<PAGE>
As filed with the Securities and Exchange Commission on June 5, 1998.
Registration No. 333-____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
INTERLEAF, INC.
(Exact name of registrant as specified in its charter)
----------------
Massachusetts
-------------------------------
(State or other jurisdiction of
incorporation or organization)
04-2729042
------------------------------------
(IRS Employer Identification Number)
Fourth Avenue, Waltham, MA 02154
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
1993 Employee Stock Option Plan
1997 Key Man Stock Option Plan and Agreement
1998 Key Man Stock Option Plan and Agreement
--------------------------------------------
(Full title of the plan)
Craig Newfield, V.P. & General Counsel
Interleaf, Inc.
62 Fourth Avenue
Waltham, Massachusetts 02154
---------------------------------------
(Name and address of agent for service)
(617) 290-0710
-------------------------------------------------------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Proposed
Maximum Proposed Amount of
Title of Each Class of Amount to be Offering Price Maximum Registration
Securities to be Registered Registered (1) Per Share Aggregate Offering Fee
Price
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,300,000 shares $3.15625 (2) $4,103,125 $1,211
- ----------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value 725,000 shares $1.25 $906,250 $267
- ----------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value 225,000 shares $3.125 $604,688 $178
- ----------------------------------------------------------------------------------------------------------------------
Total Registration Fee $1,656
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
(1) The shares being registered hereunder include 1,300,000 shares that may be
issued pursuant to the 1993 Stock Option Plan, 725,000 shares that may be
issued pursuant to the 1997 Key Man Stock Option Plan and Agreement and
225,000 shares that may be issued pursuant to the 1998 Key Man Stock Option
Plan and Agreement.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(h)(1) and (h)(3) under the Securities Act of 1933, on the basis
of the average of the high and low and trading prices on the Nasdaq
National Market on June 2, 1998.
This Registration Statement also incorporates by reference herein the
Registration Statements on Form S-8, filed with the Securities and Exchange
Commission on September 21, 1993 (File No. 33-69068) and October 24, 1997 (File
No. 333-38699), relating to 2,100,000 shares of Common Stock, par value $.01 per
share, of Interleaf, Inc. (the "Registrant"), issuable upon the exercise of
options granted and to be granted under the Registrant's 1993 Employee Stock
Option Plan.
EXPLANATORY NOTE
The material which follows, up to but not including the page beginning
Part II of this Registration Statement, constitutes a Prospectus, prepared in
accordance with the requirements of Part I of Form S-3, as permitted by General
Instruction C to Form S-8, to be used in connection with resales of securities
acquired under the Registrant's 1997 Key Man Stock Option Plan and Agreement by
an affiliate of the Registrant, as defined in Rule 405 under the Securities Act
of 1933, as amended.
<PAGE>
PROSPECTUS
725,000 Shares
INTERLEAF, INC.
Common Stock
This Prospectus relates to the resale of up to 725,000 shares of Common Stock,
$0.01 par value per share (the "Common Stock") of Interleaf, Inc. ("Interleaf"
or the "Company"), which may be offered from time to time by Mr. Jaime W.
Ellertson (the "Selling Shareholder"), for the Selling Shareholder's own
account. The shares of Common Stock covered by this Prospectus (the "Shares")
are issuable to the Selling Shareholder upon exercise of the non-qualified stock
option (the "Option") granted to the Selling Shareholder pursuant to the 1997
Key Man Stock Option Plan between the Company and the Selling Shareholder, dated
as of January 10, 1997 (the "1997 Key Man Plan"). All of the shares offered
hereunder are to be sold by the Selling Shareholder. The Company will not
receive any of the proceeds from the sale of the shares by the Selling
Shareholder.
Selling Shareholder may from time to time sell the shares covered by this
Prospectus on the Nasdaq National Market in ordinary brokerage transactions, in
negotiated transactions, or otherwise, at market prices prevailing at the time
of sale or at negotiated prices. See "Plan of Distribution." The Common Stock is
traded on the Nasdaq National Market under the symbol "LEAF."
----------------------
FOR A DISCUSSION OF THE MATERIAL RISKS INVOLVED WITH THE PURCHASE OF THESE
SECURITIES, PLEASE SEE "RISK FACTORS" COMMENCING ON PAGE 3.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------
The date of this Prospectus is June 5, 1998.
1
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission pursuant to the informational
requirements of the Exchange Act may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at 7
World Trade Center, Suite 1300, New York, New York 10048, and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such materials also may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission maintains a web site on the Internet that contains or will
contain reports, proxy and information statements and other information
regarding the Company at http://www.sec.gov. The Common Stock is traded on the
Nasdaq National Market. Reports and other information concerning the Company may
be inspected at the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C.
20006.
The Company has filed with the Commission a Registration Statement on Form S-8
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto, as certain items are omitted in accordance with
the rules and regulations of the Commission. For further information pertaining
to the Company and the shares of Common Stock offered hereby, reference is made
to such Registration Statement and the exhibits and schedules thereto, which may
be inspected without charge at the office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of which may be obtained from the
Commission at prescribed rates.
The Company will provide without charge to each person to whom this Prospectus
is delivered, upon written or oral request of such person, a copy of any or all
of the documents incorporated by reference into this Prospectus (without
exhibits to such documents other than exhibits specifically incorporated by
reference into such documents). Requests for such copies should be directed to
the General Counsel of the Company, 62 Fourth Avenue, Waltham, Massachusetts
02154; telephone number (617) 290-0710.
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus and, if given or made, such other information and
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the registered securities to which it
relates. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful.
THE COMPANY
The Company develops and markets software that is used in the creation,
management and distribution of documents. The Company's software enables
customers to compose, edit, view and print documents, while also facilitating
their electronic management, preparation, conversion and distribution. The
Company offers its customers an integrated document publishing ("IDP") solution
to meet both the needs of the document author and information user. The
Company's principal offices are located at 62 Fourth Avenue, Waltham,
Massachusetts 02154, and its telephone number is (781) 290-0710.
2
<PAGE>
RISK FACTORS
This Prospectus contains forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those discussed in
the forward looking statements as a result of certain factors, including the
factors set forth below and elsewhere in this Prospectus.
The following risk factors should be considered carefully in addition to the
other information contained in this Prospectus before purchasing the Common
Stock offered hereby.
Fluctuations and Uncertainty of Future Operating Results. The Company's revenues
have declined significantly in recent years, and its operating results have
fluctuated, as a result of changes in the marketplace for the Company's
traditional products, and the aging of its technology. The Company's future
operating results are dependent on its ability to develop and market IDP
software products and services that meet the changing needs of organizations
with complex document publishing requirements. There are numerous risks
associated with this process, including rapid technological change in the
information technology industry and the requirement to bring to market IDP and
web-based applications that solve complicated business needs in a timely manner.
To the extent that the Company's traditional complex authoring products have not
adopted or fail to adopt to changes in technology, sales of these products may
continue to decline.
Year 2000 Compliance. The Company has undertaken a systematic review and
planning process concerning the requirements and abilities of its standard
products (including embedded third party products) to handle date information
and to function appropriately from and after January 1, 2000. The Company
intends to discontinue its support of certain products which it considers
obsolete, without regard to Year 2000 concerns. Although the Company believes
that the effort required to adapt its supported standard products to function
appropriately from and after January 1, 2000 will not have a materially adverse
impact on the Company's financial performance, currently unforeseen
difficulties, delays or requirements could cause this assessment to change. Many
of the Company's customers have implemented custom applications which rely on
the Company's standard products to operate. The Company does not believe that it
has the obligation to modify such applications to function appropriately from
and after January 1, 2000. It is possible that unforeseen liabilities may arise
with respect to discontinued products or custom applications. To the extent that
the Company's traditional complex authoring products are not adapted to address
customers' Year 2000 concerns, sales of these products may continue to decline.
The Company has also undertaken a comprehensive evaluation of its internal
information systems in order to evaluate any improvements or replacements that
may be required in order to address Year 2000 functionality and other
operational deficiencies. This review is not complete, and the Company cannot
estimate the cost or risk which may be associated with its Year 2000 or other
operational issues. The Company expects to have the evaluation and planning
process completed, and to begin any necessary corrective action, by the end of
the current fiscal year.
Intense Competition. The existing document publishing, electronic distribution,
and document management markets in which the Company competes are highly
competitive. Many of these competitors are larger and better funded than the
Company. The Company competes for sales of its software products on both an
individual product basis, and as integrated with consulting services in large
IDP solution sales.
Retention of Key Employees, Customers, Vendors and Distributors. Given the
reduction in the Company's revenues and employee base over recent periods, and
given the current extremely competitive labor conditions, the Company expects to
face difficulties in managing and implementing its plans for growth, including
without limitation difficulties in attracting and retaining key technical, sales
and executive personnel, and difficulties in managing relationships with
distributors, vendors, customers and other third parties.
3
<PAGE>
Lengthy Sales and Implementation Cycles. Sales cycles associated with IDP
solution sales are long because organizations frequently require the Company to
solve complex business problems that typically involve reengineering of their
business processes. In addition, a high percentage of the Company's product
license revenues are generally realized in the last month of a fiscal quarter
and can be difficult to predict until the end of a fiscal quarter. Accordingly,
given the Company's relatively fixed cost structure, a shortfall or increase in
product license revenue can have a significant impact on the Company's operating
results and liquidity.
Markets for Products. The Company markets its software products and services
worldwide. Global and/or regional economic factors, currency exchange rate
fluctuations, and potential changes in laws and regulations affecting the
Company's business could impact the Company's financial condition or future
operating results.
Possible Volatility of Share Price. The market price of the Company's Common
Stock may be volatile at times in response to fluctuations in the Company's
quarterly operating results, changes in analysts' earnings estimates, market
conditions in the computer software industry, as well as general economic
conditions and other factors external to the Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by the
Selling Shareholder.
SELLING SECURITY HOLDERS
This Prospectus relates to possible sales of the Company's shares of Common
Stock by Jaime W. Ellertson, President, CEO and Director of the Registrant (the
"Selling Shareholder") to the extent now or hereafter permitted by the rules and
regulations promulgated under the Securities Act.
Prior to this offering, the Selling Shareholder held 19,100 shares of Common
Stock, plus an option to purchase 725,000 shares under the 1997 Key Man Plan.
Only the shares subject to the option granted under the 1997 Key Man Plan are
being offered for sale pursuant to this Prospectus. Assuming the sale of all the
shares offered hereby are sold, the Selling Shareholder will beneficially own
19,100 shares of Common Stock (less than 1% of the Common Stock outstanding).
PLAN OF DISTRIBUTION
The shares of Common Stock are being sold by the Selling Shareholder
for his own account. The Common Stock may be sold or transferred for value in
one or more transactions on the Nasdaq National Market, in negotiated
transactions or in a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at prices otherwise negotiated. The Selling Shareholder may effect
such transactions by selling the shares of Common Stock to or through
broker/dealers, and such broker/dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Shareholder
and/or the purchasers of the shares of Common Stock for whom such broker/dealers
may act as agent. Usual and customary brokerage fees will be paid by the Selling
Shareholder.
There can be no assurance that the Selling Shareholder will sell any or all of
the shares of Common Stock offered hereunder.
4
<PAGE>
MATERIAL CHANGES
On February 12, 1998, Mr. John Lopiano was appointed as a Director of the
Company. On February 23, 1998, Mr. Peter Rice was appointed as the Company's
Vice President of Finance & Administration, Chief Financial Officer and
Treasurer, replacing Robert Langer, who left the Company to pursue other
opportunities.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the securities offered hereby has been passed upon for the
Registrant by Craig Newfield, Esq., General Counsel of the Registrant. On
October 15, 1997, Craig Newfield, Vice President and General Counsel of the
Registrant, was granted an option to purchase 125,000 shares of Common Stock of
the Registrant, at an exercise price of $2.75 per share.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, filed with the Securities and Exchange Commission, are
incorporated herein be reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1997 filed pursuant to Section 13(a) or 15(d) of the Exchange
Act, as amended (the "Exchange Act").
(b) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Registrant's Annual Report referred to in (a) above.
(c) The description of the Registrant's Common Stock contained in the
Registrant's registration statement on Form 8-A, filed under the Exchange Act
with the Securities and Exchange Commission.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c)
14 and 15(d) of the Exchange Act subsequent to the date hereof and, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed incorporated by reference in this Registration Statement and to be a
part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
5
<PAGE>
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT.
Item 3. Incorporation of Documents by Reference.
The following documents, filed with the Securities and Exchange Commission, are
incorporated herein be reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1997 filed pursuant to Section 13(a) or 15(d) of the Exchange
Act, as amended (the "Exchange Act").
(b) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Registrant's Annual Report referred to in (a) above.
(c) The description of the Registrant's Common Stock contained in the
Registrant's registration statement on Form 8-A filed under the Exchange Act
with the Securities and Exchange Commission.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c)
14 and 15(d) of the Exchange Act subsequent to the date hereof and , prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the securities offered hereby has been passed upon for the
Registrant by Craig Newfield, Esq., General Counsel of the Registrant. On
October 15, 1997, Craig Newfield, Vice President and General Counsel of the
Registrant, was granted an option to purchase shares of Common Stock of the
Registrant, at an exercise price of $2.75 per share, as disclosed in Mr.
Newfield's Initial Statement of Beneficial Ownership of Securities on Form 3
filed with the Securities and Exchange Commission.
Item 6. Indemnification of Officers and Directors.
(a) Section 67 of the Massachusetts Business Corporation Law permits
indemnification of present and former directors and officers to the extent
specified in or authorized by (i) the articles of organization, (ii) a by-law
adopted by the stockholders, (iii) a vote adopted by the holders of a majority
of the shares of stock entitled to vote, or (iv) in the case of officers who are
not directors, the Board of Directors, except that no indemnification shall be
provided for any person with respect to any matter as to which he shall have
been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his action was in the best interests of the corporation
or to the extent that such matter relates to service with respect to an employee
benefit plan, in the best interests of the participants or beneficiaries of such
employee benefit plan. Section 67 also provides that the absence of any express
provision for indemnification shall not limit any right of indemnification
existing independently of such Section.
(b) Article V of the Registrant's By-laws provides that the Registrant
shall, to the extent legally permissible, indemnify each former or present
director or officer against all liabilities and expenses imposed upon or
incurred by any such person in connection with, or arising out of, the defense
or disposition of any action, suit or other proceeding, civil or criminal, in
which he may be threatened or involved, by reason of his having been a director
or officer; provided that the Registrant shall provide no
II-1
<PAGE>
indemnification with respect to any matter as to which any such person shall be
finally adjudicated in such action, suit or proceeding not to have acted in good
faith in the reasonable belief that his action was in the best interests of the
Registrant. If any such action is disposed of, on the merits or otherwise,
without the disposition being adverse to the director or officer and without an
adjudication that such person did not act in good faith in the reasonable belief
that his action was in the best interests of the Registrant, the director or
officer is entitled to indemnification as a matter of right. In all other cases,
indemnification shall be made as of right unless after investigation (a) by the
Board of Directors by a majority vote of a quorum of disinterested directors, or
(b) by written opinion of independent legal counsel (who may be regular counsel
of the Registrant), or (c) the holders of a majority of outstanding stock
entitled to vote (exclusive of stock owned by any interested directors or
officers), it shall be determined by clear and convincing evidence that such
person did not act in good faith and in a manner reasonably believed to be in or
not opposed to the best interest of the Registrant. Indemnification may include
advancement of expenses of defending an action upon receipt of an undertaking by
the person indemnified to repay such advances if it is ultimately determined
that such person is not entitled to indemnification under Article V. Article V
also provides that the right of indemnification provided therein is not
exclusive of and does not affect any other rights to which any director or
officer may be entitled under any agreement, statute, vote of stockholders or
otherwise. The Registrant's obligation to indemnify under Article V shall be
offset to the extent of any other source of indemnification or any otherwise
applicable insurance coverage.
(c) The Registrant has entered into an Agreement to Defend and
Indemnify with each of its officers and directors. Pursuant to these agreements,
the Registrant has agreed, to the extent legally permissible, to indemnify such
persons against all losses (including, without limitation, judgments, fines and
penalties) and expenses (including, without limitation, amounts paid in
settlement and counsel fees and disbursements) incurred by such person in
connection with or as a result of any claim, action, suit or other proceeding,
civil or criminal, or appeal related thereto, in which he may be involved by
reason of his having been a director or officer or by reason of any action taken
or not taken in his capacity as director or officer; provided that no
indemnification shall be provided with respect to any matter as to which such
person shall not have acted in good faith in the reasonable belief that his
action was in the best interests of the Registrant. If any such claim, action,
suit or proceeding is disposed of, on the merits or otherwise, without the
disposition being adverse to such person, without a plea of guilty or NOLO
CONTENDRE and without an adjudication that such person did not act in good faith
in the reasonable belief that his action was in the best interests of the
Registrant, the director or officer is entitled to indemnification as a matter
of right. In all other cases, indemnification shall be made upon a determination
that such person's conduct was in good faith and in the reasonable belief that
his action was in the best interests of the Registrant by (a) a quorum of
disinterested directors, or (b) independent legal counsel (who may be regular
counsel of the Registrant), or (c) the holders of a majority of outstanding
stock entitled to vote (exclusive of stock owned by an interested directors or
officer). Expenses may be advanced by the Registrant prior to any final
disposition of any such action upon receipt of an undertaking by the person
indemnified to repay such advances if it is ultimately determined that such
person is not entitled to indemnification under the Agreement. Such Agreements
provide that the right of indemnification provided therein is in addition to any
rights to which any person concerned may be entitled by other agreements or as a
matter of law, and shall inure to the benefit of the heirs, executors and
administrators of the indemnified person. The rights of indemnification provided
in such Agreements are in addition to any rights under any insurance policy in
effect, provide that to the extent any claim is covered by any such insurance
policy, the Registrant will provide coverage after the full coverage of the
insurance policy is exhausted or otherwise unavailable.
(d) Article 6D of the Registrant's Articles of Organization provides
that, to the fullest extent permitted by Chapter 156B of the Massachusetts
General Laws, a director of the Registrant shall not be
II-2
<PAGE>
personally liable to the Registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director, notwithstanding any provision of law
imposing such liability. Section 13(b)(1 1/2) of Chapter 156B of the
Massachusetts General Laws permits a corporation to include in its articles of
organization a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary as a director, except for (i) any breach of the director's duty of
loyalty to the corporation and its stockholders, (ii) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of the
law, (ii) improper issuances of stock or unauthorized distributions to
stockholders, or (iv) any transaction in which the director derived an improper
personal benefit.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
<TABLE>
<CAPTION>
Number Description
------ -----------
<S> <C>
4.1* Specimen Certificate of Common Stock (filed as Exhibit
4(a) to the Registrant's Registration Statement on Form
S-1 (File No. 33-5443)).
4.2* Rights Agreement between the Registrant and The First
National Bank of Boston, as Rights Agent, dated July 15,
1988 (filed as Exhibit 4(b) to the Registrant's Report
on 8-K, dated July 27, 1988).
5.1 Legal Opinion of Craig Newfield, Esquire.
10.1 1997 Key Man Stock Option Plan and Agreement dated January 10, 1997.
10.2 1998 Key Man Stock Option Plan and Agreement dated February 23, 1998.
23.1 Consent of Craig Newfield, Esquire (contained in his Opinion filed as Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, independent auditors.
24 Power of Attorney (included on the signature page of this Registration Statement).
</TABLE>
Item 9. Undertakings.
The Registrant hereby undertakes:
(a)(1) 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 of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information
- --------------------------
* Not filed herewith. In accordance with Rule 411 promulgated pursuant to the
Securities Act of 1933, as amended, reference is made to the documents
previously filed with the Commission, which are incorporated by reference
herein.
II-3
<PAGE>
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") that are incorporated by reference in this Registration Statement.
(2) That, for the purposes of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The 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 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 therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnification provisions described herein, 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Waltham, Commonwealth of Massachusetts, on June 5,
1998.
INTERLEAF, INC.
By: /s/ Jaime W. Ellertson
-----------------------------------------
President and Chief Executive Officer
II-4
<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and directors of Interleaf, Inc., hereby severally
constitute and appoint Jaime W. Ellertson, Peter J. Rice and Craig Newfield, and
each of them acting singly, our true and lawful attorneys with full power to
them, and each of them singly, to sign for us and in our names in the capacities
indicated below, the Registration Statement on Form S-8 filed herewith and any
and all pre-effective and post-effective amendments to said Registration
Statement, and generally to do all such things in our names and behalf in our
capacities as officers and directors to enable Interleaf, Inc. to comply with
the provisions of the Securities Act of 1933, as amended, and all requirements
of the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
WITNESS our hands and common seal on the date set forth below.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ JAIME W. ELLERTSON President and Chief Executive Officer, and Director June 5, 1998
- ------------------------ (Principal Executive Officer)
Jaime W. Ellertson
/s/ PETER J. RICE Vice President of Finance and Administration, Chief June 5, 1998
- ------------------------ Financial Officer and Treasurer
Peter J. Rice (Principal Financial and Accounting Officer)
/s/ FREDERICK B. BAMBER Director June 5, 1998
- ------------------------
Frederick B. Bamber
/s/ DAVID A. BOUCHER Director June 5, 1998
- ------------------------
David A. Boucher
/s/ RORY J. COWAN Chairman of the Board of Directors June 5, 1998
- ------------------------
Rory J. Cowan
/s/ MARCIA J. HOOPER Director June 5, 1998
- ------------------------
Marcia J. Hooper
/s/ JOHN A. LOPIANIO Director June 5, 1998
- ------------------------
John A. Lopiano
/s/ GEORGE D. POTTER, JR. Director June 5, 1998
- ------------------------
George D. Potter, Jr.
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
------ -----------
<S> <C>
4.1* Specimen Certificate of Common Stock (filed as Exhibit
4(a) to the Registrant's Registration Statement on Form
S-1 (File No. 33-5443)).
4.2* Rights Agreement between the Registrant and The First
National Bank of Boston, as Rights Agent, dated July 15,
1988 (filed as Exhibit 4(b) to the Registrant's Report
on 8-K, dated July 27, 1988).
5.1 Legal Opinion of Craig Newfield, Esquire.
10.1 1997 Key Man Stock Option Plan and Agreement dated January 10, 1997.
10.2 1998 Key Man Stock Option Plan and Agreement dated February 23, 1998.
23.1 Consent of Craig Newfield, Esquire (contained in his Opinion filed as Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, independent auditors.
24 Power of Attorney (included on the signature page of this Registration Statement).
</TABLE>
- --------------------------
* Not filed herewith. In accordance with Rule 411 promulgated pursuant to the
Securities Act of 1933, as amended, reference is made to the documents
previously filed with the Commission, which are incorporated by reference
herein.
II-6
<PAGE>
EXHIBITS 5.1
June 5, 1998
Interleaf, Inc.
62 Fourth Avenue
Waltham, MA 02154
Gentlemen:
I have assisted in the preparation of a Registration Statement on Form S-8 to be
filed with the Securities and Exchange Commission (the "Registration
Statement"), relating to 2,250,000 shares of Common Stock, $.01 par value per
share (the "Shares"), of Interleaf, Inc., a Massachusetts corporation (the
"Company"), pursuant to the Company's 1993 Employee Stock Option Plan, its 1997
Key Man Stock Option Plan and Agreement and its 1998 Key Man Stock Option Plan
and Agreement (collectively, the "Plans").
I have examined (i) the Restated Articles of Organization and By-laws of the
Company and all amendments thereto, (ii) the Plans, and (iii) such records of
meetings of the directors and stockholders of the Company, documents and other
instruments as in my judgment are necessary or appropriate to enable me to
render the opinion expressed below.
In my examination of the foregoing documents, I have assumed the genuineness of
all signatures and the authenticity of all documents submitted to me as
originals, the conformity to original documents of all documents submitted to me
as certified or photostatic copies, and the authenticity of the originals of
such latter documents.
Based upon the foregoing, I am of the opinion that the Shares have been duly
authorized for issuance and, when issued upon exercise of stock options granted
under the Plans in accordance with the terms thereof and pursuant to the terms
of the Plans, will be legally issued, fully paid and nonassessable.
I hereby consent to the use of my name in the Registration Statement and consent
to the filing of this opinion with the Securities and Exchange Commission as an
exhibit to the Registration Statement.
Very truly yours,
/s/ CRAIG NEWFIELD
- -------------------
Craig Newfield, Esq.
GENERAL COUNSEL
<PAGE>
EXHIBIT 10.1 INTERLEAF, INC.
1997 KEY MAN STOCK OPTION PLAN AND AGREEMENT
1. Grant of Option. Interleaf, Inc., a Massachusetts corporation (the
"Company"), hereby grants to the Mr. Jaime W. Ellertson (the "Optionee") an
option, pursuant to the terms and conditions of this 1997 Key Man Stock
Option Plan and Agreement (the "Plan"), to purchase an aggregate of 725,000
shares of Common Stock ("Common Stock") of the Company at a price of $2.06
per share, purchasable as set forth in, and subject to the terms and
conditions of, this Plan. Except where the context otherwise requires, the
term "Company" shall include the parent and all present and future
subsidiaries of the Company as defined in Sections 425(e) and 425(f) of the
Internal Revenue Code of 1986, as amended or replaced from time to time
(the "Code").
2. Tax Treatment and Stock Subject to the Plan.
(a) Tax Treatment. The option granted under this Plan (the "Option") is not
intended to qualify as an incentive stock option under Section 422A of the
Code.
(b) Stock Subject to Plan. Subject to adjustment as provided in Section 9
below, the maximum number of shares of Common Stock of the Company which
may be issued and sold under this Plan is 725,000 shares. If an option
granted under the Plan shall expire or terminate for any reason without
having been exercised in full, the unpurchased shares subject to such
option shall not again be available for subsequent option grants under the
Plan.
3. Exercise of Option and Provisions for Termination.
(a) Vesting Schedule. Except as otherwise provided in this Plan, the Option may
be exercised prior to the 10th anniversary of the date this Plan is
executed by all parties (hereinafter the "Expiration Date") in installments
as to not more than the number of shares and during the respective
installment periods set forth in the table below.
<TABLE>
<CAPTION>
Total No. of
Shares Exercisable
(Cumulative %
Exercise Period of Shares Vested)
<S> <C>
Prior to the first anniversary of grant date 0%
On or after the first anniversary of grant date, 25%
but prior to the second anniversary date
On or after the second anniversary of grant date, 50%
but prior to the third anniversary date
On or after the third anniversary of grant date, 75%
but prior to the fourth anniversary date
On or after the fourth anniversary of grant date, 100%
but prior to the fifth anniversary date
</TABLE>
The right of exercise shall be cumulative so that if the Option is not
exercised to the maximum extent permissible during any exercise period, it
shall be exercisable, in whole or in part, with respect to all shares not
so purchased at any time prior to the Expiration Date or the earlier
termination of the Option. This Option may not be exercised at any time on
or after the Expiration Date, except as otherwise provided in Section 3(e)
below.
(b) Exercise Procedure. Subject to the conditions set forth in this Plan, the
Option shall be exercised by
1
<PAGE>
the Optionee's delivery of written notice of exercise to the President,
General Counsel, or Corporate Controller of the Company specifying the
number of shares to be purchased and the purchase price to be paid therefor
and accompanied by payment in full in accordance with Section 4. Such
exercise shall be effective upon receipt by the President, General Counsel
or Corporate Controller of the Company of such written notice together with
the required payment. The Optionee may purchase fewer than the total number
of shares covered hereby, provided that no partial exercise of the Option
may be for any fractional share or for fewer than ten whole shares.
(c) Continuous Relationship with the Company Required. Except as otherwise
provided in this Section 3, the Option may not be exercised unless the
Optionee, at the time he exercises the Option, is, and has been at all
times since the date of grant of the Option, an employee, officer or
director of, or consultant or advisor to, the Company.
(d) Termination of Relationship With the Company. If the Optionee ceases to be
eligible under the provisions of paragraph 3(c) for any reason, then,
except as provided in paragraph (e) below, the right to exercise the Option
shall terminate three (3) months after such cessation (but in no event
after the Expiration Date), provided that the Option shall be exercisable
only to the extent that the Optionee was entitled to exercise the Option on
the date of such cessation.
(e) Exercise Period Upon Death or Disability. If the Optionee dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the
Expiration Date, while he is an Eligible Optionee, or if the Optionee dies
within three months after the Optionee ceases to be an Eligible Optionee of
the Company, the Option shall be exercisable, within the period of one (1)
year following the date of death or disability of the Optionee (whether or
not such exercise occurs before the Expiration Date), by the Optionee or by
the person to whom the Option is transferred by will or the laws of descent
and distribution, provided that the Option shall be exercisable only to the
extent that the Option was exercisable by the Optionee on the date of his
death or disability. Except as otherwise indicated by the context, the term
"Optionee", as used in the Option, shall be deemed to include the estate of
the Optionee or any person who acquires the right to exercise the Option by
bequest or inheritance or otherwise by reason of the death of the Optionee.
4. Payment of Purchase Price.
(a) Method of Payment. Payment of the purchase price for shares purchased upon
exercise of the Option shall be made by (i) delivery to the Company of cash
or a check to the order of the Company in an amount equal to the purchase
price of such shares, (ii) subject to the consent of the Company, by
delivery to the Company of shares of Common Stock of the Company then owned
by the Optionee having a fair market value equal in amount to the purchase
price of such shares, (iii) by any other means which the Board of Directors
determines are consistent with the purpose of this Plan and applicable laws
and regulations (including, without limitation, the provisions of Rule
l6b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange
Act of 1934 (the "Exchange Act") and Regulation T promulgated by the
Federal Reserve Board), or (iv) by any combination of such methods of
payment.
(b) Valuation of Shares or Other Non-Cash Consideration Tendered in Payment of
Purchase Price. For the purposes hereof, the fair market value of any share
of the Company's Common Stock or other non-cash consideration which may be
delivered to the Company in exercise of the Option shall be determined in
good faith by the Board of Directors of the Company.
2
<PAGE>
(c) Delivery of Shares Tendered in Payment of Purchase Price. If the Company
permits the Optionee to exercise options by delivery of shares of Common
Stock of the Company, the certificate or certificates representing the
shares of Common Stock of the Company to be delivered shall be duly
executed in blank by the Optionee or shall be accompanied by a stock power
duly executed in blank suitable for purposes of transferring such shares to
the Company. Fractional shares of Common Stock of the Company will not be
accepted in payment of the purchase price of shares acquired upon exercise
of the Option.
5. Delivery of Shares; Compliance With Securities Law, Etc.
(a) General. The Company shall, upon payment of the option price for the number
of shares purchased and paid for, make prompt delivery of such shares to
the Optionee, provided that if the securities laws or any other laws or
regulations require the Company to take any action with respect to such
shares before the issuance thereof, then the date of delivery of such
shares shall be extended for the period necessary to complete such action.
(b) Listing, Qualification, Etc. This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine
that the listing, registraion or qualification of the shares subject hereto
upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other
condition is necessary as a condition of, or in connection with, the
issuance or purchase of shares hereunder, the Option may not be exercised,
in whole or in part, unless such listing, registration, qualification,
consent or approval, disclosure, or satisfaction of such other condition
shall have been effected or obtained on terms acceptable to the Board of
Directors. Nothing herein shall be deemed to require the Company to apply
for, effect or obtain such listing, registration, qualification, or
disclosure or satisfy such other condition.
6. Nontransferability of Option. Except as provided in Section 3(e) of this
Plan, the Option is personal and no rights granted hereunder may be
transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) nor shall any such rights be subject to
execution, attachment or similar process, except by will or the laws of
descent and distribution, and, during the life of the Optionee the Option
may be exercised only by the Optionee. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of the Option or of such
rights contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon the Option or such rights, the Option
and such rights shall, at the election of the Company, become null and
void.
7. No Special Employment or Similar Rights; Administration.
(a) Nothing contained in this Plan or the Option shall be construed or deemed
by any person under any circumstances to bind the Company to continue the
employment or other relationship of the Optionee with the Company for the
period within which the Option may be exercised.
(b) The amount of any compensation deemed to be received by the Optionee as a
result of the exercise of an option or the sale of shares received upon
such exercise will not constitute compensation with respect to which any
other employee benefits of such Optionee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life
insurance or salary continuation plan, except as otherwise specifically
determined by the Board of Directors.
(c) Administration. This Plan will be administered by the Board of Directors of
the Company, whose construction and interpretation of the terms and
provisions of the Plan shall be final and conclusive. The Board shall have
authority, subject to the express provisions of this Plan, to construe this
Plan, to prescribe, amend and rescind rules and regulations relating to
this Plan, and to make all other determinations in the judgment of the
Board of Directors necessary or desirable for the administration
3
<PAGE>
of this Plan. The Board of Directors may correct any defect or supply any
omission or reconcile any inconsistency in this Plan in the manner and to
the extent it shall deem expedient to carry this Plan into effect and it
shall be the sole and final judge of such expediency. No director shall be
liable for any action or determination made in good faith. The Board of
Directors may, to the full extent permitted by or consistent with
applicable laws or regulations (including, without limitation, applicable
state law and Rule l6b-3) delegate any or all of its powers under this Plan
to a committee (the "Committee") appointed by the Board of Directors, and
if the Committee is so appointed all references to the Board of Directors
in the Plan shall mean and relate to such Committee.
8. Rights as a Shareholder. The Optionee shall have no rights as a shareholder
with respect to any shares which may be purchased by exercise of the Option
(including, without limitation, any rights to receive dividends or non-cash
distributions with respect to such shares) unless and until a certificate
representing such shares is duly issued and delivered to the Optionee. No
adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
9. Adjustment Provisions.
(a) General. If, through or as a result of any merger, consolidation, sale of
all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse
stock split, or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company, or (ii)
additional shares or new or different shares or other securities of the
Company or other non-cash assets are distributed with respect to such
shares of Common Stock or other securities, an appropriate and
proportionate adjustment may be made in (x) the maximum number and kind of
shares reserved for issuance under this Plan, (y) the number and kind of
shares or other securities subject to then outstanding options under this
Plan, and (z) the price for each share subject to any then outstanding
options under this Plan, without changing the aggregate purchase price as
to which such options remain exercisable, provided that no adjustment shall
be made pursuant to this Section 9 if such adjustment would cause this Plan
to fail to comply with Rule l6b-3.
(b) Board Authority to Make Adjustments. Any adjustments under this Section 9
will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the
Option on account of any such adjustments.
10. Mergers, Consolidation, Distributions, Liquidations Etc. In the event of a
consolidation or merger or sale of all or substantially all of the assets
of the Company in which outstanding shares of Common Stock are exchanged
for securities, cash or other property of any other corporation or business
entity or in the event of a liquidation of the Company, the Board of
Directors of the Company, or the board of directors of any corporation
assuming the obligations of the Company, may, in its discretion, take any
one or more of the following actions, as to outstanding options held by the
Optionee: (i) provide that such options shall be assumed, or equivalent
options shall be substituted, by the acquiring or succeeding corporation
(or an affiliate thereof), (ii) upon written notice to the Optionee,
provide that all unexercised options will terminate immediately prior to
the consummation of such transaction unless exercised by the Optionee
within a specified period following the date of such notice, (iii) in the
event of a merger under the terms of which holders of the Common Stock of
the Company will receive upon consummation thereof a cash payment for each
share surrendered in the merger (the "Merger Price"), make or provide for a
cash payment to the Optionee equal to the difference between (A) the Merger
Price times the number of shares of Common Stock subject to such
outstanding options held by the Optionee (to the extent then exercisable at
prices not in excess of the Merger
4
<PAGE>
Price) and (B) the aggregate exercise price of all such outstanding options
in exchange for the termination of such options, and (iv) provide that all
or any outstanding options shall become exercisable in full immediately
prior to such event.
11. Change in Control.
Notwithstanding anything herein to the contrary, in the event of a "Change
in Control of the Company" (as defined below), the exercise dates of all
shares granted hereunder shall be accelerated in full so that all (100%)
percent of the total number of shares originally granted hereunder shall be
immediately exercisable. For purposes of this Plan, a "Change in Control of
the Company" shall occur or be deemed to have occurred only if (i) any
"person," as such term is used in Sections 13(d) and 14(d) of the Exchange
Act (other than the Company, any trustee of other fiduciary holding
securities under an employee benefit plan of the Company, or any
corporation owned directly or indirectly by the stockholders of the Company
in substantially the same proportion as their ownership of stock of the
Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the
Company's then outstanding securities; (ii) during any period of two
consecutive years ending during the term of this Plan (not including any
period prior to the adoption of this Plan), individuals who are the
beginning of such period constitute the Board of Directors of the Company,
and any new director whose election by the Board of Directors or nomination
for election by the Company's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who were either
directors at the beginning of the period or whose election or whose
nomination for election was previously so approved (collectively, the
"Disinterested Directors"), cease for any reason to constitute a majority
of the Board of Directors; (iii) the shareholders of the Company approve a
merger or consolidation of the Company with any other corporation, other
than (A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 80% of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or (B) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no "person" (as hereinabove
defined) acquires more than 25% of the combined voting power of the
Company's then outstanding securities.
12. Term and Amendment of the Plan.
(a) This Plan shall commence upon execution hereof by all parties, and
terminate on the Expiration Date.
(b) The Board of Directors may at any time, and from time to time, modify or
amend the Plan in any respect, except that if at any time the approval of
the shareholders of the Company is required as to such modification or
amendment under Rule l6b-3 with respect to options held by Reporting
Persons, the Board of Directors may not effect such modification or
amendment without such approval.
(c) The termination or any modification or amendment of this Plan shall not,
without the consent of the Optionee, affect his rights under the Option.
With the consent of the Optionee, the Board of Directors may amend the
Option in a manner not inconsistent with this Plan. The Board of Directors
shall have the right to amend or modify the terms and provisions of this
Plan to the extent necessary to ensure the qualification of this Plan under
Rule l6b-3.
13. Withholding Taxes. The Company's obligation to deliver shares upon the
exercise of the Option shall be subject to the Optionee's satisfaction of
all applicable federal, state and local income and employment tax
withholding requirements. Without limiting the foregoing, (a) The Company
shall have the right to deduct from payments of any kind otherwise due to
the Optionee any federal, state
5
<PAGE>
or local taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under this Plan. Subject to the
prior approval of the Company, which may be withheld by the Company in its
sole discretion, the Optionee may elect to satisfy such obligations, in
whole or in part, (i) by causing the Company to withhold shares of Common
Stock otherwise issuable pursuant to the exercise of the Option or (ii) by
delivering to the Company shares of Common Stock already owned by the
Optionee. The shares so delivered or withheld shall have a fair market
value equal to such withholding obligation. The fair market value of the
shares used to satisfy such withholding obligation shall be determined by
the Company as of the date that the amount of tax to be withheld is to be
determined. If the Optionee has made an election pursuant to this Section
13, then he may only satisfy his her withholding obligation with shares of
Common Stock which are not subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements.
14. Miscellaneous.
(a) Except as provided herein, the Plan and the Option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company
and the Optionee.
(b) All notices under the Plan and the Option shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their
names below or at such other address as may be designated in writing by
either of the parties to one another.
(c) This Plan and the Option shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
EXECUTED, by Interleaf, Inc. as of January 10, 1997
Interleaf, Inc.
By: /s/ Rory J. Cowan
-----------------------
Rory J. Cowan, Chairman
OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing Plan and the Option, and agrees to
the terms and conditions hereof. The undersigned hereby acknowledges that he has
read and understands the terms of this 1997 Key Man Stock Option Plan and
Agreement, and that the shares underlying the stock option contained herein may
not be sold unless they are registered with the SEC under the provisions of the
Securities Act of 1933, as amended. The Optionee represents and warrants that he
is acquiring the Common Stock subject to the Option for his own account for
investment and not with any present intention of selling or otherwise
distributing the same.
OPTIONEE:
/s/ Jaime W. Ellertson Date: January 10, 1997
--------------------------------------- -----------------------
Jaime W. Ellertson
6
<PAGE>
EXHIBIT 10.2 INTERLEAF, INC.
1998 KEY MAN STOCK OPTION PLAN AND AGREEMENT
1. Grant of Option. Interleaf, Inc., a Massachusetts corporation (the
"Company"), hereby grants to the Mr. Peter J. Rice (the "Optionee") an
option, pursuant to the terms and conditions of this 1998 Key Man Stock
Option Plan and Agreement (the "Plan"), to purchase an aggregate of 225,000
shares of Common Stock ("Common Stock") of the Company at a price of $3.125
per share, purchasable as set forth in, and subject to the terms and
conditions of, this Plan. Except where the context otherwise requires, the
term "Company" shall include the parent and all present and future
subsidiaries of the Company as defined in Sections 425(e) and 425(f) of the
Internal Revenue Code of 1986, as amended or replaced from time to time
(the "Code").
2. Tax Treatment and Stock Subject to the Plan.
(a) Tax Treatment. The option granted under this Plan (the "Option") is not
intended to qualify as an incentive stock option under Section 422A of the
Code.
(b) Stock Subject to Plan. Subject to adjustment as provided in Section 9
below, the maximum number of shares of Common Stock of the Company which
may be issued and sold under this Plan is 225,000 shares. If an option
granted under the Plan shall expire or terminate for any reason without
having been exercised in full, the unpurchased shares subject to such
option shall not again be available for subsequent option grants under the
Plan.
3. Exercise of Option and Provisions for Termination.
(a) Vesting Schedule. Except as otherwise provided in this Plan, the Option may
be exercised prior to the 10th anniversary of the date this Plan is
executed by all parties (hereinafter the "Expiration Date") in installments
as to not more than the number of shares and during the respective
installment periods set forth in the table below.
<TABLE>
<CAPTION>
Total No. of
Shares Exercisable
(Cumulative %
Exercise Period of Shares Vested)
<S> <C>
Prior to the first anniversary of grant date 0%
On or after the first anniversary of grant date, 25%
but prior to the second anniversary date
On or after the second anniversary of grant date, 50%
but prior to the third anniversary date
On or after the third anniversary of grant date, 75%
but prior to the fourth anniversary date
On or after the fourth anniversary of grant date, 100%
but prior to the fifth anniversary date
</TABLE>
The right of exercise shall be cumulative so that if the Option is not
exercised to the maximum extent permissible during any exercise period, it
shall be exercisable, in whole or in part, with respect to all shares not
so purchased at any time prior to the Expiration Date or the earlier
termination of the Option. This Option may not be exercised at any time on
or after the Expiration Date, except as otherwise provided in Section 3(e)
below.
(b) Exercise Procedure. Subject to the conditions set forth in this Plan, the
Option shall be exercised by
1
<PAGE>
the Optionee's delivery of written notice of exercise to the President,
General Counsel, or Corporate Controller of the Company specifying the
number of shares to be purchased and the purchase price to be paid therefor
and accompanied by payment in full in accordance with Section 4. Such
exercise shall be effective upon receipt by the President, General Counsel
or Corporate Controller of the Company of such written notice together with
the required payment. The Optionee may purchase fewer than the total number
of shares covered hereby, provided that no partial exercise of the Option
may be for any fractional share or for fewer than ten whole shares.
(c) Continuous Relationship with the Company Required. Except as otherwise
provided in this Section 3, the Option may not be exercised unless the
Optionee, at the time he exercises the Option, is, and has been at all
times since the date of grant of the Option, an employee, officer or
director of, or consultant or advisor to, the Company.
(d) Termination of Relationship With the Company. If the Optionee ceases to be
eligible under the provisions of paragraph 3(c) for any reason, then,
except as provided in paragraph (e) below, the right to exercise the Option
shall terminate three (3) months after such cessation (but in no event
after the Expiration Date), provided that the Option shall be exercisable
only to the extent that the Optionee was entitled to exercise the Option on
the date of such cessation.
(e) Exercise Period Upon Death or Disability. If the Optionee dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the
Expiration Date, while he is an Eligible Optionee, or if the Optionee dies
within three months after the Optionee ceases to be an Eligible Optionee of
the Company, the Option shall be exercisable, within the period of one (1)
year following the date of death or disability of the Optionee (whether or
not such exercise occurs before the Expiration Date), by the Optionee or by
the person to whom the Option is transferred by will or the laws of descent
and distribution, provided that the Option shall be exercisable only to the
extent that the Option was exercisable by the Optionee on the date of his
death or disability. Except as otherwise indicated by the context, the term
"Optionee", as used in the Option, shall be deemed to include the estate of
the Optionee or any person who acquires the right to exercise the Option by
bequest or inheritance or otherwise by reason of the death of the Optionee.
4. Payment of Purchase Price.
(a) Method of Payment. Payment of the purchase price for shares purchased upon
exercise of the Option shall be made by (i) delivery to the Company of cash
or a check to the order of the Company in an amount equal to the purchase
price of such shares, (ii) subject to the consent of the Company, by
delivery to the Company of shares of Common Stock of the Company then owned
by the Optionee having a fair market value equal in amount to the purchase
price of such shares, (iii) by any other means which the Board of Directors
determines are consistent with the purpose of this Plan and applicable laws
and regulations (including, without limitation, the provisions of Rule
l6b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange
Act of 1934 (the "Exchange Act") and Regulation T promulgated by the
Federal Reserve Board), or (iv) by any combination of such methods of
payment.
(b) Valuation of Shares or Other Non-Cash Consideration Tendered in Payment of
Purchase Price. For the purposes hereof, the fair market value of any share
of the Company's Common Stock or other non-cash consideration which may be
delivered to the Company in exercise of the Option shall be determined in
good faith by the Board of Directors of the Company.
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(c) Delivery of Shares Tendered in Payment of Purchase Price. If the Company
permits the Optionee to exercise options by delivery of shares of Common
Stock of the Company, the certificate or certificates representing the
shares of Common Stock of the Company to be delivered shall be duly
executed in blank by the Optionee or shall be accompanied by a stock power
duly executed in blank suitable for purposes of transferring such shares to
the Company. Fractional shares of Common Stock of the Company will not be
accepted in payment of the purchase price of shares acquired upon exercise
of the Option.
5. Delivery of Shares; Compliance With Securities Law, Etc.
(a) General. The Company shall, upon payment of the option price for the number
of shares purchased and paid for, make prompt delivery of such shares to
the Optionee, provided that if the securities laws or any other laws or
regulations require the Company to take any action with respect to such
shares before the issuance thereof, then the date of delivery of such
shares shall be extended for the period necessary to complete such action.
(b) Listing, Qualification, Etc. This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine
that the listing, registraion or qualification of the shares subject hereto
upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other
condition is necessary as a condition of, or in connection with, the
issuance or purchase of shares hereunder, the Option may not be exercised,
in whole or in part, unless such listing, registration, qualification,
consent or approval, disclosure, or satisfaction of such other condition
shall have been effected or obtained on terms acceptable to the Board of
Directors. Nothing herein shall be deemed to require the Company to apply
for, effect or obtain such listing, registration, qualification, or
disclosure or satisfy such other condition.
6. Nontransferability of Option. Except (i) as provided in Section 3(e) of
this Plan, and (ii) as provided in Section 6(a) below, the Option is
personal and no rights granted hereunder may be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or
otherwise) nor shall any such rights be subject to execution, attachment or
similar process, except by will or the laws of descent and distribution,
and, during the life of the Optionee the Option may be exercised only by
the Optionee. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of the Option or of such rights contrary to the
provisions hereof, or upon the levy of any attachment or similar process
upon the Option or such rights, the Option and such rights shall, at the
election of the Company, become null and void.
(a) The foregoing notwithstanding, the Option may be transferred, in whole or
in part, to the Optionee's immediate family members through a gift or a
domestic relations order. For this purpose "immediate family" is defined to
include any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, siblings, aunt, uncle, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships, trusts for the exclusive benefit of these persons, and other
entities owned solely by these persons. Any such transfer shall be on the
conditions that (i) the Company be notified promptly upon such transfer,
(ii) and no portion of the Option or rights transferred to the transferee
may be transferred, assigned, pledged or hypothecated in any way (whether
by operation of law or otherwise) nor shall any such rights or Option be
subject to execution, attachment or similar process, except by will or the
laws of descent and distribution, and, during the life of the transferee
the Option may be exercised only by the transferee; and (iii) the
transferee agrees and acknowledges in writing in writing in form and
substance acceptable to the Company:
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(A) to be bound by and comply with the terms and conditions of this Plan;
(B) that the option and/or shares of Common Stock acquired shall not be
sold except in compliance with applicable securities laws, and that
shares may not be registered by the Company under the Securities Act of
1933;
(C) to report all sales of Common Stock to the Company to the same degree
as the Optionee is required hereunder; and
(D) to such other conditions on transfer, and reporting obligations, as the
Company may reasonably request.
7. No Special Employment or Similar Rights; Administration.
(a) Nothing contained in this Plan or the Option shall be construed or deemed
by any person under any circumstances to bind the Company to continue the
employment or other relationship of the Optionee with the Company for the
period within which the Option may be exercised.
(b) The amount of any compensation deemed to be received by the Optionee as a
result of the exercise of an option or the sale of shares received upon
such exercise will not constitute compensation with respect to which any
other employee benefits of such Optionee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life
insurance or salary continuation plan, except as otherwise specifically
determined by the Board of Directors.
(c) Administration. This Plan will be administered by the Board of Directors of
the Company, whose construction and interpretation of the terms and
provisions of the Plan shall be final and conclusive. The Board shall have
authority, subject to the express provisions of this Plan, to construe this
Plan, to prescribe, amend and rescind rules and regulations relating to
this Plan, and to make all other determinations in the judgment of the
Board of Directors necessary or desirable for the administration of this
Plan. The Board of Directors may correct any defect or supply any omission
or reconcile any inconsistency in this Plan in the manner and to the extent
it shall deem expedient to carry this Plan into effect and it shall be the
sole and final judge of such expediency. No director shall be liable for
any action or determination made in good faith. The Board of Directors may,
to the full extent permitted by or consistent with applicable laws or
regulations (including, without limitation, applicable state law and Rule
l6b-3) delegate any or all of its powers under this Plan to a committee
(the "Committee") appointed by the Board of Directors, and if the Committee
is so appointed all references to the Board of Directors in the Plan shall
mean and relate to such Committee.
8. Rights as a Shareholder. The Optionee shall have no rights as a shareholder
with respect to any shares which may be purchased by exercise of the Option
(including, without limitation, any rights to receive dividends or non-cash
distributions with respect to such shares) unless and until a certificate
representing such shares is duly issued and delivered to the Optionee. No
adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
9. Adjustment Provisions.
(a) General. If, through or as a result of any merger, consolidation, sale of
all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse
stock split, or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company, or (ii)
additional shares or new or different shares or other securities of the
Company or other non-cash assets are distributed with respect to such
shares of Common Stock or other securities, an appropriate and
proportionate adjustment may be made in (x) the maximum number and kind of
shares reserved for issuance under this Plan, (y) the number and kind of
shares or other securities subject to then outstanding options under this
Plan, and (z) the price for each share subject to any then outstanding
options under this Plan, without changing the aggregate purchase price as
to
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which such options remain exercisable, provided that no adjustment shall be
made pursuant to this Section 9 if such adjustment would cause this Plan to
fail to comply with Rule l6b-3.
(b) Board Authority to Make Adjustments. Any adjustments under this Section 9
will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the
Option on account of any such adjustments.
10. Mergers, Consolidation, Distributions, Liquidations Etc. In the event of a
consolidation or merger or sale of all or substantially all of the assets
of the Company in which outstanding shares of Common Stock are exchanged
for securities, cash or other property of any other corporation or business
entity or in the event of a liquidation of the Company, the Board of
Directors of the Company, or the board of directors of any corporation
assuming the obligations of the Company, may, in its discretion, take any
one or more of the following actions, as to outstanding options held by the
Optionee: (i) provide that such options shall be assumed, or equivalent
options shall be substituted, by the acquiring or succeeding corporation
(or an affiliate thereof), (ii) upon written notice to the Optionee,
provide that all unexercised options will terminate immediately prior to
the consummation of such transaction unless exercised by the Optionee
within a specified period following the date of such notice, (iii) in the
event of a merger under the terms of which holders of the Common Stock of
the Company will receive upon consummation thereof a cash payment for each
share surrendered in the merger (the "Merger Price"), make or provide for a
cash payment to the Optionee equal to the difference between (A) the Merger
Price times the number of shares of Common Stock subject to such
outstanding options held by the Optionee (to the extent then exercisable at
prices not in excess of the Merger Price) and (B) the aggregate exercise
price of all such outstanding options in exchange for the termination of
such options, and (iv) provide that all or any outstanding options shall
become exercisable in full immediately prior to such event.
11. Change in Control.
Notwithstanding anything herein to the contrary, in the event of a "Change
in Control of the Company" (as defined below), the exercise dates of all
shares granted hereunder shall be accelerated in full so that all (100%)
percent of the total number of shares originally granted hereunder shall be
immediately exercisable. For purposes of this Plan, a "Change in Control of
the Company" shall occur or be deemed to have occurred only if (i) any
"person," as such term is used in Sections 13(d) and 14(d) of the Exchange
Act (other than the Company, any trustee of other fiduciary holding
securities under an employee benefit plan of the Company, or any
corporation owned directly or indirectly by the stockholders of the Company
in substantially the same proportion as their ownership of stock of the
Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power
of the Company's then outstanding securities; (ii) during any period of two
consecutive years ending during the term of this Plan (not including any
period prior to the adoption of this Plan), individuals who are the
beginning of such period constitute the Board of Directors of the Company,
and any new director whose election by the Board of Directors or nomination
for election by the Company's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who were either
directors at the beginning of the period or whose election or whose
nomination for election was previously so approved (collectively, the
"Disinterested Directors"), cease for any reason to constitute a majority
of the Board of Directors; (iii) the shareholders of the Company approve a
merger or consolidation of the Company with any other corporation, other
than (A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 80% of the combined
voting power
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of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (B) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no "person" (as hereinabove
defined) acquires more than 25% of the combined voting power of the
Company's then outstanding securities.
12. Term and Amendment of the Plan.
(a) This Plan shall commence upon execution hereof by all parties, and
terminate on the Expiration Date.
(b) The Board of Directors may at any time, and from time to time, modify or
amend the Plan in any respect, except that if at any time the approval of
the shareholders of the Company is required as to such modification or
amendment under Rule l6b-3 with respect to options held by Reporting
Persons, the Board of Directors may not effect such modification or
amendment without such approval.
(c) The termination or any modification or amendment of this Plan shall not,
without the consent of the Optionee, affect his rights under the Option.
With the consent of the Optionee, the Board of Directors may amend the
Option in a manner not inconsistent with this Plan. The Board of Directors
shall have the right to amend or modify the terms and provisions of this
Plan to the extent necessary to ensure the qualification of this Plan under
Rule l6b-3.
13. Withholding Taxes. The Company's obligation to deliver shares upon the
exercise of the Option shall be subject to the Optionee's satisfaction of
all applicable federal, state and local income and employment tax
withholding requirements. Without limiting the foregoing, (a) The Company
shall have the right to deduct from payments of any kind otherwise due to
the Optionee any federal, state or local taxes of any kind required by law
to be withheld with respect to any shares issued upon exercise of options
under this Plan. Subject to the prior approval of the Company, which may be
withheld by the Company in its sole discretion, the Optionee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company
to withhold shares of Common Stock otherwise issuable pursuant to the
exercise of the Option or (ii) by delivering to the Company shares of
Common Stock already owned by the Optionee. The shares so delivered or
withheld shall have a fair market value equal to such withholding
obligation. The fair market value of the shares used to satisfy such
withholding obligation shall be determined by the Company as of the date
that the amount of tax to be withheld is to be determined. If the Optionee
has made an election pursuant to this Section 13, then he may only satisfy
his her withholding obligation with shares of Common Stock which are not
subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements.
14. Miscellaneous.
(a) Except as provided herein, the Plan and the Option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company
and the Optionee.
(b) All notices under the Plan and the Option shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their
names below or at such other address as may be designated in writing by
either of the parties to one another.
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(c) This Plan and the Option shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
EXECUTED, by Interleaf, Inc. on February 23, 1998.
Interleaf, Inc.
By: /s/ Craig Newfield
--------------------------------------
Craig Newfield, V.P. & General Counsel
OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing Plan and the Option, and agrees to
the terms and conditions hereof. The undersigned hereby acknowledges that he has
read and understands the terms of this 1998 Key Man Stock Option Plan and
Agreement, and that the shares underlying the stock option contained herein may
not be sold unless they are registered with the SEC under the provisions of the
Securities Act of 1933, as amended. The Optionee represents and warrants that he
is acquiring the Common Stock subject to the Option for his own account for
investment and not with any present intention of selling or otherwise
distributing the same.
OPTIONEE:
/s/ Peter J. Rice Date: February 23, 1998
------------------------------- --------------------
Peter J. Rice
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EXHIBITS 23.1
June 5, 1998
Interleaf, Inc.
62 Fourth Avenue
Waltham, MA 02154
Gentlemen:
I have assisted in the preparation of a Registration Statement on Form S-8 to be
filed with the Securities and Exchange Commission (the "Registration
Statement"), relating to 2,250,000 shares of Common Stock, $.01 par value per
share (the "Shares"), of Interleaf, Inc., a Massachusetts corporation (the
"Company"), pursuant to the Company's 1993 Employee Stock Option Plan, its 1997
Key Man Stock Option Plan and Agreement and its 1998 Key Man Stock Option Plan
and Agreement (collectively, the "Plans").
I have examined (i) the Restated Articles of Organization and By-laws of the
Company and all amendments thereto, (ii) the Plans, and (iii) such records of
meetings of the directors and stockholders of the Company, documents and other
instruments as in my judgment are necessary or appropriate to enable me to
render the opinion expressed below.
In my examination of the foregoing documents, I have assumed the genuineness of
all signatures and the authenticity of all documents submitted to me as
originals, the conformity to original documents of all documents submitted to me
as certified or photostatic copies, and the authenticity of the originals of
such latter documents.
Based upon the foregoing, I am of the opinion that the Shares have been duly
authorized for issuance and, when issued upon exercise of stock options granted
under the Plans in accordance with the terms thereof and pursuant to the terms
of the Plans, will be legally issued, fully paid and nonassessable.
I hereby consent to the use of my name in the Registration Statement and consent
to the filing of this opinion with the Securities and Exchange Commission as an
exhibit to the Registration Statement.
Very truly yours,
/s/ CRAIG NEWFIELD
- --------------------
Craig Newfield, Esq.
GENERAL COUNSEL
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
(Form S-8) and related Prospectus pertaining to the registration of 2,050,000
shares of common stock of Interleaf, Inc. of our report dated June 16, 1997,
with respect to the consolidated financial statements and schedule of Interleaf,
Inc., included in its Annual Report (Form 10-K) for the year ended March 31,
1997, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Boston, Massachusetts
June 5, 1998
