<PAGE> 1
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Cayenne Software, Inc.
(Exact name of issuer as specified in its charter)
Massachusetts 04-2784044
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8 New England Executive Park, Burlington, MA 01803
(Address of principal executive offices) (Zip Code)
Cadre Technologies, Inc.
1988 Incentive and Non-Statutory Stock Option Plan
1989 Non-Statutory Stock Option Plan
(Full title of the Plan)
Peter J. Boni, President
Cayenne Software, Inc.
8 New England Executive Park
Burlington, MA 01803
(617) 273-9003
(Name and address, including zip code, and
telephone number, including area code, of agent for service)
WITH A COPY TO:
John D. Patterson, Jr., Esquire
Foley, Hoag & Eliot
One Post Office Square
Boston, Massachusetts 02109
(617) 832-1000
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed
Title of Proposed maximum
securities Amount maximum aggregate Amount of
to be to be offering price offering registration
registered registered per share price fee
<S> <C> <C> <C> <C>
Common Stock 1,508,488 $4.25 $6,411,074 $2,210.72
(par value $.01) shares
Common Stock 194,853 $4.25 $ 828,125 $ 285.56
(par value $.01) shares
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h), based on the reported high and low prices on the NASDAQ
National Market System on September 11, 1996.
<PAGE> 2
PROSPECTUS
CAYENNE SOFTWARE, INC.
8 New England Executive Park
Burlington, MA 01803
(617) 273-9003
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933
SEPTEMBER 16, 1996
INTRODUCTION
------------
This Prospectus relates to 1,703,341 shares of Common Stock, par value
$0.01 per share (the "Common Stock"), offered to key employees, officers and
directors of, and individuals providing services to, Cayenne Software, Inc.
(the "Company") under two employee benefit plans of the Company's wholly-owned
subsidiary Cadre Technologies Inc. ("Cadre") providing for the grant of stock
options, designated the 1988 Incentive and Non-Statutory Stock Option Plan (the
"1988 Plan") and the 1989 Non-Statutory Stock Option Plan (the "1989 Plan").
THE PLAN
--------
Purpose
- -------
The purpose of both the 1988 Plan and the 1989 Plan is to provide
additional incentive to executives and other key employees of the Company and
its subsidiaries.
Creation, Duration, Modification and Termination
- ------------------------------------------------
The 1988 Plan was adopted by the Board of Directors of Cadre (the "Cadre
Board") and approved by Cadre's stockholders in 1988. The 1989 Plan was adopted
by the Cadre Board and approved by Cadre's stockholders in 1989. Both Plans
initially provided for issuance of options to purchase shares of Cadre's Common
Stock. In connection with the merger of Cadre with a wholly-owned subsidiary of
the Company effective July 18, 1996, the options then outstanding under both
Plans were modified to be exercisable to purchase shares of the Company's
Common Stock. The Company does not intend to grant further options under either
Plan; this Prospectus relates to shares of the Company's Common Stock that may
be issued upon exercise of options outstanding at the date of this Prospectus.
A total of 593,483 shares of the Company's Common Stock are issuable on
exercise of option outstanding under the 1988 Plan and 113,330 shares under the
1989 Plan. The 1988 Plan authorizes (i) the grant of options to purchase Common
Stock intended to qualify as incentive stock options ("Incentive Options"), as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and (ii) the grant of options that do not so qualify ("Nonqualified
Options"). The 1989 Plan authorizes the grant of Nonqualified options.
Each Plan provides that the Board may amend the Plan, except that the class
of employees eligible to receive options, the maximum term of options and the
aggregate number of shares issuable under the 1988 Plan may not be changed or
<PAGE> 3
increased (except in the event of certain changes in the Company's capital
structure) without the consent of the stockholders.
Options may not be granted under either Plan more than ten years after the
effective date of the Plan. Each Plan will terminate when the total amount of
the Common Stock with respect to which options may be granted under the Plan
will have been issued upon the exercise of options, unless sooner terminated by
the Board.
Administration
- --------------
Each Plan is administered by the Cadre Board. Currently, the sole Director
of Cadre is Peter J. Boni, who is President and Chief Executive Officer of the
Company and a member of the Company's Board of Directors. Each Plan authorizes
the Cadre Board to interpret the Plan and the options granted thereunder, to
establish, amend and revoke rules and regulations for the administration of the
Plan, to make changes to any outstanding option granted thereunder, and
generally, to exercise such powers and to perform such acts as are deemed
necessary or expedient to promote the best interests of the Company with
respect to the Plan.
Under each Plan, the Cadre Board selects the individual to whom options are
granted and determines the option exercise price and other terms of each award
(including whether repurchase rights of the Company or certain resale
restrictions are to be imposed on shares subject to the option), subject to the
provisions of the Plan.
Information about each Plan and its administration may be obtained by
calling or writing to the Company's Chief Financial Officer, Cayenne Software,
Inc., 8 New England Executive Park, Burlington, MA 01803, (617) 273-9003.
Participation
- -------------
Incentive Options under the 1988 Plan may be granted only to officers and
other employees of the Company and its subsidiaries. Nonqualified Options under
either Plan may be granted to officers or other employees of the Company and its
subsidiaries and to members of the Board and consultants or other persons who
render services to the Company (regardless of whether they are also employees).
No Incentive Option may extend for more than ten years from the date of
grant (five years in the case of persons holding 10% or more of the total
combined voting power of all classes of stock of the Company or any subsidiary).
The shares of stock issuable upon exercise of an option by any officer, director
or beneficial owner of more than 10% of the Common Stock of the Company may not
be sold or transferred for a period of six months following the grant of such
option. The Committee may accelerate the time for exercise of all unexercised
and unexpired options in connection with a merger, consolidation, liquidation or
sale of substantially all of the assets of the Company.
The exercise price of Incentive Options granted under the 1988 Plan may not
be less than 100% of the fair market value of the Common Stock on the date of
grant (or 110% of the fair market value in the case of persons holding 10% or
more of the total combined voting power of all classes of stock of the Company
or any subsidiary). The aggregate fair market value (determined at the time of
grant) of shares of Common Stock issuable pursuant to Incentive Options which
first become exercisable by an employee in any calendar year may not exceed
$100,000 (or such greater amount as may from time to time be permitted with
respect to Incentive Options by the Code or any other applicable law or
regulation).
The exercise price of Nonqualified Options granted under the 1988 Plan may
not be less than 85% of the Fair Market Value of the Common Stock at the date of
grant. The exercise price of options granted under the 1989 Plan is not subject
to any general limitation.
Shares of Common Stock issued under either Plan may be either treasury
shares or authorized but unissued shares.
<PAGE> 4
Exercise of Options; Payment of Exercise Price
- ----------------------------------------------
Each option granted under either Plan may be exercised, so long as it is
valid and outstanding, from time to time in part or as a whole, subject to any
limitations with respect to the number of shares for which the option may be
exercised at a particular time and to such other conditions as the Committee in
its discretion may specify upon granting the option.
Options may be exercised by the delivery of written notice to the Company
setting forth the number of shares of Common Stock the option holder then
desires to purchase and specifying the address to which the certificates for
such shares are to be mailed, together with (i) cash, certified check, bank
draft or postal or express money order equal to the option price of such shares;
(ii) with the consent of the Committee, other shares of Common Stock of the
Company having a fair market value equal to the option price of such shares;
(iii) with the consent of the Committee, such other consideration which is
acceptable to the Committee and which has a fair market value equal to the
option price of such shares; or (iv) with the consent of the Committee, a
combination of (i), (ii) and/or (iii).
Resale Restrictions
- -------------------
This Prospectus does not cover resales by affiliates of the Company, as
defined in the Act, of shares of the Common Stock purchased under either Plan.
Resales by affiliates of Common Stock purchased under either Plan will be
subject to the restrictions thereon imposed by the Act, and offers and sales by
affiliates may be made only pursuant to an effective registration statement
under the Act or an exemption from the registration requirements of the Act.
Officers, directors and beneficial owners of greater than 10% of the
outstanding shares of Common Stock who have been granted options under either
Plan may be subject to Section 16 of the Securities Exchange Act of 1934 and to
the rules promulgated thereunder. Such persons should consult their tax,
accounting and legal advisors with respect to options granted to them under
either Plan and the acquisition and disposition of shares of Common Stock
obtained upon exercise of such options.
United States Income Tax Information
- ------------------------------------
The following discussion is intended only as a brief overview of certain of
the current federal income tax laws applicable to the Plans. Option holders
should consult their tax advisors concerning their own federal income tax
situations, as well as concerning state tax aspects of the acquisition and
exercise of options granted to them under either Plan. No state tax matters are
addressed in the following discussion.
The grantee of a Nonqualified Option recognizes no income for federal
income tax purposes on the grant thereof. On the exercise of a Nonqualified
Option, the difference between the fair market value of the underlying shares of
Common Stock and the option exercise price is treated as compensation to the
holder of the option taxable as ordinary income in the year of exercise, and
such fair market value becomes the basis for the underlying shares which will be
used in computing any capital gain or loss upon disposition of such shares. The
Company may deduct for the year of exercise an amount equal to the amount
recognized by the option holder as ordinary income upon exercise of a
Nonqualified Option.
The grantee of an Incentive Option normally will recognize no income for
federal income tax purposes on the grant thereof. Except as provided below with
respect to the alternative minimum tax, there is no tax upon exercise of an
Incentive Option. If no disposition of shares acquired upon exercise of the
Incentive Option is made by the option holder within two years from the date of
the grant of the Incentive Option or within one year after exercise of the
option, any gain realized by the option holder on the subsequent sale of such
shares is treated as a long-term capital gain for federal income tax purposes.
If the shares are sold prior to the expiration of such periods, the difference
between the lesser of the value of the shares at the date of
<PAGE> 5
exercise or at the date of sale and the exercise price of the option is treated
as compensation to the employee taxable as ordinary income and the excess gain,
if any, is treated as capital gain (which will be long-term capital gain if the
shares are held for more than one year).
The excess of the fair market value of the underlying shares over the
option price at the time of exercise of an Incentive Option will constitute an
item of tax preference for purposes of the alternative minimum tax. Taxpayers
who incur the alternative minimum tax are allowed a credit which may be carried
forward indefinitely to be used as a credit against the regular tax liability in
a later year; however, the minimum tax credit can not reduce the regular tax
below the alternative minimum tax for that carryover year.
In connection with the sale of the shares covered by Incentive Options,
under the 1988 Plan, the Company is allowed a deduction for tax purposes only to
the extent, and at the time, the option holder receives ordinary income (for
example, by reason of the sale of shares by the holder of an Incentive Option
within two years of the date of the granting of the option or one year after the
exercise of the option).
Neither Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974, nor is either plan qualified under Section 401(a) of the
Code.
Assignment of Interests Under The Plan; Withdrawal From the Plan
- ----------------------------------------------------------------
Options under each Plan are nontransferable except by will or by the laws
of descent and distribution, and are exercisable, during the lifetime of the
option holder, only by the option holder. Options, other than Nonqualified
Options granted to persons who are not employees of the Company, terminate on
the earlier of: (i) the date of expiration thereof, (ii) the date of termination
of the option holder's employment with or performance of services to the Company
by the Company for cause (as determined by the Company), or voluntarily by the
option holder, (iii) ninety days after termination of the option holder's
employment with or services to the Company by the Company without cause, other
than in the case of death or permanent and total disability, or (iv) one year
after the date of death or permanent and total disability of the option holder
while in the employ of the Company. Nonqualified Options granted to persons who
are not employees of the Company need not, unless the Committee determines
otherwise, be subject to the provisions set forth in clauses (ii) through (iv)
above.
Charges and Deductions, and Liens Therefor
- ------------------------------------------
Neither Plan provides that a person has or may create a lien on any funds,
securities, or other property held under the Plan.
Availability of Documents Incorporated by Reference
- ---------------------------------------------------
A copy of any document incorporated by reference in Item 3 of Part II of
the Registration Statement of which this Prospectus is a part (not including
exhibits), such documents incorporated by reference constituting a prospectus
under Section 10(a) of the Act, and any other documents required to be delivered
to employees pursuant to Rule 428(b) promulgated under the Act will be provided
to any option holder by the Company upon written or oral request to the
Company's Chief Financial Officer, Cayenne Software, Inc., 8 New England
Executive Park, Burlington, MA 01803, (617) 273-9003.
<PAGE> 6
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated in this Registration Statement by reference:
(a) The Company's Annual Report (Form 10K) for the year ended June 30,
1995, File No. 0-19682.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1995, December 31, 1995, and March 31, 1996, File No. 0-19682.
(c) The description of Common Stock included in the Company's Registration
Statement on Form S-1, File No. 33-43401.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the securities registered hereby is being passed upon for
the Company by Foley, Hoag & Eliot, Boston, Massachusetts.
II-1
<PAGE> 7
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Paragraph D of Article 6 of the Company's Articles provides that, to the
maximum extent permitted by Massachusetts law (as the same exists or is
subsequently amended), no director shall be personally liable to the Company or
any of its stockholders for monetary damages arising out of the director's
breach of fiduciary duty as a director of the Company. Section 13(b)(l1/2) of
the Massachusetts BCL provides that a Massachusetts corporation's articles of
organization may state a provision eliminating or limiting the personal
liability of a director to a corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
may not eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under specified sections of the Massachusetts
BCL establishing the liability of directors for certain unauthorized
distributions and loans to insiders or (iv) for any transaction from which the
director derived an improper personal benefit.
Section 6 of Article VII of the the Company's By-Laws provides that the
Company shall, to the extent legally permissible, indemnify each of its
directors and officers (including persons who serve at its request as directors,
officers or trustees of any organization in which the Company has an interest as
a stockholder, creditor or otherwise), against all liabilities and expenses
reasonably incurred by such persons in connection with the defense or
disposition of any action, suit or proceeding in which they may be involved or
with which they may be threatened by reason of being or having been such a
director or officer, except with respect to any matter as to which they shall
have been adjudicated not to have acted in good faith in the reasonable belief
that their action was in the best interests of the Company. Section 67 of the
Massachusetts BCL authorizes a Massachusetts corporation to indemnify its
directors, officers, employees and other agents unless such person shall have
been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that such action was in the best interests of the corporation.
The effect of these provisions would be to permit indemnification by the
Company for, among other liabilities, (a) liabilities arising out of the
Securities Act in connection with this Registration Statement (see Item 9
below).
Section 67 of the Massachusetts BCL also affords a Massachusetts
corporation the power to obtain insurance on behalf of its directors, officers,
employees and agents against liabilities incurred by them in those capacities or
out of their status as such, whether or not the corporation would have the power
to indemnify them against those liabilities. the Company has procured a
directors' and officers' liability and company reimbursement liability insurance
policy that (a) insures directors and officers of the Company against losses (in
excess of a deductible amount) arising from certain claims made against them by
reason of certain acts done or attempted by such directors or officers and (b)
insures the Company against losses (in excess of a deductible amount) arising
from any such claims, but only if the Company is required or permitted to
indemnify such directors or officers for such losses under statutory or common
law or under provisions of the Company's articles of organization or by-laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Restated Articles of Organization of the Company, incorporated by
reference to the Exhibits to the Company's Registration Statement on
Form S-1, File No. 33-45841.
II-2
<PAGE> 8
4.2 Amended and Restated By-Laws of the Company, incorporated by reference
to the Exhibits to the Company's Registration Statement on Form S-1,
File No. 43401.
4.3 1988 Incentive and Non-Statutory Stock Option Plan.
4.4 1989 Non-Statutory Stock Option Plan.
5.1 Opinion of Counsel.
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (contained on the signature page).
ITEM 9. UNDERTAKINGS.
1. 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 herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
2. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act 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 2 (a)(1)(i) and 2 (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 herein.
(b) 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 herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
II-3
<PAGE> 9
3. 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.
II-4
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Burlington, Commonwealth of Massachusetts, on the
11th day of September 1996.
CAYENNE SOFTWARE, INC.
By: /S/ Peter J. Boni
-----------------
Peter J. Boni
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints Peter J. Boni and Eugene J. DiDonato, and each of
them, his true and lawful attorneys-in-fact and agents with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing he may
deem necessary or advisable to be done in connection with this Registration
Statement, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, any lawfully
do or cause to be done by virtue hereof.
<TABLE>
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.
<CAPTION>
SIGNATURE Title DATE
--------- ----- ----
<S> <C> <C>
/S/ Peter J. Boni President, Chief September 11, 1996
- ----------------- Executive Officer and
Peter J. Boni Director
(Principal Executive
Officer)
/S/ Frederick H. Phillips Vice President--Finance September 11, 1996
- ------------------------- Adminstration, Treasurer
Frederick H. Phillips and Chief Financial and
Accounting Officer
/S/ Charles W. Bachman Chairman of the Board of September 11, 1996
- ---------------------- Directors
Charles W. Bachman
</TABLE>
II-5
<PAGE> 11
<TABLE>
<S> <C> <C>
/S/ John J. Alexander Director September 11, 1996
- ---------------------
John J. Alexander
/S/ Director September __, 1996
- ---------------------
R. John Fletcher
/S/ William H.D. Goddard Director September 11, 1996
- ------------------------
William H.D. Goddard
/S/ Allyn C. Woodward, JR. Director September 11, 1996
- --------------------------
Allyn C. Woodward, Jr.
</TABLE>
II-6
<PAGE> 12
EXHIBIT INDEX
-------------
Exhibit
No. Description Page
- ------- ----------- ----
4.1 Restated Articles of Organization of the Company
(incorporated by reference)
4.2 Amended and Restated By-Laws of the Company
(incorporated by reference)
4.3 1988 Incentive and Non-Statutory Stock Option Plan
4.4 1989 Non-Statutory Stock Option Plan
5.1 Opinion of Counsel
23.1 Consent of Independent Accountants
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (contained on the signature
page)
<PAGE> 1
EXHIBIT 4.3
EAST-WEST MERGERCO, INC.
1988 Incentive and Non-statutory Stock Option Plan
--------------------------------------------------
BACKGROUND
East-West Mergerco Inc., (the "Company") was incorporated in Delaware
in 1988 in connection with the proposed merger of MicroCASE, Inc. and Cadre
Technologies Inc. (collectively, the "Constituent Companies") and the Company
pursuant to an Agreement and Plan of Merger by and among the Company and the
Constituent Companies dated December 15, 1988. Options under this 1988 Incentive
and Non-Statutory Stock Option Plan (the "Plan") will include options which are
substituted for options granted under an cation plan of one of the Constituent
Companies ("substituted options"), options granted under an option plan of one
of Constituent Companies which are assumed by the Company ("assumed options")
and options granted by the Company which are neither substituted or assumed
options ("new options") . Substituted, assumed and new options will be referred
to herein collectively as "options."
SECTION 1. PURPOSE
This Plan is intended as a performance incentive for officers and
employees of the Company or its Subsidiaries (as hereinafter defined) and for
certain other individuals providing services to or acting as directors of the
Company or its Subsidiaries, to enable the persons to whom options are granted
(an "Optionee" or "Optionees") to acquire or increase a proprietary interest in
the success of the Company. The Company intends that this purpose will be
effected by the granting of incentive stock options ("Incentive Options") as
defined in Section 422A(b) of the internal Revenue Code of 1986 (the "Code") and
other stock options ("Non-Statutory Options") under the Plan. The term
"Subsidiaries" includes any corporations in which stock possessing 50% or more
of the total combined voting power of all classes of stock is owned directly or
indirectly by the Company.
SECTION 2. OPTIONS TO BE GRANTED AND ADMINISTRATION
2.1 OPTIONS TO BE GRANTED. Options granted under the Plan (whether
substituted, assumed or new options) may be either Incentive Options or
Non-Statutory Options.
2.2. ADMINISTRATION BY THE BOARD. This Plan shall be administered by
the Board of Directors of the Company (the "Board"). The Board shall have full
and final authority to operate, manage and administer the Plan on behalf of the
Company. This authority includes, but is not limited to: (i) the power to grant
options
<PAGE> 2
conditionally or unconditionally; (ii) the power to prescribe the form or forms
of the instruments evidencing options granted under this Plan; (iii) the power
to interpret the Plan; (iv) the power to provide regulations for the operation
of the incentive features of the Plan, and otherwise to prescribe regulations
for interpretation, management and administration of the Plan; (v) the power to
delegate responsibility for Plan operation, management and administration on
such terms, consistent with the Plan, as the Board may establish; (vi) the power
to delegate to other persons the responsibility for performing ministerial acts
in furtherance of the Plan's purpose; and (vii) the power to engage the services
of persons or organizations in furtherance of the Plan's purpose, including but
not limited to, banks, insurance companies, brokerage firms and consultants.
In addition, as to each option, the Board shall have full and final
authority in its discretion: (i) to determine the number of shares subject to
each option; (ii) to determine the time or times at which options will be
granted; (iii) to determine the option price for the shares subject to each
option, which price shall be subject to the applicable requirements, if any, of
Section 5.1(c) hereof; and (iv) to determine the time or times when each option
shall become exercisable and the duration of the exercise period, which shall
not exceed the limitations specified in Section 5.1(a).
2.3. APPOINTMENT AND PROCEEDINGS OF COMMITTEE. The Board may appoint a
Stock Option Committee (the "Committee") which shall consist of at least three
members of the Board, The Board may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed,
and may fill vacancies, however caused, in the Committee. The Committee shall
select one of its members as its chairman and shall hold its meetings at such
times and places as it shall deem advisable. A majority of its members shall
constitute a quorum, and all actions of the Committee shall be taken by a
majority of its members. Any action may be taken by a written instrument signed
by a majority of the members, and any action so taken shall be as fully
effective as if it had been taken by a vote of a majority of the members at a
meeting duly called and held.
2.4. POWERS OF COMMITTEE. Subject to the provisions of this Plan and
the approval of the Board, the Committee shall have the power to make
recommendations to the Board as to whom options should be granted, the number of
shares to be covered by each option, the time or times of option grants, and the
terms and conditions of each option; provided, however, that the terms and
conditions of each substituted option shall not differ materially from the
option previously granted by a Constituent Company to the holder thereof. In
addition, the Committee shall have authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan, and to
exercise the administrative and ministerial powers of the Board with regard to
aspects of the Plan other than the granting of options. The interpretation and
construction by the Committee of any provisions of the Plan or of any option
granted hereunder and the exercise of any power delegated to it hereunder shall
be final, unless otherwise determined by the Board. No member of the Board or
the Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted hereunder.
SECTION 3. STOCK
3.1 SHARES SUBJECT TO PLAN. The stock subject to the options granted
under the plan shall be shares of the Company's authorized but unissued common
stock, par value $.01 per share ("Common Stock"). The total number of shares
that may be issued pursuant to options granted under the Plan shall not exceed
an aggregate of 4,885,000 shares of Common Stock. Such number of shares shall be
subject to adjustment as provided in Section 7 hereof.
<PAGE> 3
3.2 LAPSED OR UNEXERCISED OPTIONS. Whenever any outstanding option
under the Plan is cancelled or is otherwise terminated (other than by exercise),
the shares of Common Stock allocable to the unexercised portion of such option
shall be restored to the Plan and shall again become available for the grant of
other options under the Plan.
SECTION 4. ELIGIBILITY
4.1 ELIGIBLE OPTIONEES. Incentive options may be granted only to
officers and other employees of the Company or its Subsidiaries, including
members of the Board who are also employees of the Company or a Subsidiary.
Non-Statutory Options may be granted to officers or other employees of the
Company or its Subsidiaries, to members of the Board or the board of directors
of any Subsidiary whether or not employees of the Company or such Subsidiary,
and to certain other individuals providing services to, the Company or its
Subsidiaries.
4.2 LIMITATIONS ON 10% STOCKHOLDERS. No Incentive Option shall be
granted to an individual who, at the time the incentive Option is granted, owns
(including ownership attributed pursuant to Section 425(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any parent or Subsidiary of the Company (a "greater-than-10%
stockholder"), unless such Incentive Option provides that (i) the purchase price
per share shall not be less than 110% of the fair market value of the Common
Stock at the time such Incentive Option is granted, and (ii) that such Incentive
Option shall not be exercisable to any extent after the expiration of five years
from the date it is granted.
4.3 LIMITATION ON EXERCISABLE OPTIONS. The aggregate fair market value
(determined at the time the Incentive Option is granted) of the Common Stock
with respect to which Incentive Options are exercisable for the first time by
any person during any calendar year under the Plan and under any other option
plan of the Company (or a parent or subsidiary as defined in Section 425 of the
Code) shall not exceed $100,000; provided, however, that such limitation shall
not be applicable to assumed or substituted options if on the date of grant of
an assumed option, or on the date of grant of the option which has been replaced
by the substituted option, such option was an incentive option under the
provisions of the Internal Revenue Code of 1954 in effect on such date of grant.
Any option granted in excess of the foregoing limitation shall be specifically
designated as being a Non-Statutory Option.
SECTION 5. TERMS OF THE OPTION AGREEMENTS
5.1 MANDATORY TERMS. Each option agreement shall contain such provisions as
the Board or the Committee shall from time to time deem appropriate. Option
agreements applicable to substituted options shall contain provisions not
materially different from the options which the substituted options replace.
Option agreements need not be identical, but each option agreement by
appropriate language shall include the substance of all of the following
provisions:
(a) EXPIRATION. Notwithstanding any other provision of the Plan or any
option agreement, each option shall expire the option agreement, which date
shall not be later than the tenth anniversary of the date on which the option
was granted (fifth anniversary in the case of a greater-than-10% stockholder).
(b) EXERCISE. Each option shall be exercisable in full or in
installments (which need not be equal) and at such times as designated by the
Board or the Committee. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, at any time after becoming
<PAGE> 4
exercisable, but not later than the date the option expires.
(c) PURCHASE PRICE. The purchase price per share of the Common Stock
under each Incentive Option shall be not less than the fair market value of the
Common Stock on the date the option is granted (110% of the fair market value in
the case of a greater-than-10% stockholder); provided, however, that with
respect to substituted options, the purchase price per share shall be not less
than the fair market value of the Common Stock of the Constituent Company on the
date the option which the substituted option replaces was granted (110% of the
fair market value in the case of a greater- than-10% stockholder). For the
purpose of the Plan the fair market value of the Common Stock shall be
determined by the Board. The price at which shares may be purchased pursuant to
NonStatutory Options shall not be less than 85% of the fair market value of the
shares of Common Stock on the date the option is granted.
(d) TRANSFERABILITY OF OPTIONS. Options granted under this Plan and
rights and privileges conferred hereby may not be transferred, assigned,
pledged, or hypothecated in any manner (whether by operation of law or
otherwise) other than by will or by applicable laws of descent and distribution,
and shall not be subject to execution, attachment, or similar process upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any
option under this Plan or any right or privilege conferred hereby contrary to
the provisions of this Plan, or upon the sale of levy or any attachment or
similar process upon the rights and privileges conferred hereby, such options
shall thereupon terminate and become null and void.
(e) TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP OR DEATH OF
OPTIONEE. Except as may be otherwise expressly provided in the terms and
conditions of the option granted to the Optionee, options granted hereunder
shall terminate on the earlier to occur of:
(i) the date of expiration thereof; or
(ii) other than in the case of death of the Optionee or
disability of the Optionee within the meaning of Section 22(e)(3) of the Code
("disability"), 90 days after termination of the employment between the Company
and the Optionee in the case of an Incentive Option or 90 days after termination
of the employment or other relationship between the Company and the Optionee,
unless such termination provision is waived by resolution adopted by the Board
within 30 days of the termination of such relationship, in the case of a
Non-Statutory option.
An employment relationship between the Company and the Optionee shall
be deemed to exist during any period during which the Optionee is employed by
the Company or by any Subsidiary. Whether authorized leave of absence or absence
on military government service shall constitute termination of the employment
relationship between the Company and the Optionee shall be determined by the
Board or the Committee at the time thereof; provided, however, that with respect
to incentive stock options, such determination shall be subject to any
requirements contained in the Code including that employment shall not be deemed
to continue beyond the first 90 days of such leave, unless the Optionee's
reemployment rights are guaranteed by statute or by contract.
In the event of the death of an Optionee while in an employment or
other relationship with the Company and before the date of expiration of such
option, such option shall terminate on the earlier of such date of expiration or
180 days following the date of such death. After the death of the Optionee, his
executors, administrators or any person or persons to whom his option may be
transferred by will or by laws of descent and distribution, shall have the
right, at any time prior to
<PAGE> 5
such time termination, to exercise the option to the extent the Optionee was
entitled to exercise such option immediately prior to his death.
If an optionee's employment or other relationship with the Company
terminates because of a disability, the Optionee's option shall terminate on the
earlier of the date of expiration thereof or 12-months following the
termination of such relationship; and unless by its terms it sooner terminates
and expires during such 12-month period, the Optionee may exercise that portion
of his or her option which is exercisable at the time of termination of such
relationship.
(f) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose to
be the owner of any shares of Common Stock subject to any option unless and
until (i) the option shall have been exercised pursuant to the terms thereof,
(ii) the Company shall have issued and delivered the shares of the Optionee, and
(iii) the Optionee's name shall have been entered as a stockholder of record on
the books of the Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such shares of Common Stock.
5.2 CERTAIN OPTIONAL TERMS. The Board may in its discretion provide,
upon the grant of any option hereunder, that the Company shall have an option to
repurchase all or any number of shares purchased upon exercise of such option.
The repurchase price per share payable by the Company shall be such amount or be
determined by such formula as is fixed by the Board at the time the option for
the shares subject to repurchase was granted. The Board may also provide that
the Company shall have a right of first refusal with respect to the transfer or
proposed transfer of any shares purchased upon exercise of an option granted
hereunder. In the event the Board shall grant options subject to the Company's
repurchase rights or rights of first refusal, the certificate or certificates
representing the shares purchased pursuant to such option shall carry a legend
satisfactory to counsel for the Company referring to the Company's repurchase
option.
SECTION 6. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE
6.1 NOTICE OF EXERCISE. Any option granted under the Plan may be
exercised by the Optionee by delivering to the Company on any business day a
written notice specifying the number of shares of Common Stock the Optionee then
desires to purchase and specifying the address to which the certificates for
such shares are to be mailed (the "Notice"), accompanied by payment for such
shares.
6.2 MEANS OF PAYMENT AND DELIVERY. Payment for the shares of Common
Stock purchased pursuant to the exercise of an option shall be made either (i)
in cash equal to the option price for the number of shares specified in the
Notice (the "Total Option Price"); or (ii) if authorized by, or with the consent
of, the Committee of the Board, in shares of Common Stock of the Company having
a fair market value equal to or less than the Total Option Price, or by a
combination of stock and cash; PROVIDED, HOWEVER, that neither the Committee nor
the Board may approve the use of shares of Common Stock to pay all or any
portion of the Total Option Price unless such shares of Common Stock have been
held by the Optionee for such period of time that such use will not result in
"compensation expense" to the Company, as determined under generally accepted
accounting principles; or (iii) with respect to substituted or assumed options,
and then only if authorized by the applicable option agreement and only to the
extent permitted by law, by issuance by the option holder of a full recourse
promissory note having the repayment terms specified in the applicable option
agreement or approved by the Board or by the Committee; or (iv) if authorized by
an option agreement issued in replacement of option agreements issued prior to
1989, in shares of Common Stock of the Company having a fair market value equal
to or less than the Total Option Price, if any,
<PAGE> 6
of the Total Option Price over the fair market value of such shares of Common
Stock.
SECTION 7. ADJUSTMENT UPON CHANCES IN CAPITALIZATION
7.1 NO EFFECT OF OPTIONS UPON CERTAIN CORPORATE TRANSACTIONS. The
existence of outstanding options shall not affect in any way the right or power
of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of Common Stock, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
7.2 STOCK DIVIDENDS, RECAPITALIZATION, ETC. If the Company shall effect
a subdivision or consolidation of shares or other capital readjustment, the
payment of a stock dividend, or other increase or reduction of the number of
shares of the Common Stock outstanding, without receiving compensation therefor
in money, services or property, then (i) the number, class and per share price
of shares of stock subject to outstanding options hereunder shall be
appropriately adjusted in such a manner as to entitle an Optionee to receive
upon exercise of an option, for the same aggregate cash consideration, the same
total number and class of shares as he would have received as a result of the
event requiring the adjustment had he exercised his option in full immediately
prior to such event; and (ii) the number and class of shares with respect to
which options may be granted under the Plan shall be adjusted by substituting
for the total number of shares of Common Stock then reserved for issuance under
the Plan that number and class of shares of stock that would have been owned by
the owner of an equal number of outstanding shares of Common Stock as the result
of the event requiring the adjustment.
7.3 DETERMINATION OF ADJUSTMENTS. Adjustments under this Section 7
shall be determined by the Board and such determinations shall be conclusive.
The Board shall have the discretion and power in any such event to determine and
to make effective provision for acceleration of the time or times at which any
option or portion thereof shall become exercisable. No fractional shares of
Common Stock shall be issued under the Plan on account of any adjustment
specified above.
7.4 NO ADJUSTMENT IN CERTAIN CASES. Except as hereinbefore expressly
provided, the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services either upon direct sale or upon the exercise of rights
or warrants into shares to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Common Stock then subject to outstanding
options.
SECTION 8. EFFECT OF CERTAIN TRANSACTIONS
8.1 MERGERS WITH COMPANY AS SURVIVOR. After a merger of one or more
corporations into the company or after a consolidation of the Company and one or
more corporations in which the Company shall be the surviving corporation, each
holder of an outstanding option shall, at no additional cost, be entitled upon
exercise of such option to receive (subject to any required action by
stockholders) in lieu of the number of shares as to which such option shall then
be so exercisable, the number and class of shares of stock or other securities
to which such holder would have been entitled pursuant to the terms of the
agreement of merger or consolidation if, immediately prior to such
<PAGE> 7
merger or consolidation, such holder had been the holder of record of a number
of shares of Common Stock equal to the number of shares as to which such option
shall be so exercised.
8.2 LIQUIDATIONS AND MERGERS IN WHICH COMPANY NOT SURVIVOR. If the
Company is merged into or consolidated with another corporation under
circumstances where the Company is not the surviving corporation, or if the
Company is liquidated, or sells or otherwise disposes of substantially all of
its assets to another corporation while unexercised options remain outstanding
under the Plan: (i) subject to the provisions of clause (iii) below, after the
effective date of such merger, consolidation, liquidation, sale or disposition,
as the case may be, each holder of an outstanding option (other than a
substituted option which, by its terms, expires upon the effective date of such
merger, consolidation or sale of assets) shall be entitled, upon exercise of
such option, to receive, in lieu of shares of Common Stock, shares of such stock
or other securities, cash or property as the holders of shares of Common Stock
received pursuant to the terms of the merger, consolidation, liquidation, sale
or disposition; (ii) the Board may accelerate the time for exercise of all
unexercised and unexpired options to and after a date prior to or specified by
the Board; sale or disposition, as the case may be, the effective date of such
merger, consolidation, liquidation, sale or disposition, provided that (x)
notice of such cancellation shall be given to each holder of an option and
(y)each holder of an option shall have the right to exercise such option to the
extent that the same is then exercisable or, if the Board shall have accelerated
the time for exercise of all unexercised and unexpired options, in full during
the 30-day period preceding the effective date of such merger, consolidation,
liquidation, sale or disposition.
SECTION 9. AMENDMENT OF THE PLAN
The Board may amend the Plan at any time, and from time to time,
subject to the limitation that, except as provided in Sections 7 and 8 hereof,
no amendment shall be effective unless approved by the stockholders of the
Company in accordance with applicable law and regulations at an annual or
special meeting held within twelve months before or after the date of adoption
of such amendment, in any instance in which such amendment would: (i) increase
the number of shares of Common Stock as to which options may be granted under
the Plan; (ii) change in substance the provisions of Section 4 hereof relating
to eligibility to participate in the Plan; or (iii) increase the maximum term of
Options provided herein.
Except as provided in Sections 7 and 8 hereof, rights and obligations
under any option granted before any amendment of the Plan shall not be altered
or impaired by such amendment, except with the consent of the Optionee.
SECTION 10. NON-EXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of the Company or approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including without limitation to the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.
SECTION 11. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW
The obligation of the Company to sell and deliver shares of Common Stock
with respect to options granted under the Plan shall e subject to all applicable
laws, rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by government
<PAGE> 8
agencies as may be deemed necessary or appropriate by the Board or the
Committee.
The Plan shall be governed by and construed in accordance with the laws
of the State of Delaware.
SECTION 12. EFFECTIVE DATE OF PLAN; STOCKHOLDER APPROVAL
The Plan shall become effective upon its approval by the Board; provided,
however that the Plan shall be subject to the further approval of the Company's
stockholders in accordance with applicable laws and regulations at an annual of
special meeting held within one year of such effective date. No options granted
under the Plan prior to such stockholder approval may be exercised until such
approval has been obtained, and the right to exercise any such options shall by
the terms thereof be specifically subject to such stockholder approval. No
option may be granted under the Plan after the tenth anniversary of the
effective date of the Plan.
<PAGE> 1
EXHIBIT 4.4
EAST-WEST MERGERCO, INC.
1989 Non-statutory Stock Option Plan
------------------------------------
SECTION 1. PURPOSE
This 1989 Non-Statutory Stock Option Plan (the "Plan") is intended as a
performance incentive for officers and employees of East-West Mergerco, Inc.
(the "Company") or its Subsidiaries (as hereinafter defined) and for certain
other individuals providing services to or acting as directors of the Company or
its Subsidiaries, to enable the persons to whom options are granted (an
"Optionee" or "Optionees") to acquire or increase a proprietary interest in the
success of the Company. The Company intends that this purpose will be effected
by the granting of options ("options") that are not incentive stock options as
defined in Section 422A(b) of the Internal Revenue Code of 1986 (the "Code").
The term "Subsidiaries" includes any corporations in which stock possessing 50%
or more of the total combined voting power of all classes of stock is owned
directly or indirectly by the Company.
SECTION 2. OPTIONS TO BE GRANTED AND ADMINISTRATION
2.1 ADMINISTRATION BY THE BOARD. This Plan shall be administered by the
Board of Directors of the Company (the "Board"). The Board shall have full and
final authority to operate, manage and administer the Plan on behalf of the
Company. This authority includes, but is not limited to: (i) the power to grant
options conditionally or unconditionally; (ii) the power to prescribe the form
or forms of the instruments evidencing options granted under this Plan; (iii)
the power to interpret the Plan; (iv) the power to provide regulations for the
operation of the incentive features of the Plan, and otherwise to prescribe
regulations for interpretation, management and administration of the Plan; (v)
the power to delegate responsibility for Plan operation, management and
administration on such terms, consistent with the Plan, as the Board may
establish; (vi) the power to delegate to other persons the responsibility for
performing ministerial acts in furtherance of the Plan's purpose; and (vii) the
power to engage the services of persons or organizations in furtherance of the
Plan's purpose, including but not limited to, banks, insurance companies,
brokerage firms and consultants.
In addition, as to each option, the Board shall have full and final
authority in its discretion: (i) to determine the number of shares subject to
each option; (ii) to determine the time or times at which options will be
granted; (iii) to determine the option price for the shares subject to each
option, which price shall be subject to the applicable requirements, if any, of
Section 5.1(c) hereof; and (iv) to determine the time or times when each option
shall become exercisable and the duration of the exercise period, which shall
not exceed the limitations specified in Section 5.1(a).
2.2 APPOINTMENT AND PROCEEDINGS OF COMMITTEE. The Board may appoint a
Stock Option Committee (the "Committee") which shall consist of at least three
members of the Board. The Board may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed,
and may fill vacancies, however, caused, in the Committee. The Committee shall
select one of its members as its chairman and shall hold its meetings at such
times and places as it shall deem advisable. A majority of its members shall
constitute a quorum, and all actions of the Committee shall be taken by a
majority of its members. Any action may be taken by a
<PAGE> 2
written instrument signed by a majority of the members, and any action so taken
shall be as fully effective as if it had been taken by a vote of a majority of
the members at a meeting duly called and held.
2.3 POWERS OF COMMITTEE. Subject to the provisions of this Plan and the
approval of the Board, the Committee shall have the power to make
recommendations to the Board as to whom options should be granted, the number of
shares to be covered by each option, the time or times of option grants, and the
terms and conditions of each option. In addition, the Committee shall have
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, and to exercise the administrative and
ministerial powers of the Board with regard to aspects of the Plan other than
the granting of options. The interpretation and construction by the Committee of
any provisions of the Plan or of any option granted hereunder and the exercise
of any power delegated to it hereunder shall be final, unless otherwise
determined by the Board. No member of the Board or the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any option granted hereunder.
SECTION 3. STOCK
3.1 SHARES SUBJECT TO PLAN. The stock subject to the options granted
under the Plan shall be shares of the Company's authorized but unissued common
stock, par value $.01 per share ("Common Stock"). The total number of shares
that may be issued pursuant to options granted under the Plan shall not exceed
an aggregate of 631,000 shares of Common Stock. Such number of shares shall be
subject to increases or decreases (but not to a number of shares less than the
aggregate number covered by outstanding options) at any time or from time to
time by the Board. The number of shares covered by the plan also is subject to
adjustment as provided in Section 7 hereof.
3.2 LAPSED OR UNEXERCISED OPTIONS. Whenever any outstanding option
under the Plan expires, is cancelled or is otherwise terminated (other than by
exercise), the shares of Common Stock allocable to the unexercised portion of
such option shall be restored to the Plan and shall again become available for
the grant of other options under the Plan.
SECTION 4. ELIGIBILITY
Options may be granted to officers or other employees of the Company or
its Subsidiaries, to members of the Board or the board of directors of any
Subsidiary whether or not employees of the Company or such Subsidiary, and to
certain other individuals providing services to the Company or its Subsidiaries.
SECTION 5. TERMS OF THE OPTION AGREEMENTS
5.1 MANDATORY TERMS. Each option agreement shall contain such
provisions as the Board or the Committee shall from time to time deem
appropriate. Option agreements need not be identical, but each option agreement
by appropriate language shall include the substance of all of the following
provisions:
(a) EXPIRATION. Notwithstanding any other provision of the Plan or
of any option agreement, each option shall expire on the date specified in the
option agreement, which date shall not be later than the tenth anniversary of
the date on which the option was granted.
(b) EXERCISE. Each option shall be exercisable in full or in
installments (which
<PAGE> 3
need not be equal) and at such times as designated by the Beard or the
Committee. To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the date the option expires.
(c) PURCHASE PRICE. The price at which shares may be purchased
pursuant to the options shall be specified by the Board at the time the option
is granted, and may be less than, equal to or greater than the fair market value
of the shares of Common Stock on the date such option is granted, but shall not
be less than the par value of shares of Common Stock.
(d) TRANSFERABILITY OF OPTIONS. Options granted under this Plan and
rights and privileges conferred hereby may not be hypothecated in any manner
otherwise) other than by will or distribution, and shall not be subject to
execution, attachment, or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of any option under this Plan or any
right or privilege conferred hereby contrary to the provisions of this Plan, or
upon the sale or levy or any attachment or similar process upon the rights and
privileges conferred hereby, such options shall thereupon terminate and become
null and void.
(e) TERMINATION OF EMPLOYMENT OR DEATH OF EMPLOYEE OPTIONEE. Except
as may be otherwise expressly provided in the terms and conditions of the option
granted to the Optionee, options granted hereunder shall terminate on the
earlier to occur of:
(i) the date of expiration thereof; or
(ii) other than in the case of death of the Optionee or
disability of the Optionee within the meaning of Section 22(e)(3) of the Code
("disability"), 90 days after termination of the employment or other
relationship between the Company and the Optionee, unless such termination
provision is waived by resolution adopted by the Board within 30 days of the
termination of such relationship.
An employment relationship between the Company and the Optionee shall
be deemed to exist during any period during which the Optionee is employed by
the Company or by any Subsidiary. Whether authorized leave of absence or absence
on military government service shall constitute termination of the employment
relationship between the Company and the Optionee shall be determined by the
Board at the time thereof.
In the event of the death of an Optionee while in an employment or
other relationship with the Company and before the date of expiration of such
option, such option shall terminate on the earlier of such date of expiration or
180 days following the date of such death. After the death of the Optionee, his
executors, administrators or any person or persons to whom his option may be
transferred by will or by laws of descent and distribution, shall have the
right, at any time prior to such time termination, to exercise the option to the
extent the Optionee was entitled to exercise such option immediately prior to
his death.
If an Optionee's employment or other relationship with the Company
terminates because of a disability, the Optionee's option shall terminate on the
earlier of the date of expiration thereof or 12- months following the
termination of relationship; and unless by its terms it sooner terminates and
expires during such 12-month period, the Optionee may exercise that portion of
his or her option which is exercisable at the time of termination of such
relationship.
(f) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose
to be the owner
<PAGE> 4
of any shares of Common Stock subject to any option unless and until (i) the
option shall have been exercised pursuant to the terms thereof, (ii) the Company
shall have issued and delivered the shares of the Optionee, and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such shares of Common Stock.
5.2 The Board may in its discretion provide, upon the grant of any
option hereunder, that the Company shall have an option to repurchase all or any
number of shares purchased upon exercise of such option. The repurchase price
per share payable by the Company shall be such amount or be determined by such
formula as is fixed by the Board at the time the option for the shares subject
to repurchase was granted. The Board may also provide that the Company shall
have a right of first refusal with respect to the transfer or proposed transfer
of any shares purchased upon exercise of an option granted hereunder. In the
event the Board shall grant options subject to the Company's repurchase rights
or rights of first refusal, the certificate or certificates representing the
shares purchased pursuant to such option shall carry a legend satisfactory to
counsel for the Company referring to the Company's repurchase option.
SECTION 6. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE
6.1 NOTICE OF EXERCISE. Any option granted under the Plan may be
exercised by the Optionee by delivering to the Company on any business day a
written notice specifying the number of shares of Common Stock the Optionee then
desires to purchase and specifying the address to which the certificates for
such shares are to be mailed (the "Notice"), accompanied by payment for such
shares.
6.2 MEANS OF PAYMENT AND DELIVERY. Payment for the shares of Common
Stock purchased pursuant to the exercise of an option shall be made either (i)
in cash equal to the option price for the number of shares specified in the
Notice (the "Total Option Price"), or (ii) if authorized by the applicable
option agreement, in shares of Common Stock of the Company having a fair market
value equal to or less than the Total Option Price, plus cash in an amount equal
to the excess, if any, of the Total Option Price over the fair market value of
such shares of Common Stock, or (iii) with the consent of the Committee or the
Board, by a combination of (i) and (ii). For the purpose of the preceding
sentence, the fair market value of the shares of Common Stock sc delivered to
the Company shall be determined in accordance with procedures adopted by the
Board. As promptly as practicable after receipt of such written notification and
payment, the Company shall deliver to the Optionee certificates for the number
of shares with respect to which such Option has been so exercised, issued in the
Optionee's name; provided, however, that such delivery shall be deemed effected
for all purposes when the Company or a stock transfer agent of the Company shall
have deposited such certificates in the United States mail, addressed to the
Optionee, at the address specified pursuant to Section 6.1.
SECTION 7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
7.1 NO EFFECT OF OPTIONS UPON CERTAIN CORPORATE TRANSACTIONS. The
existence of outstanding options shall not affect in any way the right or power
of the Company or its stockholders to make or authorize any or all adjustments,
recapitalization, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of Common Stock, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate
<PAGE> 5
act or proceeding, whether of a similar character or otherwise.
7.2 STOCK DIVIDENDS, RECAPITALIZATION, ETC. If the Company shall effect
a subdivision or consolidation of shares or other capital readjustment, the
payment of a stock dividend, or other increase or reduction of the number of
shares of the Common Stock outstanding, without receiving compensation therefor
in money, services or property, then (i) the number, class and per share price
of shares of stock subject to outstanding options hereunder shall be
appropriately adjusted in such a manner as to entitle an Optionee to receive
upon exercise of an option, for the same aggregate cash consideration, the same
total number and class of shares as he would have received as a result of the
event requiring the adjustment had he exercised his option in full immediately
prior to such event; and (ii) the number and class of shares with respect to
which options may be granted under the Plan shall be adjusted by substituting
for the total number of shares of Common Stock then reserved for issuance under
the Plan that number and class of shares of stock that would have been received
by the owner of an equal number of outstanding shares of Common Stock as the
result of the event requiring the adjustment.
7.3 DETERMINATION OF ADJUSTMENTS. Adjustments under this Section 7
shall be determined by the Board and such determinations shall be conclusive.
The Board shall have the discretion and power in any such event to determine and
to make effective for provision for acceleration of the time or times at which
any option or portion thereof shall become exercisable. No fractional shares of
Common Stock shall be issued under the Plan on account of any adjustment
specified above.
7.4 NO ADJUSTMENT IN CERTAIN CASES. Except as hereinbefore expressly
provided, the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock then subject to outstanding options.
SECTION 8. EFFECT OF CERTAIN TRANSACTIONS
8.1 MERGERS WITH COMPANY AS SURVIVOR. After a merger of one or more
corporations into the Company, or after a consolidation of the Company and one
or more corporations in which the Company shall be the surviving corporation,
each holder of an outstanding option shall, at no additional cost, be entitled
upon exercise of such option to receive (subject to any required action by
stockholders) in lieu of the number of shares as to which such option shall then
be so exercisable, the number and class of shares of stock or other securities
to which such holder would have been entitled pursuant to the terms of the
agreement of merger or consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of a number of shares
of Common Stock equal to the number of shares as to which such option shall be
so exercised.
8.2 LIQUIDATIONS AND MERGERS IN WHICH COMPANY NOT SURVIVOR. If the
Company is merged into or consolidated with another corporation under
circumstances where the Company is not the surviving corporation, or if the
Company is liquidated, or sells or otherwise disposes of substantially all of
its assets to another corporation while unexercised options remain outstanding
under the Plan: (i) subject to the provisions of clause (iii) below, after the
effective date of such merger, consolidation, liquidation, sale or disposition,
as the case may bet each holder of an outstanding option shall be entitled, upon
exercise of such option, to receive, in lieu of shares of Common Stock, shares
of such stock or other securities, cash or property as the holders of shares of
<PAGE> 6
Common Stock received pursuant to the terms of the merger, consolidation,
liquidation, sale or disposition; (ii) the Board may accelerate the time for
exercise of all unexercised and unexpired options to and after a date prior to
the effective date of such merger, consolidation, liquidation, sale or
disposition, as the case may be, specified by the Board; or (iii) all
outstanding options may be cancelled by the Board as of the effective date of
any such merger, consolidation, liquidation, sale or disposition, provided that
(x) notice of such cancellation shall be given to each holder of an option and
(y) each holder of an option shall have the right to exercise such option to the
extent that the same is then exercisable or, if the Board shall have accelerated
the time for exercise of all unexercised and unexpired options, in full during
the 30-day period preceding the effective date of such merger, consolidation,
liquidation, sale or disposition.
SECTION 9. AMOUNT OF THE PLAN
The Board may amend the Plan at any time, and from time to time. Except
as provided in Sections 7 and 8 hereof, rights and obligations under any option
granted before any amendment of the Plan shall not be altered or impaired by
such amendment, except with the consent of the Optionee.
SECTION 10. NON-EXCLUSIVITY OF THE PLAN
The adoption of the Plan by the Board shall not be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including without limitation the granting
of stock options otherwise than under the Plan, and such arrangements may be
either applicable generally or only in specific cases.
SECTION 11. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW
The obligation of the Company to sell and deliver shares of Common
Stock with respect to options granted under the Plan Shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by government
agencies as may be deemed necessary or appropriate by the Board or the
Committee. The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware.
SECTION 12. EFFECTIVE DATE OF PLAN
The effective date of the Plan shall be January 24, 1989, the date of
its approval by the Board. No option may be granted under the Plan after the
tenth anniversary of the effective date of the Plan.
<PAGE> 1
EXHIBIT 5.1
FOLEY, HOAG & ELIOT LLP
One Post Office Square
Boston, Massachusetts 02109
September 16, 1996
Cayenne Software, Inc.
8 New England Executive Park
Burlington, MA 01803
Ladies and Gentlemen:
We are familiar with the Registration Statement on Form S-8 transmitted
for filing by the Company today (the "S-8 Registration Statement") relating to
706,733 shares (the "Shares") of the Company's Common Stock issuable pursuant to
two stock option plans of the Company's wholly-owned subsidiary Cadre
Technologies Inc. (the "Plans").
We are familiar with the Company's Articles of Organization and all
amendments thereto, its By-Laws and all amendments thereto, the records of all
meetings and consents of its Board of Directors and of its stockholders, and its
stock records. We have examined such other records and documents as we deemed
necessary or appropriate for purposes of rendering this opinion.
Based upon the foregoing, we are of the opinion that (a) the Company
has corporate power adequate for the issuance of the Shares in the manner set
forth in the S-8 Registration Statement, (b) the Company has taken all necessary
corporate action required to authorize the issuance and sale of the Shares and
(c) when certificates for the Shares have been duly executed and countersigned,
and delivered against due receipt of the exercise price therefore in accordance
with the Plan, the Shares will be legally issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the S-8
Registration Statement.
Very truly yours,
FOLEY, HOAG & ELIOT
By: /s/ David W. Walker
a Partner
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Cayenne Software, Inc. (formerly Bachman Information Systems, Inc.)
on Form S-8 of our reports dated August 15, 1995, except as to the information
presented in Note 17, for which the date is September 19, 1995, on our audits of
the consolidated financial statements and financial statement schedule of
Bachman Information Systems, Inc. as of June 30, 1995 and 1994, and for each of
the three years in the period ended June 30, 1995, which reports are included in
the Annual Report on Form 10-K of Bachman Information Systems, Inc. for the year
ended June 30, 1995.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
September 16, 1996
