<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1999
REGISTRATION NO. 333-_____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------------------
SAGE, INC.
(Exact name of Registrant as Specified in Its Charter)
----------------------------------------------
<TABLE>
<CAPTION>
DELAWARE 77-0389091
<S> <C>
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
</TABLE>
(Address of Principal Executive Offices)
1997 STOCK OPTION PLAN
1999 EMPLOYEE STOCK PURCHASE PLAN
(Full Titles of the Plans)
----------------------------------------------
CHANDRASHEKAR M. REDDY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SAGE, INC.
2460 NORTH FIRST STREET, SUITE 100
SAN JOSE, CALIFORNIA 95131-1023
(Name and Address of Agent for Service)
(408) 383-5300
(Telephone Number, Including Area Code, of Agent For Service)
Copies to:
JOHN W. CAMPBELL III, ESQ.
MORRISON & FOERSTER LLP
425 MARKET STREET
SAN FRANCISCO, CALIFORNIA 94105
(415) 268-7000
--------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================
Amount Maximum Proposed Maximum Proposed
Title of Securities to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share(1) Price(1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share............. 1,666,666(2) $23.75 $39,583,317
Common Stock, par value
$.01 per share............. 166,666(3) $23.75 $ 3,958,317
TOTAL................... 1,833,332 $23.75 $43,541,635 $12,105
==================================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457(h) under the Securities Act of 1933,
as amended, solely for the purpose of calculating the registration fee.
Computation based upon the average of the high and low prices of the
Registrant's Common Stock as reported on the Nasdaq National Market on
December 13, 1999.
(2) To be issued in connection with the Sage, Inc. 1997 Stock Option Plan.
(3) To be issued in connection with the Sage, Inc. 1999 Employee Stock Purchase
Plan.
II-1
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form S-8
(plan information. Registrant information and employee plan annual information)
will be sent or given to employees as specified by Securities and Exchange
Commission Rule 428(b)(1). Such documents need not be filed with the Securities
and Exchange Commission either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424. These documents and
the documents incorporated by reference in this Registration Statement pursuant
to Item 3 of Form S-8 (Part II hereof), taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act of 1933, as
amended.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Sage, Inc. (the "Registrant") with the
Securities and Exchange Commission (the "Commission") are incorporated by
reference herein:
(a) The Registrant's Prospectus filed pursuant to Rule 424(b) of the
Securities Act of 1933, as amended (the "Securities Act"), contained in the
Registration Statement on Form S-1 (the "Registration Statement") as declared
effective on August 30, 1999 (No. 333-86173), which includes audited financial
statements for the Registrant's latest fiscal year.
(b) All other reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") since the end
of the fiscal year covered by the audited financial statements described in (a)
above.
(c) The description of the Registrant's Common Stock which is contained in
its Registration Statement on Form 8-A dated November 10, 1999 filed under the
Exchange Act, including any amendment or report filed for the purpose of
updating such description.
All documents filed by the Registrant with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents. Any statement contained
in a document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
II-2
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation, as amended, and Bylaws
provide that the Registrant shall indemnify to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law ("DGCL"), as it now exists
or as amended, all directors and officers pursuant thereto. The Registrant's
Certificate of Incorporation and Bylaws also authorize the Registrant to
indemnify its employees and other agents, at its option, to the fullest extent
permitted by Section 145 of the DGCL, as it now exists or as amended. The
Registrant intends to enter into agreements to indemnify its directors and
officers, in addition to indemnification provided for in the Registrant's
charter documents. These agreements, among other things, provide for the
indemnification of the Registrant's directors and officers for certain expenses
(including attorneys' fees), judgments, fines and settlement amounts incurred by
any such person in any action or proceeding, including any action by or in the
right of the Registrant, arising out of such person's services as a director or
officer of the Registrant, any subsidiary of the Registrant or any other company
or enterprise to which such person provides services at the request of the
Registrant to the fullest extent permitted by applicable law. The Registrant
believes that these provisions and agreements will assist the Registrant in
attracting and retaining qualified persons to serve as directors and officers.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL,
or (iv) for any transaction from which the director derived an improper personal
benefit. The Registrant's Certificate of Incorporation provides for the
elimination of personal liability of a director for breach of fiduciary duty, as
permitted by Section 102(b)(7) of the DGCL.
Section 7 of the Underwriting Agreement entered into by the Registrant and
the underwriters in connection with the Registrant's initial public offering,
the form of which is attached as Exhibit 1.1 to the Registration Statement on
Form S-1 and incorporated herein by reference, contains certain provisions
relating to indemnification by the underwriters named therein under certain
circumstances of directors, officers and controlling persons of the Registrant
against certain liabilities, including liabilities under the Securities Act.
II-3
<PAGE> 4
Under the Registrant's Director and Officer Liability Insurance Policy,
each Director and certain officers of the Registrant are insured against certain
liabilities, including liabilities arising under the Securities Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrant's Registration
Statement on Form S-1 (Commission File No. 333-86173 (the
"Registration Statement")) which became effective on November
10, 1999.
4.2 Registrant's Bylaws (incorporated by reference to Exhibit 3.2 to
Registration Statement).
4.3 Registrant's 1997 Stock Option Plan, as amended (incorporated by
reference to Exhibit 10.2 to the Registration Statement).
4.4 Registrant's 1999 Employee Stock Purchase Plan.
5.1 Opinion of Morrison & Foerster LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Morrison & Foerster LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-6 and II-7).
II-4
<PAGE> 5
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(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 with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered 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, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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 that time shall be deemed to be the initial bona
fide offering thereof.
II-5
<PAGE> 6
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-6
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of San Jose, State of California, on December 15, 1999.
SAGE, INC.
By: /s/ Chandrashekar M. Reddy
------------------------------------
Chandrashekar M. Reddy
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, severally and not jointly, Chandrashekar
M. Reddy and Simon P. Westbrook, with full power to act alone, as his or her
true and lawful attorney-in-fact, with the power of substitution, for and in
such person's name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto each said attorney-in-fact full power and authority to do and perform each
and every act and thing requisite and necessary to be done as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorney-in-fact may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Chandrashekar M. Reddy President, Chief Executive Officer December 15, 1999
--------------------------
Chandrashekar M. Reddy
/s/ Simon P. Westbrook Chief Financial Officer December 15, 1998
----------------------
Simon P. Westbrook
</TABLE>
II-7
<PAGE> 8
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael A. Gumport Director December 15, 1999
----------------------
Michael A. Gumport
/s/ N. Damodar Reddy Director December 15, 1999
--------------------
N. Damodar Reddy
/s/ Kenneth Tai Director December 15, 1999
---------------
Kenneth Tai
</TABLE>
II-8
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrant's Registration
Statement on Form S-1 (Commission File No. 333-86173) (the
"Registration Statement") which became effective on November 10,
1999.
4.2 Registrant's Bylaws (incorporated by reference to Exhibit 3.2 to
Registration Statement).
4.3 Registrant's 1997 Stock Option Plan, as amended (incorporated by
reference to Exhibit 10.2 to the Registration Statement).
4.4 Registrant's 1999 Employee Stock Purchase Plan.
5.1 Opinion of Morrison & Foerster LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Morrison & Foerster LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (See page II-6 and II-7).
</TABLE>
II-9
<PAGE> 1
EXHIBIT 4.4
1999 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1999 Employee Stock Purchase
Plan of Sage, Inc.
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Parents or Subsidiaries with an opportunity to purchase
Common Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Code. The provisions of the Plan, accordingly,
shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. Definitions. As used herein, the following definitions shall apply:
"Applicable Laws" means the legal requirements relating to the
administration of employee stock purchase plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws, the
Code, the rules of any applicable stock exchange or national market system, and
the rules of any foreign jurisdiction applicable to participation in the Plan by
residents therein.
"Board" means the Board of Directors of the Company.
"Change in Control" means a change in ownership or control of the Company
effected through the direct or indirect acquisition by any person or related
group of persons (other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock of the Company.
"Company" means Sage, Inc., a Delaware corporation.
"Compensation" means an Employee's base salary from the Company or one or
more Designated Parents or Subsidiaries, including such amounts of base salary
as are deferred by the Employee (i) under a qualified cash or deferred
arrangement described in Section 401(k) of the Code, or (ii) to a plan qualified
under Section 125 of the Code. Compensation does not include overtime, bonuses,
annual awards, other incentive payments, reimbursements or other expense
allowances, fringe benefits (cash or noncash), moving expenses, deferred
compensation, contributions (other than contributions described in the first
sentence) made on the Employee's behalf by the Company or one or more Designated
Parents or Subsidiaries under any employee
<PAGE> 2
benefit or welfare plan now or hereafter established, and any other payments not
specifically referenced in the first sentence.
"Corporate Transaction" means any of the following transactions:
(1) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Company is incorporated;
(2) the sale, transfer or other disposition of all or substantially all of
the assets of the Company (including the capital stock of the Company's
subsidiary corporations) in connection with complete liquidation or dissolution
of the Company;
(3) any reverse merger in which the Company is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities are transferred to a person
or persons different from those who held such securities immediately prior to
such merger; or
(4) acquisition by any person or related group of persons (other than the
Company or by a Company-sponsored employee benefit plan) of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities (whether or not in a transaction also
constituting a Change in Control), but excluding any such transaction that the
Plan Administrator determines shall not be a Corporate Transaction
"Designated Parents or Subsidiaries" means the Parents or Subsidiaries
which have been designated by the Plan Administrator from time to time as
eligible to participate in the Plan.
"Effective Date" means the effective date of the Registration Statement
relating to the Company's initial public offering of its Common Stock.. However,
should any Designated Parent or Subsidiary become a participating company in the
Plan after such date, then such entity shall designate a separate Effective Date
with respect to its employee-participants.
"Employee" means any individual, including an officer or director, who is
an employee of the Company or a Designated Parent or Subsidiary for purposes of
Section 423 of the Code. For purposes of the Plan, the employment relationship
shall be treated as continuing intact while the individual is on sick leave or
other leave of absence approved by the individual's employer. Where the period
of leave exceeds ninety (90) days and the individual's right to reemployment is
not guaranteed either by statute or by contract, the employment relationship
will be deemed to have terminated on the ninety-first (91st) day of such leave,
for purposes of determining eligibility to participate in the Plan.
"Enrollment Date" means the first day of each Offer Period.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
<PAGE> 3
"Exercise Date" means the last day of each Purchase Period.
"Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(1) Where there exists a public market for the Common Stock, the Fair
Market Value shall be (A) the closing price for a share of Common Stock for the
last market trading day prior to the time of the determination (or, if no
closing price was reported on that date, on the last trading date on which a
closing price was reported) on the stock exchange determined by the Plan
Administrator to be the primary market for the Common Stock or the Nasdaq
National Market, whichever is applicable or (B) if the Common Stock is not
traded on any such exchange or national market system, the average of the
closing bid and asked prices of a share of Common Stock on the Nasdaq Small Cap
Market for the day prior to the time of the determination (or, if no such prices
were reported on that date, on the last date on which such prices were
reported), in each case, as reported in The Wall Street Journal or such other
source as the Plan Administrator deems reliable;
(2) In the absence of an established market of the type described in (1),
above, for the Common Stock, the Fair Market Value thereof shall be determined
by the Plan Administrator in good faith.
"Offer Period" means an Offer Period established pursuant to Section 4
hereof.
"Parent" means a "parent corporation," whether now or hereafter existing,
as defined in Section 424(e) of the Code.
"Participant" means an Employee of the Company or Designated Parent or
Subsidiary who is actively participating in the Plan.
"Plan" means this Employee Stock Purchase Plan.
"Plan Administrator" means either the Board or a committee of the Board
that is responsible for the administration of the Plan as is designated from
time to time by resolution of the Board.
(u) "Purchase Period" means a period specified as such pursuant to Section
4(b) hereof.
(v) "Purchase Price" shall mean an amount equal to 85% of the Fair Market
Value of a share of Common Stock on the Enrollment Date or on the Exercise Date,
whichever is lower.
(w) "Reserves" means the sum of the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.
<PAGE> 4
(x) "Subsidiary" means a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 424(f) of the Code.
3. Eligibility.
(a) General. Any individual who is an Employee on a given Enrollment Date
shall be eligible to participate in the Plan for the Offer Period commencing
with such Enrollment Date.
(b) Limitations on Grant and Accrual. Any provisions of the Plan to the
contrary notwithstanding, no Employee shall be granted an option under the Plan
(i) if, immediately after the grant, such Employee (taking into account stock
owned by any other person whose stock would be attributed to such Employee
pursuant to Section 424(d) of the Code) would own stock and/or hold outstanding
options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of any
Parent or Subsidiary, or (ii) which permits the Employee's rights to purchase
stock under all employee stock purchase plans of the Company and its Parents or
Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) worth of stock (determined at the Fair Market Value of the shares at
the time such option is granted) for each calendar year in which such option is
outstanding at any time. The determination of the accrual of the right to
purchase stock shall be made in accordance with Section 423(b)(8) of the Code
and the regulations thereunder.
(c) Other Limits on Eligibility. Notwithstanding Subsection (a), above, the
following Employees shall not be eligible to participate in the Plan for any
relevant Offer Period: (i) Employees whose customary employment is 20 or fewer
hours or less per week; (ii) Employees whose customary employment is for not
more than 5 or fewer months in any calendar year; (iii) Employees who have been
employed for fewer than 12 months; and (iv) Employees who are subject to rules
or laws of a foreign jurisdiction that prohibit or make impractical the
participation of such Employees in the Plan.
4. Offer Periods.
(a) The Plan shall be implemented through overlapping or consecutive Offer
Periods until such time as (i) the maximum number of shares of Common Stock
available for issuance under the Plan shall have been purchased or (ii) the Plan
shall have been sooner terminated in accordance with Section 19 hereof. The
maximum duration of an Offer Period shall be twenty-seven (27) months.
Initially, the Plan shall be implemented through overlapping Offer Periods of
twenty-four (24) months' duration commencing each April 1 and October 1
following the Effective Date (except that the initial Offer Period shall
commence on the Effective Date and shall end on March 31, 2000).
(b) A Participant shall be granted a separate option for each Offer Period
in which he or she participates. The option shall be granted on the Enrollment
Date and shall be automatically exercised in successive installments on the
Exercise Dates ending within the Offer Period. The option shall be granted on
the Enrollment Date and shall be automatically exercised on the last day of the
Offer Period. However, with respect to any Offer Period, the Plan
<PAGE> 5
Administrator may specify shorter Purchase Periods within an Offer Period, such
that the option granted on the Enrollment Date shall be automatically exercised
in successive installments on the last day of each Purchase Period ending within
the Offer Period. Use second alternative if the dates of the Purchase Periods
are not pre-established in Section 2(u).
(c) An Employee may participate in only one Offer Period at a time.
Accordingly, except as provided in Section 4(d), an Employee who wishes to join
a new Offer Period must withdraw from the current Offer Period in which the
Employee is participating and must also enroll in the new Offer Period prior to
the Enrollment Date for that Offer Period.
(d) If on the first day of any Purchase Period in an Offer Period in which
a Participant is participating, the Fair Market Value of the Common Stock is
less than the Fair Market Value of the Common Stock on the Enrollment Date of
the Offer Period (after taking into account any adjustment during the Offer
Period pursuant to Section 18(a)), the Offer Period shall be terminated
automatically and the Participant shall be enrolled automatically in the new
Offer Period which has its first Purchase Period commencing on that date,
provided the Participant is eligible to participate in the Plan on that date and
has not elected to terminate participation in the Plan.
(e) Except as specifically provided herein, the acquisition of Common Stock
through participation in the Plan for any Offer Period shall neither limit nor
require the acquisition of Common Stock by a Participant in any subsequent Offer
Period.
5. Participation.
(a) An eligible Employee may become a Participant in the Plan by completing
a subscription agreement authorizing payroll deductions in the form of Exhibit A
to this Plan and filing it with the designated payroll office of the Company at
least ten (10) business days prior to the Enrollment Date for the Offer Period
in which such participation will commence, unless a later time for filing the
subscription agreement is set by the Plan Administrator for all eligible
Employees with respect to a given Offer Period.
(b) Payroll deductions for a Participant shall commence with the first
partial or full payroll period beginning on the Enrollment Date and shall end on
the last complete payroll period during the Offer Period, unless sooner
terminated by the Participant as provided in Section 10.
6. Payroll Deductions.
(a) At the time a Participant files a subscription agreement, the
Participant shall elect to have payroll deductions made during the Offer Period
in amounts between one percent (1%) and not exceeding ten percent (10%) of the
Compensation which the Participant receives during the Offer Period.
<PAGE> 6
(b) All payroll deductions made for a Participant shall be credited to the
Participant's account under the Plan and will be withheld in whole percentages
only. A Participant may not make any additional payments into such account.
(c) A Participant may discontinue participation in the Plan as provided in
Section 10, or may increase or decrease the rate of payroll deductions during
the Offer Period by completing and filing with the Company a change of status
notice in the form of Exhibit B to this Plan authorizing an increase or decrease
in the payroll deduction rate. Any decrease in the rate of a Participant's
payroll deductions shall be effective with the first full payroll period
commencing ten (10) business days after the Company's receipt of the change of
status notice unless the Company elects to process a given change in
participation more quickly. Any increase in the rate of a Participant's payroll
deductions shall be effective with the next Purchase Period following the
Purchase Period in which the Company receives the change of status notice if
such notice is filed within ten (10) business days before the commencement of
the next Purchase Period. A Participant's subscription agreement (as modified by
any change of status notice) shall remain in effect for successive Offer Periods
unless terminated as provided in Section 10. The Plan Administrator shall be
authorized to limit the number of payroll deduction rate changes during any
Offer Period.
(d) Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and Section 3(b) herein, a Participant's payroll
deductions may be decreased to 0% at such time during any Purchase Period which
is scheduled to end during the current calendar year (the "Current Purchase
Period") that the aggregate of all payroll deductions which were previously used
to purchase stock under the Plan in a prior Purchase Period which ended during
that calendar year plus all payroll deductions accumulated with respect to the
Current Purchase Period equal $21,250. Payroll deductions shall recommence at
the rate provided in such Participant's subscription agreement, as amended, at
the beginning of the first Purchase Period which is scheduled to end in the
following calendar year, unless terminated by the Participant as provided in
Section 10.
7. Grant of Option. On the Enrollment Date, each Participant shall be
granted an option to purchase (at the applicable Purchase Price) up to a number
of shares of the Common Stock determined by dividing ten percent (10%) of such
Participant's Compensation receivable during the Offer Period by the applicable
Purchase Price; provided (i) that such option shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof, and (ii) the maximum
number of shares of Common Stock a Participant shall be permitted to purchase in
any Purchase Period shall be 2,500 shares, subject to adjustment as provided in
Section 18 hereof. Exercise of the option shall occur as provided in Section 8,
unless the Participant has withdrawn pursuant to Section 10, and the option, to
the extent not exercised, shall expire on the last day of the Offer Period.
8. Exercise of Option. Unless a Participant withdraws from the Plan as
provided in Section 10, below, the Participant's option for the purchase of
shares will be exercised automatically on each Exercise Date, by applying the
accumulated payroll deductions in the Participant's account to purchase the
maximum number of full shares subject to the option by
<PAGE> 7
dividing such Participant's payroll deductions accumulated prior to such
Exercise Date and retained in the Participant's account as of the Exercise Date
by the applicable Purchase Price. No fractional shares will be purchased; any
payroll deductions accumulated in a Participant's account which are not
sufficient to purchase a full share shall be carried over to the next Purchase
Period or Offer Period, whichever applies, or returned to the Participant, if
the Participant withdraws from the Plan. Notwithstanding the foregoing, any
amount remaining in a Participant's account following the purchase of shares on
the Exercise Date due to the application of Section 423(b)(8) of the Code or
Section 7, above, shall be returned to the Participant and shall not be carried
over to the next Offer Period. During a Participant's lifetime, a Participant's
option to purchase shares hereunder is exercisable only by the Participant.
9. Delivery. Upon receipt of a request from a Participant after each
Exercise Date on which a purchase of shares occurs, the Company shall arrange
the delivery to such Participant, as promptly as practicable, of a certificate
representing the shares purchased upon exercise of the Participant's option.
10. Withdrawal; Termination of Employment.
(a) A Participant may either (i) withdraw all but not less than all the
payroll deductions credited to the Participant's account and not yet used to
exercise the Participant's option under the Plan or (ii) terminate future
payroll deductions, but allow accumulated payroll deductions to be used to
exercise the Participant's option under the Plan at any time by giving written
notice to the Company in the form of Exhibit B to this Plan. If the Participant
elects withdrawal alternative (i) described above, all of the Participant's
payroll deductions credited to the Participant's account will be paid to such
Participant as promptly as practicable after receipt of notice of withdrawal,
such Participant's option for the Offer Period will be automatically terminated,
and no further payroll deductions for the purchase of shares will be made during
the Offer Period. If the Participant elects withdrawal alternative (ii)
described above, no further payroll deductions for the purchase of shares will
be made during the Offer Period, all of the Participant's payroll deductions
credited to the Participant's account will be applied to the exercise of the
Participant's option on the next Exercise Date, and after such Exercise Date,
such Participant's option for the Offer Period will be automatically terminated.
If a Participant withdraws from an Offer Period, payroll deductions will not
resume at the beginning of the succeeding Offer Period unless the Participant
delivers to the Company a new subscription agreement.
(b) Upon termination of a Participant's employment relationship (as
described in Section 2(k)) at a time more than three (3) months from the next
scheduled Exercise Date, the payroll deductions credited to such Participant's
account during the Offer Period but not yet used to exercise the option will be
returned to such Participant or, in the case of his/her death, to the person or
persons entitled thereto under Section 14, and such Participant's option will be
automatically terminated. Upon termination of a Participant's employment
relationship (as described in Section 2(k)) within three (3) months of the next
scheduled Exercise Date, the payroll deductions credited to such Participant's
account during the Offer Period but not yet used to exercise the option will be
applied to the purchase of Common Stock on the next Exercise
<PAGE> 8
Date, unless the Participant (or in the case of the Participant's death, the
person or persons entitled to the Participant's account balance under Section
14) withdraws from the Plan by submitting a change of status notice in
accordance with subsection (a) of this Section 10. In such a case, no further
payroll deductions will be credited to the Participant's account following the
Participant's termination of employment and the Participant's option under the
Plan will be automatically terminated after the purchase of Common Stock on the
next scheduled Exercise Date.
11. Interest. No interest shall accrue on the payroll deductions credited
to a Participant's account under the Plan.
12. Stock.
(a) The maximum number of shares of Common Stock which shall be made
available for sale under the Plan shall be 500,000 shares, subject to adjustment
upon changes in capitalization of the Company as provided in Section 18. If on a
given Exercise Date the number of shares with respect to which options are to be
exercised exceeds the number of shares then available under the Plan, the Plan
Administrator shall make a pro rata allocation of the shares remaining available
for purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.
(b) A Participant will have no interest or voting right in shares covered
by the Participant's option until such shares are actually purchased on the
Participant's behalf in accordance with the applicable provisions of the Plan.
No adjustment shall be made for dividends, distributions or other rights for
which the record date is prior to the date of such purchase.
(c) Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or in the name of the Participant and
his or her spouse.
13. Administration. The Plan shall be administered by the Plan
Administrator which shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine eligibility
and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Plan Administrator shall, to the full
extent permitted by Applicable Law, be final and binding upon all persons.
14. Designation of Beneficiary.
(a) Each Participant will file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the Participant's account under
the Plan in the event of such Participant's death. If a Participant is married
and the designated beneficiary is not the spouse, spousal consent shall be
required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the Participant (and
the Participant's spouse, if any) at any time by written notice. In the event of
the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living (or
<PAGE> 9
in existence) at the time of such Participant's death, the Company shall deliver
such shares and/or cash to the executor or administrator of the estate of the
Participant, or if no such executor or administrator has been appointed (to the
knowledge of the Plan Administrator), the Plan Administrator shall deliver such
shares and/or cash to the spouse (or domestic partner, as determined by the
Administrator) of the Participant, or if no spouse (or domestic partner) is
known to the Plan Administrator, then to the issue of the Participant, such
distribution to be made per stirpes (by right of representation).
15. Transferability. Neither payroll deductions credited to a Participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Section 14 hereof) by the Participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Plan Administrator may treat such act as an election to withdraw
funds from an Offer Period in accordance with Section 10.
16. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each Participant in
the Plan. Statements of account will be given to Participants at least annually,
which statements will set forth the amounts of payroll deductions, the Purchase
Price, the number of shares purchased and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization; Corporate Transactions.
(a) Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the Reserves, the Purchase Price, as
well as any other terms that the Plan Administrator determines require
adjustment shall be proportionately adjusted for (i) any increase or decrease in
the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, (ii) any other increase or decrease in the number of issued shares
of Common Stock effected without receipt of consideration by the Company, or
(iii) as the Plan Administrator may determine in its discretion, any other
transaction with respect to Common Stock to which Section 424(a) of the Code
applies; provided, however that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Plan Administrator and its
determination shall be final, binding and conclusive. Except as the Plan
Administrator determines, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the
Reserves and the Purchase Price.
(b) Corporate Transactions. In the event of a proposed Corporate
Transaction, each option under the Plan shall be assumed by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Plan Administrator determines, in the
<PAGE> 10
exercise of its sole discretion and in lieu of such assumption, to shorten the
Offer Period then in progress by setting a new Exercise Date (the "New Exercise
Date"). If the Plan Administrator shortens the Offer Period then in progress in
lieu of assumption in the event of a Corporate Transaction, the Plan
Administrator shall notify each Participant in writing, at least ten (10) days
prior to the New Exercise Date, that the Exercise Date for the Participant's
option has been changed to the New Exercise Date and that the Participant's
option will be exercised automatically on the New Exercise Date, unless prior to
such date the Participant has withdrawn from the Offer Period as provided in
Section 10. For purposes of this Subsection, an option granted under the Plan
shall be deemed to be assumed if, in connection with the Corporate Transaction,
the option is replaced with a comparable option with respect to shares of
capital stock of the successor corporation or Parent thereof. The determination
of option comparability shall be made by the Plan Administrator prior to the
Corporate Transaction and its determination shall be final, binding and
conclusive on all persons.
19. Amendment or Termination.
(a) The Plan Administrator may at any time and for any reason terminate or
amend the Plan. Except as provided in Section 18, no such termination can affect
options previously granted, provided that an Offer Period may be terminated by
the Plan Administrator on any Exercise Date if the Plan Administrator determines
that the termination of the Offer Period is in the best interests of the Company
and its stockholders. Except as provided in Section 18, no amendment may make
any change in any option theretofore granted which adversely affects the rights
of any Participant without the consent of affected Participants. To the extent
necessary to comply with Section 423 of the Code (or any successor rule or
provision or any other Applicable Law), the Company shall obtain stockholder
approval in such a manner and to such a degree as required.
(b) Without stockholder consent and without regard to whether any
Participant rights may be considered to have been "adversely affected," the Plan
Administrator shall be entitled to limit the frequency and/or number of changes
in the amount withheld during Offer Periods, change the length of Purchase
Periods within any Offer Period, determine the length of any future Offer
Period, whether future Offer Periods shall be consecutive or overlapping,
establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, establish additional terms, conditions, rules or procedures
to accommodate the rules or laws of applicable foreign jurisdictions, permit
payroll withholding in excess of the amount designated by a Participant in order
to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each Participant properly
correspond with amounts withheld from the Participant's Compensation, and
establish such other limitations or procedures as the Plan Administrator
determines in its sole discretion advisable and which are consistent with the
Plan.
20. Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when
<PAGE> 11
received in the form specified by the Plan Administrator at the location, or by
the person, designated by the Plan Administrator for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all Applicable Laws
and shall be further subject to the approval of counsel for the Company with
respect to such compliance. As a condition to the exercise of an option, the
Company may require the Participant to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned Applicable Laws. In addition, no options shall be exercised
or shares issued hereunder before the Plan shall have been approved by
stockholders of the Company as provided in Section 23.
22. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board or its approval by the stockholders of the Company.
It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 19.
23. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under Applicable Laws.
24. No Employment Rights. The Plan does not, directly or indirectly, create
any right for the benefit of any employee or class of employees to purchase any
shares under the Plan, or create in any employee or class of employees any right
with respect to continuation of employment by the Company or a Designated Parent
or Subsidiary, and it shall not be deemed to interfere in any way with such
employer's right to terminate, or otherwise modify, an employee's employment at
any time.
25. No Effect on Retirement and Other Benefit Plans. Except as specifically
provided in a retirement or other benefit plan of the Company or a Designated
Parent or Subsidiary, participation in the Plan shall not be deemed compensation
for purposes of computing benefits or contributions under any retirement plan of
the Company or a Designated Parent or Subsidiary, and shall not affect any
benefits under any other benefit plan of any kind or any benefit plan
subsequently instituted under which the availability or amount of benefits is
related to level of compensation. The Plan is not a "Retirement Plan" or
"Welfare Plan" under the Employee Retirement Income Security Act of 1974, as
amended.
26. Effect of Plan. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of each
Participant, including, without limitation, such Participant's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
Participant.
<PAGE> 12
27. Governing Law. The Plan is to be construed in accordance with and
governed by the internal laws of the State of California (as permitted by
Section 1646.5 of the California Civil Code, or any similar successor provision)
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties, except to the extent the
internal laws of the State of California are superseded by the laws of the
United States. Should any provision of the Plan be determined by a court of law
to be illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.
<PAGE> 1
EXHIBIT 5.1
MORRISON & FOERSTER LLP
San Francisco, California
December 15, 1999
Sage, Inc.
2460 North First Street, Suite 100
San Jose, CA 95131-1023
Gentlemen:
At your request, we have examined the Registration Statement on Form S-8
executed by you on December 15, 1999, and to be filed with the Securities and
Exchange Commission (the "SEC") in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 1,833,332 shares of your
common stock, $.01 par value (the "Common Stock") which will be issuable under
the 1997 Stock Option Plan and the 1999 Employee Stock Purchase Plan (the
"Plans").
As your counsel in connection with the Registration Statement, we have
examined the proceedings taken by you in connection with the adoption of the
Plans and the authorization of the issuance of the shares of Common Stock under
the Plans (the "Plan Shares") and such documents as we have deemed necessary to
render this opinion.
Based upon the foregoing, it is our opinion that the Plan Shares, when
issued and outstanding pursuant to the terms of the Plans, will be validly
issued, fully paid and non-assessable shares of Common Stock.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Morrison & Foerster LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Sage, Inc. of our report dated June 30, 1999, except
for Note 13, as to which the date is October 5, 1999, relating to the financial
statements, which report appears in the Registration Statement on Form S-1 of
Sage, Inc.
PricewaterhouseCoopers LLP
San Jose, California
December 14, 1999
<PAGE> 1
EXHIBIT 24.1
SAGE, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Sage, Inc. hereby constitutes and
appoints Chandrashekar M. Reddy and Simon P. Westbrook, or any one or more of
them, its attorneys-in-fact and agents, each with full power of substitution and
resubstitution for it in any and all capacities, to sign any or all amendments
or post-effective amendments to this Registration Statement, and to file the
same, with exhibits thereto and other document in connection therewith, with the
Securities and Exchange Commission, granting unto each of such attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing requisite in connection with such matters and hereby ratifying and
confirming all that each of such attorneys-in-fact and agents or his substitute
or substitutes may do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of has been signed at San Jose, California
on December 14, 1999.
SAGE, INC.
By: /s/ Chandrashekar M. Reddy
------------------------------------
President and Chief Executive Officer
<PAGE> 2
SAGE, INC.
Certified Resolution
I, Chandrashekar M. Reddy, President and Chief Executive Officer of Sage,
Inc., a Delaware corporation (the "Company"), do hereby certify that the
following is a true copy of a resolution adopted by the Board of Directors on
August 12, 1999, and that the same has not been changed and remains in full
force and effect.
RESOLVED, that Chandrashekar M. Reddy and Simon P. Westbrook, be, and
each of them hereby is, appointed as the attorney of Sage, Inc., with full
power of substitution and resubstitution for and in the name, place and
stead of the Company to sign, attest and file a Registration Statement on
Form S-8, or any other appropriate form that may be used from time to time,
with respect to the issue and/or sale of the Shares, and any and all
amendments, post-effective amendments and exhibits to such Registration
Statement and any and all applications or other documents to be filed with
the Securities and Exchange Commission or any automated quotation system of
a registered securities association pertaining to the quotation thereon of
the Shares covered by such Registration Statement or pertaining to such
registration and any and all applications and any and all applications or
other documents to be filed with any governmental or private agency or
official relative to the issuance of said Shares, with full power an
authority to do and perform any and all acts and things whatsoever
requisite and necessary to be done in the premises, hereby ratifying and
approving the acts of such attorneys or any such substitute or substitutes
and, without implied limitation, including in the above authority to do the
foregoing on behalf and in the name of any duly authorized officer of the
Company; and that the Chief Executive Officer and President and the Chief
Financial Officer of the Company be, and each of them hereby is, authorized
and directed for and on behalf of the Company to execute a Power of
Attorney evidencing the foregoing appointment.
/s/ Chandrashekar M. Reddy
----------------------------------------
President and Chief Executive Officer
December 14, 1999
