<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 2000
REGISTRATION NO. ___________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ONDISPLAY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 68-0391052
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12667 ALCOSTA BOULEVARD
SAN RAMON, CALIFORNIA 94583
(Address of Principal Executive Offices)
1990 OBERON SOFTWARE INCORPORATED STOCK OPTION PLAN
AND 1998 OBERON SOFTWARE INCORPORATED STOCK INCENTIVE PLAN
(Full title of the plan)
THE CORPORATION TRUST COMPANY
1209 ORANGE STREET
WILMINGTON, DELAWARE 19801
(800) 677-3394
(Name, address and telephone number of agent for service)
Copy to:
MICHAEL J. KENNEDY, ESQ.
ROBERT JACK, ESQ.
SHELLY R. DOLEV, ESQ.
WILSON SONSINI GOODRICH & ROSATI, P.C.
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
CALCULATION OF REGISTRATION FEE
<TABLE>
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PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM AMOUNT
SECURITIES AMOUNT OFFERING AGGREGATE OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED(1) REGISTERED(2) SHARE(3) PRICE(3) FEE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.001 par value 405,427 $35.19 $14,266,976.13 $3,823.55
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</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plans described herein.
Pursuant to the Agreement and Plan of Reorganization dated as of January
17, 2000 among OnDisplay, Inc. ("OnDisplay"), ObiOne Acquisition
Corporation and Oberon Software Incorporated, OnDisplay assumed, effective
as of March 31, 2000, all of the outstanding options to purchase common
stock of Oberon Software Incorporated under the Oberon Software
Incorporated 1990 Stock Option Plan and Oberon Software Incorporated 1998
Stock Incentive Plan, and such options became exercisable to purchase
shares of OnDisplay's common stock, with appropriate adjustments to the
number of shares and exercise price of each assumed option.
(2) Shares reserved for issuance upon the exercise of options granted pursuant
to the Oberon Software Incorporated 1990 Stock Option Plan and Oberon
Software Incorporated 1998 Stock Incentive Plan and assumed by OnDisplay.
(3) Estimated pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, solely for the purpose of calculating the registration fee. Based
on the average of the high and low prices of the common stock on April 24,
2000, as reported on the Nasdaq National Market.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents and information are incorporated by reference as
filed with the Securities and Exchange Commission:
(a) OnDisplay, Inc.'s ("OnDisplay's") Form 10-K Annual Report for the
fiscal year ended December 31, 1999, as amended (File No. 000-28955).
All documents subsequently filed by OnDisplay pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be part hereof from the date of filing such
documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters with respect to the shares will be passed upon by
Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, Palo Alto,
California.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law generally provides
that a corporation is empowered to indemnify any person who is made a party to
any threatened, pending or completed action, suit or proceeding by reason of the
fact that he is or was a director, officer, employee or agent of the corporation
or is or was serving, at the request of the corporation, in any of such
capacities of another corporation or other enterprise, if such director,
officer, employee or agent acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. This statute describes in detail the right of
OnDisplay to indemnify any such person.
OnDisplay's Certificate of Incorporation eliminates in certain
circumstances the liability of directors of OnDisplay for monetary damages for
breach of their fiduciary duty as directors. This provision does not eliminate
the liability of a director (i) for breach of the director's duty of loyalty to
OnDisplay or its stockholders, (ii) for acts or omissions by the director not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for willful or negligent declaration of an unlawful dividend, stock
purchase or redemption or (iv) for transactions from which the director derived
an improper personal benefit.
OnDisplay's Certificate of Incorporation also provides generally for
indemnification of all directors and officers of OnDisplay to the fullest extent
permitted by the General Corporation Law of the State of Delaware. Such right to
indemnification shall be deemed to be a contract right and includes generally
the right to be paid by OnDisplay the expenses incurred in defending any
proceeding covered by
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this provision in advance of its final disposition. Individuals who are entitled
to indemnification may bring suit to seek recovery of amounts due under the
foregoing provisions and to recover the expenses of such suit if successful.
OnDisplay has entered into indemnification agreements to such effect
with its officers and directors containing provisions which are in some respects
broader than the specific indemnification provisions contained in the General
Corporation Law of Delaware. The indemnification agreements may require
OnDisplay, among other things, to indemnify such officers and directors against
certain liabilities that may arise by reason of their status or service as
directors or officers (other than liabilities arising from willful misconduct of
a culpable nature) and to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified.
OnDisplay believes that it is the position of the Commission that
insofar as the foregoing provisions may be invoked to disclaim liability for
damages arising under the Securities Act, such provisions are against public
policy as expressed in the Securities Act and are therefore unenforceable.
OnDisplay currently maintains an officers' and directors' liability
insurance policy which covers, subject to the exclusions and limitations of the
policy, officers and directors of OnDisplay against certain liabilities which
may be incurred by them solely in such capacities.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number
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<S> <C>
4.1 Oberon Software Incorporated 1990 Stock Option Plan and
Oberon Software Incorporated 1998 Stock Incentive Plan
4.2 Form of Option Grant Agreement under Oberon Software
Incorporated 1990 Stock Option Plan and Oberon Software
Incorporated 1998 Stock Incentive Plan
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (Contained in Exhibit 5.1 above)
24.1 Power of Attorney (see page II-4)
</TABLE>
Item 9. Undertakings.
(a) OnDisplay 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 the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
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(3) To remove from registration by means of post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) OnDisplay hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of OnDisplay's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of OnDisplay pursuant to the Delaware General Corporation Law, the Certificate
of Incorporation or the Bylaws of OnDisplay, Indemnification Agreements entered
into between OnDisplay and its officers and directors, or otherwise, OnDisplay
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 OnDisplay in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered hereunder,
OnDisplay will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, OnDisplay certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of San Ramon, California, on this 1st day of May, 2000.
ONDISPLAY, INC.
By: /s/ MARK PINE
-------------------------------------
Mark Pine, President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each such person whose
signature appears below constitutes and appoints, jointly and severally,
Mark Pine and David Larson his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Registration Statement on Form S-8 (including post-effective amendments), and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, hereby ratifying and confirming all that each of
said attorneys-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
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<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ MARK PINE Chief Executive Officer and Chairman
- -------------------------------- of the Board of Directors(principal May 1, 2000
Mark Pine executive officer)
/s/ VENKAT MOHAN President, Chief Operating Officer and May 1, 2000
- -------------------------------- Director
Venkat Mohan
/s/ DAVID LARSON Vice President of Finance and Chief Financial
- -------------------------------- Officer (principal financial and accounting May 1, 2000
David Larson officer)
Director May 1, 2000
- --------------------------------
Christopher Spray
/s/ TIMOTHY BARROWS Director May 1, 2000
- --------------------------------
Timothy Barrows
Director May 1, 2000
- --------------------------------
John Mandile
/s/ Carmine Villani Director May 1, 2000
- --------------------------------
Carmine Villani
/s/ PROMOD HAQUE Director May 1, 2000
- --------------------------------
Promod Haque
/s/ MARGARET TAYLOR Director May 1, 2000
- --------------------------------
Margaret Taylor
</TABLE>
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EXHIBIT INDEX
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<CAPTION>
Exhibit
Number Description
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<S> <C>
4.1 Oberon Software Incorporated 1990 Stock Option Plan and
Oberon Software Incorporated 1998 Stock Incentive Plan
4.2 Forms of Option Grant Agreements under the Oberon Software
Incorporated 1990 Stock Option Plan and Oberon Software
Incorporated 1998 Stock Incentive Plan
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (Contained in Exhibit 5.1 above)
24.1 Power of Attorney (see page II-4)
</TABLE>
<PAGE> 1
EXHIBIT 4.1
OBERON SOFTWARE INCORPORATED
1990 STOCK OPTION PLAN
DECEMBER 27, 1990
(AS AMENDED THROUGH AUGUST 20, 1998)
1. Purpose. The purpose of the Oberon Software Incorporated 1990 Stock
Option Plan (the "Plan") is to further the growth and development of Oberon
Software Incorporated ("OSI") and any subsidiary and parent corporations, as
hereinafter defined (OSI and such subsidiary and parent corporations are
collectively herein referred to, unless the context otherwise requires, as the
"Company"), by granting to those employees of the Company and the other persons
rendering services to the Company referred to in Section 6, as an incentive and
encouragement to stock ownership, options ("Options") to purchase shares of the
Company's common stock, par value $.01 per share ("Common Stock"), and thereby
obtain a proprietary interest in the enterprise and a more direct stake in its
continuing welfare.
2. Administration. The Plan shall be administered by the Board of Directors
of OSI (the "Board").
3. Grant of Options. Options shall be granted on behalf of OSI by the
Board; provided, however, that no Options under the Plan may be granted after
December 27, 2000. The Board shall, from time to time within the limits of the
Plan, determine the persons to whom Options are to be granted, the number of
shares to be optioned, the option price, the manner in which such option price
shall be payable, and the time or times during the Exercise Period (as defined
in Section 8) at which each such Option shall become exercisable. Options
granted under the Plan may be either incentive stock options, within the meaning
of Section 422A of the Internal Revenue Code of 1986 (the "Code"), or
non-statutory stock options. Each Option granted under the Plan shall be
designated by the Board at the time the Option is granted as either an incentive
stock option or a non-statutory stock option.
4. Definitions. As used herein, the terms "subsidiary corporation" and
"parent corporation" shall mean a "subsidiary corporation" and a "parent
corporation" as such terms are defined in Section 425 of the Code. As used
herein, the term "10% shareholder" shall mean an employee who, at the time an
option is granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of OSI or any of its parent or subsidiary
corporations.
5. Shares Subject to the Plan. An aggregate of up to 1,998,466 shares of
the Common Stock shall be available for the grant of Options under the Plan.
Such shares may be authorized and unissued shares or shares held in OSI's
treasury. All shares subject to Options that shall have terminated or shall have
been canceled for any reason shall be available for subsequent optioning under
the Plan.
<PAGE> 2
OBERON SOFTWARE INCORPORATED
1990 STOCK OPTION PLAN
DECEMBER 27, 1990
(AS AMENDED THROUGH AUGUST 20, 1998)
6. Participants. All officers and other key employees of the Company shall
be eligible to receive incentive or non-statutory stock options and thereby
become participants in the Plan. All non-employee directors of the Company and
all non-employee consultants retained by the Company shall become eligible to
receive non-statutory stock options and thereby become participants in the Plan.
In granting Options, the Board may include or exclude previous participants in
the Plan as the Board may determine.
7. Option Price. The price at which shares may from time to time be
optioned under the Plan shall be, in the case of incentive stock options granted
to employees other than 10% shareholders, not less than the fair market value of
such shares at the time the Option is granted, as determined in good faith by
the Board at each time that such Options are granted by it; in the case of
incentive stock options granted to 10% shareholders, such price shall be not
less than 110% of such fair market value; and in the case of non-statutory stock
options, such price shall be not less than par value.
8. Exercise Period. Subject to the provisions of Section 15, the period for
exercising an Option (the "Exercise Period") shall be determined by the
provisions of the option agreement entered into with respect to such Option
("the Option Agreement"); provided, however, that in the case of incentive
options granted to employees other than 10% stockholders, the Exercise Period
shall in no event be longer than the ten-year period beginning with the date of
grant, and in the case of incentive stock options granted to 10% shareholders,
the Exercise Period shall in no event be longer than the five-year period
beginning with the date of grant.
9. Payment for Shares and Related Matters. Full payment for shares
purchased, together with the amount of any tax or excise due in respect of the
sale and issue thereof, shall be paid at the time of exercise and shall be made
in cash or by check only. OSI will issue no certificates for shares until (a)
full payment therefor has been made and (b) the person purchasing such shares
provides for payment to (or withholding by) the Company of all amounts, if any,
required under then applicable provisions of the Code and state and local tax
laws to be withheld with respect to such purchase. A participant shall have none
of the rights of a stockholder until certificates for the shares purchased are
issued to him or her.
10. Nonassignability. Each Option by its terms shall not be transferable
otherwise than by will or the laws of descent and distribution and shall be
exercisable, during a participant's lifetime, only by him or her.
2
<PAGE> 3
OBERON SOFTWARE INCORPORATED
1990 STOCK OPTION PLAN
DECEMBER 27, 1990
(AS AMENDED THROUGH AUGUST 20, 1998)
11. Conditions to Exercise of Options. The Board may, in its discretion,
require as a condition to the exercise of Options and the issuance of shares
thereunder that the participant (i) shall have represented, warranted and
agreed, in form and substance satisfactory to OSI, at the time of exercising the
Option, that he or she is acquiring the shares for his or her own account, for
investment and not with a view to or in connection with any distribution, (ii)
shall have agreed to restrictions on transfer in form and substance satisfactory
to Oberon, and (iii) shall have agreed to an endorsement which makes appropriate
reference to such representations, warranties, agreements and restrictions on
the certificate(s) representing the shares. All shares issued to participants
upon exercise of Options shall be subject to any and all restrictions on
transfer, including without limitation rights of first refusal, imposed by
applicable state or federal securities laws, by the Articles of Organization or
the By-Laws of OSI as then in effect or by the Option Agreement or any other
agreement to which the participant is a party.
12. Conditions to Effectiveness of the Plan. No Options may be granted
under the Plan unless and until the Plan shall have been duly approved by the
stockholders of OSI.
13. Termination or Amendment. The Board may terminate or amend the Plan any
time, and from time to time. The Board may not, however, without stockholder
approval, increase the maximum number of shares in the aggregate that may be
offered for sale under Options, or change the manner of determining the option
price or the class of employees eligible to receive incentive stock options
under the Plan; or, without the consent of the participant, alter or impair any
Option previously granted to him or her under the Plan, except as provided in
Sections 14 and 15.
14. Effect of Changes in Common Stock. If OSI shall combine, subdivide or
reclassify the shares of Common Stock which have been or may be optioned, or
shall declare thereon any dividend payable in shares of Common Stock, or shall
take any other action of a similar nature affecting the Common Stock, then the
number and class of shares of stock as to which Options may thereafter be
granted (in the aggregate and to any participant) shall be appropriately
adjusted and, in the case of each Option outstanding at the time of any such
action, the number and class of shares which may thereafter be purchased
pursuant to such Option and the option price per share shall likewise be
appropriately adjusted, all to such extent as may be determined by the Board to
be necessary to preserve unimpaired the rights of the participant. Each and
every such determination shall be conclusive and binding upon such participant.
15. Effect of Reorganizations. In case of any one or more
reclassifications, changes or exchanges of outstanding shares of Common Stock or
other stock (other than as provided in Section 14), or consolidations of OSI
with, or mergers of OSI into, other
3
<PAGE> 4
OBERON SOFTWARE INCORPORATED
1990 STOCK OPTION PLAN
DECEMBER 27, 1990
(AS AMENDED THROUGH AUGUST 20, 1998)
corporations, or other recapitalizations or reorganizations (other than
consolidations with a subsidiary in which OSI is the continuing corporation and
which do not result in any reclassifications, changes or exchanges of shares of
OSI), or in case of any one or more sales or conveyances to another corporation
of the property of OSI as an entirety, or substantially as an entirety, any and
all of which are hereinafter in this Section called "Reorganizations", a
participant shall have the right, upon any subsequent exercise of any Option, to
acquire the same kind and amount of securities and property which such
participant would then have if such participant had exercised such Option
immediately before the first of any such Reorganizations and continued to hold
all securities and property which came to such participant as a result of that
and subsequent Reorganizations, less all securities and property surrendered or
canceled pursuant to any of same, the adjustment rights in Section 14 and this
Section being continuing and cumulative.
Notwithstanding any provision of this Plan or any Option Agreement to the
contrary, the Board shall have the right in connection with any Reorganization,
upon not less than 30 days written notice to the participants, to terminate the
Exercise Period of all outstanding Options, and in such event all outstanding
Options may be exercised only at a time prior to or simultaneously with the
consummation of such Reorganization. In connection with such termination of the
Exercise Period, the Board may in its discretion cause some or all of such
Options to become fully exercisable notwithstanding any contrary terms of this
Plan or of the Option Agreements relating to such Options.
In the event of the acquisition of OSI by means of the purchase of all of
its capital stock, or in the event of the liquidation of OSI, unless the Board
votes otherwise and so notifies all persons holding Options prior to such
purchase or liquidation, all outstanding Options, to the extent not already
exercisable, shall become fully exercisable at the time of such purchase or
liquidation and, notwithstanding any provision of this Plan or any Option
Agreement to the contrary, the Board may terminate the Exercise Period for such
Options upon not less than 30 days written notice to the holders of such
Options.
16. Interpretation. The Board shall interpret the Plan and make and amend
such regulations with regard to the Plan as it may deem appropriate.
4
<PAGE> 5
Exhibit 4.1
OBERON SOFTWARE INCORPORATED
AMENDMENT NO. 2 TO THE 1998 STOCK INCENTIVE PLAN
(OCTOBER 25, 1999)
1. Purpose
The purpose of this 1998 Stock Incentive Plan (the "Plan") of Oberon
Software Incorporated, a Massachusetts corporation (the "Company"), is to
advance the interests of the Company's stockholders by enhancing the Company's
ability to attract, retain and motivate persons who make (or are expected to
make) important contributions to the Company by providing such persons with
equity ownership opportunities and performance-based incentives and thereby
better aligning the interests of such persons with those of the Company's
stockholders. Except where the context otherwise requires, the term "Company"
shall include any present or future subsidiary corporations of Oberon Software
Incorporated as defined in Section 424(f) of the Internal Revenue Code of 1986,
as amended, and any regulations promulgated thereunder (the "Code").
2. Eligibility
All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options, restricted stock awards, or other stock-based
awards (each, an "Award") under the Plan. Each person who has been granted an
Award under the Plan shall be deemed a "Participant".
3. Administration, Delegation
(a) Administration by Board of Directors. The Plan will be administered
by the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem expedient to carry the Plan into effect and it shall be the sole and final
judge of such expediency. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.
(b) Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.
(c) Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
<PAGE> 6
more committees or subcommittees of the Board (a "Committee"). If and when the
common stock, $.01 value per share, of the Company (the "Common Stock") is
registered under the Securities Exchange Act of 1934 (the "Exchange Act"), the
Board shall appoint one such Committee of not less than two members, each member
of which shall be an "outside director" within the meaning of Section 162(m) of
the Code and a "non-employee director" as defined in Rule 16b-3 promulgated
under the Exchange Act." All references in the Plan to the "Board" shall mean
the Board or a Committee of the Board or the executive officer referred to in
Section 3(b) to the extent that the Board's powers or authority under the Plan
have been delegated to such Committee or executive officer.
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 8, Awards may
be made under the Plan for up to 5,102,489 shares of Common Stock plus shares
subject to options granted under the Company's 1990 Stock Option Plan as of
September 29, 1999 that expire by their terms and are not exercised, provided
that the aggregate number of shares issuable under the Plan shall not exceed
6,051,589 shares of Common Stock. If any Award expires or is terminated,
surrendered or canceled without having been fully exercised or is forfeited in
whole or in part or results in any Common Stock not being issued, the unused
Common Stock covered by such Award shall again be available for the grant of
Awards under the Plan, subject, however, in the case of Incentive Stock Options
(as hereinafter defined), to any limitation required under the Code. Shares
issued under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.
(b) Per-Participant Limit. Subject to adjustment under Section 8, for
Awards granted after the Common Stock is registered under the Exchange Act, the
maximum number of shares of Common Stock with respect to which an Award may be
granted to any Participant under the Plan shall be 1,000,000 per calendar year.
The per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code.
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".
(b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
(c) Exercise Price. The Board shall establish the exercise price at the
<PAGE> 7
time each Option is granted and specify it in the applicable option agreement,
which exercise price shall not be less than the par value per share of the
Common Stock.
(d) Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.
(e) Exercise of Option. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.
(f) Payment Upon Exercise. Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may, in its sole discretion, otherwise
provide in an option agreement, (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price or (ii) delivery by the Participant
to the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price;
(3) at such time as the Common Stock is registered under the
Exchange Act, delivery of shares of Common Stock owned by the Participant valued
at their fair market value as determined by (or in a manner approved by) the
Board in good faith ("Fair Market Value"), which Common Stock was owned by the
Participant at least six months prior to such delivery;
(4) to the extent permitted by the Board, in its sole discretion
(i) by delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) by payment of such other lawful consideration
as the Board may determine; or
(5) any combination of the above permitted forms of payment.
6. Restricted Stock
(a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock at any price equal to or greater than the par value
thereof, subject to the right of the Company to repurchase all or part of such
shares at their issue price or other stated or formula price from the recipient
in the event that conditions specified by the Board in the applicable Award are
not satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, "Restricted Stock Award").
(b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase and the issue price, if any. Any stock certificates issued in respect
of a Restricted Stock Award shall be registered in the name of the Participant
and,
<PAGE> 8
unless otherwise determined by the Board, deposited by the Participant,
together with a stock power endorsed in blank, with the Company (or its
designee). At the expiration of the applicable restriction periods, the Company
(or such designee) shall deliver the certificates no longer subject to such
restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.
7. Other Stock-Based Awards
The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.
8. Adjustments for Changes in Common Stock and Certain Other Events
(a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in Section 4(b), (iii) the number and
class of securities and exercise price per share subject to each outstanding
Option, (iv) the repurchase price per share subject to each outstanding
Restricted Stock Award, and (v) the terms of each other outstanding Award shall
be appropriately adjusted by the Company (or substituted Awards may be made, if
applicable) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is necessary and appropriate. If this Section 8(a)
applies and Section 8(c) also applies to any event, Section 8(c) shall be
applicable to such event, and this Section 8(a) shall not be applicable.
(b) Liquidation or Dissolution. In the event of a proposed liquidation
or dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award or other Award granted under the Plan
at the time of the grant of such Award.
(c) Acquisition and Change in Control Events
(1) Definitions
(a) An "Acquisition Event" shall mean:
(i) any merger or consolidation of the Company
with or into another entity as a result of
which the Common Stock is converted into or
<PAGE> 9
exchanged for the right to receive cash,
securities or other property; or
(ii) any exchange of shares of the Company for
cash, securities or other property pursuant
to a statutory share exchange transaction.
(b) A "Change in Control Event" shall mean:
(i) the acquisition by an individual, entity or
group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial
ownership of any capital stock of the
Company if, after such acquisition, such
Person beneficially owns (within the meaning
of Rule 13d-3 promulgated under the Exchange
Act) 35% or more of either (x) the
then-outstanding shares of common stock of
the Company (the "Outstanding Company Common
Stock") or (y) the combined voting power of
the then-outstanding securities of the
Company entitled to vote generally in the
election of directors (the "Outstanding
Company Voting Securities"); provided,
however, that for purposes of this
subsection (i), the following acquisitions
shall not constitute a Change in Control
Event: (A) any acquisition directly from the
Company (excluding an acquisition pursuant
to the exercise, conversion or exchange of
any security exercisable for, convertible
into or exchangeable for common stock or
voting securities of the Company, unless the
Person exercising, converting or exchanging
such security acquired such security
directly from the Company or an underwriter
or agent of the Company), (B) any
acquisition by any employee benefit plan (or
related trust) sponsored or maintained by
the Company or any corporation controlled by
the Company, or (C) any acquisition by any
corporation pursuant to a Business
Combination (as defined below) which
complies with clauses (x) and (y) of
subsection (iii) of this definition; or
(ii) such time as the Continuing Directors (as
defined below) do not constitute a majority
of the Board (or, if applicable, the Board
of Directors of a successor corporation to
the Company), where the term "Continuing
Director" means at any date a member of the
Board (x) who was a member of the Board on
the date of the initial adoption of this
Plan by
<PAGE> 10
the Board or (y) who was nominated or
elected subsequent to such date by at least
a majority of the directors who were
Continuing Directors at the time of such
nomination or election or whose election to
the Board was recommended or endorsed by at
least a majority of the directors who were
Continuing Directors at the time of such
nomination or election; provided, however,
that there shall be excluded from this
clause (y) any individual whose initial
assumption of office occurred as a result of
an actual or threatened election contest
with respect to the election or removal of
directors or other actual or threatened
solicitation of proxies or consents, by or
on behalf of a person other than the Board;
or
(iii) the consummation of a merger, consolidation,
reorganization or statutory share exchange
involving the Company or a sale or other
disposition of all or substantially all of
the assets of the Company (a "Business
Combination"), unless, immediately following
such Business Combination, each of the
following two conditions is satisfied: (x)
all or substantially all of the individuals
and entities who were the beneficial owners
of the Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such Business
Combination beneficially own, directly or
indirectly, more than 50% of the
then-outstanding shares of common stock and
the combined voting power of the
then-outstanding securities entitled to vote
generally in the election of directors,
respectively, of the resulting or acquiring
corporation in such Business Combination
(which shall include, without limitation, a
corporation which as a result of such
transaction owns the Company or
substantially all of the Company's assets
either directly or through one or more
subsidiaries) (such resulting or acquiring
corporation is referred to herein as the
"Acquiring Corporation") in substantially
the same proportions as their ownership of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities,
respectively, immediately prior to such
Business Combination and (y) no Person
(excluding the Acquiring Corporation or any
employee benefit plan (or related trust)
maintained or sponsored by the Company or by
the Acquiring Corporation) beneficially
<PAGE> 11
owns, directly or indirectly, 35% or more of
the then-outstanding shares of common stock
of the Acquiring Corporation, or of the
combined voting power of the
then-outstanding securities of such
corporation entitled to vote generally in
the election of directors (except to the
extent that such ownership existed prior to
the Business Combination).
(c) "Good Reason" shall mean any (i) change in the
Participant's position with the Company which
materially reduces such Participant's level of
responsibility, (ii) reduction in the
Participant's level of compensation (including
base salary and any nondiscretionary bonuses or
other incentive payments earned pursuant to
objective standards or criteria), or (iii)
relocation of the place of business at which the
Participant is principally located to a location
that is greater than 50 miles from the current
site without the Participant's consent, from and
after such Change in Control Event.
(d) "Cause" shall mean any (i) willful failure by the
Participant, which failure is not cured within 30
days of written notice to the Participant from the
Company, to perform his or her material
responsibilities to the Company or (ii) willful
misconduct by the Participant which affects the
business reputation of the Company.
(2) Effect on Options
(a) Acquisition Event. Upon the occurrence of an
Acquisition Event (regardless of whether such
event also constitutes a Change in Control Event),
or the execution by the Company of any agreement
with respect to an Acquisition Event (regardless
of whether such event will result in a Change in
Control Event), the Board shall provide that all
outstanding Options shall be assumed, or
equivalent options shall be substituted, by the
acquiring or succeeding corporation (or an
affiliate thereof); provided that (i) any options
substituted for Incentive Stock Options shall
satisfy, in the determination of the Board, the
requirements of Section 424(a) of the Code and
(ii) if such Acquisition Event also constitutes a
Change in Control Event, except to the extent
specifically provided to the contrary in the
instrument evidencing any Option or any other
agreement between a Participant and the Company
(A) (I) with respect to all Options that become
exercisable ("vest") over a five-year period,
those shares subject to the Option which were not
already vested but would vest within 18
<PAGE> 12
months after such Change in Control Event (the "18
Month Accelerated Option Shares") and (II) with
respect to Options that vest over a four-year
period, those shares subject to the Option which
were not already vested but would vest within
twelve months after such Change in Control event
(the "12 Month Accelerated Option Shares", and
together with the 18 Month Accelerated Option
Shares, the "Accelerated Option Shares"), shall be
exercisable upon the occurrence of such Change in
Control Event and, subject to (B) below, the
remaining shares subject to the Option shall
continue to become vested in accordance with the
original vesting schedule set forth in such
Option, with that number of shares that would
otherwise have first become vested, multiplied by
a fraction (x) the numerator of which is the
difference between the number of shares subject to
the Option and the applicable Accelerated Option
Shares and (y) the denominator of which is the
number of shares subject to the Option, becoming
so vested on each subsequent vesting date in
accordance with the original schedule and (B) such
assumed or substituted options shall become
immediately exercisable in full if, on or prior to
the first anniversary of the date of the
consummation of such Acquisition Event also
constituting a Change in Control Event, the
Participant's employment with the Company or the
acquiring or succeeding corporation is terminated
for Good Reason by the Participant or is
terminated without Cause by the Company or the
acquiring or succeeding corporation.
Notwithstanding the foregoing, if the
acquiring or succeeding corporation (or an
affiliate thereof) does not agree to assume, or
substitute for, such Options, then the Board shall
(x) upon written notice to the Participants,
provide that all then unexercised Options will
become exercisable in full as of a specified time
(the "Acceleration Time") prior to the Acquisition
Event and will terminate immediately prior to the
consummation of such Acquisition Event, except to
the extent exercised by the Participants before the
consummation of such Acquisition Event, and/or (y)
in the event of an Acquisition Event under the
terms of which holders of Common Stock will receive
upon consummation thereof a cash payment for each
share of Common Stock surrendered pursuant to such
Acquisition Event (the "Acquisition Price"),
provide that all outstanding Options shall
terminate upon consummation of such Acquisition
Event and each Participant shall receive, in
exchange therefor, a cash payment equal to the
amount (if any) by which (A) the Acquisition Price
multiplied by the number of shares of Common Stock
subject to such
<PAGE> 13
outstanding Options (whether or not then
exercisable), exceeds (B) the aggregate exercise
price of such Options.
(b) Change in Control Event that is not an Acquisition
Event. Upon the occurrence of a Change in Control
Event that does not also constitute an Acquisition
Event, except to the extent specifically provided
to the contrary in the instrument evidencing any
Option or any other agreement between a
Participant and the Company, the vesting schedule
of such Option shall be accelerated in part so
that the Accelerated Option Shares shall
immediately become exercisable. The remaining
number of shares shall continue to become vested
in accordance with the original vesting schedule
set forth in such Option, with that number of
shares that would otherwise have first become
vested, multiplied by a fraction (x) the numerator
of which is the difference between the number of
shares subject to the Option and the applicable
Accelerated Option Shares and (y) the denominator
of which is the number of shares subject to the
Option, becoming so vested on each subsequent
vesting date in accordance with the original
schedule; provided, however, that each such Option
shall be immediately exercisable in full if, on or
prior to the first anniversary of the date of the
consummation of the Change in Control Event, the
Participant's employment with the Company or the
acquiring or succeeding corporation is terminated
for Good Reason by the Participant or is
terminated without Cause by the Company or the
acquiring or succeeding corporation.
(3) Effect on Restricted Stock Awards
(a) Acquisition Event that is not a Change in Control
Event. Upon the occurrence of an Acquisition Event
that is not a Change in Control Event, the
repurchase and other rights of the Company under
each outstanding Restricted Stock Award shall
inure to the benefit of the Company's successor
and shall apply to the cash, securities or other
property which the Common Stock was converted into
or exchanged for pursuant to such Acquisition
Event in the same manner and to the same extent as
they applied to the Common Stock subject to such
Restricted Stock Award.
(b) Change in Control Event. Upon the occurrence of a
Change in Control Event (regardless of whether
such event also constitutes an Acquisition Event),
except to the extent specifically provided to the
contrary in the instrument evidencing any
Restricted Stock Award or any other agreement
between a Participant
<PAGE> 14
and the Company, the vesting schedule of all
Restricted Stock Awards shall be accelerated in
part so that such number of shares that would
otherwise have first become free from conditions
or restrictions (A) within 18 months after the
date of the Change in Control Event in the case of
Restricted Stock Awards which are subject to a
five year Purchase Option (as defined in the
Restricted Stock Agreement) by the Company (the
"18-Month Accelerated Shares"), and (B) within 12
months after the date of the Change of Control
Event in the case of Restricted Stock Awards which
are subject to a four year Purchase Option by the
Company (the "12-Month Accelerated Shares,"
together with the 18-Month Accelerated Shares, the
"Accelerated Shares"), shall immediately become
free from conditions or restrictions. Subject to
the following sentence, the remaining number of
shares shall continue to become free from
conditions or restrictions in accordance with the
original schedule set forth in such Restricted
Stock Award, with that number of shares that would
otherwise have first become free from conditions
or restrictions, multiplied by a fraction (x) the
numerator of which is the difference between the
number of shares covered by such Restricted Stock
Award and the applicable Accelerated Shares and
(y) the denominator of which is the number of
shares covered by such Restricted Stock Award,
becoming free from conditions or restrictions on
each subsequent vesting date in accordance with
the original schedule. In addition, each such
Restricted Stock Award shall immediately become
free from all conditions or restrictions if, on or
prior to the first anniversary of the date of the
consummation of the Change in Control Event, the
Participant's employment with the Company or the
acquiring or succeeding corporation is terminated
for Good Reason by the Participant or is
terminated without Cause by the Company or the
acquiring or succeeding corporation.
(4) Effect on Other Awards
(a) Acquisition Event that is not a Change in Control
Event. The Board shall specify the effect of an
Acquisition Event that is not a Change in Control
Event on any other Award granted under the Plan at
the time of the grant of such Award.
(b) Change in Control Event. Upon the occurrence of a
Change in Control Event (regardless of whether
such event also constitutes an Acquisition Event),
except to the extent specifically provided to the
contrary in the instrument evidencing any Award or
any other agreement between a Participant and the
Company,
<PAGE> 15
the vesting schedule of all other Awards shall be
accelerated in part so that such number of shares
that would otherwise have first become
exercisable, realizable, vested or free from
conditions or restrictions (A) within 18 months
after the date of the Change in Control Event in
the case of other Awards which are subject to a
five year purchase option by the Company (the
"18-Month Accelerated Award Shares"), and (B)
within 12 months after the date of the Change of
Control Event in the case of other Awards which
are subject to a four year purchase option by the
Company (the "12-Month Accelerated Award Shares,"
together with the 18-Month Accelerated Award
Shares, the "Accelerated Award Shares"), shall
immediately become exercisable, realizable, vested
or free from conditions or restrictions. Subject
to the following sentence, the remaining number of
shares shall continue to become exercisable,
realizable, vested or free from conditions or
restrictions in accordance with the original
schedule set forth in such Award, with that number
of shares that would otherwise have first become
exercisable, realizable, vested or free from
conditions or restrictions, multiplied by a
fraction (x) the numerator of which is the
difference between the number of shares covered by
such Award and the applicable Accelerated Award
Shares and (y) the denominator of which is the
number of shares covered by such Award, becoming
so exercisable, realizable, vested or free from
conditions or restrictions on each subsequent
vesting date in accordance with the original
schedule. In addition, each such Award shall
immediately become fully exercisable, realizable,
vested or free from conditions or restrictions if,
on or prior to the first anniversary of the date
of the consummation of the Change in Control
Event, the Participant's employment with the
Company or the acquiring or succeeding corporation
is terminated for Good Reason by the Participant
or is terminated without Cause by the Company or
the acquiring or succeeding corporation.
10. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.
(b) Documentation. Each Award shall be evidenced by a written instrument
in such form as the Board shall determine. Each Award may contain
<PAGE> 16
terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each
Award may be made alone or in addition or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.
(e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, Participants may satisfy such tax obligations in whole or
in part by delivery of shares of Common Stock, including shares retained from
the Award creating the tax obligation, valued at their Fair Market Value. The
Company may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to a Participant.
(f) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
(g) Conditions on Delivery of Stock. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(h) Acceleration. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of restrictions in full or in part or that any other
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
11. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
<PAGE> 17
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.
(c) Effective Date and Term of Plan. The Plan shall become effective on
the date on which it is adopted by the Board. No Awards shall be granted under
the Plan after the completion of ten years from the earlier of (i) the date on
which the Plan was adopted by the Board or (ii) the date the Plan was approved
by the Company's stockholders, but Awards previously granted may extend beyond
that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time.
(e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the Commonwealth of Massachusetts, without regard to any applicable conflicts of
law.
<PAGE> 1
EXHIBIT 4.2
OBERON SOFTWARE INCORPORATED
STOCK OPTION AGREEMENT (1990 PLAN)
Oberon Software Incorporated, a Massachusetts corporation (the
"Company"), hereby grants to of ________ (the "Grantee"), an option (the
"Option") to purchase _________ shares of the Company' s Common Stock, pursuant
to the Company's 1990 Stock Option Plan (the "Plan"), a copy of which is
attached hereto and is incorporated herein in its entirety by this reference.
The Grantee hereby accepts the Option granted subject to the terms and
provisions set forth in the Plan and the following additional terms and
provisions:
1. The Option is an incentive stock option.
2. The price at which shares of Common Stock may be purchased pursuant
to the Option is _______ per share, both the price and the number of shares
being subject to adjustment only as provided in the Plan.
3. Subject to the provisions of Section 15 of the Plan, the period for
exercising the Option (the "Exercise Period" ) commences on the date hereof (the
"Grant Date" ) and continues thereafter for five (5) years; provided, however,
that the Option may be exercised during the Exercise Period only to the
following extent, decreased in each case by the aggregate number of shares as to
which it has previously been exercised;
(i) immediately upon the Grant Date, the Option may be exercised
for twenty percent (20%) of the total number of shares subject to this Option
Agreement;
(ii) following the expiration of each six-month period after the
Grant Date, the Option may be exercised for an additional ten percent (10%) of
the total number of shares subject to this Option Agreement; and
(iii) following the expiration of four years after the Grant
Date, the Option may be exercised for all of the shares subject to this Option
Agreement.
If the Grantee retires from the employ of the Company during the
Exercise Period, the Option shall be exercisable by him or her only during the
three months following his or her retirement (but in no event after the
expiration of the Exercise Period) and only as to the number of shares, if any,
as to which it was exercisable immediately prior to retirement.
<PAGE> 2
If the Grantee ceases to be an officer, employee, director or consultant
of the Company by reason of his or her death during the Exercise Period, the
Option shall be exercisable by either his or her executor or administrator or,
if not so exercised, by the legatees or the distributees of his or her estate,
only during the six months following his or her death (but in no event after the
expiration of the Exercise Period); provided that a legatee or distributee can
exercise the Option only if such legatee or distributee is the participant's
spouse, issue or a trustee or trustees principally for the benefit of such
spouse and/or any such issue. During such six month period, the Option shall be
exercisable as to the total number of shares subject to this Option Agreement
(decreased by the aggregate number of shares as to which it has previously been
exercised).
If the Grantee ceases to be an officer, employee, director or consultant
of the Company by reason of his or her permanent and total disability (as
determined conclusively by the Company) during the Exercise Period, the Option
shall be exercisable by him or her only during the three months following such
cessation (but in no event after the expiration of the Exercise Period) and as
to the total number of shares subject to this Option Agreement (decreased by the
aggregate number of shares as to which it has previously been exercised).
If the Grantee ceases to be an officer, employee, director or consultant
of the Company other than because of his or her retirement, death or permanent
and total disability during the Exercise Period, the Option shall be exercisable
by him or her only during the thirty days following such cessation (but in no
event after the expiration of the Exercise Period) and only as to the number of
shares, if any, as to which it was exercisable immediately prior to such
cessation.
WARNING: THE OPTION EXERCISE PERIOD MAY BE CUT SHORT IN THE EVENT OF CERTAIN
"REORGANIZATIONS" OR OTHER MAJOR CORPORATE EVENTS. SEE SECTION 15 OF THE PLAN.
4. The Option shall not be exercisable unless the Grantee (i) shall have
represented, warranted and agreed, in form and substance satisfactory to the
Company, at the time of exercising the Option, that he or she is acquiring the
shares for his or her own account, for investment and not with a view to or in
connection with any distribution, (ii) shall have agreed to restrictions on
transfer in form and substance satisfactory to the Company and (iii) shall have
agreed to an endorsement which makes appropriate reference to such
representations, warranties, agreements and restrictions on the certificate(s)
representing the shares.
All shares issued upon exercise of the Option will be subject to
applicable restrictions on transfer (including, without limitation, rights of
first refusal) imposed by Section 17 of the Plan, state and federal securities
laws, the Articles of Organization and the By-Laws of the Company as then in
effect, or this Agreement or any other agreement to which the Grantee is a
party. For the purpose of Section 17 of the Plan, a pledge of, or
<PAGE> 3
the granting of a security interest in, the shares issued to the Grantee upon
exercise of the Option will be treated as a transfer.
5. The Option may be exercised, subject to such conditions as the
Company's Board of Directors may require in accordance with the Plan, by the
giving of written notice, by hand or by mail, to the Company's Treasurer at its
principal place of business in Cambridge, Massachusetts, of the election to
purchase shares pursuant hereto, which notice shall specify the number of shares
to be so purchased, accompanied by full payment for the shares purchased,
together with any tax or excise due in respect of issue of such shares, in cash
or by check.
6. Notwithstanding anything to the contrary contained herein, no shares
shall be issued to the Grantee upon exercise of the Option until the Company and
the Grantee have made appropriate arrangements for the withholding of applicable
income taxes, if any, attributable to the exercise of the Option with respect to
such shares, and the Company may require the Grantee to make a cash payment to
the Company in the amount of such taxes required to be withheld.
THE OPTION IS NOT TRANSFERABLE BY THE GRANTEE OTHERWISE THAN BY WILL OR
THE LAWS OF DESCENT AND DISTRIBUTION AND, DURING THE LIFETIME OF THE GRANTEE,
MAY BE EXERCISED ONLY BY THE GRANTEE.
WITNESS the execution hereof under seal as of the seventh day of January, 1997.
OBERON SOFTWARE INCORPORATED
By: ,
------------------------------
Joseph J Chappell, President
ACCEPTED:
--------------------------------
Grantee
<PAGE> 4
[four year vest]
EXHIBIT 4.2
OBERON SOFTWARE INCORPORATED
Incentive Stock Option Agreement
Granted Under 1998 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant by Oberon Software Incorporated, a
Massachusetts corporation (the "Company"), on _________________ to
_______________, an employee of the Company (the "Participant"), of an option to
purchase, in whole or in part, on the terms provided herein and in the Company's
1998 Stock Incentive Plan (the "Plan"), a total of _______ shares of common
stock, $.01 par value per share, of the Company ("Common Stock") (the "Shares")
at $___ per Share. For purposes of this option, the "Vesting Commencement Date"
shall mean ________________. Unless earlier terminated, this option shall expire
on _______________ (the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended and any regulations promulgated thereunder (the "Code"). Except
as otherwise indicated by the context, the term "Participant", as used in this
option, shall be deemed to include any person who acquires the right to exercise
this option validly under its terms.
2. Vesting Schedule.
This option will become exercisable ("vest") as to 25% of the original
number of Shares on the date twelve months after the Vesting Commencement Date
set forth above and as to an additional 6.25% of the original number of Shares
at the end of each successive full three-month period following thereafter until
the fourth anniversary of the Grant Date. This option shall expire upon, and
will not be exercisable after, the Final Exercise Date.
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.
<PAGE> 5
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan, including without limitation Section 5(f)(3) of the
Plan following registration of the Common Stock under the Securities
Exchange Act of 1934. The Participant may purchase less than the number of
shares covered hereby, provided that no partial exercise of this option may
be for any fractional share or for fewer than ten whole shares.
(b) Continuous Relationship with the Company Required. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been
at all times since the date of grant of this option, an employee, officer or
director of, or consultant or advisor to, the Company or any parent or
subsidiary of the Company as defined in Section 424(e) or (f) of the Code
(an "Eligible Participant").
(c) Termination of Relationship with the Company. If the Participant ceases to
be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall
terminate three months after such cessation (but in no event after the Final
Exercise Date), provided that this option shall be exercisable only to the
extent that the Participant was entitled to exercise this option on the date
of such cessation. Notwithstanding the foregoing, if the Participant, prior
to the Final Exercise Date, violates the non-competition or confidentiality
provisions of any employment contract, confidentiality and nondisclosure
agreement or other agreement between the Participant and the Company, the
right to exercise this option shall terminate immediately upon such
violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the
Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant by the
Participant, provided that this option shall be exercisable only to the
extent that
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<PAGE> 6
this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(e) Discharge for Cause. If the Participant, prior to the Final Exercise Date,
is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of
such discharge. "Cause" shall mean willful misconduct by the Participant or
willful failure by the Participant to perform his or her responsibilities to
the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure,
non-competition or other similar agreement between the Participant and the
Company), as determined by the Company, which determination shall be
conclusive. The Participant shall be considered to have been discharged for
"Cause" if the Company determines, within 30 days after the Participant's
resignation, that discharge for cause was warranted.
4. Right of First Refusal.
(a) If the Participant proposes to sell, assign, transfer, pledge, hypothecate
or otherwise dispose of, by operation of law or otherwise (collectively,
"transfer") any Shares acquired upon exercise of this option, then the
Participant shall first give written notice of the proposed transfer (the
"Transfer Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Participant
proposes to transfer (the "Offered Shares"), the price per share and all
other material terms and conditions of the transfer.
(b) For 30 days following its receipt of such Transfer Notice, the Company shall
have the option to purchase all (but not less than all) of the Offered
Shares at the price and upon the terms set forth in the Transfer Notice. In
the event the Company elects to purchase all of the Offered Shares, it shall
give written notice of such election to the Participant within such 30-day
period. Within 10 days after his receipt of such notice, the Participant
shall tender to the Company at its principal offices the certificate or
certificates representing the Offered Shares, duly endorsed in blank by the
Participant or with duly endorsed stock powers attached thereto, all in a
form suitable for transfer of the Offered Shares to the Company. Upon
receipt of such certificate or certificates, the Company shall deliver or
mail to the Participant a check
3
<PAGE> 7
in payment of the purchase price for the Offered Shares; provided that if
the terms of payment set forth in the Transfer Notice were other than cash
against delivery, the Company may pay for the Offered Shares on the same
terms and conditions as were set forth in the Transfer Notice.
(c) At and after the time at which the Offered Shares are required to be
delivered to the Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the Participant on
account of such Shares or permit the Participant to exercise any of the
privileges or rights of a stockholder with respect to such Offered Shares,
but shall, in so far as permitted by law, treat the Company as the owner of
such Offered Shares.
(d) If the Company does not elect to acquire all of the Offered Shares, the
Participant may, within the 30-day period following the expiration of the
option granted to the Company under subsection (b) above, transfer the
Offered Shares to the proposed transferee, provided that such transfer shall
not be on terms and conditions more favorable to the transferee than those
contained in the Transfer Notice. Notwithstanding any of the above, all
Offered Shares transferred pursuant to this Section 4 shall remain subject
to the right of first refusal set forth in this Section 4 and such
transferee shall, as a condition to such transfer, deliver to the Company a
written instrument confirming that such transferee shall be bound by all of
the terms and conditions of this Section 4.
(e) The following transactions shall be exempt from the provisions of this
Section 4:
1) any transfer of Shares to or for the benefit of any spouse, child or
grandchild of the Participant, or to a trust for their benefit;
2) any transfer pursuant to an effective registration statement filed by
the Company under the Securities Act of 1933, as amended (the
"Securities Act"); and
3) any transfer of the Shares pursuant to the sale of all or substantially
all of the business of the Company;
provided, however, that in the case of a transfer pursuant to clause (1)
above, such Shares shall remain subject to the right of first refusal set forth
in this Section 4 and such transferee shall, as a condition to such transfer,
deliver to the Company a
4
<PAGE> 8
written instrument confirming that such transferee shall be bound by all of the
terms and conditions of this Section 4.
(f) The Company may assign its rights to purchase Offered Shares in any
particular transaction under this Section 4 to one or more persons or
entities.
(g) The provisions of this Section 4 shall terminate upon the earlier of the
following events:
1) the closing of the sale of shares of Common Stock in an underwritten
public offering pursuant to an effective registration statement filed by the
Company under the Securities Act; or
2) the sale of all or substantially all of the capital stock, assets or
business of the Company, by merger, consolidation, sale of assets or otherwise.
(h) The Company shall not be required (a) to transfer on its books any of the
Shares which shall have been sold or transferred in violation of any of the
provisions set forth in this Section 4, or (b) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall
have been so sold or transferred.
5. Agreement in Connection with Public Offering.
The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration statement
under the Securities Act, (i) not to sell, make short sale of, loan, grant any
options for the purchase of, or otherwise dispose of any shares of Common Stock
held by the Participant (other than those shares included in the offering)
without the prior written consent of the Company or the underwriters managing
such initial underwritten public offering of the Company's securities for a
period of 180 days from the effective date of such registration statement, and
(ii) to execute any agreement reflecting clause (i) above as may be requested by
the Company or the managing underwriters at the time of such offering.
6. Withholding.
No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any
5
<PAGE> 9
federal, state or local withholding taxes required by law to be withheld in
respect of this option. Such withholding includes delivery of shares of Common
Stock pursuant to Section 9(e) of the Plan.
7. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.
6
<PAGE> 10
8. Disqualifying Disposition.
If the Participant disposes of Shares acquired upon exercise of this
option within two years from the date of grant of the option or one year after
such Shares were acquired pursuant to exercise of this option, the Participant
shall notify the Company in writing of such disposition.
9. Provisions of the Plan.
This option is subject to the provisions of the Plan (including without
limitation Section 8(c) thereof), a copy of which is furnished to the
Participant with this option.
IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
OBERON SOFTWARE INCORPORATED
Dated: _________________ By:
------------------------------
NAME: Joseph J. Chappell
TITLE: President & CEO
7
<PAGE> 11
PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1998 Stock Incentive Plan.
PARTICIPANT:
----------------------------------
Address:
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8
<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF WILSON SONSINI GOODRICH & ROSATI, PROFESSIONAL CORPORATION]
April 28, 2000
OnDisplay, Inc.
12667 Alcosta Boulevard,
Suite 300
San Ramon, California 94583
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about April 28, 2000 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 3,764,689 shares of your Common Stock
(the "Shares") to be issued under your assumed Oberon Software Incorporated
1990 Stock Option Plan and Oberon Software Incorporated 1998 Stock Incentive
Plan (the "Plans"). As your counsel in connection with this transaction, we have
examined the proceedings taken and are familiar with the proceedings proposed
to be taken by you in connection with the issuance of the Shares.
It is our opinion that, when the shares are issued pursuant to options
granted in the manner described in the Plans, and pursuant to the agreements
which accompany each option grant, the Shares 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 whenever appearing in the
Registration Statement and any amendments thereto.
Very truly yours,
/s/ Wilson Sonsini Goodrich & Rosati
----------------------------------------
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
<PAGE> 1
EXHIBIT 23.1
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report dated February 16, 2000 relating to the consolidated
financial statements of OnDisplay, Inc., which appears in the Annual Report on
Form 10-K for the year ended December 31, 1999.
/s/ PRICEWATERHOUSECOOPERS LLP
April 28, 2000
