<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY __, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________
SUNGARD DATA SYSTEMS INC.
(Exact name of registrant as specified in its charter)
_______________________
DELAWARE 51-0267091
(State of Incorporation) (I.R.S. Employer Identification No.)
_______________________
1285 DRUMMERS LANE, SUITE 300, WAYNE, PENNSYLVANIA 19087
(Address of principal executive offices)
_______________________
OPTIONS ASSUMED BY SUNGARD DATA SYSTEMS INC. ORIGINALLY GRANTED UNDER
THE INFINITY INTERNATIONAL FINANCIAL TECHNOLOGY INC. 1989 STOCK OPTION PLAN,
THE INFINITY FINANCIAL TECHNOLOGY, INC. 1993 STOCK INCENTIVE PLAN
AND THE INFINITY FINANCIAL TECHNOLOGY, INC. 1996 STOCK INCENTIVE PLAN
(Full title of the plans)
LAWRENCE A. GROSS, ESQUIRE
SUNGARD DATA SYSTEMS INC.
1285 DRUMMERS LANE, SUITE 300
WAYNE, PENNSYLVANIA 19087
(610) 341-8700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
_________________________
COPIES TO:
RICHARD E. CLIMAN, ESQ.
KEITH A. FLAUM, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CA 94306-2155
(650) 843-5000
_________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================
<S> <C> <C> <C> <C>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES OFFERING PRICE PER AGGREGATE OFFERING
TO BE REGISTERED AMOUNT TO BE SHARE (1) PRICE (1) AMOUNT OF
REGISTERED REGISTRATION FEE
- -------------------------------------------------------------------------------------------------
Common Stock (par
value $.01) 1,684,658 $0.01-$27.95 $12,885,452.62 $3,801.21
================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee. The offering price is based upon the exercise prices for
shares previously granted under the Infinity International Financial
Technology Inc. 1989 Stock Option Plan (88,285 shares at prices
ranging from $0.01 to $1.11 per share); the Infinity Financial Technology,
Inc. 1993 Stock Incentive Plan (1,434,465 shares at prices ranging from
$0.12 to $27.95 per share); and the Infinity Financial Technology, Inc.
1996 Stock Incentive Plan (161,908 shares at prices ranging from $18.39
to $27.21 per share) pursuant to Rule 457(h) under the Securities Act of
1933, as amended (the "Securities Act").
================================================================================
Total Number of Pages: _____
Exhibit Index at Page: _____
<PAGE>
The stock options to be registered hereunder have been assumed by SunGard
Data Systems Inc. (the "Registrant") pursuant to an Agreement and Plan of Merger
and Reorganization, dated as of October 17, 1997, among the Registrant,
Information Data Inc., a Delaware corporation and wholly-owned subsidiary of the
Registrant, and Infinity Financial Technology, Inc. ("Infinity"). These options
were originally granted to directors, employees and consultants of Infinity
under the Infinity International Financial Technology, Inc. 1989 Stock Option
Plan, the Infinity Financial Technology, Inc. 1993 Stock Incentive Plan and the
Infinity Financial Technology, Inc. 1996 Stock Incentive Plan.
i.
<PAGE>
PART II
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
are incorporated by reference:
(a) The Registrant's annual report on Form 10-K for the fiscal year ended
December 31, 1996;
(b) All other reports filed pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") since the end of the
fiscal year covered by the annual report referred to in (a) above.
(c) The description of the Registrant's Common Stock contained in the Form
8-A filed with the Commission on May 14, 1997, including all amendments and
reports updating such description.
All reports and other documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the
date of this Registration Statement, but prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered by this Registration Statement have been sold or which deregisters all
such 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.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Lawrence A. Gross, Esquire, who prepared the opinion attached as Exhibit
5.1 as to the validity of the shares of the Registrant's Common Stock issuable
under the Infinity International Financial Technology Inc. 1989 Stock Option
Plan, the Infinity Financial Technology, Inc. 1993 Stock Incentive Plan and the
Infinity Financial Technology, Inc. 1996 Stock Incentive Plan, is Vice President
and General Counsel of the Registrant, and, as of the date hereof, beneficially
owns 25,312 shares of the Registrant's Common Stock.
1.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's By-laws provide for indemnification to the fullest extent
permitted by the Delaware General Corporation Law. The Delaware General
Corporation Law provides, in substance, that Delaware corporations shall have
the power, under specified circumstances, to indemnify their directors,
officers, employees and agents in connection with actions, suits or proceedings
brought against them by third parties and in connection with actions or suits by
or in the right of the corporation, by reason of the fact that they were or are
such directors, officers, employees or agents, against expenses (including
attorneys' fees) and, in the case of actions, suits or proceedings brought by
third parties, against judgments, fines and amounts paid in settlement actually
and reasonably incurred in any such action, suit or proceeding.
The Delaware General Corporation Law also provides that a Delaware
corporation may, by amendment to its certificate of incorporation, eliminate
personal liability of its directors to the corporation and its stockholders, in
certain circumstances, for monetary damages arising from a breach of the
director's duty of care. The Registrant has adopted an amendment to the
Registrant's Certificate of Incorporation which limits a director's liability
for monetary damages for breach of fiduciary duty, including gross negligence,
except in circumstances involving certain wrongful acts, such as the breach of a
director's duty of loyalty or acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law. The Registrant
has also entered into indemnification agreements with its directors and
officers, providing for indemnification to the fullest extent permitted by law
and, in certain respects, provide greater protection than that specifically
provided by the Delaware General Corporation Law. The indemnification
agreements do not provide indemnification for, among other things, conduct which
is adjudged to be knowingly fraudulent, deliberately dishonest or willful
misconduct.
The Registrant has obtained directors' and officers' liability insurance
which covers certain liabilities, including liabilities to the Registrant and
its stockholders, in the amount of $20 million.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable
ITEM 8. EXHIBITS
EXHIBIT
NUMBER
5.1 Legal Opinion of the Registrant's General Counsel.
23.1 Consent of Coopers & Lybrand LLP, independent accountants.
23.2 Consent of Counsel (included as part of Exhibit 5.1)
24.1 Power of Attorney (included as part of the signature page).
99.1 Infinity International Financial Technology Inc. 1989 Stock Option
Plan.
99.2 Infinity Financial Technology, Inc. 1993 Stock Incentive Plan.
99.3 Infinity Financial Technology, Inc. 1996 Stock Incentive Plan.
2.
<PAGE>
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) ((S) 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.
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 this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
3.
<PAGE>
SIGNATURES
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 Wayne, Pennsylvania, on January 8, 1998.
SUNGARD DATA SYSTEMS INC.
By: /s/ James L. Mann
--------------------------------------
Name: James L. Mann
Title: Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby authorizes James L. Mann and Michael J. Ruane and each of them, as
Attorney-in-fact, to sign on his behalf individually and in each capacity stated
below, and to file, any amendments, including post-effective amendments, to this
registration statement.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ James L. Mann Chief Executive Officer, President, January 8, 1998
- ---------------------- and Chairman of the Board of
James L. Mann Directors (Principal Executive
Officer)
/s/ Michael J. Ruane Chief Financial Officer and Vice January 8, 1998
- ----------------------- President--Finance (Principal
Michael J. Ruane Financial Officer)
/s/ Andrew P. Bronstein Vice President and Controller January 8, 1998
- ----------------------- (Principal Accounting Officer)
Andrew P. Bronstein
/s/ Gregory S. Bentley January 8, 1998
- ----------------------- Director
Gregory S. Bentley
/s/ Michael C. Brooks January 8, 1998
- ----------------------- Director
Michael C. Brooks
</TABLE>
4.
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Albert A. Eisenstat Director January 8, 1998
- -----------------------
Albert A. Eisenstat
/s/ Bernard Goldstein Director January 8, 1998
- -----------------------
Bernard Goldstein
/s/ Michael Roth Director January 8, 1998
- -----------------------
Michael Roth
/s/ Malcolm I. Ruddock Director January 8, 1998
- -----------------------
Malcolm I. Ruddock
/s/ Lawrence J. Schoenberg Director January 8, 1998
- --------------------------
Lawrence J. Schoenberg
</TABLE>
5.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION SEQUENTIAL PAGE NUMBER
<C> <S> <C>
5.1 Legal Opinion of the Registrant's General Counsel.
23.1 Consent of Coopers & Lybrand LLP, independent accountants.
23.2 Consent of Counsel (included as part of Exhibit 5.1).
24.1 Power of Attorney (included as part of the signature page).
99.1 Infinity International Financial Technology Inc. 1989 Stock Option
Plan
99.2 Infinity Financial Technology, Inc. 1993 Stock Incentive Plan
99.3 Infinity Financial Technology, Inc. 1996 Stock Incentive Plan
</TABLE>
6.
<PAGE>
EXHIBIT 5.1
January 9, 1998
SunGard Data Systems Inc.
1285 Drummers Lane
Wayne, PA 19087
Ladies and Gentlemen:
I am Vice President and General Counsel of SunGard Data Systems Inc.
("Company"). This opinion is being furnished in connection with a Registration
Statement on Form S-8 ("Registration Statement") to be filed by the Company
pursuant to the Securities Act of 1933, as amended, in connection with the offer
and sale by the Company of up to 1,684,658 shares of common stock, par
value $.01 per share ("Common Stock"), relating to certain options outstanding
under the Infinity International Financial Technology Inc. 1989 Stock Option
Plan, the Infinity Financial Technology, Inc. 1993 Stock Incentive Plan and the
Infinity Financial Technology, Inc. 1996 Stock Incentive Plan (the "Plans").
This opinion is furnished pursuant to the requirement of item 601(b)(5) of
Regulation S-K.
In rendering this opinion, I have examined the following documents: (i) the
Company's Certificate of Incorporation and By-laws, as amended and restated
since the inception of the Company, (ii) resolutions adopted by the Board of
Directors on October 14, 1997 and the minutes of the Board of Directors' meeting
on October 16, 1997, (iii) the Registration Statement, and (iv) such other
instruments and documents as I have deemed relevant. I have assumed and relied,
as to questions of fact and mixed questions of law and fact, on the truth,
completeness, authenticity and due authorization of all documents and records
examined and the genuineness of all signatures. This opinion is limited to the
laws of the State of Delaware.
Based upon and subject to the foregoing, I am of the opinion that the
shares of Common Stock of the Company which are being offered and sold by the
Company pursuant to the Registration Statement, when sold in the manner and for
the consideration contemplated by the Registration Statement and the Plans, will
be legally issued, fully paid and non-assessable.
I consent to the filing of this opinion as an Exhibit to the Registration
Statement.
Sincerely,
/s/ Lawrence A. Gross
- -----------------------
Lawrence A. Gross
<PAGE>
EXHIBIT 23.1
CONSENT OF COOPERS & LYBRAND LLP, INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report dated February 13, 1997, on our audits of the
consolidated financial statements of SunGard Data Systems Inc. as of December
31, 1996 and 1995 and for each of the three years in the period ended December
31, 1996, which report is included in the Annual Report on Form 10-K.
/s/ COOPERS & LYBRAND LLP
- -------------------------------------
COOPERS & LYBRAND LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 8, 1998
<PAGE>
Exhibit 99.1
INFINITY INTERNATIONAL FINANCIAL TECHNOLOGY INC.
1989 STOCK OPTION PLAN
1. PURPOSE. The INFINITY International Financial Technology Inc. 1989
Stock Option Plan (the "Plan") is established to create additional incentive for
key employees, directors and consultants of INFINITY International Financial
Technology Inc. and any successor corporation thereto (collectively referred to
as the "Company"), and any present or future parent and/or subsidiary
corporations of such corporation (all of whom along with the Company being
individually referred to as a "Participating Company" and collectively referred
to as the "Participating Company Group"), to promote the financial success and
progress of the Participating Company Group. For purposes of the Plan, a parent
corporation and a subsidiary corporation shall be as defined in sections 425(e)
and 425(f) of the Internal Revenue Code of 1986, as amended (the "Code").
2. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board") and/or by a duly appointed committee of
the Board having such powers as shall be specified by the Board. Any subsequent
references herein to the Board shall also mean the committee if such committee
has been appointed and, unless the powers of the committee have been
specifically limited, the committee shall have all of the powers of the Board
granted herein, including, without limitation, the power to terminate or amend
the Plan at any time, subject to the terms of the Plan and any applicable
limitations imposed by law. All questions of interpretation of the Plan or of
any options granted under the Plan (an "Option") shall be determined by the
Board, and such determinations shall be final and binding upon all persons
having an interest in the Plan and/or any Option. Options may be either
incentive stock options as defined in section 422A of the Code ("Incentive Stock
Options") or nonqualified stock options. Any officer of a Participating Company
shall have the authority to act on behalf of the Company with respect to any
matter, right, obligation, or election which is the responsibility of or which
is allocated to the Company herein, provided the officer has apparent authority
with respect to such matter, right obligation, or election.
3. ELIGIBILITY. The Options may be granted only to employees (including
officers) and directors of the Participating Company Group or to individuals who
are rendering services as consultants, advisors, or other independent
contractors to the Participating Company Group. The Board shall, in the Board's
sole discretion, determine which persons shall be granted Options (an
"Optionee"). A director of the Company shall be eligible to be granted only a
nonqualified stock option unless the director is also an employee of the
Company. An individual who is rendering services as a consultant, advisor, or
other independent contractor shall be eligible to be granted only a nonqualified
stock option. An Optionee may, if otherwise eligible, be granted additional
Options.
4. SHARES SUBJECT TO OPTION. Options shall be options for the purchase
of the authorized but unissued common stock of the Company (the "Stock"),
subject to adjustment as provided in paragraph 9 below. The maximum number of
shares of Stock which may be issued under the Plan shall be one million five
hundred thousand (1,500,000) shares. In the event that any outstanding Option
for any reason expires or is terminated or canceled and/or shares of Stock
subject to repurchase are repurchased by the Company, the shares allocable to
the unexercised portion of such Option, or such repurchased shares, may again be
subjected to an Option.
5. TIME FOR GRANTING OPTIONS. All Options shall be granted, if at all,
within ten (10) years from the earlier of the date the Plan is adopted by the
Board or the date the Plan is duly approved by the shareholders of the Company.
6. TERMS, CONDITIONS AND FORM OF OPTIONS. Subject to the provisions of
the Plan, the Board shall determine for each Option (which need not be
identical) the number of shares of Stock for which the Option shall be granted,
the option price of the Option, the exercisability of the Option, whether the
Option is to be treated as an Incentive Stock Option or as a nonqualified stock
option and all other terms and conditions of the Option not inconsistent with
the Plan. Options granted pursuant to the Plan shall be evidenced by written
agreements specifying the number of shares of Stock covered thereby, in such
form as the Board shall from time to time establish, and shall comply with and
be subject to the following terms and conditions:
<PAGE>
(a) Option Price. The option price for each Option shall be
------------
established in the sole discretion of the Board; provided, however that (i) the
option price per share for an Incentive Stock Option shall be not less than the
fair market value, as determined by the Board, of a share of Stock on the date
of the granting of the Option, (ii) the option price per share for a
nonqualified stock option shall not be less than eighty-five percent (85%) of
the fair market value, as determined by the Board, of a share of Stock on the
date of the granting of the Option and (iii) no Option granted to an Optionee
who at the time the Option is granted owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of a
Participating Company within the meaning of section 422A(b)(6) of the Code
and/or ten percent (10%) of the total combined value of all classes of stock of
a Participating Company (a "Ten Percent Owner Optionee") shall have an option
price per share less than one hundred ten percent (110%) of the fair market
value of a share of Stock on the date the Option is granted. Notwithstanding
the foregoing, an Option (whether an Incentive Stock Option or a nonqualified
stock option) may be granted with an exercise price lower than the minimum
exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying with the
provisions of section 425(a) of the Code.
(b) Exercise Period of Options. The Board shall have the power to set
--------------------------
the time or times which each Option shall be exercisable or the event or events
upon the occurrence of which all or a portion of each Option shall be
exercisable and the term of each Option; provided, however, that (i) no Option
shall be exercisable after the expiration of ten (10) years after the date such
Option is granted and (ii) no Option granted to a Ten Percent Owner Optionee
shall be exercisable after the expiration of five (5) years after the date such
Option is granted.
(c) Payment of Option Price. Payment of the option price for the
-----------------------
number of shares of Stock being purchased pursuant to any Option shall be made
(i) in cash, by check, or cash equivalent, (ii) by tender to the Company of
shares of the Company's stock owned by the Optionee having a value, as
determined by the Board (but without regard to any restrictions on
transferability applicable to such stock by reason of federal or state
securities laws or agreements with an underwriters of the Company), not less
than the option price, (iii) by the Optionee's recourse promissory note, (iv) by
the assignment of the proceeds of a sale of some or all of the shares being
acquired upon the exercise of an Option (including, without limitation, through
an exercise complying with the provisions of Regulation T as promulgated from
time to time by the Board of Governors of the Federal Reserve System), or (v) by
any combination thereof. The Board may at any time or from time to time, by
adoption of or by amendment to the form of Standard Option Agreement described
in paragraph 7 below, or by other means, grant Options which do not permit all
of the foregoing forms of consideration to be used in payment of the option
price and/or which otherwise restrict one (1) or more forms of consideration.
Notwithstanding the foregoing, an Option may not be exercised by tender to the
Company of shares of the Company's stock to the extent such tender of stock
would constitute a violation of the provisions of any law, regulation and/or
agreement restricting the redemption of the Company's stock. Furthermore, no
promissory note shall be permitted if an exercise using a promissory note would
be a violation of any law. Any permitted promissory note shall be due and
payable not more than five (5) years after the Option is exercised, and interest
shall be payable at least annually and be at least equal to the minimum interest
rate necessary to avoid imputed interest pursuant to all applicable sections of
the Code. The Board shall have the authority to permit or require the Optionee
to secure any promissory note used to exercise an Option with the shares of
Stock acquired on exercise of the Option and/or with other collateral acceptable
to the Company.
(x) Unless otherwise provided by the Board, an Option may not be
exercised by tender to the Company of shares of the Company's stock unless such
shares of the Company's stock either have been owned by the Optionee for more
than six (6) months or were not acquired, directly or indirectly, from the
Company.
(y) Unless otherwise provided by the Board, in the event the Company
at any time becomes subject to the regulations promulgated by the Board of
Governors of the Federal Reserve System or any other governmental entity
affecting the extension of credit in connection with the Company's securities,
any promissory note shall comply with such applicable regulations, and the
Optionee shall pay the unpaid principal and accrued interest, if any, to the
extent necessary to comply with such applicable regulations.
(z) The Company reserves, at any and all times, the right, in the
Company's sole and absolute discretion, to establish, decline to approve and/or
terminate any program and/or procedures for the exercise of Options by means of
an assignment of the proceeds of a sale of some or all of the shares of Stock to
be acquired upon such exercise.
<PAGE>
7. STANDARD FORM OF STOCK OPTION AGREEMENT. Unless otherwise provided
for by the Board at the time an Option is granted or as otherwise provided for
by this paragraph 7, all Options shall comply with and be subject to the terms
and conditions set forth in the stock option agreement attached hereto as
Exhibit A and incorporated herein by reference (the "Standard Option
Agreement").
(a) Modifications for Nonqualified Stock Options. In the event the
--------------------------------------------
Option is designated as a nonqualified stock option, the Standard Option
Agreement for such Option shall be the Standard Option Agreement as modified as
set forth below unless otherwise specified by the Board:
(i) The title and paragraph 2 of the Standard Option
Agreement shall reflect the Option's status as a nonqualified stock option.
(ii) Paragraph 4(a) of the Standard Option Agreement shall be
modified to delete therefrom the second and third sentences referring to the
"$100,000 Exercise Limitation" applicable to Incentive Stock Options.
(iii) A new paragraph 7(f) shall be added to the Standard
Option Agreement providing that, in the event an Optionee is a director,
consultant, or advisor but not an employee of a Participating Company at the
time the Option is granted, termination of the Optionee's status as a director,
consultant or advisor of the Participating Company shall be deemed to be
termination of the Optionee's employment for purposes of the Standard Option
Agreement.
(iv) Paragraph 15 of the Standard Option Agreement providing,
among other things, that the Optionee give the Company notice of sales upon
disqualifying dispositions of Incentive Stock Options shall be deleted and shall
not apply to the Option.
(v) Paragraph 16 of the Standard Option Agreement regarding
the "$100,000 Exercise Limitation" applicable to Incentive Stock Options shall
be deleted and shall not apply to the Option.
(vi) Paragraph 18(e) of the Standard Option Agreement
regarding the stock certificate legend applicable to Incentive Stock Options
shall be deleted and shall not apply to the Option.
(vii) Paragraph 21 of the Standard Option Agreement shall be
modified to delete the provision that amendments to the Standard Option
Agreement may be made without the Optionee's consent if such amendments are
required to enable an Option designated as an Incentive Stock Option to qualify
as an Incentive Stock Option.
(viii) The remaining paragraphs of such modified Standard
Option Agreement for nonqualified stock options shall be renumbered accordingly.
(b) Standard Term for Options. Unless otherwise provided for by the
-------------------------
Board in grant of an Option, any Option granted hereunder shall be exercisable
for a term of five (5) years.
8. AUTHORITY TO VARY TERMS. The Board shall have the authority from time
to time to vary the terms of the Standard Option Agreement either in connection
with the grant of an individual Option or in connection with the authorization
of a new standard form or forms; provided, however, that the terms and
conditions of such revised or amended standard form or forms of stock option
agreement shall be in accordance with the terms of the Plan. Such authority
shall include, but not by way of limitation, the authority to grant Options
which are not immediately exercisable.
9. EFFECT OF CHANGE IN STOCK SUBJECT TO PLAN. Appropriate adjustments
shall be made in the number and class of shares of Stock subject to the Plan and
to any outstanding Options and in the option price of any outstanding options in
the event of a stock dividend, stock split, reverse stock split, combination,
reclassification, or like change in the capital structure of the Company.
10. TRANSFER OF CONTROL. A "Transfer of Control" shall be deemed to have
occurred in the event any of the following occurs with respect to the Control
Company. For purposes of applying this paragraph 10, the "Control Company"
shall mean the Participating Company whose stock is subject to the Option.
<PAGE>
(a) the direct or indirect sale or exchange by the shareholders of the
Control Company of all or substantially all of the stock of the Control Company
where the shareholders of the Control Company where the shareholders of the
Control Company before such sale or exchange do not retain, directly or
indirectly, at least a majority of the beneficial interest in the voting stock
of the Control Company;
(b) a merger in which the shareholders of the Control Company before
such merger do not retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of the Control Company; or
(c) the sale, exchange, or transfer (including, without limitation,
pursuant to a liquidation or dissolution) of all or substantially all of the
Control Company's assets (other than a sale, exchange, or transfer to one (1) or
more corporations where the shareholders of the Control Company before such
sale, exchange, or transfer retain, directly or indirectly, at least a majority
of the beneficial interest in the voting stock of the corporation(s) to which
the assets were transferred).
In the event of a Transfer of Control, the surviving, continuing,
successor, or purchasing corporation, as the case may be (the "Acquiring
Corporation"), shall either assume the Company's rights and obligations under
outstanding stock option agreements or substitute options for the Acquiring
Corporation's stock for such outstanding Options. In the event the Acquiring
Corporation elects not to assume or substitute for such outstanding Options in
connection with a merger described in (b) above or a sale or assets described in
(c) above, the Board shall provide than any unexercisable and/or unvested
portion of the outstanding Options shall be immediately exercisable and vested
as of a date prior to the Transfer of Control, as the Board so determines. The
exercise and/or vesting of any Option that was permissible solely by reason of
this paragraph 10 shall be conditioned upon the consummation of the Transfer of
Control. Any Options which are neither assumed by the Acquiring Corporation nor
exercised as of the date of the Transfer of Control shall terminate effective as
of the date of the Transfer of Control.
11. PROVISION OF INFORMATION. Each Optionee shall be given access to
information concerning the Company equivalent to that information generally made
available to the Company's common shareholders.
12. OPTIONS NON-TRANSFERABLE. During the lifetime of the Optionee, the
Option shall be exercisable only by the Optionee. No Option shall be assignable
or transferable by the Optionee, except by will or by the laws of descent and
distribution.
13. TRANSFER OF COMPANY'S RIGHTS. In the event any Participating Company
assigns, other than by operation of law, to a third person, other than another
Participating Company, any of the Participating Company's rights to repurchase
any shares of Stock acquired on the exercise of an Option, the assignee shall
pay to the assigning Participating Company the value of such right as determined
by the Company in the Company's sole discretion. Such consideration shall be
paid in cash. In the event such repurchase right is exercisable at the time of
such assignment, the value of such right shall be not less than the fair market
value of the shares of Stock which may be repurchased under such right (as
determined by the Company) minus the repurchase price of such shares. The
requirements of this paragraph 13 regarding the minimum consideration to be
received by the assigning Participating Company shall not inure to the benefit
of the Optionee whose shares of Stock are being repurchased. Failure of a
Participating Company to comply with the provisions of this paragraph 13 shall
not constitute a defense or otherwise prevent the exercise of the repurchase
right by the assignee of such right.
14. TERMINATION OR AMENDMENT OF PLAN. The Board, including any duly
appointed committee of the Board, may terminate or amend the Plan at any time;
provided, however, that without the approval of the Company's shareholders,
there shall be (a) no increase in the total number of shares of Stock covered by
the Plan (except by operation of the provisions of paragraph 9 above), (b) no
change in the class of persons eligible to receive Incentive Stock Options and
(c) no expansion in the class of persons eligible to receive nonqualified stock
options. In any event, no amendment may adversely affect any then outstanding
Option or any unexercised portion thereof, without the consent of the Optionee,
unless such amendment is required to enable an Option designated as an Incentive
Stock Option to qualify as an Incentive Stock Option.
<PAGE>
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that
the foregoing INFINITY International Financial Technology Inc. 1989 Stock Option
Plan was duly adopted by the Board of Directors of the Company on the ___ day of
December, 1989.
-----------------------------
<PAGE>
Exhibit 99.2
INFINITY FINANCIAL TECHNOLOGY, INC
1993 STOCK INCENTIVE PLAN
1. ESTABLISHMENT, PURPOSE AND DEFINITIONS.
(a) The 1993 Stock Incentive Plan (the "Plan") of INFINITY Financial
Technology, Inc., a California corporation (the "Company"), is hereby adopted.
(b) The purpose of this Plan is to provide incentives to employees,
directors, advisors and consultants of the Company and its affiliates
(collectively, the "Participants") for increased efforts and successful
achievements on behalf of or in the interests of the Company and its affiliates
and to maximize the rewards due them for such increased efforts and successful
achievements.
(c) The Plan is intended to provide a means whereby Participants may
be given an opportunity to purchase shares of Stock (as defined in Section 3 of
the Plan) of the Company pursuant to (i) options which may qualify as incentive
stock options (the "incentive stock options") under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or (ii) options which do not
qualify as incentive stock options (the "nonqualified stock options").
(d) The term "affiliates" as used in this Plan means parent or
subsidiary corporations, as defined in Section 424(e) and (f) of the Code (but
substituting "the Company" for "employer corporation"), including parents or
subsidiaries which become such after adoption of the Plan.
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Board of Directors of the
Company(the "Board"). The Board may delegate the responsibility for
administering the Plan to a committee (the "Committee"), under such terms and
conditions as the Board shall determine. If the Board does not delegate
administration of the Plan to the Committee, then each reference in this Plan to
"the Committee" shall be construed to refer solely to the Board. The Committee
shall consist of two or more members of the Board or such lesser number of
members of the Board as permitted by Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3"). From and after the date on
which the Stock is registered under Section 12(g) of the Securities Exchange Act
of 1934 (the "1934 Act Effective Date"), none of the members of the Committee
shall receive, while serving on the Committee, or with respect to any member of
the Committee appointed after the 1934 Act Effective Date, during the lesser of
(x) the one year period preceding appointment to the Committee and (y) the
period commencing on the 1934 Act Effective Date and terminating on the date of
appointment to the Committee, a grant or award of equity securities under (i)
the Plan or (ii) any other plan of the Company or its affiliates under which the
participants are entitled to acquire Stock (including restricted Stock), stock
options, stock bonuses, related rights or stock appreciation rights of the
Company or any of its affiliates, other than pursuant to transactions in any
such other plan which do not disqualify a director from being a disinterested
person under Rule 16b-3. The limitations set forth in this Section 2(a) shall
automatically incorporate any additional requirements that may in the future be
necessary for the Plan to comply with Rule 16b-3. Members of the Committee
shall serve at the pleasure of the Board.
(b) The Committee may from time to time determine which employees,
directors, advisors or consultants of the Company or its affiliates shall be
granted options under the Plan, the terms thereof (including without limitation
determining whether the options are incentive stock options, the times at which
the options shall become exercisable, restrictions on transfer of Stock acquired
upon exercise of the options, and whether the Company shall have rights to
repurchase such Stock), and the number of shares for which an option or options,
may be granted; provided, however, that only nonqualified stock options shall be
granted to persons who are not employees of the Company or its affiliates.
1.
<PAGE>
(c) If rights of the Company to repurchase Stock are imposed, (i) the
Committee may, in its sole discretion, accelerate, in whole or in part, the time
for lapsing of any such rights of the Company to repurchase of shares of such
Stock, and (ii) the certificates evidencing such shares of Stock, although
issued in the name of the Participant concerned, shall be held by the Company or
a third party designated by the Committee in escrow subject to delivery to the
Participant or to the Company at such times and in such amounts as shall be
directed by the Committee under the terms of this Plan and the Participant's
option agreement.
(d) The Committee shall have the sole authority, in its absolute
discretion, to (i) adopt, amend and rescind such rules and regulations
consistent with the provisions of the Plan as, in its opinion, may be advisable
in the administration of the Plan, (ii) construe and interpret the Plan, the
rules and regulations, and the instruments evidencing options granted under the
Plan and (iii) make all other determinations deemed necessary or advisable for
the administration of the Plan. All decisions, determinations and
interpretations of the Committee shall be binding on all Participants in the
Plan.
3. STOCK SUBJECT TO THE PLAN.
(a) Stock shall mean Common Stock of the Company reserved for issuance
under this Plan or such stock as may be changed as contemplated by Section 3(c)
below. Stock shall include shares drawn and reserved from either the Company's
authorized but unissued shares of Common Stock or from reacquired shares of
Common Stock, including without limitation shares repurchased by the Company in
the open market.
(b) Options may be granted under the Plan from time to time to
Participants to purchase an aggregate of 3,186,266 shares of Stock.
Notwithstanding the foregoing, no option shall be granted under the Plan if, at
the time of any such grant, the aggregate number of shares subject to
outstanding options and rights to purchase Stock would exceed 30% of the then
outstanding shares of the Company. Should one or more outstanding options under
this Plan expire or terminate for any reason prior to exercise in full
(including any option canceled in accordance with the cancellation-regrant
provisions of Section 6(f) of this Plan), then the shares of Stock subject to
the portion of each option not so exercised shall be available for subsequent
option grants under the Plan. Shares of Stock repurchased by the Company
pursuant to any repurchase right shall be available for subsequent option grants
(other than incentive stock options) under the Plan. Shares of Stock subject to
any option or portion thereof surrendered or canceled in accordance with Section
11 or 12 shall not be available for subsequent option grant under the Plan.
(c) If there shall be any change in the Stock subject to the Plan,
including Stock subject to any option granted hereunder, through merger,
consolidation, reorganization, reincorporation stock split, stock dividend or
other similar change in the corporate structure of the Company, appropriate
adjustments shall be made by the Committee in order to preserve but not to
increase the benefits to each Participant, including adjustments in the
aggregate number of shares of Stock subject to the Plan and the number of shares
of Stock and the price per share subject to outstanding options granted
hereunder. Consistent with the foregoing, in the event that the outstanding
Stock is changed into another class or series of capital stock of the Company,
outstanding options to purchase Stock granted under the Plan shall become
options to purchase such other class or series and the provisions of this
Section 3(c) shall apply to such new class or series.
4. ELIGIBILITY.
Persons who shall be eligible to have granted to them options provided
for by the Plan shall be such employees, directors, advisors or consultants of
the Company and its affiliates as the Committee, in its absolute discretion,
determines should be awarded such incentives given the best interests of the
Company; provided, however that (i) incentive stock options may only be granted
to employees of the Company or its affiliates and (ii) any person holding
capital stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary corporation (a "10%
shareholder") shall not be eligible to receive incentive stock options unless
the exercise price per share of the Stock subject thereto is at least 110% of
the fair market value of such Stock on the date the option is granted.
As used herein, "Continuous Status as an Employee" shall mean the
absence of any interruption or termination of the employment relationship by the
Company or its affiliates. Continuous Status as an Employee shall not be
considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Committee, provided that such
leave is for a period of not more than ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract or statute, or
unless provided otherwise
2.
<PAGE>
pursuant to Company policy adopted from time to time; or (iv) transfers between
locations of the Company or between the Company, its affiliates or successor.
5. TERMINATION OF OPTION.
(a) Termination of Employment. In the event of termination of an
-------------------------
optionee's advisory or consulting relationship or Continuous Status as an
Employee with the Company or its affiliates, as the case may be, such optionee
may, but only during the Termination Period specified below, exercise the option
to the extent that the optionee was entitled to exercise it at the date of such
termination. The Termination Period shall be thirty (30) days (or such longer
period of time as the Committee determines, provided that, in the case of an
incentive stock option, such determination shall be made at the time of grant of
the option and such period of time shall not be more than ninety (90) days)
after the date of such termination (but in no event later than the expiration
date of the term of such option as set forth in the option agreement). 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 to the extent
so entitled within the Termination Period, the option shall terminate. No
termination shall be deemed to occur and this Section 5 shall not apply if (i)
the optionee is an advisor or a consultant who becomes an employee within the
Termination Period, or (ii) the optionee is an employee who becomes an advisor
or a consultant within the Termination Period. In the case of an optionee who
performs services as an advisor or a consultant to the Company or its affiliates
on a project-by-project basis, completion of a project shall not constitute
termination of the advisory or consulting relationship, regardless of the period
of time elapsed before the next project, if any, unless the Committee determines
otherwise. Change in status from one type of advisor or consultant to another
(e.g., from advisor or consultant to director) shall not constitute termination
of the advisory or consulting relationship.
(b) Disability of Optionee. Notwithstanding the provisions of Section
----------------------
5(a) above, in the event of termination of an optionee's advisory or consulting
relationship or Continuous Status as an Employee as a result of optionee's
disability (within the meaning of Section 22(e)(3) of the Code), the Optionee
may exercise the Option at any time within one year (or such other period of
time as the Committee determines, provided that, in the case of an incentive
stock option, such determination shall be made at the time of the grant of the
option and such period of time shall not be more than twelve (12) months) after
such termination, but only to the extent that the Option is exercisable on the
date of such termination and does not otherwise expire. Upon termination of an
Optionee's employment or other relationship with the Company by reason of the
Optionee's disability other than as defined in Section 22(d)(3) of the Code, the
Optionee may exercise the Option at any time within six (6) months after such
termination, but only to the extent that the Option is exercisable on the date
of such termination and does not otherwise expire. To the extent that Optionee
was not entitled to exercise the option at the date of termination, or if
Optionee does not exercise such option to the extent so entitled within the time
specified herein, the option shall terminate.
(c) Death of Optionee. In the event of the death of an optionee, the
-----------------
option may be exercised, at any time within twelve (12) months (or such other
period of time as the Committee determines, provided that, in the case of an
incentive stock option, such determination shall be made at the time of grant of
the option and such period of time shall not be more than twelve (12) months
following the date of optionee's death but in no event later than the expiration
date of the term of such option as set forth in the optionee's option
agreement), by the optionee's estate or by a person who acquired the right to
exercise the option by bequest or inheritance, but only to the extent the
optionee was entitled to exercise the option at the date of death. To the
extent that optionee was not entitled to exercise the option at the date of
termination, or if optionee does not exercise such option to the extent so
entitled within the time specified herein, the option shall terminate.
6. EXERCISE PRICE FOR OPTIONS GRANTED UNDER THE PLAN.
(a) The exercise price of a nonqualified stock option granted under
the Plan shall be the price determined by the Committee on the date the option
is granted; provided, however, that such price shall not be less than 85% of the
per share fair market value of such Stock on the date the option is granted.
The exercise price of an incentive stock option shall not be less than 100% of
the per share fair market value of the Stock on the date the option is granted;
provided, however that the exercise price of incentive stock options granted to
any 10% shareholder shall be at least 110% of the per share fair market value of
the Stock on the date the option is granted. The price of an incentive stock
option or nonqualified stock option granted under the Plan shall be subject to
adjustment to the extent provided in Section 3(c).
(b) The fair market value of the Stock under this Plan shall be
determined as follows:
3.
<PAGE>
(i) if the Stock is quoted on the NASDAQ National Market
System or listed on a national securities exchange, the last reported sale price
or, if no such reported sale takes place on any day, the average of the closing
bid and asked prices, or
(ii) if such Stock shall not be quoted on such National
Market System nor listed or admitted to trading on a national securities
exchange, then the average of the closing bid and asked prices, as reported by
The Wall Street Journal for the over-the-counter market, or
- -----------------------
(iii) if neither of the foregoing is applicable, then the fair
market value of a share of Stock shall be determined in good faith by the
Committee in its reasonable discretion.
7. TERMS AND CONDITIONS OF OPTIONS.
(a) Each option granted pursuant to the Plan shall be evidenced by a
written stock option agreement executed by the Company and the Participant to
whom such option is granted. The option agreement shall designate whether the
option is an incentive stock option or a nonqualified stock option.
(b) The term of each incentive stock option shall be for no more than
ten (10) years, provided, however, that the term of any incentive stock option
granted to a 10% shareholder shall not be more than five (5) years, and no
incentive stock option shall be granted more than ten (10) years after the
earlier of (i) the date the Plan was adopted or (ii) the date the Plan was
approved by the Company's shareholders. Notwithstanding the foregoing, no
option granted under the Plan may vest at less than 20% per year over five
consecutive years.
(c) If the aggregate fair market value of Stock with respect to which
incentive stock options are exercisable for the first time by a Participant
during any calendar year (under this Plan or under any other plan of the Company
or any parent or subsidiary of the Company) exceeds $100,000, the options for
the first $100,000 worth of Stock to become exercisable in such calendar year
shall be incentive stock options and the options for the amount in excess of
$100,000 that becomes exercisable in that calendar year shall be treated as
nonqualified stock options.
(d) The stock option agreement may contain such other terms,
provisions and conditions as may be determined by the Committee, provided that
they are not inconsistent with this Plan. If an option, or any part thereof, is
intended to qualify as an incentive stock option, the stock option agreement
shall contain those terms and conditions which are necessary to so qualify it.
(e) The Committee shall have full power and authority to extend the
period of time for which any option granted under the Plan is to remain
exercisable following the Participant's cessation of service as an employee,
director, advisor or consultant of the Company or its affiliates, including
without limitation cessation as a result of such Participant's death or
disability (as defined in Section 22(e)(3) of the Code); provided, however, that
in no event shall such option be exercisable after the expiration date of the
option term specified in such Participant's option agreement covering such
option; and provided further that incentive stock options shall not be
exercisable more than ninety (90) days following termination of any
Participant's employment for any reason other than death or disability (as
defined in Section 22(e)(3) of the Code) and more than one year following
termination of any Participant's employment due to death or disability (as
defined in Section 22(e)(3) of the Code).
(f) The Committee shall have full power and authority to effect at any
time and from time to time, with the consent of the affected Participants, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution new options under the Plan covering the same or different numbers
of shares of Stock with the same or different exercise prices.
(g) In the event of any Participant's death or disability (as defined
in Section 22(e)(3) of the Code), and only in such an event, the Committee shall
have full power and authority to accelerate the times at which any options
issued under this Plan become exercisable and the times at which any shares of
Stock issued under this Plan are no longer subject to transfer restrictions or
repurchase rights in favor of the Company.
4.
<PAGE>
8. USE OF PROCEEDS.
Cash proceeds realized from the sale of Stock under the Plan shall
constitute general funds of the Company.
9. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
(a) The Committee may at any time suspend or terminate the Plan, and
may amend it from time to time in such respects as the Committee may deem
advisable, provided, however, that such amendment, suspension or termination
complies with all applicable state and federal requirements and requirements of
any stock exchange on which the Stock is then listed, including any applicable
requirement that the Plan or an amendment to the Plan be approved by the
Company's shareholders. The Plan shall terminate on the earlier of (i) ten (10)
years from the date the Plan is adopted or (ii) the date on which no additional
shares of Stock are available for issuance under the Plan.
(b) No option may be granted during any suspension or after the
termination of the Plan, and no amendment, suspension or termination of the Plan
shall, without the Participant's consent, alter or impair any rights or
obligations under any option granted under the Plan or any shares issued upon
exercise of any option; provided, however, that the Committee shall have the
right to amend, suspend or terminate any option to (i) convert outstanding
incentive stock options into nonqualified stock options or (ii) provide for a
forfeiture of the Participant's rights in the event the Participant competes
with the Company or, if the Participant is an employee, in the event the
Participant is terminated for cause.
10. ASSIGNABILITY OF OPTIONS AND RIGHTS.
Each option granted pursuant to this Plan shall, during the
Participant's lifetime, be exercisable only by him or her, and no option shall
be transferable by the Participant by operation of law or otherwise other than
by will or the laws of descent and distribution.
11. PAYMENT UPON EXERCISE.
Payment of the purchase price upon exercise of any option granted
under this Plan shall be made in whole or in part (a) in cash or, in the
discretion of the Committee, (i) by check, (ii) by delivery to the Company of
the optionee's promissory note, or (iii) by delivery of shares of Stock owned by
optionee for at least six (6) months or such other period as may be required to
avoid a charge to the Company's earnings; (b) with such other consideration as
the Committee, in its absolute discretion, determines is consistent with the
Plan's purpose and applicable law; or (c) in any combination of the foregoing.
Any Stock used to exercise options to purchase Stock shall be valued at its fair
market value on the date of the exercise of the option. Any notes used to
exercise options shall (i) be full recourse, (ii) bear interest at the lowest
rate required to avoid imputed interest under federal and state income tax laws,
(iii) be due in no more than five (5) years (subject to acceleration, if the
stock option agreement so provides, upon the optionee's termination of
employment or service) or upon sale of the Stock, (iv) provide for payment of
interest, compounded annually, at maturity, (v) be secured by the shares of
Stock in the Company acquired therewith, and (vi) contain such terms as the
Committee shall determine. Such consideration also may be paid through a
broker-dealer sale and remittance procedure pursuant to which the Participant
shall (a) provide irrevocable written instructions to a designated brokerage
firm to effect the immediate sale of the purchased shares and remit to the
Company, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate option price payable for the purchased shares plus
all applicable federal and state income and employment taxes required to be
withheld by the Company in connection with such purchase and (b) provide written
directives to the Company to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale transaction.
12. WITHHOLDING TAXES.
(a) Subject to subsection (b), shares of Stock issued hereunder shall
be delivered to a Participant only upon payment in cash by such person to the
Company of the amount of any withholding tax which may be imposed thereon under
the provisions of the Code as then in effect or any law of any other taxing
jurisdiction requiring such withholding tax.
5.
<PAGE>
(b) The Committee may, under such terms and conditions as it deems
appropriate, authorize a Participant to satisfy withholding tax obligations
under this Section 12 by delivering shares of Stock or by electing to have the
Company withhold from the Stock to be issued to the Participant shares of Stock,
in each case having a fair market value equal to the amount of the withholding
tax required to be withheld.
13. RATIFICATION.
This Plan and all options issued under this Plan shall be void unless
this Plan is approved or ratified by a majority of the votes cast at a
shareholder meeting at which a quorum representing at least a majority of the
outstanding shares entitled to vote is (either in person or by proxy) present
and voting on the Plan within twelve (12) months of the date this Plan is
adopted by the Board. No incentive stock option shall be exercisable prior to
the date such shareholder approval is obtained.
14. LOANS.
(a) The Committee may, in its discretion, assist any Participant in
the exercise of options granted under this Plan, including the satisfaction of
any federal and state income and employment tax obligations arising therefrom,
by authorizing the extension of a loan from the Company to such Participant.
The terms of any loan (including the interest rate and terms of repayment) will
be upon such terms as the Committee specifies in the applicable loan agreement
or otherwise deems appropriate under the circumstances. Loans may be granted
with or without security or collateral (other than to Participants who are not
employees, in which event the loan must be adequately secured by collateral
other than the purchased shares). However, the maximum credit available to the
Participant may not exceed the exercise or purchase price of the acquired shares
of Stock plus any federal and state income and employment tax liability incurred
by the Participant in connection with the acquisition of such shares of Stock.
(b) The Committee may, in its absolute discretion, determine that one
or more loans extended under this financial assistance program shall be subject
to forgiveness by the Company in whole or in part upon such terms and conditions
as the Committee may deem appropriate.
15. REGULATORY APPROVALS.
All actions taken or proposed to be taken pursuant to this Plan shall
be subject to the Company's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over this Plan and compliance with
all applicable state and federal securities laws and listing requirements of any
securities exchange or trading system on which the Stock is then listed or
traded.
16. NO EMPLOYMENT/SERVICE RIGHTS.
Neither the action of the Company in establishing this Plan, nor any
action taken by the Committee hereunder, nor any provision of this Plan shall be
construed so as to grant any individual the right to remain in the employ or
service of the Company (or any parent, subsidiary or affiliated corporation) for
any period of specific duration, and the Company (or any parent, subsidiary or
affiliated corporation retaining the services of such individual) may terminate
such individual's employment or service at any time and for any reason, with or
without cause.
17. MISCELLANEOUS PROVISIONS.
(a) The right to acquire Stock or other assets under this Plan may not
be assigned, encumbered or otherwise transferred by any Participant except
pursuant to Section 10 hereinabove.
(b) The provisions of this Plan shall be governed by the laws of the
State of California, as such laws are applied to contracts entered into and
performed in such State.
(c) The provisions of this Plan shall inure to the benefit of, and be
binding upon, the Company and its successors or assigns, and the Participants
and the legal representatives of their respective estates, their respective
heirs or legatees and their permitted assignees.
6.
<PAGE>
(d) The Company shall provide to each Participant, on a periodic basis
(but not less than annually), financial statements of the Company. The Company
may provide other information regarding the Company as determined by the Board
in its discretion.
(e) No Participant shall disclose any confidential information about
the Company disclosed to the Participant in his or her capacity as a holder of
Options. A Participant may, however, disclose such information to his or her
legal and financial advisers in connection with advice to be rendered by them to
the Participant, or to any transferee of the Shares, but only if the advisor or
transferee agrees not to further disclose such information or to use the
information for the benefit of anyone other than the Participant, the transferee
as a holder of the Shares, or the Company.
7.
<PAGE>
Exhibit 99.3
INFINITY FINANCIAL TECHNOLOGY, INC.
1996 STOCK INCENTIVE PLAN
1. PURPOSES OF THE PLAN. The purposes of this Stock Incentive Plan are
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of the Committees appointed
to administer the Plan.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.
(c) "Applicable Laws" means the legal requirements relating to the
administration of stock incentive plans, if any, under applicable provisions of
federal securities laws, state corporate and securities laws, the Code, the
rules of any applicable stock exchange or national market system, and the rules
of any foreign jurisdiction applicable to Awards granted to residents therein.
(d) "Award" means the grant of an Option, SAR, Dividend Equivalent
Right, Restricted Stock, Performance Unit, Performance Share, or other right or
benefit under the Plan.
(e) "Award Agreement" means the written agreement evidencing the grant
of an Award executed by the Company and the Grantee, including any amendments
thereto.
(f) "Board" means the Board of Directors of the Company.
(g) "Change in Control" means a change in ownership or control of the
Company effected through either of the following transactions:
(i) the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or by
a Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities pursuant to
a tender or exchange offer made directly to the Company's stockholders which a
majority of the Continuing Directors who are not Affiliates or Associates of the
offeror do not recommend such stockholders accept, or
(ii) a change in the composition of the Board over a period
of thirty-six (36) months or less such that a majority of the Board members
(rounded up to the next whole ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who are
Continuing Directors.
(h) "Code" means the Internal Revenue Code of 1986, as amended.
(i) "Committee" means any committee appointed by the Board to
administer the Plan.
(j) "Common Stock" means the common stock of the Company.
(k) "Company" means Infinity Financial Technology, Inc., a Delaware
corporation.
(l) "Consultant" means any person who is engaged by the Company or any
Parent or Subsidiary to render consulting or advisory services as an independent
contractor and is compensated for such services.
1.
<PAGE>
(m) "Continuing Directors" means members of the Board who either (i)
have been Board members continuously for a period of at least thirty-six (36)
months or (ii) have been Board members for less than thirty-six (36) months and
were elected or nominated for election as Board members by at least a majority
of the Board members described in clause (i) who were still in office at the
time such election or nomination was approved by the Board.
(n) "Continuous Status as an Employee, Director or Consultant" means
that the employment, director or consulting relationship with the Company, any
Parent, or Subsidiary, is not interrupted or terminated. Continuous Status as
an Employee, Director or Consultant shall not be considered interrupted in the
case of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. A leave of absence approved by the Company shall
include sick leave, military leave, or any other personal leave approved by an
authorized representative of the Company. For purposes of Incentive Stock
Options, no such leave may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract.
(o) "Corporate Transaction" means any of the following stockholder-
approved transactions to which the Company is a party:
(i) a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal purpose of which is
to change the state in which the Company is incorporated;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock of
the Company's subsidiary corporations) in connection with the complete
liquidation or dissolution of the Company; or
(iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger.
(p) "Director" means a member of the Board.
(q) "Dividend Equivalent Right" means a right entitling the Grantee to
compensation measured by dividends paid with respect to Common Stock.
(r) "Employee" means any person, including an Officer or Director, who
is an employee of the Company or any Parent or Subsidiary of the Company for
purposes of Section 422 of the Code. The payment of a director's fee by the
Company shall not be sufficient to constitute "employment" by the Company.
(s) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(t) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) Where there exists a public market for the Common Stock,
the Fair Market Value shall be (A) the closing sales price for a Share for the
last market trading day prior to the time of the determination (or, if no sales
were reported on that date, on the last trading date on which sales were
reported) on the stock exchange determined by the Administrator to be the
primary market for the Common Stock or the Nasdaq National Market, whichever is
applicable or (B) if the Common Stock is not traded on any such exchange or
national market system, the average of the closing bid and asked prices of a
Share on the Nasdaq Small Cap Market, in each case, as reported in The Wall
--------
Street Journal or such other source as the Administrator deems reliable; or
- --------------
(ii) In the absence of an established market of the type
described in (i), above, for the Common Stock, the Fair Market Value thereof
shall be determined by the Administrator in good faith.
(u) "Grantee" means an Employee, Director or Consultant who receives
an Award under the Plan.
2.
<PAGE>
(v) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(w) "Non-Qualified Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(x) "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.
(y) "Option" means a stock option granted pursuant to the Plan.
(z) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(aa) "Performance Shares" means Shares or an award denominated in
Shares which may be earned in whole or in part upon attainment of performance
criteria established by the Administrator.
(bb) "Performance Units" means an award which may be earned in whole
or in part upon attainment of performance criteria established by the
Administrator and which may be settled for cash, Shares or other securities or a
combination of cash, Shares or other securities as established by the
Administrator.
(cc) "Plan" means this 1996 Stock Incentive Plan.
(dd) "Registration Date" means the closing of the first sale of Common
Stock to the general public pursuant to a registration statement filed with and
declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
(ee) "Restricted Stock" means Shares issued under the Plan to the
Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture provisions,
and other terms and conditions as established by the Administrator.
(ff) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act
or any successor thereto.
(gg) "SAR" means a stock appreciation right entitling the Grantee to
Shares or cash compensation, as established by the Administrator, measured by
appreciation in the value of Common Stock.
(hh) "Share" means a share of the Common Stock.
(ii) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
(jj) "Subsidiary Disposition" means the disposition by the Company of
its equity holdings in any subsidiary corporation effected by a merger or
consolidation involving that subsidiary corporation, the sale of all or
substantially all of the assets of that subsidiary corporation or the Company's
sale or distribution of substantially all of the outstanding capital stock of
such subsidiary corporation.
3. STOCK SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 10, below, the maximum
aggregate number of Shares which may be issued pursuant to Awards initially
shall be eight hundred thousand (800,000) Shares, and commencing with the first
business day of each calendar year thereafter beginning with January 2, 1997,
such maximum aggregate number of Shares shall be increased by a number equal to
one and one-half percent (1 1/2%) of the number of Shares outstanding as of
December 31 of the immediately preceding calendar year. Notwithstanding the
foregoing, the maximum aggregate number of Shares available for grant of
Incentive Stock Options shall be eight hundred thousand (800,000) Shares, and
such number shall not be subject to annual adjustment as described above. The
Shares to be issued pursuant to Awards may be authorized, but unissued, or
reacquired Common Stock.
3.
<PAGE>
(b) If an Award expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Award exchange program, or
if any unissued Shares are retained by the Company upon exercise of an Award in
order to satisfy the exercise price for such Award or any withholding taxes due
with respect to such Award, such unissued or retained Shares shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). Shares that actually have been issued under the Plan pursuant to
an Award shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) Plan Administrator.
------------------
(i) Administration with Respect to Directors and Officers.
-----------------------------------------------------
With respect to grants of Awards to Directors or Employees who are also Officers
or Directors of the Company, the Plan shall be administered by (A) the Board or
(B) a Committee designated by the Board, which Committee shall be constituted in
such a manner as to satisfy the Applicable Laws and to permit such grants and
related transactions under the Plan to be exempt from Section 16(b) of the
Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board.
(ii) Administration With Respect to Consultants and Other
----------------------------------------------------
Employees. With respect to grants of Awards to Employees or Consultants who are
- ---------
neither Directors nor Officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the Applicable Laws. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. The Board may authorize one or more
Officers to grant such Awards and may limit such authority by requiring that
such Awards must be reported to and ratified by the Board or a Committee within
six (6) months of the grant date, and if so ratified, shall be effective as of
the grant date.
(iii) Administration Errors. In the event an Award is granted
---------------------
in a manner inconsistent with the provisions of this subsection (a), such Award
shall be presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.
(b) Powers of the Administrator. Subject to Applicable Laws and the
---------------------------
provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator
shall have the authority, in its discretion:
(i) to select the Employees, Directors and Consultants to
whom Awards may be granted from time to time hereunder;
(ii) to determine whether and to what extent Awards are
granted hereunder;
(iii) to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreement for use under the
Plan;
(v) to determine the terms and conditions of any Award
granted hereunder;
(vi) to amend the terms of any outstanding Award granted
under the Plan, including a reduction in the exercise price (or base amount on
which appreciation is measured) of any Award to reflect a reduction in the Fair
Market Value of the Common Stock since the grant date of the Award, provided
that any amendment that would adversely affect the Grantee's rights under an
outstanding Award shall not be made without the Grantee's written consent;
(vii) to construe and interpret the terms of the Plan and
Awards granted pursuant to the Plan;
4.
<PAGE>
(viii) to establish additional terms, conditions, rules or
procedures to accommodate the rules or laws of applicable foreign jurisdictions
and to afford Grantees favorable treatment under such laws; provided, however,
that no Award shall be granted under any such additional terms, conditions,
rules or procedures with terms or conditions which are inconsistent with the
provisions of the Plan; and
(ix) to take such other action, not inconsistent with the
terms of the Plan, as the Administrator deems appropriate.
(c) Effect of Administrator's Decision. All decisions, determinations
----------------------------------
and interpretations of the Administrator shall be conclusive and binding on all
persons.
5. ELIGIBILITY. Awards other than Incentive Stock Options may be granted
to Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee, Director or Consultant who has been granted an
Award may, if otherwise eligible, be granted additional Awards. Awards may be
granted to such Employees of the Company and its subsidiaries who are residing
in foreign jurisdictions as the Administrator may determine from time to time.
6. TERMS AND CONDITIONS OF AWARDS.
(a) Type of Awards. The Administrator is authorized under the Plan to
--------------
award any type of arrangement to an Employee, Director or Consultant that is not
inconsistent with the provisions of the Plan and that by its terms involves or
might involve the issuance of (i) Shares, (ii) an Option, a SAR or similar right
with an exercise or conversion privilege at a fixed or variable price related to
the Common Stock and/or the passage of time, the occurrence of one or more
events, or the satisfaction of performance criteria or other conditions, or
(iii) any other security with the value derived from the value of the Common
Stock. Such awards include, without limitation, Options, SARs, sales or bonuses
of Restricted Stock, Dividend Equivalent Rights, Performance Units or
Performance Shares, and an Award may consist of one such security or benefit, or
two or more of them in any combination or alternative.
(b) Designation of Award. Each Award shall be designated in the Award
--------------------
Agreement. In the case of an Option, the Option shall be designated as either
an Incentive Stock Option or a Non-Qualified Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of Shares subject to Options designated as Incentive Stock Options which
become exercisable for the first time by a Grantee during any calendar year
(under all plans of the Company or any Parent or Subsidiary) exceeds $100,000,
such excess Options, to the extent of the Shares covered thereby in excess of
the foregoing limitation, shall be treated as Non-Qualified Stock Options. For
this purpose, Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of the Shares shall be
determined as of the date the Option with respect to such Shares is granted.
(c) Conditions of Award. Subject to the terms of the Plan, the
-------------------
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, increase in share price, earnings per share, total stockholder
return, return on equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator.
Partial achievement of the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award Agreement.
(d) Deferral of Award Payment. The Administrator may establish one or
-------------------------
more programs under the Plan to permit selected Grantees the opportunity to
elect to defer receipt of consideration upon exercise of an Award, satisfaction
of performance criteria, or other event that absent the election would entitle
the Grantee to payment or receipt of Shares or other consideration under an
Award. The Administrator may establish the election procedures, the timing of
such elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts or Shares so deferred, and such other terms,
conditions, rules and procedures that the Administrator deems advisable for the
administration of any such deferral program.
5.
<PAGE>
(e) Award Exchange Programs. The Administrator may establish one or
-----------------------
more programs under the Plan to permit selected Grantees to exchange an Award
under the Plan for one or more other types of Awards under the Plan on such
terms and conditions as established by the Administrator from time to time.
(f) Term of Award. The term of each Award shall be the term stated in
-------------
the Award Agreement, provided, however, that the term of an Incentive Stock
Option shall be no more than ten (10) years from the date of grant thereof.
However, in the case of an Incentive Stock Option granted to a Grantee who, at
the time the Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Incentive Stock Option shall be five (5) years
from the date of grant thereof or such shorter term as may be provided in the
Award Agreement.
(g) Transferability of Awards. Incentive Stock Options 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 Grantee, only by the Grantee. Other
Awards shall be transferable to the extent provided in the Award Agreement.
(h) Time of Granting Awards. The date of grant of an Award shall for
-----------------------
all purposes be the date on which the Administrator makes the determination to
grant such Award, or such other date as is determined by the Administrator.
Notice of the grant determination shall be given to each Employee, Director or
Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.
7. AWARD EXERCISE OR PURCHASE PRICE, CONSIDERATION, TAXES AND RELOAD
OPTIONS.
(a) Exercise or Purchase Price. The exercise or purchase price, if
--------------------------
any, for an Award shall be as follows:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be not less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant.
(B) granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.
(ii) In the case of other Awards, such price as is determined
by the Administrator.
(b) Consideration. Subject to Applicable Laws, the consideration to
-------------
be paid for the Shares to be issued upon exercise or purchase of an Award
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). In addition to any other types of consideration the Administrator may
determine, the Administrator is authorized to accept as consideration for Shares
issued under the Plan the following:
(i) cash;
(ii) check;
(iii) delivery of Grantee's promissory note with such
recourse, interest, security, and redemption provisions as the Administrator
determines as appropriate;
(iv) surrender of Shares (including withholding of Shares
otherwise deliverable upon exercise of the Award) which have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Award shall be exercised (but only to the extent that such
exercise of the Award would not result in an accounting compensation charge with
respect to the Shares used to pay the exercise price unless otherwise determined
by the Administrator);
6.
<PAGE>
(v) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Award and delivery to the
Company of the sale or loan proceeds required to pay the exercise price; or
(vi) any combination of the foregoing methods of payment.
(c) Taxes. No Shares shall be delivered under the Plan to any Grantee
-----
or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign, federal,
state, or local income and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive Stock
Option. Upon exercise of an Award, the Company shall withhold or collect from
Grantee an amount sufficient to satisfy such tax obligations.
(d) Reload Options. In the event the exercise price or tax
--------------
withholding of an Option is satisfied by the Company or the Grantee's employer
withholding Shares otherwise deliverable to the Grantee, the Administrator may
issue the Grantee an additional Option, with terms identical to the Award
Agreement under which the Option was exercised, but at an exercise price as
determined by the Administrator in accordance with the Plan.
8. EXERCISE OF AWARD.
(a) Procedure for Exercise; Rights as a Stockholder.
-----------------------------------------------
(i) Any Award granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Award Agreement.
(ii) An Award 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 Award by the person entitled to exercise the Award and full payment
for the Shares with respect to which the Award is exercised has been received by
the Company. 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
Shares subject to an Award, notwithstanding the exercise of an Option or other
Award. The Company shall issue (or cause to be issued) such stock certificate
promptly upon exercise of the Award. 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 the Award Agreement or Section 10,
below.
(b) Exercise of Award Following Termination of Employment, Director or
------------------------------------------------------------------
Consulting Relationship.
- -----------------------
(i) An Award may not be exercised after the termination date
of such Award set forth in the Award Agreement and may be exercised following
the termination of a Grantee's Continuous Status as an Employee, Director or
Consultant only to the extent provided in the Award Agreement.
(ii) Where the Award Agreement permits a Grantee to exercise
an Award following the termination of the Grantee's Continuous Status as an
Employee, Director or Consultant for a specified period, the Award shall
terminate to the extent not exercised on the last day of the specified period or
the last day of the original term of the Award, whichever occurs first.
(iii) Any Award designated as an Incentive Stock Option to the
extent not exercised within the time permitted by law for the exercise of
Incentive Stock Options following the termination of a Grantee's Continuous
Status as an Employee, Director or Consultant shall convert automatically to a
Non-Qualified Stock Option and thereafter shall be exercisable as such to the
extent exercisable by its terms for the period specified in the Award Agreement.
(c) Buyout Provisions. The Administrator may at any time offer to buy
-----------------
out for a payment in cash or Shares, an Award previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Grantee at the time that such offer is made.
7.
<PAGE>
9. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares
pursuant thereto shall comply with all Applicable Laws, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) As a condition to the exercise of an Award, the Company may
require the person exercising such Award 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 by any
Applicable Laws.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders of the Company, the number of Shares covered by each
outstanding Award, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan, as well as the price per share of Common Stock
covered by each such outstanding Award, 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 similar event resulting in
an increase or decrease in the number of issued shares of Common Stock. 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 hereof shall be made with respect to, the
number or price of Shares subject to an Award.
11. CORPORATE TRANSACTIONS/CHANGES IN CONTROL/SUBSIDIARY DISPOSITIONS.
(a) The Administrator shall have the authority, exercisable either in
advance of any actual or anticipated Corporate Transaction, Change in Control or
Subsidiary Disposition or at the time of an actual Corporate Transaction, Change
in Control or Subsidiary Disposition, and exercisable at the time of the grant
of an Award under the Plan or any time while an Award remains outstanding, to
provide for the full automatic vesting and exercisability of one or more
outstanding unvested Awards under the Plan and the release from restrictions on
transfer and repurchase or forfeiture rights of such Awards in connection with a
Corporate Transaction, Change in Control or Subsidiary Disposition, on such
terms and conditions as the Administrator may specify. The Administrator also
shall have the authority to condition any such Award vesting and exercisability
or release from such limitations upon the subsequent termination of the
Continuous Status as an Employee or Consultant of the Grantee within a specified
period following the effective date of the Change in Control or Subsidiary
Disposition. The Administrator may provide that any Awards so vested or
released from such limitations in connection with a Change in Control or
Subsidiary Disposition shall remain fully exercisable until the expiration or
sooner termination of the Award. Effective upon the consummation of a Corporate
Transaction, all outstanding Awards under the Plan shall terminate unless
assumed by the successor company or its Parent.
(b) The portion of any Incentive Stock Option accelerated under this
Section 11 in connection with a Corporate Transaction, Change in Control or
Subsidiary Disposition shall remain exercisable as an Incentive Stock Option
under the Code only to the extent the $100,000 dollar limitation of Section
422(d) of the Code is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated excess portion of such Option shall be exercisable as
a Non-Qualified Stock Option.
12. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the stockholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated.
13. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
(a) The Board may at any time amend, suspend or terminate the Plan.
To the extent necessary to comply with Applicable Laws, the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.
(b) No Award may be granted during any suspension of the Plan or after
termination of the Plan.
8.
<PAGE>
(c) Any amendment, suspension or termination of the Plan shall not
affect Awards already granted, and such Awards shall remain in full force and
effect as if the Plan had not been amended, suspended or terminated, unless
mutually agreed otherwise between the Grantee and the Administrator, which
agreement must be in writing and signed by the Grantee and the Company.
14. RESERVATION OF SHARES.
(a) The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
(b) 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.
15. NO EFFECT ON TERMS OF EMPLOYMENT. The Plan shall not confer upon any
Grantee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.
16. STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws. Any Award exercised
before shareholder approval is obtained shall be rescinded if shareholder
approval is not obtained within the time prescribed, and Shares issued on the
exercise of any such Award shall not be counted in determining whether
shareholder approval is obtained.
17. CALIFORNIA SECURITIES LAWS. Notwithstanding the foregoing provisions
of the Plan, during such time as the Company is subject to Section 260.140 of
Title 10 of the California Code of Regulations, the Plan shall be administered
in accordance with the following:
(a) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) Where there exists a public market for the Common Stock,
the Fair Market Value shall be (A) the closing sales price for a Share for the
last market trading day prior to the time of the determination (or, if no sales
were reported on that date, on the last trading date on which sales were
reported) on the stock exchange determined by the Administrator to be the
primary market for the Common Stock or the Nasdaq National Market, whichever is
applicable or (B) if the Common Stock is not traded on any such exchange or
national market system, the average of the closing bid and asked prices of a
Share on the Nasdaq Small Cap Market, in each case, as reported in The Wall
--------
Street Journal or such other source as the Administrator deems reliable; or
- --------------
(ii) In the absence of an established market of the type
described in (i), above, for the Common Stock, the Fair Market Value thereof
shall be determined by the Administrator in good faith and in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations.
(b) Stock Subject to the Plan. Subject to the provisions of Section
-------------------------
10, above, the maximum aggregate number of Shares which may be issued pursuant
to all Awards (including Incentive Stock Options) is eight hundred thousand
(800,000) Shares.
(c) Plan Administrator. With respect to grants of Awards to
------------------
Employees, Directors, Officers or Consultants, the Plan shall be administered by
(A) the Board or (B) a Committee (or a subcommittee of the Committee) designated
by the Board, which Committee shall be constituted in such a manner as to
satisfy Applicable Laws. Once appointed, such Committee shall continue to serve
in its designated capacity until otherwise directed by the Board. The Board may
authorize one or more Officers to grant such Awards and may limit such authority
by requiring that such Awards must be reported to and ratified by the Board or a
Committee within six (6) months of the grant date, and if so ratified, shall be
effective as of the grant date.
9.
<PAGE>
(d) Term of Award. The term of each Award shall be the term stated in
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the Award Agreement, provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an Incentive
Stock Option granted to a Grantee who, at the time the Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Award Agreement.
(e) Non-Transferability of Awards. Awards may not be sold, pledged,
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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 Grantee, only by the Grantee.
(f) Exercise or Purchase Price. The exercise or purchase price, if
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any, for an Award shall be as follows:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time of the grant
of such Incentive Stock Option owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be not less than one hundred
ten percent (110%) of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.
(ii) In the case of a Non-Qualified Stock Option:
(A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be not less than one hundred ten percent (110%)
of the Fair Market Value per Share on the date of grant.
(B) granted to any person other than a person described
in the preceding paragraph, the per Share exercise price shall be not less than
eighty-five percent (85%) of the Fair Market Value per Share on the date of
grant.
(iii) In the case of the sale of Shares:
(A) granted to a person who, at the time of the grant of
such Award, or at the time the purchase is consummated, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share purchase price shall be not
less than one hundred percent (100%) of the Fair Market Value per share on the
date of grant.
(B) granted to any person other than a person described
in the preceding paragraph, the per Share purchase price shall be not less than
eighty-five percent (85%) of the Fair Market Value per Share on the date of
grant.
(iv) In the case of other Awards, such price as is determined
by the Administrator.
(g) Consideration. Subject to Applicable Laws, the consideration to
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be paid for the Shares to be issued upon exercise or purchase of an Award
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). In addition to any other types of consideration the Administrator may
determine, the Administrator is authorized to accept as consideration for Shares
issued under the Plan the following:
(i) cash;
(ii) check;
10.
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(iii) delivery of Grantee's promissory note with such
recourse, interest, security, and redemption provisions as the Administrator
determines as appropriate;
(iv) if the exercise or purchase occurs on or after the
Registration Date, surrender of Shares (including withholding of Shares
otherwise deliverable upon exercise of the Award) which have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Award shall be exercised (but only to the extent that such
exercise of the Award would not result in an accounting compensation charge with
respect to the Shares used to pay the exercise price unless otherwise determined
by the Administrator);
(v) if the exercise or purchase occurs on or after the
Registration Date, delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Award and delivery to the Company of
the sale or loan proceeds required to pay the exercise price; or
(vi) combination of the foregoing methods of payment.
(h) Procedure for Exercise; Rights as a Shareholder.
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(i) Any Award granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Award Agreement, but in the case of an
Option, in no case at a rate of less than 20% per year over five (5) years from
the date the Option is granted.
(ii) An Award 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 Award by the person entitled to exercise the Award and full payment
for the Shares with respect to which the Award is exercised has been received by
the Company. 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 shareholder shall exist with respect to
Shares subject to an Award, notwithstanding the exercise of an Option or other
Award. The Company shall issue (or cause be issued) such stock certificate
promptly upon exercise of the Award. 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 the Award Agreement or Section 10,
above.
(i) Exercise of Award Following Termination of Employment, Director or
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Consulting Relationship. In the event of termination of an Grantee's Continuous
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Status as an Employee, Director or Consultant with the Company for any reason
other than disability or death (but not in the event of an Grantee's change of
status from Employee to Consultant or from Consultant to Employee), such Grantee
may, but only within the time period specified in the Award Agreement which time
period shall not be less than thirty days (30) after the date of such
termination (but in no event later than the expiration date of the term of such
Award as set forth in the Award Agreement), exercise his or her Award to the
extent that the Grantee was entitled to exercise it at the date of such
termination or to such other extent as may be determined by the Administrator.
If the Grantee should die within three (3) months after the date of such
termination, the Grantee's estate or the person who acquired the right to
exercise the Award by bequest or inheritance may exercise the Award to the
extent that the Grantee was entitled to exercise it at the date of such
termination within twelve (12) months of the Grantee's date of death, but in no
event later than the expiration date of the term of such Award as set forth in
the Award Agreement. In the event of an Grantee's change of status from Employee
to Consultant, an Employee's Incentive Stock Option shall convert automatically
to a Non-Qualified Stock Option on the ninety-first (91) day following such
change of status. If the Grantee does not exercise such Award to the extent so
entitled within the time specified herein, the Award shall terminate.
(j) Disability of Grantee. In the event of termination of an
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Grantee's Continuous Status as an Employee, Director or Consultant as a result
of his or her disability, Grantee may, but only within twelve (12) months from
the date of such termination (and in no event later than the expiration date of
the term of such Award as set forth in the Award Agreement), exercise the Award
to the extent otherwise entitled to exercise it at the date of such termination;
provided, however, that if such disability is not a "disability" as such term is
defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock
Option such Incentive Stock Option shall automatically convert to a Non-
Qualified Stock Option on the day three (3) months and one day following such
termination. To
11.
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the extent that Grantee is not entitled to exercise the Award at the date of
termination, or if Grantee does not exercise such Award to the extent so
entitled within the time specified herein, the Award shall terminate.
(k) Death of Grantee. In the event of the death of an Grantee, the
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Award may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Award as
set forth in the Award Agreement), by the Grantee's estate or by a person who
acquired the right to exercise the Award by bequest or inheritance, but only to
the extent that the Grantee was entitled to exercise the Award at the date of
death. If, at the time of death, the Grantee was not entitled to exercise his
or her entire Award, the Shares covered by the unexercisable portion of the
Award shall immediately revert to the Plan. If, after death, the Grantee's
estate or a person who acquired the right to exercise the Award by bequest or
inheritance does not exercise the Award within the time specified herein, the
Award shall terminate.
(l) Repurchase Rights. If the provisions of an Award Agreement grant
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to the Company the right to repurchase Shares upon termination of the Grantee's
Continuing Status as an Employee, Director or Consultant, the Award Agreement
shall provide that the repurchase price will be either:
(i) The higher of the original purchase price or Fair Market
Value on the date of termination of the Grantee's Continuous Status as an
Employee, Director or Consultant, if the right to repurchase must be exercised
for cash or cancellation of purchase money indebtedness for the Shares within
ninety (90) days of the termination of the Grantee's Continuous Status as an
Employee, Director or Consultant, and the right terminates when the Company's
securities become publicly traded; or
(ii) The original purchase price, provided (i) the right to
repurchase at the original purchase price lapses at the rate of at least twenty
percent (20%) per year over five (5) years from the date the Award is granted
(without respect to the date the Award was exercised or became exercisable),
which right must be exercised for cash or cancellation of purchase money
indebtedness for the Shares within ninety (90) days of termination of the
Grantee's Continuous Status as an Employee, Director or Consultant, and (ii) if
the repurchase right is assignable, the assignee must pay the Company upon
assignment of the right, (unless the assignee is a one hundred percent (100%)
owned subsidiary of the Company or is the parent of the Company owning one
hundred percent (100%) of the stock of the Company) cash equal to the difference
between the original purchase price and Fair Market Value if the original
purchase price is less than Fair Market Value.
(m) Corporate Transaction. Section 11, above, shall not apply and in
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the event of a proposed Corporate Transaction, the Administrator shall notify
the Grantee at least fifteen (15) days prior to such proposed Corporate
Transaction and for each Award which is at the time outstanding under the Plan,
the Administrator, in its discretion, may provide for the acceleration of
vesting and release from any restrictions on transfer and repurchase or
forfeiture rights of any such outstanding Award. To the extent it has not been
previously exercised, the Award will terminate immediately prior to the
consummation of such proposed Corporate Transaction, unless the Award is assumed
or an equivalent Award is substituted by the successor corporation or a Parent
or Subsidiary of such successor corporation. For the purposes of this
subsection, the Award shall be considered assumed if, following the Corporate
Transaction, the Award confers, for each Share subject to the Award immediately
prior to the Corporate Transaction, (i) the consideration (whether stock, cash,
or other securities or property) received in the Corporate Transaction by
holders of Common Stock for each Share subject to the Award held on the
effective date of the Corporate 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), or (ii) the right to purchase such
consideration in the case of an Option or similar Award; provided, however, that
if such consideration received in the Corporate Transaction was not solely
common stock of the successor corporation or its Parent, the Administrator may,
with the consent of the successor corporation, provide for the consideration to
be received upon the exercise or exchange of the Award for each Share subject to
the Award 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 Corporate Transaction.
(n) Information to Grantees. The Company shall provide to each
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Grantee, during the period for which such Grantee has one or more Awards
outstanding, copies of financial statements at least annually and all annual
reports and other information which is provided to all shareholders of the
Company.
12.
