Registration
Number 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
NETEGRITY, INC.
(Exact name of issuer as specified in its charter)
Delaware 04-2911320
(State of Incorporation) (IRS Employer Identification Number)
245 Winter Street, Waltham, MA 02154
(Address of Principal Executive Offices)
(617) 890-1700
(Registrant's telephone number, including area code)
NETEGRITY, INC.
1994 Stock Plan
(Full title of the Plan)
Anthony J. Medaglia, Jr., Esquire
Hutchins, Wheeler & Dittmar
A Professional Corporation
l01 Federal Street
Boston, Massachusetts 02110
(617) 951-6600
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(l) Per Share Price Fee(2)
Common Stock 313,000 shares $1.70 $532,100 $161.24
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(1) Also registered hereunder are such additional number of shares of
Common Stock, presently indeterminable, as may be necessary to satisfy
the antidilution provisions of the Plan to which this Registration
Statement relates.
(2) The registration fee has been calculated with respect to 313,000 shares
registered on the basis of the average of the high and low sale prices
on the Nasdaq SmallCap Market on January 26, 1998.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The Company hereby incorporates by reference the documents listed in
(a) through (c) below. In addition, all documents subsequently filed by the
Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 (prior to filing of a Post-Effective Amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold) shall be deemed to be incorporated by
reference in this Registration Statement and to be a part thereof from the date
of filing of such documents.
(a) The Company's latest annual report filed pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 or the latest Prospectus filed
pursuant to Rule 424(b) under the Securities Act of 1933, which contains either
directly or by incorporation by reference, audited financial statements for the
Company's latest fiscal year for which such statements have been filed.
(b) All of the reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 since the end of the fiscal year
covered by the annual report or the Prospectus referred to in (a) above.
(c) The description of the Company's Common Stock which is contained in
the Registration Statement filed by the Company under the Securities Exchange
Act of 1934, including any amendment or report filed for the purpose of updating
such description.
Item 4. Description of Securities
Inapplicable.
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Item 5. Interests of Named Experts and Counsel
The validity of the authorization and issuance of the Common Stock
offered hereby will be passed upon for the Company by Hutchins, Wheeler &
Dittmar, A Professional Corporation, Boston, Massachusetts. Anthony J. Medaglia,
Jr., who is a stockholder of Hutchins, Wheeler & Dittmar, A Professional
Corporation, is the Secretary of the Company.
Item 6. Indemnification of Directors and Officers
The Delaware General Corporate Law and the Company's Certificate of
Incorporation and By-Laws allow for indemnification of the Company's directors
and officers for liabilities and expenses that they may incur in such
capacities. In general, directors and officers are indemnified with respect to
actions taken in good faith in a manner reasonably believed to be in, or not
opposed to, the best interests of the Company, and with respect to any criminal
action or proceeding, actions that the indemnitee has no reasonable cause to
believe were unlawful.
Article V of the Amended By-Laws of the Company provides as follows:
Article V
INDEMNIFICATION
Section 5.1 Third Party Actions. The Corporation shall
indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason
of the fact that he is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (each an
"Indemnitee"), against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding.
Section 5.2 Derivative Actions. The Corporation shall
indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a Director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit.
Section 5.3 Expenses. To the extent that a Director,
officer, employee or agent of the Corporation has been successful
on the merits or otherwise in defense of any action,
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suit or proceeding referred to in Sections 5.1 and 5.2, or in defense
of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred
by him in connection therewith.
Section 5.4 Authorization and Request for Indemnification.
(a) Any indemnification requested by the Indemnitee
under Section 5.1 hereof shall be made no later than ten (10)
days after receipt of the written request of the Indemnitee,
unless it shall have been adjudicated by a court of final
determination that the Indemnitee did not act in good faith
and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and with
respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
(b) Any indemnification requested by the Indemnitee
under Section 5.2 hereof shall be made no later than ten (10)
days after receipt of the written request of the Indemnitee,
unless it shall have been adjudicated by a court of final
determination that the Indemnitee did not act in good faith
and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Corporation, the
Indemnitee shall have been finally adjudged to be liable to
the Company by a court of competent jurisdiction due to
willful misconduct of a culpable nature in the performance of
the Indemnitee's duty to the Corporation unless and only to
the extent that any court in which such proceeding was brought
shall determine upon application that despite the adjudication
of liability, but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem proper.
Section 5.5 Advance Payment of Expenses. Subject to Section
5.4 above, the Corporation shall advance all expenses incurred by the
Indemnitee in connection with the investigation, defense, settlement or
appeal of any proceeding to which the Indemnitee is a party or is
threatened to be made a party by reason of the fact that the Indemnitee
is or was an agent of the Corporation. The Indemnitee hereby undertakes
to repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that the Indemnitee is not entitled to
be indemnified by the Corporation. The advances to be made hereunder
shall be paid by the Corporation to or on behalf of the Indemnitee
within 30 days following delivery of a written request therefor by the
Indemnitee to the Corporation.
Section 5.6 Non-Exclusiveness. The indemnification provided by
this Article V shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any by-law,
agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office, and shall continue as to
a person who has ceased to be a
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Director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
Section 5.7 Insurance. The Corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a
Director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status
as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this
Article V.
Section 5.8 Constituent Corporations. The Corporation shall
have power to indemnify any person who is or was a director, officer,
employee or agent of a constituent corporation absorbed in a
consolidation or merger with this Corporation or is or was serving at
the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, in the same manner as hereinabove provided
for any person who is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
Section 5.9 Additional Indemnification. In addition to the
foregoing provisions of this Article V, the Corporation shall have the
power, to the full extent provided by law, to indemnify any person for
any act or omission of such person against all loss, cost, damage and
expense (including attorney's fees) if such person is determined (in
the manner prescribed in Section 5.4 hereof) to have acted in good
faith and in a manner he reasonably believed to be in, or not opposed
to, the best interest of the Corporation.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Number Description
4 1994 Stock Plan.
5 Opinion of Hutchins, Wheeler & Dittmar, A
Professional Corporation, as to legality of shares
being registered and consent of Hutchins,
Wheeler & Dittmar, A Professional Corporation.
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23 Consents of Independent Public Accountants -
included in Registration Statement under heading
"Consent of Independent Public Accountants."
Item 9. Undertakings
The undersigned Registrant hereby undertakes the following:
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(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)(l)(i) and (a)(l)(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 Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where
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applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in 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) The undersigned Registrant hereby undertakes, that, insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 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 of 1933 and will be governed by the final adjudication of such issue.
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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 Waltham, Massachusetts on January 23, 1998.
NETEGRITY, INC.
By /s/ Barry N. Bycoff
Barry N. Bycoff
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Barry N. Bycoff Director, President January 23, 1998
Barry N. Bycoff and Chief Executive Officer
(principal executive officer)
/s/ Stephen L. Watson Chairman of the Board January 23, 1998
Stephen L. Watson of Directors
/s/ James O'Connor, Jr. Vice President and Chief January 23, 1998
James O'Connor, Jr. Financial Officer (principal
financial and accounting
officer)
/s/ Milton J. Pappas Director January 23, 1998
Milton J. Pappas
/s/ Ralph B. Wagner Director January 23, 1998
Ralph B. Wagner
/s/ Michael L. Mark Director January 23, 1998
Michael L. Mark
/s/ Eric R. Giler Director January 23, 1998
Eric R. Giler
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
to
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
NETEGRITY, INC.
(Exact name of registrant as specified in its charter)
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Exhibit 4
THE SOFTWARE DEVELOPER'S COMPANY, INC.
1994 STOCK PLAN
1. Purpose. This 1994 Stock Plan (the "Plan") is intended to provide
incentives: (a) to the officers and other employees of The Software Developer's
Company, Inc. (the "Company"), its parent (if any) and any present or future
subsidiaries of the Company (collectively, "Related Corporations") by providing
them with opportunities to purchase stock in the Company pursuant to options
granted hereunder which qualify as "incentive stock options" under Section
422A(b) of the Internal Revenue Code of 1986, as amended (the "Code") ("ISO" or
"ISOs"); (b) to directors, officers, employees and consultants of the Company
and Related Corporations by providing them with opportunities to purchase stock
in the Company pursuant to options granted hereunder which do not qualify as
ISOs ("NonQualified Option" or "Non-Qualified Options"); (c) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with awards of stock in the Company ("Awards"); and (d) to
directors, officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to make direct purchases of
stock in the Company ("Purchases"). Both ISOs and Non-Qualified options are
referred to hereafter individually as an "Option" and collectively as "Options".
Options, Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights". As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation",
respectively, as those terms are defined in Section 425 of the Code.
2. Administration of the Plan.
A. Board or Committee Administration. The Plan shall be
administered by the Board of Directors of the Company (the "Board").
The Board may appoint a Compensation Committee (the "Committee") of
three or more of its members to administer this Plan. To the extent
required by Rule 16b-3 or any successor provision ("Rule 16b-3") of the
Securities Exchange Act of 1934, with respect to specific grants of
Stock Rights, the Plan shall be administered by a disinterested
administrator or administrators within the meaning of Rule 16b-3.
Subject to ratification of the grant or authorization of each Stock
Right by the Board (if so required by applicable state law), and
subject to the terms of the Plan, the Committee shall have the
authority to (i) determine the employees of the Company and Related
Corporations (from among the class of employees eligible under
paragraph 3 to receive ISOs) to whom ISOs may be granted, and to
determine (from among the class of individuals and entities eligible
under paragraph 3 to receive Non-Qualified Options and Awards and to
make Purchases) to whom Non-Qualified Options, Awards and
authorizations to make Purchases may be granted; (ii) determine the
time or times at which Options or Awards
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may be granted or Purchases made; (iii) determine the option price of
shares subject to each Option, which price shall not be less than the
minimum price specified in paragraph 6, and the purchase price of
shares subject to each Purchase; (iv) determine whether each Option
granted shall be an ISO or a Non-Qualified Option; (v) determine
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(subject to paragraph 7) the time or times when each option shall
become exercisable and the duration of the exercise period; (vi)
determine whether restrictions such as repurchase options are to be
imposed on shares subject to Options, Awards and Purchases and the
nature of such restrictions, if any, and (vii) interpret the Plan and
prescribe and rescind rules and regulations relating to it. If the
Committee determines to issue a Non-Qualified Option, it shall take
whatever actions it deems necessary, under Section 422A of the Code and
the regulations promulgated thereunder, to ensure that such Option is
not treated as an ISO. The interpretation and construction by the
Committee of any provisions of the Plan or of any Stock Right granted
under it shall be final unless otherwise determined by the Board. The
Committee may from time to time adopt such rules and regulations for
carrying out the Plan as it may deem best. No member of the Board or
the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Stock Right granted under
it.
B. Committee Action. The Committee may select one of its
members as its chairman, and shall hold meetings at such time and
places as it may determine. Acts by a majority of the Committee, or
acts reduced to or approved in writing by a majority of the members of
the Committee, shall be the valid acts of the Committee. All references
in this Plan to the Committee shall mean the Board if no Committee has
been appointed. From time to time the Board may increase the size of
the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution
therefor, fill vacancies however caused, or remove all members of the
Committee and thereafter directly administer the Plan.
C. Grant of Stock Rights to Board Members. Stock Rights may be
granted to members of the Board consistent with the provisions of the
third sentence of paragraph 2(A) above, if applicable. All grants of
Stock Rights to members of the Board shall in all other respects be
made in accordance with the provisions of this Plan applicable to other
eligible persons. Consistent with the provisions of the third sentence
of paragraph 2(A) above, members of the Board who are either (i)
eligible for Stock Rights pursuant to the Plan or (ii) have been
granted Stock Rights may vote on any matters affecting the
administration of the Plan or the grant of any Stock Rights pursuant to
the Plan, except that no such member shall act upon the granting to
himself of Stock Rights, but any such member may be counted in
determining the existence of a quorum at any meeting of the Board
during which action is taken with respect to the granting to him of
Stock Rights.
3. Eligible Employees and Others. ISOs may be granted to any
employee of the Company or any Related Corporation. Those officers and
directors of the Company who are not employees may not be granted ISOs under
the Plan. Non-Qualified Options, Awards and authorizations to make Purchases
may be granted to any director (whether or not an employee), officer, employee
or consultant of the Company or any Related Corporation. The Committee may
take into consideration a recipient's individual circumstances in determining
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whether to grant an ISO, a Non-Qualified Option or an authorization to make a
Purchase. Granting of any Stock Right to any individual or entity shall neither
entitle that individual or entity to, nor disqualify him from, participation in
any other grant of Stock Rights.
4. Stock. The stock subject to Options, Awards and Purchases shall be
authorized but unissued shares of Common Stock of the Company, par value $.01
per share (the "Common Stock"), or shares of Common Stock reacquired by the
Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is [1,500,000] shares, subject to adjustment as provided in
paragraph 13. Any such shares may be issued as ISOs, Non-Qualified Options or
Awards, or to persons or entities making Purchases, so long as the number of
shares so issued does not exceed such number, as adjusted or amended from time
to time by a vote of stockholders or otherwise pursuant to paragraph 13. If any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject to such Options shall again be
available for grants of Stock Rights under the Plan.
5. Granting of Stock Rights. Stock Rights may be granted under the Plan
at any time on or after March 23, 1994 and prior to March 23, 2004. The date of
grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant. The Committee shall have the right, with the consent of the optionee, to
convert an ISO granted under the Plan to a Non-Qualified Option pursuant to
paragraph 16.
6. Minimum Option Price; ISO Limitations.
A. Price for Non-Qualified Options. The exercise price per
share specified in the agreement relating to each Non-Qualified Option
granted under the Plan shall in no event be less than the lesser of (i)
the book value per share of Common Stock as of the end of the fiscal
year of the Company immediately preceding the date of such grant, or
(ii) fifty (50%) percent of the fair market value per share of Common
Stock on the date of such grant.
B. Price for ISOs. The exercise price per share specified in
the agreement relating to each ISO granted under the Plan shall not be
less than the fair market value per share of Common Stock on the date
of such grant. In the case of an ISO to be granted to an employee
owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the agreement
relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date
of grant.
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C. $100,000 Annual Limitation on ISOs. Each eligible employee
may be granted ISOs only to the extent that, in the aggregate under
this Plan and all incentive stock option plans of the Company and any
Related Corporation, such ISOs do not become exercisable for the first
time by such employee during any calendar year in a manner which would
entitle the employee to purchase more than $100,000 in fair market
value (determined at the time the ISOs were granted) of Common Stock in
that year. Any options granted to an employee in excess of such amount
will be granted as Non-Qualified Options.
D. Determination of Fair Market Value. If, at the time an
Option is granted under the Plan, the Company's Common Stock is
publicly traded, "fair market value" shall be determined as of the last
business day for which the prices or quotes discussed in this sentence
are available prior to the date such Option is granted and shall mean
(i) the average (on that date) of the high and low prices of the Common
Stock on the principal national securities exchange on which the Common
stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the NASDAQ National Market List, if the
Common Stock is not then traded on a national securities exchange; or
(iii) the average of the closing bid and asked prices last quoted (on
that date) by an established quotation service for over-the-counter
securities, if the Common Stock is not reported on the NASDAQ National
Market List. However, if the Common Stock is not publicly traded at the
time an Option is granted under the Plan, "fair market value" shall be
deemed to be the fair value of the Common Stock as determined by the
Committee after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer
prices of the Common Stock in private transactions negotiated at arm's
length.
7. Option Duration. Subject to earlier termination as provided in
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than (i) ten years and one day from the date of grant in
the case of Non-Qualified Options, (ii) ten years from the date of grant in the
case of ISOs generally, and (iii) five years from the date of grant in the case
of ISOs granted to an employee owning stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any Related Corporation. Subject to earlier termination as provided in
paragraphs 9 and 10, the term of each ISO shall be the term set forth in the
original instrument granting such ISO, except with respect to any part of such
ISO that is converted into a Non-Qualified Option pursuant to paragraph 16.
8. Exercise of Option. Subject to the provisions of paragraphs
9 through 12, each Option granted under the Plan shall be exercisable as
follows:
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A. Full Vesting or Partial Vesting. The Option shall
either be fully exercisable on the date of grant or shall become
exercisable thereafter in such installments as the Committee may
specify.
B. Full Vesting of Installments. Once an installment
becomes exercisable it shall remain exercisable until expiration or
termination of the Option, unless otherwise specified by the Committee.
C. Partial Exercise. Each Option or installment may be
exercised at any time or from time to time, in whole or in part, for
up to the total number of shares with respect to which it is then
exercisable.
D. Acceleration of Vesting. The Committee shall have the right
to accelerate the date of exercise of any installment of any Option;
provided that the Committee shall not accelerate the exercise date of
any installment of any Option granted to any employee as an ISO (and
not previously converted into a Non-Qualified Option pursuant to
paragraph 16) if such acceleration would violate the annual vesting
limitation contained in Section 422A(b)(7) of the Code, as described in
paragraph 6(C).
9. Termination of Employment. If an ISO optionee ceases to be employed
by the Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his ISOs shall
become exercisable, and his ISOs shall terminate after the passage of ninety
(90) days from the date of termination of his employment, but in no event later
than on their specified expiration dates, except to the extent that such ISOs
(or unexercised installments thereof) have been converted into Non-Qualified
Options pursuant to paragraph 16. Employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those attributable
to illness, military obligations or governmental service) provided that the
period of such leave does not exceed ninety (90) days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute. A
bona fide leave of absence with the written approval of the Committee shall not
be considered an interruption of employment under the Plan, provided that such
written approval contractually obligates the Company or any Related Corporation
to continue the employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the right to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.
10. Death; Disability.
A. Death. If an ISO optionee ceases to be employed by
the Company and all Related Corporations by reason of his death, any ISO of his
may be exercised, to the
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extent of the number of shares with respect to which he could have
exercised it on the date of his death, by his estate, personal
representative or beneficiary who has acquired the ISO by will or by
the laws of descent and distribution, at any time prior to the earlier
of the specified expiration date of the ISO or 180 days from the date
of the optionee's death.
B. Disability. If an ISO optionee ceases to be employed by the
Company and all Related Corporations by reason of his disability, he
shall have the right to exercise any ISO held by him on the date of
termination of employment, to the extent of the number of shares with
respect to which he could have exercised it on that date, at any time
prior to the earlier of the specified expiration date of the ISO or 180
days from the date of the termination of the optionee's employment. For
the purposes of the Plan, the term "disability" shall mean "permanent
and total disability" as defined in Section 22(e)(3) of the Code or
successor statute.
11. Assignability. No Option shall be assignable or transferable
by the grantee except by will or by the laws of descent and distribution, and
during the lifetime of the grantee each Option shall be exercisable only by him.
12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. In granting any Non-Qualified Option, the
Committee may specify that such Non-Qualified Option shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other termination
and cancellation provisions as the Committee may determine. The Committee may
from time to time confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of such instruments.
13. Adjustments. Upon the occurrence of any of the following
events, an optionee's rights with respect to Options granted to him hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
A. Stock Dividends and Stock Splits. If the shares of Common
Stock shall be subdivided or combined into a greater or smaller number
of shares or if the Company shall issue any shares of Common Stock as a
stock dividend on its outstanding Common Stock, the number of shares of
Common Stock deliverable upon the exercise of Options shall be
appropriately increased or decreased proportionately,
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and appropriate adjustments shall be made in the purchase price per
share to reflect such subdivision, combination or stock dividend.
B. Consolidations or Mergers. If the Company is to be
consolidated with or acquired by another entity in a merger, sale of
all or substantially all of the Company's assets or otherwise (an
"Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor
Board"), shall, as to outstanding Options, take one or more of the
following actions: (i) make appropriate provision for the continuation
of such Options by substituting on an equitable basis for the shares
then subject to such Options the consideration payable with respect to
the outstanding shares of Common Stock in connection with the
Acquisition; or (ii) make appropriate provision for the continuation of
such Options by substituting on an equitable basis for the shares then
subject to such Options any equity securities of the successor
corporation; or (iii) upon written notice to the optionees, provide
that all Options must be exercised, to the extent then exercisable,
within a specified number of days of the date of such notice, at the
end of which period the Options shall terminate; or (iv) terminate all
Options in exchange for a cash payment equal to the excess of the fair
market value of the shares subject to such Options (to the extent then
exercisable) over the exercise price thereof; or (v) accelerate the
date of exercise of such Options or of any installment of any such
Options; or (vi) terminate all Options in exchange for the right to
participate in any stock option or other employee benefit plan of any
successor corporation.
C. Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than a
transaction described in subparagraph B above) pursuant to which
securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an optionee upon
exercising an Option shall be entitled to receive for the purchase
price paid upon such exercise the securities he would have received if
he had exercised his Option prior to such recapitalization or
reorganization.
D. Modification of ISOs. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs A, B or C with respect to
ISOs shall be made only after the Committee, after consulting with
counsel for the Company, determines whether such adjustments would
constitute a "modification" of such ISOs (as that term is defined in
Section 425 of the Code) or would cause any adverse tax consequences
for the holders of such ISOs. If the Committee determines that such
adjustments made with respect to ISOs would constitute a modification
of such IS0s, it may refrain from making such adjustments.
E. Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, each Option will
terminate immediately prior to the
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consummation of such proposed action or at such other time and subject
to such other conditions as shall be determined by the Committee.
F. Issuances of Securities. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to Options. No adjustments shall be
made for dividends paid in cash or in property other than securities of
the Company.
G. Fractional Shares. No fractional shares shall be
issued under the Plan and the optionee shall receive from the Company
cash in lieu of such fractional shares.
H. Adjustments. Upon the happening of any of the foregoing
events described in subparagraphs A, B or C above, the class and
aggregate number of shares set forth in paragraph 4 hereof that are
subject to Stock Rights which previously have been or subsequently may
be granted under the Plan shall also be appropriately adjusted to
reflect the events described in such subparagraphs. The Committee or
the Successor Board shall determine the specific adjustments to be made
under this paragraph 13 and, subject to paragraph 2, its determination
shall be conclusive.
If any person or entity owning restricted Common Stock obtained by exercise of a
Stock Right made hereunder receives shares or securities or cash in connection
with a corporate transaction described in subparagraphs A, B or C above as a
result of owning such restricted Common Stock, such shares or securities or cash
shall be subject to all of the conditions and restrictions applicable to the
restricted Common Stock with respect to which such shares or securities or cash
were issued, unless otherwise determined by the Committee or the Successor
Board.
14. Means of Exercising Stock Rights. A Stock Right (or any part or
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Stock Right
being exercised and specify the number of shares as to which such Stock Right is
being exercised, accompanied by full payment of the purchase price therefor
either (a) in United States dollars in cash or by check, or (b) at the
discretion of the Committee, through delivery of shares of Common Stock having a
fair market value equal as of the date of the exercise to the cash exercise
price of the Stock Right, or (c) at the discretion of the Committee, by delivery
of the grantee's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable Federal rate, as defined
in Section 1274(d) of the Code, or (d) at the discretion of the Committee, by
any combination of (a), (b) and (c) above. If the Committee exercises its
discretion to permit payment of the exercise price of an ISO by means of the
methods set forth in clauses (b), (c), or (d) of the preceding sentence, such
discretion shall be exercised in writing at the time of the grant of the ISO in
question. The holder of a Stock Right shall not have the rights of a shareholder
with respect to the shares covered by his Stock Right until the date of issuance
of a
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stock certificate to him for such shares. Except as expressly provided above in
paragraph 13 with respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which the record
date is before the date such stock certificate is issued.
15. Term and Amendment of Plan. This Plan was adopted by the Board as
of March 23, 1994, subject (with respect to the validation of ISOs granted under
the Plan) to approval of the Plan by the stockholders of the Company at the next
Meeting of Stockholders or, in lieu thereof, by unanimous written consent. If
the approval of stockholders is not obtained by March 23, 1995, any grants of
Options under the Plan made prior to that date will be rescinded. The Plan shall
expire on March 23, 2004 (except as to Options outstanding on that date).
Subject to the provisions of paragraph 5 above, Stock Rights may be granted
under the Plan prior to the date of stockholder approval of the Plan. The Board
may terminate or amend the Plan in any respect at any time, except that, without
the approval of the stockholders obtained within 12 months before or after the
Board adopts a resolution authorizing any of the following actions: (a) the
total number of shares that may be issued under the Plan may not be increased
(except by adjustment pursuant to paragraph 13); (b) the provisions of paragraph
3 regarding eligibility for grants of ISOs may not be modified; (c) the
provisions of paragraph 6(B) regarding the exercise price at which shares may be
offered pursuant to ISOs may not be modified (except by adjustment pursuant to
paragraph 13); and (d) the expiration date of the Plan may not be extended.
Except as otherwise provided in this paragraph 15, in no event may action of the
Board or stockholders alter or impair the rights of a grantee, without his
consent, under any Stock Right previously granted to him.
16. Conversion of ISOs into Non-Qualified Options; Termination of ISOs.
The Committee, at the written request or any optionee, may in its discretion
take such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options. At
the time of such conversion, the Committee (with the consent of the Optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any optionee the right to have such optionee's ISOs converted
into NonQualified Options, and no such conversion shall occur until and unless
the Committee takes appropriate action. The Committee, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
17. Application Of Funds. The proceeds received by the Company
from the sale of shares pursuant to Options granted and Purchases authorized
under the Plan shall be used for general corporate purposes.
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<PAGE>
18. Governmental Regulation. The Company's obligation to sell
and deliver shares of the Common Stock under this Plan is subject to the
approval of any governmental authority required in connection with the
authorization, issuance or sale of such shares.
19. Withholding of Additional Income Taxes. Upon the exercise of a
NonQualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 20) or the vesting of restricted Common
Stock acquired on the exercise of a Stock Right hereunder, the Company, in
accordance with Section 3402(a) of the Code, may require the optionee, Award
recipient or purchaser to pay additional withholding taxes in respect of the
amount that is considered compensation includible in such person's gross income.
The Committee in its discretion may condition (i) the exercise of an Option,
(ii) the grant of an Award, (iii) the making of a Purchase of Common Stock for
less than its fair market value, or (iv) the vesting of restricted Common Stock
acquired by exercising a Stock Right, on the grantee's payment of such
additional withholding taxes.
20. Notice to Company of Disqualifying Disposition. Each
employee who receives an ISO must agree to notify the Company in writing
immediately after the employee makes a Disqualifying Disposition of any Common
Stock acquired pursuant to the exercise of an ISO. A Disqualifying Disposition
is any disposition (including any sale) of such Common Stock before the later
of (a) two years after the date the employee was granted the ISO, or (b) one
year after the date the employee acquired Common Stock by
exercising the ISO. If the employee has died before such stock is sold, these
holding period requirements do not apply and no Disqualifying Disposition can
occur thereafter.
21. Governing Law; Construction. The validity and construction of the
Plan and the instruments evidencing Stock Rights shall be governed by the laws
of the State of Delaware or the laws of any jurisdiction in which the Company or
its successors in interest may be organized. In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise requires.
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Exhibit 5
January 22, 1998
NeTegrity, Inc.
245 Winter Street
Waltham, MA 02154
Ladies and Gentlemen:
In connection with the proposed registration under the Securities Act
of 1933, as amended, of 313,000 shares of common stock, par value $.01 per share
(the "Common Stock"), of NeTegrity, Inc. a Delaware corporation (the "Company"),
proposed to be sold pursuant to the Company's 1994 Stock Option Plan, as amended
(the "Plan"), by certain selling stockholders of the Company, we have examined
such corporate records and other documents, including the registration statement
on Form S-8 relating to such shares (the "Registration Statement"), and have
reviewed such matters of law as we have deemed necessary as a basis for the
opinions as hereinafter expressed.
Based upon the foregoing and having regard for such legal consideration
as we deem relevant, we are of the opinion that:
1. The Company is a corporation validly existing under the laws
of the State of Delaware.
2. The Company is authorized to issue 25,000,000 shares of
common stock, par value $.01 per share.
3. The 313,000 shares of Common Stock proposed to be sold
pursuant to the Registration Statement have been duly
authorized and when issued in accordance with the Plan will be
validly issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the captions in the
prospectus constituting a part of the Registration Statement.
Very truly yours,
/s/ Hutchins, Wheeler & Dittmar
Hutchins, Wheeler & Dittmar
A Professional Corporation
AJM/NMP
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated January 29, 1997, on our audits of the consolidated
financial statements of NeTegrity, Inc. as of December 31, 1996 and March 31,
1996 and for the nine-month transition period ended December 31, 1996 and fiscal
years ended March 31, 1996 and 1995 which report is included in the Company's
Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 23, 1998
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