<PAGE>
As filed with the Securities and Exchange Commission on _________, 1996
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
BOOLE & BABBAGE, INC.
(Exact name of registrant as specified in its charter)
-----------------------
DELAWARE 94-1651571
(State of Incorporation) (I.R.S. Employer Identification No.)
-----------------------
3131 ZANKER ROAD
SAN JOSE, CALIFORNIA 95134
(408) 526-3000
(Address and telephone number of principal executive offices)
-----------------------
1995 STOCK OPTION PLAN
(Full title of the plans)
PAUL E. NEWTON
President and Chief Executive Officer
3131 ZANKER ROAD
SAN JOSE, CALIFORNIA 95134
(408) 526-3000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
-----------------------
Copies to:
ALAN C. MENDELSON, ESQ.
COOLEY GODWARD CASTRO HUDDLESON & TATUM
Five Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306-2155
(415) 843-5000
-----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO OFFERING PRICE PER SHARE AGGREGATE OFFERING PRICE AMOUNT OF REGISTRATION
TO BE REGISTERED BE REGISTERED(2) (1) (1) FEE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and
Common Stock (par
value $.001) 1,100,957 $25.75 $28,349,642.75 $ 9,775.81
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h). The price per share and aggregate
offering price are based upon (a) the weighted average exercise price for
options granted pursuant to the Registrant's 1995 Stock Option Plan and (b) the
average of the high and low prices of Registrant's Common Stock on April 18,
1996 as reported on The Nasdaq National Market.
(2) As of the date of this Registration Statement, no shares have been issued
pursuant to the 1995 Stock Option Plan and no options have been granted or are
outstanding under the Plan.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Boole & Babbage, Inc., a Delaware
corporation (the "Registrant"), with the Securities and Exchange Commission (the
"SEC") are incorporated by reference into this Registration Statement:
(a) The Registrant's latest Annual Report on Form 10-K filed pursuant
to Sections 13(a) or 15(d) of the Securities Act of 1934, as amended (the
"Exchange Act"), that contains audited financial statements for the Company's
latest fiscal year for which such statements have been filed.
(b) All other reports filed pursuant to Sections 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual Report
referred to in (a) above.
(c) The description of the Registrant's Common Stock which is
contained in a registration statement filed with the SEC under the Exchange
Act, including any amendment or report filed for the purpose of updating such
description.
All reports and other documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part of this
Registration Statement from the date of the filing of such reports and
documents.
DESCRIPTION OF SECURITIES
Not applicable.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, the Company
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933 (the "Securities Act"). The Company's Bylaws require the Company to
indemnify its directors and executive officers, and permit the Company to
indemnify its other officers, employees and other agents, to the extent
permitted by Delaware law. Under the Company's Bylaws, indemnified parties
are entitled to indemnification for negligence, gross negligence and otherwise
to the fullest extent permitted by law. The Bylaws also require the Company to
advance litigation expenses in the case of stockholder derivative actions or
other actions, against an undertaking by the indemnified party to repay such
advances if it is ultimately determined that the indemnified party is not
entitled to indemnification.
The Company has entered into indemnity agreements with each of its
directors and executive officers. Such indemnity agreements contain provisions
which are in some respects broader than the specific indemnification provisions
contained in Delaware law.
EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
1
<PAGE>
EXHIBITS
EXHIBIT
NUMBER
3.1 Certificate of Amendment of the Restated Certificate of Incorporation.
3.2 Restated Certificate of Incorporation.(1)
3.3 Bylaws of Registrant.(2)
4.1 Reference is made to Exhibits 3.2 and 3.3.
5.1 Opinion of Cooley Godward Castro Huddleson & Tatum.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Cooley Godward Castro Huddleson & Tatum is contained in
Exhibit 5.1 to this Registration Statement.
24.1 Power of Attorney is contained on pages 4 and 5 of this Registration
Statement.
99.1 1995 Stock Option Plan.
99.2 Form of Incentive Stock Option Agreement for use in connection with the
1995 Stock Option Plan.
99.3 Form of Supplemental Stock Option for use in connection with the 1995
Stock Option Plan.
- ---------------
(1) Previously filed as an Exhibit to the definitive Proxy Statement for
the January 20, 1987 Annual Meeting of Stockholders, and incorporated
herein by reference.
(2) Previously filed as an Exhibit to the Annual Report on Form 10-K for
the year ended September 30, 1989, and incorporated herein by reference.
UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
a. To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
i. To include any prospectus required by Section
10(a)(3) of the Securities Act;
ii. To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective Registration
Statement; and
iii. To include any material information with respect to
the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained
2
<PAGE>
in periodic reports filed by the issuer pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference herein.
b. That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
c. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
3
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Jose, State of
California, on April 22, 1996.
BOOLE & BABBAGE, INC.
By: /s/ Arthur F. Knapp, Jr.
------------------------------------
Title Chief Financial Officer
----------------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Paul E. Newton and Arthur F. Knapp, Jr.,
and each or any one of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/
- ------------------------------ President and Chief April 22, 1996
(Paul E. Newton) Executive Officer
(PRINCIPAL EXECUTIVE
OFFICER)
/s/
- ------------------------------ Chief Financial Officer April 22, 1996
(Arthur F. Knapp, Jr.) (PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
/s/
- ------------------------------ Director April 22, 1996
(Franklin P. Johnson, Jr.)
- ------------------------------ Director _________, 1996
(Johannes S. Bruggeling)
/s/
- ------------------------------ Director April 22, 1996
(Raymond E. Cairns)
/s/
- ------------------------------ Director April 22, 1996
(Terry R. McGowan)
/s/
- ------------------------------ Director April 22, 1996
(Paul E. Newton)
/s/
- ------------------------------ Director April 22, 1996
(Carl H. Reynolds)
5
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
BOOLE & BABBAGE, INC.
BOOLE & BABBAGE, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of Delaware (the "Corporation"), does
hereby certify that the original Certificate of Incorporation of the Corporation
was filed with the Delaware Secretary of State on December 11, 1986. A Restated
Certificate of Incorporation was filed with the Delaware Secretary of State on
December 31, 1986. A Certificate of Amendment of the Restated Certificate of
Incorporation was filed with the Delaware Secretary of State on March 14, 1994.
The Corporation further hereby certifies that:
I. The Board of Directors of the Corporation adopted resolutions to amend
Paragraph A of ARTICLE FOURTH of the Restated Certificate of Incorporation of
the Corporation to read in its entirety as follows:
"FOURTH:
A. The Corporation is authorized to issue two classes of shares
designated respectively "Common Stock" and "Preferred Stock." The aggregate
number of shares of capital stock which the Corporation is authorized to issue
is Thirty-Two Million (32,000,000) shares consisting of Thirty Million
(30,000,000) shares of Common Stock, $.001 par value, and Two Million
(2,000,000) shares of Preferred Stock, $.001 par value."
II. Thereafter at the Corporation's 1996 Annual Meeting of Stockholders
the necessary number of shares as required by statute were voted in favor of the
amendment.
III. The aforesaid amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment of the Restated Certificate of Incorporation to be signed by Paul E.
Newton, President, and by Arthur F. Knapp, Jr., Secretary, this 16th day of
April, 1996.
/s/ Paul E. Newton
-------------------------------------
Paul E. Newton, President
ATTEST:
/s/ Arthur F. Knapp, Jr.
- ------------------------------
Arthur F. Knapp, Jr.,
Secretary
<PAGE>
[COOLEY GODWARD LETTERHEAD]
April 18, 1996
Boole & Babbage, Inc.
3131 Zanker Road
San Jose, California 95134
Ladies & Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Boole & Babbage, Inc. (the "Company") of a Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission covering the offering of up to 1,100,957 shares of the
Company's Common Stock, $.001 par value, (the "Shares") pursuant to its 1995
Stock Option Plan (the "Plan").
In connection with this opinion, we have examined the Registration Statement,
your Certificate of Incorporation and By-laws, as amended, and such other
documents, records, certificates, memoranda and other instruments as we deem
necessary as a basis for this opinion. We have assumed the genuineness and
authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as copies thereof, and the due
execution and delivery of all documents where due execution and delivery are a
prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Plan and the
Registration Statement and related Prospectus, will be validly issued, fully
paid, and nonassessable (except as to shares issued pursuant to certain deferred
payment arrangements, which will be fully paid and nonassessable when such
deferred payments are made in full).
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
COOLEY GODWARD CASTRO
HUDDLESON & TATUM
By: /s/ Alan C. Mendelson
----------------------
Alan C. Mendelson
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1995 Stock Option Plan of Boole and Babbage, Inc.
of our report dated October 27, 1995, with respect to the consolidated
financial statements of Boole and Babbage, Inc. incorporated by reference in
its Annual Report (Form 10-K) for the year ended September 30, 1995 and the
related financial statement schedule included therein, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
San Jose, California
April 19, 1996
<PAGE>
BOOLE & BABBAGE, INC.
STOCK OPTION PLAN
ADOPTED OCTOBER 25, 1995
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company, and its Affiliates,
may be given an opportunity to purchase stock of the Company.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Directors of or Consultants to the Company or
its Affiliates, to secure and retain the services of new Employees, Directors
and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.
(c) The Company intends that the Options issued under the Plan shall, in
the discretion of the Board or any Committee to which responsibility for
administration of the Plan has been delegated pursuant to subsection 3(c), be
either Incentive Stock Options or Supplemental Stock Options. All Options shall
be separately designated Incentive Stock Options or Supplemental Stock Options
at the time of grant, and in such form as issued pursuant to Section 6, and a
separate certificate or certificates will be issued for shares purchased on
exercise of each type of Option.
<PAGE>
2. DEFINITIONS.
(a) "AFFILIATE" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(e) "COMPANY" means Boole & Babbage, Inc., a Delaware corporation.
(f) "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services, provided that the term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.
(g) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means that
the service of an individual to the Company, whether as an Employee, Director or
Consultant, is not interrupted or terminated. The Board, in its sole
discretion, may determine whether Continuous Status as an Employee, Director or
Consultant shall be considered interrupted in the case of: (i) any leave of
absence approved by the Board, including sick leave, military leave, or any
other personal leave; or (ii) transfers between the Company, Affiliates or their
successors.
(h) "COVERED EMPLOYEE" means the chief executive officer and the four (4)
other highest compensated officers of the Company for whom total compensation is
required to be
2.
<PAGE>
reported to shareholders under the Exchange Act, as determined for purposes of
Section 162(m) of the Code.
(i) "DIRECTOR" means a member of the Board.
(j) "DISINTERESTED Person" means a Director who either (i) was not during
the one year prior to service as an administrator of the Plan granted or awarded
equity securities pursuant to the Plan or any other plan of the Company or any
Affiliate entitling the participants therein to acquire equity securities of the
Company or any Affiliate except as permitted by Rule 16b-3(c)(2)(i); or (ii) is
otherwise considered to be a "disinterested person" in accordance with Rule
16b-3(c)(2)(i), or any other applicable rules, regulations or interpretations
of the Securities and Exchange Commission.
(k) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(l) "EXCHANGE Act" means the Securities Exchange Act of 1934, as amended.
(m) "FAIR MARKET VALUE" means, as of any date, the value of the common
stock of the Company determined as follows:
(1) If the common stock 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 ("NASDAQ") System, the Fair Market Value of a share of common stock
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in common stock) on the day of determination (if the
day of determination is a market trading day), and if the day of determination
is not a market trading
3.
<PAGE>
day, then on the last market trading day prior to the day of determination, as
reported in the Wall Street Journal or such other source as the Board deems
reliable;
(2) If the common stock is quoted on the NASDAQ System (but not on
the National Market System thereof) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a share of common stock shall be the mean between the bid and asked prices for
the common stock on the day of determination (if the day of determination is a
market trading day), and if the day of determination is not a market trading
day, then on the last market trading day prior to the day of determination, as
reported in the Wall Street Journal or such other source as the Board deems
reliable;
(3) In the absence of an established market for the common stock, the
Fair Market Value shall be determined in good faith by the Board.
(n) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(p) "OPTION" means a stock option granted pursuant to the Plan.
(q) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(r) "OPTIONEE" means an Employee, Director or Consultant who holds an
outstanding Option.
4.
<PAGE>
(s) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
the Treasury regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time, and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director, or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.
(t) "PLAN" means this Boole & Babbage 1995 Stock Option Plan.
(u) "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.
(v) "SUPPLEMENTAL STOCK OPTION" means an Option not intended to qualify as
an Incentive Stock Option.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).
(b) The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted Options; when and how each Option shall be
granted; whether an Option will be an Incentive Stock Option or a Supplemental
Stock Option; the provisions of each Option granted (which need not be
identical), including the time or times such Option may be exercised
5.
<PAGE>
in whole or in part; and the number of shares for which an Option shall be
granted to each such person.
(2) To construe and interpret the Plan and Options granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Option Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective.
(3) To amend the Plan or an Option as provided in Section 11.
(4) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of which Committee shall be Disinterested Persons and may also be, in the
discretion of the Board, Outside Directors. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board (and references in this
Plan to the Board shall thereafter be to the Committee), subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee at
any time and revest in the Board the administration of the Plan. Notwithstanding
anything in this Section 3 to the contrary, the Board or the Committee may
delegate to a committee of one or more members of the Board the authority to
grant Options to eligible persons who (1) are not then subject to Section 16 of
the Exchange Act and/or (2) are either (i) not then Covered Employees and are
not expected to be Covered Employees at the time of recognition of income
resulting from such Option, or (ii)
6.
<PAGE>
not persons with respect to whom the Company wishes to comply with Section
162(m) of the Code.
(d) Any requirement that an administrator of the Plan be a Disinterested
Person shall not apply if the Board or the Committee expressly declares that
such requirement shall not apply. Any Disinterested Person shall otherwise
comply with the requirements of Rule 16b-3.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 10 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to Options shall not
exceed in the aggregate seven hundred fifty thousand (750,000) shares of the
Company's common stock (after taking into account the three-for-two stock split
approved by the Board at its October 25, 1995 meeting (the "1995 Stock Split"),
plus any shares of the Company's common stock previously reserved under the
Company's 1986 Incentive Stock Option Plan and 1986 Supplemental Stock Option
Plan (the "Option Plans") (also as adjusted to reflect the 1995 Stock Split)
which (i) have not, as of the date of adoption of this Plan, previously been
issued pursuant to the exercise of options under the Option Plans, and (ii) are
not, as of the date of adoption of this Plan, subject to options outstanding
under the Option Plans. If any Option granted under this Plan or any stock
option granted under the Option Plans shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the stock
not acquired shall revert to and again become available for issuance under this
Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
7.
<PAGE>
5. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to Employees.
Supplemental Stock Options may be granted only to Employees, Directors or
Consultants.
(b) A Director shall in no event be eligible for the benefits of the Plan
unless at the time discretion is exercised in the selection of the Director as a
person to whom Options may be granted, or in the determination of the number of
shares which may be covered by Options granted to the Director: (i) the Board
has delegated its discretionary authority over the Plan to a Committee which
consists solely of Disinterested Persons; or (ii) the Plan otherwise complies
with the requirements of Rule 16b-3. The Board shall otherwise comply with the
requirements of Rule 16b-3. This subsection 5(b) shall not apply if the Board
or Committee expressly declares that it shall not apply.
(c) No person shall be eligible for the grant of an Incentive Stock Option
if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates unless the exercise price of such Option is at least one hundred
ten percent (110%) of the Fair Market Value of such stock at the date of grant
and the Option is not exercisable after the expiration of five (5) years from
the date of grant.
(d) Subject to the provisions of Section 10 relating to adjustments upon
changes in stock, no person shall be eligible to be granted Options covering
more than three hundred thousand (300,000) shares of the Company's common stock
in any calendar year.
8.
<PAGE>
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) TERM. No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) PRICE. The exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted; the exercise price of
each Supplemental Stock Option shall be not less than eighty-five percent (85%)
of the Fair Market Value of the stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Option (whether an
Incentive Stock Option or a Supplemental Stock Option) may be granted with an
exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code.
(c) CONSIDERATION. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, or (ii) at
the discretion of the Board or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other common stock of the Company,
(B) according to a deferred payment or other arrangement (which may include,
without limiting the generality of the foregoing, the use of other common stock
of the Company) with the person to whom the Option is granted or to whom the
Option is transferred pursuant
9.
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to subsection 6(d), or (C) in any other form of legal consideration that may be
acceptable to the Board.
In the case of any deferred payment arrangement, interest shall be payable
at least annually and shall be charged at the minimum rate of interest necessary
to avoid the treatment as interest, under any applicable provisions of the Code,
of any amounts other than amounts stated to be interest under the deferred
payment arrangement.
(d) TRANSFERABILITY. An Incentive Stock Option shall not be transferable
except by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the person to whom the Incentive Stock Option
is granted only by such person. A Supplemental Stock Option shall not be
transferable except by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order satisfying the requirements of
Rule 16b-3 and the rules thereunder (a "QDRO"), and shall be exercisable during
the lifetime of the person to whom the Option is granted only by such person or
any transferee pursuant to a QDRO. The person to whom the Option is granted
may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionee,
shall thereafter be entitled to exercise the Option.
(e) VESTING. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the Option may become exercisable ("vest")
with respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be
10.
<PAGE>
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The provisions of this subsection 6(e) are subject to any
Option provisions governing the minimum number of shares as to which an Option
may be exercised.
(f) SECURITIES LAW COMPLIANCE. The Company may require any Optionee, or
any person to whom an Option is transferred under subsection 6(d), as a
condition of exercising any such Option, (1) to give written assurances
satisfactory to the Company as to the Optionee's knowledge and experience in
financial and business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Option; and (2) to give written assurances satisfactory to the
Company stating that such person is acquiring the stock subject to the Option
for such person's own account and not with any present intention of selling or
otherwise distributing the stock. The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (i) the
issuance of the shares upon the exercise of the Option has been registered under
a then currently effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws. The Company may require the Optionee to provide such other
representations, written assurances or information which the Company shall
determine is necessary, desirable or appropriate to comply with applicable
securities and other laws as a condition of granting an Option to such Optionee
or permitting the Optionee to exercise such Option. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems
11.
<PAGE>
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.
(g) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR CONSULTANT.
In the event an Optionee's Continuous Status as an Employee, Director or
Consultant terminates (other than upon the Optionee's death or disability), the
Optionee may exercise his or her Option (to the extent that the Optionee was
entitled to exercise it at the date of termination) but only within such period
of time ending on the earlier of (i) the date three (3) months after the
termination of the Optionee's Continuous Status as an Employee, Director or
Consultant, or such longer or shorter period specified in the Option Agreement,
or (ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionee does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.
(h) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous Status
as an Employee, Director or Consultant terminates as a result of the Optionee's
disability, the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement), or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and
12.
<PAGE>
the shares covered by such Option shall revert to and again become available for
issuance under the Plan.
(i) DEATH OF OPTIONEE. In the event of the death of an Optionee during,
or within a period specified in the Option after the termination of, the
Optionee's Continuous Status as an Employee, Director or Consultant, the Option
may be exercised (to the extent the Optionee was entitled to exercise the Option
at the date of death) by the Optionee's estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionee's death pursuant to subsection 6(d),
but only within the period ending on the earlier of (i) the date eighteen (18)
months following the date of death (or such longer or shorter period specified
in the Option Agreement), or (ii) the expiration of the term of such Option as
set forth in the Option Agreement. If, at the time of death, the Optionee was
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate, and the shares
covered by such Option shall revert to and again become available for issuance
under the Plan.
(j) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject to
the Option prior to the full vesting of the Option. Any unvested shares so
purchased may be subject to a repurchase right in favor of the Company or to any
other restriction the Board determines to be appropriate.
(k) WITHHOLDING. To the extent provided by the terms of an Option
Agreement, the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise
13.
<PAGE>
of such Option by any of the following means or by a combination of such means:
(1) tendering a cash payment; (2) authorizing the Company to withhold shares
from the shares of the common stock otherwise issuable to the Optionee as a
result of the exercise of the Option; or (3) delivering to the Company owned and
unencumbered shares of the common stock of the Company.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the Options, the Company shall keep available at
all times the number of shares of stock required to satisfy such Options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Options; PROVIDED, HOWEVER,
that this undertaking shall not require the Company to register under the
Securities Act either the Plan, any Option or any stock issued or issuable
pursuant to any such Option. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such Options unless and until
such authority is obtained.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Options shall constitute
general funds of the Company.
14.
<PAGE>
9. MISCELLANEOUS.
(a) The Board shall have the power to accelerate the time at which an
Option may first be exercised or the time during which an Option or any part
thereof will vest pursuant to subsection 6(e), notwithstanding the provisions in
the Option stating the time at which it may first be exercised or the time
during which it will vest.
(b) Neither an Optionee nor any person to whom an Option is transferred
under subsection 6(d) shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to such Option unless and
until such person has satisfied all requirements for exercise of the Option
pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Option granted
pursuant thereto shall confer upon any Employee, Director, Consultant or
Optionee any right to continue in the employ of the Company or any Affiliate (or
to continue acting as a Director or Consultant) or shall affect the right of the
Company or any Affiliate to terminate the employment of any Employee, with or
without cause, to remove any Director as provided in the Company's By-Laws and
the provisions of General Corporation Law of the State of Delaware, or to
terminate the relationship of any Consultant in accordance with the terms of
that Consultant's agreement with the Company or Affiliate to which such
Consultant is providing services.
(d) To the extent that the aggregate Fair Market Value (determined at the
time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand dollars
($100,000), the Options or portions thereof which exceed such limit (according
to the order in which they were granted) shall be treated as Supplemental Stock
Options.
15.
<PAGE>
(e) (1) The Board or the Committee shall have the authority to effect, at
any time and from time to time (i) the repricing of any outstanding Options
under the Plan and/or (ii) with the consent of the affected holders of Options,
the cancellation of any outstanding Options and the grant in substitution
therefor of new Options under the Plan covering the same or different numbers of
shares of Common Stock, but having an exercise price per share not less than
eighty-five percent (85%) of the Fair Market Value (one hundred percent (100%)
of the Fair Market Value in the case of an Incentive Stock Option or, in the
case of an Incentive Stock Option granted to a ten percent (10%) stockholder (as
defined in subsection 5(c)), not less than one hundred and ten percent (110%) of
the Fair Market Value) per share of Common Stock on the new grant date.
(2) Shares subject to an Option canceled under this subsection 9(e)
shall continue to be counted against the maximum award of Options permitted to
be granted pursuant to subsection 5(d) of the Plan. The repricing of an Option
under this subsection 9(e), resulting in a reduction of the exercise price,
shall be deemed to be a cancellation of the original Option and the grant of a
substitute Option; in the event of such repricing, both the original and the
substituted Options shall be counted against the maximum awards of Options
permitted to be granted pursuant to subsection 5(d) of the Plan. The provisions
of this subsection 9(e) shall be applicable only to the extent required by
Section 162(m) of the Code.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject to
any Option (through merger, consolidation, reorganization, recapitalization,
stock dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of
16.
<PAGE>
consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan pursuant to
subsection 4(a) and the maximum number of shares subject to award to any person
during any calendar year pursuant to subsection 5(d), and the outstanding
Options will be appropriately adjusted in the class(es) and number of shares and
price per share of stock subject to such outstanding Options. Such adjustments
shall be made by the Board or Committee, the determination of which shall be
final, binding and conclusive. (The conversion of any convertible securities of
the Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company.")
(b) In the event of: (1) a dissolution, liquidation, or sale of all or
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving corporation; (3) a reverse merger in
which the Company is the surviving corporation but the shares of the Company's
common stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise; or (4) the acquisition by any person, entity or group within
the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable
successor provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any Affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Act, or comparable successor rule) of securities of the Company representing at
least fifty percent (50%) of the combined voting power entitled to vote in the
election of directors, then to the extent permitted by applicable law: (i) any
surviving or acquiring corporation shall assume any Options outstanding under
the Plan or shall substitute similar Options (including an option to acquire the
same consideration paid to the stockholders in the transaction described in this
subsection 10(b)) for those outstanding under the Plan, or (ii) such Options
shall continue
17.
<PAGE>
in full force and effect. In the event any surviving or acquiring corporation
refuses to assume such Options, or to substitute similar options for those
outstanding under the Plan, then, with respect to Options held by persons then
performing services as Employees, Directors or Consultants, the time during
which such Options may be exercised shall be accelerated prior to such event and
the Options terminated if not exercised after such acceleration and at or prior
to such event.
11. AMENDMENT OF THE PLAN AND OPTIONS.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 10 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(1) Increase the number of shares reserved for Options under the
Plan;
(2) Modify the requirements as to eligibility for participation in
the Plan (to the extent such modification requires stockholder approval in order
for the Plan to satisfy the requirements of Section 422 of the Code); or
(3) Modify the Plan in any other way if such modification requires
stockholder approval in order for the Plan to satisfy the requirements of
Section 422 of the Code or to comply with the requirements of Rule 16b-3.
(b) The Board may in its sole discretion submit any other amendment to the
Plan for stockholder approval, including, but not limited to, amendments to the
Plan intended to satisfy the requirements of Section 162(m) of the Code and the
regulations promulgated thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of compensation paid to
certain executive officers.
18.
<PAGE>
(c) It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide Optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to Incentive Stock Options
and/or to bring the Plan and/or Incentive Stock Options granted under it into
compliance therewith.
(d) Rights and obligations under any Option granted before amendment of
the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the person to whom the Option was granted and
(ii) such person consents in writing.
(e) The Board at any time, and from time to time, may amend the terms of
any one or more Options; PROVIDED, HOWEVER, that the rights and obligations
under any Option shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the Option was granted and
(ii) such person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on October 24, 2005, which shall be
within ten (10) years from the date the Plan is adopted by the Board or approved
by the stockholders of the Company, whichever is earlier. No Options may be
granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any Option granted while the Plan is in
effect shall not be impaired by suspension or termination of the Plan, except
with the written consent of the person to whom the Option was granted.
19.
<PAGE>
13. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no Options
granted under the Plan shall be exercised unless and until the Plan has been
approved by the stockholders of the Company, which approval shall be within
twelve (12) months before or after the date the Plan is adopted by the Board.
20.
<PAGE>
INCENTIVE STOCK OPTION
_________________________, Optionee:
BOOLE & BABBAGE, INC. (the "Company"), pursuant to its 1995 Stock Option
Plan (the "Plan") has this day granted to you, the optionee named above, an
option to purchase shares of the common stock of the Company ("Common Stock").
This option is intended to qualify as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants. Defined terms not explicitly
defined in this agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option is
____________________ (__________). Subject to the limitations contained herein,
this option shall be exercisable with respect to each installment shown below on
or after the vesting date applicable to such installment as follows:
NUMBER OF SHARES DATE OF EARLIEST EXERCISE (VESTING)
<PAGE>
2. (a) The exercise price of this option is ___________ ($___________)
per share, being not less than the fair market value of the Common Stock on the
date of grant of this option.
(b) Payment of the exercise price per share is due in full upon
exercise of all or any part of each installment which has accrued to you. You
may elect, to the extent permitted by applicable statutes and regulations, to
make payment of the exercise price under one of the following alternatives:
(i) Payment of the exercise price per share in cash
(including check) at the time of exercise; or
(ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which results in the
receipt of cash (or check) by the Company prior to the issuance of Common Stock.
3. The minimum number of shares with respect to which this option may be
exercised at any one time is ten (10), except (i) as to any installment subject
to exercise, as set forth in paragraph 1, which amounts to fewer than ten (10)
shares, in which case, as to the exercise of that installment, the number of
such shares in such installment shall be the minimum number of shares, and (ii)
with respect to the final exercise of this option this paragraph 3 shall not
apply. This option may not be exercised for any number of shares which would
require the issuance of anything other than whole shares.
4. Notwithstanding anything to the contrary contained herein, this option
may not be exercised unless the shares issuable upon exercise of this option are
then registered under the Act or, if such shares are not then so registered, the
Company has determined that such exercise and issuance would be exempt from the
registration requirements of the Act.
5. The term of this option commences on __________, 19__, the date of
grant and, unless sooner terminated as set forth below or in the Plan,
terminates on ________________________ (which date shall be no more than ten
(10) years from the date this option is granted). In no event may this option
be exercised on or after the date on which it terminates. This option shall
terminate prior to the expiration of its term as follows: thirty (30) days
after the termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company (as defined in the
Plan) unless one of the following circumstances exists:
(a) Your termination of Continuous Status as an Employee, Director or
Consultant is due to your permanent and total disability (within the meaning of
Section 422(c)(6) of the Code). This option will then terminate on the earlier
of the termination date set forth above or twelve (12) months following such
termination of Continuous Status as an Employee, Director or Consultant.
2.
<PAGE>
(b) Your termination of Continuous Status as an Employee, Director or
Consultant is due to your death or your death occurs within thirty (30) days
following your termination of Continuous Status as an Employee, Director or
Consultant for any other reason. This option will then terminate on the earlier
of the termination date set forth above or eighteen (18) months after your
death.
(c) If during any part of such thirty (30) day period you may not
exercise your option solely because of the condition set forth in paragraph 4
above, then your option will not terminate until the earlier of the termination
date set forth above or until this option shall have been exercisable for an
aggregate period of thirty (30) days after your termination of Continuous Status
as an Employee, Director or Consultant.
(d) If your exercise of the option within thirty (30) days after
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or with an Affiliate would result in liability under section
16(b) of the Securities Exchange Act of 1934, then your option will terminate on
the earlier of (i) the termination date set forth above, (ii) the tenth (10th)
day after the last date upon which exercise would result in such liability or
(iii) six (6) months and ten (10) days after the termination of your Continuous
Status as an Employee, Director or Consultant with the Company or an Affiliate.
However, this option may be exercised following termination of Continuous
Status of an Employee, Director or Consultant only as to that number of shares
as to which it was exercisable on the date of termination of Continuous Status
of an Employee, Director or Consultant under the provisions of paragraph 1 of
this option.
In order to obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or an
Affiliate, except in the event of your death or permanent and total disability.
The Company has provided for continued vesting or extended exercisability of
your option under certain circumstances for your benefit, but cannot guarantee
that your option will necessarily be treated as an "incentive stock option" if
you provide services to the Company or an Affiliate as a consultant or exercise
your option more than three (3) months after the date your employment with the
Company and all Affiliates terminates.
6. (a) This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require pursuant to subsection 6(f)
of the Plan.
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any exercise of
this option, the Company may require you to enter an arrangement providing for
the payment by you
3.
<PAGE>
to the Company of any tax withholding obligation of the Company arising by
reason of (A) the exercise of this option; (B) the lapse of any substantial risk
of forfeiture to which the shares are subject at the time of exercise; or
(C) the disposition of shares acquired upon such exercise; and
(ii) you will notify the Company in writing within fifteen
(15) days after the date of any disposition of any of the shares of the Common
Stock issued upon exercise of this option that occurs within two (2) years after
the date of this option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of this option.
7. This option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by you.
Notwithstanding the foregoing, by delivering written notice to the Company, in a
form satisfactory to the Company, you may designate a third party who, in the
event of your death, shall thereafter be entitled to exercise this option.
8. This option is not an employment contract and nothing in this option
shall be deemed to create in any way whatsoever any obligation on your part to
continue in the employ of the Company, or of the Company to continue your
employment with the Company. In addition, nothing in this option shall obligate
the Company or any Affiliate, or their respective stockholders, Board of
Directors, officers or employees to continue any relationship which you might
have as a Director or Consultant for the Company or Affiliate.
9. Any notices provided for in this option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by the Company to you, five (5) days after deposit in the
United States mail, postage prepaid, addressed to you at the address specified
below or at such other address as you hereafter designate by written notice to
the Company.
10. This option is subject to all the provisions of the Plan, a copy of
which is attached hereto and its provisions are hereby made a part of this
option, including without limitation the provisions of Section 6 of the Plan
relating to option provisions, and is further subject to all
4.
<PAGE>
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of this option and those of the Plan, the provisions of
the Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
---------------------------------------
By
----------------------------------
Duly authorized on behalf of the
Board of Directors
ATTACHMENTS:
Boole & Babbage, Inc. 1995 Stock Option Plan
Notice of Exercise
5.
<PAGE>
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee and the Company
and its affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the undersigned
under stock option plans of the Company, and (ii) the following agreements only:
NONE
--------------
(Initial)
OTHER
----------------------------
----------------------------
----------------------------
---------------------------------------
OPTIONEE
Address:
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------------------------------
6.
<PAGE>
SUPPLEMENTAL STOCK OPTION
________________________, Optionee:
BOOLE & BABBAGE, INC. (the "Company"), pursuant to its 1995 Stock Option
Plan (the "Plan") has this day granted to you, the optionee named above, an
option to purchase shares of the common stock of the Company ("Common Stock").
This option is not intended to qualify and will not be treated as an "incentive
stock option" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants. Defined terms not explicitly
defined in this agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option is
___________________ (_______). Subject to the limitations contained herein,
this option shall be exercisable with respect to each installment shown below on
or after the vesting date applicable to such installment as follows:
NUMBER OF SHARES DATE OF EARLIEST EXERCISE (VESTING)
<PAGE>
2. (a) The exercise price of this option is _________________
($____________) per share, being not less than the fair market value of the
Common Stock on the date of grant of this option.
(b) Payment of the exercise price per share is due in full upon
exercise of all or any part of each installment which has accrued to you. You
may elect, to the extent permitted by applicable statutes and regulations, to
make payment of the exercise price under one of the following alternatives:
(i) Payment of the exercise price per share in cash
(including check) at the time of exercise; or
(ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which results in the
receipt of cash (or check) by the Company prior to the issuance of Common Stock.
3. The minimum number of shares with respect to which this option may be
exercised at any one time is ten (10), except (i) as to any installment subject
to exercise, as set forth in paragraph 1 above, which amounts to fewer than ten
(10) shares, in which case, as to the exercise of that installment, the number
of such shares in such installment shall be the minimum number of shares, and
(ii) with respect to the final exercise of this option this paragraph 3 shall
not apply. This option may not be exercised for any number of shares which
would require the issuance of anything other than whole shares.
4. Notwithstanding anything to the contrary contained herein, this option
may not be exercised unless the shares issuable upon exercise of this option are
then registered under the Act or, if such shares are not then so registered, the
Company has determined that such exercise and issuance would be exempt from the
registration requirements of the Act.
5. The term of this option commences on ___________, 19__, the date of
grant and, unless sooner terminated as set forth below or in the Plan,
terminates on _____________________ (which date shall be no more than ten (10)
years from the date this option is granted). In no event may this option be
exercised on or after the date on which it terminates. This option shall
terminate prior to the expiration of its term as follows: thirty (30) days
after the termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company (as defined in the
Plan) for any reason or for no reason unless:
(a) such termination of Continuous Status as an Employee, Director or
Consultant is due to your permanent and total disability (within the meaning of
Section 422(c)(6) of the Code), in which event the option shall terminate on the
earlier of the termination date set forth above or twelve (12) months following
such termination of Continuous Status as an Employee, Director or Consultant; or
2.
<PAGE>
(b) such termination of Continuous Status as an Employee, Director or
Consultant is due to your death or your death occurs within thirty (30) days
following your termination for any other reason, in which event the option shall
terminate on the earlier of the termination date set forth above or eighteen
(18) months after your death; or
(c) during any part of such thirty (30) day period the option is not
exercisable solely because of the condition set forth in paragraph 4 above, in
which event the option shall not terminate until the earlier of the termination
date set forth above or until it shall have been exercisable for an aggregate
period of thirty (30) days after the termination of Continuous Status as an
Employee, Director or Consultant; or
(d) exercise of the option within thirty (30) days after termination
of your Continuous Status as an Employee, Director or Consultant with the
Company or with an Affiliate would result in liability under section 16(b) of
the Securities Exchange Act of 1934 (the "Exchange Act"), in which case the
option will terminate on the earlier of (i) the termination date set forth
above, (ii) the tenth (10th) day after the last date upon which exercise would
result in such liability or (iii) six (6) months and ten (10) days after the
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or an Affiliate.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to that number
of shares as to which it was exercisable on the date of termination of
Continuous Status as an Employee, Director or Consultant under the provisions of
paragraph 1 of this option.
6. (a) This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require pursuant to subsection 6(f)
of the Plan.
(b) By exercising this option you agree that the Company may require
you to enter an arrangement providing for the cash payment by you to the Company
of any tax withholding obligation of the Company arising by reason of: (1) the
exercise of this option; (2) the lapse of any substantial risk of forfeiture to
which the shares are subject at the time of exercise; or (3) the disposition of
shares acquired upon such exercise. You also agree that any exercise of this
option has not been completed and that the Company is under no obligation to
issue any Common Stock to you until such an arrangement is established or the
Company's tax withholding obligations are satisfied, as determined by the
Company.
7. This option is not transferable, except by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order
satisfying the requirements of Rule 16b-3 of the Exchange Act (a "QDRO"), and is
exercisable during your life only by you or a transferee pursuant to a QDRO.
Notwithstanding the foregoing, by delivering written notice to the Company, in a
form satisfactory to the Company, you may designate a third party who, in the
event of your death, shall thereafter be entitled to exercise this option.
3.
<PAGE>
8. This option is not an employment contract and nothing in this option
shall be deemed to create in any way whatsoever any obligation on your part to
continue in the employ of the Company, or of the Company to continue your
employment with the Company. In addition, nothing in this option shall obligate
the Company or any Affiliate, or their respective stockholders, Board of
Directors, officers, or employees to continue any relationship which you might
have as a Director or Consultant for the Company or Affiliate.
9. Any notices provided for in this option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by the Company to you, five (5) days after deposit in the
United States mail, postage prepaid, addressed to you at the address specified
below or at such other address as you hereafter designate by written notice to
the Company.
10. This option is subject to all the provisions of the Plan, a copy of
which is attached hereto and its provisions are hereby made a part of this
option, including without limitation the provisions of Section 6 of the Plan
relating to option provisions, and is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the Plan
shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
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By
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Duly authorized on behalf
of the Board of Directors
ATTACHMENTS:
Boole & Babbage, Inc. 1995 Stock Option Plan
Notice of Exercise
4.
