<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1999
REGISTRATION NO. 333-_____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------
PEOPLESOFT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 68-0137069
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
4460 HACIENDA DRIVE
PLEASANTON, CALIFORNIA 94588
(Address of Principal Executive Offices) (Zip Code)
---------------
Distinction Software, Inc. Stock Option Plan
(Full title of the Plans)
---------------
DAVID A. DUFFIELD
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
PEOPLESOFT, INC.
4460 HACIENDA DRIVE, PLEASANTON, CALIFORNIA 94588
(Name and Address of Agent for Service)
(925) 694-3000
(Telephone number, including area code, of agent for service)
---------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED(1) PER SHARE (2) OFFERING PRICE(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share..................... 5,941 shares $12.37 $73,511 $20.44
==============================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Distinction Software, Inc. Stock
Option Plan by reason of any stock dividend, stock split, recapitalization
or other similar transaction effected without the receipt of consideration
which results in an increase in the number of the outstanding shares of
PeopleSoft, Inc. Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the maximum offering
price per share as such options may be exercised.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
PeopleSoft, Inc. (the "Registrant") hereby incorporates by reference into
this Registration Statement the following documents previously filed with the
Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended June
30, 1998.
(c) The description of the Registrant's Common Stock to be offered hereby
contained in the Registrant's Registration Statement on Form 8-A dated
October 7, 1992, filed pursuant to Section 12(g) of the Exchange Act
including any amendment or report filed for the purpose of updating such
description.
(d) The description of the Registrant's Preferred Share Purchase Rights
contained in its Registration Statement on Form 8-A/A filed with the
Commission on March 25, 1998 including any amendment or report filed for
the purpose of updating such description.
All documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), after the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court to award,
or a corporation's Board of Directors to grant, indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933 ( the "1933 Act"). Article
XIII of the Registrant's currently effective Certificate of Incorporation and
Article VI of the Registrant's Bylaws provide for indemnification of its
directors, officers, employees and other agents. In addition, the Registrant has
entered into indemnification agreements with its officers and directors.
Item 7. Exemption from Registration Claimed
Not Applicable.
II-1
<PAGE> 3
Item 8. Consultants and Advisors
Not applicable
Item 9. Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------ -------
<S> <C>
4 Instruments Defining Rights of Stockholders. Reference is made
to Registrant's Registration Statements on Form 8-A which are
incorporated herein by reference pursuant to Items 3(c) and (d).
5 Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Gibson, Dunn & Crutcher is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-3 of this
Registration Statement.
99 Distinction Software Inc. Stock Option Plan.
</TABLE>
Item 10. Undertaking
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 1933 Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement; and (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 clauses (1)(i) and (1)(ii) shall
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 1934 Act that are
incorporated by reference into this Registration Statement; and (2) that for the
purpose of determining any liability under the 1933 Act, 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.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers or controlling persons of the Registrant
pursuant to the indemnity provisions incorporated by reference in Item 6, or
otherwise, the Registrant has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 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 1933 Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Pleasanton, State of California, on this 26th
day of August, 1999.
PEOPLESOFT, INC.
By: /s/ Stephen F. Hill
-----------------------------
Stephen F. Hill
Vice President and Acting Chief
Financial Officer
(Principal Financial Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of PeopleSoft, Inc., a Delaware
corporation, do hereby constitute and appoint David A. Duffield, Stephen F. Hill
and Anne Jorden, and each of them, the lawful attorneys-in-fact and agents with
full power and authority to do any and all acts and things and to execute any
and all instruments which said attorneys and agents, and either one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
that all said attorneys and agents, or either of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
II-3
<PAGE> 5
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ David A. Duffield Chief Executive Officer August 27, 1999
- ------------------------------------------- (Principal Executive Officer) and Director
(David A. Duffield)
/s/ Craig Conway President, Chief Operating Officer, and August 27, 1999
- ------------------------------------------- Director
(Craig Conway)
/s/ Stephen F. Hill Vice President and Acting Chief August 27, 1999
- ------------------------------------------- Financial Officer
(Stephen F. Hill) (Principal Financial Officer)
/s/ Bill Elson Vice President and Corporate Controller August 27, 1999
- -------------------------------------------
(Bill Elson) (Principal Accounting Officer)
/s/ Aneel Bhusri Director and Vice Chairman August 27, 1999
- -------------------------------------------
(Aneel Bhusri)
- ------------------------------------------- Director
(A. George Battle)
/s/ George J. Still Jr. Director August 27, 1999
- -------------------------------------------
(George J. Still, Jr.)
/s/ Cyril J. Yansouni Director August 27, 1999
- -------------------------------------------
(Cyril J. Yansouni)
</TABLE>
II-4
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------ -------
<S> <C>
4 Instruments Defining Rights of Stockholders. Reference is made
to Registrant's Registration Statements on Form 8-A which are
incorporated herein by reference pursuant to Items 3(c) and (d).
5 Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Gibson, Dunn & Crutcher LLP is contained in Exhibit
5.
24 Power of Attorney. Reference is made to page II-3 of this
Registration Statement.
99.1 Distinction Software Inc. Stock Option Plan.
</TABLE>
<PAGE> 1
Exhibit 5
August 27, 1999
(415) 393-8200 C 72711-00012
PeopleSoft, Inc.
4460 Hacienda Drive
Pleasanton, CA 94588
Re: Registration Statement on Form S-8 of PeopleSoft, Inc.
Ladies and Gentlemen:
We refer to the registration statement on Form S-8 ("Registration
Statement") filed under the Securities Act of 1933, as amended (the "Securities
Act"), by PeopleSoft, Inc., a Delaware corporation (the "Company"), with respect
to the proposed offering by the Company of up to 5,941 shares (the "Shares") of
the common stock of the Company, $.01 par value per share (the "Common Stock"),
under the Distinction Software, Inc. Stock Option Plan (the "Plan").
We have examined the originals or certified copies of such corporate
records, certificates of officers of the Company and/or public officials and
such other documents and have made such other factual and legal investigations
as we have deemed relevant and necessary as the basis for the opinions set forth
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as conformed or
photostatic copies and the authenticity of the originals of such copies.
Based on our examination mentioned above, subject to the assumptions
stated above and relying on the statements of fact contained in the documents
that we have examined, we are of the opinion that (i) the issuance by the
Company of the Shares has been duly authorized and (ii) when issued in
accordance with the terms of the Plan, the Shares will be duly and validly
issued, fully paid and non-assessable.
<PAGE> 2
PeopleSoft, Inc.
August 27, 1999
Page 2
We are admitted to practice in the State of California and are not
admitted to practice in the State of Delaware. However, for the limited purposes
of our opinion set forth above, we are generally familiar with the General
Corporation Law of the State of Delaware (the "DGCL") as presently in effect and
have made such inquiries as we consider necessary to render this opinion with
respect to a Delaware corporation. This opinion letter is limited to the laws of
the State of California and, to the limited extent set forth above, the DGCL, as
such laws presently exist and to the facts as they presently exist. We express
no opinion with respect to the effect or applicability of the laws of any other
jurisdiction. We assume no obligation to revise or supplement this opinion
letter should the laws of such jurisdictions be changed after the date hereof by
legislative action, judicial decision or otherwise.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act or the General Rules and Regulations of the Securities and
Exchange Commission.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
GIBSON, DUNN & CRUTCHER LLP
KRL/pth
<PAGE> 1
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Distinction Software, Inc. Stock Option Plan, of
our report dated January 26, 1999 with respect to the consolidated financial
statements of PeopleSoft, Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1998 filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
Walnut Creek, California
August 27, 1999
<PAGE> 1
Exhibit 99.1
DISTINCTION SOFTWARE, INC.
STOCK OPTION PLAN
Section 1.
PURPOSE
The purpose of this Plan is to promote the interests of the Company by
granting Options to purchase Shares to ( i ) Employees in order (a) to attract
and retain Employees, (b) to provide an additional incentive to each Employee to
work to increase the value of Shares, and (c) to provide each Employee with a
stake in the future of the Company which corresponds to the stake of each of the
Company's shareholders, and (ii) Key Persons who have rendered valuable services
to the Company, and to provide such Key Person with a stake in the future of the
Company which corresponds to each of the Company's shareholders.
Section 2.
DEFINITIONS
Each term set forth in this Section 2 shall have the meaning set forth
opposite such term for purposes of this Plan and, for purposes of such
definitions, the singular shall include the plural and the plural shall include
the singular, and reference to one gender shall include the other gender.
2.1 BOARD means the Board of Directors of the Company.
2.2 CODE means the Internal Revenue Code of 1986, as amended.
2.3 COMMITTEE means the Compensation Committee of the Board.
2.4 COMMON STOCK means the common stock of the Company, par value
$.01 per share.
2.5 COMPANY means Distinction Software, Inc., a Georgia Corporation,
and any successor to such organization.
2.6 EMPLOYEE means an employee of the Company, a Subsidiary or a
Parent.
2.7 EXCHANGE ACT means the Securities Exchange Act of the 1934, as
amended.
2.8 EXERCISE PRICE means the price which shall be paid to purchase
one (1) Share upon the exercise of an Option granted under this
Plan.
1
<PAGE> 2
2.9 FAIR MARKET VALUE means the price at which the Committee or the
Board acting in good faith determines through any reasonable
valuation method that a Share might change hands between a
willing buyer and a willing seller, neither being under any
compulsion to buy or to sell and both having reasonable
knowledge of the relevant facts.
2.10 ISO means an option granted under this Plan to purchase Shares
which is intended by the Company to satisfy the requirements of
Code Section 422 as an incentive stock option.
2.11 KEY PERSON means (i) a member of the Board who is not an
employee, (ii) a consultant, distributor or other person who has
rendered valuable services to the Company, a Subsidiary or a
Parent, (iii) a person who has incurred, or is willing to incur,
financial risk in the form of guaranteeing or acting as
co-obligor with respect to debts or other obligations of the
Company, or (iv) a person who has extended credit to the
Company. Key Persons are not limited to individuals and, subject
to the preceding definition, may include corporations,
partnerships, associations and other entities.
2.12 NON-ISO means an option granted under this Plan to purchase
Shares which is not intended by the Company to satisfy the
requirements of Code Section 422.
2.13 OPTION means an ISO or a Non-ISO.
2.14 OPTIONEE means grantee of an Option.
2.15 PARENT means any corporation which is a parent of the Company
(within the meaning of Code Section 424).
2.16 PLAN means the Distinction Software, Inc. Stock Option Plan, as
amended from time to time.
2.17 SHARE means a share of the Common Stock of the Company.
2.18 STOCK OPTION GRANT means the written agreement or instrument
which sets forth the terms of an Option granted to an Employee
or Key Person under this Plan.
2.19 SUBSIDIARY means any corporation which is a subsidiary of the
Company (within the meaning of Code Section 424 (f)).
2
<PAGE> 3
2.20 SURRENDERED SHARES means the Shares described in Section 11.2
which (in lieu of being purchased) are surrendered for cash or
shares, or for a combination of cash and Shares, in accordance
with Section 11.
2.21 TEN PERCENT SHAREHOLDER means a person who owns (after taking
into account the attribution rules of Code Section 424(d)) more
than ten percent (10%) of the total combined voting power of all
classes of shares of either the Company, a Subsidiary or a
Parent.
Section 3.
SHARES SUBJECT TO OPTIONS
Fifty-five thousand four hundred (55,400) Shares of Common Stock shall
be reserved for issuance under this Plan. Such Shares shall be reserved, to the
extent that the Company deems appropriate, from authorized but unissued Shares,
and from Shares which have been reacquired by the Company. Furthermore, any
Shares subject to an Option which remain after the cancellation, expiration or
exchange of such Option thereafter shall again become available for use under
this Plan, but any Surrendered Shares which remain after the surrender of an
Option under Section 11 shall not again become available for use under this
Plan.
Section 4.
EFFECTIVE DATE
The effective date of this Plan shall be the date it is adopted by the
Board provided the shareholders of the Company approver this Plan within twelve
(12) months after such effective date. If such effective date comes before such
shareholder approval, any Options granted under this Plan before the date of
such approval automatically shall be granted subject to such approval.
Section 5.
COMMITTEE
This Plan shall be administered by the Committee. The Committee acting
in its absolute discretion shall exercise such powers and take such action as
expressly called for under this Plan and, further, the Committee shall have the
power to interpret this Plan and (subject to Section 16) to take such other
action in the administration and operation of this Plan as the Committee deems
equitable under the circumstances. The Committee's actions shall be binding on
the Company, on each affected Employee or Key Person, and on each other person
directly or indirectly affected by such actions. Notwithstanding anything else
to the contrary herein, the Board shall have the authority to assume the powers
and responsibilities outlined above with respect to the Committee, in whole or
in part. In addition, until such time as the Committee has been appointed, its
duties shall be performed by the Board.
3
<PAGE> 4
Section 6.
ELIGIBILITY
Except as provided below, only Employees shall be eligible for the grant
of Options under this Plan, but no Employee shall have the right to be granted
an Option under this Plan merely as a result of his or her status as an
Employee. Key Persons may be eligible, subject to written approval by the Board,
for the grant of Options under this Plan, but only if the Key Person has
provided valuable services to the Company, a Subsidiary or a Parent and only if
the Option is a Non-ISO.
Section 7.
GRANT OF OPTIONS
The Committee, acting pursuant to the procedure established by the
Board, shall either grant Options under this Plan, or recommend to the Board
that Options be granted under this Plan. In accordance with the procedure
established by the Board, the Committee, or the Board, in its absolute
discretion, shall grant Options under this Plan from time to time to purchase
Shares and, further, shall have the right to grant new Options in exchange for
outstanding Options. Such Options shall be granted to Employees or Key Persons
selected by the Committee, acting in its discretion as set forth above, and
neither the Board nor the Committee shall be under any obligation whatsoever to
grant Options to all Employees or Key Persons, or to grant all Options subject
to the same terms and conditions. Each grant of an Option shall be evidenced by
a Stock Option Grant and each Stock Option Grant shall"
1. specify whether the Option is an ISO or Non-ISO; and
2. incorporate such other terms and conditions as the Committee or
the Board, acting in its absolute discretion, deems consistent
with the terms of this Plan, including (without limitation) a
restriction on the number of Shares subject to the Option which
first becomes exercisable or subject to surrender during any
calendar year.
In determining Employee(s) or Key Person(s) to whom an Option shall be
granted and the number of Shares to be covered by such Option, the Committee or
the Board may take into account the recommendations of the President of the
Company and its other officers, the duties of the Employee or Key Person, the
present and potential contributions of the Employee or Key Person to the success
of the Company, the anticipated number of years of service remaining before the
attainment by the Employee of retirement age, and other factors deemed relevant
by the Committee or the Board, in its sole discretion, in connection with
accomplishing the purpose of this Plan. An Employee or Key Person who has been
granted an Option to purchase Shares of the Company, whether under this Plan or
otherwise, may be granted one or more additional Options.
4
<PAGE> 5
If the Committee or the Board grants an ISO and a Non-ISO to an Employee
on the same date, the right of the Employee to exercise or surrender one such
Option shall not be conditioned on his or her failure to exercise or surrender
the other such Option.
Section 8.
EXERCISE PRICE
If an Option is an ISO, the Exercise Price for each Share subject
to such Option shall be no less than the Fair Market Value of a Share on the
date such Option is granted or, if such Option is granted to a Ten Percent
Shareholder, the Exercise Price for each Share subject to such Option shall be
no less than 110% of the Fair Market Value of a Share on the date such Option is
granted. If an Option is a Non-ISO, the Exercise Price for each Share shall be
no less than the minimum price required by applicable state law, or by the
Company's governing instrument, or $0.01, whichever price is greater. The
Exercise Price shall be payable in full upon the exercise of any Option, and a
Stock Option Grant, at the discretion of the Committee or Board, or in any
combination of cash and Shares acceptable to the Committee or the Board. Any
payment made in Shares shall be treated as equal to the Fair Market Value of
such Shares on the date the properly endorsed certificate for such Shares is
delivered to the Committee or the Board.
Notwithstanding the above, and in the sole discretion of the
Committee or the Board, an Option may be exercised as to a portion or all (as
determined by the Committee or the Board) of the number of Share's specified in
the Stock Option Grant by delivery to the Company of a promissory note, such
promissory note to be executed by the Optionee and which shall include, with
such other terms and conditions as the Committee or the Board shall determine,
provisions in a form approved by the Committee or the Board under which (i) the
balance of the aggregate purchase price shall be payable in equal installments
over such period and shall bear interest at such rate (which shall not be less
than the prime bank loan rate as determined by the Committee or the Board) as
the Committee or the Board shall approve and (ii) the Optionee shall be
personally liable for payment of the unpaid principal balance and all accrued
but unpaid interest.
Section 9.
EXERCISE PERIOD
Each Option granted under this Plan shall be exercisable in whole or in
part at such time or times as set forth in the related Stock Option Grant, but
no Stock Option Grant shall:
1. make an Option exercisable before the date such Option is
granted; or
2. make an Option exercisable after the earlier of the:
(a) the date such Option is exercised in full, or
5
<PAGE> 6
(b) the date which is the tenth (10th) anniversary of the
date such Option is granted, if such Option is a Non-ISO
or an ISO granted to a non-Ten Percent Shareholder, or
the date which is the fifth (5th) anniversary of the
date such Option is granted, if such Option is an ISO
granted to a Ten Percent Shareholder.
A Stock Option Grant may provide for the exercise of an Option after the
employment of an Employee has terminated for any reason whatsoever, including
death or disability.
Section 10.
NONTRANSFERABILITY
No Option granted under this Plan shall be transferable by an Employee
or Key Person other than by will or by the laws of descent and distribution, and
such Option shall be exercisable during an Employee's or Key Person's lifetime
only by the Employee or Key Person, as the case may be. The person or persons to
whom an Option is transferred by will or by the laws of descent and distribution
thereafter shall be treated as the Employee or Key Person.
Section 11.
SURRENDER OF OPTIONS
11.1 GENERAL RULE. The Committee or the Board, acting in its absolute
discretion, may incorporate a provision in a Stock Option Grant to allow an
Employee or Key Person to surrender his or her Option in whole or in part in
lieu of the exercise in whole or in part of that Option on any date that:
1. the Fair Market Value of the Shares subject to such
Option exceeds the Exercise Price for such Shares, and
2. the Option to purchase such Shares is otherwise
exercisable.
11.2 PROCEDURE. The surrender of an Option in whole or in part shall be
effected by the delivery of the Stock Option Grant to the Committee or the
Board, together with a statement signed by the Employee or Key Person which
specifies the number of Shares ("Surrendered Shares") as to which the Employee
or Key Person surrenders his or her Option and how he or she desires payment be
made for such Surrendered Shares.
11.3 PAYMENT. An Employee or Key Person in exchange for his or her
Surrendered Shares shall receive a payment in cash or in Shares, or in a
combination of cash and Shares, equal in amount on the date such surrender is
effected to the excess of the Fair Market Value of the Surrendered Shares on
such date over the Exercise Price for the Surrendered Shares. The Committee or
the Board, acting in its absolute discretion, can
6
<PAGE> 7
approve or disapprove an Employee's or Key Person's request for payment in whole
or in part in cash and can make that payment in cash or in such combination of
cash and Shares as the Committee or the Board deems appropriate. A request for
payment only in Shares shall be approved and made in Shares to the extent
payment can be made in whole shares of Shares and (at the Committee's or Board's
discretion) in cash in lieu of any fractional Shares.
11.4 RESTRICTIONS. Any Stock Option Grant which incorporates a provision
to allow an Employee or Key Person to surrender his or her Option in whole or in
part also shall incorporate such additional restrictions on the exercise or
surrender of such Option as the Committee or the Board deems necessary to
satisfy the conditions to the exemption under Rule 16b-3 (or any successor
exemption) to Section 16(b) of the Exchange Act.
Section 12.
SECURITIES REGISTRATION
Each Stock Option Grant may provide that, upon the receipt of Shares as
a result of the surrender or exercise of an Option, the Employee or Key Person
shall, if so requested by the Company, hold such Shares for investment and not
with a view of resale or distribution to the public and, if so requested by the
Company, shall deliver to the Company a written statement satisfactorily to the
Company to that effect. Each Stock Option Grant may also provide that, if so
requested by the Company, the Employee or Key Person shall make a written
representation to the Company that he or she will not sell or offer to sell any
of such Shares unless a registration statement shall be in effect with respect
to such Shares under the Securities Act of 1933, as amended ("1933 Act"), and
any applicable state securities law or, unless he or she shall have furnished to
the Company an opinion, in form and substance satisfactory to the Company, of
legal counsel acceptable to the Company, that such registration is not required.
Certificates representing the Shares transferred upon the exercise or surrender
of an Option granted under this Plan may at the discretion of the Company bear a
legend to the effect that such Shares have not been registered under the 1933
Act or any applicable state securities law and that such Shares may not be sold
or offered for sale in the absence of an effective registration statement as to
such Shares under the 1933 Act and any applicable state securities law or an
opinion, in form and substance satisfactory to the Company, of legal counsel
acceptable to the Company, that such registration is not required.
Section 13.
LIFE OF PLAN
No Option shall be granted under this Plan on or after the earlier of:
1. the tenth (10th) anniversary of the effective date of
this Plan (as determined under Section 4 of this Plan),
in which event this Plan otherwise thereafter shall
continue in effect until all outstanding
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Options have been surrendered or exercised in full or no
longer are exercisable, or
2. the date on which all of the Shares reserved under
Section 3 of this Plan have (as a result of the
surrender or exercise of Options granted under this
Plan) been issued or no longer are available for use
under this Plan, in which event this Plan also shall
terminate on such date.
Section 14.
ADJUSTMENT
The number of Shares reserved under Section 3 of this Plan, and the
number of Shares subject to Options granted under this Plan, and the Exercise
Price of such Options shall be adjusted by the Committee in an equitable manner
to reflect any change in the capitalization of the Company, including, but not
limited to, such changes as stock dividends or stock splits. Furthermore, the
Committee or the Board shall have the right to adjust (in a manner which
satisfies the requirements of Code Section 424(a)) the number of Shares reserved
under Section 3 of this Plan, and the number of Shares subject to Options
granted under this Plan, and Exercise Price of such Options in the event of any
corporate transaction described in Code Section 424(a) which provides for a
substitution or assumption of such Options. If any adjustment under this Section
14 creates a fractional Share or a right to acquire a fractional Share, such
fractional Share shall be disregarded, and the number of Shares reserved under
this Plan and the number subject to any Options granted under this Plan shall be
the next lower number of Shares, rounding all fractions downward. And adjustment
made under this Section 14 by the Committee or the Board shall be conclusive and
binding on all affected persons and, further, shall bot constitute and increase
in the number of Shares reserved under Section 3 of this Plan.
Section 15.
SALE OR MERGER OF THE COMPANY
If the Company agrees to sell substantially all of its assets for cash
or property, or for a combination of cash and property, or agrees to any merger,
consolidation, reorganization, division or other transaction in which Shares are
converted into another security or into the right to receive securities or
property, and such agreement does not provide for the assumption or
substitution, each such Option, at the direction and discretion of the Committee
or the Board, or as is otherwise provided in the Stock Option Grants, may be
canceled unilaterally by the Company in exchange for the cash or, if the
Committee or the Board elects, the whole Shares (or, subject to satisfying the
conditions to the exemption under Rule 16b-3 or any successor exemption to
Section 16(b) of the
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Exchange Act, for the whole Shares and the cash in lieu of a fractional Share)
which each Employee or Key Person otherwise would receive if he or she had the
right to surrender his or her outstanding Option in full under Section 11 of
this Plan and he or she exercised that right on a date fixed by the Committee or
the Board which comes before such sale or other corporate transaction as
described in this Section 15 shall become fully vested and immediately
exercisable just prior to the closing of such transaction.
Section 16.
AMENDMENT OR TERMINATION
This Plan may be amended by the Committee or the Board from time to time
to the extent that the Committee or the Board deems necessary or appropriate,
provided, however, no such amendment shall be made absent the approval of the
shareholders of the Company (1) to increase the number of Shares reserved under
Section 3 except as set forth in Section 14, (2) to extend the maximum life of
the Plan under Section 13 or the maximum exercise period under Section 9, (3) to
decrease the minimum Exercise Price under Section 8, or (4) to change the
designation of Employees or Key Persons eligible for Options under Section 6.
The Committee or the Board also may suspend the granting of Options under this
Plan at any time and may terminate this Plan at any time; provided, however, the
Company shall not have the right to modify, amend or cancel any Option granted
before such suspension or termination unless (1) the employee or Key Person
consents in writing to such modification, amendment or cancellation or (2) there
is a dissolution or liquidation of the Company or a transaction described in
Section 14 or Section 15 of this Plan.
Section 17.
MISCELLANEOUS
18.1 SHAREHOLDER RIGHTS. No employee or Key Person shall have any rights
as a shareholder of the Company as a result of the grant of an Option to him or
to her under this Plan or his or her exercise or surrender of such Option
pending the actual delivery of Shares subject to such Option to such Employee or
Key Person.
18.2 NO CONTRACT OF EMPLOYMENT. The grant of an Option to an Employee or
Key Person under this Plan shall not constitute a contract of employment and
shall not confer on an Employee any rights upon his or her termination of
employment in addition to those rights, if any, expressly set forth in the Stock
Option Grant which evidences his or her Option.
18.3 WITHHOLDING. The exercise or surrender of any Option granted under
this Plan shall constitute an Employee's or Key Person's full and complete
consent to whatever action the Committee or the Board directs to satisfy the
federal and state tax withholding requirements, if any, which the Committee or
Board in its discretion deems applicable to such exercise or surrender.
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18.4 TRANSFER. The transfer of an Employee between or among the Company,
a Subsidiary or a Parent shall not be treated as a termination of his or her
employment under this Plan.
18.5 CONSTRUCTION. This Plan shall be construed under the laws of the
State of Georgia.
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