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 Employee
Identification Number)
245 Winter Street, Waltham, MA 02451
(Address of Principal Executive Offices
(781) 890-1700
(Registrant's telephone number, including area code)
NETEGRITY, INC. 1991 DIRECTOR STOCK PLAN
NETEGRITY, INC. 1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
NETEGRITY, INC. 1994 NON-EMPLOYEE DIRECTOR PLAN
(Full title of the Plan)
Anthony J. Medaglia, Jr., Esquire
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
(617) 951-6600
(Name, address and telephone number of agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
<S> <C> <C> <C> <C>
Netegrity, Inc. 1991
Director Stock Plan 47,250 shares $ 2.40(1) $ 113,400.00(1) $ 31.52(1)
22,750 shares $23.50(1) $ 540,312.50(1) $150.21(1)
Netegrity, Inc. 1993
Non-Employee Director
Stock Option Plan 44,042 shares $ 1.47(1) $ 64,741.74(1) $ 18.00(1)
15,958 shares $23.75(1) $ 379,002.50(1) $105.36(1)
Netegrity, Inc. 1994
Non-Employee
Director Plan 105,000 shares $ .75(1) $ 78,750.00(1) $ 21.89(1)
TOTAL 235,000 shares $1,176,206.70 $326.98
(need to break out issued and unissued for each plan)
</TABLE>
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(1) Computed in accordance with Rule 457(h) under the Securities Act of 1933,
as amended, solely for the purpose of calculating the registration fee. The
computation with respect to unissued options is based upon the average high
and low sale prices of the Common Stock as reported on the Nasdaq SmallCap
Market on September 27, 1999. The computation with respect to outstanding
options is based on the weighted average per share exercise price of the
options, the shares issuable under which are registered hereby.
<PAGE>
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(a)
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.
Item 5. Interests of Named Experts and Counsel
The financial statements and schedules incorporated by reference in
this Registration Statement have been audited by PricewaterhouseCoopers LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
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 and owns 15,195 shares of its Common Stock.
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 and Restated 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, 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 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
4.1 NETEGRITY, INC. 1991 DIRECTOR STOCK PLAN.
4.2 NETEGRITY, INC. 1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN.
4.3 NETEGRITY, INC. 1994 NON-EMPLOYEE DIRECTOR PLAN
5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional
Corporation, as to legality of shares being registered and
consent of Hutchins, Wheeler & Dittmar, A Professional
Corporation.
23.1 Consent of PricewaterhouseCoopers LLP- Independent Auditors.
23.2 Consent of Hutchins, Wheeler & Dittmar, A Professional
Corporation (included in Exhibit 5.1)
24.1 Powers of Attorney (See page 5.1).
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 the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(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 the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
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, September 17, 1999.
NETEGRITY, INC.
By /s/ James E. Hayden
James E. Hayden
Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below
constitutes and appoints James E. Hayden his true and lawful attorney-in- fact
and agent, with full power of substitution and resubstitution, for him or in his
name, place and stead, in any and all capacities to sign any and all amendments
or post-effective amendments to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agents, full power and authority to do and perform each and every act and
thing requisite or necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in- fact and agent, or his substitutes, may
lawfully do or cause to be done by virtue hereof.
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.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/Barry N. Bycoff Director, President, Chief Executive Officer September 17, 1999
Barry N. Bycoff (principal executive officer and accounting
officer)
/s/Stephen L. Watson Chairman of the Board of Directors September 17, 1999
Stephen L. Watson
/s/ James E. Hayden Chief Financial Officer, Vice President of September 17, 1999
James E. Hayden Finance and Administration and Treasurer
/s/Eric R. Giler Director September 17, 1999
Eric R. Giler
/s/Michael L. Mark Director September 17, 1999
Michael L. Mark
/s/James P. McNiel Director September 17, 1999
James P. McNiel
/s/Ralph B. Wagner Director September 17, 1999
Ralph B. Wagner
</TABLE>
<PAGE>
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)
EXHIBIT 4.1
NETEGRITY, INC.
1991 DIRECTOR STOCK PLAN
1. Purpose. This stock option plan, to be known as the 1991 Director
Stock Plan (hereinafter, the "Plan") , is intended to promote the interests of
Netegrity, Inc., a Delaware corporation (hereinafter, the "Company"), by
providing an inducement to obtain and retain the services of qualified persons
who are neither employees nor officers of the Company to serve as members of the
Board of Directors and to demonstrate the Company's appreciation for their
service upon the Company's Board of Directors.
2. Rights to be Granted. Under the Plan, non-qualified stock options
are granted that give an Optionee the right for a specified period of time to
purchase a pre-determined number of shares of Common Stock, par value $.01 per
share, of the Company. The option price is determined automatically at the time
of the grant in each instance in accordance with the terms of this Plan.
3. Available Shares. The total number of shares of Common Stock of the
Company for which options may be granted under the Plan shall not exceed Seventy
Thousand (70,000) shares, subject to adjustment in accordance with Section 13
hereof. Shares of Common Stock subject to the Plan are authorized but unissued
shares or shares that were once issued and subsequently reacquired by the
Company. If any options granted under this Plan are surrendered before exercise
or lapse without exercise, in whole or in part, the shares of Common Stock
reserved therefor shall revert to the option pool and continue to be available
for grant under the Plan.
4. Administration. The Plan shall be administered by the Compensation
Committee or Stock Option Committee of the Board of Directors of the Company
(the "Committee"). The Committee shall, subject to the provisions of the Plan
and Section 17 hereof in particular, have the power to construe the Plan, to
determine all questions thereunder, and to adopt and amend such rules and
regulations for the administration of the Plan as it may deem desirable.
5. Option Agreement. Each option granted under the provisions of this
Plan shall be evidenced by an option Agreement, in such form as may be approved
by the Committee, which Agreement shall be duly executed and delivered on behalf
of the Company and by the Optionee to whom such option is granted. The Agreement
shall contain such terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the Board of Directors or the Committee.
6. Eligibility and Limitations. Options may be granted pursuant to the
Plan only to non-employee members of the Board of Directors of the Company who
are not officers of the Company and who must hold the options (and the shares of
Common Stock issuable upon exercise thereof) individually in their own names.
7. Option Price. The purchase price of the Common Stock covered by an
option granted pursuant to the Plan shall be 100% of the fair market value of
such shares on the day the option is granted. The option price will be subject
to adjustment in accordance with the provisions of Section 13 hereof. For
purposes of the Plan, the fair market value of a share of Common Stock on any
day shall be (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, or (iv) if the Common Stock is not then traded or listed
for quotation on any exchange, the fair market value of the Common Stock shall
be determined as of the most recent sale price for the Common Stock or the grant
of any option therefor under any other stock option plan of the Company.
8. Automatic Grant of Options. Each member of the Company's Board of
Directors who is neither an employee nor an officer of the Company serving on
the Board of Directors on April 15, 1991 shall be automatically granted, without
further action by the Board or Committee, an option to purchase Eight Thousand
Seven Hundred Fifty (8,750) shares of the Company's Common Stock. Each person
who is neither an employee nor an officer of the Company who is first elected to
the Board of Directors after the date of approval of the Plan by the Board of
Directors shall be automatically granted, on the date of such election without
further action by the Board of Directors, an option to purchase Eight Thousand
Seven Hundred Fifty (8,750) shares of the Company's Common Stock. Anything in
the Plan to the contrary notwithstanding, the effectiveness of the Plan and of
the grant of all options hereunder is in all respects subject to, and the Plan
and options granted under it shall be of no force and effect unless and until,
and no option granted hereunder shall in any way vest or become exercisable in
any respect unless and until, approval of the Plan is obtained by the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock of the Company present in person or by proxy and entitled to vote
at a meeting of shareholders at which the Plan is presented for approval, and
such other matters and in form and substance satisfactory to counsel for the
Company. In the event that such stockholder approval as aforesaid has not been
received on or before April 1, 1992, then in such event the Plan and any options
granted hereunder shall be null and void, and upon the occurrence of both such
approval and concurrence as aforesaid, the Plan and such options shall become
effective as of the date of the Directors' approval of the Plan.
9. Period of Option. The options granted hereunder shall expire on a
date which is ten (10) years after the date of grant of the options and the Plan
shall terminate when all options granted hereunder have terminated.
10. Exercise of Option. Subject to the terms and conditions of the Plan
and the Option Agreement, an option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to the
Company by first class or registered or certified mail or in person addressed to
the Treasurer or Chief Financial Officer of the Company, stating the number of
shares with respect to which the option is being exercised, accompanied by
payment in full for such shares, which payment may be in whole or in part in
shares of the Common Stock of the Company already owned by the person or persons
exercising the option, valued at fair market value determined in accordance with
the provisions of Section 7 hereof. There shall be no such exercise at any one
time as to fewer than one hundred (100) shares or all of the remaining shares
then purchasable by the person or persons exercising the option, if fewer than
one hundred (100) shares. Upon notification from the Company, the transfer agent
shall prepare a certificate or certificates representing such shares acquired
pursuant to exercise of the option, shall register the Optionee as the owner of
such shares on the stock transfer books of the Company and shall cause the fully
executed certificate(s) representing such shares to be delivered to the Optionee
as soon as practicable after payment of the option price in full. The holder of
an option shall not have any rights of a shareholder with respect to the shares
covered by the option, except to the extent that one or more certificates for
such shares shall be delivered to him upon the due exercise of the option.
11. Vesting of Shares and Non-Transferability of Options.
(a) Vesting. Options granted under the Plan shall vest in the
Optionee and thus become exercisable in installments, in accordance with the
following schedule:
Cumulative Number of Option Date of Vesting and
Shares for which Exercisability of Option
Option is Exercisable
20% of total Option Shares 1 year anniversary of the date of the
grant of the option
40% of total Option Shares 2 year anniversary of the date of the
grant of the option
60% of total Option Shares 3 year anniversary of the date of the
grant of the option
80% of total Option Shares 4 year anniversary of the date of the
grant of the option
100% of total Option Shares 5 year anniversary of the date of the
grant of the option
The number of shares as to which the option may be exercised shall be
cumulative, so that once the option shall become exercisable as to any shares,
it shall continue to be exercisable as to said shares until expiration or
termination of the option as provided in the Plan.
(b) Legend on Certificates. The certificates representing such
shares shall carry such appropriate legend, and such written instructions shall
be given to the Company's Transfer Agent, as may be deemed necessary or
advisable by counsel to the Company in order to comply with the requirements of
the Securities Act of 1933 or any state securities laws.
(c) Non-Transferability. Any option granted pursuant to the
Plan shall not be assignable or transferable other than by will or the laws of
descent and distribution, and shall be exercisable during the Optionee's
lifetime only by him.
12. Termination of Option Rights.
(a) In the event an Optionee voluntarily resigns or
voluntarily ceases to be a member of the Board of Directors of the Company for
any reason other than death or disability, any options granted to such Optionee
shall, to the extent any portion of such options are not then exercisable,
immediately terminate and become void. Any options which are then exercisable
but have not been exercised at the time the Optionee so ceases to be a member of
the Board of Directors may be exercised to the extent any portion of such
options are then exercisable, by the Optionee at any time prior to the scheduled
expiration date of the option. Notwithstanding the foregoing, in the event any
Optionee (i) ceases to be a member of the Board of Directors at the request of
the Company, (ii) is removed without cause, or (iii) otherwise does not stand
for nomination or re-election as a director of the Company at the request-of the
Company, then any portion of any option granted to such Optionee which is not
then exercisable shall be accelerated and such Option shall be fully exercisable
by the Optionee at any time prior to the scheduled expiration date. No portion
of this Option may be exercised if the Optionee is removed from the Board of
Directors for any one of the following reasons: (i) disloyalty, gross
negligence, dishonesty or breach of fiduciary duty to the Company; or (ii) the
commission of an act of embezzlement, fraud or deliberate disregard of the rules
or policies of the Company which results in loss, damage or injury to the
Company, whether directly or indirectly; or (iii) the unauthorized disclosure of
any trade secret or confidential information of the Company; or (iv) the
commission of an act which constitutes unfair competition with the Company or
which induces any customer of the Company to break a contract with the Company;
or (v) the conduct of any activity on behalf of any organization or entity which
is a competitor of the Company (unless such conduct is approved by a majority of
the disinterested members of the Board of Directors).
(b) In the event that an Optionee ceases to be a member of the
Board of Directors of the Company by reason of his or her disability or death,
any option granted to such Optionee may be exercised, to the extent of the
number of shares with respect to which an Optionee could have exercised it on
the date of such disability or death (by the Optionee's personal representative,
heir or legatee, in the event of death) during the period ending one hundred
eighty (180) days after the date the Optionee so ceases to be a member of the
Board of Directors, but in no event later than the scheduled expiration date of
the option.
13. Adjustments Upon Changes in Capitalization and Other Matters. In
the event that the outstanding shares of the Common Stock of the Company are
changed into or exchanged for a different number or kind of shares or other
securities of the Company (or of another corporation) by reason of any
reorganization, merger, consolidation, recapitalization or reclassification, or
in the event of a stock split, combination of shares or dividends payable in
capital stock, an automatic adjustment shall be made in the number and kind of
shares as to which outstanding options or any portions thereof then unexercised
shall be exercisable and in the available shares set forth in Section 3 hereof,
to the end that the proportionate interest of the option holder shall be
maintained as before the occurrence of such event. Such adjustment in
outstanding options shall be made without change in the total price applicable
to the unexercised portion of such options and with a corresponding adjustment
in the option price per share. In the event of fractional shares, the option
shall be adjusted upward or downward to the nearest whole share.
If an option hereunder shall be assumed, or a new option substituted
therefor, as a result of sale of the Company, whether by a corporate merger,
consolidation or sale of property or stock, then membership on the Board of
Directors of such assuming or substituting corporation or by a parent
corporation or a subsidiary therefor shall be considered for purposes of an
option to be membership on the Board of Directors of the Company,
14. Restrictions on Issuance of Shares. Notwithstanding the provisions
of Sections 8 and 10 hereof, the Company shall have no obligation to deliver any
certificate or certificates upon exercise of an option until one of the
following conditions shall be satisfied:
(i) The shares with respect to which the option has been exercised are
at the time of the issue of such shares effectively registered under applicable
Federal and state securities acts as now in force or hereafter amended; or
(ii) Counsel for the Company shall have given an opinion that such
shares are exempt from registration under Federal and state securities acts as
now in force or hereafter amended; and until the Company has complied with all
applicable laws and regulations, including without limitation all regulations
required by any stock exchange upon which the Company's outstanding Common Stock
is then listed.
The Company shall use its best efforts to bring about compliance with
the above conditions within a reasonable time, except that the Company shall be
under no obligation to cause a registration statement or a post-effective
amendment to any registration statement to be prepared at its expense solely for
the purpose of covering the issue of shares in respect of which any option may
be exercised under this Plan.
15. Representation of Optionee. The Company shall require the Optionee
to deliver written warranties and representations upon exercise of the option
that are necessary to show compliance with Federal and state securities laws,
including to the effect that a purchase of shares under the option is made for
investment and not with a view to their distribution (as that term is used in
the Securities Act of 1933, as amended).
16. Approval of Stockholders. The effectiveness of this Plan and of the
grant of all options hereunder is in all respects subject to approval by the
Company's shareholders.
17. Acceleration and Vesting of Option for Business Combinations. Upon
any merger, consolidation, sale of all (or substantially all) of the assets of
the Company, or other business combination involving the sale or transfer of all
(or substantially all) of the capital stock or assets of the Company in which
the Company is not the surviving entity, or, if it is the surviving entity, does
not survive as an operating going concern in substantially the same line of
business, then all options granted under the Plan shall, immediately prior to
the consummation of any of the foregoing events, become fully vested and
immediately exercisable by the Employee.
18. Termination and Amendment of Plan. The Board may at any time
terminate the Plan or make such modification or amendment thereof as it deems
advisable; provided, however, that the Board may not, without approval by the
affirmative vote of the holders of a majority of the shares present in person or
by proxy and entitled to vote at the meeting, (a) increase the maximum number of
shares for which options may be granted under the Plan or the number of shares
for which an option may be granted to any participating Director hereunder; (b)
change the provisions of the Plan regarding the termination of the options or
the time when they may be exercised; (c) change the period during which any
options may be granted or remain outstanding or the date on which the Plan shall
terminate; (d) change the designation of the class of persons eligible to
receive options, or otherwise change Section 7 hereof; or (e) materially
increase benefits accruing to option holders under the Plan. Except as provided
in Section 16, termination or any modification or amendment of the Plan shall
not, without consent of a participant, affect his rights under an option
previously granted to him.
EXHIBIT 4.2
NETEGRITY, INC.
1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose. This Non-Qualified Stock Option Plan, to be known as the
1993 Non-Employee Director Stock Option Plan (hereinafter, this "Plan") is
intended to promote the interests of Netegrity, Inc. (hereinafter, the
"Company") by providing an inducement to obtain and retain the services of
qualified persons who are not employees or officers of the Company to serve as
members of its Board of Directors (the "Board").
2. Available Shares. The total number of shares of Common Stock, par
value $.01 per share, of the Company (the "Common Stock"), for which options may
be granted under this Plan shall not exceed 60,000 shares, subject to adjustment
in accordance with paragraph 10 of this Plan. Shares subject to this Plan are
authorized but unissued shares or shares that were once issued and subsequently
reacquired by the Company. If any options granted under this Plan are
surrendered before exercise or lapse without exercise, in whole or in part, the
shares reserved therefor shall continue to be available under this Plan.
3. Administration. This Plan shall be administered by the Board or by a
committee appointed by the Board (the "Committee"). In the event the Board fails
to appoint or refrains from appointing a Committee, the Board shall have all
power and authority to administer this Plan. In such event, the word "Committee"
wherever used herein shall be deemed to mean the Board. The Committee shall,
subject to the provisions of the Plan, have the power to construe this Plan, to
determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of this Plan as it may deem desirable. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any option granted
under it.
4. Automatic Grant of Options. Subject to the availability of shares
under this Plan, (a) each person who is a member of the Board on April 1, 1993,
April 1, 1994 and/or April 1, 1995 and who is not an employee or officer of the
Company on such date shall be automatically granted on April 1, 1993, April 1,
1994 and April 1, 1995, without further action by the Board, an option to
purchase 3,500 shares of the Common Stock prorated for the number of months that
the person served as a Director during the previous fiscal year. The options to
be granted under this paragraph 4 shall be the only options ever to be granted
at any time to such member under this Plan.
Except for the specific options referred to above, no other options
shall be granted under this Plan.
5. Option Price. The purchase price of the stock covered by an option
granted pursuant to this Plan shall be 100% of the fair market value of such
shares on the day the option is granted. The option price will be subject to
adjustment in accordance with the provisions of paragraph 10 of this Plan. For
purposes of this Plan, 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 closing bid price (or average of
bid 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.
6. Period of Option. Unless sooner terminated in accordance with the
provisions of paragraph 8 of this Plan, an option granted hereunder shall expire
on the date which is ten (10) years after the date of grant of the option.
7. Vesting of Shares and Non-Transferability of Options.
(a) Vesting. Options granted under this Plan shall be fully
vested as of the date of grant.
(b) Legend on Certificates. The certificates representing such
shares shall carry such appropriate legend, and such written instructions shall
be given to the Company's transfer agent, as may be deemed necessary or
advisable by counsel to the Company in order to comply with the requirements of
the Securities Act of 1933 or any state securities laws.
(c) Non-transferability. Except to the extent permitted by
Rule 16b-3 under the Securities Exchange Act of 1934, any option granted
pursuant to this Plan shall not be assignable or transferable other than by will
or the laws of descent and distribution and shall be exercisable during the
optionee's lifetime only by him or her.
8. Termination of Option Rights.
(a) In the event an optionee ceases to be a member of the
Board for any reason other than death or permanent disability, any portion of an
option which has not been exercised at the time the optionee so ceases to be a
member of the Board may be exercised by the optionee within 36 months of the
date the optionee ceased to be a member of the Board; and all options shall
terminate after such 36 months have expired.
(b) In the event that an optionee ceases to be a member of the
Board by reason of his or her death or permanent disability, any option granted
to such optionee shall be exercisable by the optionee (or by the Optionee's
personal representative, heir or legatee, in the event of death) until the
scheduled expiration date of the option.
9. Exercise of Option. Subject to the terms and conditions of this Plan
and the option agreements, an option granted hereunder shall be exercisable in
whole or in part by giving written notice to the Company by mail or in person to
Netegrity, Inc., 245 Winter Street, Waltham, MA 02451, Attention: Chief
Financial Officer, stating the number of shares with respect to which the option
is being exercised, accompanied by payment in full for such shares. Payment may
be (a) in United States dollars in cash or by check, (b) in whole or in part in
shares of the Common Stock of the Company already owned by the person or persons
exercising the option or shares subject to the option being exercised (subject
to such restrictions and guidelines as the Board may adopt from time to time),
valued at fair market value determined in accordance with the provisions of
paragraph 5 or (c) consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participants direction at the time of exercise. There shall be no such
exercise at any one time as to fewer than one hundred (100) shares or all of the
remaining shares than purchasable by the person or persons exercising the
option, if fewer than one hundred (100) shares. The Company's transfer agent
shall, on behalf of the Company, prepare a certificate or certificates
representing such shares acquired pursuant to exercise of the option, shall
register the optionee as the owner of such shares on the books of the Company
and shall cause the fully-executed certificate(s) representing such shares to be
delivered to the optionee as soon as practicable after payment of the option
price in full. The holder of an option shall not have any rights of a
stockholder with respect to the shares covered by the option, except to the
extent that one or more certificates for such shares shall be delivered to him
or her upon the due exercise of the option.
10. Adjustments Upon Changes in Capitalization and Other Matters. Upon
the occurrence of any of the following events, an optionee's rights with respect
to options granted to him or her hereunder shall be adjusted as hereinafter
provided:
(a) Stock Dividends and Stock Splits. If, after May 1, 1993,
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, and appropriate adjustments shall be
made in the purchase price per share to reflect such subdivision, combination or
stock dividend.
(b) Recapitalization Adjustments. In the event of a
reorganization, recapitalization, merger, consolidation, or any other change in
the corporate structure of shares of the Company, to the extent permitted by
Rule 16b-3 under the Securities Exchange Act of 1934, adjustments in the number
and kind of shares authorized by this Plan and in the number and kind of shares
covered by, and in the option price of outstanding options under this Plan
necessary to maintain the proportionate interest of the Optionee and preserve,
without exceeding the value of such option, shall be made.
(c) 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.
(d) Adjustments. Upon the happening of any of the foregoing
events, the class and aggregate number of shares set forth in paragraph 2 of
this Plan that are subject to options which previously have been or subsequently
may be granted under this Plan shall also be appropriately adjusted to reflect
such events. The Board shall determine the specific adjustments to be made under
this paragraph 10 and its determination shall be conclusive.
11. Restrictions on Issuance of Shares. Notwithstanding the provisions
of paragraphs 4 and 9 of this Plan, the Company shall have no obligation to
deliver any certificate or certificates upon exercise of an option until one of
the following conditions shall be satisfied:
(i) The shares with respect to which the option has been
exercised are at the time of the issue of such shares effectively registered
under applicable Federal and state securities laws as now in force or hereafter
amended; or
(ii) Counsel for the Company shall have given an opinion that
such shares are exempt from registration under Federal and state securities laws
as now in force or hereafter amended; and the Company has complied with all
applicable laws and regulations with respect thereto, including without
limitation all regulations required by any stock exchange upon which the
Company's outstanding Common Stock is then listed.
12. Representation of Optionee. If requested by the Company, the
optionee shall deliver to the Company written representations and warranties
upon exercise of the option that are necessary to show compliance with Federal
and state securities laws, including representations and warranties to the
effect that a purchase of shares under the option is made for investment and not
with a view to their distribution (as that term is used in the Securities Act of
1933).
13. Option Agreement. Each option granted under the provisions of this
Plan shall be evidenced by an option agreement, which agreement shall be duly
executed and delivered on behalf of the Company and by the optionee to whom such
option is granted. The option agreement shall contain such terms, provisions and
conditions not inconsistent with this Plan as may be determined by the officer
executing it.
14. Termination and Amendment of Plan. Options may no longer be granted
under this Plan after April 1, 1995, and this Plan shall terminate when all
options granted or to be granted hereunder are no longer outstanding. The Board
may at any time terminate this Plan or make such modification or amendment
thereof as it deems advisable; provided, however, that the Board may not,
without approval by the affirmative vote of the holders of a majority of the
shares of Common Stock present in person or by proxy and entitled to vote at the
meeting, (a) materially increase the maximum number of shares for which options
may be granted under this Plan (except by adjustment pursuant to Section 10),
(b) materially modify the requirements as to eligibility to participate in this
Plan, (c) materially increase benefits accruing to option holders under this
Plan, or (d) amend this Plan in any manner which would cause Rule 16b-3 to
become inapplicable to this Plan; and provided further that the provisions of
this Plan specified in Rule 16b-3(c)(2)(ii)(A) (or any successor or amended
provision thereof) under the Securities Exchange Act of 1934 (including without
limitation, provisions as to eligibility, amount, price and timing of awards)
may not be amended more than once every six months, other than to comply with
changes in the Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules thereunder. Termination or any modification or amendment of
this Plan shall not, without consent of a participant, affect his or her rights
under an option previously granted to him or her.
15. Withholding of Income Taxes. Upon the exercise of an option, the
Company, in accordance with Section 3402(a) of the Internal Revenue Code, may
require the optionee to pay withholding taxes in respect of amounts considered
to be a compensation includible in the optionee's gross income.
16. Compliance with Regulations. It is the Company's intent that the
Plan comply in all respects with Rule 16b-3 under the Securities Exchange Act of
1934 (or any successor or amended version thereof) and any applicable Securities
and Exchange Commission interpretations thereof. If any provision of this Plan
is deemed not to be in compliance with Rule 16b-3, the provision shall be null
and void,
17. Governing Law. The validity and construction of this Plan and the
instruments evidencing options shall be governed by the laws of the State of
Delaware, without giving effect to the principles of conflicts of law thereof.
EXHIBIT 4.3
NETEGRITY, INC.
1994 NON-EMPLOYEE DIRECTOR PLAN
1. Purpose. This stock option plan, to be known as the 1994
Non-Employee Director Plan (hereinafter, the "Plan"), is intended to promote the
interests of Netegrity, Inc., a Delaware corporation (hereinafter, the
"Company"), by providing an inducement to obtain and retain the services of
qualified persons who are neither employees nor officers of the Company to serve
as members of the Board of Directors and to demonstrate the Company's
appreciation for their service upon the Company's Board of Directors.
2. Rights to be Granted. Under the Plan, non-qualified stock options
are granted that give an Optionee the right for a specified period of time to
purchase a pre-determined number of shares of Common Stock, par value $.01 per
share, of the Company. The option price is determined automatically at the time
of the grant in each instance in accordance with the terms of this Plan.
3. Available Shares. The total number of shares of Common Stock of the
Company for which options may be granted under the Plan shall not exceed One
Hundred Five Thousand (105,000) shares, subject to adjustment in accordance with
Section 13 hereof. Shares of Common Stock subject to the Plan are authorized but
unissued shares or shares that were once issued and subsequently reacquired by
the Company. If any options granted under this Plan are surrendered before
exercise or lapse without exercise, in whole or in part, the shares of Common
Stock reserved therefor shall revert to the option pool and continue to be
available for grant under the Plan.
4. Administration. This Plan shall be administered by the Board or by a
committee appointed by the Board (the "Committee"). In the event the Board fails
to appoint or refrains from appointing a Committee, the Board shall have all
power and authority to administer this Plan. In such event, the word "Committee"
wherever used herein shall be deemed to mean the Board. The Committee shall,
subject to the provisions of the Plan, have the power to construe this Plan, to
determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of this Plan as it may deem desirable. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any option granted
under it.
5. Option Agreement. Each option granted under the provisions of this
Plan shall be evidenced by an Option Agreement, in such form as may be approved
by the Committee, which Agreement shall be duly executed and delivered on behalf
of the Company and by the Optionee to whom such option is granted. The Agreement
shall contain such terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the officer executing it.
6. Eligibility and Limitations. Options may be granted pursuant to the
Plan only to non-employee members of the Board of Directors of the Company who
are not officers of the Company and who must hold the options (and the shares of
Common Stock issuable upon exercise thereof) individually in their own names.
In the event any non-employee director also becomes an officer or
employee of the Company, then all future installments of any option previously
granted shall not be exercisable from and after the date such person becomes an
employee or officer of the Company. The Optionee shall nevertheless be entitled
to exercise any installment of any option which was exercisable prior to the
person becoming an officer or employee of the Company.
7. Option Price. The purchase price of the Common Stock covered by an
option granted pursuant to the Plan shall be 100% of the fair market value of
such shares on the day the option is granted. The option price will be subject
to adjustment in accordance with the provisions of Section 13 hereof. For
purposes of the Plan, the fair market value of a share of Common Stock on any
day shall be (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, or (iv) if the Common Stock is not then traded or listed
for quotation on any exchange, the fair market value of the Common Stock shall
be determined as of the most recent sale price for the Common Stock or the grant
of any option therefor under any other stock option plan of the Company.
8. Automatic Grant of Options. Each member of the Company's Board of
Directors who is neither an employee nor an officer of the Company serving on
the Board of Directors on June 1, 1994, shall be automatically granted, without
further action by the Board or Committee, an option to purchase Seventeen
Thousand Five Hundred (17,500) shares of the Company's Common Stock. Each person
who is neither an employee nor an officer of the Company who is first elected to
the Board of Directors after the date of approval of the Plan by the Board of
Directors shall be automatically granted, on the date of such election without
further action by the Board of Directors, an option to purchase Seventeen
Thousand Five Hundred (17,500) shares of the Company's Common Stock.
Anything in the Plan to the contrary notwithstanding, the effectiveness
of the Plan and of the grant of all options hereunder is in all respects subject
to, and the Plan and options granted under it shall be of no force and effect
unless and until, and no option granted hereunder shall in any way vest or
become exercisable in any respect unless and until, approval of the Plan is
obtained by the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock of the Company present in person or by proxy and entitled
to vote at a meeting of shareholders at which the Plan is presented for
approval, and such other matters and in form and substance satisfactory to
counsel for the Company. In the event that such stockholder approval as
aforesaid has not been received on or before April 5, 1995, then in such event
the Plan and any options granted hereunder shall be null and void, and upon the
occurrence of both such approval and concurrence as aforesaid, the Plan and such
options shall become effective as of the date of the Directors' approval of the
Plan.
9. Period of Option. The options granted hereunder shall expire on a
date which is ten (10) years after the date of grant of the options and the Plan
shall terminate when all options granted hereunder have terminated.
10. Exercise of Option. Subject to the terms and conditions of the Plan
and the Option Agreement, an option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to the
Company by first class or registered or certified mail or in person addressed to
the Treasurer or Chief Financial Officer of the Company, stating the number of
shares with respect to which the option is being exercised, accompanied by
payment in full for such shares, which payment may be in whole or in part in
shares of the Common Stock of the Company already owned by the person or persons
exercising the option, valued at fair market value determined in accordance with
the provisions of Section 7 hereof. There shall be no such exercise at any one
time as to fewer than one hundred (100) shares or all of the remaining shares
then purchasable by the person or persons exercising the option, if fewer than
one hundred (100) shares. Upon notification from the Company, the transfer agent
shall prepare a certificate or certificates representing such shares acquired
pursuant to exercise of the option, shall register the Optionee as the owner of
such shares on the stock transfer books of the Company and shall cause the fully
executed certificate(s) representing such shares to be delivered to the Optionee
as soon as practicable after payment of the option price in full. The holder of
an option shall not have any rights of a shareholder with respect to the shares
covered by the option, except to the extent that one or more certificates for
such shares shall be delivered to him upon the due exercise of the option.
11. Vesting of Shares and Non-Transferability of Options.
(a) Vesting. Options granted under the Plan shall vest in the
Optionee and thus become exercisable in installments, in accordance with the
following schedule:
Cumulative Number of Option Shares Date of Vesting and
for which Option is Exercisable Exercisability of Option
20% of total Option Shares 1 year anniversary of the date of the
grant of the option
40% of total Option Shares 2 year anniversary of the date of the
grant of the option
60% of total Option Shares 3 year anniversary of the date of the
grant of the option
80% of total Option Shares 4 year anniversary of the date of the
grant of the option
100% of total Option Shares 5 year anniversary of the date of the
grant of the option
The number of shares as to which options may be exercised shall be
cumulative, so that once the option shall become exercisable as to any shares it
shall continue to be exercisable as to said shares, until expiration or
termination of the option as provided in this Plan; provided, however, that any
option granted under this Plan shall in no event be exercised unless and until
this Plan has been approved by the Company's stockholders as set forth in
Section 16, but upon such approval the vesting shall become effective as of the
date of grant.
(b) Legend on Certificates. The certificates representing such
shares shall carry such appropriate legend, and such written instructions shall
be given to the Company's Transfer Agent, as may be deemed necessary or
advisable by counsel to the Company in order to comply with the requirements of
the Securities Act of 1933, as amended, or any state securities laws.
(c) Non-Transferability. Any option granted pursuant to this
Plan shall not be assignable or transferable other than by will or the laws of
descent and distribution or pursuant to a domestic relations order and shall be
exercisable during the optionee's lifetime only by him or her.
12. Termination of Option Rights.
(a) In the event an Optionee voluntarily resigns or
voluntarily ceases to be a member of the Board of Directors of the Company for
any reason other than death or disability, any options granted to such Optionee
shall, to the extent any portion of such options are not then exercisable,
immediately terminate and become void. Any options which are then exercisable
but have not been exercised at the time the Optionee so ceases to be a member of
the Board of Directors may be exercised, to the extent any portion of such
options are then exercisable, by the Optionee at any time prior to the scheduled
expiration date of the option. Notwithstanding the foregoing, in the event any
Optionee (i) ceases to be a member of the Board of Directors at the request of
the Company, (ii) is removed without cause, or (iii) otherwise does not stand
for nomination or re-election as a director of the Company at the request of the
Company, then any portion of any Option granted to such Optionee which is not
then exercisable shall be accelerated and such Option shall be fully exercisable
by the Optionee at any time prior to the scheduled expiration date. No portion
of this option may be exercised if the Optionee is removed from the Board of
Directors for any one of the following reasons: (i) disloyalty, gross
negligence, dishonesty or breach of fiduciary duty to the Company; or (ii) the
commission of an act of embezzlement, fraud or deliberate disregard of the rules
or policies of the Company which results in loss, damage or injury to the
Company, whether directly or indirectly; or (iii) the unauthorized disclosure of
any trade secret or confidential information of the Company; or (iv) the
commission of an act which constitutes unfair competition with the Company or
which induces any customer of the Company to break a contract with the Company;
or (v) the conduct of any activity on behalf of any organization or entity which
is a competitor of the Company (unless such conduct is approved by a majority of
the disinterested members of the Board of Directors).
(b) In the event that an Optionee ceases to be a member of the Board of
Directors of the Company by reason of his or her disability or death, any option
granted to such Optionee may be exercised, to the extent of the number of shares
with respect to which an Optionee could have exercised it on the date of such
disability or death (by the Optionee's personal representative, heir or legatee,
in the event of death) until the scheduled expiration date of the option.
13. Adjustments Upon Changes in Capitalization and Other Matters. Upon
the occurrence or any or the following events, an optionee's rights with respect
to options granted to him or her hereunder shall be adjusted as hereinafter
provided:
(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, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) Recapitalization Adjustments. 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, each option granted
under this Plan which is outstanding but unvested as of the effective date of
such event shall become exercisable in full ten business days prior to the
effective date of such event. In the event of a reorganization,
recapitalization, merger, consolidation, or any other change in the corporate
structure or shares of the Company, to the extent permitted by Rule 16b-3 under
the Securities Exchange Act of 1934, as amended, adjustments in the number and
kind of shares authorized by this Plan and in the number and kind of shares
covered by, and in the option price of outstanding options under this Plan
necessary to maintain the proportionate interest of the optionee and preserve,
without exceeding, the value of such option, shall be made. Notwithstanding the
foregoing, no such adjustment shall be made which would, within the meaning of
any applicable provisions of the Internal Revenue Code of 1986, as amended,
constitute a modification, extension or renewal of any Option or a grant of
additional benefits to the holder of an Option.
(c) 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.
(d) Adjustments. Upon the happening of any of the foregoing
events, the class and aggregate number of shares set forth in Section 3 of this
Plan that are subject to options which previously have been or subsequently may
be granted under this Plan shall also be appropriately adjusted to reflect such
events. The Board shall determine the specific adjustments to be made under this
paragraph 10 and its determination shall be conclusive.
If an option hereunder shall be assumed, or a new option substituted
therefor, as a result of sale of the Company, whether by a corporate merger,
consolidation or sale of property or stock, then membership on the Board of
Directors of such assuming or substituting corporation or by a parent
corporation or a subsidiary therefor shall be considered for purposes of an
option to be membership on the Board of Directors of the Company,
14. Restrictions on Issuance of Shares. Notwithstanding the provisions
of Sections 8 and 10 hereof, the Company shall have no obligation to deliver any
certificate or certificates upon exercise of an option until one of the
following conditions shall be satisfied:
(i) The shares with respect to which the option has been
exercised are at the time of the issue of such shares effectively registered
under applicable Federal and state securities acts as now in force or hereafter
amended; or
(ii) Counsel for the Company shall have given an opinion that
such shares are exempt from registration under Federal and state securities acts
as now in force or hereafter amended; and until the Company has complied with
all applicable laws and regulations, including without limitation all
regulations required by any stock exchange upon which the Company's outstanding
Common Stock is then listed.
The Company shall use its best efforts to bring about compliance with
the above conditions within a reasonable time, except that the Company shall be
under no obligation to cause a registration statement or a post-effective
amendment to any registration statement to be prepared at its expense solely for
the purpose of covering the issue of shares in respect of which any option may
be exercised under this Plan.
15. Representation of Optionee. If requested by the Company, the
Optionee shall deliver written warranties and representations upon exercise of
the option that are necessary to show compliance with Federal and state
securities laws, including to the effect that a purchase of shares under the
option is made for investment and not with a view to their distribution (as that
term is used in the Securities Act of 1933, as amended).
16. Approval of Stockholders. The effectiveness of this Plan and of the
grant of all options hereunder is in all respects subject to approval by the
Company's shareholders.
17. Acceleration and Vesting of Option for Business Combinations. Upon
any merger, consolidation, sale of all (or substantially all) of the assets of
the Company, or other business combination involving the sale or transfer of all
(or substantially all) of the capital stock or assets of the Company in which
the Company is not the surviving entity, or, if it is the surviving entity, does
not survive as an operating going concern in substantially the same line of
business, then all options granted under the Plan shall, immediately prior to
the consummation of any of the foregoing events, become fully vested and
immediately exercisable by the Employee.
18. Termination and Amendment of Plan. The Board may at any time
terminate the Plan or make such modification or amendment thereof as it deems
advisable; provided, however, that the Board may not, without approval by the
affirmative vote of the holders of a majority of the shares present in person or
by proxy and entitled to vote at the meeting, (a) increase the maximum number of
shares for which options may be granted under the Plan or the number of shares
for which an option may be granted to any participating Director hereunder; (b)
change the provisions of the Plan regarding the termination of the options or
the time when they may be exercised; (c) change the period during which any
options may be granted or remain outstanding or the date on which the Plan shall
terminate; (d) change the designation of the class of persons eligible to
receive options, or otherwise change Section 7 hereof; or (e) materially
increase benefits accruing to option holders under the Plan. In no event,
however, may any provision of this Plan specified in Rule l6b-3(c)(2)(ii)(A) (or
any successor or amended provision thereof) of the Securities Exchange Act of
1934, as amended (including without limitation, provisions as to eligibility and
who may participate in the Plan, the amount and price of shares for which
options may be granted or the timing of awards), be amended more than once every
six months, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder. Except as
provided in Section 16, termination or any modification or amendment of the Plan
shall not, without consent of a participant, affect his rights under an option
previously granted to him.
19. Compliance with Regulations. It is the Company's intent that the
Plan comply in all respects with Rule 16b-3 under the Securities Exchange Act of
1934, as amended (or any successor or amended version thereof) and any
applicable Securities and Exchange Commission interpretations thereof. If any
provision of this Plan is deemed not to be in compliance with Rule 16b-3, the
provision shall be null and void.
20. Governing Law. The validity and construction of this Plan and the
instruments evidencing options shall be governed by the laws of the State of
Delaware, without giving effect to the principles of conflicts of law thereof.
EXHIBIT 5.1
Hutchins, Wheeler & Dittmar, A Professional Corporation
September 17, 1999
Netegrity, Inc.
245 Winter Street
Waltham, MA 02451
Re: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by Netegrity, Inc. (the "Company") with the Securities
and Exchange Commission (the "Commission") on or about September 17, 1999 in
connection with the registration under the Securities Act of 1933, as amended,
of (i) a total of 70,000 shares of the Company's Common Stock reserved for
issuance under the Company's 1991 Director Stock Plan (the "1991 Plan"), (ii)
60,000 shares of the Company's Common Stock reserved for issuance under the
Company's 1993 Non-Employee Director Stock Option Plan (the "1993 Plan"), and
(iii) 105,000 shares of the Company's Common Stock reserved for issuance under
the Company's 1994 Non-Employee Director Plan (the "1994 Plan," and together
with the 1991 Plan and the 1993 Plan, the "Plans"). We have also examined such
corporate records of the Company and such other documents as we have deemed
necessary as a basis for the opinions herein expressed.
Based upon the foregoing, and having regard for such legal considerations as we
deem relevant, we are of the opinion that the shares issued pursuant to the
Plans, when issued and sold in accorance with the terms of the Plans will be
legally and 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 references to us under the caption "Interests of Named
Experts and Counsel" in the Registration Statement, including the Prospectus
constituting a part thereof, and in any amendment thereto.
Very truly yours,
/s/Hutchins, Wheeler & Dittmar
HUTCHINS, WHEELER & DITTMAR,
A Professional Corporation
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in this registration
statement on Form S-8 of Netegrity, Inc. of our report dated February 8, 1999,
or our audits of the consolidated financial statements and financial schedules
of Netegrity, Inc. as of December 31, 1998 and December 31, 1997, and for each
of the three years in the period ended December 31, 1998 and 1997, and the nine
months ended December 31, 1997. We also consent to the reference to our firm
under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
September 15, 1999
