TERM INCENTIVE PLAN, AS AMENDED
SOFTWORKS, INC. 1999 STOCK OPTION PLAN
(Full Title of the Plan)
Judy G. Carter, President
SOFTWORKS, INC.
5845 Richmond Highway
Suite 400
Alexandria, VA 22303
(Name and address of agent for service)
(703) 317-2424
(Telephone number, including area code, of agent for service)
copy to:
Nancy D. Lieberman, Esq.
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
(516) 822-4820
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Minimum Proposed Maximum
Class of Securities Amount to be Offering Price Per Aggregate Offering Amount of
To be Registered Registered (1) Security (2) Price (2) Registration Fee
- -------------------- -------------- ------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.001
per share 3,727,000 shs.(3) $12.44 $46,363,880 $12,890
Common Stock,
par value $.001
per share 1,250,000 shs.(4) $12.44 $15,550,000 $4,232
<FN>
(1) The Registration Statement also covers an indeterminate number of
additional shares of Common Stock which may become issuable pursuant to
anti-dilution and adjustment provisions of the Plan.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
(3) Represents shares issuable under the 1998 Long-Term Incentive Plan.
(4) Represents shares issuable under the 1999 Stock Option Plan.
</FN>
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Softworks hereby incorporates by reference into this Registration Statement
the documents listed in (a) and (b) below:
(a) Softworks Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
(b) The description of the class of securities to be offered which is
contained in a registration statement filed under Section 12 of the
Securities Exchange Act of 1934 (File No. 0- 24719), including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by Softworks pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which indicates that all securities offered have been sold or which
deregisters all such 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.
Members of the law firm of Blau, Kramer, Wactlar & Lieberman, P.C. own an
aggregate 20,000 shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
Softworks, a Delaware corporation, is empowered by Section 145 of the
Delaware General Corporation Law (the Delaware Act), subject to the procedures
and limitations stated therein, to indemnify certain parties. Section 145 of the
Delaware Act provides in part that a corporation shall have the power to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding (other than
an action by or in the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or other enterprise, against expenses
(including attorneys fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and with respect
<PAGE>
to any criminal action or proceeding had no reasonable cause to believe his
conduct was unlawful. Similar indemnity is authorized for such persons against
expenses (including attorneys fees) actually and reasonably incurred in defense
or settlement of any threatened, pending or completed action or suit by or in
the right of the corporation, if such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and provided further that (unless a court of competent jurisdiction
otherwise provides) such person shall not have been adjudged liable to the
corporation. Any such indemnification may be made only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct. Where an officer or a director is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually or reasonably incurred. Section 145 provides further that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any law, agreement, vote
of stockholders or disinterested directors or otherwise.
Softworks Certificate of Incorporation and By-laws contain provisions that
limit the potential personal liability of directors for certain monetary damages
and provide for indemnity of directors and other persons. Softworks also
maintains officers and directors liability insurance. The policy coverage is $10
million, which includes reimbursement for costs and fees, with a maximum
deductible for officers and directors of $200,000 for each securities-related
claim and $75,000 for each non-securities-related claim. Softworks is unaware
of any pending or threatened litigation against Softworks or its directors that
would result in any liability for which such director would seek indemnification
or similar protection.
The provisions affecting personal liability do not abrogate a directors
fiduciary duty to Softworks and its stockholders, but eliminate personal
liability for monetary damages for breach of that duty. The provisions do not,
however, eliminate or limit the liability of a director for failing to act in
good faith, for engaging in intentional misconduct or knowingly violating a law,
for authorizing the illegal payment of a dividend or repurchase of stock, for
obtaining an improper personal benefit, for breaching a directors duty of
loyalty (which is generally described as the duty not to engage in any
transaction that involves a conflict between the interests of Softworks and
those of the director) or for violations of the federal securities laws. The
provisions also limit or indemnify against liability resulting from grossly
negligent decisions, including grossly negligent business decisions relating to
attempts to change control of Softworks.
The provisions regarding indemnification provide, in essence, that
Softworks will indemnify its directors against expenses (including attorneys
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with any action, suit or proceeding arising out of the
directors status as a director of Softworks, including actions brought by or on
behalf of Softworks (shareholder derivative actions). The provisions do not
require a showing of good faith. Moreover, they do not provide indemnification
for liability arising out of willful misconduct, fraud, or dishonesty, for
short-swing profits violations under the federal securities laws, or for the
receipt of illegal remuneration. The provisions also do not provide
indemnification for any liability to the extent such liability is covered by
insurance. One purpose of the provisions is to supplement the coverage provided
by such insurance.
These provisions diminish the potential rights of action that might
otherwise be available to stockholders by limiting the liability of officers and
directors to the maximum extent allowable under Delaware law and by affording
indemnification against most damages and settlement amounts paid by a director
of Softworks in connection with any stockholders derivative action. However, the
provisions do not have the effect of limiting the right of a stockholder to
enjoin a director from taking actions in breach of the directors fiduciary duty,
or to cause Softworks to rescind actions already taken, although as a practical
matter courts may be unwilling to grant such equitable remedies in circumstances
in which such actions have already been taken.
Softworks has entered into indemnification agreements with certain of its
officers. The indemnification agreements provide for reimbursement for all
direct and indirect costs of any type or nature whatsoever (including attorneys
fees and related disbursements) actually and reasonably incurred in connection
with either the investigation, defense or appeal of a legal proceeding,
including amounts paid in settlement by or on behalf of an indemnitee
thereunder.
Item 7. Exemption from Registration Claimed.
Not applicable.
<PAGE>
Item 8. Exhibits.
4.1 1998 Long-Term Incentive Plan, as amended
4.2 1999 Stock Option Plan
5 Opinion and consent of Blau, Kramer, Wactlar & Lieberman, P.C.
23.1 Consent of Blau, Kramer, Wactlar & Lieberman, P.C. - included in their
opinion filed as Exhibit 5.
23.2 Consent of Arthur Andersen LLP
24 Powers of Attorney - included on signature page.
Item 9.Undertakings.
(a) The undersigned 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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the 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 the Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(l)(i) and (a)(l)(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 that are
incorporated by reference in the Registration Statement.
(2) That, for the purposes of determining any liability under
the Securities Act of 1933, 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.
(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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 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 policy
as expressed in the Act and will be governed by final adjudication of such
issue.
<PAGE>
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
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 Alexandria, Virginia on the 3rd day of May, 1999.
SOFTWORKS, INC.
/s/ Judy G. Carter
------------------------------
By: Judy G. Carter,
President and Director
(Chief Executive Officer)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on May 3, 1999 by the following
persons in the capacities indicated. Each person whose signature appears below
constitutes and appoints Judy G. Carter and Robert McLaughlin, and each of them
acting individually, with full power of substitution, our true and lawful
attorneys-in-fact and agents to do any and all acts and things in our name and
on our behalf in our capacities indicated below which they or either of them may
deem necessary or advisable to enable Softworks, Inc. to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with this Registration
Statement including specifically, but not limited to, power and authority to
sign for us or any of us in our names in the capacities stated below, any and
all amendments (including post-effective amendments) thereto, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in such connection, as
fully to all intents and purposes as we might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Signature Title
--------- -----
/s/ James A. Cannavino
- --------------------------- Chairman of the Board and Director
James A. Cannavino
/s/ Judy G. Carter
- --------------------------- President, Chief Executive Officer and
Judy G. Carter a Director
- --------------------------- Vice President and Secretary
C. R. Kinsey, III
/s/ Robert C. McLaughlin
- --------------------------- Treasurer and Chief Financial Officer
Robert C. McLaughlin
/s/ Robert Devine
- --------------------------- Director
Robert Devine
/s/ Charles Feld
- --------------------------- Director
Charles Feld
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SOFTWORKS, INC.
Form S-8 Registration Statement
E X H I B I T I N D E X
Page No. in Sequential
Exhibit Numbering of all Pages,
Number Exhibit Description including Exhibit Pages
- -------- ------------------- ------------------------
4.1 1998 Long-Term Incentive Plan,
as amended
4.2 1999 Stock Option Plan
5 Opinion and Consent of Counsel
23.1 Consent of Counsel See Exhibit 5
23.2 Consent of Arthur Andersen LLP
24 Powers of Attorney See signature page
Exhibit 4.1
SOFTWORKS, Inc.
1998 Long-Term Incentive Plan
(as amended)
1. PURPOSE.
The purpose of the 1998 Long-Term Incentive Plan (the "Plan") is to advance
the interests of SOFTWORKS, Inc. a Delaware corporation (the "Company"), and its
shareholders by providing incentives to certain key employees of the Company and
its affiliates and to certain other key individuals who perform services for
these entities, including those who contribute significantly to the strategic
and long-term performance objectives and growth of the Company and its
affiliates.
2. ADMINISTRATION.
(a) The Plan shall be determined solely by the Long-Term Incentive Plan
Administrative Committee (the "Committee") of the Board of Directors (the
"Board") of the Company, as such Committee is from time to time constituted, or
any successor committee the Board may designate to administer the Plan; provided
that if at any time Rule 16b-3 or any successor rule ("Rule 16b-3") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), so permits
without adversely affecting the ability of the Plan to comply with the
conditions for exemption from Section 16 of the Exchange Act (or any successor
provision) provided by Rule 16b-3, the Committee may delegate the administration
of the Plan in whole or in part, on such terms and conditions, and to such
person or persons as it may determine in its discretion. The membership of the
Committee or such successor committee shall be constituted so as to comply at
all times with the applicable requirements of Rule 16b-3. No member of the
Committee shall be eligible or have been eligible within one year prior to his
appointment to receive awards under the Plan ("Awards") or to receive awards
under any other plan, program or arrangement of the Company or any of its
affiliates if such eligibility would cause such member to cease to be a
"Non-employee director" under Rule 16b-3; provided that if at any time Rule
16b-3 so permits without adversely affecting the ability of the Plan to comply
with the conditions for exemption from Section 16 of the Exchange Act (or any
successor provision) provided by Rule 16b-3, one or more members of the
Committee may cease to be "Non-employee directors."
(b) The Committee has all the powers vested in it by the terms of the
Plan set forth herein, such powers to include exclusive authority (except as may
be delegated as permitted herein) to select the key employees and other key
individuals to be granted Awards under the Plan, to determine the type, size and
terms of the Award to be made to each individual selected, to modify the terms
of any Award that has been granted, to determine the time when awards will be
granted, to establish performance objectives, to make any adjustments necessary
or desirable as a result of the granting of Awards to eligible individuals
located outside the United States and to prescribe the form of the instruments
embodying Awards made under the Plan. The Committee is authorized to interpret
the Plan and the Awards granted under the Plan, to establish, amend and rescind
any rules and regulations relating to the Plan, and to make any other
determination, which it deems necessary or desirable for the administration of
the Plan. The Committee (or its delegate as permitted herein) may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any Award in the manner and to the extent the Committee deems necessary or
<PAGE>
desirable to carry it into effect. any decision of the Committee (or its
delegate as permitted herein) in the interpretation and administration of the
Plan, as described herein, shall lie within its sole and absolute discretion and
shall be final, conclusive and binding on all parties concerned. The Committee
may act only by a majority of its members in office, except that the members
thereof may authorize any one or more of their members or any officer of the
Company to execute and deliver documents or to take any other ministerial action
on behalf of the Committee with respect to Awards made or to be made to Plan
participants. No member of the Committee and no officer of the Company shall be
liable for anything done or omitted to be done by him, by any other member of
the Committee or by any officer of the Company in connection with the
performance of duties under the Plan, except for his own willful misconduct or
as expressly provided by statute. Determinations to be made by the Committee
under the Plan may be made by its delegates.
3. PARTICIPATION.
(a) Affiliates. If an Affiliate (as hereinafter defined) of the Company
wishes to participate in the Plan and its participation shall have been approved
by the Board upon the recommendation of the Committee, the board of directors or
other governing body of the Affiliate shall adopt a resolution in form and
substance satisfactory to the Committee authorizing participation by the
Affiliate in the Plan with respect to its key employees or other key individuals
performing services for it. As used herein, the term "Affiliate" means any
entity in which the Company has a substantial direct or indirect equity interest
or which has a substantial direct or indirect equity interest in the Company, as
determined by the Committee in its discretion.
An Affiliate participating in the Plan may cease to be a participating
company at any time by action of the Board or by action of the board of
directors or other governing body of such Affiliate, which latter action shall
be effective not earlier than the date of delivery to the Secretary of the
Company of a certified copy of a resolution of the Affiliate's board of
directors or other governing body taking such action. If the participation in
the Plan of an Affiliate shall terminate, such termination shall not relieve it
of any obligations theretofore incurred by it, except as may be approved by the
Committee in its discretion.
(b) Participants. Consistent with the purposes of the Plan, the Committee
shall have exclusive power (except as may be delegated as permitted herein) to
select the key employees and other key individuals performing services for the
Company, including consultants or independent contractors and others who perform
services for the Company and its Affiliates who may participate in the Plan and
be granted Awards under the Plan. Eligible individuals may be selected
individually or by groups or categories, as determined by the Committee in its
discretion. In no event may a corporation be eligible to receive an Award of
incentive stock options under the Plan.
4. AWARDS UNDER THE PLAN.
(a) Types of Awards. Awards under the Plan may include, but need not be
limited to, one or more of the following types, either alone or in any
combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights,"
(iii) "Restricted Stock," (iv) "Performance Grants" and (v) any other type of
Award deemed by the Committee in its discretion to be consistent with the
purposes of the Plan (including but not limited to, Awards of or options or
similar rights granted with respect to unbundled stock units or components
thereof, and Awards to be made to participants who are foreign nationals or are
employed or performing services outside the United States). Stock Options, which
include "Non-Qualified Stock Options" and "Incentive Stock Options" or
combinations thereof, are rights to purchase common shares of the Company and
stock of any other class into which such shares may thereafter be changed (the
"Common Shares"). Non-Qualified Stock Options and Incentive Stock Options are
subject to the terms, conditions and restrictions specified in Paragraph 5.
Stock Appreciation Rights are rights to receive (without payment to the Company)
cash, Common Shares, other Company securities (which may include, but need not
be limited to, unbundled stock units or components thereof, debentures,
preferred stock, warrants, securities convertible into Common Shares or other
property, and other types of securities including, but not limited to, those of
the Company or an Affiliate, or any combination thereof ("Other Company
Securities") or property, or other forms of payment, or any combination thereof,
as determined by the Committee, based on the increase in the value of the number
<PAGE>
of Common Shares specified in the Stock Appreciation Right. Stock Appreciation
Rights are subject to the terms, conditions and restrictions specified in
Paragraph 6. Shares of Restricted Stock are Common Shares which are issued
subject to certain restrictions pursuant to Paragraph 7. Performance Grants are
contingent awards subject to the terms, conditions and restrictions described in
Paragraph 8, pursuant to which the participant may become entitled to receive
cash, Common Shares, Other Company Securities or property, or other forms of
payment, or any combination thereof, as determined by the Committee.
(b) Maximum Number of Shares that May Be Issued. There may be issued under
the Plan (as Restricted Stock, in payment of Performance Grants, pursuant to the
exercise of Stock Options or Stock Appreciation Rights, or in payment of or
pursuant to the exercise of such other Awards as the Committee, in its
discretion, may determine) an aggregate of not more than 4,000,000 Common
Shares, subject to adjustment as provided in Paragraph 15. Common Shares issued
pursuant to the Plan may be either authorized but unissued shares, treasury
shares, reacquired shares, or any combination thereof. If any Common Shares
issued as Restricted Stock or otherwise subject to repurchase or forfeiture
rights are reacquired by the Company pursuant to such rights, or if any Award is
cancelled, terminates or expires unexercised, any Common Shares that would
otherwise have been issuable pursuant thereto will be available for issuance
under new Awards.
(c) Rights with Respect to Common Shares and Other Securities.
(i) Unless otherwise determined by the Committee in its discretion, a
participant to whom an Award of Restricted Stock has been made (and any
person succeeding to such a participant's rights pursuant to the Plan)
shall have, after issuance of a certificate or copy thereof for the number
of Common Shares awarded and prior to the expiration of the Restricted
Period or the earlier repurchase of such Common Shares as herein provided,
ownership of such Common Shares, including the right to vote the same and
to receive dividends or other distributions made or paid with respect to
such Common Shares (provided that such Common Shares, and any new,
additional or different shares, or Other Company Securities or property, or
other forms of consideration which the participant may be entitled to
receive with respect to such Common Shares as a result of a stock split,
stock dividend or any other change in the corporate or capital structure of
the Company, shall be subject to the restrictions hereinafter described as
determined by the Committee in its discretion), subject, however, to the
options, restrictions and limitations imposed thereon pursuant to the Plan.
Notwithstanding the foregoing, unless otherwise determined by the Committee
in its discretion, a participant with whom an Award agreement is made to
issue Common Shares in the future shall have no rights as a shareholder
with respect to Common Shares related to such agreement until issuance of a
certificate to him.
(ii) Unless otherwise determined by the Committee in its discretion, a
participant to whom a grant of Stock Options, Stock Appreciation Rights,
Performance Grants or any other Award is made (and any person succeeding to
such a participant's rights pursuant to the Plan) shall have no rights as a
stockholder with respect to any Common Shares or as a holder with respect
to other securities, if any, issuable pursuant to any such Award until the
date of the issuance of a stock certificate to him for such Common Shares
or other instrument of ownership, if any. Except as provided in Paragraph
15, no adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in cash, securities,
other property or other forms of consideration, or any combination thereof)
for which the record date is prior to the date such stock certificate or
other instrument of ownership, if any, is issued.
5. STOCK OPTIONS.
The Committee may grant Stock Options either alone, or in conjunction with
Stock Appreciation Rights, Performance Grants or other Awards, either at the
time of grant or by amendment thereafter, provided that an Incentive Stock
Option may be granted only to an eligible employee of the Company or its parent
or subsidiary corporation. Each Stock Option (referred to herein as an "Option")
granted under the Plan shall be evidenced by an instrument in such form as the
Committee shall prescribe from time to time in accordance with the Plan and
shall comply with the following terms and conditions, and with such other terms
and conditions, including, but not limited to, restrictions upon the Option or
the Common Shares issuable upon exercise thereof, as the Committee, in its
discretion, shall establish:
<PAGE>
(a) The option price may be less than, equal to, or greater than, the fair
market value of the Common Shares subject to such Option at the time the Option
is granted, as determined by the Committee, but in no event will such option
price be less than 85% of the fair market value of the underlying Common Shares
at the time the Option is granted; provided, however, that in the case of an
Incentive Stock Option granted to such an employee, the option price shall not
be less than the fair market value of the Common Shares subject to such Option
at the time the Option is granted, or if granted to such an employee who owns
stock representing more than ten percent of the voting power of all classes of
stock of the Company or of its parent or subsidiary (a "Ten Percent Employee"),
such option price shall be not less than 110% of such fair market value at the
time the Option is granted; provided, further that in no event will such option
price be less than the par value of such Common Shares.
(b) The Committee shall determine the number of Common Shares to be subject
to each option. The number of Common Shares subject to an outstanding Option may
be reduced on a share-for-share or other appropriate basis, as determined by the
Committee, to the extent that Common Shares under such Option are used to
calculate the cash, Common Shares, Other Company Securities or property, or
other forms of payment, or any combination thereof, received pursuant to
exercise of a Stock Appreciation Right attached to such Option, or to the extent
that any other Award granted in conjunction with such Option is paid.
(c) The Option may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of descent and
distribution, and shall be exercisable during the grantee's lifetime only by him
unless the Committee otherwise determines that the Option shall also be
transferable by the grantee. Unless the Committee determines otherwise, one-half
of the Option shall not be exercisable for at least twelve months after the date
of grant, unless the grantee ceases employment or performance of services before
the expiration of such twelve-month period by reason of his disability as
defined in Paragraph 12 or his death.
(d) The Option shall not be exercisable:
(i) in the case of any Incentive Stock Option granted to a Ten Percent
Employee, after the expiration of five years from the date it is granted,
and, in the case of any other Option, after the expiration of ten years
from the date it is granted. Any Option may be exercised during such period
only at such time or times and in such installments as the Committee may
establish;
(ii) unless payment in full is made for the shares being acquired
thereunder at the time of exercise, such payment shall be made in such form
(including, but not limited to, cash, Common Shares, promissory notes of
which 80% of the required payment, excluding interest, may be non-recourse,
or the surrender of another outstanding Award under the Plan, or any
combination thereof) as the Committee may determine in its discretion; and
(iii) unless the person exercising the Option has been, at all times
during the period beginning with the date of the grant of the Option and
ending on the date of such exercise, employed by or otherwise performing
services for the Company or an Affiliate, or a corporation, or a parent or
subsidiary of a corporation, substituting or assuming the Option in a
transaction to which Section 424(a) of the Internal Revenue Code of 1986,
as amended, or any successor statutory provisions thereto (the "Code"), is
applicable, except that:
(A) in the case of any Non-Qualified Stock Option, if
such person shall cease to be employed by or otherwise performing services
for the Company or an Affiliate solely by reason of a period of related
Employment as defined in Paragraph 14, he may, during such period of
Related Employment, exercise the Non-Qualified Stock Option as if he
continued such employment or performance of service; or
(B) if such person shall cease such employment or
performance of services by reason of his disability as defined in
Paragraph 12 or early, normal or deferred retirement under an approved
retirement program of the Company or an Affiliate (or such other plan
or arrangement as may be approved by the Committee, in its
discretion, for this purpose) while holding an option whichhas not
expired and has not been fully exercised, such person, at any time
within three months (or such other period determined by the Committee)
after the date he ceased such employment or performance of services (but
in no event after the Option has expired), may exercise the Option with
respect to any shares as to which he could have exercised the Option
on the date he ceased such employment or performance of services, or
with respect to such greater number of shares as determined by the
Committee; or
<PAGE>
(C) if such person shall cease such employment or
performance of services for reasons other than Related Employment,
disability, early, normal or deferred retirement or death (as provided
elsewhere) while holding an Option which has not expired and has not
been fully exercised, such person may exercise the Option at any time
within three months (or such other period determined by the Committee)
after the date he ceased such employment or performance of services (but
in no event after the Option has expired), but only to the extent such
Option is exercisable on the date of such termination, or with respect to
such greater number of shares as determined by the Committee; or
(D) if any person to whom an Option has been granted
shall die holding an Option which has not expired and has not been fully
exercised, his executors, administrators, heirs or distributees, as
the case may be, may, at any time within one year (or such other period
determined by the Committee) after the date of death (but in no event
after the Option has expired), exercise the Option with respect to any
shares as to which the decedent could have exercised the Option at the
time of his death, or with respect to such greater number of shares as
determined by the Committee.
(E) In the case of an Incentive Stock Option, the
amount of aggregate fair market value of Common Shares (determined at
the time of grant of the Option pursuant to subparagraph 5(a) of the Plan)
with respect to which incentive stock options are exercisable for the
first time by an employee during any calendar year (under all such plans
of his employer corporation any calendar year (under all such plans of
his employer corporation and its parent and its parent and subsidiary
corporations) shall not exceed $100,000.
(F) It is the intent of the Company that Non-
Qualified Stock Options granted under the Plan not be classified as
Incentive Stock Options, that the Incentive Stock Options granted under
the Plan be consistent with and contain or be deemed to contain all
provisions required under Section 422(b) and other appropriate provisions
of the Code and any implementing regulations (and any successor
provisions thereof), and that any ambiguities in construction shall
be interpreted in order to effectuate such intent. The Agreements
providing Non-Qualified Stock Options shall provide that such Options
are not "incentive stock options" for the purposes of Section 422(b) of
the Code.
6. STOCK APPRECIATION RIGHTS.
The Committee may grant Stock Appreciation Rights either alone, or in
conjunction with Stock Options, Performance Grants or other Awards, either at
the time of grant or by amendment thereafter. Each Award of Stock Appreciation
Rights granted under the Plan shall be evidenced by an instrument in such form
as the Committee shall prescribe from time to time in accordance with the Plan
and shall comply with the following terms and conditions, and with such other
terms and conditions, including, but not limited to, restrictions upon the Award
of Stock Appreciation Rights or the Common Shares issuable upon exercise
thereof, as the Committee in its discretion shall establish:
<PAGE>
(a) The Committee shall determine the number of Common Shares to be subject
to each Award of Stock Appreciation Rights. The number of Common Shares subject
to an outstanding Award of Stock Appreciation Rights may be reduced on a
share-for-share or other appropriate basis, as determined by the Committee, to
the extent that Common Shares under such Award of Stock Appreciation Rights are
used to calculate the cash, Common Shares, Other Company Securities or property,
or other forms of payment, or any combination thereof, received pursuant to
exercise of an Option attached to such Award of Stock Appreciation Rights, or to
the extent that any other Award granted in conjunction with such Award of Stock
Appreciation Rights is paid.
(b) The Award of Stock Appreciation Rights may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of the descent and distribution, and shall be exercisable during the
grantee's lifetime only by him. Unless the Committee determines otherwise, the
Award of Stock Appreciation Rights shall not be exercisable for at least six
months after the date of grant, unless the grantee ceases employment or
performance of services before the expiration of such six-month period by reason
of his disability as defined in Paragraph 12 or his death.
(c) The Award of Stock Appreciation Rights shall not be exercisable:
(i) in the case of any Award of Stock Appreciation Rights that are
attached to an Incentive Stock Option granted to a Ten Percent Employee,
after the expiration of five years from the date it is granted, and, in the
case of any other award of Stock Appreciation Rights, after the expiration
of ten years from the date it is granted. Any Award of Stock Appreciation
Rights may be exercised during such period only at such time or times and
in such installments as the Committee may establish;
(ii) unless the Option or other Award to which the Award of Stock
Appreciation Rights is attached is at the time exercisable; and
(iii) unless the person exercising the Award of Stock Appreciation
Rights has been, at all times during the period beginning with the date
of the grant thereof and ending on the date of such exercise, employed
by or otherwise performing services for the Company or an Affiliate,
except that
(A) in the case of any Award of Stock Appreciation
Rights (other than those attached to an Incentive Stock Option),
if such person shall cease to be employed by or otherwise
performing services for the Company or an Affiliate solely by
reason of a period of Related Employment as defined in Paragraph 14,
he may, during such period of Related Employment, exercise the Award
of Stock Appreciation Rights as if he continued such employment
or performance of services; or
(B) if such person shall cease such employment or
performance of services by reason of his disability as defined in
Paragraph 12 or early, normal or deferred retirement under an
<PAGE>
approved retirement program of the Company or an Affiliate (or
such other plan or arrangement as may be approved by the
Committee, in its discretion, for this purpose) while holding an
Award of Stock Appreciation Rights which has not expired and has not
been fully exercised, such person may, at any time within three years
(or such other period determined by the Committee) after the
date he ceased such employment or performance of services
(but in no event after the Award of Stock Appreciation Rights has
expired), exercise the Award of Stock Appreciation Rights with
respect to any shares as to which he could have exercised the
Award of Stock Appreciation Rights on the date he ceased such
employment or performance of services, or with respect to such
greater number of shares as determined by the Committee; or
(C) if such person shall cease such employment or
performance of services for reasons other than Related Employment,
disability, early, normal or deferred retirement or death (as
provided elsewhere) while holding an Award of Stock Appreciation
Rights which has not expired and has not been fully exercised, such
person may exercise the Award of Stock Appreciation Rights at any
time during the period, if any, which the Committee approves
(but in no event after the Award of Stock Appreciation Rights
expires) following the date he ceased such employment or performance
of services with respect to any shares as to which he could have
exercised the Award of Stock Appreciation Rights on the date he
ceased such employment or performance of services or as otherwise
permitted in the Committee's discretion; or
(D) if any person to whom an Award of Stock
Appreciation Rights has been granted shall die holding an Award of
Stock Appreciation Rights which has not expired and has not been
fully exercised, his executors, administrators, heirs or
distributees, as the case may be, may, at any time within one year
(or such other period determined by the Committee) after the
date of death (but in no event after the Award of Stock Appreciation
Rights has expired), exercise the Award of Stock Appreciation
Rights with respect to any shares as to which the decedent could
have exercised the Award of Stock Appreciation Rights at the time
of his death, or with respect to such greater number of shares as
determined by the Committee.
(d) An Award of Stock Appreciation Rights shall entitle the holder (or
any person entitled to act under the provisions of subparagraph 6(c)(iii)(D)
hereof) to exercise such Award or to surrender unexercised the option (or other
Award) to which the Stock Appreciation Rights is attached (or any portion of
such Option or other Award) to the Company and to receive from the Company in
exchange therefor, without payment to the Company, that number of Common Shares
having an aggregate value equal to the excess of the fair market value of one
share, at the time of such exercise, over the exercise price (or Option Price,
as the case may be) per share, times the number of shares subject to the Award
or the Option (or other Award), or portion thereof, which is so exercised or
surrendered, as the case may be. The Committee shall be entitled in its
discretion to elect to settle the obligation arising out of the exercise of a
Stock Appreciation Right by the payment of cash or Other Company Securities or
property, or other forms of payment, or any combination thereof, as determined
by the Committee, equal to the aggregate value of the Common Shares it would
otherwise be obligated to deliver. Any such election by the Committee shall be
made as soon as practicable after the receipt by the Committee of written notice
of the exercise of the Stock Appreciation Right. The value of a Common Share,
Other Company Securities or property, or other forms of payment determined by
the Committee for this purpose shall be the fair market value thereof on the
last business day next preceding the date of the election to exercise the Stock
Appreciation Right, unless the Committee, in its discretion, determines
otherwise.
(e) A Stock Appreciation Right may provide that it shall be deemed to
have been exercised at the close of business on the business day preceding the
expiration date of the Stock Appreciation Right or of the related Option (or
other Award), or such other date as specified by the Committee, if at such time
such Stock Appreciation Right has a positive value. Such deemed exercise shall
be settled or paid in the same manner as a regular exercise thereof as provided
in subparagraph 6(d) hereof.
<PAGE>
(f) No fractional shares may be delivered under this Paragraph 6, but in
lieu thereof a cash or other adjustment shall be made as determined by the
Committee in its discretion.
7. RESTRICTED STOCK.
Each Award of Restricted Stock under the Plan shall be evidenced by an
instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions as the Committee, in its
discretion, shall establish:
(a) The Committee shall determine the number of Common Shares to be issued
to a participant pursuant to the Award, and the extent, if any, to which they
shall be issued in exchange for cash, other consideration, or both.
(b) Common Shares issued to a participant in accordance with the Award may
not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed
of, except by will or the laws of descent and distribution, or as otherwise
determined by the Committee, for such period as the Committee shall determine,
from the date on which the Award is granted (the "Restricted Period"). The
Company will have the option, at the Committee's discretion, to repurchase the
shares subject to the Award at such price as the Committee shall have fixed or
to provide for forfeiture to the Company of the shares subject to the Award,
which option or forfeiture may be exercisable (i) if the participant's
continuous employment or performance of services for the Company and its
Affiliates shall terminate for any reason, except solely by reason of a period
of Related Employment as defined in Paragraph 14, or except as otherwise
provided in subparagraph 7(c), prior to the expiration of the Restricted Period,
(ii) if, on or prior to the expiration of the Restricted Period or the earlier
lapse of such forfeiture option, the participant has not paid to the Company an
amount equal to any federal, state, local or foreign income or other taxes which
the Company determines is required to be withheld in respect of such shares, or
(iii) under such other circumstances as determined by the Committee in its
discretion. Such repurchase option or forfeiture shall be exercisable on such
terms, in such manner and during such period as shall be determined by the
Committee when the Award is made or as amended thereafter, except as otherwise
determined in the Committee's discretion. Each certificate for Common Shares
issued pursuant to a Restricted Stock Award shall bear an appropriate legend
referring to the foregoing repurchase option or forfeiture and other
restrictions and to the fact that the shares are partly paid, shall be deposited
by the award holder with the Company, together with a stock power endorsed in
blank, or shall be evidenced in such other manner permitted by applicable law as
determined by the Committee in its discretion. Any attempt to dispose of any
such Common Shares in contravention of the foregoing repurchase and forfeiture
options and other restrictions shall be null and void and without effect. If
Common Shares issued pursuant to a Restricted Stock Award shall be repurchased
or forfeited pursuant to the repurchase option described above, the participant,
or in the event of his death, his personal representative, shall forthwith
deliver to the Secretary of the Company the certificates for the Common Shares
awarded to the participant, accompanied by such instrument of transfer, if any,
as may reasonably be required by the Secretary of the Company.
(c) If a participant who has been in continuous employment or performance
of services for the Company or an Affiliate since the date on which a Restricted
Stock Award was granted to him shall, while in such employment or performance of
services, die, or terminate such employment or performance of services by reason
of disability as defined in Paragraph 12 or by reason of early normal or
deferred retirement under an approved retirement program of the Company or an
Affiliate (or such other plan or arrangement as may be approved by the Committee
in its discretion, for this purpose) and any of such events shall occur after
the date on which the Award was granted to him and prior to the end of the
Restricted Period of such Award, the Committee may determine to cancel the
repurchase option or forfeiture (and any and all other restrictions) on any or
all of the Common Shares subject to such Award; and the repurchase option or
forfeiture shall become exercisable at such time as to the remaining shares, if
any.
8. PERFORMANCE GRANTS.
The Award of a Performance Grant ("Performance Grant") to a participant
will entitle him to receive a specified amount determined by the Committee (the
"Actual Value"), if the terms and conditions specified herein and in the Award
are satisfied. Each Award of a Performance Grant shall be subject to the
following terms and conditions, and to such other terms and conditions,
including but not limited to, restrictions upon any cash, Common Shares, Other
Company Securities or property, or other forms of payment, or any combination
thereof, issued in respect of the Performance Grant, as the Committee, in its
discretion, shall establish, and shall be embodied in an instrument in such form
and substance as is determined by the Committee.
<PAGE>
(a) The Committee shall determine the value or range of values of a
Performance Grant to be awarded to each participant selected for an award and
whether or not such a Performance Grant is granted in conjunction with an Award
of Options, Stock Appreciation Rights, Restricted Stock or other Award, or any
combination thereof, under the Plan (which may include, but need not be limited
to, deferred Awards) concurrently or subsequently granted to the participant
(the "Associated Award"). As determined by the Committee, the maximum value of
each Performance Grant (the "Maximum Value") shall be: (i) an amount fixed by
the Committee at the time the award is made or amended thereafter, (ii) an
amount which varies from time to time based in whole or in part on the then
current value of a Common Share, Other Company Securities or property, or other
securities or property, or any combination thereof, or (iii) an amount that is
determinable from criteria specified by the Committee. Performance Grants may be
issued in different classes or series having different names, terms and
conditions. In the case of a Performance Grant awarded in conjunction with an
Associated Award, the Performance Grant may be reduced on an appropriate basis
to the extent that the Associated Award has been exercised, paid to or otherwise
received by the participant, as determined by the Committee.
(b) The award period ("Award Period") in respect of any Performance Grant
shall be a period determined by the Committee. At the time each Award is made,
the Committee shall establish performance objectives to be attained within the
Award Period as the means of determining the Actual Value of such a Performance
Grant. The performance objectives shall be based on such measure or measures of
performance, which may include, but need not be limited to, the performance of
the participant, the Company, one or more of its subsidiaries or one or more of
their divisions or units, or any combination of the foregoing, as the Committee
shall determine, and may be applied on an absolute basis or be relative to
industry or other indices, or any combination thereof. The Actual Value of a
Performance Grant shall be equal to its Maximum Value only if the performance
objectives are attained in full, but the Committee shall specify the manner in
which the Actual Value of Performance Grants shall be determined if the
performance objectives are met in part. Such performance measures, the Actual
Value or the Maximum Value, or any combination thereof, may be adjusted in any
manner by the Committee in its discretion at any time and from time to time
during or as soon as practicable after the Award Period, if it determines that
such performance measures, the Actual Value or the Maximum Value, or any
combination thereof, are not appropriate under the circumstances.
(c) The rights of a participant in Performance Grants awarded to him shall
be provisional and may be cancelled or paid in whole or in part, all as
determined by the Committee, if the participant's continuous employment or
performance of services for the Company and its Affiliates shall terminate for
any reason prior to the end of the Award Period, except solely by reason of a
period of Related Employment as defined in Paragraph 14.
(d) The Committee shall determine whether the conditions of subparagraph
8(b) or 8(c) hereof have been met and, if so, shall ascertain the Actual Value
of the Performance Grants. If the Performance Grants have no Actual Value, the
Award and such Performance Grants shall be deemed to have been cancelled and the
Associated Award, if any, may be cancelled or permitted to continue in effect in
accordance with its terms. If the Performance Grants have any Actual Value and:
(i) were not awarded in conjunction with an Associated Award, the
Committee shall cause an amount equal to the actual Value of the
Performance Grants earned by the participant to be paid to him or his
beneficiary as provided below; or
<PAGE>
(ii) were awarded in conjunction with an Associated Award, the
Committee shall determine, in accordance with criteria specified by the
Committee (A) to cancel the Performance Grants, in which event no amount in
respect thereof shall be paid to the participant or his beneficiary, and
the Associated Award may be permitted to continue in effect in accordance
with its terms, (B) to pay the Actual Value of the Performance Grants to
the participant or his beneficiary as provided below, in which event the
Associated Award may be cancelled or (C) to pay to the participant or his
beneficiary as provided below, the Actual Value of only a portion of the
Performance Grants, in which a complimentary portion of the Associated
Award may be permitted to continue in effect in accordance with its terms
or be cancelled, as determined by the Committee.
Such determination by the Committee shall be made as promptly as
practicable following the end of the Award Period or upon the earlier
termination of employment or performance of services, or at such other time or
times as the Committee shall determine, and shall be made pursuant to criteria
specified by the Committee.
Payment of any amount in respect of the Performance Grants which the
Committee determines to pay as provided above shall be made by the Company as
promptly as practicable after the end of the Award Period or at such other time
or times as the Committee shall determine, and may be made in cash, Common
Shares, Other Company Securities or property, or other forms of payment, or any
combination thereof or in such other manner, as determined by the Committee in
its discretion. Notwithstanding anything in this Paragraph 8 to the contrary,
the Committee may, in its discretion, determine and pay out the Actual Value of
the Performance Grants at any time during the Award Period.
9. DEFERRAL OF COMPENSATION.
The Committee shall determine whether or not an Award shall be made in
conjunction with deferral of the participant's salary, bonus or other
compensation, or any combination thereof, and whether or not such deferred
amounts may be
(i) forfeited to the Company or to other participants, or any
combination thereof, under certain circumstances (which may include, but
need not be limited to, certain types of termination of employment or
performance of services for the Company and its Affiliates),
(ii) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures and/or
(iii) credited with income equivalents (which may include, but need
not be limited to, interest, dividends or other rates of return) until the
date or dates of payment of the Award, if any.
10. DEFERRED PAYMENT OF AWARDS.
The Committee may specify that the payment of all or any portion of cash,
Common Shares, Other Company Securities or property, or any other form of
payment, or any combination thereof, under an Award shall be deferred until a
later date. Deferrals shall be for such periods or until the occurrence of such
events, and upon such terms, as the Committee shall determine in its discretion.
Deferred payments of Awards may be made by undertaking to make payment in the
future based upon the performance of certain investment equivalents (which may
include, but need not be limited to, government securities, Common Shares, other
securities, property or consideration, or any combination thereof), together
with such additional amounts of income equivalents (which may be compounded and
may include, but need not be limited to, interest, dividends or other rates of
return, or any combination thereof) as may accrue thereon until the date or
dates of payment, such investment equivalents and such additional amounts of
income equivalents to be determined by the Committee in its discretion.
11. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN.
The terms of any outstanding Award under the Plan may be amended from time
to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of exercise
of any Award and/or payments thereunder, or reduction of the Option Price of an
Option or exercise price of an Award of Stock Appreciation Rights); provided,
that no such amendment shall adversely affect in a material manner any right of
<PAGE>
a participant under the Award without his written consent, unless the Committee
determines in its discretion that there have occurred or are about to occur
significant changes in the participant's position, duties or responsibilities,
or significant changes in economic, legislative, regulatory, tax, accounting or
cost/benefit conditions which are determined by the Committee in its discretion
to have or to be expected to have a substantial effect on the performance of the
Company, or any subsidiary, affiliate, division or department thereof, on the
Plan or an any Award under the Plan. The Committee may, in its discretion,
permit holders of Awards to surrender outstanding Awards as a condition
precedent to the grant of new Awards under the Plan.
12. DISABILITY.
For the purposes of this Plan, a participant shall be deemed to have
terminated his employment or performance of services for the Company and its
Affiliates by reason of disability if the Committee shall determine that the
physical or mental condition of the participant by reason of which such
employment or performance of services terminated was such at that time as would
entitle him to payment of monthly disability benefits under any disability plan
of the Company or an Affiliate in which he is a participant. If the participant
is not eligible for benefits under any disability plan of the Company or an
Affiliate, he shall be deemed to have terminated such employment or performance
of services by reason of disability if the Committee shall determine that he is
permanently and totally disabled within the meaning of Section 22(e)(3) of the
Code.
13. TERMINATION OF A PARTICIPANT.
For all purposes under the Plan, the Committee shall determine whether a
participant has terminated employment by or the performance of services for the
Company or an Affiliate, provided that transfers between the Company and an
Affiliate or between Affiliates, and approved leaves of absence shall not be
deemed such a termination.
14. RELATED EMPLOYMENT.
For the purposes of this Plan, Related Employment shall mean the employment
or performance of services by an individual for an employer that is neither the
Company nor an Affiliate, provided that (i) such employment or performance of
services is undertaken by the individual at the request of the Company or an
Affiliate, (ii) immediately prior to undertaking such employment or performance
of services, the individual was employed by or performing services for the
Company or an Affiliate or was engaged in Related Employment as herein defined,
and (iii) such employment or performance of services is in the best interests of
the Company and is recognized by the Committee, in its discretion, as Related
Employment for purposes of this Paragraph 14. The death or disability of an
individual during a period of Related Employment as herein defined shall be
treated, for purposes of this Plan, as if the death or onset of disability had
occurred while the individual was employed by or performing services for the
Company or an Affiliate.
15. DILUTION AND OTHER ADJUSTMENTS.
In the event of any change in the outstanding Common Shares of the Company
by reason of any stock split, stock dividend, split-up, split-off, spin-off,
recapitalization, merger, consolidation, rights offering, share offering,
reorganization, combination or exchange of shares, a sale by the Company of all
or part of its assets, any distribution to shareholders other than a normal cash
dividend, or other extraordinary or unusual event, if the Committee shall
determine, in its discretion, that such change equitably requires an adjustment
in the terms of any Award or the number of Common Shares available for Awards,
such adjustment may be made by the Committee and shall be final, conclusive and
binding for all purposes of the Plan.
16. DESIGNATION OF BENEFICIARY BY PARTICIPANT.
A participant may name a beneficiary to receive any payment to which he may
be entitled in respect of any Award under the Plan in the event of his death, on
a written form to be provided by and filed with the Committee, and in a manner
determined by the Committee in its discretion. The Committee reserves the right
to review and approve beneficiary designations. A participant may change his
<PAGE>
beneficiary from time to time in the same manner, unless such participant has
made an irrevocable designation. Any designation of beneficiary under the Plan
(to the extent it is valid and enforceable under applicable law) shall be
controlling over any other disposition, testamentary or otherwise, as determined
by the Committee in its discretion. If no designated beneficiary survives the
participant and is living on the date on which any amount becomes payable to
such participant's beneficiary, such payment will be made to the legal
representatives of the participant's estate, and the term "beneficiary" as used
in the Plan shall be deemed to include such person or persons. If there is any
question as to the legal right of any beneficiary to receive a distribution
under the Plan, the Committee in its discretion may determine that the amount in
question be paid to the legal representatives of the estate of the participant,
in which event the Company, the Board and the Committee and the members thereof
will have no further liability to anyone with respect to such amount.
17. CHANGE IN CONTROL.
(a) Upon any Change in Control:
(i) each Stock Option and Stock Appreciation Right that is outstanding
on the date of such Change in Control shall be exercisable in full
immediately;
(ii) all restrictions with respect to Restricted Stock shall lapse
immediately, and the Company's right to repurchase or forfeit any
Restricted Stock outstanding on the date of such Change in Control shall
thereupon terminate and the certificates representing such Restricted Stock
and the related stock powers shall be promptly delivered to the
participants entitled thereto; and
(iii) All Award Periods for the purposes of determining the amounts of
Awards of Performance Grants shall end as of the end of the calendar
quarter immediately preceding the date of such Change in Control, and the
amount of the Award payable shall be the portion of the maximum possible
Award allocable to the portion of the Award Period that had elapsed and the
results achieved during such portion of the Award Period.
(b) For this purpose, a Change in Control shall be deemed to occur when and
only when any of the following events first occurs:
(i) any person who is not currently such becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then outstanding voting
securities; or
(ii) three or more directors, whose election or nomination for
election is not approved by a majority of the Incumbent Board (as
hereinafter defined), are elected within any single 24-month period to
serve on the Board of Directors; or
(iii) members of the Incumbent Board cease to constitute a majority of
the Board of Directors without the approval of the remaining members of the
Incumbent Board; or
(iv) any merger (other than a merger where the Company is the survivor
and there is no accompanying Change in Control under subparagraphs (i),
(ii) or (iii) of this paragraph (b)), consolidation, liquidation or
dissolution of the Company, or the sale of all or substantially all of the
assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur pursuant to subparagraph (i) of this paragraph (b) solely because 25%
or more of the combined voting power of the Company's outstanding securities is
acquired by one or more employee benefit plans maintained by the Company or by
any other employer, the majority interest in which is held, directly or
indirectly, by the Company. For purposes of this Section 17, the terms "person"
and "beneficial owner" shall have the meaning set forth in Sections 3(a) and
13(d) of the Exchange Act, and in the regulations promulgated thereunder, as in
effect on August 7, 1998; and the term "Incumbent Board" shall mean (A) the
members of the Board of Directors of the Company on August 7, 1998, to the
extent that they continue to serve as members of the Board of Directors, and (B)
any individual who becomes a member of the Board of Directors after August 7,
1998, if his election or nomination for election as a director was approved by a
vote of at least three-quarters of the then Incumbent Board.
<PAGE>
18. MISCELLANEOUS PROVISIONS.
(a) No employee or other person shall have any claim or right to be granted
an Award under the Plan. Determinations made by the Committee under the Plan
need not be uniform and may be made selectively among eligible individuals under
the Plan, whether or not such eligible individuals are similarly situated.
Neither the Plan nor any action taken hereunder shall be construed as giving any
employee or other person any right to continue to be employed by or perform
services for the Company or any Affiliate, and the right to terminate the
employment of or performance of services by any participant at any time and for
any reason is specifically reserved.
(b) No participant or other person shall have any right with respect to the
Plan, the Common Shares reserved for issuance under the Plan or in any Award,
contingent or otherwise, until written evidence of the Award shall have been
delivered to the recipient and all the terms, conditions and provisions of the
Plan and the Award applicable to such recipient (and each person claiming under
or through him) have been met.
(c) Except as may be approved by the Committee where such approval shall
not adversely affect compliance of the Plan with Rule 16b-3 under the Exchange
Act, a participant's rights and interest under the Plan may not be assigned or
transferred, hypothecated or encumbered in whole or in part either directly or
by operation of law or otherwise (except in the event of a participant's death)
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner; provided, however, that
any Option or similar right (including, but not limited to, a Stock Appreciation
Right) offered pursuant to the Plan shall not be transferable other than by will
or the laws of descent and distribution and shall be exercisable during the
participant's lifetime only by him.
(d) No Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment shall be issued hereunder with
respect to any Award unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal, state, local and foreign
legal, securities exchange and other applicable requirements.
(e) It is the intent of the Company that the Plan comply in all respects
with Rule 16b-3 under the Exchange Act, that any ambiguities or inconsistencies
in construction of the Plan be interpreted to give effect to such intention and
that if any provision of the Plan is found not to be in compliance with Rule
16b-3, such provision shall be deemed null and void to the extent required to
permit the Plan to comply with Rule 16b-3.
(f) The Company and its Affiliates shall have the right to deduct from any
payment made under the Plan, any federal, state, local or foreign income or
other taxes required by law to be withheld with respect to such payment. It
shall be a condition to the obligation of the Company to issue Common Shares,
Other Company Securities or property, other securities or property, or other
forms of payment, or any combination thereof, upon exercise, settlement or
payment of any Award under the Plan, that the participant (or any beneficiary or
person entitled to act) pay to the Company, upon its demand, such amount as may
be requested by the Company for the purpose of satisfying any liability to
withhold federal, state, local or foreign income or other taxes. If the amount
requested is not paid, the Company may refuse to issue Common Shares, Other
Company Securities or property, other securities or property, or other forms of
payment, or any combination thereof. Notwithstanding anything in the Plan to the
contrary, the Committee may, in its discretion, permit an eligible participant
(or any beneficiary or person entitled to act) to elect to pay a portion or all
of the amount requested by the Company for such taxes with respect to such
Award, at such time and in such manner as the Committee shall deem to be
appropriate including, but not limited to, by authorizing the Company to
withhold, or agreeing to surrender to the Company on or about the date such tax
liability is determinable, Common Shares, Other Company Securities or property,
other securities or property, or other forms of payment, or any combination
thereof, owned by such person or a portion of such forms of payment that would
otherwise be distributed, or have been distributed, as the case may be, pursuant
to such Award to such person, having a fair market value equal to the amount of
such taxes.
<PAGE>
(g) The expenses of the Plan shall be borne by the Company. However, if an
Award is made to an individual employed by or performing services for an
Affiliate:
(i) if such Award results in payment of cash to the participant,
such Affiliate shall pay to the Company an amount equal to such cash
payment unless the Committee shall otherwise determine in its
discretion;
(ii) if the Award results in the issuance by the Company to the
participant of Common Shares, Other Company Securities or property,
other securities or property, or other forms of payment, or any
combination thereof, such Affiliate shall, unless the Committee shall
otherwise determine in its discretion, pay to the Company an amount
equal to the fair market value thereof, as determined by the
Committee, on the date such Common Shares, other Company Securities or
property, other securities or property, or other forms of payment, or
any combination thereof, are issued (or in the case of the issuance of
Restricted Stock or of Common Shares, Other Company Securities or
property, or other securities or property, or other forms of payment
subject to transfer and forfeiture conditions, equal to the fair
market value thereof on the date on which they are no longer subject
to applicable restrictions), minus the amount, if any, received by the
Company in respect of the purchase of such Common Shares, Other
Company Securities or property, other securities or property or other
forms of payment, or any combination thereof, all as the Committee
shall determine in its discretion; and
(iii) the foregoing obligations of any such Affiliate entity
shall survive and remain in effect and binding on such entity even if
its status as an Affiliate of the Company should subsequently cease,
except as otherwise agreed by the Company and the entity.
(h) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan, and rights to the
payment of Awards shall be no greater than the rights of the Company's general
creditors.
(i) By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to, any
action taken by the Company, the Board or the Committee or its delegates.
(j) Fair market value in relation to Common Shares, Other Company
Securities or property, other securities or property or other forms of payment
of Awards under the Plan or any combination thereof, as of any specific time
shall mean such value as determined by the Committee in accordance with
applicable law.
(k) The masculine pronoun includes the feminine and the singular includes
the plural wherever appropriate.
(l) The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding Awards hereunder or any Common
Shares issued pursuant hereto as may be required by Section 13 or 15(d) of the
Exchange Act (or any successor provision) or any other applicable statute, rule
or regulation.
(m) The validity, construction, interpretation, administration and effect
of the Plan, and of its rules and regulations, and rights relating to the Plan
and to Awards granted under the Plan, shall be governed by the substantive laws,
but not the choice of law rules, of the State of Delaware.
<PAGE>
19. PLAN AMENDMENT OR SUSPENSION.
The Plan may be amended or suspended in whole or in part at any time and
from time to time by the Board, but no amendment shall be effective unless and
until the same is approved by shareholders of the Company where the failure to
obtain such approval would adversely affect the compliance of the Plan with Rule
16b-3 under the Exchange Act and with other applicable law. No amendment of the
Plan shall adversely affect in a material manner any right of any participant
with respect to any Award theretofore granted without such participant's written
consent, except as permitted under Paragraph 11.
20. PLAN TERMINATION.
This Plan shall terminate upon the earlier of the following dates or events
to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan; or
(b) ten years from the date the Plan is initially approved and adopted by
the shareholders of the Company in accordance with Paragraph 21 hereof;
provided, however, that the Board may, prior to the expiration of such ten-year
period, extend the term of the Plan for an additional period of up to five years
for the grant of Awards other than Incentive Stock Options. No termination of
the Plan shall materially alter or impair any of the rights or obligations of
any person, without his consent, under any Award theretofore granted under the
Plan except that subsequent to termination of the Plan, the Committee may make
amendments permitted under Paragraph 11.
Exhibit 4.2
SOFTWORKS, Inc.
1999 Stock Option Plan
SECTION 1. GENERAL PROVISIONS
1.1. Name and General Purpose
The name of this plan is the SOFTWORKS, Inc. 1999 Stock Option Plan
(hereinafter called the "1999 Plan"). The 1999 Plan is intended to be a
broadly-based incentive plan which enables SOFTWORKS Inc. (the "Company") and
its subsidiaries and affiliates to foster and promote the interests of the
Company by attracting and retaining directors, officers and employees of, and
consultants to, the Company who contribute to the Company's success by their
ability, ingenuity and industry, to enable such directors, officers, employees
and consultants to participate in the long-term success and growth of the
Company by giving them a proprietary interest in the Company and to provide
incentive compensation opportunities competitive with those of competing
corporations.
1.2 Definitions
a. "Affiliate" means any person or entity controlled by or under common
control with the Company, by virtue of the ownership of voting securities, by
contract or otherwise.
b. "Board" means the Board of Directors of the Company.
c. "Change in Control" means a change of control of the Company, or in any
person directly or indirectly controlling the Company, which shall mean:
(i) any person who is not currently such becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then outstanding voting
securities; or
(ii) three or more directors, whose election or nomination for
election is not approved by a majority of the Incumbent Board (as
hereinafter defined), are elected within any single 24-month period to
serve on the Board of Directors; or
(iii) members of the Incumbent Board cease to constitute a majority of
the Board of Directors without the approval of the remaining members of the
Incumbent Board; or
(iv) any merger (other than a merger where the Company is the survivor
and there is no accompanying Change in Control under subparagraphs (i),
(ii) or (iii) of this paragraph (b)), consolidation, liquidation or
dissolution of the Company, or the sale of all or substantially all of the
assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur pursuant to subparagraph (i) of this definition solely because 25% or more
of the combined voting power of the Company's outstanding securities is acquired
by one or more employee benefit plans maintained by the Company or by any other
employer, the majority interest in which is held, directly or indirectly, by the
<PAGE>
Company. For purposes of this definition, the terms "person" and "beneficial
owner" shall have the meaning set forth in Sections 3(a) and 13(d) of the
Exchange Act, and in the regulations promulgated thereunder, as in effect on
January __, 1999; and the term "Incumbent Board" shall mean (A) the members of
the Board of Directors of the Company on January __, 1999, to the extent that
they continue to serve as members of the Board of Directors, and (B) any
individual who becomes a member of the Board of Directors after January __,
1999, if his election or nomination for election as a director was approved by a
vote of at least three-quarters of the then Incumbent Board.
d. "Committee" means the Committee referred to in Section 1.3 of the 1999
Plan.
e. "Common Stock" means shares of the Common Stock, par value $.10 per
share, of the Company.
f. "Company" means SOFTWORKS Inc., a corporation organized under the laws
of the State of Delaware (or any successor corporation).
g. "Fair Market Value" means the market price of the Common Stock on The
Nasdaq Stock Market on the date of the grant or as reported on any other
exchange on which the Common Stock is then traded on such date or on any other
date on which the Common Stock is to be valued hereunder. If no sale shall have
been reported on any such exchange, Fair Market Value shall be determined by the
Committee.
h. Non-Employee Director shall have the meaning set forth in Rule 16(b)
promulgated by the Securities and Exchange Commission (Commission).
i. Option" means any option to purchase Common Stock under Section 2 of the
1999 Plan.
j. Option Agreement means the option agreement described in Section 2.4 of
the 1999 Plan.
k. "Participant" means any director, officer, employee or consultant of the
Company, a Subsidiary or an Affiliate who is selected by the Committee to
participate in the 1999 Plan.
l. "Subsidiary" means any corporation in which the Company possesses
directly or indirectly 50% or more of the combined voting power of all classes
of stock of such corporation.
m. "Total Disability" means accidental bodily injury or sickness which
wholly and continuously disabled an optionee. The Committee, whose decisions
shall be final, shall make a determination of Total Disability.
1.3 Administration of the Plan
The 1999 Plan shall be administered by the Board or by the Committee
appointed by the Board consisting of two or more members of the Board all of
whom shall be Non-Employee Directors. The Committee shall serve at the pleasure
of the Board and shall have such powers as the Board may, from time to time,
confer upon it.
Subject to this Section 1.3, the Committee shall have sole and complete
authority to adopt, alter, amend or revoke such administrative rules, guidelines
and practices governing the operation of the 1999 Plan as it shall, from time to
time, deem advisable, and to interpret the terms and provisions of the 1999
Plan.
The Committee shall keep minutes of its meetings and of action taken by it
without a meeting. A majority of the Committee shall constitute a quorum, and
the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved in writing by all of the members of the Committee
without a meeting, shall constitute the acts of the Committee.
<PAGE>
1.4 Eligibility
Stock Options may be granted only to directors, officers, employees or
consultants of the Company or a Subsidiary or Affiliate. Any person who has been
granted any Option may, if he is otherwise eligible, be granted an additional
Option or Options.
1.5 Shares
The aggregate number of shares reserved for issuance pursuant to the 1999
Plan shall be 1,500,000 shares of Common Stock, or the number and kind of shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in Section 1.6.
Such number of shares may be set aside out of the authorized but unissued
shares of Common Stock or out of issued shares of Common Stock acquired for and
held in the Treasury of the Company, not reserved for any other purpose. Shares
subject to, but not sold or issued under, any Option terminating or expiring for
any reason prior to its exercise in full will again be available for Options
thereafter granted during the balance of the term of the 1999 Plan.
1.6 Adjustments Due to Stock Splits,
Mergers, Consolidation, Etc.
If, at any time, the Company shall take any action, whether by stock
dividend, stock split, combination of shares or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, the number of shares which are reserved for
issuance under the 1999 Plan and the number of shares which, at such time, are
subject to Options shall, to the extent deemed appropriate by the Committee, be
increased or decreased in the same proportion, provided, however, that the
Company shall not be obligated to issue fractional shares.
Likewise, in the event of any change in the outstanding shares of Common
Stock by reason of any recapitalization, merger, consolidation, reorganization,
combination or exchange of shares or other corporate change, the Committee shall
make such substitution or adjustments, if any, as it deems to be appropriate, as
to the number or kind of shares of Common Stock or other securities which are
reserved for issuance under the 1999 Plan and the number of shares or other
securities which, at such time are subject to Options.
In the event of a Change in Control, at the option of the Board or
Committee, (a) all Options outstanding on the date of such Change in Control
shall, for a period of sixty (60) days following such Change in Control, become
immediately and fully exercisable, and (b) an optionee will be permitted to
surrender for cancellation within sixty (60) days after such Change in Control
any Option or portion of an Option which was granted more than six (6) months
prior to the date of such surrender, to the extent not yet exercised, and to
receive a cash payment in an amount equal to the excess, if any, of the Fair
Market Value (on the date of surrender) of the shares of Common Stock subject to
the Option or portion thereof surrendered, over the aggregate purchase price for
such Shares under the Option.
1.7 Non-Alienation of Benefits
Except as herein specifically provided, no right or unpaid benefit under
the 1999 Plan shall be subject to alienation, assignment, pledge or charge and
any attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or other person entitled to benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease.
1.8 Withholding or Deduction for Taxes
If, at any time, the Company or any Subsidiary or Affiliate is required,
under applicable laws and regulations, to withhold, or to make any deduction for
any taxes, or take any other action in connection with any Option exercise, the
Participant shall be required to pay to the Company or such Subsidiary or
Affiliate, the amount of any taxes required to be withheld, or, in lieu thereof,
at the option of the Company, the Company or such Subsidiary or Affiliate may
accept a sufficient number of shares of Common Stock to cover the amount
required to be withheld.
1.9 Administrative Expenses
The entire expense of administering the 1999 Plan shall be borne by the
Company.
<PAGE>
1.10 General Conditions
a. The Board or the Committee may, from time to time, amend, suspend or
terminate any or all of the provisions of the 1999 Plan, provided that, without
the Participant's approval, no change may be made which would alter or impair
any right theretofore granted to any Participant.
b. With the consent of the Participant affected thereby, the Committee may
amend or modify any outstanding Option in any manner not inconsistent with the
terms of the 1999 Plan, including, without limitation, and irrespective of the
provisions of Section 2.3(c) below, to accelerate the date or dates as of which
an installment of an Option becomes exercisable.
c. Nothing contained in the 1999 Plan shall prohibit the Company or any
Subsidiary or Affiliate from establishing other additional incentive
compensation arrangements for employees of the Company or such Subsidiary or
Affiliate.
d. Nothing in the 1999 Plan shall be deemed to limit, in any way, the right
of the Company or any Subsidiary or Affiliate to terminate a Participant's
employment with the Company (or such Subsidiary or Affiliate) at any time.
e. Any decision or action taken by the Board or the Committee arising out
of or in connection with the construction, administration, interpretation and
effect of the 1999 Plan shall be conclusive and binding upon all Participants
and any person claiming under or through any Participant.
f. No member of the Board or of the Committee shall be liable for any act
or action, whether of commission or omission, (i) by such member except in
circumstances involving actual bad faith, nor (ii) by any other member or by any
officer, agent or employee.
1.11 Compliance with Applicable Law
Notwithstanding any other provision of the 1999 Plan, the Company shall not
be obligated to issue any shares of Common Stock, or grant any Option with
respect thereto, unless it is advised by counsel of its selection that it may do
so without violation of the applicable Federal and State laws pertaining to the
issuance of securities and the Company may require any stock certificate so
issued to bear a legend, may give its transfer agent instructions limiting the
transfer thereof, and may take such other steps, as in its judgment are
reasonably required to prevent any such violation.
1.12 Effective Dates
The 1999 Plan was adopted by the Board on January __, 1999. The 1999 Plan
shall terminate on January __, 2009.
Section 2. OPTION GRANTS
2.1 Authority of Committee
Subject to the provisions of the 1999 Plan, the Committee shall have the
sole and complete authority to determine (i) the Participants to whom Options
shall be granted; (ii) the number of shares to be covered by each Option; and
(iii) the conditions and limitations, if any, in addition to those set forth in
Sections 2 and 3 hereof, applicable to the exercise of an Option, including
without limitation, the nature and duration of the restrictions, if any, to be
imposed upon the sale or other disposition of shares acquired upon exercise of
an Option.
<PAGE>
Stock Options granted under the 1999 Plan shall be non-qualified stock
options.
The Committee shall have the authority to grant Options.
2.2 Option Exercise Price
The price of stock purchased upon the exercise of Options granted pursuant
to the 1999 Plan shall be the Fair Market Value thereof at the time that the
Option is granted.
The purchase price is to be paid in full in cash, certified or bank
cashier's check or, at the option of the Company, Common Stock valued at its
Fair Market Value on the date of exercise, or a combination thereof, when the
Option is exercised and stock certificates will be delivered only against such
payment.
2.3 Option Grants
Each Option will be subject to the following provisions:
a. Term of Option
An Option will be for a term of not more than ten years from the
date of grant.
b. Exercise
(i) By an Employee:
Subject to the power of the Committee under Section 1.10(b) above
and except in the manner described below upon the death of the
optionee, an Option may be exercised only in installments as
follows: up to one-half of the subject shares on and after the
first anniversary of the date of grant, up to all of the subject
shares on and after the second such anniversary of the date of
the grant of such Option but in no event later than the
expiration of the term of the Option.
An Option shall be exercisable during the optionee's lifetime
only by the optionee and shall not be exercisable by the optionee
unless, at all times since the date of grant and at the time of
exercise, such optionee is an employee of or providing services
to the Company, any parent corporation of the Company or any
Subsidiary or Affiliate, except that, upon termination of all
such employment or provision of services (other than by death,
Total Disability, or by Total Disability followed by death in the
circumstances provided below), the optionee may exercise an
Option at any time within three months thereafter but only to the
extent such Option is exercisable on the date of such
termination.
Upon termination of all such employment by Total Disability, the
optionee may exercise such Options at any time within three years
thereafter, but only to the extent such Option is exercisable on
the date of such termination.
In the event of the death of an optionee (i) while an employee of
or providing services to the Company, any parent corporation of
the Company or any Subsidiary or Affiliate, or (ii) within three
months after termination of all such employment or provision of
services (other than for Total Disability) or (iii) within three
years after termination on account of Total Disability of all
such employment or provision of services, such optionee's estate
or any person who acquires the right to exercise such option by
bequest or inheritance or by reason of the death of the optionee
may exercise such optionee's Option at any time within the period
of three years from the date of death. In the case of clauses (i)
and (iii) above, such Option shall be exercisable in full for all
the remaining shares covered thereby, but in the case of clause
(ii) such Option shall be exercisable only to the extent it was
exercisable on the date of such termination.
<PAGE>
(ii) By Persons other than Employees:
If the optionee is not an employee of the Company or the parent
corporation of the Company or any Subsidiary or Affiliate, the
vesting of such optionees right to exercise his Options shall be
established and determined by the Committee in the Option
Agreement covering the Options granted to such optionee.
Notwithstanding the foregoing provisions regarding the exercise
of an Option in the event of death, Total Disability, other
termination of employment or provision of services or otherwise,
in no event shall an Option be exercisable in whole or in part
after the termination date provided in the Option Agreement.
c. Transferability
An Option granted under the 1999 Plan shall not be transferable
otherwise than by will or by the laws of descent and
distribution, or, as determined by the Board or the Committee, to
(i) a member or members of the optionees family, (ii) a trust,
(iii) a family limited partnership or (iv) a similar estate
planning vehicle primarily for members of the optionees family.
2.4 Agreements
In consideration of any Options granted to a Participant under the 1999
Plan, each such Participant shall enter into an Option Agreement with the
Company providing, consistent with the 1999 Plan, such terms as the Committee
may deem advisable.
Exhibit 5
May 3, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: SOFTWORKS, Inc.
Registration Statement on Form S-8
Gentlemen:
Reference is made to the filing by SOFTWORKS, Inc. (the "Corporation") of a
Registration Statement on Form S-8 with the Securities and Exchange Commission
pursuant to the provisions of the Securities Act of 1933, as amended, covering
the registration of 3,727,000 shares of the Corporation's Common Stock, $.001
par value per share, in connection with the Corporation's 1998 Long-Term
Incentive Plan (the " 1998 Plan") and the registration of 1,250,000 shares of
the Corporation's Common Stock, $.001 par value per share, in connection with
the Corporation's 1999 Stock Option Plan (the " 1999 Plan" and, together with
the 1998 Plan, the Plans).
As counsel for the Corporation, we have examined its corporate records,
including its Certificate of Incorporation, as amended, By-Laws, its corporate
minutes, the form of its Common Stock certificate, the Plans, related documents
under the Plans and such other documents as we have deemed necessary or relevant
under the circumstances.
Based upon our examination, we are of the opinion that:
1. The Corporation is duly organized and validly existing under the laws of
the State of Delaware.
2. There have been reserved for issuance by the Board of Directors of the
Corporation under the 1998 Plan 3,727,000 shares of its Common Stock, $.001 par
value per share. The shares of the Corporation's Common Stock, when issued
pursuant to the 1998 Plan, will be validly authorized, legally issued, fully
paid and non-assessable.
3. There have been reserved for issuance by the Board of Directors of the
Corporation under the 1999 Plan 1,250,000 shares of its Common Stock, $.001 par
value per share. The shares of the Corporation's Common Stock, when issued
pursuant to the 1999 Plan, will be validly authorized, legally issued, fully
paid and non-assessable.
We hereby consent to be named in the Registration Statement and in the
Prospectus which constitutes a part thereof as counsel of the Corporation, and
we hereby consent to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Very truly yours,
/s/BLAU, KRAMER, WACTLAR & LIEBERMAN, P.C.
BLAU, KRAMER, WACTLAR &
LIEBERMAN, P.C.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 9, 1999
included in SOFTWORKS Inc.'s Form 10-K for the year ended December 31, 1998 and
to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Washington, D.C.
May 4, 1999
