As filed with the Securities and Exchange Commission on October 30, 1998
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 of principal executive offices)
1995 Stock Option Plan
1997 Non-Officer 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.
Michael J. Sullivan, Esq.
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
(650) 843-5000
<TABLE>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
<CAPTION>
================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities to Amount to be Offering Price Per Aggregate Offering Price Amount of Registration
be Registered Registered Share (1) (1) Fee
========================== ====================== ========================= ========================== =========================
<S> <C> <C> <C> <C>
Stock Options and Common
Stock (par value $.001) 1,542,577 shares $22.17 - $25.1875 $36,772,038 $10,223
========================== ====================== ========================= ========================== =========================
<FN>
(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 1997 Non-Officer Stock Option Plan and (b) the average of the high and low prices of Registrant's Common
Stock on October 23, 1998 as reported on the Nasdaq National Market.
</FN>
</TABLE>
<PAGE>
<TABLE>
The chart below details the calculations of the registration fee:
<CAPTION>
- ---------------------------------------- -------------------------------- ----------------------- --------------------
Offering Price Per Aggregate Offering
Securities Number of Shares Share Price
- ---------------------------------------- -------------------------------- ----------------------- --------------------
<S> <C> <C> <C>
Shares issuable pursuant to the 1995
Stock Option Plan 42,577 $25.1875 (1)(b) $1,072,409
- ---------------------------------------- -------------------------------- ----------------------- --------------------
Shares issuable pursuant to
outstanding options under the 1997
Non-Officer Stock Option Plan 689,850 $22.17 (1)(a) $15,293,975
- ---------------------------------------- -------------------------------- ----------------------- --------------------
Shares issuable pursuant to the 1997
Non-Officer Stock Option Plan 810,150 $25.1875 (1)(b) $20,405,654
- ---------------------------------------- -------------------------------- ----------------------- --------------------
Proposed Maximum Offering Price $36,772,038
- ---------------------------------------- -------------------------------- ----------------------- --------------------
Registration Fee $10,223
- ---------------------------------------- -------------------------------- ----------------------- --------------------
</TABLE>
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Boole & Babbage, Inc. (the "Company")
with the Securities and Exchange Commission are incorporated by reference into
this Registration Statement:
(a) The Company's latest annual report on Form 10-K filed for fiscal
year end September 30, 1997 pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
Registration Statement on Form S-8 previously filed with the Commission (File
No. 333-02723).
(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 reports, the
prospectus or the registration statement referred to in (a) above.
(c) The description of the Company's Common Stock which is contained in
Registration Statement filed under the Exchange Act, including any amendment or
report filed for the purpose of updating such description.
(d) The Company's Current Report on Form 8-K as filed with the
Commission on October 23, 1998 (File No. 000-13258).
All reports and other documents subsequently filed by the Company
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.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the Common Stock offered hereby will be passed upon
for the Company by Cooley Godward LLP, Palo Alto, California ("Cooley Godward").
As of the date of this prospectus, certain members of Cooley Godward own an
aggregate of approximately 2,000 shares of the Registrant's Common Stock.
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. The Company's By-laws 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 By-laws, indemnified parties are entitled to indemnification for
negligence, gross negligence and otherwise to the fullest extent permitted by
law. The By-laws 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.
<PAGE>
EXHIBITS
Exhibit
Number
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of PricewaterhouseCoopers, LLP, Independent Auditors.
23.3 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney is contained on the signature pages.
99.1 1995 Stock Option Plan.(1)
99.2 1997 Non-Officer Stock Option Plan.
99.3 Form of Nonstatutory Stock Option under the 1997 Non-Officer Stock
Option Plan.
- -------------
(1) Previously filed as an Exhibit to the Registration Statement on Form
S-8 filed April 23, 1996. (File No. 333-02723)
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 the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) (ss. 230.424(b) of this
chapter) 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.
(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 information required to be included in a post-effective amendment by those
paragraphs is contained 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.
<PAGE>
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.
<PAGE>
SIGNATURES
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 October 29,
1998.
BOOLE & BABBAGE, INC.
By /s/ Arthur F. Knapp, Jr.
-------------------------------
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.
<TABLE>
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.
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Paul E. Newton
- -------------------------------------------- President and Chief Executive Officer October 29, 1998
Paul E. Newton (Principal Executive Officer)
/s/ Arthur F. Knapp, Jr.
- -------------------------------------------- Chief Financial Officer (Principal October 29, 1998
Arthur F. Knapp, Jr. Financial Officer)
- -------------------------------------------- Director October __, 1998
Franklin P. Johnson, Jr.
/s/ Johannes S. Bruggeling
- -------------------------------------------- Director October 29, 1998
Johannes S. Bruggeling
<PAGE>
/s/ Raymond E. Cairns
- -------------------------------------------- Director October 28, 1998
Raymond E. Cairns
/s/ Terry R. McGowan
- -------------------------------------------- Director October 28, 1998
Terry R. McGowan
/s/ Paul E. Newton
- -------------------------------------------- Director October 29, 1998
Paul E. Newton
- -------------------------------------------- Director October __, 1998
David Wright
</TABLE>
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit
Number Description Sequential Page Number
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of PricewaterhouseCoopers, LLP, Independent Auditors.
23.3 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney is contained on the signature pages.
99.1 1995 Stock Option Plan.(1)
99.2 1997 Non-Officer Stock Option Plan.
99.3 Form of Nonstatutory Stock Option under the 1997 Non-Officer Stock
Option Plan.
<FN>
- ----------
(1) Previously filed as an Exhibit to the Registration Statement on Form
S-8 filed on April 23, 1996. (File No. 333-02723)
</FN>
</TABLE>
October 28, 1998 Exhibit 5.1
Boole & Babbage, Inc.
3131 Zanker Road
San Jose, CA 95134
Ladies and 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 an aggregate of 1,542,577
shares of the Company's Common Stock, $.001 par value (the "Shares"), pursuant
to its 1995 Stock Option Plan and 1997 Non-Officer Stock Option Plan (the
"Plans").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, the Company's Restated Certificate of Incorporation, as
amended, and By-laws, 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 Plans, 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 LLP
By: /s/ Michael J. Sullivan
--------------------------------------------
Michael J. Sullivan
Exhibit 23.1
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 and 1997 Non-Officer Stock Option
Plan of Boole & Babbage, Inc. of our report dated October 24,1997, with respect
to the consolidated financial statements of Boole & Babbage, Inc. incorporated
by reference in its Annual Report (Form 10-K) for the year ended September 30,
1997 and the related financial statement schedule included therein, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
San Jose, California
October 28, 1998
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement on
Form S-8 of Boole & Babbage, Inc. of our report, dated April 10, 1997, on our
audit of the financial statement of MAXM Systems, Inc. as of September 30, 1996
and 1995 for the years then ended as included in the Current Report on Form
8-K/A for Boole & Babbage, Inc. dated April 22, 1997 (File No. 000-13258), which
report is incorporated by reference in this registration statement on Form S-8.
/s/ PricewaterhouseCoopers LLP
McLean, Virginia
October 27, 1998
BOOLE & BABBAGE, INC.
1997 NON-OFFICER STOCK OPTION PLAN
As Adopted Effective on October 30, 1997
Stockholder Approval Not Required
Adjusted for 3-for-2 Stock Split on March 25, 1998
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Consultants who are not Officers or members of the Board of
Directors may be given an opportunity to benefit from increases in value of the
common stock of the Company ("Common Stock") through the granting of
Nonstatutory Stock Options. Only Nonstatutory Stock Options may be granted
hereunder.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Consultants who are not Officers or members of
the Board of Directors, to secure and retain the services of such new Employees
and Consultants and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "Affiliate" shall mean any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f) respectively, of the Code, or such other
parent corporation or subsidiary corporation designated by the Board.
(b) "Board" shall mean the Committee, if one has been appointed, or the
Board of Directors, if no Committee is appointed.
(c) "Board of Directors" shall mean the Board of Directors of the
Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed.
(f) "Common Stock" shall mean the Common Stock of the Company.
(g) "Company" shall mean Boole & Babbage, Inc., a Delaware corporation.
(h) "Consultant" shall mean any consultants, independent contractors or
advisers to the Company or an Affiliate (provided that such persons render bona
fide services not in connection with the offering and sale of securities in
capital raising transactions) excluding
1
<PAGE>
officers and directors of the Company and stockholders beneficially owning 10%
or more of the Company's Common Stock.
(i) "Continuous Service as an Employee or Consultant" shall mean the
absence of any interruption or termination of service to the Company or an
Affiliate, whether as an Employee or Consultant. The Board or the Chief
Executive Officer of the Company may determine, in that party's sole discretion,
whether Continuous Service as an Employee or Consultant shall be considered
interrupted in the case of: (i) any leave of absence approved by the Board or
the Chief Executive Officer of the Company, including sick leave, military
leave, or any other personal leave; or (ii) transfers between the Company,
Affiliates or their successors.
(j) "Employee" shall mean any person employed by the Company or by any
Affiliate, excluding officers and directors of the Company and stockholders
beneficially owning 10% or more of the Company's Common Stock.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" means, as of any date, the value of the Common
Stock of the Company determined as follows:
(i) If the Common Stock is listed on any established stock
exchange, or traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
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 exchange or market (or the exchange or market with the greatest volume
of trading in Common Stock) on the trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Board deems reliable;
(ii) In the absence of such markets for the Common Stock, the
Fair Market Value shall be determined in good faith by the Board.
(m) "Nonstatutory Stock Option" shall mean an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(n) "Officer" shall mean 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 and any other Employees of the Company whom
the Board or the Committee classifies as "Officer" in its sole discretion.
(o) "Option" shall mean a Nonstatutory Stock Option granted pursuant to
the Plan.
(p) "Option Agreement" shall mean 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.
(q) "Optioned Stock" shall mean the Common Stock subject to an Option.
2
<PAGE>
(r) "Optionee" shall mean an Employee or Consultant who receives an
Option.
(s) "Plan" shall mean this 1997 Non-Officer Stock Option Plan.
(t) "Share" shall mean a share of Common Stock, as adjusted in
accordance with Section 11 of the Plan.
3. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 11 of the Plan, the maximum
aggregate number of Shares which may be optioned and sold under the Plan is one
million five hundred thousand (1,500,000) shares of Common Stock. The Shares may
be authorized, but unissued, or reacquired Common Stock. If an Option should
expire or become unexercisable for any reason without having been exercised in
full, the unpurchased Shares that were subject thereto shall, unless the Plan
shall have been terminated, become available for future grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) Procedure. The Plan shall be administered by the Board of
Directors. The Board of Directors may appoint a Committee consisting of not less
than two members of the Board of Directors to administer the Plan on behalf of
the Board of Directors, subject to such terms and conditions as the Board of
Directors may prescribe. Once appointed, the Committee shall continue to serve
until otherwise directed by the Board of Directors. From time to time the Board
of Directors may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause), and appoint new members
in substitution therefor, fill vacancies however caused and remove all members
of the Committee, and thereafter directly administer the Plan. Notwithstanding
anything in this Section 4 to the contrary, at any time the Board of Directors
or the Committee may delegate to a committee of one or more members of the Board
of Directors the authority to grant Options to all Employees and Consultants or
any portion or class thereof.
(b) Powers of the Board. Subject to the provisions of the Plan, the
Board shall have such authority with regard to the Plan and the options as
determined by the Board of Directors, including the authority, in its
discretion: (i) to grant options under the Plan, provided, however, that only
nonstatutory options may be granted under the Plan; (ii) to determine, upon
review of relevant information and in accordance with subsection 2(l) of the
Plan, the Fair Market Value of the Common Stock; (iii) to determine the exercise
price per share of Options to be granted, which exercise price shall be
determined in accordance with subsection 8(a) of the Plan; (iv) to determine the
Employees or Consultants to whom, and the time or times at which, Options shall
be granted and the number of Shares to be represented by each Option, provided
that no Options may be granted to persons who are neither Employees nor
Consultants; (v) to interpret the Plan; (vi) to prescribe, amend and rescind
rules and regulations relating to the Plan; (vii) to determine the terms and
provisions of each Option granted (which need not be identical) in accordance
with the Plan, and, with the consent of the holder thereof with respect to any
adverse change, modify or amend each Option; (viii) to accelerate or defer (the
latter with the consent of the Optionee) the exercise date and vesting of any
Option; (ix) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted by
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<PAGE>
the Board; and (x) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(c) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
5. ELIGIBILITY.
Options may be granted only to Employees or Consultants as defined in
Section 2 hereof. An Employee or Consultant who has been granted an Option may,
if he or she is otherwise eligible, be granted an additional Option or Options.
Notwithstanding the foregoing, no Employee who is an Officer of the Company or
who is a member of the Board of Directors shall be entitled to receive the grant
of an Option under the Plan.
The Plan shall not confer upon any Optionee any right with respect to
continuation of employment or consultancy by the Company, nor shall it interfere
in any way with the Optionee's right or the Company's right to terminate the
Optionee's employment at any time or the Optionee's consultancy pursuant to the
terms of the Consultant's agreement with the Company.
6. TERM OF THE PLAN.
The Plan shall become effective upon its adoption by the Board of
Directors. It shall continue in effect for a term of fifteen (15) years unless
sooner terminated under Section 13 of the Plan.
7. TERM OF OPTION.
The term of each Option shall be ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
8. EXERCISE PRICE, CONSIDERATION AND VESTING.
(a) Exercise Price. The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be no less than 100% of the Fair
Market Value per Share on the date of grant.
(b) Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be
determined by the Board and may consist entirely of (i) cash or check; (ii)
promissory note (except that payment of the Common Stock's "par value", as
defined in the Delaware General Corporation Law, shall not be made by deferred
payment); (iii) other shares of the Common Stock of the Company having a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which the Option shall be exercised, including by delivering to
the Company an attestation of ownership of owned and unencumbered shares of the
Common Stock of the Company in a form approved by the Company; (iv) payment
pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board which, prior to the issuance of Common Stock,
4
<PAGE>
results in either the receipt of cash (or check) by the Company or the receipt
of irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds; (v) any combination of such methods of payment; or (vi)
such other consideration and method of payment for the issuance of Shares to the
extent permitted under applicable law. In making its determination as to the
type of consideration to accept, the Board shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.
(c) Vesting. The total number of Shares 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 exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. The provisions of this
subsection 8(c) are subject to any Option provisions governing the minimum
number of Shares as to which an Option may be exercised.
9. EXERCISE OF OPTION.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under subsection 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares that thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
The Option may, but need not, include a provision whereby the
Optionee may elect to exercise at any time while an Employee or Consultant (or
while an officer or director of the Company) the Option as to any part or all of
the shares subject to the Option, subject to a repurchase right in favor of the
Company on such terms as the Board shall establish.
5
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(b) Termination of Service as an Employee or Consultant. If an Optionee
ceases to serve as an Employee or Consultant for any reason other than death or
disability, the Optionee may, but only within thirty (30) days (or such other
period of time as is determined by the Board) after the date the Optionee ceases
to be an Employee or Consultant, exercise the Option to the extent that the
Optionee was entitled to exercise it at the date of such termination. To the
extent that the Optionee was not entitled to exercise the Option at the date of
such termination, or if the Optionee does not exercise such Option (which the
Optionee was entitled to exercise) within the time specified herein, the Option
shall terminate.
(c) Death of Optionee. In the event of the death of an Optionee during
the term of the Option who is at the time of his or her death an Employee or
Consultant and who shall have been in Continuous Service as an Employee or
Consultant since the date of grant of the Option, the Option may be exercised at
any time within eighteen (18) months (or such other period of time as is
determined by the Board) following the date of death, by the Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, to the extent that the Optionee was entitled to exercise it at the
date of such termination. To the extent that the Optionee was not entitled to
exercise the Option at the date of such termination, or if the Option is not
exercised (to the extent the Optionee was entitled to exercise) within the time
specified herein, the Option shall terminate.
(d) Disability of Optionee. In the event of the disability of an
Optionee during the term of the Option who is at the time of his or her
disability an Employee or Consultant and who shall have been in Continuous
Service as an Employee or Consultant since the date of grant of the Option, the
Optionee may, but only within twelve (12) months (or such other period of time
as is determined by the Board) after the date the Optionee ceases to be an
Employee or Consultant on account of such disability, exercise the Option to the
extent that the Optionee was entitled to exercise it at the date of such
termination. To the extent that the Optionee was not entitled to exercise the
Option at the date of such termination, or if the Optionee does not exercise
such Option (which the Optionee was entitled to exercise) within the time
specified herein, the Option shall terminate.
(e) Withholding. To the extent provided by the terms of the Option
Agreement, the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following means
or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold Shares from the Shares otherwise issuable to
the Optionee as a result of the exercise of the Option; or (iii) delivering to
the Company owned and unencumbered shares of the Common Stock of the Company.
10. TRANSFERABILITY OF OPTIONS.
Except as otherwise expressly provided in the terms of the Option
Agreement, the Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. Notwithstanding the foregoing, the Optionee 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.
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11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
(a) The number of Shares covered by each outstanding Option, and the
number of Shares which have been authorized for issuance under the Plan but as
to which no Options have yet been granted or which have been returned to the
Plan upon cancellation or expiration of an Option, as well as the price per
Share covered by each such outstanding Option, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split or the payment of a stock dividend with respect to
the Common Stock or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration".
Such adjustments shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.
(b) 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 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 beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange 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: (a) any
surviving or acquiring corporation shall assume Options outstanding under the
Plan or shall substitute similar options (including an option to acquire the
same consideration paid to stockholders in the transaction described in this
Section 11) for those outstanding under the Plan, or (b) in the event any
surviving or acquiring corporation refuses to assume such Options or to
substitute similar options for those outstanding under the Plan, (i) with
respect to Options held by persons then performing services as Employees or
Consultants, the vesting of such Options and 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, and (ii) with respect to any other Options outstanding under the Plan,
such Options shall be terminated if not exercised prior to such event.
Notwithstanding the foregoing, the Board shall at all times have the
complete and sole discretion to accelerate the vesting and exercisability of
some or all of the shares of Common Stock subject to any or all of then
outstanding Options granted under the Plan and to establish the date as of which
any such Option shall terminate (and all other terms and conditions relating to
such termination.)
12. TIME OF GRANTING OPTIONS.
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The date of grant of an Option shall, for all purposes, be the date on
which the Board makes the determination granting such Option. Notice of the
determination shall be given to each Employee or Consultant to whom an Option is
so granted within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Amendment and Termination. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. CONDITIONS UPON ISSUANCE OF SHARES.
The Company may require any Optionee, or any person to whom an Option
is transferred under Section 10, 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 Shares subject to the Option for such person's own account and not
with any present intention of selling or otherwise distributing the Shares. 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, 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 necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to, legends restricting
the transfer of the shares.
15. RESERVATION OF SHARES.
The Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect
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of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
16. OPTION AGREEMENT.
Options shall be evidenced by written Option Agreements in such form or
forms as the Board or the Committee shall approve.
17. EFFECTIVE DATE.
The Plan shall become effective on October 30, 1997.
9
BOOLE & BABBAGE, INC.
1997 NON-OFFICER STOCK OPTION PLAN
STOCK OPTION AGREEMENT
NONSTATUTORY STOCK OPTION
Pursuant to the Notice of Grant and this Stock Option Agreement, Boole
& Babbage, Inc. (the "Company"), has granted to you an option to purchase the
number of shares of the common stock of the Company ("Common Stock") indicated
in the Notice of Grant at the exercise price indicated in the Notice of Grant.
This option is not intended to qualify as 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 pursuant to the Company's 1997 Non-Officer Stock Option
Plan (the "Plan") and is made in furtherance of the Company's compensatory
benefit plan for participation of the Company's employees (excluding officers
and directors). 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. VESTING. Subject to the limitations contained herein, your option
will vest in installments over a period of four (4) years from the effective
date of the grant (as specified in the Notice of Grant). Twenty-five percent
(25%) of the shares covered by this option shall vest on the first anniversary
of the effective date of the grant, and six and one-fourth percent (6.25%) of
the shares shall vest at the end of each quarter thereafter, provided that
vesting will cease upon termination of your Continuous Service.
2. METHOD OF PAYMENT. 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:
(a) Payment of the exercise price per share in cash (including
check) at the time of exercise;
(b) Payment pursuant to a program developed under Regulation T
as promulgated by the Federal Reserve Board which, prior to the issuance of
Common Stock, results in either the receipt of cash (or check) by the Company or
the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds;
(c) Provided that at the time of exercise the Company's Common
Stock is publicly traded and quoted regularly in The Wall Street Journal,
payment by delivery of already-owned shares of Common Stock, held for the period
required to avoid a charge to the Company's reported earnings, and owned free
and clear of any liens, claims, encumbrances or security interests, which Common
Stock shall be valued at its fair market value on the date of exercise; or
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(d) Payment by a combination of the methods of payment
permitted by subsection 2(a) through 2(c) above.
3. WHOLE SHARES. This option may not be exercised for any number of
shares which would require the issuance of anything other than whole shares.
4. SECURITIES LAW COMPLIANCE. 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 Securities Act of
1933, as amended (the "Securities 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 Securities Act.
5. TERM. The term of this option begins on the effective date of the
grant (as specified in the Notice of Grant), and expires on and shall not be
exercised after the day before the tenth anniversary of the date of grant (the
"Expiration Date") unless this option expires sooner as set forth below or in
the Plan. In no event may this option be exercised on or after the Expiration
Date. This option shall terminate prior to the Expiration Date of its term as
follows: thirty (30) days after the termination of your Continuous Service
unless one of the following circumstances exists:
(a) Your termination of Continuous Service is due to your
permanent and total disability (within the meaning of Section 422(c)(6) of the
Code). This option will then expire on the earlier of the Expiration Date set
forth above or twelve (12) months following such termination of Continuous
Service.
(b) Your termination of Continuous Service is due to your
death. This option will then expire on the earlier of the Expiration 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 Section 4
above, then your option will not expire until the earlier of the Expiration 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
Service.
(d) If your exercise of the option within thirty (30) days
after termination of your Continuous Service would result in liability under
Section 16(b) of the Securities Exchange Act of 1934 as amended (the "Exchange
Act"), then your option will expire on the earlier of (i) the Expiration 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 Service.
However, this option may be exercised following termination of
Continuous Service only as to that number of shares as to which it was
exercisable on the date of termination of Continuous Service.
6. EXERCISE.
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(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 the Plan.
(b) By exercising this option you agree that 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 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.
7. TRANSFERABILITY. 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. OPTION NOT A SERVICE CONTRACT. 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 any Affiliate, or of the Company or any Affiliate to continue your employment
with the Company or any Affiliate. 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. NOTICES. 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. GOVERNING PLAN DOCUMENT. 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.
3
