<PAGE> 1
As filed with the Securities and Exchange Commission on April 26, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
GARTNER GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-3099750
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
----------------------
P.O. Box 10212
56 Top Gallant Road
Stamford, Connecticut 06904-2212
(Address of Principal Executive Offices) (Zip Code)
----------------------
Gartner Group, Inc. 1991 Stock Option Plan
(Full title of the plan)
----------------------
Michael D. Fleisher
Chief Financial Officer and Executive Vice President-
Finance and Administration
Gartner Group, Inc.
56 Top Gallant Road
Stamford, CT 06904-2212
(Name and address of agent for service)
----------------------
(203) 964-0096
(Telephone number, including area code, of agent for service)
----------------------
Copy to:
Michael J. Palmieri, Esq.
Shipman & Goodwin LLP
One Landmark Square
Stamford, CT 06901
(203) 324-8100
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================================
Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities to be to be Price per Offering Registration
Registered Registered Share Price (1) Fee
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, Class A, par 3,110,914 shares $21.86 $ 68,003,942 $18,906
value $0.0005 (currently
outstanding options) (1)
- ----------------------------------------------------------------------------------------------
Common Stock, Class A, par 100,000 shares $19.3125 $ 1,931,250 $ 537
value $0.0005 (allocated
shares of restricted stock)
(2)
- ----------------------------------------------------------------------------------------------
Common Stock, Class A, par 6,789,086 shares $19.3125 $131,114,223 $36,450
value $0.0005 (shares
available for future
issuance) (2)
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
<TABLE>
- ----------------------------------------------------------------------------------------------
<S> <C>
Total $55,893
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) In accordance with Rule 457(h), the computation is based on the weighted
average exercise price per share of $21.86 as to 3,110,914 outstanding but
unexercised options to purchase Common Stock under the 1991 Stock Option
Plan.
(2) In accordance with Rule 457(h), the Proposed Maximum Offering Price per
Share as to the 100,000 shares of restricted stock to be issued under the
1991 Stock Option Plan and the remaining 6,789,086 shares of Common Stock
authorized for issuance pursuant to the 1991 Stock Option Plan has been
estimated in accordance with Rule 457(c) under the Securities Act of 1933,
solely for the purpose of calculating the registration fee. The
computation is based on the average of the high and low price of the
Common Stock as reported on the New York Stock Exchange on April 21, 1999.
- --------------------------------------------------------------------------------
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus relating
to the securities registered under this Registration Statement also relates to
Registration Statement No. 33-85926.
================================================================================
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information statement being delivered by Gartner Group, Inc. (the
"Company") to participants in the Company's 1991 Stock Option Plan (the "Plan"),
as required by Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"), has been prepared in accordance with the requirements of Form
S-8 and relates to shares of common stock, par value $0.0005 per share, (the
"Shares") issued or to be issued pursuant to the Plan. The information with
respect to the Plan required in the Section 10(a) prospectus is included in
documents being maintained and delivered by the Company as required by Rule 428
under the Securities Act. The Company shall provide to participants a written
statement advising them of the availability without charge, upon written or oral
request, of documents incorporated by reference herein, as is required by Item 2
of Part I of Form S-8.
<PAGE> 4
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, previously filed with the Commission, are hereby
incorporated by reference in this registration statement:
(a) The Company's Annual Report on Form 10-K for the year ended September
30, 1998;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1998; and
(c) The description of the Shares contained in the Registration Statement
on Form 8-A filed on August 24, 1998, filed pursuant to Section 12(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including any
amendment or report filed for the purpose of updating such description.
In addition, all documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this registration
statement shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this registration statement.
Item 4. Description of Securities.
This item is not applicable.
Item 5. Interests of Named Experts and Counsel.
This item is not applicable.
Item 6. Indemnification of Directors and Officers.
<PAGE> 5
Section 145 of the Delaware General Corporation Law ("Delaware Law")
provides that a corporation may indemnify a director, officer, employee or agent
made a party to an action by reason of the fact that he was a director, officer,
employee or agent of the corporation, or was serving at the request of the
corporation, against expenses actually and reasonably incurred, including
attorneys' fees, in connection with such action, if he acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal action, had no
reasonable cause to believe his conduct was unlawful.
The Company's Certificate of Incorporation limits, to the maximum extent
permitted by Delaware Law, the personal liability of a director to the Company
or its shareholders for monetary damages for breach of fiduciary duty as a
director. The Company's By-laws provide that the Company shall indemnify its
officers and directors to the fullest extent permitted by Delaware Law against
all expense, liability and loss, including attorneys' fees, actually and
reasonably incurred and may purchase and maintain insurance against any
liability asserted and incurred by reason of serving as such, whether or not the
Company has the power to indemnify against such liability. The Company has
entered into indemnification agreements with its officers and directors
containing provisions which are in some respects broader than the specific
indemnification provisions contained in Delaware Law and which require that, to
the extent the Company maintains liability insurance applicable to officers or
directors, each officer and director shall be covered by such policies to the
same extent as are accorded the most favorably insured of the Company's officers
or directors, as the case may be.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions and agreements, the Company has been
informed that in the opinion of the staff of the Commission such indemnification
is against public policy as expressed in the Securities Act and is therefore
unenforceable.
Item 7. Exemption from Registration Claimed.
This item is not applicable.
II-2
<PAGE> 6
Item 8. Exhibits.
The following exhibits are filed as part of this Registration Statement or
incorporated by reference herein:
Exhibit Number Description of Exhibits
- -------------- -----------------------
4.1(a) Restated Certificate of Incorporation of the Company (filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K (File
No. 0-15144) for the year ended September 30, 1995 and
incorporated herein by reference).
4.1(b) Amendment dated March 18, 1996 to Restated Certificate of
Incorporation of the Company (filed as Exhibit 4.1(c) to the
Company's Registration Statement on Form S-8 (File No.
333-35169) and incorporated herein by reference).
4.2 Amended By-laws of the Company, as of April 24, 1997 (filed as
Exhibit 4.2 to the Company's Registration Statement on Form
S-8 (File No. 333-35169) and incorporated herein by
reference).
4.3 Form of certificate for the Company's common stock (filed as
Exhibit 4.2 to the Company's Registration Statement on Form
S-1 (File No. 33-67576) and incorporated herein by reference).
4.4* Gartner Group, Inc. 1991 Stock Option Plan, as amended
effective October 13, 1998.
5.1* Opinion of Shipman & Goodwin LLP.
23.1* Independent Auditors' Consent, KPMG LLP.
23.2* Consent of Shipman & Goodwin LLP (included in Exhibit 5).
24.1* Powers of Attorney.
- -------------
* Filed herewith.
II-3
<PAGE> 7
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification of liabilities arising under the Securities Act
of 1933 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 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 Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 8
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 Stamford and State of Connecticut on the 26th
day of April, 1999.
GARTNER GROUP, INC.
BY /s/ William T. Clifford
-------------------------------------
William T. Clifford
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ William T. Clifford President, Chief Executive Officer April 26, 1999
- -------------------------- and Director
William T. Clifford (principal executive officer)
/s/ Michael D. Fleisher Chief Financial Officer and April 26, 1999
- -------------------------- Executive Vice President-Finance and
Michael D. Fleisher Administration (principal
financial and accounting officer)
Manuel A. Fernandez* Chairman of the Board April 26, 1999
- --------------------------
Manuel A. Fernandez
William A. Grabe* Director April 26, 1999
- --------------------------
William O. Grabe
Max D. Hopper* Director April 26, 1999
- --------------------------
Max D. Hopper
John P. Imlay, Jr.* Director April 26, 1999
- --------------------------
John P. Imlay, Jr.
II-5
<PAGE> 9
Stephen G. Pagliuca* Director April 26, 1999
- ------------------------------
Stephen G. Pagliuca
Dennis G. Sisco* Director April 26, 1999
- ------------------------------
Dennis G. Sisco
Director
- ------------------------------
Robert E. Weissman
*By: /s/ Michael D. Fleisher April 26, 1999
- ------------------------------
Michael D. Fleisher
Attorney-in-Fact
II-6
<PAGE> 10
EXHIBIT INDEX
Exhibit Number Description of Exhibits
- -------------- -----------------------
4.1(a) Restated Certificate of Incorporation of the Company (filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K (File
No. 0-15144) for the year ended September 30, 1995 and
incorporated herein by reference).
4.1(b) Amendment dated March 18, 1996 to Restated Certificate of
Incorporation of the Company (filed as Exhibit 4.1(c) to the
Company's Registration Statement on Form S-8 (File No.
333-35169) and incorporated herein by reference).
4.2 Amended By-laws of the Company, as of April 24, 1997 (filed as
Exhibit 4.2 to the Company's Registration Statement on Form
S-8 (File No. 333-35169) and incorporated herein by
reference).
4.3 Form of certificate for the Company's common stock (filed as
Exhibit 4.2 to the Company's Registration Statement on Form
S-1 (File No. 33-67576) and incorporated herein by reference).
4.4* Gartner Group, Inc. 1991 Stock Option Plan, as amended
effective October 13, 1998.
5.1* Opinion of Shipman & Goodwin LLP.
23.1* Independent Auditors' Consent, KPMG LLP.
23.2* Consent of Shipman & Goodwin LLP (included in Exhibit 5).
24.1* Powers of Attorney.
- -------------
* Filed herewith.
<PAGE> 1
EXHIBIT 4.4
GARTNER GROUP, INC.
1991 STOCK OPTION PLAN
As amended effective October 13, 1998 and approved by stockholders on
January 28, 1999
This 1991 Stock Option Plan is an amendment and restatement of the Gartner
Group, Inc. 1991 Stock Option and Appreciation Right Incentive Compensation
Plan.
1. Purpose of the Plan. The purpose of this Stock Option Plan is to enable
the Company to provide incentive to eligible employees, consultants and officers
whose present and potential contributions are important to the continued success
of the Company, to afford these individuals the opportunity to acquire a
proprietary interest in the Company, and to enable the Company to enlist and
retain in its employment qualified personnel for the successful conduct of its
business. It is intended that this purpose will be effected through the granting
of (a) stock options, (b) stock purchase rights, (c) stock appreciation rights,
and (d) long-term performance awards.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or such of its Committees as
shall be administering the Plan, in accordance with Section 8 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to the
administration of stock option plans under applicable securities laws, Delaware
corporate law and the Code.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a Committee appointed by the Board in
accordance with Section 8 of the Plan.
(f) "Common Stock" means the Common Stock, $.01 par value, of the
Company.
(g) "Company" means Gartner Group, Inc., a Delaware corporation,
previously known as GGI Holding Corporation.
(h) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services and who is compensated
for
<PAGE> 2
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.
(i) "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship is not interrupted or terminated by the
Company, or any Parent or Subsidiary. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of: (i) any leave of
absence approved by the Administrator, including sick leave, military leave, or
any other personal leave; provided, however, that for purposes of Continuous
Status as an Employee or Consultant, no such leave may exceed ninety (90) days,
unless reemployment upon the expiration of such leave is guaranteed by contract
(including written Company policies) or statute or unless (in the case of
Options and Rights other than Incentive Stock Options) the Administrator has
expressly designated a longer leave period during which (for purposes of such
Options or Rights) Continuous Status as an Employee or Consultant shall
continue; or (ii) transfers between locations of the Company or between the
Company, its Parent, its Subsidiaries or its successor; and provided further
that any vesting or lapsing of the Company's right to repurchase Shares at their
original purchase price shall cease on the ninety-first (91st) consecutive day
of any leave of absence approved by the Administrator and shall not recommence
until such date, if any, upon which the Consultant or Optionee resumes his or
her service with the Company. Continuous employment shall be interrupted and
terminated for an Employee if the Employee's weekly work hours change from full
time (40 hours) to part time (less than 40 hours).
(j) "Director" means a member of the Board.
(k) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary 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.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(n) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the Nasdaq National Market of the National
2
<PAGE> 3
Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, the Fair Market Value of a
share of Common Stock shall be the average of the
closing sales prices for such stock (or the average of
the closing bids, 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 five
market trading days immediately preceding the date of
determination, as reported in The Wall Street Journal or
such other source as the Administrator of the Plan deems
reliable; provided, however, that in the event the Fair
Market Value as so determined is more than 20% greater
or more than 20% less than the closing sales price for
such stock (or the closing bid, if no sales were
reported) as so quoted on the date of determination,
then the Administrator shall be entitled to determine
the Fair Market Value in good faith, at a price within
the range of prices from the Fair Market Value as
otherwise determined above to the closing price (or
closing bid, as applicable) on the date of
determination;
(ii) If the Common Stock is quoted on the NASDAQ System (but
not on the Nasdaq National Market 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 average of the
means between the high bid and low asked prices for the
Common Stock on the five market trading days immediately
preceding the day of determination, as reported in The
Wall Street Journal or such other source as the
Administrator deems reliable; provided, however, that in
the event the Fair Market Value as so determined is more
than 20% greater or more than 20% less than the mean
between the high bid and low asked prices for such stock
as so quoted on the date of determination, then the
Administrator shall be entitled to determine the Fair
Market Value in good faith, at a price within the range
of prices from the Fair Market Value as otherwise
determined above to the mean between the high bid and
low asked prices on the date of determination;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good
faith by the Administrator.
3
<PAGE> 4
(o) "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.
(p) "Long-Term Performance Award" means an award under Section 7
below. A Long-Term Performance Award shall permit the recipient to receive a
cash or stock bonus (as determined by the Administrator) upon satisfaction of
such performance factors as are set out in the recipient's individual grant.
Long-term Performance Awards will be based upon the achievement of Company,
Subsidiary and/or individual performance factors or upon such other criteria as
the Administrator may deem appropriate.
(q) "Long-Term Performance Award Agreement" means a written
agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Long-Term Performance Award grant. The Long-Term
Performance Award Agreement is subject to the terms and conditions of the Plan.
(r) "Nonstatutory Stock Option" means any Option that is not an
Incentive Stock Option.
(s) "Notice of Grant" means a written notice evidencing certain
terms and conditions of an individual Option, Stock Purchase Right, SAR or
Long-Term Performance Award grant. The Notice of Grant is part of the Option
Agreement, the SAR Agreement and the Long-Term Performance Award Agreement.
(t) "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.
(u) "Option" means a stock option granted pursuant to the Plan.
(v) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.
(w) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.
(x) "Optioned Stock" means the Common Stock subject to an Option or
Right.
(y) "Optionee" means an Employee or Consultant who holds an
outstanding Option or Right.
4
<PAGE> 5
(aa) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(bb) "Plan" means this Stock Option Plan, formerly the 1991 Stock
Option and Appreciation Right Incentive Compensation Plan.
(cc) "Restricted Stock" means shares of Common Stock subject to a
Restricted Stock Purchase Agreement acquired pursuant to a grant of Stock
Purchase Rights under Section 6 below.
(dd) "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
(ee) "Right" means and includes SARs, Long-Term Performance Awards
and Stock Purchase Rights granted pursuant to the Plan.
(ff) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor rule thereto, as in effect when discretion is being exercised with
respect to the Plan.
(gg) "SAR" means a stock appreciation right granted pursuant to
Section 5 of the Plan.
(hh) "SAR Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual SAR grant.
The SAR Agreement is subject to the terms and conditions of the Plan.
(ii) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.
(jj) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 6 of the Plan, as evidenced by a Notice of Grant.
(kk) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Shares Subject to the Plan. Subject to the provisions of Section 10 of
the Plan, the total number of Shares reserved and available for distribution
under the Plan is 32,800,000 Shares. Subject to Section 10 of the Plan, if any
Shares that have been optioned under an Option cease to be subject to such
Option (other than through exercise of the Option), or if any Option or Right
granted hereunder is forfeited or any such award otherwise terminates prior to
the issuance of Common Stock to the participant, the
5
<PAGE> 6
shares that were subject to such Option or Right shall again be available for
distribution in connection with future Option or right grants under the Plan;
provided, however, that Shares that have actually been issued under the Plan,
whether upon exercise of an Option or Right, shall not in any event be returned
to the Plan and shall not become available for future distribution under the
Plan.
4. Eligibility. Nonstatutory Stock Options and Rights may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. If otherwise eligible, an Employee or Consultant who has been granted
an Option or Right may be granted additional Options or Rights.
5. Options and SARs.
(a) Options. The Administrator, in its discretion, may grant Options
to eligible participants and shall determine whether such Options shall be
Incentive Stock Options or Nonstatutory Stock Options. Each Option shall be
evidenced by a Notice of Grant which shall expressly identify the Options as
Incentive Stock Options or as Nonstatutory Stock Options, and be in such form
and contain such provisions as the Administrator shall from time to time deem
appropriate. Without limiting the foregoing, the Administrator may at any time
authorize the Company, with the consent of the respective recipients, to issue
new Options or Rights in exchange for the surrender and cancellation of
outstanding Options or Rights. Option agreements shall contain the following
terms and conditions:
(i) Exercise Price; Number of Shares. The per Share exercise
price for the Shares issuable pursuant to an Option
shall be such price as is determined by the
Administrator; provided, however, that in the case of an
Incentive Stock Option, the price shall be no less than
100% of the Fair Market Value of the Common Stock on the
date the Option is granted, subject to any additional
conditions set out in Section 5(a)(iv) below.
The Notice of Grant shall specify the number of Shares
to which it pertains.
(ii) Waiting Period and Exercise Dates. At the time an Option
is granted, the Administrator will determine the terms
and conditions to be satisfied before Shares may be
purchased, including the dates on which Shares subject
to the Option may first be purchased. The Administrator
may specify that an Option may not be exercised until
the completion of the service period specified at the
time of grant. (Any such period is referred to herein as
the "waiting period.") At the
6
<PAGE> 7
time an Option is granted, the Administrator shall fix
the period within which the Option may be exercised,
which shall not be earlier than the end of the waiting
period, if any, nor, in the case of an Incentive Stock
Option, later than ten (10) years, from the date of
grant.
(iii) Form of Payment. The consideration to be paid for the
Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive
Stock Option, shall be determined at the time of grant)
and may consist entirely of:
(1) cash;
(2) check;
(3) promissory note;
(4) other Shares which (1) in the case of Shares
acquired upon exercise of an option, have been owned by
the Optionee for more than six months on the date of
surrender, and (2) have a Fair Market Value on the date
of surrender not greater than the aggregate exercise
price of the Shares as to which said Option shall be
exercised;
(5) delivery of a properly executed exercise notice
together with such other documentation as the
Administrator and any broker approved by the Company, if
applicable, shall require to effect an exercise of the
Option and delivery to the Company of the sale or loan
proceeds required to pay the exercise price;
(6) any combination of the foregoing methods of payment;
or
(7) such other consideration and method of payment for
the issuance of Shares to the extent permitted by
Applicable Laws.
7
<PAGE> 8
(iv) Special Incentive Stock Option Provisions. In addition
to the foregoing, Options granted under the Plan which
are intended to be Incentive Stock Options under Section
422 of the Code shall be subject to the following terms
and conditions:
(1) Dollar Limitation. To the extent that the aggregate
Fair Market Value of (a) the Shares with respect to
which Options designated as Incentive Stock Options plus
(b) the shares of stock of the Company, Parent and any
Subsidiary with respect to which other incentive stock
options are exercisable for the first time by an
Optionee during any calendar year under all plans of the
Company and any Parent and Subsidiary exceeds $100,000,
such Options shall be treated as Nonstatutory Stock
Options. For purposes of the preceding sentence, (a)
Options shall be taken into account in the order in
which they were granted, and (b) the Fair Market Value
of the Shares shall be determined as of the time the
Option or other incentive stock option is granted.
(2) 10% Stockholder. If any Optionee to whom an
Incentive Stock Option is to be granted pursuant to the
provisions of the Plan is, on the date of grant, the
owner of Common Stock (as determined under Section
424(d) of the Code) possessing more than 10% of the
total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary of the Company,
then the following special provisions shall be
applicable to the Option granted to such individual:
(a) The per Share Option price of Shares subject
to such Incentive Stock Option shall not be less
than 110% of the Fair Market Value of Common Stock
on the date of grant; and
(b) The Option shall not have a term in excess of
five (5) years from the date of grant.
Except as modified by the preceding provisions of this
subsection 5(a)(iv) and except as otherwise limited by
Section 422 of the Code, all of the provisions of the
Plan shall be applicable to the Incentive Stock Options
granted hereunder.
8
<PAGE> 9
(v) Other Provisions. Each Option granted under the Plan may
contain such other terms, provisions, and conditions not
inconsistent with the Plan as may be determined by the
Administrator.
(vi) Buyout Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares, an
Option previously granted, based on such terms and
conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer
is made.
(b) SARs.
(i) In Connection with Options. At the sole discretion of
the Administrator, SARs may be granted in connection
with all or any part of an Option, either concurrently
with the grant of the Option or at any time thereafter
during the term of the Option. The following provisions
apply to SARs that are granted in connection with
Options:
(1) The SAR shall entitle the Optionee to exercise the
SAR by surrendering to the Company unexercised a portion
of the related Option. The Optionee shall receive in
Exchange from the Company an amount equal to the excess
of (1) the Fair Market Value on the date of exercise of
the SAR of the Common Stock covered by the surrendered
portion of the related Option over (2) the exercise
price of the Common Stock covered by the surrendered
portion of the related Option. Notwithstanding the
foregoing, the Administrator may place limits on the
amount that may be paid upon exercise of an SAR;
provided, however, that such limit shall not restrict
the exercisability of the related Option.
(2) When an SAR is exercised, the related Option, to the
extent surrendered, shall cease to be exercisable.
(3) An SAR shall be exercisable only when and to the
extent that the related Option is exercisable and shall
expire no later than the date on which the related
Option expires.
(4) An SAR may only be exercised at a time when the Fair
Market Value of the Common Stock covered by the
9
<PAGE> 10
related Option exceeds the exercise price of the Common
Stock covered by the related Option.
(ii) Independent of Options. At the sole discretion of the
Administrator, SARs may be granted without related
Options. The following provisions apply to SARs that are
not granted in connection with Options:
(1) The SAR shall entitle the Optionee, by exercising
the SAR, to receive from the Company an amount equal to
the excess of (1) the Fair Market Value of the Common
Stock covered by the exercised portion of the SAR, as of
the date of such exercise, over (2) the Fair Market
Value of the Common Stock covered by the exercised
portion of the SAR, as of the last market trading date
prior to the date on which the SAR was granted;
provided, however, that the Administrator may place
limits on the aggregate amount that may be paid upon
exercise of an SAR.
(2) SARs shall be exercisable, in whole or in part, at
such times as the Administrator shall specify in the
Optionee's SAR agreement.
(iii) Form of Payment. The Company's obligation arising upon
the exercise of an SAR may be paid in Common Stock or in
cash, or in any combination of Common Stock and cash, as
the Administrator, in its sole discretion, may
determine. Shares issued upon the exercise of an SAR
shall be valued at their Fair Market Value as of the
date of exercise.
(c) Method of Exercise.
(i) Procedure for Exercise; Rights as a Stockholder. Any
Option or SAR granted hereunder shall be exercisable at
such times and under such conditions as determined by
the Administrator 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 or SAR 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 or
SAR by the person entitled to exercise the Option or SAR
10
<PAGE> 11
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
Administrator (and, in the case of an Incentive Stock
Option, determined at the time of grant) and permitted
by the Option Agreement consist of any consideration and
method of payment allowable under subsection 5(a)(iii)
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 10
of the Plan.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter shall
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. Exercise of an SAR in any
manner shall, to the extent the SAR is exercised, result
in a decrease in the number of Shares which thereafter
shall be available for purposes of the Plan, and the SAR
shall cease to be exercisable to the extent it has been
exercised.
(ii) Rule 16b-3. Options and SARs granted to individuals
subject to Section 16 of the Exchange Act ("Insiders")
must comply with the applicable provisions of Rule 16b-3
and shall contain such additional conditions or
restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
(iii) Termination of Employment or Consulting Relationship. In
the event an Optionee's Continuous Status as an Employee
or Consultant terminates (other than upon the Optionee's
death or Disability), the Optionee may exercise his or
her Option or SAR, but only within such period of time
as is determined by the Administrator at the time of
grant, not to exceed six (6) months (three (3) months in
the case of an Incentive Stock Option) from the date of
such termination,
11
<PAGE> 12
and only to the extent that the Optionee was entitled to
exercise it at the date of such termination (but in no
event later than the expiration of the term of such
Option or SAR as set forth in the Option or SAR
Agreement). To the extent that Optionee was not entitled
to exercise an Option or SAR at the date of such
termination, and to the extent that the Optionee does
not exercise such Option or SAR (to the extent otherwise
so entitled) within the time specified herein, the
Option or SAR shall terminate.
(iv) Disability of Optionee. In the event an Optionee's
Continuous Status as an Employee or Consultant
terminates as a result of the Optionee's Disability, the
Optionee may exercise his or her Option or SAR, but only
within six (6) months from the date of such termination,
and only to the extent that the Optionee was entitled to
exercise it at the date of such termination (but in no
event later than the expiration of the term of such
Option or SAR as set forth in the Option or SAR
Agreement). To the extent that Optionee was not entitled
to exercise an Option or SAR at the date of such
termination, and to the extent that the Optionee does
not exercise such Option or SAR (to the extent otherwise
so entitled) within the time specified herein, the
Option or SAR shall terminate.
(v) Death of Optionee. Notwithstanding Sections 5(c)(iii)
and 5(c)(iv) above, in the event of an Optionee's death
during Optionee's Continuous Status as an Employee or
Consultant, the Optionee's estate or a person who
acquired the right to exercise the deceased Optionee's
Option or SAR by bequest or inheritance may exercise the
Option or SAR, but only within six (6) months (or such
lesser period as the Option or SAR Agreement may
provide, or such longer period, not to exceed twelve
(12) months, as the Option or SAR Agreement may provide)
following the date of death, and only to the extent that
the Optionee was entitled to exercise it at the date of
death (but in no event later than the expiration of the
full term of such Option or SAR as set forth in the
Option or SAR Agreement). To the extent that Optionee
was not entitled to exercise an Option or SAR at the
date of death, and to the extent that the Optionee's
estate or a person who acquired the right to exercise
such Option does not exercise such Option or SAR (to the
extent
12
<PAGE> 13
otherwise so entitled) within the time specified herein,
the Option or SAR shall terminate.
(d) The following limitations shall apply to grants of Options to
Employees:
(i) No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 500,000 shares.
(ii) In connection with his or her initial employment, an
Employee may be granted Options to purchase up to an
additional 500,000 Shares which shall not count against
the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the
Company's capitalization as described in Section 10.
(iv) If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in
connection with a transaction describe in Section 10),
the canceled Option will be counted against the limit
set forth in Section 5(d)(i). For this purpose, if the
exercise price of an Option is reduced, the transaction
will be treated as a cancellation of the Option and the
grant of a new Option.
6. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that the offeree shall be entitled to
purchase, the price to be paid, and the time within which the offeree must
accept such offer, which shall in no event exceed thirty (30) days from the date
upon which the Administrator made the determination to grant the Stock Purchase
Right. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock
13
<PAGE> 14
purchase agreement shall be the original price paid by the purchaser and may be
paid by cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may determine.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.
(d) Rule 16b-3. Stock Purchase Rights granted to Insiders, and
Shares purchased by Insiders in connection with Stock Purchase Rights, shall be
subject to any restrictions applicable thereto in compliance with Rule 16b-3. An
Insider may only purchase Shares pursuant to the grant of a Stock Purchase
Right, and may only sell Shares purchased pursuant to the grant of a Stock
Purchase Right, during such time or times as are permitted by Rule 16b-3.
(e) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 10
of the Plan.
7. Long-Term Performance Awards.
(a) Administration. Long-Term Performance Awards are cash or stock
bonus awards that may be granted either alone or in addition to other awards
granted under the Plan. Such awards shall be granted for no cash consideration.
The Administrator shall determine the nature, length and starting date of any
performance period (the "Performance Period") for each Long-Term Performance
Award, and shall determine the performance or employment factors, if any, to be
used in the determination of Long-Term Performance Awards and the extent to
which such Long-Term Performance Awards are valued or have been earned.
Long-Term Performance Awards may vary from participant to participant and
between groups of participants and shall be based upon the achievement of
Company, Subsidiary, Parent and/or individual performance factors or upon such
other criteria as the Administrator may deem appropriate. Performance Periods
may overlap and participants may participate simultaneously with respect to
Long-Term Performance Awards that are subject to different Performance Periods
and different performance factors and criteria. Long-Term Performance Awards
shall be confirmed by, and be subject to the terms of, a Long-Term Performance
Award agreement. The terms of such awards need not be the same with respect to
each participant.
14
<PAGE> 15
At the beginning of each Performance Period, the Administrator may
determine for each Long-Term Performance Award subject to such Performance
Period the range of dollar values or number of shares of Common Stock to be
awarded to the participant at the end of the Performance Period if and to the
extent that the relevant measures of performance for such Long-Term Performance
Award are met. Such dollar values or number of shares of Common Stock may be
fixed or may vary in accordance with such performance or other criteria as may
be determined by the Administrator.
(b) Adjustment of Awards. The Administrator may adjust the
performance factors applicable to the Long-Term Performance Awards to take into
account changes in legal, accounting and tax rules and to make such adjustments
as the Administrator deems necessary or appropriate to reflect the inclusion or
exclusion of the impact of extraordinary or unusual items, events or
circumstances in order to avoid windfalls or hardships.
8. Administration.
(a) Composition of Administrator.
(i) Multiple Administrative Bodies. If permitted by Rule
16b-3 and Applicable Laws, the Plan may (but need not)
be administered by different administrative bodies with
respect to (A) Directors who are employees, (B) Officers
who are not Directors and (C) Employees who are neither
Directors nor Officers.
(ii) Administration with respect to Directors and Officers.
With respect to grants of Options and Rights to eligible
participants who are Officers or Directors of the
Company, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan in
compliance with Rule 16b-3 as it applies to a plan
intended to qualify thereunder as a discretionary grant
or award plan, or (B) a Committee designated by the
Board to administer the Plan, which Committee shall be
constituted (1) in such a manner as to permit the Plan
to comply with Rule 16b-3 as it applies to a plan
intended to qualify thereunder as a discretionary grant
or award plan and (2) in such a manner as to satisfy the
Applicable Laws.
(iii) Administration with respect to Other Persons. With
respect to grants of Options to eligible participants
who are neither Directors nor Officers of the Company,
the Plan shall be administered by (A) the Board or (B) a
Committee
15
<PAGE> 16
designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the
Applicable Laws.
(iv) General. Once a Committee has been appointed pursuant to
subsection (ii) or (iii) of this Section 8(a), such
Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From
time to time the Board may increase the size of any
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 a Committee and
thereafter directly administer the Plan, all to the
extent permitted by the Applicable Laws and, in the case
of a Committee appointed under subsection (ii), to the
extent permitted by Rule 16b-3 as it applies to a plan
intended to qualify thereunder as a discretionary grant
or award plan.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common Stock,
in accordance with Section 2(n) of the Plan;
(ii) to select the Consultants and Employees to whom Options
and Rights may be granted hereunder;
(iii) to determine whether and to what extent Options and
Rights or any combination thereof, are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each Option and Right granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted
hereunder. Such terms and conditions include, but are
not limited to, the exercise price, the time or times
when Options or Rights may be exercised (which may be
based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any
restriction or limitation
16
<PAGE> 17
regarding any Option or Right or the shares of Common
Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion,
shall determine;
(vii) to construe and interpret the terms of the Plan;
(viii) to prescribe, amend and rescind rules and regulations
relating to the Plan;
(ix) to determine whether and under what circumstances an
Option or Right may be settled in cash instead of Common
Stock or Common Stock instead of cash;
(x) to reduce the exercise price of any Option or Right;
(xi) to modify or amend each Option or Right (subject to
Section 16 of the Plan);
(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of
an Option or Right previously granted by the
Administrator;
(xiii) to institute an Option Exchange Program;
(xiv) to determine the terms and restrictions applicable to
Options and Rights and any Restricted Stock; and
(xv) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Rights.
9. Transferability of Options. Unless otherwise determined by the
Administrator to the contrary, Options and Rights 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. The Administrator may, in the
manner established by the Administrator, provide for the transfer of a
Nonstatuatory Stock Option by the Optionee to any member of the Optionee's
immediate family. In such case, the Nonstatutory Stock Option shall be
exercisable only by such transferee. Following transfer, any such Nonstatutory
Stock Options shall continue to be subject to the same terms and conditions as
were applicable immediately prior to the transfer. For purposes of this Section,
an
17
<PAGE> 18
Optionee's "immediate family" shall mean any of the following who have acquired
the Option from the Optionee through a gift or domestic relations order: a
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, trusts for the exclusive
benefit of these persons and any other entity owned solely by these persons, and
such other persons and entities as shall be eligible to be included as
transferees in the Form S-8 Registration Statement under the Securities Act of
1933, as amended, filed or to be filed by the Company to register shares of
Common Stock to be issued upon the exercise of Options granted pursuant to the
Plan.
10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Right, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
Options or Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Right, as well as the price per
share of Common Stock covered by each such outstanding Option or Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Right
has not been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its sole
discretion in such instances, declare that any Option or Right shall terminate
as of a date fixed by the Board and give each Optionee the right to exercise his
or her Option or Right as to all or any part of the Optioned Stock, including
Shares as to which the Option or Right would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Right shall be assumed or an
equivalent Option
18
<PAGE> 19
or Right substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation. In the event that the successor corporation does not
agree to assume the Option or to substitute an equivalent option, the
Administrator shall, in lieu of such assumption or substitution, provide for the
Optionee to have the right to exercise the Option or Right as to all or a
portion of the Optioned Stock, including Shares as to which it would not
otherwise be exercisable. If the Administrator makes an Option or Right
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee that the Option or
Right shall be exercisable for a period of not less than fifteen (15) days from
the date of such notice, and the Option or Right will terminate upon the
expiration of such period. For the purposes of this paragraph, the Option or
Right shall be considered assumed if, immediately following the merger or sale
of assets, the Option or Right confers the right to purchase, for each Share of
Optioned Stock subject to the Option or Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets was not solely
common stock of the successor corporation or its Parent, the Administrator may,
with the consent of the successor corporation and the participant, provide for
the consideration to be received upon the exercise of the Option or Right, for
each Share of Optioned Stock subject to the Option or Right, to be solely common
stock of the successor corporation or its Parent equal in Fair Market Value to
the per share consideration received by holders of Common Stock in the merger or
sale of assets.
11. Date of Grant. The date of grant of an Option or Right shall be, for
all purposes, the date on which the Administrator makes the determination
granting such Option or Right, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.
12. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Right unless the exercise of such Option or Right and
the issuance and delivery of such Shares shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
Applicable Laws, and the requirements of any stock exchange or quotation system
upon which the Shares may then be listed or quoted, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.
19
<PAGE> 20
(b) Investment Representations. As a condition to the exercise of an
Option or Right, the Company may require the person exercising such Option or
Right to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.
13. Liability of Company.
(a) Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock covered
by an Option or Right exceeds, as of the date of grant, the number of Shares
which may be issued under the Plan without additional stockholder approval, such
Option or Right shall be void with respect to such excess Optioned Stock, unless
stockholder approval of an amendment sufficiently increasing the number of
Shares subject to the Plan is timely obtained in accordance with Section 16(b)
of the Plan.
14. 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.
15. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law.
16. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such stockholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.
20
<PAGE> 21
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
17. Taxation Upon Exercise of Option or Right. At the discretion of the
Administrator, Optionees may satisfy withholding obligations as provided in this
Section 17. When an Optionee incurs tax liability in connection with an Option
or Right, which tax liability is subject to withholding under applicable tax
laws, the Optionee may satisfy the tax withholding obligation by one or some
combination of the following methods: (a) by cash payment, or (b) out of
Optionee's current compensation, or (c) by surrendering to the Company Shares
which (i) in the case of Shares previously acquired from the Company, have been
owned by the Optionee for more than six months on the date of surrender, and
(ii) have a fair market value on the date of surrender equal to or less than
Optionee's marginal tax rate times the ordinary income recognized, or (d) by
electing to have the Company withhold from the Shares to be issued upon exercise
of the Option or Right that number of Shares having a fair market value equal to
the amount required to be withheld. For this purpose, the fair market value of
the Shares to be withheld shall be determined on the date that the amount of tax
to be withheld is to be determined (the "Tax Date").
If the Optionee is an Insider, any surrender of previously owned Shares to
satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax
Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator;
(d) if the Optionee is an Insider, the election must comply with the
applicable provisions of Rule 16b-3 and shall be subject to such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
21
<PAGE> 22
In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.
18. Term of the Plan. The Plan shall expire, and no further Options shall
be granted pursuant to the Plan, on April 25, 2001.
19. Tax and Social Security Indemnity. An Optionee shall indemnify the
Company against any tax arising in respect of the grant or exercise of an Option
or Right which is a liability of the Optionee but for which the Company is
required to account under the laws of any relevant territory. The Company may
recover the tax from the Optionee in such manner as the Administrator deems
appropriate, including (but without prejudice to the generality of the
foregoing):
(a) withholding shares upon the exercise of the Option and selling
the same;
(b) deducting the necessary amount from the Optionee's compensation;
or
(c) requiring the Optionee to make cash payment to the Company for
such tax.
20. Options Granted to Employees of French Subsidiaries.
(a) Purpose. Options granted under the Plan to Employees of French
subsidiaries are intended to qualify under the French regulations as provided in
articles 208-1 to 208-8-2 of the French Company Act (Code des Societes). The
purpose of this Section is to specify the applicable rules to Options for French
Employees and shall not be applicable to any other Employee of the Company.
(b) General. Options granted to French Employees under the Plan are
subject to the provisions of the Plan and any option agreement unless otherwise
provided in this Section 20.
(c) Eligible Participants. Options may be granted exclusively to
Employees of French subsidiaries as (defined in Section 2(l)) of the Plan.
Payment of Director fees by the Company shall not be sufficient to constitute
employment for any purposes of the Options granted to Employees of French
subsidiaries. Employees of French subsidiaries may not be granted Options if, at
the date of grant, they hold more than ten percent (10%) of the Common Stock of
the Company. Section 5(a)(iv)(2) shall not apply to the grant of Options to
French employees.
22
<PAGE> 23
(d) Options. Eligible Employees may be granted options as provided
in Section 5(a) of the Plan. If rights or awards mentioned in Section 5(b)
(Stock Appreciation Rights), Section 6 (Stock Purchase Rights) and Section 7
(Long-Term Performance Awards) of the Plan are granted to Employees of French
subsidiaries, the provisions of this Section shall not apply to the Stock
Appreciation Rights, Stock Purchase Rights and Long-Term Performance Awards
granted.
(e) Option Price. The exercise price of the Option shall be
determined as set forth in the Plan but it shall not be less than 80% of the
average Fair Market Value of the Common Stock during the twenty (20) market
trading days prior to the date of the grant. The exercise price shall remain
unchanged once the Option is granted. The authority of Administrator to reduce
the Option exercise price, as set forth in Section 8(b)(x) of the Plan, shall,
with respect to Options granted to Employees of French subsidiaries, be limited
to the extend that such reduction may not be to a price less than 80% of the
average Fair Market Value of the Common Stock during the twenty (20) market
trading days prior to the date of such reduction.
(f) Exercise of the Option. Upon exercise of an Option, Employees of
French subsidiaries will receive Shares of Common Stock. Section 8(b)(ix) of the
Plan, concerning the ability to settle the Option in cash instead of Shares of
Common Stock, is not applicable to Employees of French subsidiaries.
(g) Qualification of Plan. In order to have the Plan qualify in
France, any other provision of the Plan that would not be consistent with French
company law or tax law requirements shall not apply to Employees of French
subsidiaries.
23
<PAGE> 1
EXHIBIT 5.1
April 26, 1999
Gartner Group, Inc.
P.O. Box 10212
56 Top Gallant Road
Stamford, CT 06904-2212
Ladies and Gentlemen:
In connection with the proposed issuance by Gartner Group, Inc. (the
"Company") of up to 10,000,000 shares of its Common Stock, par value $0.0005 per
share (the "Shares"), pursuant to the Company's 1991 Stock Option Plan (the
"Plan"), we have examined, as counsel to the Company, the Registration Statement
on Form S-8 filed under the Securities Act of 1933 as amended (the "Securities
Act"), and such other documents as we have deemed necessary or appropriate in
order to express the opinion set forth below.
In connection with our opinion hereinafter given, we have examined and
relied upon originals, or copies, certified or otherwise, identified to our
satisfaction, of such agreements, documents, certificates and other statements
of government officials, corporate officers and representatives and other
documents as we have deemed relevant and necessary as a basis for such opinion.
In such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of documents submitted to us as copies.
Based upon the foregoing, we are of the opinion that the Shares, when
issued as contemplated by the Plan and the Registration Statement, will be duly
authorized and legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not hereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act or the rules and regulations of the Securities and Exchange
Commission.
Very truly yours,
/s/ Shipman & Goodwin LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Boards of Directors of
Gartner Group, Inc.:
We consent to the use of our reports incorporated by reference herein.
/s/ KPMG LLP
St. Petersburg, Florida
April 26, 1999
<PAGE> 1
EXHIBIT 24.1
POWERS OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints William T. Clifford and Michael D.
Fleisher jointly and severally, his attorneys-in-fact, each with the power of
substitution for him in any and all capacities, to sign the this Registration
Statement filed by Gartner Group, Inc. on Form S-8 with respect to the Gartner
Group, Inc. 1991 Stock Option Plan, and any and all amendments thereto, and to
file the same, with exhibits thereto and other documents in connection therewith
with the Securities and Exchange Commission, hereby ratifying and confirming all
that each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
----------------------------
Signature Title Date
--------- ----- ----
/s/ William T. Clifford President, Chief Executive Officer April 3, 1999
- -------------------------- and Director
William T. Clifford (principal executive officer)
/s/ Michael D. Fleisher Chief Financial Officer and April 3, 1999
- -------------------------- Executive Vice President-Finance
Michael D. Fleisher and Administration (principal
financial and accounting officer)
/s/ Manuel A. Fernandez Chairman of the Board April 2, 1999
- --------------------------
Manuel A. Fernandez
/s/ William A. Grabe Director April 1, 1999
- --------------------------
William O. Grabe
/s/ Max D. Hopper Director April 2, 1999
- --------------------------
Max D. Hopper
/s/ John P. Imlay, Jr. Director April 2, 1999
- --------------------------
John P. Imlay, Jr.
/s/ Stephen G. Pagliuca Director April 2, 1999
- --------------------------
Stephen G. Pagliuca
/s/ Dennis G. Sisco Director April 2, 1999
- --------------------------
Dennis G. Sisco
<PAGE> 2
Director
- --------------------------
Robert E. Weissman
