<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
INTELLICORP, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
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<PAGE> 2
INTELLICORP
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 5, 2000
To the Stockholders of IntelliCorp, Inc.:
The Annual Meeting of Stockholders of IntelliCorp, Inc. (the "Company")
will be held at the Grand Hotel, 865 West El Camino Real, Sunnyvale, California,
on December 5, 2000 at 9:00 a.m. local time for the following purposes:
1. To elect six directors to hold office until the next annual meeting of
stockholders and until their successors are elected.
2. To approve the Company's 2000 Stock Option Plan (the "Plan") covering
4,000,000 shares issuable under the Plan.
3. To approve the Company's 2000 Nonemployee Directors Stock Option Plan
(the "Directors Plan") covering 500,000 shares issuable under the
Directors Plan.
4. To transact such other business as properly may come before the meeting,
or any adjournment or postponements of the meeting.
Only stockholders of record at the close of business on October 16, 2000
are entitled to notice of, and to vote at, the meeting and any adjournments or
postponements of the meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
[/s/ KENNETH H. HAAS]
Kenneth H. Haas,
Director and Chief Executive Officer
Mountain View, California
November 1, 2000
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POST-PAID
ENVELOPE. THANK YOU FOR ACTING PROMPTLY.
<PAGE> 3
INTELLICORP
1975 EL CAMINO REAL WEST
MOUNTAIN VIEW, CALIFORNIA 94040-2216
(650) 965-5500
To the Stockholders of IntelliCorp, Inc.:
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of IntelliCorp, Inc., a Delaware corporation ("IntelliCorp" or the
"Company"). The proxy is solicited for use at the annual meeting of stockholders
(the "Annual Meeting") to be held at 9:00 a.m. local time on December 5, 2000 at
the Grand Hotel, 865 West El Camino Real, Sunnyvale, California. The approximate
date on which this proxy statement and the accompanying notice and proxy are
being mailed to stockholders is November 1, 2000.
Only stockholders of record at the close of business on October 16, 2000
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements thereof. At the close of business on that date,
the Company had outstanding 21,100,607 shares of its Common Stock, par value
$.001 per share ("Common Stock"). Holders of Common Stock are entitled to one
vote for each share of Common Stock held. In order to constitute a quorum for
the conduct of business at the Annual Meeting, a majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting must be
represented at the Annual Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
All shares represented by each properly executed, unrevoked proxy received
in time for the Annual Meeting will be voted in the manner specified therein. If
the manner of voting is not specified in an executed proxy received by the
Company, the proxy will be voted for the election of the directors listed in the
proxy for election to the Board and for approval of the other proposals
described in this proxy statement.
Shares represented by proxies that reflect abstentions or broker non-votes
will be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Directors will be elected by a favorable
vote of a plurality of the shares of voting stock present and entitled to vote,
in person or by proxy, at the Annual Meeting. Accordingly, abstentions or broker
non-votes as to the election of directors will not affect the election of the
candidates receiving the plurality of votes. Proposals Two and Three require the
approval of a majority of the shares of Common Stock represented and voting at
the meeting at which a quorum is present. Abstentions will have the same effect
as votes against such proposal. Broker non-votes, however, will be treated as
unvoted for the purposes of determining approval of such proposal and will not
be counted as votes for or against such proposals.
Any stockholder giving a proxy in the form accompanying this proxy
statement has the power to revoke the proxy prior to its exercise. A proxy can
be revoked by an instrument of revocation delivered prior to the Annual Meeting
to the Secretary of the Company, by a duly executed proxy bearing a later date
or time than the date or time of the proxy being revoked, or at the Annual
Meeting if the stockholder is present and elects to vote in person. Mere
attendance at the Annual Meeting will not serve to revoke a proxy.
Solicitation of proxies may be by directors, officers and other employees
or agents of the Company by personal interview, telephone or telegraph. Costs of
solicitation will be borne by the Company.
<PAGE> 4
PROPOSAL ONE
NOMINATION AND ELECTION OF DIRECTORS
NOMINATION OF DIRECTORS
The Bylaws of the Company provide for a Board consisting of not fewer than
five nor more than nine directors. The size of the Board is presently set at
six. Proxies cannot be voted for more than six directors at the Annual Meeting.
The present term of office of all directors will expire at the Annual Meeting.
Six directors are nominated to be elected at the Annual Meeting to serve
until the next annual meeting and until their respective successors are elected.
All of the nominees are currently directors of the Company. It is intended that
proxies received will be voted FOR the election of the nominees named below
unless marked to the contrary. In the event any such person is unable or
unwilling to serve as a director, proxies may be voted for substitute nominees
designated by the present Board. The Board has no reason to believe that any of
the persons named below will be unable or unwilling to serve as a director if
elected.
The following table indicates the name and age of each nominee, all
positions with the Company held by the nominee, and the year during which the
nominee first was elected a director.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY DIRECTOR SINCE
---- --- --------------------- --------------
<S> <C> <C> <C>
Arthur W. Berry(1)(2)....................... 59 Director 1997
Katharine C. Branscomb(1)(2)................ 44 Director 1988
Elmer F. Fisher(1).......................... 62 Director 2000
Kenneth H. Haas............................. 49 Director and Chief 1993
Executive Officer
Robert A. Lauridsen(1)(2)................... 52 Director 1999
Norman J. Wechsler(1)(2).................... 55 Director 1996
</TABLE>
---------------
(1) Compensation and Stock Option Committee Member
(2) Audit Committee Member
BUSINESS EXPERIENCE OF NOMINEES
Arthur W. Berry became a Director of the Company in August 1997. Since
1990, he has been Chairman of Pecks Management Partners Ltd. in New York, a
specialized, institutional investment manager focusing on public and privately
placed convertible securities. From 1985 to 1990, Mr. Berry was President of the
Alliance Capital Management, L.P. Convertible Fund. Prior to joining Alliance,
he was with the Harris Bank in Chicago, first as Senior Portfolio Manager in the
bank's individual investment group, then as Vice President and Head of the
Special Funds section and Manager of the Harris Convertible Fund. Mr. Berry, a
Chartered Financial Analyst, is a graduate of Monmouth College and holds an MBA
degree from Washington University. He is a director of Hybridon, Inc.
Katharine C. Branscomb has been a Director of the Company since October
1988. She is currently Vice President and Director of the Branscomb Family
Foundation and a director of Ariat International. From October 1992 to November
1995, she was Senior Vice President of Business Development for Lotus
Development Corporation and, in that capacity, served a principal role in the
sale of Lotus to IBM in June 1995. From November 1991 until joining Lotus, Ms.
Branscomb was the Chief Executive Officer of IntelliCorp, Inc. She had
previously held the position of Chief Operating Officer since late 1988. Prior
to joining IntelliCorp, Ms. Branscomb was Senior Vice President of Sales and
Marketing at Aion Corporation, founding principal and Vice President of Metaphor
Computer Systems and a consultant with the Boston Consulting Group, Inc.
Elmer F. Fisher has been a Director of the Company since July 2000. Mr.
Fisher retired in June 2000 from Deloitte Consulting where he held the position
of Chairman/CEO at Deloitte Consulting/ICS, a
2
<PAGE> 5
$1 billion, 5,000 person global SAP consultancy firm. From 1990 - 1995 he worked
as the National Managing Director of Operations at Deloitte & Touche.
Kenneth H. Haas has been a Director of the Company since 1993. Mr. Haas was
appointed President of IntelliCorp in October 1992 and Chief Executive Officer
in August 1999. He joined the Company in 1983 as General Counsel, became Vice
President and Secretary in March 1984 and was appointed Vice President, Finance
and Chief Financial Officer in January 1990. Mr. Haas received his B.A. from
Harvard College in 1972, his J.D. from Harvard Law School in 1976, and attended
the Harvard Business School Advanced Management Program in 1989.
Robert A. Lauridsen has been a Director of the Company since April 1999. He
is a Partner with R.B. Webber & Company in Palo Alto, California, a management
consulting firm focused on working with high technology companies. He has been
with R.B. Webber since 1995. From 1990 to 1995, Mr. Lauridsen was an executive
with Apple Computer; from 1991 as Vice President of Corporate Development. Mr.
Lauridsen has also been a Partner with the Boston Consulting Group, Inc. and
Booz, Allen & Hamilton's Technology Practice. He was also founder and CEO of
Redwood Fire and Casualty Insurance Company, a subsidiary of Berkshire Hathaway
Company.
Norman J. Wechsler has been a Director of the Company since September 1996.
He is Chairman and President of Wechsler & Co., Inc., a broker-dealer and
investment company, which he joined in 1963. The firm is a member of the NASD
and SIPC.
BOARD MEETINGS AND COMMITTEES
The Board of Directors met seven times during the last fiscal year. Other
than for Katharine C. Branscomb, all directors participated in more than 75% of
the total number of meetings of the Board and all committees of the Board on
which he or she served that were held during the period.
The Board of Directors has a Compensation and Stock Option Committee and an
Audit Committee. The Compensation and Stock Option Committee met five times
during the last fiscal year. The functions of this Committee are to review and
approve management compensation and to administer the Company's stock option
plans.
The Audit Committee met four times during the last fiscal year. The
functions of the Audit Committee are to recommend to the Board the firm of
independent auditors to serve the Company, to review the scope, fees and results
of the audit by the independent auditors and to review the internal control
procedures of the Company.
The Board of Directors does not have a nominating committee.
COMPENSATION OF DIRECTORS
The Company's 1991 Nonemployee Directors Stock Option Plan (the "Directors
Plan"), as amended provides that if a person who is neither an officer nor an
employee of the Company is elected or appointed a director, the Company is
required to grant that person an initial nonqualified stock option ("NQO") to
purchase 25,000 shares of the Company's Common Stock at an exercise price equal
to the fair market value of Common Stock on the date of grant. Generally, each
such option will be exercisable in full upon the date of grant. Under the
Directors Plan, at the first meeting of the Board following each annual meeting
of the stockholders of the Company, the Company is required to grant to each
director of the Company who is neither an officer nor an employee of the Company
an NQO to purchase 10,000 shares of the Company's Common Stock, at an exercise
price equal to the fair market value of Common Stock on the date of the grant.
Generally, each such option will be exercisable in full upon the date of grant.
The Directors Plan also permits the Board to elect to waive the payment of all
or any part of director fees and to credit an amount not greater than such
waived fees to reduce the exercise price of options granted under the Directors
Plan. The term of any option granted under the Directors Plan is ten years and
two days.
3
<PAGE> 6
An aggregate of 50,000 options were granted to nonemployee directors under
the Directors Plan during the fiscal year ended June 30, 2000.
Nonemployee directors of the Company have the right to receive an annual
fee for their services as directors. During fiscal 2000, all nonemployee
directors were entitled to receive an annual fee of $15,000 each, and they
elected to waive payment of such fees and to credit a portion of such waived
fees to reduce the exercise price of options granted under the Directors Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than ten percent of the Common Stock, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities
and Exchange Commission and the National Association of Securities Dealers. Such
officers, directors and ten percent shareholders are also required by Securities
and Exchange Commission rules to furnish the Company with copies of all Section
16(a) forms that they file.
Peter Christiansen, David A. Higdon, and Adrian G. Rayner each filed a late
Form 4 for February 2000, David J. Loeb filed a late Form 4 for March 2000, and
Norman J. Wechsler filed a late Form 5 for June 2000, reporting their respective
beneficial ownership in the Company. Other than these instances, based solely on
its review of copies of such reports received or written representations from
certain reporting persons, the Company believes that, during the fiscal
year-ended June 30, 2000, there has been no other failure by any of its
officers, directors or 10% shareholders to file on a timely basis any reports
required by Section 16(a).
BENEFICIAL STOCK OWNERSHIP
Based on 21,099,733 shares of common stock outstanding as of September 30,
2000, the following table sets forth: (i) the name and address of each person
who, to the knowledge of the Company, beneficially owned more than five percent
(5%) of the outstanding Common Stock; (ii) the total number of shares
beneficially owned by such person; and (iii) the percentage of the outstanding
Common Stock so owned. The information relating to ownership of shares is based
upon information furnished by the beneficial owner.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS
---------------- ---------------- ----------------
<S> <C> <C>
SAP AG................................................ 1,736,263 8.64%
Postfach 1461
D-69185, Walldorf, Germany
Norman J. Wechsler(1)................................. 6,817,928 31.14%
105 South Bedford Road, Suite 310
Mt. Kisco, NY 10549
</TABLE>
---------------
(1) Includes 5,246,695 shares of Common Stock held by Wechsler & Company, Inc.,
of which Mr. Wechsler is the Chairman of the Board, President, and principal
shareholder, including 764,426 shares issuable upon conversion of Preferred
Stock and 994,032 shares issuable upon exercise of warrants, 60,000 shares
of Common Stock held by Mr. Wechsler's spouse, 5,000 shares of Common Stock
held by a trust for the benefit of Mr. Wechsler's minor son, 26,101 shares
of Common Stock held by Waco Partners, of which Mr. Wechsler is the managing
general partner, outstanding options to purchase 34,375 shares granted
directly to Mr. Wechsler under the 1991 Nonemployee Directors Stock Option
Plan which were exercisable as of September 30, 2000, or within 60 days from
such date, and 1,445,757 shares of Common Stock directly owned by Mr.
Wechsler.
4
<PAGE> 7
The following table sets forth as of September 30, 2000, beneficial Common
Stock ownership information concerning: (i) all current directors and nominees;
(ii) each executive officer named in the Summary Compensation Table; and (iii)
all directors and executive officers as a group. Each person has sole investment
and voting power with respect to the shares indicated, except as otherwise set
forth in the footnotes to the table.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME SHARES(1) CLASS(1)
---- --------- ----------
<S> <C> <C>
Arthur W. Berry............................................. 311,551(2) 1.54%
Katharine C. Branscomb...................................... 172,801 *
Elmer F. Fisher............................................. 35,000 *
Robert A. Lauridsen......................................... 31,250 *
Norman J. Wechsler.......................................... 6,817,928(3) 31.14%
Kenneth H. Haas............................................. 479,657 2.33%
David J. Loeb............................................... 60,438 *
Adrian G. Rayner............................................ 155,625 *
All directors and executive officers as a group (14
persons).................................................. 8,351,957(4) 36.29%(4)
</TABLE>
---------------
* Less than 1%
(1) Assumes that the person has exercised, to the extent exercisable within 60
days and not subject to repurchase on or after September 30, 2000, all
options to purchase Common Stock held by him or her and that no other person
has exercised any outstanding options.
(2) Includes 32,529 shares of Common Stock issuable upon conversion of Preferred
Stock and 45,000 shares issuable upon exercise of warrants.
(3) Includes 5,246,695 shares of Common Stock held by Wechsler & Company, Inc.,
of which Mr. Wechsler is the Chairman of the Board, President, and principal
shareholder, including 764,426 shares issuable upon conversion of Preferred
Stock and 994,032 shares issuable upon exercise of warrants, 60,000 shares
of Common Stock held by Mr. Wechsler's spouse, 5,000 shares of Common Stock
held by a trust for the benefit of Mr. Wechsler's minor son, 26,101 shares
of Common Stock held by Waco Partners, of which Mr. Wechsler is the managing
general partner, outstanding options to purchase 34,375 shares granted
directly to Mr. Wechsler under the 1991 Nonemployee Directors Stock Option
Plan which were exercisable as of September 30, 2000, or within 60 days from
such date, and 1,445,757 shares of Common Stock directly owned by Mr.
Wechsler.
(4) Includes 1,024,251 shares which executive officers and directors as a group
have the right to acquire prior to September 30, 2000 through the exercise
of options and which are not subject to repurchase after that date and
1,842,237 shares issuable upon conversion of Warrants and Preferred Stock
for Mr. Wechsler, Mr. Berry, and Mr. Sulier.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following table sets forth compensation paid by the Company for
services rendered in all capacities during the three most recent fiscal years to
the following executive officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
----------------------- COMPENSATION
YEAR COMMISSION/ ---------------------
ENDED SALARY BONUS SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION JUNE 30 $ $ OPTIONS/SARS(#)
--------------------------- ------- -------- ----------- ---------------------
<S> <C> <C> <C> <C>
Kenneth H. Haas.......................... 2000 $200,000 $ 0 150,000
Director and Chief 1999 $196,154 $ 0 0
Executive Officer 1998 $193,750 $ 0 75,000
Sze-Lo (Steve) Tsui(1)................... 2000 $156,475 $ 51,812 60,000
President 1999 $127,051 $ 45,975 210,000
Colin I. Bodell(2)....................... 2000 $201,667 $ 18,396 40,000
Executive Vice President 1999 $196,154 $ 0 30,000
1998 $189,500 $ 0 30,000
David J. Loeb............................ 2000 $128,938 $101,676 60,000
Vice President, Consulting 1999 $119,167 $ 46,065 10,000
& Training 1998 $106,667 $ 25,500 0
Adrian G. Rayner......................... 2000 $122,943 $110,592 120,000
Vice President and Managing 1999 $101,584 $127,751 25,000
Director, Europe 1998 $102,564 $136,131 20,000
</TABLE>
---------------
(1) Mr. Tsui resigned from IntelliCorp in April 2000.
(2) Mr. Bodell resigned from IntelliCorp in August 2000.
SEVERANCE AGREEMENTS
In October 1991, the Company executed an agreement with Mr. Haas which
provides for a severance payment equal to one year's salary if his employment is
terminated without cause.
The following table shows for each executive officer named in the Summary
Compensation Table certain information regarding stock option grants during
fiscal year 2000:
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENT VALUE AT
TOTAL ASSUMED RATES
NUMBER OF OPTIONS/SARS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OR OPTION TERM(3)
OPTION/SARS IN FISCAL YEAR BASE PRICE EXPIRATION ---------------------
NAME GRANTED(2) 2000 ($/SHARE) DATE 5% 10%
---- ----------- -------------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Kenneth H. Haas........... 150,000(4) 7% $4.6875 02/03/2010 $442,192 $1,120,600
Sze-Lo (Steve) Tsui....... 60,000(5) 3% $0.8750 07/14/2001 $ 33,017 $ 83,671
Colin I. Bodell........... 40,000(4) 2% $4.6875 11/25/2000 $117,918 $ 298,827
David J. Loeb............. 25,000 1% $1.8750 10/08/2009 $ 29,479 $ 74,707
35,000(4) 2% $4.6875 02/03/2010 $103,178 $ 261,473
Adrian G. Rayner.......... 120,000(4) 6% $4.6875 02/03/2010 $353,753 $ 896,480
</TABLE>
---------------
(1) No SAR grants were made to any named executive officer during the year ended
June 30, 2000.
(2) The options have a term of ten years and two days and are immediately
exercisable upon issuance but are subject to a right of repurchase which
expires ratably over a period of 4 years, except for those noted below with
alternate repurchase rights. Payment by the optionee on exercise of options
may be in cash, by a full recourse promissory note, or by tender of shares.
All options are granted at the fair market value of
6
<PAGE> 9
the Company's Common Stock on the date of grant, except for 60,000 options
granted to Mr. Tsui which were $1.325 below the fair market value of the
Company's Common Stock on the date of grant.
(3) The potential realizable value is based on the term of the option at the
date of the grant (10 years). It is calculated by assuming that the stock
price on the date of grant appreciates at the indicated annual rate,
compounded annually for the entire term, and that the option is exercised
and sold on the last day of the option term for the appreciated stock price.
These amounts represent certain assumed rates of appreciation, in accordance
with the rules of the SEC, and do not reflect the Company's estimate or
projection of the future stock price performance. Actual gains, if any, are
dependent on the actual future performance of the Company's Common Stock.
There can be no assurance that the amounts reflected in this table will be
achieved.
(4) The options granted to Mr. Haas, Mr. Bodell, Mr. Loeb, and Mr. Rayner have a
term of ten years and two days and are immediately exercisable upon issuance
but are subject to a right of repurchase which expires ratably over a period
of one year.
The following table shows for each executive officer named in the Summary
Compensation Table certain information regarding option exercises during fiscal
year 2000 and options outstanding as of June 30, 2000:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES(1)
<TABLE>
<CAPTION>
SHARES NUMBER OF VALUE OF UNEXERCISED
ACQUIRED SECURITIES UNDERLYING IN-THE-MONEY
ON VALUE UNEXERCISED OPTIONS OPTIONS AT FISCAL YEAR-END
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE(2) EXERCISABLE/UNEXERCISABLE(2)(3)
---- -------- -------- ---------------------------- -------------------------------
<S> <C> <C> <C> <C>
Kenneth H. Haas........... 78,575 $411,608 359,237/167,188 $124,017/$0
Sze-Lo (Steve) Tsui....... 58,500 $183,985 58,375/0 $62,023/$0
Colin I. Bodell........... 70,000 $238,125 108,541/71,459 $28,125/$21,094
David J. Loeb............. 82,437 $541,397 11,146/65,417 $2,734/$7,578
Adrian G. Rayner.......... 0 $ 0 74,375/124,688 $15,097/$18,262
</TABLE>
---------------
(1) No SAR grants were outstanding at June 30, 2000.
(2) All options included in the table are immediately exercisable at the
exercise price upon issuance, but the shares issuable upon option exercise
are subject to a right of repurchase by the Company upon employment
termination. Options identified as "Unexercisable" in the table were subject
to a right of repurchase as of fiscal year end.
(3) Based on a closing share price of $1.9375 at fiscal year end.
PROPOSAL TWO
APPROVAL OF 2000 STOCK OPTION PLAN
BACKGROUND
At the Annual Meeting, the stockholders are being asked to approve the 2000
Stock Option Plan (the "Plan"). The Board of Directors adopted the Plan on
October 13, 2000. Subject to stockholder approval, this plan provides for the
grant of incentive stock options to our employees and nonqualified stock options
to our employees, directors and consultants. As of October 13, 2000, 4,000,000
shares of common stock were reserved for issuance under the Plan.
DESCRIPTION OF THE PLAN
The purposes of the Plan are to: encourage selected employees, directors
and consultants to improve operations and increase profits of the Company;
encourage selected employees, directors and consultants to accept or continue
employment or association with the Company or its affiliates; and increase the
interest of selected employees, directors and consultants in the Company's
welfare through participation in the growth in
7
<PAGE> 10
value of the Common Stock of the Company, and thereby strengthen the Company by
providing added incentive to officers, employees, and consultants for high
levels of performance and unusual efforts required to increase the earnings of
the Company. Stock options are generally used by technology companies to create
such incentives, particularly technology companies in Silicon Valley with which
the Company competes directly for employees and consultants. The Company
believes that the ability to grant stock options is extremely important to
attract, retain, and motivate the individuals essential to the Company's
long-term growth and financial success.
The Company can grant either incentive stock options ("ISOs") or
nonqualified stock options ("NQOs") under the Plan. The Plan is administered by
the Compensation and Stock Option Committee (the "Option Committee"), which
determines the number of shares for which each option shall be granted, whether
the option is an ISO or an NQO, the exercise price of the option, the time and
amounts in which the option is exercisable, and the option's other terms and
conditions. Employees of the Company are eligible to receive ISOs. Consultants
and directors are eligible to receive only NQOs. Options granted expire ten
years after the date of grant, except for NQO grants, which expire ten years and
two days after the date of grant, or earlier, in the event of termination of the
optionee's employment, consulting or director relationship with the Company. The
per share exercise price of ISOs may not be less than 100% of the fair market
value of the Common Stock on the date of grant. The per share exercise price of
NQOs may not be less than 85% of the fair market value of the Common Stock on
the date of grant. The exercise price of an ISO granted to an individual then
owning stock possessing more than ten percent (10%) of the voting power of the
Company's outstanding capital stock must be at least equal to one hundred ten
percent (110%) of the fair market value on the date of grant, and the maximum
term of such an ISO may not exceed five years.
The consideration payable for, upon exercise of, or for tax payable in
connection with, an option grant may be paid in cash, by promissory note of the
participant, or by delivery of securities of the Company, if authorized by the
administrator of the Plan. The Company will not receive any consideration upon
the grant of any options. Options generally may be exercised immediately, or may
vest over four or five years, depending upon the particular grant, and must
generally be exercised within three months after a participant's employment by,
or consulting or director relationship with, the Company terminates. If
termination is due to the participant's death, retirement or disability, the
options may be exercised for at least six months thereafter. Shares issued upon
exercise of options may be subject to a right of repurchase by the Company which
generally lapses as to 25% of the total number of shares subject to the option
on the anniversary of the grant date and expires as to an additional 6.25% of
such shares on a quarterly basis thereafter.
FEDERAL INCOME TAX CONSEQUENCES
See "Certain Federal Income Tax Consequences" below for a discussion of
federal income tax consequences relating to participation in the Plan.
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<PAGE> 11
The following table shows for each executive officer named in the Summary
Compensation Table, for all executives as a group, for all non-executive
directors as a group and for all non-executive officer employees as a group, the
options granted under the 1991 Stock Option Plan for the year ended June 30,
2000.
PLAN BENEFITS
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF SHARES
----------------- ----------------
<S> <C>
Kenneth H. Haas............................................. 150,000
Director and Chief Executive Officer
Sze-Lo (Steve) Tsui......................................... 60,000
President
Colin I. Bodell............................................. 40,000
Executive Vice President
David J. Loeb............................................... 60,000
Vice President, Consulting & Training
Adrian G. Rayner............................................ 120,000
Vice President and Managing Director, Europe
Executive Group............................................. 250,000
Non-Executive Director Group................................ 0
Non-Executive Officer Employee Group........................ 931,900
</TABLE>
PROPOSAL
At the Annual Meeting, stockholders will be asked to approve the 2000 Stock
Option Plan. Such approval will require the affirmative vote of a majority of
the shares of Common Stock represented and voting at the meeting at which a
quorum is present. The Board of Directors recommends a vote "FOR" approval of
the 2000 Stock Option Plan.
PROPOSAL THREE
APPROVAL OF 2000 NONEMPLOYEE DIRECTORS OPTION PLAN
BACKGROUND
At the Annual Meeting, the stockholders are being asked to approve the 2000
Nonemployee Directors Option Plan (the "Directors Plan"). The Board of Directors
adopted the Directors Plan on October 13, 2000 to strengthen the Company by
providing added incentive to attract and retain nonemployee directors. The
Company believes that the ability to grant stock options is extremely important
to attract, retain, and motivate the individuals essential to the Company's
long-term growth and financial success. Furthermore, the Company believes that
the Directors Plan is required to remain competitive in its industry. Stock
options are generally used by technology companies to create incentives for
directors, especially technology companies in Silicon Valley with which the
Company competes directly for directors. As of October 13, 2000, 500,000 shares
of common stock were reserved for issuance under the Directors Plan.
DESCRIPTION OF THE DIRECTORS PLAN
The Directors Stock Plan provides that if a person who is neither an
officer nor an employee of the Company is elected or appointed a director, the
Company is required to grant that person an initial nonqualified stock option
("NQO") to purchase 25,000 shares of the Company's Common Stock at an exercise
price equal to the fair market value of Common Stock on the date of grant.
Generally, these options become exercisable in full immediately after the date
of grant. Under the Directors Plan, at the first meeting of the Board following
each annual meeting of the stockholders of the Company, the Company is required
to grant to each director of the Company, then in office for at least six
months, who is neither an officer nor an employee of the Company an NQO to
purchase 10,000 shares of the Company's Common Stock, at an exercise price equal
to the fair market value of Common Stock on the date of the grant. Generally,
each such
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<PAGE> 12
option becomes exercisable in full immediately after the date of grant. The
Directors Plan also permits the Board to elect to waive the payment of all or
any part of director fees and to credit an amount not greater than such waived
fees to reduce the exercise price of options granted under the Directors Plan.
The term of any option granted under the Directors Plan is ten years and two
days.
The Directors Plan is administered by the Compensation and Stock Option
Committee (the "Option Committee"). No option may be granted under the Directors
Plan after October 15, 2010, but outstanding options may extend beyond that
date. Options may be exercised for three months after the optionee leaves the
Company and, if the optionee's term on the Board is terminated by reason of
death, for one year after the optionee's death, but in either case not beyond
the original term of the option. No option granted under the Directors Plan is
transferable by the optionee other than by will or under the laws of descent and
distribution, and each option is exercisable, during the lifetime of the
optionee, only by the optionee. The Directors Plan expires in October 15, 2010,
unless earlier terminated by the Board of Directors.
The following table shows for each executive officer named in the Summary
Compensation Table, for all executives as a group, for all non-executive
directors as a group and for all non-executive officer employees as a group, the
options which may be granted under the 2000 Nonemployee Directors Stock Option
Plan over the life of the plan.
PLAN BENEFITS
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF SHARES
----------------- ----------------
<S> <C>
Kenneth H. Haas............................................. 0
Director and Chief Executive Officer
Sze-Lo (Steve) Tsui......................................... 0
President
Colin I. Bodell............................................. 0
Executive Vice President
David J. Loeb............................................... 0
Vice President, Consulting & Training
Adrian G. Rayner............................................ 0
Vice President and Managing Director, Europe
Executive Group............................................. 0
Non-Executive Director Group................................ 500,000
Non-Executive Officer Employee Group........................ 0
</TABLE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES IS BASED UPON
EXISTING STATUTES, REGULATIONS AND INTERPRETATIONS THEREOF. THE APPLICABLE RULES
ARE COMPLEX, AND INCOME TAX CONSEQUENCES MAY VARY DEPENDING UPON THE PARTICULAR
CIRCUMSTANCES OF EACH PLAN PARTICIPANT. THIS PROXY STATEMENT DESCRIBES FEDERAL
INCOME TAX CONSEQUENCES OF GENERAL APPLICABILITY BUT DOES NOT PURPORT TO
DESCRIBE PARTICULAR CONSEQUENCES TO EACH INDIVIDUAL PLAN PARTICIPANT OR FOREIGN,
STATE OR LOCAL INCOME TAX CONSEQUENCES, WHICH MAY DIFFER FROM UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES.
INCENTIVE STOCK OPTIONS
Award; Exercise. ISOs are intended to constitute "incentive stock options"
within the meaning of Section 422 of the Code. ISOs may be granted only to
employees of the Company (including directors who are also employees). An
optionee does not recognize taxable income upon either the grant or exercise of
an ISO. However, the excess of the fair market value of the shares purchased
upon exercise over the option exercise price (the "Option Spread") is includable
in the optionee's "alternative minimum taxable income"
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<PAGE> 13
("AMTI") for purposes of the alternative minimum tax ("AMT"). The Option Spread
is generally measured on the date of exercise and is includable in the AMTI in
the year of exercise. Special rules regarding the time of AMTI inclusion may
apply for shares subject to a repurchase right or other "substantial risk of
forfeiture" (including, in the case of each person subject to the reporting
requirements of Section 16 of the Exchange Act, limitations on resale of shares
imposed under Section 16(b) of the Exchange Act).
Sale of Option Shares. If an optionee holds the shares purchased under an
ISO for at least two years from the date the ISO was granted and for at least
one year from the date the ISO was exercised, any gain from a sale of the shares
other than the Company is taxable as long-term capital gain. Under these
circumstances, the Company would not be entitled to a tax deduction at the time
the ISO is exercised or at the time the stock is sold. If an optionee were to
dispose of stock acquired pursuant to an ISO before the end of the required
holding periods (a "Disqualifying Disposition"), the amount by which the market
value of the stock at the time the ISO is exercised exceeds the exercise price
(or, if less, the amount of gain realized on the sale) is taxable as ordinary
income, the Company is entitled to a corresponding tax deduction. Such income is
subject to information reporting requirements and may become subject to income
and employment tax withholding. Gain from a Disqualifying Disposition in excess
of the amount required to be recognized as ordinary income is capital gain.
Optionees are required to notify the Company immediately prior to making a
Disqualifying Disposition. If the stock is sold to the Company rather than to a
third party, the sale may not produce a capital gain or loss but may constitute
a redemption taxable as a dividend unless the redemption is "not essentially
equivalent to a dividend" within the meaning of the Code. The timing and amount
of income from a Disqualifying Disposition and the beginning of the optionee's
holding period for determining whether capital gain or loss is long- or
short-term may be affected if option stock is acquired subject to a repurchase
right or other "substantial risk of forfeiture" (including in the case of each
person subject to the reporting requirements of Section 16 of the Exchange Act,
limitations on resale of shares imposed under Section 16(b) of the Exchange
Act).
Exercise With Stock. If an optionee pays for ISO shares with shares of the
Company acquired under an ISO or a qualified employee stock purchase plan
("qualified option stock"), the tender of shares is a Disqualifying Disposition
of the qualified option stock if the above-described (or other applicable)
holding periods respecting those shares have not been satisfied. If the holding
periods with respect to the qualified option stock are satisfied, or the shares
were not acquired under a qualified stock option of the Company, then any
appreciation in value of the surrendered shares is not taxable upon surrender.
Special basis and holding period rules apply where previously owned
non-qualified option stock is used to exercise an ISO.
NONQUALIFIED STOCK OPTIONS
Award; Exercise. An optionee is not taxable upon the award of a NQO.
Federal income tax consequences upon exercise will depend upon whether the
shares thereby acquired are subject to a "substantial risk of forfeiture." If
the shares are not subject to a substantial risk of forfeiture, or if they are
so restricted and the optionee files an election under Section 83(b) of the Code
(a "Section 83(b) Election") with respect to the shares, the optionee will have
ordinary income at the time of exercise measured by the Option Spread on the
exercise date. The optionee's tax basis in the shares will be the fair market
value of the shares on the date of exercise, and the holding period for purposes
of determining whether capital gain or loss upon sale is long- or short-term
also will begin on or immediately after that date. If the shares are subject to
a substantial risk of forfeiture and no Section 83(b) Election is filed, the
optionee will not be taxable upon exercise, but instead will have ordinary
income on the date the restrictions lapse, in an amount equal to the difference
between the amount paid for the shares under the NQO and their fair market value
as of the date of lapse; in addition, the optionee's holding period will begin
on the date of the lapse.
Whether or not the shares are subject to a substantial risk of forfeiture,
the amount of ordinary income taxable to an optionee who is an employee at the
time of grant constitutes "supplemental wages" subject to withholding of income
and employment taxes by the Company, and the Company receives a corresponding
income tax deduction.
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<PAGE> 14
Sale of Option Shares. Upon sale, other than to the Company, of shares
acquired under a NQO, an optionee generally will recognize capital gain or loss
to the extent of the difference between the sale price and the optionee's tax
basis in the shares, which will be long-term gain or loss if the employee's
holding period in the shares is more than one year. If stock is sold to the
Company, rather than to a third party, the sale may not produce capital gain or
loss. A sale of shares to the Company will constitute a redemption of such
shares, which could be taxable as a dividend unless the redemption is "not
essentially equivalent to a dividend" within the meaning of the Code.
Exercise with Stock. If an optionee tenders Common Stock to pay all or part
of the exercise price of a NQO, the optionee will not have a taxable gain or
deductible loss on the surrendered shares. Instead, shares acquired upon
exercise that are equal in value to the fair market value of the shares
surrendered in payment are treated as if they had been substituted for the
surrendered shares, taking as their basis and holding period the basis and
holding period that the optionee had in the surrendered shares. The additional
shares are treated as newly acquired with a zero basis.
If the surrendered shares are qualified option stock as described above
under "Incentive Stock Options", with respect to which the applicable holding
period requirements for favorable income tax treatment have not expired, then
the newly acquired shares substituted for the qualified option shares should
remain subject to the federal income tax rules governing the surrendered shares,
but the surrender should not constitute a Disqualifying Disposition of the
surrendered stock.
PROPOSAL
At the Annual Meeting, stockholders will be asked to approve the 2000
Nonemployee Directors Option Plan. Such approval will require the affirmative
vote of a majority of the shares of Common Stock represented and voting at the
meeting at which a quorum is present. The Board of Directors recommends a vote
"FOR" approval of the 2000 Nonemployee Directors Option Plan.
INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Ernst & Young LLP as
independent auditors to audit the financial statements of the Company for the
fiscal year ending June 30, 2001. Ernst & Young LLP has acted in such capacity
since its appointment in March 1987. Representatives of Ernst & Young LLP will
be present at the Annual Meeting and will have an opportunity to make a
statement if they desire to do so. The representatives of Ernst & Young LLP also
will be available to respond to appropriate questions raised during the Annual
Meeting.
FINANCIAL STATEMENTS
The Company's annual report to stockholders for the fiscal year ended June
30, 2000, containing audited consolidated balance sheets as of the end of each
of the past two fiscal years and audited consolidated statements of operations,
stockholders' equity and cash flows for each of the past three fiscal years, is
being mailed with this proxy statement to stockholders entitled to notice of the
Annual Meeting.
STOCKHOLDER PROPOSALS
The Company will, in future proxy statements of the Board, include
stockholder proposals complying with the applicable rules of the Securities and
Exchange Commission and any applicable state laws. In order for a proposal by a
stockholder to be included in the proxy statement of the Board relating to the
Annual Meeting of Stockholders to be held in fall 2001, that proposal must be
received in writing by the Secretary of the Company at the Company's principal
executive offices no later than June 30, 2001.
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<PAGE> 15
OTHER MATTERS
The Board knows of no other matters which will be presented to the Annual
Meeting. If, however, any other matter is properly presented at the Annual
Meeting, the proxy solicited by this Proxy Statement contains discretionary
authority on the persons named therein and will be voted in accordance with the
judgment of the person or persons holding such proxy. In addition, if the
Company is not notified by September 6, 2001 of a proposal to be brought before
the 2001 annual meeting by a stockholder, then proxies held by management for
such meeting may provide the discretion to vote against such proposal even
though it is not discussed in the proxy statement for such meeting.
BY ORDER OF THE BOARD OF DIRECTORS
[/s/ KENNETH H. HAAS]
Kenneth H. Haas
Director and Chief Executive Officer
Mountain View, California
November 1, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED POSTPAID ENVELOPE.
13
<PAGE> 16
2000 STOCK OPTION PLAN
OF
INTELLICORP, INC.
1. PURPOSES OF THE PLAN
The purposes of the 2000 Stock Option Plan (the "Plan") of Intellicorp,
Inc., a Delaware corporation (the "Company"), are to:
(a) Encourage selected employees, directors and consultants to
improve operations and increase profits of the Company;
(b) Encourage selected employees, directors and consultants to
accept or continue employment or association with the Company or its Affiliates;
and
(c) Increase the interest of selected employees, directors and
consultants in the Company's welfare through participation in the growth in
value of the common stock of the Company (the "Common Stock").
Options granted under this Plan ("Options") may be "incentive stock
options" ("ISOs") intended to satisfy the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or "nonstatutory
options" ("NSOs").
2. ELIGIBLE PERSONS
Employees of the Company or any Affiliate (as defined below) at the date
of grant of an Option are eligible to receive ISOs or NQOs. Consultants and
non-employee directors of the Company or any Affiliate (as defined below) at the
date of grant are eligible to receive only NQOs. The term "Affiliate" as used in
the Plan means a parent or subsidiary corporation as defined in the applicable
provisions of the Code. The term "employee" includes an officer or director who
is an employee, of the Company. The term "consultant" includes persons employed
by, or otherwise affiliated with, a consultant.
3. STOCK SUBJECT TO THIS PLAN
Subject to the provisions of Section 6.1.1 of the Plan, the total number
of shares of stock which may be issued under options granted pursuant to this
Plan shall be 4,000,000 shares of Common Stock. The shares covered by the
portion of any grant under the Plan which expire unexercised shall become
available again for grants under the Plan.
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<PAGE> 17
4. ADMINISTRATION
4.1 General. This Plan shall be administered by the Board of
Directors of the Company (the "Board") or, by a committee (the "Committee") of
at least two Board members to which administration of the Plan, or of part of
the Plan, is delegated (in either case, the "Administrator").
4.2 Public Company. From and after such time as the Company
registers a class of equity securities under Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Committee shall
consist of Board members who are "Non-Employee Directors" as defined under Rule
16b-3 promulgated by the Securities and Exchange Commission ("Rule 16b-3"), or
any successor rule thereto.
4.3 Authority of Administrator. Subject to the other provisions
of this Plan, the Administrator shall have the authority, in its discretion: (i)
to grant Options; (ii) to determine the fair market value of the Common Stock
subject to Options; (iii) to determine the exercise price of Options granted;
(iv) to determine the persons to whom, and the time or times at which, Options
shall be granted, and the number of shares subject to each Option; (v) to
interpret this Plan; (vi) to prescribe, amend, and rescind rules and regulations
relating to this Plan; (vii) to determine the terms and provisions of each
Option granted (which need not be identical), including but not limited to, the
time or times at which Options shall be exercisable; (viii) with the consent of
the optionee, to modify or amend any Option; (ix) to accelerate the exercise
date of any Option; (x) to authorize any person to execute on behalf of the
Company any instrument evidencing the grant of an Option; and (xi) to make all
other determinations deemed necessary or advisable for the administration of
this Plan. The Administrator (A) may delegate to one or more officers of this
corporation the authority to grant Options in an amount not to exceed 10,000
shares of Common Stock to persons other than "executive officers" as defined in
the Securities Exchange Act and the rules and regulations thereunder and to
determine the fair market value of Common Stock subject to such Options, to
determine the exercise price of such Options granted (which need not be
identical), including, but not limited to, the time or times at which such
Options shall be exercisable, and to determine the terms and provisions of each
such Option granted and (B) may delegate nondiscretionary administrative duties
to such employees of the Company as it deems proper.
4.4 Interpretation by Administrator. All questions of
interpretation, implementation, and application of this Plan shall be determined
in its absolute discretion by the Administrator. Such determinations shall be
final and binding on all persons.
4.5 Rule 16b-3. With respect to persons subject to Section 16 of
the Exchange Act, if any, transactions under this Plan are intended to comply
with the
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<PAGE> 18
applicable conditions of Rule 16b-3, or any successor rule thereto. To the
extent a transaction under this Plan or action by the Administrator fails to so
comply, it shall, to the extent deemed advisable by the Administrator, be
modified to comply with Rule 16b-3. Notwithstanding the above, it shall be the
responsibility of such persons, not of the Company or the Administrator, to
comply with the requirements of Section 16 of the Exchange Act; and neither the
Company nor the Administrator shall be liable if this Plan or any transaction
under this Plan fails to comply with the applicable conditions of Rule 16b-3 or
any successor rule thereto, or if any such person incurs any liability under
Section 16 of the Exchange Act.
5. GRANTING OF OPTIONS; OPTION AGREEMENT
5.1 No Options shall be granted under this Plan after ten (10)
years from the date of adoption of this Plan by the Board.
5.2 Each Option shall be evidenced by a written stock option
agreement (the "Option Agreement"), in form satisfactory to the Company,
executed by the Company and the person to whom such Option is granted; provided,
however, that the failure by the Company, the optionee, or both to execute the
Option Agreement shall not invalidate the granting of an Option, although the
exercise of each option shall be subject to Section 6.1.3.
5.3 The Option Agreement shall specify whether each Option it
evidences is an NSO or an ISO.
5.4 Subject to Section 6.3.3 with respect to ISOs, the
Administrator may approve the grant of Options under this Plan to persons who
are expected to become employees, directors or consultants of the Company, but
are not employees, directors or consultants at the date of approval.
6. TERMS AND CONDITIONS OF OPTIONS
Each Option granted under this Plan shall be subject to the terms and
conditions set forth in Section 6.1. NQOs shall be also subject to the terms and
conditions set forth in Section 6.2, but not those set forth in Section 6.3.
ISOs shall also be subject to the terms and conditions set forth in Section 6.3,
but not those set forth in Section 6.2.
6.1 Terms and Conditions to Which All Options Are Subject.
Options granted under this Plan shall be subject to the following terms and
conditions:
6.1.1 Changes in Capital. Subject to Section 6.1.2, if
the stock of the Company is changed by reason of a stock split, reverse stock
split, stock dividend, or recapitalization, combination or reclassification,
appropriate adjustments shall be made by
3
<PAGE> 19
the Board in (a) the number and class of shares of stock subject to this Plan
and each Option outstanding under this Plan, and (b) the exercise price of each
outstanding Option; provided, however, that the Company shall not be required to
issue fractional shares as a result of any such adjustments. Each such
adjustment shall be subject to approval by the Board in its absolute discretion.
6.1.2 Corporate Transactions. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each optionee at least thirty (30) days prior to such proposed action. To
the extent not previously exercised, all Options will terminate immediately
prior to the consummation of such proposed action. In the event of a merger or
consolidation of the Company with or into another corporation or entity, or in
the event of a sale of all or substantially all of the assets of the Company in
which the stockholders of the Company receive securities of the acquiring entity
or an affiliate thereof, the repurchase rights of the Company with respect to
the shares issued or issuable upon exercise of outstanding Options shall expire
with respect to twice the number of shares otherwise indicated pursuant to the
terms of the Option (up to a maximum of 100%); provided that if Options have
been held for more than six (6) months but less than one (1) year the length of
time between the date of grant and the date determined by the Administrator in
accordance with the next sentence shall be doubled to determine the number of
shares as to which repurchase rights shall expire. The Administrator shall have
the authority, in its sole discretion to: (i) determine the time prior to
consummation of such acquisition when such increased expiration of repurchase
rights shall become effective; and (ii) grant more favorable terms regarding
expiration of repurchase rights in connection with the occurrence of any such
acquisition.
6.1.3 Time of Option Exercise. Subject to Section 5 and
Section 6.3.4, Options granted under this Plan shall be exercisable (a)
immediately as of the effective date of the Option Agreement granting the
Option, or (b) in accordance with a schedule related to the date of the grant of
the Option, the date of first employment, or such other date as may be set by
the Administrator (in any case, the "Vesting Base Date") and specified in the
Option Agreement relating to such Option; provided, however, that the right to
exercise an Option must vest at the rate of at least 20% per year over five
years from the date the option was granted. Options granted to officers,
directors or consultants may become fully exercisable, subject to reasonable
conditions such as continued employment, at any time or during any period
established by the Board of the Administrator in accordance with this Plan. In
any case, no Option shall be exercisable until a written Option Agreement in
form satisfactory to the Company is executed by the Company and the optionee.
6.1.4 Option Grant Date. Except in the case of advance
approvals described in Section 5.4, the date of grant of an Option under this
Plan shall be the date as of which the Administrator approves the grant.
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<PAGE> 20
6.1.5 Nonassignability of Option Rights. Except as
otherwise determined by the Administrator and expressly set forth in the Option
Agreement, no Option granted under this Plan shall be assignable or otherwise
transferable by the optionee except by will or by the laws of descent and
distribution. During the life of the optionee, except as otherwise determined by
the Administrator and expressly set forth in the Option Agreement, an Option
shall be exercisable only by the optionee.
6.1.6 Payment. Except as provided below, payment in
full, in cash, shall be made for all stock purchased at the time written notice
of exercise of an Option is given to the Company, and proceeds of any payment
shall constitute general funds of the Company. At the time an Option is granted
or exercised, the Administrator, in the exercise of its absolute discretion
after considering any tax or accounting consequences, may authorize any one or
more of the following additional methods of payment:
(a) Acceptance of the optionee's full recourse
promissory note for all or part of the Option price, payable on such terms and
bearing such interest rate as determined by the Administrator (but in no event
less than the minimum interest rate specified under the Code at which no
additional interest would be imputed and in no event more than the maximum
interest rate allowed under applicable usury laws), which promissory note may be
either secured or unsecured in such manner as the Administrator shall approve
(including, without limitation, by a security interest in the shares of the
Company); and
(b) Delivery by the optionee of Common Stock
already owned by the optionee for all or part of the Option price, provided the
value (determined as set forth in Section 6.1.11) of such Common Stock is equal
on the date of exercise to the Option price, or such portion thereof as the
optionee is authorized to pay by delivery of such stock; provided, however, that
if an optionee has exercised any portion of any Option granted by the Company by
delivery of Common Stock, the optionee may not, within six (6) months following
such exercise, exercise any Option granted under this Plan by delivery of Common
Stock without the consent of the Administrator.
6.1.7 Termination of Employment.
(a) If, for any reason other than death,
disability or "cause" (as defined below), an optionee ceases to be employed by
the Company or any of its Affiliates (such event being called a "Termination"),
Options held at the date of Termination (to the extent then exercisable) may be
exercised in whole or in part at any time within ninety (90) days of the date of
such Termination, or such other period of not less than thirty (30) days after
the date of such Termination as is specified in the Option Agreement (but in no
event after the Expiration Date).
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<PAGE> 21
(b) If an optionee dies or becomes disabled
(within the meaning of Section 22(c)(3) of the Code) while employed by the
Company or an Affiliate or within the period that the Option remains exercisable
after Termination, Options then held (to the extent then exercisable) may be
exercised, in whole or in part, by the optionee, by the optionee's personal
representative or by the person to whom the Option is transferred by devise or
the laws of descent and distribution, at any time within twelve (12) months
after the death or twelve (12) months after the disability of the optionee, or
such other period of not less than six (6) months from the date of Termination
as is specified in the Option Agreement (but in no event after the Expiration
Date).
(c) If an optionee is terminated for "cause,"
all Options then held shall terminate and no longer be exercisable as of the
date of Termination.
(d) For purposes of this Section 6.1.7,
"employment" includes service as a director or as a consultant.
(e) For purposes of this Section 6.1.7, an
optionee's employment shall not be deemed to terminate by reason of sick leave,
military leave or other leave of absence approved by the Administrator, if the
period of any such leave does not exceed ninety (90) days or, if longer, if the
optionee's right to reemployment by the Company or any Affiliate is guaranteed
either contractually or by statute.
(f) For purposes of this Section 6.1.7, "cause"
shall mean Termination (i) by reason of optionee's commission of a felony,
misdemeanor or other illegal conduct involving dishonesty, fraud or other
matters of moral turpitude, (ii) by reason of optionee's dishonesty towards,
fraud upon, or deliberate injury or attempted injury to the Company or any of
its Affiliates, or (iii) by reason of optionee's willfully engaging in
misconduct which is materially and demonstrably injurious to the Company or any
of its Affiliates.
6.1.8 Repurchase of Stock. Unless otherwise provided for
by the Administrator in the option agreement, the Common Stock to be delivered
pursuant to the exercise of any Option granted to an employee or consultant
under this Plan may be subject to a right of repurchase in favor of the Company,
with respect to any employee or consultant whose employment or consulting
relationship with the Company is terminated, at the Option exercise price per
share, and such shares shall be held by the Company in escrow to facilitate the
Company's repurchase right. Unless otherwise provided for by the Administrator
in the option agreement, the Company's repurchase right shall expire as to 25%
of the total amount of the shares subject to the Option on the first anniversary
date of the Option grant and shall expire as to an additional 6.25% of such
shares on a quarterly basis thereafter. For purposes of the immediately
preceding provision, the percentages set forth therein are applicable to
full-time employees and the percentage
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<PAGE> 22
applicable to part-time employees shall be adjusted proportionately to the
percentage of full-time employment that such employee is working during the
relevant period. Determination of the number of shares subject to such right of
repurchase shall be made as of the date the employee's employment by or
consultant's consulting relationship with, the Company terminates, not as of the
date that any Option granted to such employee or consultant is thereafter
exercised.
6.1.9 Withholding and Employment Taxes. At the time of
exercise of an Option or at such other time as the amount of such obligations
becomes determinable (the "Tax Date"), the optionee shall remit to the Company
in cash all applicable federal and state withholding and employment taxes. If
authorized by the Administrator in its absolute discretion, after considering
any tax or accounting consequences, an optionee may elect to (i) deliver a full
recourse promissory note on such terms as the Administrator deems appropriate,
(ii) tender to the Company previously owned shares of Stock or other securities
of the Company, or (iii) have shares of Common Stock which are acquired upon
exercise of the Option withheld by the Company to pay some or all of the amount
of tax that is required by law to be withheld by the Company as a result of the
exercise of such Option. Any election pursuant to clause (ii) above, where the
optionee is tendering Common Stock issued pursuant to the exercise of an Option,
shall require that such shares have been held at least six (6) months prior to
the Tax Date. Any securities tendered or withheld in accordance with this
Section 6.1.9 shall be valued by the Company as of the Tax Date.
6.1.10 Other Provisions. Each Option granted under this
Plan may contain such other terms, provisions, and conditions not inconsistent
with this Plan as may be determined by the Administrator, and each ISO granted
under this Plan shall include such provisions and conditions as are necessary to
qualify the Option as an "incentive stock option" within the meaning of Section
422 of the Code.
6.1.11 Determination of Value. For purposes of the Plan,
the value of Common Stock or other securities of the Company shall be determined
as follows:
(a) If the stock of the Company is listed on any
established stock exchange or a national market system, including without
limitation the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System, 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 largest such exchange) for the date
the value is to be determined (or if there are no sales for such date, then for
the last preceding business day on which there were sales), as reported in the
Wall Street Journal or similar publication.
7
<PAGE> 23
(b) If the stock of the Company is 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 stock on the date the value is to be determined (or if there are
no quoted prices for the date of grant, then for the last preceding business day
on which there were quoted prices).
(c) In the absence of an established market for
the stock, the fair market value thereof shall be determined in good faith by
the Administrator, by consideration of such factors as the Administrator in its
discretion deems appropriate among the recent issue price of other securities of
the Company, the Company's net worth, prospective earning power, dividend-paying
capacity, and other relevant factors, including the goodwill of the Company, the
economic outlook in the Company's industry, the Company's position in the
industry and its management, and the values of stock of other corporations in
the same or a similar line of business.
6.1.12 Option Term. Subject to Section 6.3.5, no NQO
shall be exercisable more than ten (10) years and two (2) days after the date of
grant no ISO shall be exercisable more than ten (10) years after the date of
grant, or such lesser period of time as is set forth in the stock option
agreement (the end of the maximum exercise period stated in the Option Agreement
is referred to in this Plan as the "Expiration Date").
6.1.13 Exercise Price. The exercise price of any Option
granted to any person who owns, directly or by attribution under the Code
currently Section 424(d), stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or of any Affiliate
(a "Ten Percent Stockholder") shall in no event be less than 110% of the fair
market value (determined in accordance with Section 6.1.11) of the stock covered
by the Option at the time the Option is granted.
6.2 Terms and Conditions to Which Only NQOs Are Subject. Except
as set forth in Section 6.1.13, the exercise price of a NQO shall be not less
than 85% of the fair market value (determined in accordance with Section 6.1.11)
of the stock subject to the Option on the date of grant.
6.3 Terms and Conditions to Which Only ISOs Are Subject. Options
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:
6.3.1 Exercise Price. Except as set forth in Section
6.1.13, the exercise price of an ISO shall be determined in accordance with the
applicable provisions of the Code and shall in no event be less than the fair
market value (determined in accordance with Section 6.1.11) of the stock covered
by the Option at the time the Option is granted.
8
<PAGE> 24
6.3.2 Disqualifying Dispositions. If stock acquired by
exercise of an ISO granted pursuant to this Plan is disposed of in a
"disqualifying disposition" within the meaning of Section 422 of the Code, the
holder of the stock immediately before the disposition shall promptly notify the
Company in writing of the date and terms of the disposition and shall provide
such other information regarding the Option as the Company may reasonably
require.
6.3.3 Grant Date. If an ISO is granted in anticipation
of employment as provided in Section 5.4, the Option shall be deemed granted,
without further approval, on the date the grantee assumes the employment
relationship forming the basis for such grant, and, in addition, satisfies all
requirements of this Plan for Options granted on that date.
6.3.4 Vesting. Notwithstanding any other provision of
this Plan, ISOs granted under all incentive stock option plans of the Company
and its subsidiaries may not "vest" for more than $100,000 in fair market value
of stock (measured on the grant dates(s)) in any calendar year. For purposes of
the preceding sentence, an option "vests" when it first becomes exercisable. If,
by their terms, such ISOs taken together would vest to a greater extent in a
calendar year, and unless otherwise provided by the Administrator, ISOs with
lower exercise prices shall vest before ISOs with higher exercise prices,
regardless of the grant date.
6.3.5 Term. Notwithstanding Section 6.1.12, no ISO
granted to any Ten Percent Stockholder shall be exercisable more than five (5)
years after the date of grant.
7. MANNER OF EXERCISE
7.1 An optionee wishing to exercise an Option shall give written
notice to the Company at its principal executive office, to the attention of the
officer of the Company designated by the Administrator, accompanied by payment
of the exercise price as provided in Section 6.1.6. The date the Company
receives written notice of an exercise hereunder accompanied by payment of the
exercise price will be considered as the date such Option was exercised.
7.2 Promptly after receipt of written notice of exercise of an
Option, the Company shall, without stock issue or transfer taxes to the optionee
or other person entitled to exercise the Option, deliver to the optionee or such
other person a certificate or certificates for the requisite number of shares of
stock. An optionee or permitted transferee of an optionee shall not have any
privileges as a stockholder with respect to any shares of stock covered by the
Option until the date of issuance (as evidenced by the appropriate entry on the
books of the Company or a duly authorized transfer agent) of such shares.
9
<PAGE> 25
8. EMPLOYMENT OR CONSULTING RELATIONSHIP
Nothing in this Plan or any Option granted thereunder shall interfere
with or limit in any way the right of the Company or of any of its Affiliates to
terminate any optionee's employment or consulting at any time, nor confer upon
any optionee any right to continue in the employ of, or consult with, the
Company or any of its Affiliates.
9. FINANCIAL INFORMATION
The Company shall provide to each optionee during the period such
optionee holds an outstanding Option, and to each holder of Common Stock
acquired upon exercise of Options granted under the Plan for so long as such
person is a holder of such Common Stock, annual financial statements of the
Company as prepared either by the Company or independent certified public
accountants of the Company. Such financial statements shall include, at a
minimum, a balance sheet and an income statement, and shall be delivered as soon
as practicable following the end of the Company's fiscal year.
10. CONDITIONS UPON ISSUANCE OF SHARES
Shares of Common Stock 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
"Securities Act").
11. NONEXCLUSIVITY OF THE PLAN
The adoption of the Plan shall not be construed as creating any
limitations on the power of the Company to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options other than under the Plan.
12. MARKET STANDOFF
Each Optionee, if so requested by the Company or any representative of
the underwriters in connection with any registration of the offering of any
securities of the Company under the Securities Act of 1933, as amended (the
"Securities Act"), shall not sell or otherwise transfer any shares of Common
Stock acquired upon exercise of Options during the 180-day period following the
effective date of a registration statement of the company filed under the
Securities Act; provided, however, that such restriction shall apply only to the
first two registration statements of the Company to become effective under the
Securities Act which includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may
10
<PAGE> 26
impose stop-transfer instructions with respect to securities subject to the
foregoing restriction until the end of such 180-day period.
13. AMENDMENTS TO PLAN
The Board may at any time amend, alter, suspend or discontinue this
Plan. Without the consent of an optionee, no amendment, alteration, suspension
or discontinuance may adversely affect outstanding Options except to conform
this Plan and ISOs granted under this Plan to the requirements of federal or
other tax laws relating to incentive stock options. No amendment, alteration,
suspension or discontinuance shall require stockholder approval unless (a)
stockholder approval is required to preserve incentive stock option treatment
for federal income tax purposes, or (b) the Board otherwise concludes that
stockholder approval is advisable.
14. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon adoption by the Board provided,
however, that no Option shall be exercisable unless and until written consent of
the stockholders of the Company, or approval of stockholders of the Company
voting at a validly called stockholders' meeting, is obtained within twelve (12)
months after adoption by the Board. If such stockholder approval is not obtained
within such time, Options granted hereunder shall terminate and be of no force
and effect from and after expiration of such twelve (12) month period. Options
may be granted and exercised under this Plan only after there has been
compliance with all applicable federal and state securities laws.
Plan adopted by the Board of Directors on October 13, 2000.
Plan approved by Stockholders on ___________, 2000.
11
<PAGE> 27
2000 NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
OF
INTELLICORP INC.
1. PURPOSES OF THE PLAN
The purposes of the 2000 Nonemployee Directors Stock Option Plan
of Intellicorp Inc., a Delaware corporation, are: (a) to encourage Nonemployee
Directors to accept or continue their association with the Company; and (b) to
increase the interest of Nonemployee Directors in the Company's operations and
increased profits through participation in the growth in value of the Common
Stock of the Company.
2. DEFINITIONS
As used herein, the following definitions shall apply:
(a) "Administrator" shall mean the entity, either the Board or a
committee appointed by the Board, responsible for administering this Plan, as
provided in Section 5.
(b) "Affiliate" shall mean a parent or subsidiary corporation as
defined in the applicable provisions of the Code.
(c) "Annual Option" shall have the meaning set forth in Section
6(b).
(d) "Board" shall mean the Board of Directors of the Company, as
constituted from time to time.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) "Common Stock" shall mean the Common Stock of the Company.
(g) "Company" shall mean Intellicorp, Inc., a Delaware
corporation.
(h) "Director Fee" shall mean the cash amount, if any, a
Nonemployee Director shall be entitled to receive for serving as a director of
the Company in any fiscal year.
(i) "Fair Market Value" shall mean, as of the date in question,
the last transaction price quoted by the Nasdaq National Market System or Nasdaq
Small Cap Market System on the date of grant; provided, however, that if the
Common Stock is not traded on such market system or the foregoing shall
otherwise be inappropriate, then the
<PAGE> 28
Fair Market Value shall be determined by the Administrator in good faith at its
sole discretion and on such basis as it shall deem appropriate. Such
determination shall be conclusive and binding on all persons.
(j) "Initial Option" shall have the meaning set forth in Section
6(a).
(k) "Nonemployee Director" shall mean any person who is a member
of the Board but is not an employee of the Company or any Parent or Subsidiary
of the Company and has not been an employee of the Company or any Parent or
Subsidiary of the Company at any time during the preceding twelve (12) months.
(l) "Option" shall mean a stock option granted pursuant to this
Plan.
(m) "Option Agreement" shall mean the written agreement
described in Section 6(c) evidencing the grant of an Option to a Nonemployee
Director and containing the terms, conditions and restrictions pertaining to
such Option.
(n) "Option Shares" shall mean the Shares subject to an Option
granted under this Plan.
(o) "Optionee" shall mean a Nonemployee Director who holds an
Option.
(p) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(q) "Plan" shall mean this 2000 Nonemployee Directors Stock
Option Plan of Intellicorp, Inc., as it may be amended from time to time.
(r) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission, or any successor rule thereto.
(s) "Section" unless the context clearly indicates otherwise,
shall refer to a Section of this Plan.
(t) "Share" shall mean a share of Common Stock, as adjusted in
accordance with Section 8(a).
(u) "Subsidiary" shall mean a "subsidiary corporation" of the
Company, whether now or hereafter existing, within the meaning of Section 424(f)
of the Code, but only for so long as it is a "subsidiary corporation".
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<PAGE> 29
3. ELIGIBLE PERSONS
Every person who at the date of grant of an Option is a
Nonemployee Director is eligible to receive Options under this Plan.
4. STOCK SUBJECT TO THIS PLAN
Subject to Section 8(a) of this Plan, the maximum aggregate
number of Shares which may be issued on exercise of Options granted pursuant to
this Plan is 500,000 Shares. The Shares covered by the portion of any grant
under the Plan which expires unexercised shall become available again for grants
under the Plan.
5. ADMINISTRATION
(a) This Plan shall be administered by the Board, or by a
committee (the "Committee") of at least two Board members to which
administration of the Plan is delegated (in either case, the "Administrator"),
in accordance with the requirements of Rule 16b-3.
(b) Subject to the other provisions of this Plan, the
Administrator shall have the authority, in its sole discretion: (i) to determine
the Fair Market Value of the Shares subject to Option; (ii) to interpret this
Plan; (iii) to prescribe, amend and rescind rules and regulations relating to
this Plan; (iv) to defer (with the consent of the Optionee) or accelerate the
exercise date of any Option; (v) to authorize any person to execute on behalf of
the Company any instrument evidencing the grant of an Option; and (vi) to make
all other determinations deemed necessary or advisable for the administration of
this Plan. The Administrator may delegate nondiscretionary administrative duties
to such employees of the Company, as it deems proper.
(c) All questions of interpretation, implementation and
application of this Plan shall be determined by the Administrator. Such
determination shall be final and binding on all persons.
6. GRANT OF OPTIONS
(a) Grant for Initial Election or Appointment to Board. Subject
to the terms and conditions of this Plan, beginning at any time after the
Company's 2001 Annual Stockholder's meeting, if any person who is not an officer
or employee of the Company is first elected or appointed as a member of the
Board and is otherwise considered a "Nonemployee Director" as defined herein,
then the Company shall grant to such Nonemployee Director on such day an Option
to purchase 25,000 Shares ("Initial Option") at an exercise price equal to the
Fair Market Value of such Shares on the date of such Initial Option grant,
subject to the limitation of Section 8(i).
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<PAGE> 30
(b) Grant for Re-election to Board. Subject to the terms and
conditions of this Plan, on the date of the first meeting of the Board
immediately following each annual meeting of stockholders of the Company
beginning with the Company's 2001 Annual Stockholders Meeting (even if held on
the same day as the meeting of stockholders) the Company shall grant to each
Nonemployee Director then in office for longer than six months, an Option to
purchase 10,000 shares (the "Annual Option") at an exercise price equal to the
Fair Market Value of such Shares.
(c) No Option shall be granted under this Plan after ten (10)
years and two (2) days from the date of adoption of this Plan by the Board. Each
Option shall be evidenced by a written Option Agreement, in form and substance
satisfactory to the Company, executed by the Company and the Optionee. Failure
by the Company, the Nonemployee Director, or both to execute an Option Agreement
shall not invalidate the granting of an Option; however, the Option may not be
exercised until the Option Agreement has been executed by both parties.
7. DIRECTOR FEE ELECTION
Upon election by the Board, all or any part of the Director Fees
can be waived in any given year, and the Director Fees waived may be applied by
the Board to reduce the exercise price of Options granted to the Nonemployee
Directors pursuant to Sections 6(a) and 6(b). The amount of Director Fees waived
may vary from year to year, and upon election by the Board, an amount less than
the amount of Director Fees waived may be applied to reduce the exercise price
of Options with the balance forgiven. By way of example, if the Board elects
pursuant to this Section to waive an aggregate of $15,000 of Director Fees which
would otherwise be payable to three Nonemployee Directors ($5,000 of fees for
each), an amount of up to $15,000 (up to $5,000 each) may be applied by the
Board to reduce the exercise price of Options granted pursuant to Section 6(b),
so that if each of the three Nonemployee Directors in this example are granted
Options for 5,000 shares exercisable at $1.50 each, the $5,000 could be applied
to reduce the exercise price of these options to $.50 per share ($5,000 / 5,000
shares = $1.00 per share reduction in exercise price).
8. TERMS AND CONDITIONS OF OPTIONS
Each Option granted under this Plan shall be subject to the
terms and conditions set forth in this Section 8.
(a) Changes in Capital Structure. Subject to subsection 8(b), if
the Common Stock is changed by reason of a stock split, reverse stock split,
stock dividend, or recapitalization, or converted into or exchanged for other
securities as a result of a merger, consolidation, or reorganization,
appropriate adjustments shall be made in: (i) the
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<PAGE> 31
number and class of shares of Common Stock subject to this Plan and each Option
outstanding under this Plan; and (ii) the exercise price of each outstanding
Option; provided, however, that the Company shall not be required to issue
fractional shares as a result of any such adjustment. Each such adjustment shall
be subject to approval by the Administrator in its sole discretion.
(b) Corporate Transactions. In the event of a merger,
consolidation, reorganization, similar transaction or series of related
transactions in which the holders of the Company's outstanding shares
immediately before such transaction or series of transactions do not,
immediately after such transaction or series of transactions, retain stock
representing a majority of the voting power of the surviving entity or in the
event of a sale of all or substantially all of the assets of the Company, all
outstanding Options shall become vested, and any right of repurchase shall
lapse, immediately prior to the consummation of such transaction, and each
Option shall thereafter remain exercisable for a period of thirty days from the
consummation of such transaction.
(c) Time of Option Exercise. Subject to the other provisions of
this Plan, each Option shall be for a term of ten (10) years and two (2) days.
Each Option shall be exercisable in full on the date of grant.
(d) Limitation on Other Grants. The Administrator shall have no
discretion to grant Options under this Plan other than as set forth in Sections
8(a) and 8(b).
(e) Nonassignability of Option Rights. No Option shall be
assignable or otherwise transferable by the Optionee, except by will or the laws
of descent and distribution. During the life of an Optionee, an Option shall be
exercisable only by the Optionee.
(f) Payment. Except as provided below, payment in full, in cash,
shall be made for all Option Shares purchased at the time written notice of
exercise of an Option is given to the Company, and proceeds of any payment shall
constitute general funds of the Company. Payment may also be made pursuant to a
cashless exercise/sale procedure. At the time an Option is granted or exercised,
the Administrator, in its absolute discretion, may authorize any one or more of
the following additional methods of payment: (i) acceptance of the Optionee's
full recourse promissory note for all or part of the Option price, less any par
value per share, which must be paid in cash, payable on such terms and bearing
such interest rate as determined by the Administrator (but in no event less than
the minimum interest rate specified under the Code at which no additional
interest on debt instruments of such type would be imputed), which promissory
note may be either secured or unsecured in such manner as the Administrator
shall approve (including, without limitation, by a security interest in the
Shares); (ii) delivery by the
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<PAGE> 32
Optionee of Common Stock already owned by the Optionee for all or part of the
Option price, provided the Fair Market Value of such Common Stock is equal on
the date of exercise to the Option price, or such portion thereof as the
Optionee is authorized to pay by delivery of such stock; provided, however, that
if an Optionee has exercised any portion of any Option granted by the Company by
delivery of Common Stock, the Optionee may not, within six (6) months following
such exercise, exercise any Option granted under this Plan by delivery of Common
Stock; and (iii) any other consideration and method of payment to the extent
permitted under the Delaware General Corporation Law.
(g) Termination as Director. Unless determined otherwise by the
Administrator in its absolute discretion, to the extent not already expired or
exercised, an Option shall terminate at the earlier of: (i) the expiration of
the term of the Option; or (ii) three (3) months after the last day served by
the Optionee as a director of the Company; provided, that an Option shall be
exercisable after the date of termination of service as a director only to the
extent exercisable on the date of termination; and provided further, that if
termination of service as a director is due to the Optionee's death or
"disability" (as determined in accordance with Section 22(e)(3) of the Code),
the Optionee, or the Optionee's personal representative (or any other person who
acquires the Option from the Optionee by will or the applicable laws of descent
and distribution), may at any time within twelve (12) months after the
termination of service as a director (or such lesser period as is specified in
the Option Agreement but in no event after the expiration of the term of the
Option), exercise the rights to the extent they were exercisable on the date of
the termination.
(h) Withholding and Employment Taxes. At the time of exercise of
an Option (or at such later time(s) as the Administrator may prescribe), the
Optionee shall remit to the Company in cash all applicable federal and state
withholding and employment taxes. If authorized by the Administrator in its sole
discretion, an Optionee shall be permitted to elect, by means of a form of
election to be prescribed by the Administrator, to have shares of Common Stock
which are acquired upon exercise of the Option withheld by the Company or to
tender to the Company other shares of Common Stock or other securities of the
Company owned by the Optionee on the date of determination of the amount of tax
to be withheld as a result of the exercise of such Option (the "Tax Date") to
pay the amount of withholding taxes due. Any securities so withheld or tendered
shall be valued by the Company as of the Tax Date.
(i) Option Term. Each Option shall expire ten years (10) and two
(2) days after the date of grant.
(j) Exercise Price. The exercise price of any Option granted to
any person who owns, directly or by attribution under the Code currently Section
424(d),
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<PAGE> 33
stock possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or of any Affiliate (a "Ten Percent
Stockholder") shall in no event be less than 110% of the fair market value
(determined in accordance with 2(i) of the stock covered by the Option at the
time the Option is granted.
9. MANNER OF EXERCISE
(a) An Optionee wishing to exercise an Option shall give written
notice to the Company at its principal executive office, to the attention of the
officer of the Company designated by the Administrator, accompanied by payment
of the exercise price as provided in Section 8(e) and, if required, by payment
of any federal or state withholding or employment taxes required to be withheld
due to exercise of the Option. The date the Company receives written notice of
an exercise accompanied by payment of the exercise price and any required
federal or state withholding or employment taxes will be considered as the date
such Option was exercised. Unless otherwise provided by the Administrator,
Options may be exercised only twice in any calendar year.
(b) Promptly after the date an Option is exercised, the Company
shall, without stock issue or transfer taxes to the optionee or other person
entitled to exercise the Option, deliver to the Optionee or such other person a
certificate or certificates for the requisite number of shares of Common Stock.
An Optionee or transferee of an Optionee shall not have any privileges as a
stockholder with respect to any Common Stock covered by the Option until the
date of issuance of a stock certificate.
10. NO RIGHT TO DIRECTORSHIP
Neither this Plan nor any Option shall confer upon any Optionee
any right with respect to continuation of the Optionee's membership on the Board
or shall interfere in any way with provisions in the Company's Certificate of
Incorporation, as amended, and Bylaws, as amended, relating to the election,
appointment, terms of office, and removal of members of the Board.
11. LEGAL REQUIREMENTS
The Company shall not be obligated to offer or sell any Shares
upon exercise of any Option unless the Shares are at that time effectively
registered or exempt from registration under the federal securities laws and the
offer and sale of the Shares are otherwise in compliance with all applicable
securities laws and the regulations of any stock exchange on which the Company's
securities may then be listed. The Company shall have no obligation to register
the Shares covered by this Plan under the federal securities laws or take any
other steps as may be necessary to enable the Shares covered by this Plan to be
offered and sold under federal or other securities laws. Upon exercising
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<PAGE> 34
all or any portion of an Option, an Optionee may be required to furnish
representations or undertakings deemed appropriate by the Company to enable the
offer and sale of the Shares or subsequent transfers of any interest in the
Shares to comply with applicable securities laws. Certificates evidencing Shares
acquired upon exercise of Options shall bear any legend required by, or useful
for purposes of compliance with, applicable securities laws, this Plan or the
Option Agreements.
12. AMENDMENTS TO PLAN
The Board may amend this Plan at any time. Without the consent
of an optionee, no amendment may adversely affect outstanding Options. No
amendment shall require stockholder approval unless:
(a) stockholder approval is required to meet the exemptions
provided by Rule 16b-3, or any successor rule thereto or under applicable state
statutes; or
(b) The Board otherwise concludes that stockholder approval is
advisable.
13. STOCKHOLDER APPROVAL; TERM
This Plan shall become effective upon adoption by the Board of
Directors; provided, however, that no Option shall be exercisable unless and
until written consent of holders of a majority of the outstanding shares of
capital stock of the Company, or approval by holders of a majority of shares of
capital stock of the Company present, or represented, and entitled to vote at a
validly called stockholders' meeting (or such greater number as may be required
by law or applicable governmental regulations or orders) is obtained within
twelve (12) months after adoption by the Board. This Plan shall terminate ten
(10) years after adoption by the Board unless terminated earlier by the Board.
The Board may terminate this Plan at any time without stockholder approval. No
Options shall be granted after termination of this Plan, but termination shall
not affect rights and obligations under then-outstanding Options.
Adopted by the Board of Directors: October 13, 2000
Approved by the Stockholders: ______________, 2000
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<PAGE> 35
Item 1 - To elect as directors Arthur W. Berry, Katharine C. Branscomb, Elmer F.
Fisher, Kenneth H. Haas, Robert A. Lauridsen and Norman J. Wechsler.
FOR all nominees listed (except as indicated below)
WITHHOLD AUTHORITY to vote (as to all nominees)
To withhold authority to vote for any individual nominee, write that nominee's
name on the line provided below:
-----------------------------------
Item 2 - To approve the Company's 2000 Stock Option Plan (the "Plan") covering
4,000,000 shares issuable under the Plan.
-----------------------------------
Item 3 - To approve the Company's 2000 Nonemployee Directors Stock Option Plan
(the "Directors Plan") covering 500,000 shares issuable under the Directors
Plan.
FOR
AGAINST
ABSTAIN
This proxy, when properly executed, will be voted in the manner directed by the
undersigned stockholders. WHEN NO CHOICE IS INDICATED, THIS PROXY WILL BE VOTED
FOR THE NOMINEES LISTED ABOVE. This proxy may be revoked at any time prior to
the time it is voted by any means described in the accompanying Proxy Statement.
Dated: , 2000
-----------------------------------
-----------------------------------
Signature
-----------------------------------
Signature
Please date and sign exactly as name(s) appear(s) hereon. If shares are held
jointly, each holder should sign. Please give full title and capacity in which
signing if not signing as an individual.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTPAID ENVELOPE.
<PAGE> 36
IntelliCorp
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoint(s) Kenneth H. Haas and Jerome F. Klajbor, and
each of them, with full power of substitution, the lawful attorney and proxy of
the undersigned to vote as designated on the reverse side, and, in their
discretion, upon such other business as may properly be presented to the
meeting, all of the shares of INTELLICORP, INC. which the undersigned shall be
entitled to vote at the Annual Meeting of Stockholders to be held on December 5,
2000, and at any adjournments or postponements thereof.
(Continued and to be signed on the other side)
