<PAGE> 1
As filed with the Securities and Exchange Commission on February 1, 2000
Registration No. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ACCRUE SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 94-3238684
(State of incorporation) (I.R.S. Employer Identification No.)
48634 MILMONT DRIVE
FREMONT, CA 94538-7353
(Address of principal executive offices)
----------------
MARKETWAVE CORPORATION
1997 STOCK OPTION PLAN
NEOVISTA SOFTWARE, INC.
1991 INCENTIVE STOCK OPTION PLAN
1991 NON-QUALIFIED STOCK OPTION PLAN
(Full title of the Plans)
----------------
RICHARD D. KREYSAR
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ACCRUE SOFTWARE, INC.
48634 MILMONT DRIVE
FREMONT, CA 94538-7353
(510) 580-4500
(Name, address and telephone number, including area code, of agent for service)
----------------
Copy to:
John V. Bautista
Venture Law Group
A Professional Corporation
2800 Sand Hill Road
Menlo Park, California 94025
(415) 854-4488
Page 1
Exhibit Index on Page 6
(Calculation of Registration Fee on following page)
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<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=======================================================================================================================
Proposed Proposed
Maximum Maximum Maximum Amount of
Amount to be Offering Price Aggregate Registration
Title of Securities to be Registered Registered(1) Per Share Offering Price Fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MARKETWAVE CORPORATION 1997 STOCK OPTION PLAN (1)
Common Stock,
$0.001 par value......................... 218,081 Shares $1.14(2) $248,613 $66
NEOVISTA SOFTWARE, INC. 1991 INCENTIVE STOCK
OPTION PLAN AND 1991 NON-QUALIFIED STOCK
OPTION PLAN (3)
Common Stock,
$0.001 par value......................... 546,749 Shares $4.15(2) $2,269,009 $599
TOTAL 764,830 Shares $2,517,622 $665
=======================================================================================================================
</TABLE>
- -----------------------
(1) Pursuant to the Agreement and Plan of Merger and Reorganization dated as of
September 14, 1999, among Registrant, Marketwave Acquisition Corp.,
Marketwave Corporation and the shareholders of Marketwave Corporation,
Registrant assumed, effective as of September 30, 1999, all of the
outstanding options to purchase Common Stock of Marketwave Corporation
under the Marketwave Corporation 1997 Stock Option Plan, and such options
became exercisable to purchase shares of Registrant's Common Stock, with
appropriate adjustments to the number of shares and exercise price of each
assumed option.
(2) Estimated in accordance with Rule 457(h) under the Securities Act of 1933
(the "Securities Act") solely for the purpose of calculating the
registration fee.
(3) Pursuant to the Agreement and Plan of Merger and Reorganization dated as of
November 17, 1999, among Registrant, NeoVista Acquisition Corporation and
NeoVista Software, Inc., Registrant assumed, effective as of January 14,
2000, all of the outstanding options to purchase Common Stock of NeoVista
Software, Inc. under the NeoVista Software, Inc. 1991 Incentive Stock
Option Plan and 1991 Non-Qualified Stock Option Plan, and such options
became exercisable to purchase shares of Registrant's Common Stock, with
appropriate adjustments to the number of shares and exercise price of each
assumed option.
2
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference:
(a) The Registrant's Registration Statement on Form S-1 filed with the
Commission on May 27, 1999 (as amended on July 2, 1999, July 20, 1999 and July
30, 1999) (File No. 333-79491).
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarters
ended June 30, 1999 and September 30, 1999.
(c) The Registrant's Current Reports on Form 8-K, filed with the
Commission on October 12, 1999 (as amended on November 15, 1999) and January 31,
2000.
All documents subsequently filed 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 hereby 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
part hereof from the date of filing such documents.
Item 4. DESCRIPTION OF SECURITIES. Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the common stock offered hereby will be passed upon for
the Registrant by Venture Law Group, A Professional Corporation, Menlo Park,
California. John V. Bautista, a director of Venture Law Group, is the secretary
of the Registrant. As of the date of this Registration Statement, certain
directors of Venture Law Group and an investment partnership affiliated with
Venture Law Group own 22,857 shares of the Registrant's common stock and hold
options to purchase 20,000 shares of the Registrant's common stock at an
exercise price of $8.00 per share.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation reduces the liability of
a director to the corporation or its shareholders for monetary damages for
breaches of his or her fiduciary duty of care to the fullest extent permissible
under Delaware law. The Bylaws of the Registrant further provide for
indemnification of corporate agents to the maximum extent permitted by the
Delaware General Corporation Law. In addition, the Registrant has entered into
Indemnification Agreements with its officers and directors.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
Item 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number
-------
<S> <C>
4.1 Marketwave Corporation 1997 Stock Option Plan
4.2 NeoVista Software, Inc. 1991 Incentive Stock Option Plan
4.3 NeoVista Software, Inc. 1991 Non-Qualified Stock Option
Plan
5.1 Opinion of Venture Law Group, a Professional Corporation.
23.1 Consent of Venture Law Group, a Professional Corporation
(included in Exhibit 5.1).
23.2 Consent of Independent Accountants
24.1 Powers of Attorney (see page 5)
</TABLE>
3
<PAGE> 4
Item 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement 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 purposes 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in 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.
Insofar as the 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 a successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereunder, the Registrant will, unless in the opinion of its counsel
the question has already been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of 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.
[Signature Page Follows]
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Accrue Software, Inc., a corporation organized and existing under
the laws of the State of Delaware, 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 Fremont, State of
California, on this 31st day of January, 2000.
Accrue Software, Inc.
By: /s/ RICHARD D. KREYSAR
--------------------------------------
Richard D. Kreysar
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Richard D. Kreysar and Gregory C. Walker,
jointly and severally, his or her attorneys-in-fact and agents, each with the
power of substitution and resubstitution, for him or her and in his or her name,
place or stead, in any and all capacities, to sign any amendments to this
Registration Statement on Form S-8, and to file such amendments, together with
exhibits and other documents in connection therewith, with the Securities and
Exchange Commission, granting to each attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully as he or she might or could do in
person, and ratifying and confirming all that the attorney-in-facts and agents,
or his or her substitute or substitutes, may 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/ Richard D. Kreysar President and Chief Executive Officer January 31, 2000
- ------------------------------------ (Principal Executive Officer)
Richard D. Kreysar
/s/ Gregory C. Walker Chief Financial Officer (Principal January 31, 2000
- ------------------------------------ Financial and Accounting Officer)
Gregory C. Walker
/s/ David Folkman Director January 28, 2000
- ------------------------------------
David Folkman
/s/ Max D. Hopper Director January 31, 2000
- ------------------------------------
Max D. Hopper
Director February __, 2000
- ------------------------------------
Steven T. Podradchik
/s/ A. Brooke Seawell Director January 31, 2000
- ------------------------------------
A. Brooke Seawell
/s/ Robert Smelick Director January 31, 2000
- ------------------------------------
Robert Smelick
</TABLE>
5
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
- -------
<S> <C>
4.1 Marketwave Corporation 1997 Stock Option Plan
4.2 NeoVista Software, Inc. 1991 Incentive Stock Option Plan
4.3 NeoVista Software, Inc. 1991 Non-Qualified Stock Option Plan
5.1 Opinion of Venture Law Group, a Professional Corporation
23.1 Consent of Venture Law Group, a Professional Corporation
(included in Exhibit 5.1).
23.2 Consent of Independent Accountants
24.1 Powers of Attorney (see page 5)
</TABLE>
6
<PAGE> 1
EXHIBIT 4.1
MARKETWAVE CORPORATION
1997 STOCK OPTION PLAN, AS AMENDED
Adopted by the Board of Directors and the Shareholders on August 19, 1997.
As amended by the Board of Directors on August 21, 1998 and February 3, 1999 and
approved by the Shareholders on February 5, 1999.
<PAGE> 2
MARKETWAVE CORPORATION
1997 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this 1997 Stock Option Plan
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or non-statutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means Marketwave Corporation, a Washington
corporation.
(g) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not, provided that if and in the event the
Company registers any class of any equity security pursuant to the Exchange Act,
the term Consultant shall thereafter not include directors who are not
compensated for their services or are paid only a director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" means the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Administrator, provided that
such leave is for a period of not more than ninety (90) days, unless
re-employment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the Company
or between the Company, its Subsidiaries or their respective
Adopted by the Board of Directors and the Shareholders on August 19, 1997.
As amended by the Board of Directors on August 21, 1998 and February 3, 1999 and
approved by the Shareholders on February 5, 1999.
<PAGE> 3
successors. For purposes of this Plan, a change in status from an Employee to a
Consultant or from a Consultant to an Employee will not constitute an
interruption of Continuous Status as an Employee or Consultant.
(i) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company, with the
status of employment determined based upon such minimum number of hours or
periods worked as shall be determined by the Administrator in its discretion,
subject to any requirements of the Code. The payment of a director's fee by the
Company to a director shall not be sufficient to constitute "employment" of such
director by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the fair market value
of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation System ("Nasdaq"), its Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no sales
were reported), as quoted on such system or exchange, or the exchange
with the greatest volume of trading in Common Stock for the last market
trading day prior to the time of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is quoted on the Nasdaq (but not on the
National Market thereof) or regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall
be the mean between the high bid and low asked prices for the Common
Stock for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith
by the Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable option agreement.
(m) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable option
agreement.
(n) "Option" means a stock option granted pursuant to the Plan.
(o) "Optioned Stock" means the Common Stock subject to an Option.
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<PAGE> 4
(p) "Optionee" means an Employee or Consultant who receives an
Option.
(q) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code, or any successor provision.
(r) "Plan" means this 1997 Stock Option Plan.
(s) "Reporting Person" means an officer, director, or greater than
ten percent (10%) shareholder of the Company within the meaning of Rule 16a-2
under the Exchange Act, who is required to file reports pursuant to Rule 16a-3
under the Exchange Act.
(t) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, as the same may be amended from time to time, or any successor provision.
(u) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(v) "Stock Exchange" means any stock exchange or consolidated stock
price reporting system on which prices for the Common Stock are quoted at any
given time.
(w) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code, or any successor
provision.
3. Stock Subject to the Plan. Subject to the provisions of Section 11
of the Plan, the maximum aggregate number of shares that may be optioned and
sold under the Plan is four million seven hundred fifty thousand (4,750,000)
shares of Common Stock. The shares may be authorized, but unissued, or
reacquired Common Stock. If an Option should expire or become unexercisable for
any reason without having been exercised in full, the unpurchased Shares that
were subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. In addition, any shares of Common
Stock which are retained by the Company upon exercise of an Option in order to
satisfy the exercise price for such Option or any withholding taxes due with
respect to such exercise shall be treated as not issued and shall continue to be
available under the Plan.
4. Administration of the Plan
(a) Initial Plan Procedure. Prior to the date, if any, upon which
the Company becomes subject to the Exchange Act, the Plan shall be administered
by the Board or a committee appointed by the Board.
(b) Plan Procedure After the Date, if any, Upon Which the Company
Becomes Subject to the Exchange Act.
(i) Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees or Consultants who are
not Reporting Persons.
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<PAGE> 5
(ii) Administration With Respect to Reporting Persons. With
respect to grants of Options to Employees who are Reporting Persons,
the Plan shall be administered by (A) the Board if the Board may
administer the Plan in compliance with Rule 16b-3 with respect to a
plan intended to qualify thereunder as a discretionary plan, or (B) a
committee designated by the Board to administer the Plan, which
committee shall be constituted in such a manner as to permit the Plan
to comply with Rule 16b-3 with respect to a plan intended to qualify
thereunder as a discretionary plan. Once appointed, such committee
shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the
size of the committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
committee and thereafter directly administer the Plan, all to the
extent permitted by Rule 16b-3 with respect to a plan intended to
qualify thereunder as a discretionary plan. No person serving as a
member of an Administrator that has authority with respect to grants to
Reporting Persons shall be eligible to receive any grant under the Plan
which would cause such member to cease to be "disinterested" within the
meaning of Rule 16b-3.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options to Employees or
Consultants who are not Reporting Persons, the Plan shall be
administered by (A) the Board or (B) a committee designated by the
Board, which committee shall be constituted in such a manner as to
satisfy the legal requirements relating to the administration of
incentive stock option plans, if any, of state corporate and securities
laws, of the Code and of any applicable Stock Exchange (the "Applicable
Laws"). Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to
time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however
caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable
Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, including the approval, if required, of any Stock Exchange, the
Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees to whom Options may
from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
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<PAGE> 6
(iv) to determine the number of shares of Common Stock to be
covered by each such option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any option granted hereunder;
(vii) to determine whether and under what circumstances an
Option may be settled in cash under Section 9(f) instead of Common
Stock;
(viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option
was granted;
(ix) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(x) in order to fulfill the purposes of the Plan and without
amending the Plan, to modify grants of Options to participants who are
foreign nationals or employed outside of the United States in order to
recognize differences in local law, tax policies or customs.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.
5. Eligibility
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he or she is
otherwise eligible, be granted additional Options.
(b) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares subject to an Incentive Stock Option shall be determined as
of the date of the grant of such Option.
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<PAGE> 7
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with such Optionee's right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 18 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement. However, in the case of an Option granted to
an Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement.
8. Option Exercise Price and Consideration
(a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option that is:
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee, the per Share exercise price
shall be no less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option that is:
(A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than one hundred ten percent (110%) of
the Fair Market Value per Share on the date of the grant.
(B) granted to any person, the per Share exercise price
shall be no less than eighty-five percent (85%) of the Fair Market Value per
Share on the date of grant.
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<PAGE> 8
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (i) cash, (ii)
check, (iii) promissory note, (iv) other Shares that (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender or such other period as may be required
to avoid a charge to the Company's earnings, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (v) authorization for the Company to
retain from the total number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value on the date of exercise equal to the
exercise price for the total number of Shares as to which the Option is
exercised, (vi) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price and any applicable
income or employment taxes, (vii) delivery of an irrevocable subscription
agreement for the Shares that irrevocably obligates the option holder to take
and pay for the Shares not more than twelve months after the date of delivery of
the subscription agreement, (8) any combination of the foregoing methods of
payment, or (9) such other consideration and method of payment for the issuance
of Shares to the extent permitted under Applicable Laws. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. Exercise of Option
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
-7-
<PAGE> 9
Exercise of an Option in any manner shall result in a decrease
in the number of Shares that thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment or Consulting Relationship. Subject to
Section 9(c), in the event of termination of an Optionee's Continuous Status as
an Employee or Consultant with the Company, such Optionee may, but only within
three (3) months (or such other period of time not less than thirty (30) days as
is determined by the Administrator, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the Option and not
exceeding three (3) months) after the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that the Optionee
was entitled to exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of such
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. No
termination shall be deemed to occur and this Section 9(b) shall not apply if
(i) the Optionee is a Consultant who becomes an Employee; or (ii) the Optionee
is an Employee who becomes a Consultant.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of an Optionee's Continuous
Status as an Employee or Consultant as a result of his or her total and
permanent disability (within the meaning of Section 22(e)(3) of the Code),
Optionee may, but only within twelve (12) months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. To the extent
that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee
during the period of Continuous Status as an Employee or Consultant, or within
thirty (30) days following the termination of the Optionee's Continuous Status
as an Employee or Consultant, the Option may be exercised, at any time within
six (6) months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the
Optionee was entitled to exercise the Option at the date of death or, if
earlier, the date of termination of the Continuous Status as an Employee or
Consultant. To the extent that Optionee was not entitled to exercise the Option
at the date of death or termination, as the case may be, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
(e) Rule 16b-3. Options granted to Reporting Persons shall comply
with Rule 16b-3 and shall contain such additional conditions or restrictions as
may be required thereunder to qualify for the maximum exemption for Plan
transactions.
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<PAGE> 10
(f) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
10. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (a) by cash payment, or (b) out of Optionee's current
compensation, (c) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares that (i) in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six (6)
months on the date of surrender, and (ii) have a fair market value on the date
of surrender equal to or less than Optionee's marginal tax rate times the
ordinary income recognized, or (d) by electing to have the Company withhold from
the Shares to be issued upon exercise of the Option, if any, that number of
Shares having a fair market value equal to the amount required to be withheld.
For this purpose, the fair market value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").
Any surrender by a Reporting Person of previously owned Shares
to satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
All elections by an Optionee to have Shares withheld to satisfy
tax withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax
Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator;
(d) if the Optionee is a Reporting Person, the election must comply
with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under
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<PAGE> 11
Section 83(b) of the Code, the Optionee shall receive the full number of Shares
with respect to which the Option is exercised but such Optionee shall be
unconditionally obligated to tender back to the Company the proper number of
Shares on the Tax Date.
11. Adjustments Upon Changes in Capitalization; Corporate Transactions
(a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock that have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or that have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per share of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination, recapitalization or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; 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 Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Administrator. The Administrator may, in the exercise of its sole discretion
in such instances, declare that any Option shall terminate as of a date fixed by
the Administrator and give each Optionee the right to exercise his or her Option
as to all of the Optioned Stock, including Shares as to which the Option would
not otherwise be exercisable.
(c) Acquisition, Merger or Change in Control
In the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger of the Company with or into another
corporation, or other change in control (a "Change in Control"), the
exercisability of each outstanding Option shall automatically be accelerated
completely so that one hundred percent (100%) of the number of shares of Common
Stock covered by such Option shall be fully vested upon the consummation of the
Change in Control; provided, however, that a transaction for the purpose of
reincorporation in another jurisdiction or change of corporate form shall not
constitute a Change of Control for purposes of this Plan.
12. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised or purchased
during the lifetime of the Optionee, only by the Optionee.
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<PAGE> 12
13. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
14. Amendment and Termination of the Plan
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made that would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 or with Section 422
of the Code (or any other applicable law or regulation, including the
requirements of any Stock Exchange), the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to such a degree as
required.
(b) Effect of Amendment or Termination. No amendment or termination
of the Plan shall adversely affect Options already granted, unless mutually
agreed otherwise between the Optionee and the Board, which agreement must be in
writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any Stock Exchange.
As a condition to the exercise of an Option, the Company may
require the person exercising such Option 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 law.
16. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
17. Agreements. Options shall be evidenced by written agreements in
such form as the Administrator shall approve from time to time.
18. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is
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<PAGE> 13
adopted. Such shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law and the rules of any Stock
Exchange upon which the Common Stock is listed. All Options issued under the
Plan shall become void in the event such approval is not obtained.
19. Information to Optionees. To the extent required by Applicable
Laws, the Company shall provide financial statements at least annually to each
Optionee during the period such Optionee has one or more Options outstanding.
The Company shall not be required to provide such information if the issuance of
Options under the Plan is limited to key employees whose duties in connection
with the Company assure their access to equivalent information.
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<PAGE> 1
EXHIBIT 4.2
NEOVISTA SOFTWARE, INC.
1991 INCENTIVE STOCK OPTION PLAN
(AMENDED AS OF JULY 1999)
I. PURPOSE
A. This 1991 Incentive Stock Option Plan (the "Plan") is an equity
incentive program which is intended to promote the interests of NeoVista
Software, Inc. (the "Corporation") by providing employees (including officers
and directors) of the Corporation (or its parent or subsidiary corporations) who
are responsible for the management, growth and financial success of the
Corporation (or its parent or subsidiary corporations) with the opportunity to
acquire a proprietary interest, or increase their proprietary interest, in the
Corporation and thereby encourage them to remain in the service of the
Corporation (or its parent or subsidiary corporations).
B. For purposes of the Plan, the following provisions shall be
applicable in determining the parent and subsidiary corporations of the
Corporation:
(i) Any corporation (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation shall be considered
to be a parent corporation of the Corporation, provided each such
corporation in the unbroken chain (other than the Corporation) owns, at
the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
(ii) Each corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation shall be
considered to be a subsidiary of the Corporation, provided each such
corporation (other than the last corporation) in the unbroken chain
owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
II. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board of Directors (the
"Board") of the Corporation. The Board, however, may at any time appoint a
committee ("Committee") of two (2) or more members of the Board and delegate to
such Committee one or more of the administrative powers allocated to the Board
pursuant to the provisions of the Plan. Members of the Committee shall serve for
such period of time as the Board may determine and shall be subject to removal
by the Board at any time. The Board may also at any time terminate the functions
of the Committee and reassume all powers and authority previously delegated to
the Committee.
Adopted by the Board of Directors and the Shareholders on August 19, 1997.
As amended by the Board of Directors on August 21, 1998 and February 3, 1999 and
approved by the Shareholders on February 5, 1999.
<PAGE> 2
B. The Plan Administrator (either the Board or the Committee, to
the extent the Committee is at the time responsible for the administration of
the Plan) shall have full power and authority (subject to the provisions of the
Plan) to establish such rules and regulations as it may deem appropriate for the
proper administration of the Plan and to make such determinations under, and
issue such interpretations of, the Plan and any outstanding option grants as it
may deem necessary or advisable. Decisions of the Plan Administrator shall be
final and binding on all parties who have an interest in the Plan or any
outstanding option.
C. The Plan Administrator shall have complete discretion (subject
to the express provisions of the Plan) to determine the employees who are to be
granted options from time to time under the Plan, the number of shares which are
to purchasable under each granted option, the time or times at which the option
is to become exercisable, the vesting schedule (if any) which is to be in effect
for the shares purchased under the option, and the maximum term for which the
grant is to remain outstanding.
III. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired common stock ("Common
Stock"). The maximum number of shares which may be issued over the term of the
Plan shall not exceed 8,214,396 shares, less any and all shares of Common Stock
(whether vested or unvested) issued under the Corporation's 1991 Non-Qualified
Stock Option/Stock Issuance Plan (the "Non-Qualified Plan"). The total number of
shares issuable under the Plan shall be subject to adjustment from time to time
in accordance with the provisions of paragraph C. below.
B. Should an option granted under either this Plan or the
Non-Qualified Plan expire or terminate for any reason prior to exercise or
surrender in full (including options cancelled in accordance with the
cancellation-regrant provisions of this Plan or the Non-Qualified Plan), the
shares subject to the portion of the option not so exercised or surrendered
shall be available for subsequent option grants under either this Plan (subject
to the share-issuance limitation of paragraph A. above) or the Non-Qualified
Plan. Shares issued under either this Plan or the Non-Qualified Plan (whether as
vested or unvested shares) which are repurchased by the Corporation shall not be
available for subsequent issuance under this Plan.
C. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock dividend, stock split, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
shall be made to (i) the maximum number and/or class of shares issuable under
the Plan and (ii) the aggregate number and/or class of shares and the option
price per share of the Common Stock subject to each outstanding option in order
to prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.
D. Common Stock issuable under the Plan may be subject to such
restrictions on transfer, repurchase rights or other restrictions as may be
determined by the Plan Administrator.
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<PAGE> 3
IV. ELIGIBILITY
Any and all employees (including officers and directors) of the
Corporation (or its parent or subsidiary corporations) shall be eligible to
receive option grants from time to time under the Plan.
V. TERMS AND CONDITIONS OF OPTIONS
A. All options granted the Plan shall be structured to qualify as
incentive stock options under Section 422 of the Internal Revenue Code (the
"Code").
B. Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator. Each granted option shall be evidenced by one
or more instruments in the form approved by the Plan Administrator; provided,
however, that each such instrument (the "Option Agreement") shall comply with
and incorporate the terms and conditions specified below.
1. Option Price.
a. The option price per share of the Common Stock subject to
each granted option shall in no event be less than one hundred percent (100%) of
the fair market value per share of such Common Stock on the grant date.
b. The aggregate fair market value (determined as of the
respective date or dates of grant) of the Common Stock for which one or more
options granted to any one Employee under this Plan (or any other option plan of
the Corporation or its parent or subsidiary corporations) may for the first time
become exercisable as incentive stock options under the Federal tax laws during
any one calendar year shall not exceed the sum of One Hundred Thousand Dollars
($100,000.00). To the extent the Employee holds two or more such options which
become exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability thereof as incentive stock options under the
Federal tax laws shall be applied on the basis of the chronological order in
which such options are granted. Should such limitation be exceeded, the excess
shares purchased under such option or options shall be taxed under the Code as
shares acquired under a non-qualified or non-statutory option.
c. If any individual to whom an option is to be granted
pursuant to the provisions of the Plan is at the time the owner of stock (as
determined under Section 424(d) of the Internal Revenue Code) possessing 10% or
more of the total combined voting power of all classes of stock of the
Corporation or any one of its parent or subsidiary corporations ("10%
Stockholder"), then the option price per share shall not be less than one
hundred ten percent (110%) of the fair market value per share of Common Stock on
the grant date.
d. The option price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Article X, be
payable in cash or cash equivalent such as a personal check or bank draft.
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<PAGE> 4
e. Provided the Corporation is at the time a reporting
company under Section 12(g) of the Securities Exchange Act of 1934, the option
price will also be payable in one of the alternative forms specified below (to
the extent provided in the Option Agreement):
(i) Full payment in shares of Common Stock held by the
optionee for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and valued at
fair market value on the Exercise Date (as such term is defined below);
or
(ii) Full payment through a combination of shares of
Common Stock held by the optionee for the requisite period necessary to
avoid a charge to the Corporation's earnings for financial reporting
purposes and valued at fair market value on the Exercise Date and cash
or cash equivalents;
(iii) Full payment through a special sale and remittance
procedure pursuant to which the Optionee is to provide irrevocable
written instructions (a) to a designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation,
out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Option Price payable for the purchased
shares plus all applicable Federal and State income and employment
taxes required to be withheld by the Corporation by reason of such
purchase and (b) concurrently to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm
in order to effect the sale transaction.
For purposes of this subparagraph e., the Exercise Date shall be the date on
which the Corporation shall have received written notice of the exercise of the
option. Except to the extent the sale and remittance procedure is utilized in
connection with the exercise of the option, payment of the option price must
accompany the written notice of the exercise delivered to the Corporation.
f. For purposes of subparagraphs a. through e. above (and for
all other valuation purposes under the Plan), the fair market value per share of
Common Stock on any relevant date shall be determined in accordance with the
following provisions:
(i) If the Common Stock is not at the time listed or
admitted to trading on any stock exchange but is traded on the NASDAQ
National Market System, the fair market value shall be the closing
selling price of one share of Common Stock on the date in question, as
such price is reported by the National Association of Securities
Dealers through its NASDAQ system or any successor system. If there is
no closing selling price for the Common Stock on the date in question,
then the closing selling price on the last preceding date for which
such quotation exists shall be determinative of fair market value.
(ii) If the Common Stock is at the time listed or admitted
to trading on any stock exchange, then the fair market value shall be
the closing
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<PAGE> 5
selling price per share of Common Stock on the date in question on the
stock exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no
reported sale of Common Stock on such exchange on the date in question,
then the fair market value shall be the closing selling price on the
exchange on the last preceding date for which such quotation exists.
(iii) If the Common Stock is at the time neither listed
nor admitted to trading on any stock exchange nor traded in the
over-the-counter market, then the fair market value shall be determined
by the Plan Administrator after taking into account such factors as the
Plan Administrator shall deem appropriate.
2. Term and Exercise of Options. Each option granted under the
Plan shall be exercisable at such time or times, during such period, and for
such number of shares as shall be determined by the Plan Administrator and set
forth in the Option Agreement. In no event, however, shall any option granted
under the Plan have a term in excess of ten (10) years from the grant date, and
no option granted to a 10% Stockholder shall have a term in excess of five (5)
years from the grant date. During the lifetime of the optionee, the option shall
be exercisable only by the optionee and shall not be assignable or transferable
by the optionee otherwise than by will or by the laws of descent and
distribution.
3. Effect of Termination of Employment.
a. Should the optionee cease to remain in Service for any
reason (including death or permanent disability as defined in Section 22(e)(3)
of the Internal Revenue Code) while the holder of one or more outstanding
options under the Plan, then each such option shall not (except to the extent
otherwise provided pursuant to Article IX) remain exercisable for more than the
limited period of time (following the date of such cessation of Service)
specified by the Plan Administrator in the relevant Option Agreement. In no
event, however, shall any such option be exercisable after the specified
expiration date of the option term. Each such option shall, during such limited
period, be exercisable only to the extent of the number of shares (if any) for
which the option is exercisable on the date of the optionee's cessation of
Service. Upon the expiration of such period or (if earlier) upon the expiration
of the option term, the option shall terminate and cease to be exercisable.
b. Any option held by the optionee under the Plan at the time
of his/her death may be subsequently exercised, but only to the extent of the
number of shares (if any) for which the option is exercisable on the date of the
optionee's cessation of Service, by the personal representative of the
optionee's estate or by the person or persons to whom the option is transferred
pursuant to the optionee's will or in accordance with the laws of descent and
distribution, provided and only if such exercise occurs prior to the earlier of
(i) the first anniversary of the date of the optionee's death (or such shorter
period as is specified by the Plan Administrator in the Option Agreement) or
(ii) the specified expiration date of the option term. Upon the occurrence of
the earlier event, the option shall terminate and cease to be exercisable.
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<PAGE> 6
c. For purposes of the foregoing provisions of this
subsection 3 (and for all other purposes under the Plan), unless it is expressly
provided otherwise in the relevant Option Agreement evidencing the grant or in
the purchase agreement evidencing the purchase of the option shares, the
optionee shall be deemed to continue in Service for so long as such individual
renders services on a periodic basis to the Corporation (or any parent or
subsidiary corporation) in the capacity of an Employee. The optionee shall be
considered to be an Employee for so long as such individual remains in the
common-law employ of the Corporation or one or more of its parent or subsidiary
corporations.
4. Stockholder Rights. The optionee shall have none of the
rights of a stockholder with respect to any shares covered by the option until
such optionee shall have exercised the option and paid the option price for the
purchased shares.
5. Repurchase Rights. The shares of Common Stock acquired upon
the exercise of options granted under the Plan may be subject to one or more
repurchase rights of the Corporation in accordance with the following
provisions:
a. The Plan Administrator may in its discretion determine
that it shall be a term and condition of one or more options exercised under the
Plan that the Corporation (or its assignees) shall have the right, exercisable
upon the optionee's cessation of Service, to repurchase at the option price all
or (at the discretion of the Corporation and with the consent of the optionee)
part of any unvested shares of Common Stock held at the time by the optionee as
a result of one or more prior exercises of such option. The repurchase right
shall be exercisable by the Corporation (or its assignees) upon such terms and
conditions (including the establishment of the appropriate vesting schedule and
other provision for the expiration of such right in one or more installments
over the optionee's period of Service) as the Plan Administrator may specify in
the instrument evidencing such right.
b. In no event may the Plan Administrator impose a vesting
schedule upon any option granted under the Plan or upon any shares of Common
Stock issued under the Plan which is more restrictive than 20% per year annual
vesting, beginning one year after the grant date of the option.
c. All of the Corporation's outstanding repurchase rights
shall automatically terminate upon the occurrence of any Corporate Transaction
under Section VII, except to the extent: (i) the Corporation's outstanding
repurchase rights are to be assigned to the successor corporation (or parent
thereof) in connection with the Corporate Transaction or (ii) the termination of
such repurchase rights are precluded by other limitations imposed by the Plan
Administrator at the time of the option grant.
d. Until such time as the Corporation's outstanding shares of
Common Stock are first registered under Section 12(g) of the 1934 Act, the
Corporation shall have the right of first refusal with respect to any proposed
sale or other disposition by the optionee (or any successor in interest by
reason of purchase, gift or other mode of transfer) of any shares of Common
Stock issued under the Plan. Such right of first refusal shall be
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<PAGE> 7
exercisable by the Corporation (or its assignees) in accordance with the terms
and conditions established by the Plan Administrator and set forth in the
instrument evidencing such right.
VI. STOCK APPRECIATION RIGHTS
A. Provided and only if the Plan Administrator determines in its
discretion to implement the stock appreciation right provisions of this Article
VI., one or more optionees may be granted the right, exercisable upon such terms
and conditions as the Plan Administrator may establish at the time of the option
grant or at any time thereafter, to surrender all or part of an unexercised
option under the Plan in exchange for a distribution from the Corporation equal
in amount to the excess of (i) the fair market value (at date of surrender) of
the number of shares in which the optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (ii) the aggregate
option price payable for such vested shares.
B. No surrender of an option shall be effective hereunder unless it
is approved by the Plan Administrator. If the surrender is so approved, then the
distribution to which the optionee shall accordingly become entitled under this
Article VI. may be made in shares of Common Stock valued at fair market value at
date of surrender, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.
VII. CORPORATE TRANSACTION
A. In the event of any of the following transactions ("Corporate
Transaction"):
(i) a merger or acquisition in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of
which is to change the State of the Corporation's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation; or
(iii) any reverse merger in which the Corporation is the
surviving entity but in which fifty percent (50%) or more of the
Corporation's outstanding voting stock is transferred to persons
different from those who held the stock immediately prior to such
merger, then each option at the time outstanding under the Plan shall
terminate upon the consummation of such Corporate Transaction and cease
to be exercisable, unless assumed by the successor corporation or
parent thereof.
B. If the Corporation is the surviving entity in any Corporate
Transaction or the outstanding options under the Plan are to be assumed in
connection with such Corporate Transaction, then each continuing or assumed
option shall, immediately after such Corporate Transaction, be appropriately
adjusted to apply and pertain to the number and class of securities which would
have been issuable to the optionee, in consummation of such Corporate
Transaction, had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the option price
payable per share, provided the
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<PAGE> 8
aggregate option price payable for such securities shall remain the same. In
addition, the class and number of securities available for issuance under the
Plan following the consummation of such Corporate Transaction shall be
appropriately adjusted.
C. The grant of options under this Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
VIII. CANCELLATION AND NEW GRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or different
numbers of shares of Common Stock but having an option price per share not less
than one hundred percent (100%) of the fair market value per share of Common
Stock on the new grant date or, in the case of a 10% Stockholder, not less than
one hundred and ten percent (110%) of such fair market value.
IX. EXTENSION OF EXERCISE PERIOD
The Plan Administrator shall have full power and authority to
extend (either at any time while the option is granted or at the time while the
option remains outstanding) the period of time for which the option is to remain
exercisable following the optionee's cessation of Service from the limited
period specified in the Option Agreement to such greater period of time as the
Plan Administrator shall deem appropriate; provided, however, that in no event
shall such option be exercisable after the specified expiration date of the
option term.
X. PLAN LOANS
A. The Plan Administrator may assist any optionee (including any
optionee who is an officer or director of the Corporation) in the exercise of
one or more options granted to such optionee under the Plan, including the
satisfaction of any Federal and State income and employment tax obligations
arising therefrom, by (i) authorizing the extension of a loan from the
Corporation to such optionee or (ii) permitting the optionee to pay the option
price in installments over a period of years. The terms of any loan or
installment method of payment (including the interest rate and terms of
repayment) shall be established by the Plan Administrator in its sole
discretion. Loans or installment payments may be granted with or without
security or collateral, but the maximum credit available to the optionee may not
exceed the sum of (A) the aggregate option price payable for the acquired shares
(less the par value of such shares) plus (B) any Federal and State income and
employment tax liability incurred by the optionee in connection with such
exercise or issuance.
B. The Plan Administrator may, in its absolute discretion,
determine that one or more loans extended under the Plan shall be subject to
forgiveness by the Corporation in
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<PAGE> 9
whole or in part upon such terms and conditions as the Plan Administrator may in
its discretion deem appropriate.
XI. AMENDMENT OF THE PLAN AND AWARDS
A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever; provided,
however, that no such amendment or modification shall adversely affect the
rights and obligations of an optionee with respect to options at the time
outstanding under the Plan, nor adversely affect the rights of any holder of
unvested Common Stock issued under the Plan prior to such action, unless such
individual consents to such amendment; and provided further, that the Board
shall not, without the approval of the Corporation's stockholders, amend the
Plan to (i) materially increase the maximum number of shares issuable under the
Plan (except for permissible adjustments under Article III.C), (ii) materially
increase the benefits accruing to individuals who participate in the Plan, or
(iii) materially modify the eligibility requirements for participation in the
Plan.
B. Options to purchase shares of Common Stock may be granted under
the Plan in excess of shares then available for issuance under the Plan,
provided (i) an amendment to increase the maximum number of shares issuable
under the Plan is adopted by the Board prior to the initial grant of any such
option or the issuance of any such shares and is thereafter submitted to the
Corporation's stockholders for approval and (ii) any excess shares actually
issued under the Plan are held in escrow until such stockholder approval is
obtained. If such stockholder approval is not obtained within twelve (12) months
after the date the share-increase amendment is adopted by the Board, then any
unexercised options granted on the basis of such increase shall terminate and
cease to be exercisable, and the Corporation shall promptly refund the option
price paid for any excess shares issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow.
XII. EFFECTIVE DATE AND TERM OF PLAN
A. This Plan was initially adopted by the Board in June 1990 and
was ratified by the Corporation's stockholders in July 1990. The Plan was
subsequently amended by the Board at various dates to increase the total number
of shares issuable thereunder to a total of 8,214,396. This restatement of the
Plan is effective as of June 1999, the date the restatement was adopted by the
Board. However, no stock option or stock appreciation right granted on the basis
of any share-increase shall become exercisable, and no shares shall be issued on
the basis of such share-increase, unless and until such increase shall have been
approved by the Corporation's stockholders. If such stockholder approval is not
obtained within twelve (12) months after the date of the Board's adoption of an
increase, then all stock options and stock appreciation rights previously
granted on the basis of such share-increase shall terminate and no further stock
options or stock appreciation rights shall be granted on the basis of such
share-increase. Subject to such limitation, the Plan Administrator may grant
stock options and stock appreciation rights under the Plan at any time after the
effective date and before the date fixed herein for termination of the Plan.
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B. The sale and remittance procedure authorized for the exercise of
outstanding options under this Plan shall be available for all options granted
under this Plan on or after July 10, 1992. The Plan Administrator may also allow
such procedure to be utilized in connection with one or more disqualifying
dispositions of Incentive Option shares effected after July 10, 1992.
C. The Plan shall in all events terminate upon the earlier of (i)
the tenth (10th) anniversary of the date of its adoption by the Board or (ii)
the date on which all shares available for issuance under the Plan shall have
been issued or cancelled pursuant to the exercise or surrender of stock options
and/or stock appreciation rights under the Plan. If the date of termination is
determined under clause (i) above, then any stock options, stock appreciation
rights and unvested shares at the time outstanding under the Plan shall continue
to have force and effect in accordance with the provisions of the instruments
evidencing such grants or issuances.
XIII. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the issuance of
shares of Common Stock hereunder shall be used for general corporate purposes.
XIV. WITHHOLDING
The Corporation's obligation to deliver shares upon the exercise or
surrender of any options granted under the Plan shall be subject to the
satisfaction of all applicable Federal, State and local income and employment
tax withholding requirements.
XV. REGULATORY APPROVALS
The implementation of the Plan, the granting of any options under
the Plan, and the issuance of Common Stock upon the exercise or surrender of the
option grants made hereunder shall be subject to the Corporation's procurement
of all approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the options granted under it, and the Common Stock
issued pursuant to it.
XVI. FINANCIAL REPORTS
The Corporation shall deliver a balance sheet and an income
statement at least annually to each individual holding an outstanding option
under the Plan, unless the optionee is a key employee whose duties in connection
with the Corporation assures such employee access to equivalent information.
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EXHIBIT 4.3
NEOVISTA SOFTWARE, INC.
1991 NON-QUALIFIED STOCK OPTION/STOCK ISSUANCE PLAN
(AMENDED AS OF JULY 2, 1991)
ARTICLE I
GENERAL PROVISIONS
1. PURPOSE.
A. This 1991 Non-Qualified Stock Option/Stock Issuance Plan (the
"Plan") is a new equity incentive program which is to serve as the successor to
the NeoVista Software, Inc. Restricted Stock Purchase Plan (the "Predecessor
Plan"). The Plan is intended to promote the interests of NeoVista Software, Inc.
(the "Corporation") by providing (i) employees (including officers and
directors) of the Corporation (or its parent or subsidiary corporations) and
(ii) consultants and independent contractors who provide valuable services to
the Corporation (or its parent or subsidiary corporations) with the opportunity
to acquire a proprietary interest, or increase their proprietary interest, in
the Corporation and thereby encourage them to remain in the service of the
Corporation (or its parent or subsidiary corporations).
B. For purposes of the Plan, the following provisions shall be
applicable in determining the parent and subsidiary corporations of the
Corporation:
(i) Any corporation (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation shall be considered to be a
parent corporation of the Corporation, provided each such corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
(ii) Each corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation shall be considered to be a
subsidiary of the Corporation, provided each such corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
2. STRUCTURE OF THE PLAN.
A. The Plan shall be divided into two separate components: the
Option Grant Program specified in Article II and the Stock Issuance Program
specified in Article III. Under the Option Grant Program, eligible individuals
may be granted options to purchase shares of the Corporation's Common Stock at a
discount of up to 15% of the fair market value of such shares on the grant date.
Adopted by the Board of Directors and the Shareholders on August 19, 1997.
As amended by the Board of Directors on August 21, 1998 and February 3, 1999 and
approved by the Shareholders on February 5, 1999.
<PAGE> 2
B. The Stock Issuance Program shall allow eligible individuals to
acquire shares of the Corporation's Common Stock at discounts from the fair
market value of such shares of up to 15%. Such shares may be fully-vested when
issued or may vest over time.
C. The provisions of Articles I and IV of the Plan shall apply to
both the Option Grant Program and the Stock Issuance Program and shall
accordingly govern the interests of all individuals in the Plan.
3. ADMINISTRATION OF THE PLAN.
A. The Plan shall be administered by the Board of Directors (the
"Board") of the Corporation. The Board, however, may at any time appoint a
committee ("Committee") of three (3) or more members of the Board and delegate
to such Committee one or more of the administrative powers allocated to the
Board pursuant to the provisions of the Plan. Members of the Committee shall
serve for such period of time as the Board may determine and shall be subject to
removal by the Board at any time. The Board may also at any time terminate the
functions of the Committee and reassume all powers and authority previously
delegated to the Committee.
B. The Plan Administrator (either the Board or the Committee, to the
extent the Committee is at the time responsible for the administration of the
Plan) shall have full power and authority (subject to the provisions of the
Plan) to establish such rules and regulations as it may deem appropriate for the
proper administration of the Plan and to make such determinations under, and
issue such interpretations of, the Plan and any outstanding option grants or
share issuances as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in
the Plan or any outstanding option or share issuance.
4. OPTION GRANTS AND SHARE ISSUANCES.
A. Eligibility for share issuances under the Stock Issuance Program
or option grants pursuant to the Option Grant Program shall be limited to the
following individuals:
(i) any and all employees (including officers and directors) of
the Corporation (or its parent or subsidiary corporations); and
(ii) consultants and other independent contractors who provide
valuable services to the Corporation (or its parent or subsidiary corporations).
B. The Plan Administrator shall have full authority to determine:
(i) with respect to the option grants made under the Plan, the
eligible individuals who are to receive option grants, the number of shares to
be covered by each such grant, the time or times at which each granted option is
to become exercisable, the vesting schedule (if any) which is to be in effect
for the shares purchased under such option and the maximum term for which the
option may remain outstanding, and
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<PAGE> 3
(ii) with respect to share issuances under the Stock Issuance
Program, the number of shares to be issued to each Recipient, the vesting
schedule (if any) to be applicable to the issued shares, and the consideration
to be paid by the individual for such shares.
C. The Plan Administrator shall have the absolute discretion either
to grant options in accordance with Article II of the Plan or to effect share
issuances in accordance with Article III of the Plan.
5. STOCK SUBJECT TO THE PLAN.
A. The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired common stock ("Common
Stock"). The maximum number of shares which may be issued over the term of the
Plan shall not exceed the sum of (i) 2,250,000 shares of Common Stock plus (ii)
the number of shares of Common Stock available for issuance, as of the June 8,
1990 adoption date of this Plan, under the Predecessor Plan plus (iii) any
shares of Common Stock outstanding under the Predecessor Plan as of June 8, 1990
which are subsequently repurchased by the Corporation as unvested shares
pursuant to its repurchase rights under the Predecessor Plan, less any and all
vested shares of Common Stock issued from time to time under the Corporation's
1991 Incentive Stock Option Plan (the "ISO Plan"). The total number of shares
issuable under the Plan shall be subject to adjustment from time to time in
accordance with the provisions of subparagraph C. below.
B. Should an option granted under either this Plan or the ISO Plan
expire or terminate for any reason prior to exercise or surrender in full
(including options cancelled in accordance with the cancellation-regrant
provisions of this Plan or the ISO Plan), the shares subject to the portion of
the option not so exercised or surrendered shall be available for subsequent
option grants or share issuances under this Plan or the subsequent option grants
under the ISO Plan. Shares of Common Stock issued under either the Option Grant
Program of the Stock Issuance Program of this Plan or under the ISO Plan which
are subsequently repurchased by the Corporation as unvested shares pursuant to
its repurchase rights under such Plans shall be available for subsequent option
grants and issuances under this Plan but shall not be available for subsequent
option grants or issuances under the ISO Plan.
C. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock dividend, stock split, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
shall be made to (i) the maximum number and/or class of shares issuable under
the Plan and (ii) the aggregate number and/or class of shares and the option
price per share of the Common Stock subject to each outstanding option in order
to prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.
D. Common Stock issuable under the Plan, whether under the Option
Grant Program or the Stock Issuance Program, may be subject to such restrictions
on transfer, repurchase rights or other restrictions as may be determined by the
Plan Administrator.
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<PAGE> 4
ARTICLE II
OPTION GRANT PROGRAM
1. TERMS AND CONDITIONS OF OPTIONS.
A. All options granted under the Plan shall be non-qualified stock
options which are not intended to meet the requirements of Section 422 of the
Internal Revenue Code.
B. Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator and shall be evidenced by one or more
instruments in the form approved by the Plan Administrator; provided, however,
that each such instrument (the "Option Agreement") shall comply with and
incorporate the terms and conditions specified below.
1. Option Price.
a. The option price per share shall be fixed by the Plan
Administrator; provided, however, that in no event shall the option price per
share be less than eighty-five percent (85%) of the fair market value per share
of Common Stock on the grant date.
b. If any individual to whom an option is to be granted pursuant
to the provisions of the Plan is at the time the owner of stock (as determined
under Section 424(d) of the Internal Revenue Code) possessing 10% or more of the
total combined voting power of all classes of stock of the Corporation or any
one of its parent or subsidiary corporations ("10% Stockholder"), then the
option price per share shall not be less than one hundred ten percent (110%) of
the fair market value per share of Common Stock on the grant date.
c. The option price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section 1 of Article IV, be
payable in cash or cash equivalent such as a personal check or bank draft.
d. Provided the Corporation is at the time a reporting company
under Section 12(g) of the Securities Exchange Act of 1934, the option price
will also be payable in one of the following alternative forms specified below
(to the extent provided in the Option Agreement):
(i) Full payment in shares of Common Stock held by the
Optionee for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and valued at fair
market value on the Exercise Date (as such term is defined below); or
(ii) Full payment through a combination of shares of Common
Stock held by the Optionee for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes and valued at
fair market value on the Exercise Date and cash or cash equivalents.
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<PAGE> 5
For purposes of this subparagraph d., the Exercise Date shall be the first date
on which the Corporation shall have received both written notice of the exercise
of the option and payment of the option price for the purchased shares.
e. For purposes of subparagraphs a. through d. above (and for all
other valuation purposes under the Plan), the fair market value per share of
Common Stock on any relevant date shall be determined in accordance with the
following provisions:
(i) If the Common Stock is not at the time listed or admitted
to trading on any stock exchange but is traded in the over-the-counter market,
the fair market value shall be the mean between the highest bid and the lowest
asked prices (or if such information is available the closing selling price) per
share of Common Stock on the date in question in the over-the-counter market, as
such prices are reported by the National Association of Securities Dealers
through the NASDAQ system or any successor system. If there are no reported bid
and asked prices (or closing selling price) for the Common Stock on the date in
question, then the mean between the highest bid and lowest asked prices (or
closing selling price) on the last preceding date for which such quotations
exist shall be determinative of fair market value.
(ii) If the Common Stock is at the time listed or admitted to
trading on any stock exchange, then the fair market value shall be the closing
selling price per share of Common Stock on the date in question on the stock
exchange determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no reported sale of Common Stock on
such exchange on the date in question, then the fair market value shall be the
closing selling price on the exchange on the last preceding date for which such
quotation exists.
(iii) If the Common Stock is at the time neither listed nor
admitted to trading on any stock exchange nor traded in the over-the-counter
market, then the fair market value shall be determined by the Plan Administrator
after taking into account such factors as the Plan Administrator shall deem
appropriate, including one or more independent professional appraisals.
2. Term and Exercise of Options. Each option granted under the Plan
shall be exercisable at such time or times, during such period, and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the Option Agreement. In no event, however, shall any option granted under
the Plan have a term in excess of ten (10) years from the grant date, and no
option granted to a 10% Stockholder shall have a term in excess of five (5)
years from the grant date. During the lifetime of the Optionee, the option shall
be exercisable only by the Optionee and shall not be assignable or transferable
by the Optionee otherwise than by will or by the laws of descent and
distribution.
3. Effect of Termination of Employment.
a. Should an Optionee cease to remain in Service for any reason
(including death or permanent disability as defined in Section 22(e)(3) of the
Internal Revenue Code) while the holder of one or more outstanding options under
the Plan, then each such option
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<PAGE> 6
shall not (except to the extent otherwise provided pursuant to Section 5 of this
Article II) remain exercisable for more than the limited period of time
(following the date of such cessation of Service) specified by the Plan
Administrator in the relevant Option Agreement. In no event, however, shall any
such option be exercisable after the specified expiration date of the option
term. Each such option shall, during such limited period, be exercisable only to
the extent of the number of shares (if any) for which the option is exercisable
on the date of the Optionee's cessation of Service. Upon the expiration of such
period or (if earlier) upon the expiration of the option term, the option shall
terminate and cease to be exercisable.
b. Any option held by the Optionee under the Plan at the time of
the Optionee's death may be subsequently exercised, but only to the extent of
the number of shares (if any) for which the option is exercisable on the date of
the Optionee's cessation of Service, by the personal representative of the
Optionee's estate or by the person or persons to whom the option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent and
distribution, provided and only if such exercise occurs prior to the earlier of
(i) the first anniversary of the date of the Optionee's death (or such shorter
period as is specified by the Plan Administrator in the Option Agreement) or
(ii) the specified expiration date of the option term. Upon the occurrence of
the earlier event, the option shall terminate and cease to be exercisable.
c. Notwithstanding subparagraphs a. and b. above, the Plan
Administrator shall have complete discretion, exercisable either at the time of
the option grant or at the time of the Optionee's cessation of Service, to
establish as a provision applicable to the exercise of one or more options
granted under the Plan that during the limited period of exercisability
following such cessation of Service, the option may be exercised not only with
respect to the number of shares for which it is otherwise exercisable at such
time, but also with respect to one or more subsequent installments of
purchasable shares for which the option would have otherwise become exercisable
had the Optionee continued in Service.
d. For purposes of the foregoing provisions of this subsection 3
(and for all other purposes under the Plan), unless it is expressly provided
otherwise in the relevant Option Agreement evidencing the option grant or in the
purchase agreement evidencing the purchase of the option shares:
(i) the Optionee shall, if an Employee at the time of the
option grant, be deemed to continue in Service for so long as such individual
renders services on a periodic basis to the Corporation (or any parent or
subsidiary corporation) in the capacity of an Employee;
(ii) the Optionee shall, if a consultant or other independent
advisor at the time of the option grant, be deemed to continue in Service for so
long as such individual renders services on a periodic basis to the Corporation
(or any parent or subsidiary corporation) in the capacity of an independent
consultant or advisor or as an Employee; and
(iii) the Optionee shall be considered to be an Employee for
so long as such individual remains in the common-law employ of the Corporation
or one or more of its parent or subsidiary corporations.
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<PAGE> 7
5. Stockholder Rights. An Optionee shall have none of the rights of a
stockholder with respect to any shares covered by the option until such Optionee
shall have exercised the option and paid the option price for the purchased
shares.
6. Repurchase Rights. The shares of Common Stock acquired upon the
exercise of options granted under the Plan may be subject to one or more
repurchase rights of the Corporation in accordance with the following
provisions:
a. The Plan Administrator may in its discretion determine that it
shall be a term and condition of one or more options exercised under the Plan
that the Corporation (or its assignees) shall have the right, exercisable upon
the Optionee's cessation of Service, to repurchase at the option price all or
(at the discretion of the Corporation and with the consent of the Optionee) part
of any unvested shares of Common Stock held at the time by the Optionee as a
result of one or more prior exercises of such option. The repurchase right shall
be exercisable by the Corporation (or its assignees) upon such terms and
conditions (including the establishment of the appropriate vesting schedule and
other provision for the expiration of such right in one or more installments of
the Optionee's period of Service) as the Plan Administrator may specify in the
instrument evidencing such right.
b. The Plan Administrator may assign the Corporation's repurchase
rights under subsection a. above to any person or entity selected by the Plan
Administrator, including one or more stockholders of the Corporation. If the
selected assignee is other than a parent or subsidiary corporation of the
Corporation, then the assignee must make a cash payment to the Corporation upon
the assignment of the repurchase rights, in an amount equal to the excess (if
any) of the fair market value of the unvested shares at the time subject to the
assigned rights and the aggregate repurchase price payable for such unvested
shares thereunder.
c. The Plan Administrator may also in its discretion establish as a
term and condition of one or more options granted under the Plan that the
Corporation shall have a right of first refusal with respect to any proposed
sale or other disposition by the Optionee (or any successor in interest by
reason of purchase, gift or other mode of transfer) of any shares of Common
Stock issued upon the exercise of such options. Any such right of first refusal
shall be exercisable by the Corporation (or its assignees) in accordance with
the terms and conditions set forth in the instrument evidencing such right.
2. STOCK APPRECIATION RIGHTS.
a. Provided and only if the Plan Administrator determines in its
discretion to implement the stock appreciation right provisions of this Section
2, one or more Optionees may be granted the right, exercisable upon such terms
and conditions as the Plan Administrator may establish at the time of the option
grant or at any time thereafter, to surrender all or part of an unexercised
option under the Plan in exchange for a distribution from the Corporation equal
in amount to the excess of (i) the fair market value (at date of surrender) of
the number of shares in which the Optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (ii) the aggregate
option price payable for such vested shares.
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<PAGE> 8
b. No surrender of an option shall be effective hereunder unless it
is approved by the Plan Administrator. If the surrender is so approved, then the
distribution to which the Optionee shall accordingly become entitled under this
Section 2 may be made in shares of Common Stock valued at fair market value at
date of surrender, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.
3. CORPORATE TRANSACTION.
a. In the event of any of the following transactions ("Corporate
Transaction"):
(i) a merger or acquisition in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State of the Corporation's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation; or
(iii) any reverse merger in which the Corporation is the
surviving entity but in which fifty percent (50%) or more of the Corporation's
outstanding voting stock is transferred to holders different from those who held
the stock immediately prior to such merger,
then each option at the time outstanding under the Plan shall terminate upon the
consummation of such Corporation Transaction and cease to be exercisable, unless
assumed by the successor corporation or parent thereof.
b. If the Corporation is the surviving entity in any Corporate
Transaction or the outstanding options under the Plan are to be assumed in
connection with such Corporate Transaction, then each continuing or assumed
option shall, immediately after such Corporate Transaction, be appropriately
adjusted to apply and pertain to the number and class of securities which would
have been issuable to the Optionee, in consummation of such Corporate
Transaction, had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the option price
payable per share, provided the aggregate option price payable for such
securities shall remain the same. In addition, the class and number of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction shall be appropriately adjusted.
c. The grant of options under this Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
4. CANCELLATION AND NEW GRANT OF OPTIONS.
The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected Optionees, the
cancellation of any or all outstanding
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<PAGE> 9
options under the Plan and to grant in substitution therefor new options under
the Plan covering the same or different numbers of shares of Common Stock but
having an option price per share not less than eighty-five percent (85%) of the
fair market value per share of Common Stock on the new grant date (or, in the
case of a 10% Stockholder, not less than one hundred and ten percent (110%) of
such fair market value).
5. EXTENSION OF EXERCISE PERIOD.
The Plan Administrator shall have full power and authority to extend
(either at any time while the option is granted or at the time while the option
remains outstanding) the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service from the limited
period specified in the Option Agreement to such greater period of time as the
Plan Administrator shall deem appropriate; provided, however, that in no event
shall such option be exercisable after the specified expiration date of the
option term.
ARTICLE III
STOCK ISSUANCE PROGRAM
1. TERMS AND CONDITIONS OF STOCK ISSUANCES.
A. Shares may be issued under this Stock Incentive Program as a
reward for past services rendered the Corporation or one or more of its parent
or subsidiary corporations or as an incentive for future service with such
entities. All shares so issued shall be evidenced by an appropriate Stock
Issuance Agreement ("Issuance Agreement") which complies with the terms and
conditions of this Stock Issuance Program.
1. Share Issuance.
a. Shares may, in the absolute discretion of the Plan
Administrator, be issued for consideration with a value less than one-hundred
percent (100%) of the fair market value of the issued shares. In no event,
however, shall any shares be issued hereunder for consideration valued by the
Plan Administrator at less than eighty-five percent (85%) of the fair market
value of the shares at the time of issuance. In the event the Recipient of the
share issuance is a 10% Stockholder, the issue price shall not be less than one
hundred and ten percent (110%) of such fair market value.
b. Shares shall be issued under the Plan for such consideration
as the Plan Administrator shall from time to time determine; provided, however,
that in no event shall shares be issued for consideration other than
(i) cash or cash equivalent (such as a personal check or bank
draft) paid the Corporation;
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<PAGE> 10
(ii) promissory note payable to the Corporation's order, which
may be subject to cancellation by the Corporation in whole or in part upon such
terms and conditions as the Plan Administrator shall specify; or
(iii) services rendered.
2. Vesting Schedule.
a. The Recipient's interest in the issued shares of Common Stock
may, in the absolute discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments.
b. The elements of the vesting schedule applicable to any
unvested shares issued under this Stock Issuance Program, namely the number of
installments in which the shares are to vest, the interval or intervals (if any)
which are to lapse between installments and the effect which death, disability
or other event designated by the Plan Administrator is to have upon the vesting
schedule, shall be determined by the Plan Administrator and set forth in the
Issuance Agreement executed by the Corporation and the Recipient at the time of
the share issuance.
c. Except as may otherwise be provided in the Issuance Agreement,
the Recipient may not transfer unvested shares of Common Stock. The Recipient,
however, shall have all the rights of a stockholder with respect to such
unvested shares, including the right to vote such shares and to receive all
regular cash dividends paid on such shares.
3. Cancellation of Shares.
a. In the event the Recipient should, while his/her interest in
the issued Common Stock remains unvested, cease to continue in Service for any
reason whatsoever, then all such unvested shares shall immediately be cancelled,
and the Recipient shall cease to have any further stockholder rights with
respect to such cancelled shares. In connection with such cancellation, the
Recipient shall be entitled to a concurrent payment from the Corporation
(payable in cash or through forgiveness of any purchase-money indebtedness
outstanding with respect to the cancelled shares) equal to the per share price
at which such shares were initially issued to the Recipient.
b. The Plan Administrator may in its discretion waive such
cancellation of unvested shares in whole or in part and thereby effect the
immediate vesting of the Recipient's interest in the shares of Common Stock (or
other assets) as to which the waiver applies.
4. Corporate Transaction.
a. Upon the occurrence of any Corporate Transaction, the
Corporation's outstanding repurchase rights under the Stock Issuance Program
shall be assigned to the successor corporation (or parent thereof).
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b. For purposes of this Stock Issuance Program, a Corporate
Transaction shall mean the occurrence of any of the following transactions:
(i) a merger or acquisition in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of which is
to change the State of incorporation,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation to any entity other than a
parent or subsidiary corporation, or
(iii) a reverse merger in which the Corporation is the
surviving entity but in which fifty percent (50%) or more of the Corporation's
outstanding voting stock is transferred to holders different from those who held
the stock immediately prior to such merger.
5. Right of First Refusal.
a. The Plan Administrator may in its discretion establish as a
term and condition of the issuance of one or more shares of Common Stock
pursuant to this Stock Issuance Program that the Corporation shall have a right
of first refusal with respect to any proposed disposition of such shares by the
Recipient (or any successor in interest by reason of purchase, gift or other
mode of transfer).
b. Any such right of first refusal shall be exercisable by the
Corporation (or its assignees) in accordance with the terms and conditions
specified forth in the Issuance Agreement incorporating such right.
ARTICLE IV
MISCELLANEOUS
1. PLAN LOANS.
a. The Plan Administrator may assist any Optionee or Recipient
(including any Optionee or Recipient who is an officer or director of the
Corporation) in the exercise of one or more options granted to such Optionee
under the Article II Option Grant Program or the purchase of one or more shares
issued to such Recipient under the Article III Stock Issuance Program, including
the satisfaction of any Federal and State income and employment tax obligations
arising therefrom, by (i) authorizing the extension of a loan from the
Corporation to such Optionee or Recipient or (ii) permitting the Optionee or
Recipient to pay the option price or issue price in installments over a period
of years. The terms of any loan or installment method of payment (including the
interest rate and terms of repayment) shall be established by the Plan
Administrator in its sole discretion. Loans and installment payments may be
granted with or without security or collateral, but the maximum credit available
to the Optionee or Recipient may not exceed the sum of (A) the aggregate option
price or issue price payable for the acquired shares (less the par value of such
shares), plus (B) any Federal and State income and employment tax liability
incurred by the Optionee or Recipient in connection with such exercise or
issuance.
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<PAGE> 12
b. The Plan Administrator may, in its absolute discretion, determine
that one or more loans extended under the Plan shall be subject to forgiveness
by the Corporation in whole or in part upon such terms and conditions as the
Plan Administrator may in its discretion deem appropriate.
2. AMENDMENT OF THE PLAN AND AWARDS.
a. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever; provided,
however, that no such amendment or modification shall adversely affect the
rights and obligations of an Optionee with respect to options at the time
outstanding under the Plan, nor adversely affect the rights of any Recipient
with respect to Common Stock issued under the Plan prior to such action, unless
the Optionee or Recipient consents to such amendment; and provided, further,
that the Board shall not, without the approval of the Corporation's
stockholders, amend the Plan to (i) materially increase the maximum number of
shares issuable under the Plan (except for permissible adjustments under Article
I, Section 5.C.), (ii) materially increase the benefits accruing to individuals
who participate in the Plan, or (iii) materially modify the eligibility
requirements for participation in the Plan.
b. Options to purchase shares of Common Stock may be granted under
the Option Grant Program and shares of Common Stock may be issued under the
Stock Issuance Program, which are in both instances in excess of the number of
shares then available for issuance under the Plan, provided (i) an amendment to
increase the maximum number of shares issuable under the Plan is adopted by the
Board prior to the initial grant of any such option or the issuance of any such
shares and is thereafter submitted to the Corporation's stockholders for
approval and (ii) any excess shares actually issued under the Option Grant
Program or the Stock Issuance Program are held in escrow until such stockholder
approval is obtained. If such stockholder approval is not obtained within twelve
(12) months after the date the share-increase amendment is adopted by the Board,
then any unexercised options granted on the basis of such increase shall
terminate and cease to be exercisable, and the Corporation shall promptly refund
to the Optionees and Recipients the option or issue price paid for any excess
shares issued under the Plan and held in escrow, together with interest (at the
applicable Short Term Federal Rate) for the period the shares were held in
escrow.
3. EFFECTIVE DATE AND TERM OF PLAN.
a. The Plan was initially adopted by the Board in June 1990 and was
ratified by the Corporation's shareholders in July 1990. The Plan was
subsequently amended by the Board on May 7, 1991 to increase the total number of
shares issuable thereunder by 1,500,000 to a total of 2,250,000. However, no
stock option or stock appreciation right granted under the Plan shall become
exercisable, and no shares shall be issued under the Plan, unless and until the
Plan shall have been approved by the Corporation's stockholders. If such
stockholder approval is not obtained within twelve (12) months after the date of
the Board's adoption of the Plan, then all stock options and stock appreciation
rights previously granted under the Plan shall terminate and no further stock
options or stock appreciation rights shall be granted. Subject to such
limitation,
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the Plan Administrator may grant stock options and stock appreciation rights
under the Plan at any time after the effective date and before the date fixed
herein for termination of the Plan.
b. The Plan shall in all events terminate upon the earlier of (i)
the tenth (10th) anniversary of the date of its adoption by the Board or (ii)
the date on which all shares available for issuance under the Plan shall have
been issued or cancelled pursuant to (I) the exercise or surrender of stock
options and/or stock appreciation rights under the Plan or (II) the issuance of
shares under the Stock Issuance Program. If the date of termination is
determined under clause (i) above, then any stock options, stock appreciation
rights and unvested shares at the time outstanding under the Plan shall continue
to have force and effect in accordance with the provisions of the instruments
evidencing such grants or issuances.
4. USE OF PROCEEDS.
Any cash proceeds received by the Corporation from the issuance of
shares of Common Stock hereunder shall be used for general corporate purposes.
5. WITHHOLDING.
The Corporation's obligation to deliver shares upon the exercise or
surrender of any options granted under Article II or upon the issuance of any
shares under Article III shall be subject to the satisfaction of all applicable
Federal, State and local income and employment tax withholding requirements.
6. REGULATORY APPROVALS.
The implementation of the Plan, the granting of any options under
the Option Grant Program, the issuance of any shares under the Stock Issuance
Program, and the issuance of Common Stock upon the exercise or surrender of the
option grants made hereunder shall be subject to the Corporation's procurement
of all approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the options granted under it, and the Common Stock
issued pursuant to it.
7. FINANCIAL REPORTS.
The Corporation shall deliver financial and other information
regarding the Corporation, on an annual or more frequent basis, to each
individual holding an outstanding option under and each participant in the Plan,
to the extent the Corporation is required to provide such information pursuant
to Section 260.140.41.2 of the Rules of the California Corporations
Commissioner.
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EXHIBIT 5.1
February 1, 2000
Accrue Software, Inc.
48634 Milmont Drive
Fremont, CA 94538-7353
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the
"Registration Statement") filed by you with the Securities and Exchange
Commission (the "Commission") on or about February 1, 2000 in connection with
the registration under the Securities Act of 1933, as amended, of a aggregate of
764,830 shares of your Common Stock (the "Shares") reserved for issuance under
the Marketwave Corporation 1997 Stock Option Plan and the NeoVista Software,
Inc. 1991 Incentive Stock Option Plan and 1991 Non-Qualified Stock Option Plan.
As your counsel in connection with these transactions, we have examined the
proceedings taken and are familiar with the proceedings proposed to be taken by
you in connection with the sale and issuance of the Shares.
It is our opinion that upon conclusion of the proceedings being taken
or contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares, and upon completion of the proceedings being taken in order to permit
such transactions to be carried out in accordance with the securities laws of
the various states where required, the Shares when issued and sold in the manner
described in the Registration Statement will be legally and validly issued,
fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and in any amendment thereto.
Very truly yours,
VENTURE LAW GROUP
A Professional Corporation
/s/ Venture Law Group
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated May 17, 1999, except for Note 11, as
to which date is May 25, 1999, relating to the financial statements of Accrue
Software, Inc., which appears in the Registration Statement on Form S-1 (File
No. 333-79491), as amended, filed on May 27, 1999. We also consent to the
incorporation by reference of our report dated May 17, 1999 relating to the
financial statement schedule, which appears in such Registration Statement on
Form S-1 (File No. 333-79491), as amended.
/s/ PricewaterhouseCooper LLP
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PricewaterhouseCoopers LLP
San Jose, CA
January 31, 2000
