<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 1, 1999
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SILKNET SOFTWARE, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 02-0478949
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
50 PHILLIPPE COTE STREET
MANCHESTER, NH 03101
(Address of Principal Executive Offices) (Zip Code)
--------------------
INSITE MARKETING TECHNOLOGY, INC. 1997 STOCK OPTION PLAN
(Full Title of the Plan)
--------------------
JAMES C. WOOD
PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
SILKNET SOFTWARE, INC.
50 PHILLIPPE COTE STREET
MANCHESTER, NH 03101
(Name and Address of Agent For Service)
(603) 625-0070
(Telephone Number, Including Area Code, of Agent For Service)
------------------------------
Copy to:
John Hession, Esq.
TESTA, HURWITZ & THIBEAULT, LLP
Oliver Street Tower, 125 High Street
Boston, Massachusetts 02110
(617) 248-7000
IN ADDITION, PURSUANT TO RULE 416(c) UNDER THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ALSO COVERS AN INDETERMINATE AMOUNT OF INTERESTS TO BE
OFFERED OR SOLD PURSUANT TO THE EMPLOYEE BENEFIT PLANS DESCRIBED HEREIN.
================================================================================
<PAGE> 2
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE REGISTRATION FEE (2)
------------------------------------ ---------- ---------------- --------------- --------------------
<S> <C> <C> <C> <C> <C>
INSITE MARKETING TECHNOLOGY, INC.
1997 STOCK OPTION PLAN
Common Stock (Par Value $.01 Per Share) 38,097 $ 0.33 $ 12,572 $ 3.50
Common Stock (Par Value $.01 Per Share) 22,678 $ 3.31 $ 75,065 $20.87
Common Stock (Par Value $.01 Per Share) 4,988 $ 9.50 $ 47,386 $13.18
Common Stock (Par Value $.01 Per Share) 17,520 $12.24 $214,445 $59.62
------ -------- ------
TOTAL: 83,283 $349,468 $97.17
</TABLE>
- ----------------------------
(1) Such shares are issuable upon exercise of outstanding options with fixed
exercise prices. Pursuant to Rule 457(h), the aggregate offering price
and the fee have been computed upon the basis of the price at which the
options may be exercised. The offering price per share set forth for such
shares is the exercise price per share at which such options are
exercisable.
(2) Calculated pursuant to Section 6(b) of the Securities Act of 1933.
2
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
The documents containing the information specified in this Item 1 will
be sent or given to employees, directors and others as specified by Rule
428(b)(1). In accordance with the rules and regulations of the Securities and
Exchange Commission (the "Commission") and the instructions to Form S-8, such
documents are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The documents containing the information specified in this Item 2 will
be sent or given to employees, directors and others as specified by Rule
428(b)(1). In accordance with the rules and regulations of the Commission and
the instructions to Form S-8, such documents are not being filed with the
Commission either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Registrant with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
are incorporated by reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1999, filed pursuant to the Exchange Act
which contains audited financial statements for the fiscal
year ended June 30, 1999.
(b) The Registrant's Current Report on Form 8-K dated October 5,
1999 pursuant to the Exchange Act.
(c) The section entitled "Description of Registrant's Securities
to be Registered," contained in the Registrant's Registration
Statement on Form 8-A, filed on March 3, 1999 pursuant to
Section 12(g) of the Exchange Act.
All documents subsequently filed with the Commission by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered herein have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
3
<PAGE> 4
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law and the Registrant's Certificate
of Incorporation and by-laws, as amended, provide for indemnification of the
Registrant's directors and officers for liabilities and expenses that they may
incur in such capacities. In general, directors and officers are indemnified
with respect to actions taken in good faith in a manner reasonably believed to
be in, or not opposed to, the best interests of the Registrant and, with respect
to any criminal action or proceeding, actions that the indemnitee had no
reasonable cause to believe were unlawful. Reference is made to the Registrant's
Certificate of Incorporation and By-laws, as amended filed as Exhibits 3.01 and
3.02, respectively, to the Registrant's Registration Statement on Form S-1, as
amended (File No. 333-73295) and incorporated herein by reference.
The Underwriting Agreement by and between the Company and Credit Suisse
First Boston Corporation, BancBoston Robertson Stephens, NationBanc Montgomery
Securities LLC and First Union Capital Markets Corp., as representatives of the
Underwriters named in Schedule A thereto, provides that the underwriters are
obligated, under certain circumstances, to indemnify directors, officers and
controlling persons of the Company against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
Reference is made to the form of Underwriting Agreement filed as Exhibit 1.01 to
the S-1 Registration Statement and incorporated herein by reference.
In addition, the Registrant maintains directors and officers liability
insurance for the benefit of its directors and certain of its officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
Exhibit 4.1 Specimen certificate representing the Common Stock of the
Registrant (filed as Exhibit 4.01 to Registrant's
Registration Statement on Form S-1 (File No. 333-73295) and
incorporated herein by reference).
Exhibit 4.2 Form of Certificate of Incorporation of the Registrant (filed
as Exhibit 3.01 to Registrant's Registration Statement on
Form S-1 (File No. 333-73295) and incorporated herein by
reference).
Exhibit 4.3 By-Laws, as amended, of the Registrant (filed as Exhibit 3.02
to Registrant's Registration Statement on Form S-1 (File No.
333-73295) and incorporated herein by reference).
4
<PAGE> 5
Exhibit 4.4 InSite Marketing Technology, Inc. 1997 Stock Option Plan
(filed herewith).
Exhibit 5.1 Opinion of Testa, Hurwitz & Thibeault, LLP (filed herewith).
Exhibit 23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
Exhibit 23.2 Consent of Testa, Hurwitz & Thibeault, LLP (included in
Exhibit 5.1).
Exhibit 24.1 Power of Attorney (included as part of the signature page to
this Registration Statement).
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 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.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 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 the registration statement or any
material change to such information in the
registration statement.
(2) That, for the purpose 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
5
<PAGE> 6
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
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 public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
6
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Manchester, State of New Hampshire, on the 1st day of
November, 1999.
SILKNET SOFTWARE, INC.
By: /s/ James C. Wood
---------------------------------------
James C. Wood
President, Chief Executive Officer,
and Chairman of the Board
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Silknet Software, Inc.,
hereby severally constitute and appoint James C. Wood and Patrick J. Scannell,
Jr., and each of them singly, our true and lawful attorneys, with full power to
them and each of them singly, to sign for us in our names in the capacities
indicated below, any amendments to this Registration Statement on Form S-8
(including post-effective amendments), and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, and generally to do all things in our names and on our
behalf in our capacities as officers and directors to enable Silknet Software,
Inc., to comply with the provisions of the Securities Act of 1933, as amended,
hereby ratifying and confirming our signatures as they may be signed by our said
attorneys, or any of them, to said Registration Statement and all amendments
thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ James C. Wood President, Chief Executive Officer November 1, 1999
- ------------------------------------ and Chairman of the Board of Directors
James C. Wood (Principal Executive Officer)
/s/ Patrick J. Scannell, Jr. Vice President, Chief Financial November 1, 1999
- ------------------------------------ Officer, Treasurer and Secretary
Patrick J. Scannell, Jr. (Principal Financial and Accounting Officer)
/s/ Guy Bradley
- ------------------------------------ Director November 1, 1999
Guy Bradley
/s/ Joo Hock Chua
- ------------------------------------ Director November 1, 1999
Joo Hock Chua
/s/ Stanley Fung
- ------------------------------------ Director November 1, 1999
Stanley Fung
/s/ Andrew Goldfarb
- ------------------------------------ Director November 1, 1999
Andrew Goldfarb
/s/ Glen L. Urban
- ------------------------------------ Director November 1, 1999
Glen L. Urban
</TABLE>
7
<PAGE> 8
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
4.1 Specimen certificate representing the Common Stock of the
Registrant (filed as Exhibit 4.01 to Registrant's Registration
Statement on Form S-1 (File No. 333-73295) and incorporated
herein by reference).
4.2 Form of Certificate of Incorporation of the Registrant (filed
as Exhibit 3.01 to Registrant's Registration Statement on Form
S-1 (File No. 333-73295) and incorporated herein by reference).
4.3 By-Laws, as amended, of the Registrant (filed as Exhibit 3.02
to Registrant's Registration Statement on Form S-1 (File No.
333-73295) and incorporated herein by reference).
4.4 InSite Marketing Technology, Inc. 1997 Stock Option Plan
(filed herewith).
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP (filed herewith).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (contained in
Exhibit 5.1).
24.1 Power of Attorney (included as part of the signature page to
this Registration Statement).
<PAGE> 1
EXHIBIT 4.4
INSITE MARKETING TECHNOLOGY, INC.
1997 STOCK OPTION PLAN
1. PURPOSE.
The purpose of this plan (the "Plan") is to secure for InSite Marketing
Technology, Inc. (the "Company") and its shareholders the benefits arising from
capital stock ownership by employees, officers and directors of, and consultants
or advisors to, the Company and its parent and subsidiary corporations who are
expected to contribute to the Company's future growth and success. Except where
the context otherwise requires, the term "Company" shall include the parent and
all present and future subsidiaries of the Company as defined in Sections 424(e)
and 424(f) of the Internal Revenue Code of 1986, as amended or replaced from
time to time (the "Code"). Those provisions of the Plan which make express
reference to Section 422 shall apply only to Incentive Stock Options (as that
term is defined in the Plan).
2. TYPES OF OPTIONS AND ADMINISTRATION.
(a) TYPES OF OPTIONS. Options granted pursuant to the Plan
("Options") shall be authorized by action of the Board of Directors of the
Company and may be either incentive stock options ("Incentive Stock Options")
meeting the requirements of Section 422 of the Code or non-statutory Options
which are not intended to meet the requirements of Section 422 of the Code. All
Options when granted are intended to be non-statutory Options, unless the
applicable Option Agreement (as defined below) explicitly states that the Option
is intended to be an Incentive Stock Option. If an Option is intended to be an
Incentive Stock Option, and if for any reason such Option (or any portion
thereof) shall not qualify as an Incentive Stock Option, then, to the extent of
such nonqualification, such Option (or portion thereof) shall be regarded as a
non-statutory Option appropriately granted under the Plan provided that such
Option (or portion thereof) otherwise meets the Plan's requirements relating to
non-statutory Options.
(b) ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company, whose construction and interpretation of the terms and
provisions of the Plan shall be final and conclusive. The Board of Directors may
in its sole discretion grant options to purchase shares of the Company's common
stock, $.01 par value ("Common Stock"), and issue shares upon exercise of such
Options as provided in the Plan. The Board shall have authority, subject to the
express provisions of the Plan, to construe the respective Option Agreements and
the Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the respective Option Agreements,
which need not be identical, and to make all other determinations in the
judgment of the Board of Directors necessary or desirable for the administration
of the Plan. The Board of Directors may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Option Agreement
in the manner and to the extent it shall deem expedient to carry the Plan into
effect and it shall be the sole and final judge of such expediency. No director
or person acting pursuant to authority delegated by the Board of Directors shall
be liable for any action or determination under the Plan made in good faith. The
Board of Directors may, to the full extent permitted by or consistent with
applicable laws or regulations (including, without limitation, applicable state
law, delegate any or all of its powers under the Plan to a committee (the
"Committee") appointed by the Board of Directors, and if the Committee is so
appointed all references to the Board of Directors in the Plan shall mean and
relate to such Committee.
3. ELIGIBILITY.
Options may be granted to persons who are, at the time of such grant,
employees, officers or directors of, or consultants or advisors to, the Company;
provided, that the class of persons to whom Incentive Stock Options may be
granted shall be limited to employees of the Company.
4. STOCK SUBJECT TO PLAN.
Subject to adjustment as provided in Section 14 below, the maximum
number of shares of Common Stock of the Company which may be issued under the
Plan is 150,000 shares. If an Option shall expire or terminate for any
<PAGE> 2
reason without having been exercised in full, the unpurchased shares subject to
such Option shall again be available for subsequent Option grants under the
Plan. If shares issued upon exercise of an Option are tendered to the Company in
payment of the exercise price of an Option, such tendered shares shall again be
available for subsequent Option grants under the Plan; provided that in no event
shall the total number of shares issued pursuant to the exercise of Incentive
Stock Options under the Plan, on a cumulative basis, exceed the number of shares
authorized for issuance under the Plan, exclusive of shares made available for
issuance pursuant to this sentence.
5. FORMS OF OPTION AGREEMENTS.
(a) OPTION AGREEMENT. As a condition to the grant of an Option,
each recipient of an Option shall execute an option agreement ("Option
Agreement") in such form not inconsistent with the Plan as may be approved by
the Board of Directors. Such Option Agreements may differ among recipients.
(b) "STAND-OFF" AGREEMENT. Unless the Board of Directors specifies
otherwise, each Option Agreement shall provide that upon the request of the
Company or the managing Underwriter(s), the holder of any Option shall, in
connection with an initial public offering of the Company's common stock, agree
in writing that for a period of time (not to exceed 180 days) from the effective
date of the Securities and Exchange Commission registration statement for such
offering, the holder or purchaser will not sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any shares of the
Company's common stock owned or controlled by him.
6. PURCHASE PRICE.
(a) GENERAL. The purchase price per share of stock deliverable
upon the exercise of an Option shall be determined by the Board of Directors,
PROVIDED, HOWEVER, that in the case of an Incentive Stock Option, the exercise
price shall not be less than 100% of the fair market value of such stock, as
determined by the Board of Directors at the time of grant of such Option, or
less than 110% of such fair market value in the case of Options described in
Section 11(b).
(b) PAYMENT OF PURCHASE PRICE. Option Agreements may provide for
the payment of the exercise price by delivery of cash or a check to the order of
the Company in an amount equal to the exercise price of such Options, or, to the
extent provided in the applicable Option Agreement, (i) by delivery to the
Company of shares of Common Stock of the Company then owned by the optionee
having a fair market value equal in amount to the exercise price of the Options
being exercised, (ii) by any other means (including, without limitation, by
delivery of a promissory note of the optionee payable on such terms as are
specified by the Board of Directors) which the Board of Directors determines are
consistent with the purpose of the Plan and with applicable laws and
regulations, or (iii) by any combination of such methods of payment. The fair
market value of any shares of the Company's Common Stock or other non-cash
consideration which may be delivered upon exercise of an Option shall be
determined by the Board of Directors.
7. OPTION PERIOD.
Each Option and all rights thereunder shall expire on such date as
shall be set forth in the applicable Option Agreement, PROVIDED that, in any
event, in the case of an Incentive Stock Option, such date shall not be later
than 10 years after the date on which the Option is granted (or five years in
the case of Options described in Section 11(b)) and, in the case of
non-statutory Options, not later than 10 years after the dates on which the
Option is granted, and, in either case, shall be subject to earlier termination
as provided in the Plan.
8. EXERCISE OF OPTIONS.
Each Option shall be exercisable either in full or in installments at
such time or times and during such period as shall be set forth in the agreement
evidencing such Option, subject to the provisions of the Plan.
9. NONTRANSFERABILITY OF OPTIONS.
<PAGE> 3
No Option shall be assignable or transferable by the person to whom it
is granted, either voluntarily or by operation of law, except by will or the
laws of descent and distribution. During the life an optionee, an Option held by
him or her shall be exercisable only by the optionee. Notwithstanding the
foregoing, non-statutory Options may be transferred pursuant to a qualified
domestic relations order (as defined in SEC Rule 16b-3).
10. EFFECT OF TERMINATION.
No Incentive Stock Option may be exercised unless, at the time of such
exercise, the optionee is, and has continuously since the date of grant of his
or her Incentive Stock Option, been employed by the Company except that, unless
the Option Agreement expressly provides otherwise:
(a) except as provided in paragraphs (b) and (c) below,
the Incentive Stock Option may be exercised within the period of thirty (30)
days after the date the optionee ceases to be an employee of the Company for any
reason other than termination of the optionee's employment voluntarily by the
optionee or by the Company for cause (as determined by the Company) or within
thirty (30) days after the optionee's retirement in good standing from the
Company for reasons of age under the then established rules of the Company;
(b) if the optionee dies while in the employ of the
Company, the Incentive Stock Option may be exercised by the person to whom it is
transferred by will or the laws of descent and distribution within the period of
one year after the date of death (or within such lesser period as may be
specified in the applicable Option Agreement); and
(c) if the optionee becomes disabled (within the meaning
of Section 22(e)(3) of the Code or any successor provision thereto) while in the
employ of the Company, the Incentive Stock Option may be exercised within the
period of one year after the date the optionee ceases to be such an employee
because of such disability (or within such lesser period as may be specified in
the applicable Option Agreement); PROVIDED, HOWEVER, that (i) any Incentive
Stock Option may only be exercised to the extent such Option was exercisable by
the optionee on the date of termination of the optionee's employment with the
Company and (ii) in no event may any Incentive Stock Option be exercised after
the expiration date of the Incentive Stock Option. For all purposes of the Plan
and any Incentive Stock Option granted hereunder, "employment" shall be defined
in accordance with the provisions of Section 1.421-7(h) of the Income Tax
Regulations (or any successor regulations).
Unless the applicable Option Agreement expressly provides otherwise, a
non-statutory Option granted to an employee shall be subject to the foregoing
provisions of this Section 10 as if it were an Incentive Stock Option, but a
non-statutory Option may also be exercised so long as the optionee maintains a
relationship with the Company as a director, consultant, or adviser.
11. INCENTIVE STOCK OPTIONS.
Options which are intended to be Incentive Stock Options shall be
subject to the following additional terms and conditions:
(a) EXPRESS DESIGNATION. All Incentive Stock Options shall, at the
time of grant, be specifically designated as such in the Option Agreement
covering such Incentive Stock Options.
(b) 10% SHAREHOLDER. If any employee to whom an Incentive Stock
Option is to be granted is, at the time of the grant of such Option, the owner
of stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company (after taking into account the attribution of
stock ownership rules of Section 424(d) of the Code), then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual:
(i) The purchase price per share of the Common Stock
subject to such Incentive Stock Option shall not be less than 110% of
the fair market value of one share of Common Stock at the time of
grant; and
<PAGE> 4
(ii) the option exercise period shall not exceed five
years from the date of grant.
(c) DOLLAR LIMITATION. For so long as the Code shall so provide,
Options granted to any employee under the Plan (and any other incentive stock
option plans of the Company) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
Options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate fair market value
(determined as of the respective date or dates of grant) of more than $100,000.
12. ADDITIONAL PROVISIONS.
(a) ADDITIONAL PROVISIONS. The Board of Directors may, in its sole
discretion, include additional provisions in Option Agreements, including
without limitation restrictions on transfer, rights of the Company to repurchase
shares of Common Stock acquired upon exercise of Options or rights of first
refusal of the Company with respect to such shares, commitments to pay cash
bonuses, to make, arrange for or guaranty loans or to transfer other property to
optionees upon exercise of Options, or such other provisions as shall be
determined by the Board of Directors; PROVIDED THAT such additional provisions
shall not be inconsistent with any other term or condition of the Plan and such
additional provisions shall not be such as to cause any Incentive Stock Option
to fail to qualify as an Incentive Stock Option within the meaning of Section
422 of the Code.
(b) ACCELERATION, EXTENSION, ETC. The Board of Directors may, in
its sole discretion, (i) accelerate the date or dates on which all or any
particular Option or Options may be exercised or (ii) extend the dates during
which all, or any particular, Option or Options may be exercised; PROVIDED,
HOWEVER, that no such extension shall be permitted if it would cause the Plan to
fail to comply with Section 422 of the Code.
13. RIGHTS AS A SHAREHOLDER.
The holder of an Option shall have no rights as a shareholder with
respect to any shares covered by the Option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.
14. ADJUSTMENT PROVISIONS FOR RECAPITALIZATIONS AND RELATED TRANSACTIONS.
(a) GENERAL. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased, decreased or exchanged for a different number or
kind of shares or other securities of the Company, or (ii) additional shares or
new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Common Stock or other
securities, an appropriate and proportionate adjustment may be made in (x) the
maximum number and kind of shares reserved for issuance under the Plan, (y) the
number and kind of shares or other securities subject to any then outstanding
Options, and (z) the price for each share subject to any then outstanding
Options, without changing the aggregate purchase price as to which such Options
remain exercisable. Notwithstanding the foregoing, no adjustment shall be made
pursuant to this Section 14 if such adjustment would cause the Plan to fail to
comply with Section 422 of the Code.
(b) BOARD AUTHORITY TO MAKE ADJUSTMENTS. Any adjustments under
this Section 14 will be made by the Board of Directors, whose determination as
to what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
15. MERGER, CONSOLIDATION, ASSET SALE, LIQUIDATION, ETC.
(a) GENERAL. In the event of a consolidation or merger or sale of
all or substantially all of the stock or assets of the Company in which
outstanding shares of Common Stock are exchanged for securities, cash or other
property of any other corporation or business entity or in the event of a
liquidation of the Company, the Board of
<PAGE> 5
Directors of the Company, or the board of directors of any corporation assuming
the obligations of the Company, may, in its discretion, take any one or more of
the following actions, as to some or all outstanding Options (and need not take
the same action as to each such Option: (i) provide that such Options shall be
assumed, or equivalent Options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), PROVIDED that any such Options
substituted for Incentive Stock Options shall meet the requirements of Section
424(a) of the Code, (ii) upon written notice to the optionees, provide that all
unexercised Options will terminate immediately prior to the consummation of such
transaction unless exercised by the optionee within a specified period following
the date of such notice, (iii) in the event of a merger under the terms of which
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment for each share surrendered in the merger (the "Merger
Price"), make or provide for a cash payment to the optionees equal to the
difference between (A) the Merger Price times the number of shares of Common
Stock subject to such outstanding Options (to the extent then exercisable at
prices not in excess of the Merger Price) and (B) the aggregate exercise price
of all such outstanding Options in exchange for the termination of such Options,
and (iv) provide that all or any outstanding Options shall become exercisable in
full immediately prior to such event.
(b) SUBSTITUTE OPTIONS. The Company may grant Options in
substitution for Options held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute Options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.
16. NO SPECIAL EMPLOYMENT RIGHTS.
Nothing contained in the Plan or in any Option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
17. OTHER EMPLOYEE BENEFITS.
The amount of any compensation deemed to be received by an employee as
a result of the grant or exercise of an Option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.
18. AMENDMENT OF THE PLAN.
(a) The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect, except that if at any time the approval
of the shareholders of the Company is required under Section 422 of the Code or
any successor provision with respect to Incentive Stock Options, the Board of
Directors may not effect such modification or amendment without such approval.
(b) The termination or any modification or amendment of the Plan
shall not, without the consent of an optionee, affect his or her rights under an
Option previously granted to him or her. With the consent of the optionee
affected, the Board of Directors may amend outstanding Option Agreements in a
manner not inconsistent with the Plan. The Board of Directors shall have the
right to amend or modify the terms and provisions of the Plan and of any
outstanding Incentive Stock Options to the extent necessary to qualify any or
all such Options for such favorable federal income tax treatment (including
deferral of taxation upon exercise) as may be afforded incentive stock options
under Section 422 of the Code.
19. WITHHOLDING.
<PAGE> 6
The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to issuance of any shares upon
exercise of Options. Subject to the prior approval of the Company, which may be
withheld by the Company in its sole discretion, the obligor may elect to satisfy
such obligations, in whole or in part, (i) by causing the Company to withhold
shares of Common Stock otherwise issuable or (ii) by delivering to the Company
shares of Common Stock already owned by the obligor. The shares so delivered or
withheld shall have a fair market value equal to such withholding obligation.
The fair market value of the shares used to satisfy such withholding obligation
shall be determined by the Company as of the date that the amount of tax to be
withheld is to be determined. A person who has made an election pursuant to this
Section 19 may only satisfy his or her withholding obligation with shares of
Common Stock which are not subject to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements.
20. EFFECTIVE DATE AND DURATION OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall become effective when adopted
by the Board of Directors, but no Incentive Stock Option shall become
exercisable unless and until the Plan shall have been approved by the Company's
shareholders. If such shareholder approval is not obtained within twelve months
after the date of the Board's adoption of the Plan, no Options previously
granted under the Plan shall be deemed to be Incentive Stock Options and no
Incentive Stock Options shall be granted thereafter. Amendments to the Plan not
requiring shareholder approval shall become effective when adopted by the Board
of Directors; amendments requiring shareholder approval (as provided in Section
18) shall become effective when adopted by the Board of Directors, but no
Incentive Stock Option granted after the date of such amendment shall become
exercisable (to the extent that such amendment to the Plan was required to
enable the Company to grant such Incentive Stock Option to a particular
optionee) unless and until such amendment shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any Incentive Stock
Options granted on or after the date of such amendment shall terminate to the
extent that such amendment to the Plan was required to enable the Company to
grant such Option to a particular optionee. Subject to this limitation, Options
may be granted under the Plan at any time after the effective date and before
the date fixed for termination of the Plan.
(b) TERMINATION. Unless sooner terminated in accordance with
Section 15 or by the Board of Directors the Plan shall terminate upon the close
of business on the day next preceding the tenth anniversary of the date of its
adoption by the Board of Directors. Options outstanding on such date shall
continue in force and effect in accordance with the provisions of the Plan and
those Option Agreements.
21. RESTRICTION ON TRANSFER OR EXERCISE TO PRESERVE THE COMPANY'S
S-CORPORATION STATUS.
In addition to any other restriction on the transfer or encumbrance of
Common Stock acquired upon exercise of an Option, no holder thereof may transfer
any shares of such Common Stock whether by sale, gift, bequest, operation of
law, or otherwise, if, in the opinion of legal counsel to the Company, transfer
might result in the termination of the Company's S-corporation status for any
reason (including by reason of creating more than the allowed number of
shareholders under Section 1361 of the Code). No such holder may encumber Common
Stock of the Company acquired upon exercise of any Option if, in the opinion of
legal counsel to the Company, a possible result thereof might be a subsequent
transfer prohibited under the immediately preceding sentence. Any such transfer
or encumbrance in violation of this Section 21 shall be null and void and shall
not be recognized on the books and records of the Company, and the holder making
the purported transfer shall retain the right to vote and receive distributions
and shall continue to report the share of income or loss allocated by the
Company to such holder for tax purposes.
No Option granted hereunder may be exercised if, in the opinion of
legal counsel to the Company, such exercise might result in termination of the
Company's S-corporation status for any reason (including by reason of creating
more than the allowed number of shareholders under Section 1361 of the Code),
except that this provision shall not postpone the right of exercise of any
Option beyond its expiration.
22. PROVISION FOR FOREIGN PARTICIPANTS.
<PAGE> 7
The Board of Directors may, without amending the Plan, modify the terms
of Option Agreements to differ from those specified in the Plan with respect to
participants who are foreign nationals or employed outside the United States to
recognize differences in laws, rules, regulations or customs of such foreign
jurisdictions with respect to tax, securities, currency, employee benefit or
other matters.
* * *
<PAGE> 1
EXHIBIT 5.1
November 1, 1999
Silknet Software, Inc.
50 Phillippe Cote Street
Manchester, New Hampshire 03101
Re: REGISTRATION STATEMENT ON FORM S-8 RELATING TO THE
INSITE MARKETING TECHNOLOGY, INC. 1997 STOCK OPTION PLAN (THE "PLAN")
---------------------------------------------------------------------
Ladies and Gentlemen:
Reference is made to the above-captioned Registration Statement on Form
S-8 (the "Registration Statement") filed by Silknet Software, Inc. (the
"Company") on the date hereof with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, relating to an aggregate of 83,283
shares of Common Stock, $.01 par value, of the Company issuable pursuant to the
Plan (the "Shares").
We have examined, are familiar with, and have relied as to factual matters
solely upon, a copy of the Plan, the Company's Certificate of Incorporation, the
Company's By-Laws, as amended, the minute books and stock records of the
Company, and originals or certified copies of such other certificates,
documents, records and materials as we have deemed necessary for the purpose of
rendering this opinion.
Based upon the foregoing, we are of the opinion that the Shares have been
duly authorized and, when issued and paid for in accordance with the terms of
the Plan, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Testa, Hurwitz & Thibeault, LLP
TESTA, HURWITZ & THIBEAULT, LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 19, 1999 relating to the
financial statements of Silknet Software, Inc. which appears in Silknet
Software, Inc.'s Annual Report on Form 10-K for the year ended June 30, 1999.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 1, 1999
