Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Network Imaging Corporation
(Exact name of issuer as specified in its charter)
Delaware 54-1590649
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
500 Huntmar Park Drive
Herndon, Virginia 20170
(Address of principal executive offices and zip code)
Network Imaging Corporation Amended and Restated 1997 Director
Stock Option Plan
Network Imaging Corporation Employee Stock Purchase Plan
The 1994 Key Employee Incentive Stock Option Plan of
Network Imaging Corporation
(Full titles of the plans and/or grants)
Julia A. Bowen, Esquire
Network Imaging Corporation
500 Huntmar Park Drive
Herndon, Virginia 20170
(Name and address of agent for service)
(703) 478-2260
(Telephone number, including area code, of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
- --------------------------------- ------------------ ------------------- -------------------- ---------------------
Title of securities Amount to Proposed maximum Proposed maximum Amount of
to be registered be registered offering price Aggregate offering registration fee (1)
per share (1) Price (1)
- --------------------------------- ------------------ ------------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 Par Value 1,760,000 shares $1.16 $2,041,600 $704
- --------------------------------- ------------------ ------------------- -------------------- ---------------------
(1) Estimated solely for the purpose of calculating the registration fee,
pursuant to Rule 457(c) under the Securities Act of 1933, on the basis of
the average of the high and low prices for the Common Stock on March 19,
1998, as reported by the NASDAQ National Market System.
</TABLE>
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PART I: PROSPECTUS INFORMATION
This registration statement relates to (a) 360,000 shares of Common
Stock reserved for issuance upon the exercise of options granted or which may be
granted under the Registrant's Amended and Restated 1997 Director Stock Option
Plan, (b) 400,000 shares of Common Stock reserved for issuance upon the exercise
of options granted pursuant to the Network Imaging Corporation Employee Stock
Purchase Plan, and (c) 1,000,000 additional shares of Common Stock reserved for
issuance upon the exercise of options granted or which may be granted under the
Registrant's 1994 Employee Stock Option Plan.
Item 1. Plan Information.
Inapplicable.
Item 2. Registrant Information and Employee Plan Annual Information.
The documents containing the information specified in this Part I will
be sent or given to participants in the Amended and Restated 1997 Director Stock
Option Plan, the Network Imaging Corporation Employee Stock Purchase Plan and
the 1994 Key Employee Incentive Stock Option Plan to which this Registration
Statement relates as specified by Rule 428(b) promulgated under the Securities
Act of 1933, as amended, and are not filed as part of this Registration
Statement.
PART II: REGISTRATION STATEMENT INFORMATION
Item 3. Incorporation of Documents by Reference.
The following documents previously filed with the Commission by the
Company are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
2. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A under the
Exchange Act of 1934, as amended (the "Exchange Act"),
including any amendment or report filed to update the
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act, after the date of this registration statement
and prior to the termination of the offering of the Common Stock shall be deemed
to be incorporated by reference in this registration statement and to be a part
hereof from the date of filing such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any other subsequently
filed document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this registration statement.
Item 4. Description of Securities.
Inapplicable.
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Inapplicable.
Item 6. Indemnification of Directors and Officers.
Delaware General Corporation Law, Section 102(b)(7), enables a
corporation in its certificate of incorporation to eliminate or limit personal
liability of members of its Board of Directors for monetary damages for breach
of a director's fiduciary duty of care. The elimination or limitation does not
apply where there has been a breach of the duty of loyalty, failure to act in
good faith, engaging in intentional misconduct or knowingly violating a law,
paying a dividend or approving a stock repurchase which was deemed illegal or
obtaining an improper personal benefit. The Company's Certificate of
Incorporation and Bylaws provide that directors "shall be excused from liability
to the fullest extent permitted by Delaware law," as now in effect or as
subsequently amended.
Delaware General Corporation Law, Section 145, permits a corporation
organized under Delaware law to indemnify directors and officers with respect to
any matter in which the director or officer acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful.
The Bylaws of the Company include comparable provisions.
Directors and officers are also insured against certain liabilities
under a directors and officers' liability insurance policy maintained by the
Company.
Item 7. Exemption from Registration Claimed.
Inapplicable.
Item 8. Exhibits.
5 Opinion of General Counsel of the Company as to the legality of
securities being registered.
10.1 The Network Imaging Corporation Amended and Restated 1997 Director
Stock Option Plan.
10.2 Network Imaging Corporation Employee Stock Purchase Plan.
10.3 The 1994 Key Employee Incentive Stock Option Plan of Network Ima-
ging Corporation.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Price Waterhouse LLP.
23.2 Consent of General Counsel. Contained with the opinion filed as
Exhibit 5 hereto and incorporated herein by this reference.
24.1 Powers of Attorney. Contained in the signature pages of this Form
S-8 registration statement and incorporated herein by reference.
<PAGE>
Item 9. Undertakings.
(a) Rule 415 Offering.
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 to
include any additional or changed 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities that remain unsold at the end of
the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Re-
ference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Exchange Act that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Regulation S-K Item 512(h) Undertaking for Registration
Statement on Form S-8.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Herndon, State of Virginia, on the 23rd day of March,
1998.
NETWORK IMAGING CORPORATION
By: *
-------------------------
James J. Leto
President and Chief Executive Officer
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the persons who signatures appear
below constitute and appoint James J. Leto and Jorge R. Forgues, and each of
them, as true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign this Registration Statement on Form S-8 relating
to certain stock option plans and stock purchase plans, and any and all
amendments (including post-effective amendments) to said Registration Statement
on Form S-8, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully as 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 their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-8 have been signed below by the following
persons in the capacities and on the dates indicated. Moreover, the undersigned
hereby also certify that to the best of their knowledge and belief the
Registrant meets all the requirements for filing on Form S-8.
Signature Title Date
* President and Chief Executive March 23, 1998
- ------------------------- Officer; Director (Principal
James J. Leto Executive Officer)
* Senior Vice President and Chief March 23, 1998
- ------------------------- Financial Officer (Principal
Jorge R. Forgues Financial Officer and Principal
Accounting Officer)
* Director and Secretary March 23, 1998
- -------------------------
Robert P. Bernardi
* Director March 23, 1998
- -------------------------
John F. Burton
* Director March 23, 1998
- -------------------------
C. Alan Peyser
* Director March 23, 1998
- -------------------------
Robert Ripp
*By: /s/ James J. Leto
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James J. Leto, Attorney-in-Fact
Exhibit 5
March 23, 1998
Network Imaging Corporation
500 Huntmar Park Drive
Herndon, Virginia 20170
Re: Network Imaging Corporation
Registration Statement on Form S-8
Ladies and Gentlemen:
I am general counsel to Network Imaging Corporation, a Delaware
corporation (the "Corporation"). This opinion letter regards the preparation and
filing of the above-captioned Registration Statement on Form S-8 ("Registration
Statement"), under the Securities Act of 1933, as amended, covering 1,760,000
shares of Common Stock, $0.0001 par value per share ("Common Stock"), of the
Corporation issuable in connection with the Network Imaging Corporation Amended
and Restated 1997 Director Stock Option Plan, Network Imaging Corporation
Employee Stock Purchase Plan and the 1994 Key Employee Incentive Stock Option
Plan of Network Imaging Corporation.
I have examined copies of the Registration Statement, the Prospectus
forming a part thereof, the Certificate of Incorporation and Bylaws of the
Corporation, each as amended to date, the minutes of various meetings and
unanimous written consents of the Board of Directors and the shareholders of the
Corporation, and original, reproduced or certified copies of such records of the
Corporation and such agreements, certificates of public officials, certificates
of officers and representatives of the Corporation and others, and such other
documents, papers, statutes and authorities as I deem necessary to form the
basis of the opinions hereinafter expressed. In such examination, I have assumed
the genuineness of all signatures and the conformity to original documents of
all documents supplied to us as copies. As to various questions of fact material
to such opinions, I have relied upon statements and certificates of officers and
representatives of the Corporation and others.
Based on the foregoing, I am of the opinion that each of the 1,760,000
shares of Common Stock, when issued in accordance with the terms of the
respective (i) Network Imaging Corporation Amended and Restated 1997 Director
Stock Option Plan, (ii) Network Imaging Corporation Employee Stock Purchase Plan
and (iii) the 1994 Key Employee Incentive Stock Option Plan of Network Imaging
Corporation, will be duly and validly issued by the Corporation, fully paid and
nonassessable.
Very truly yours,
/s/ Julia A. Bowen
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Julia A. Bowen
General Counsel
Exhibit 10.1
NETWORK IMAGING CORPORATION
AMENDED AND RESTATED
1997 DIRECTOR STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1997 Director Stock Option Plan (the "Plan") of
Network Imaging Corporation, Inc. (the "Company") is to encourage ownership in
the Company by outside directors of the Company, whose continued services are
considered essential to the Company's future progress and to provide them with a
further incentive to remain as directors of the Company.
2. ADMINISTRATION
The Board of Directors of the Company (the "Board of Directors") shall
supervise and administer the Plan. Grants of stock options under the Plan and
the amount and nature of the awards to be granted shall be automatic in
accordance with Section 5. However, all questions of interpretations of the Plan
or of any options issued under it shall be determined by the Board of Directors
and such determination shall be final and binding upon all persons having an
interest in the Plan.
3. PARTICIPATION IN THE PLAN
Directors of the Company who are not executive officers of the Company
or any subsidiary of the Company and are not serving of the Board of Directors
as a representative of any institutional investor ("outside directors") shall be
eligible to participate in the Plan.
4. STOCK SUBJECT TO THE PLAN
(a) The maximum number of shares of the Company's Common Stock, no par
value per share ("Common Stock"), that may be issued under the plan shall be
360,000, subject to adjustment as provided in Section 9 of the Plan.
(b) If any outstanding option under the Plan for any reason expires or
is terminated without having been exercised in full, the shares allocable to the
unexercised portion of such option shall again become available for grant
pursuant to the Plan.
( c) All options granted under the Plan shall be non-statutory options
not entitled to special tax treatment under Section 422 of the Internal Revenue
Code of 1986, as amended to date and as it may be amended from time to time (the
"Code").
5. TERMS, CONDITIONS AND FORM OF OPTIONS
Each option granted under the Plan shall be evidenced by a written
agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:
(a) Option Grant Dates. Subject to Section 7 of this Plan, an option to
purchase Common Stock shall be granted automatically to each outside director
elected to the Board of Directors after the effective date of this Plan, at the
end of each calendar quarter.
(b) Share Subject to Option. The number of shares covered by the option
(i) in the case of an outside director elected at the commencement of a term (a
"Full -Term Director"), shall be 7,500 per each calendar quarter and (ii) in the
case of an outside director elected during the course of a term (for example, to
fill a vacancy) an ("Interim Director"), shall be equal to 7,500 per each
calendar quarter in which he serves as a member of the Board.
( c) Option Exercise Price. The option exercise price per share for
each option granted under the Plan shall equal to (i) the closing sales price
per share of the Company's Common Stock on the Nasdaq National Market (or, if
the company is traded on a nationally recognized securities exchange on the date
of grant, the reported closing sales price per share of the Company's Common
Stock by such exchange) on the lowest day during the last month of each calendar
quarter (i.e., March, June, September, and December). The date of grant, for
purposes of the option and its vesting schedule, shall be the date that option
is granted or (ii) if the Common Stock is not traded on Nasdaq National Market
or an exchange, the fair market value per share on the lowest closing sale price
for the last calendar month of a quarter.
(d) Option Non-Transferable. Each option granted under the Plan by its
terms shall not be transferable by the optionee otherwise than by will, or by
the laws of descent and distribution, and shall be exercised during the lifetime
of the optionee only by him. No option or interest therein may be transferred,
assigned, pledged or hypothecated by the optionee during his lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment or
similar process.
(e) Vesting and Exercise Period. Each Option granted to a Full-Term
Director shall vest ninety (90) days following the date of grant if such
Full-Time Director is still serving as a director of the Company at such time.
Each Option may be exercised on a cumulative basis as to be the vested number of
shares at any time or from time to time, in whole or in part; provided that,
subject to the provisions of Section 5 (f), no Option may be exercised more that
one year after the optionee ceases to serve as a director of the Company or for
a number of shares greater than that which was vested at the time the optionee
ceased to serve as a director of the Company. No Option shall be exercisable
after the expiration of ten years from the date of grant.
(f) Exercise Period Upon Disability or Death. Notwithstanding the
provisions of Section 5(e), any option granted under the Plan may be exercised,
to the extent then vested an exercisable, by an optionee who becomes disabled
(within the meaning of Section 22 (e) (3) of the Code or any successor provision
thereto) while acting as a director of the Company, or may be exercised, to the
extend then exercisable, upon the death of such optionee while a director of the
Company by the person to whom it is transferred by will, by the laws of descent
and distribution, or by written notice filed pursuant to Section 5 (h), in each
case within the period of one year after the date the optionee ceases to be such
a director or reason of such disability or death; provided that no option shall
be exercisable after the expiration of nine years from the date of grant.
(g) Exercise Procedure. Options may be exercised only by written notice
to the Company at its principal office accompanied by payment in cash of the
full consideration for the shares as to which they are exercised.
(h) Exercise by Representative Following Death of Director. A director,
by written notice to the Company, may designate one or more persons (and from
time to time change such designation) including his legal representative, who,
by reason of the director's death, shall acquire the right to exercise all or a
portion of the option. If the person or persons so designated wish to exercise
any portion of the option, they must do so within the term of the option as
provided herein. Any exercise by a representative shall be subject to the
provisions of the Plan
6. ASSIGNMENTS
The rights and benefits under the Plan may not be assigned except for
the designation of a beneficiary as provided in Section 5.
7. EFFECTIVE DATE AND TIME FOR GRANTING OPTIONS
(a) The Plan shall become effective on July 1, 1997 as adopted by the
Board of Directors.
(b) All options for shares subject to the Plan shall be granted, if at
all, not later than ten years after the approval of the Plan by the Company's
shareholders.
8. LIMITATIONS OF RIGHTS
(a) No Right to Continue as a Director. Neither the Plan, nor the
granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a director for any period of time.
(b) No Shareholders' Rights for Options. An optionee shall have no
rights as a shareholder with respect to the shares covered by his options until
the date of the issuance to him of a stock certificate therefor, and no
adjustment will be made for dividends or other rights (except as provided in
Section 9) for which the record date is prior to the date such certificate is
issued.
9. CHANGES IN COMMON STOCK
(a) If the outstanding shares of Common Stock are increased, decreased
or exchanged for a different number of kind of shares or other securities (other
than the stock split approved by the Board on the same date as the initial
adoption of this Plan), or if additional shares or new or different shares or
other securities, through merger, consolidation, sale of all or substantially
all of the assets of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
distribution with respect to such shares of Common Stock, or other securities,
an appropriate and proportionate adjustment will be made in (i) the maximum
number and kind of shares reserved for issuance under the Plan, (ii) the number
and kind of shares or other securities subject to then outstanding options under
the Plan and (iii) the price for each share subject to any then outstanding
options under the Plan, without changing the aggregate purchase price as to
which such options remain exercisable. No fractional shares will be issued under
the Plan on account of any such adjustments.
(b) In the event that the Company is merged or consolidated into or
with another corporation (in which consolidation or merger the shareholders of
the Company receive distributions of cash or securities of another issuer as a
result thereof), or in the event that all or substantially all of the assets of
the Company is acquired by any other person or entity, or in the event of a
reorganization or liquidation of they Company, all stock options granted under
this Plan to the Director shall become immediately vested and exercisable and
shall continue to be exercisable for a period of one (1) year
10. AMENDMENT OF THE PLAN
The Board of Directors may suspend or discontinue the Plan or review or
amend it in any respect whatsoever; provided, however, that without approval of
the shareholders of the Company no revision or amendment shall change the number
of shares subject to the Plan (except as provided in Section 9), change the
designation of the class of directors eligible to receive options, or materially
increase the benefits accruing to participants under the Plan.
11. NOTICE
Any written notice to the Company required by any of the provisions of
the Plan shall be addressed to the Treasurer of the Company and shall become
effective when it is received.
12. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the Commonwealth of Virginia.
Adopted by the Board of Directors on August , 1997
Approved by the Shareholders on , 1997
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NETWORK IMAGING CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The Employee Stock Purchase Plan (the "Plan") is intended to
encourage stock ownership by employees of Network Imaging Corporation (the
"Corporation") or any of its present or future subsidiaries (the "Subsidiaries")
as defined in Section 424 of the Internal Revenue Code of 1986, as amended (the
"Code") so that such employees may increase their interest in the success of the
Corporation and its Subsidiaries and so that they may be encouraged to remain in
the employ of the Corporation or its Subsidiaries. It is the intention of the
Corporation to have the Plan qualify as an Employee Stock Purchase Plan under
Section 423 of the Code.
2. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Corporation (the "Committee"). The
Board of Directors may from time to time remove members from, or add members to,
the Committee. Vacancies on the Committee, howsoever caused, shall be filled by
the Board of Directors. The Committee shall hold meetings at such times and
places as it may determine and may hold telephonic Committee meetings. If the
Committee consists of three or more members, the Committee shall select one of
its members as Chairman. Acts by a majority of the Committee at a meeting at
which a quorum is present shall be the valid acts of the Committee. Any decision
or determination reduced to writing and signed by a majority of the members of
the Committee shall be as fully effective as if it had been made by a majority
vote at a meeting duly called and held. The interpretation and construction by
the Committee of any provisions of the Plan shall be final. No member of the
Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan.
3. Definitions.
(a) "Compensation" shall mean regular straight-time gross earnings plus
payments for overtime, shift premium, incentive compensation, bonuses and
other special payments, such as, in the case of employees who are
salespersons, sales commissions.
(b) "Committee" shall mean the Committee referenced in Article 2, or if
no such Committee has been designated, it shall mean the Board of Directors
of the Corporation.
(c) "Employee" shall mean any person (including officers, whether or not
they are Directors) who is customarily employed on a full-time or part-time
basis by the Corporation or its Subsidiaries and is regularly scheduled to
work more than twenty (20) hours per week but excluding any employee
customarily employed for not more than five months in any calendar year.
(d) "Enrollment Period" shall mean the applicable time periods during
which an employee will be allowed to become a participant under the Plan.
(e) "Exercise Date" or "Purchase Date" shall mean the applicable date at
the end of an Offering Period on which shares are purchased pursuant to an
option issued under the Plan, which date shall be each Offering Termination
Date.
(f) "Fair Market Value" or "FMV" shall mean the average of the high and
low market prices as reported on NASDAQ National Market System on a given
trading day.
(g) "Offering Commencement Date" shall mean the applicable date on which
an Offering under the Plan commences pursuant to Article 6.
(h) "Offering Termination Date" shall mean the applicable date on which
an Offering under the Plan terminates pursuant to Article 6.
(i) "Offering Period" shall mean the applicable time period during which
an Offering under the Plan shall take place pursuant to Article 6.
(j) "Purchase Price" shall mean 85% of the lower of: (a) the average of
the high and low market prices as reported on NASDAQ National Market System
on the Offering Commencement Date ("Option Price") and (b) the average of
the high and low market prices as reported on NASDAQ on the Offering
Termination Date, pursuant to Article 22.
(k) "Trading Day" shall mean a day on which the National Association of
Securities Dealers Automated Quotation (NASDAQ) System is open for trading.
4. Eligibility. The persons who shall be eligible to participate in the Plan
shall be all Employees of the Corporation or its Subsidiaries on a given
Enrollment Date. No Participant shall be granted an option under the Plan if (i)
immediately after the grant such Participant (or any other person whose stock
would be attributed to such Participant pursuant to Section 424(d) of the Code)
would own capital stock of the Corporation or any Subsidiary and/or hold
outstanding options of any kind to purchase such stock possessing five percent
(5%) or more of the capital stock of the Corporation or any Subsidiary or (ii)
his or her rights to purchase stock under the Plan or any other employee stock
purchase plan of the Corporation or any Subsidiary accrues at a rate which
exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the
fair market value of the shares at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
5. Stock. The stock subject to the options of the Plan shall be shares of
the Corporation's authorized, but unissued or reacquired common stock (the
"Common Stock").
(a) The aggregate number of shares which may be issued under the Plan
shall not exceed 400,000 shares of Common Stock. The limitation established
by the preceding sentence shall be subject to adjustment as provided in
Article 18 of the Plan. If, on a given Exercise Date, the number of shares
with respect to which options are to be exercised exceeds the number of
shares then available under the Plan, the Committee shall make a pro rata
allocation of the shares remaining available for purchase in as uniform a
manner among the persons exercising options as shall be practicable and as
it shall determine to be equitable.
(b) The Participant will have no voting right or other interests in
shares issuable upon exercise of any option held by such Participant until
such option has been exercised.
(c) Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or in the name of the Participant
and the Participant's spouse.
6. Offering Periods. The Plan shall be implemented by consecutive Offering
Periods with a new Offering Period commencing on the first Trading Day on or
after January 1 and July 1 of each year, or on such other date as the Committee
shall determine, and continuing thereafter until terminated in accordance with
Article 21 hereof. The duration of each Offering Period shall be six (6) months.
The Committee shall have the power to change the duration of Offering Periods at
its discretion (including the commencement dates thereof) with respect to future
offerings without shareholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be effective thereafter.
7. Participation.
(a) An eligible Employee may become a Participant in the Plan by
completing a Subscription Agreement authorizing payroll deductions on a form
established by the Company from time to time which will be similar to
Exhibit A to this Plan and filing it with the Corporation's Payroll
Administrator during the applicable Enrollment Period.
(b) Payroll deductions for a Participant shall commence on the first
payday following the Offering Commencement Date and shall end on the last
payday in the Offering Period to which such authorization is applicable,
unless sooner terminated by the Participant as provided in Article 12
hereof.
8. Payroll Deductions.
(a) At the time a Participant files his or her Subscription Agreement,
he or she shall elect to have payroll deductions made on each payday during
the Offering Period in an amount not less than one percent (1%) of his or
her Compensation and not exceeding ten percent (10%) of his or her
Compensation for such payroll period on each payday during the Offering
Period.
(b) All payroll deductions made for a Participant shall be credited to
his or her account under the Plan. A Participant may not make any additional
payments into such account.
(c) A Participant may discontinue his or her participation in the Plan
as provided in Article 12 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Article 9 hereof, a Participant's
payroll deductions may be decreased to zero percent (0%) at such time during
any Offering Period, which is scheduled to end during the current calendar
year (the "Current Offering Period"), that the aggregate of all payroll
deductions which were previously used to purchase Common Stock under the
Plan in a prior Offering Period which ended during that calendar year plus
all payroll deductions accumulated with respect to the Current Offering
Period equal $25,000. Payroll deductions shall recommence as provided in
such Participant's Subscription Agreement at the beginning of the first
Offering Period which is scheduled to end in the following calendar year,
unless terminated by the Participant as provided in Article 12 hereof.
(e) At the time some or all of the Common Stock issued under the Plan is
disposed of, the Participant must make adequate provision for the
Corporation's federal, state, or other tax withholding obligations, if any,
which arise upon the exercise of the option or the disposition of the Common
Stock. At any time, the Company may, but will not be obligated to, withhold
from the Participant's compensation the amount necessary for the Company to
meet applicable withholding obligations, including any withholding required
to make available to the Company any tax deductions or benefits attributable
to sale or early disposition of Common Stock by the Employee.
9. Grant of Option. On the Enrollment Date of each Offering Period, each
Participant shall be granted an option to purchase on the Exercise Date of such
Offering Period (at the applicable Purchase Price) up to a maximum number of
shares of Common Stock determined as follows: an amount equal to (a) that
percentage of such Participant's Compensation as of the Enrollment Date which he
has elected to have withheld (but not in any case in excess of ten percent
(10%)) multiplied by (b) the Participant's annual Compensation as of the
Enrollment Date (c) divided by the applicable percentage of the Purchase Price
of the Common Stock on the Offering Commencement Date elected by the Participant
at the commencement of each Offering Period pursuant to Article 22 hereof. No
Participant shall be granted an option to purchase in excess of the maximum
amount allowable pursuant to Section 423 of the IRS Code. Exercise of the option
shall occur as provided in Article 10 hereof, unless the Participant has
withdrawn pursuant to Article 12 hereof, and shall expire on the last day of the
Offering Period.
10. Exercise of Option. Unless a Participant withdraws from the Plan as
provided in Article 12 hereof, his or her option for the purchase of shares will
be exercised automatically on the Exercise Date of each Offering Period, and the
maximum number of full shares subject to option shall be purchased for such
Participant at the applicable Purchase Price, as defined in Article 3, with the
accumulated payroll deductions in his or her account (but not in excess of the
number of shares for which options have been granted to the Participant pursuant
to Article 9 hereof). No fractional shares will be purchased and any payroll
deductions accumulated in a Participant's account which are not sufficient to
purchase a full share shall be retained in the Participant's account for the
subsequent Offering Period, subject to earlier withdrawal by the Participant as
provided in Article 12 hereof. Any other monies left over in a Participant's
account after the Exercise Date shall be returned to the Participant. During a
Participant's lifetime, a Participant's option to purchase shares hereunder is
exercisable only by him or her.
11. Delivery of Shares Purchased. All shares of Common Stock purchased
pursuant to this Plan shall be held in a separate shareholder account
("Shareholder Account") maintained by such brokerage house, investment banking
firm, commercial bank or other such similar institution as may be selected by
the Committee. Each Shareholder Account shall be in the name of a Participant.
Each Participant shall have all of the rights and privileges of a shareholder of
the Corporation with respect to those shares purchased under the Plan and held
in his or her Shareholder Account.
12. Withdrawal; Termination of Employment.
(a) A Participant may voluntarily withdraw all, but not less than all,
the payroll deductions credited to his or her account, and not yet used to
exercise his or her option under the Plan, at any time by giving written
notice to the Corporation on a form established by the Corporation from time
to time which will be similar to Exhibit B to this Plan. All of the
Participant's payroll deductions credited to his or her account will be paid
to such Participant promptly after receipt of notice of withdrawal and such
Participant's option for the Offering Period will be automatically
terminated and no further payroll deductions for the purchase of shares will
be made during the Offering Period. If a Participant voluntarily withdraws
from an Offering Period, payroll deductions will not resume at the beginning
of the succeeding Offering Period unless the Participant completes and
delivers to the Company a new Subscription Agreement.
(b) Upon a Participant's ceasing to be an Employee for any reason, he or
she will be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such Participant's account during the Offering
Period, but not yet used to exercise the option, will be returned to such
Participant or, in the case of his or her death, to the person or persons
entitled thereto under Article 14 hereof, and such Participant's option will
be automatically terminated.
(c) A Participant's withdrawal from an Offering Period (other than in
the case of death) will not have any effect upon his or her eligibility to
participate in any similar plan which may hereafter be adopted by the
Corporation or in succeeding Offering Periods which commence after the
termination of the Offering Period from which the Participant voluntarily
withdraws for so long as the Participant remains an Employee of the
Corporation or its Subsidiaries.
13. Interest. No interest shall be paid on the payroll deductions of a
Participant in the Plan.
14. Designation of Beneficiary.
(a) A Participant may file with the Corporation's Payroll Administrator
a written designation of a beneficiary who is to receive any shares and
cash, if any, from the Participant's accounts under the Plan in the event of
such Participant's death subsequent to an Exercise Date on which the option
is exercised but prior to delivery to such Participant of any shares and/or
cash in Participant's accounts.
(b) Such designation of beneficiary may be changed by the Participant at
any time by written notice to the Corporation's Payroll Administrator. In
the event of the death of a Participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
Participant's death, the Corporation shall deliver such shares and/or cash
to the executor or administrator of the estate of the Participant, or if no
such executor or administrator has been appointed (to the knowledge of the
Corporation), the Corporation, in its discretion, may deliver such shares
and/or cash to the spouse or to any one or more dependents or relatives of
the Participant, or if no spouse, dependent or relative is known to the
Corporation, then to such other person as the Corporation may designate.
15. Transferability. Neither payroll deductions credited to a Participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Article 14 hereof) by the Participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Article 12 hereof.
16. Application of Funds. The proceeds received by the Corporation from the
sale of Common Stock issued pursuant to options will be used for general
corporate purposes.
17. Reports. Individual accounts will be maintained by the Corporation for
each Participant in the Plan. Statements of account will be given to
Participants after the termination of each Offering Period. Such statements will
set forth the amounts of payroll deductions, the Purchase Price, the number of
shares of Common Stock purchased and any remaining cash balance.
18. Recapitalization. Subject to any required action by the shareholders of
the Corporation, the number of shares of Common Stock covered by each
outstanding option, and the price per share thereof in each such option, shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Corporation resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only on the
Common Stock) or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Corporation, so that the
optionee's percentage of ownership of the total number of shares of Common Stock
outstanding is neither increased nor decreased.
Subject to any required action by the shareholders of the Corporation, if
the Corporation shall be the surviving corporation in any merger or
consolidation, each outstanding option shall pertain to and apply to the
securities to which a holder of the number of shares of Common Stock subject to
the option would have been entitled.
In the event of a change in the Common Stock of the Corporation as presently
constituted, which is limited to a change of all of its authorized shares with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or securities
of the Corporation, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive.
Except as hereinbefore expressly provided in this Article 18, the
Participant shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class or by
reason of any dissolution, liquidation, merger, consolidation or spin-off of
assets or stock of another corporation, and any issue by the Corporation of
shares of stock of any class, or securities convertible into or exchangeable or
exercisable for shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to the option.
The grant of an option pursuant to the Plan shall not affect in any way the
right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell, or transfer all or any part of its
business or assets.
19. Amendment of the Plan. The Committee of the Corporation may, insofar as
permitted by law, from time to time, with respect to any shares at the time not
subject to outstanding options, suspend or discontinue the Plan or revise or
amend it in any respect whatsoever except that, without approval of the
Shareholders of the Corporation, no such revision or amendment shall increase
the number of shares of Common Stock which may be issued pursuant to the Plan,
materially increase the benefits accruing to Participants under the Plan, or
otherwise materially modify the requirements for eligibility or the class of
subsidiaries whose employees are eligible to participate.
20. Notices. All notices or other communications by a Participant to the
Corporation under or in connection with the Plan shall be deemed to have been
duly given when received in writing by the person designated by the Corporation
for the receipt thereof.
21. Term of Plan. Options may be granted pursuant to the Plan from time to
time until such time as all shares of Common Stock available under the Plan as
set forth in Article 5 have been made subject to an option grant. If any
outstanding option under the Plan for any reason expires or is terminated, the
shares of Common Stock allocable to the option may again be subject to an option
under the Plan.
22. Investment Purpose. Each option under the Plan shall be granted on the
condition that the purchase of stock thereunder shall be for investment purposes
and not with a view for resale or distribution. Participant agrees to receive
shares carrying a six month holding period restriction. Participants may sell
shares purchased under the Plan subject to compliance with any applicable
governmental securities laws, provided, however, that because of certain
governmental tax requirements, each Participant agrees by entering the Plan, to
promptly give the Corporation notice of any such Common Stock disposed of within
two years after the date of grant of the applicable option or one year from the
date of exercise showing the number of such shares disposed of. The Participant
assumes the risk of any market fluctuations in the price of the stock.
23. Indemnification of Committee. In addition to such other rights of
indemnification as they may have as directors or as members of the Committee and
the Board of Directors, the members of the Committee and the Board of Directors
shall be indemnified by the Corporation against the reasonable expenses,
including attorneys' fees actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, in which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Corporation) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such person is liable for gross
negligence or intentional misconduct in the performance of his or her duties,
provided that within sixty (60) days after institution of any such action, suit
or proceeding such person shall in writing offer the Corporation the
opportunity, at its own expense, to handle and defend the same.
24. No Employment Rights. The Plan does not, directly or indirectly, create
any right for the benefit of any employee or class of employees to purchase any
shares under the Plan, or create in any employee or class of employees any right
with respect to continuation of employment by the Corporation or its
Subsidiaries, and it shall not be deemed to interfere in any way with the
Corporation's or its Subsidiaries' right to terminate, or otherwise modify, an
employee's employment at any time.
25. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
26. Approval of Stockholders; Effectiveness of Plan. The Plan is subject to
the approval of the shareholders of the Corporation at their next annual meeting
or at any special meeting of the shareholders for which one of the purposes of
such a special meeting shall be to act upon the Plan.
Exhibit 10.3
THE 1994 KEY EMPLOYEE INCENTIVE STOCK OPTION PLAN
OF
NETWORK IMAGING CORPORATION
1. Purpose. This Stock Option Plan ("plan") is intended to provide incentive
to Eligible Participants (as hereinafter defined) to advance the interests
of Network Imaging Corporation ("The Company") and its subsidiaries by pro-
viding those persons with opportunities to purchase shares of the Company's
Common Stock ("Shares") under (a) incentive stock options ("Incentive Stock
Options") as such term is defined under Section 422(b) of the Internal Re-
venue Code of 1986, as amended ("Code"), in the case of officers and key
employees of the Company and its subsidiaries, and (b) other stock options
in the case of all Eligible Participants. (As used herein, "Options and
"option" refer to Incentive Stock Options and other options hereunder.)
2. Administration. The Plan shall be administered by the Board of Directors
of the Company or a committee of one or more directors appointed by the
Board (the "Board"). The Board shall have authority, subject to the terms
of the Plan, (a) to determine the persons to whom Options shall be granted,
the number of Shares to be subject to each Option ("Option Price"), the
times at which Options shall be granted and shall vest and other terms and
conditions thereof, and the provisions of the instruments by which Options
shall be evidenced; (b) to modify or amend any Option or to waive any res-
trictions or conditions applicable to any Option or the exercise thereof;
(c) to interpret the Plan and the instruments by which Options shall be
evidenced; (d) to make all determinations necessary or advisable for the
administration of the Plan.
3. Eligibility. Options may be granted to persons who at the time of grant are
existing or potential officers or directors or key employees of or
consultants or advisors to the Company or any of its subsidiaries
("Eligible Participants"). The granting of any Options to a person shall
neither entitle such person to, nor disqualify such person from, receiving
additional Options.
4. Shares Subject to this Plan. The total number of Shares that may be issued
pursuant to Options granted under this Plan shall not exceed 6,000,000
Shares (subject to adjustment as provided in Section 7). In the event that
any outstanding Option under this Plan for any reason expires or is
terminated prior to the end of the period during which Options may be
granted, the Shares not purchased pursuant to such Option may again be
subject in full or in part to Options under this Plan.
5. Granting of Options. Options may be granted under the Plan at any time
prior to January 3, 2004. Persons to whom Options have been granted and
whose Options remain outstanding under the Plan are referred to herein as
"Optionees".
6. Provision of Options. Options shall be evidenced by instruments in such
forms as the Board may from time to time approve. Options shall conform to
the following:
Option Price. The Option price per share of Incentive Stock Options
shall not be less that 100% of the fair market value of a Share at the
time the Option is granted; provided, however, that in the case of
Incentive Stock Option granted to a person who owns, directly or
indirectly, Shares possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company, as
contemplated by Code Sections 422(b)(6) and 424(d) ("Ten-Percent
Stockholder"), the Option price per Share shall not be less that 110%
of the fair market value of a Share at the time the Option is granted.
Term of Options. Each Option shall expire as provided in the
instrument evidencing the Option and in no event later than the tenth
anniversary of the date of its grant, provided, however, that in the
case of a Ten-Percent Stockholder, each Incentive Stock Option shall
expire no later than the fifth anniversary of the date of its grant.
Exercisability. Each Option shall become exercisable at one time or in
two or more installments as provided in the instrument evidencing the
Option. An Option shall be exercisable during an Optionee's lifetime
only by the Optionee. The holder of an Option shall have none of the
rights or privileges of a stockholder with respect to the Shares
issuable upon exercise of the Option until certificates evidencing such
Shares shall have been delivered to such Optionee upon exercise of his
or her Option.
The Company shall deliver certificates evidencing such Shares within a
reasonable period of time; provided, however, that if any law,
regulation, or agreement requires the Company to take any action with
respect to such Shares before such delivery, then the date for such
delivery shall be extended for the period to take such action.
Termination. If an Optionee ceases to be an Eligible Participant, any
Option or unexercised portion thereof granted to such Optionee which is
otherwise exercisable shall terminate as provided in the instrument
evidencing the Option, but in no event later than the date of
expiration of the term of the Option.
Assignability. An Optionee may not assign, transfer, pledge or other-
wise dispose of an Option other than by will or the laws of descent and
distribution.
Limit. To the extent that the aggregate fair market value (determined
at the time of an Incentive Stock Option is granted) of the Shares for
which Incentive Stock Options are exercisable for the first time by a
person during any calendar year under all incentive stock option plans
of the Company (and its parent and subsidiary corporations, if any)
exceeds $100,000, such Options shall be treated as Options which are
not Incentive Stock Options.
Instruments evidencing Options may contain such other provisions,
consistent with this Plan, as the Board deems advisable. Among those
provisions may be restrictions on the right of the Optionee to dispose of
Shares and a requirement that the Optionee represent to the Company in
writing, when an Option is granted or when Shares are purchased on exercise
of an Option, that such Optionee is accepting such Option, or purchasing
Shares, for his or her own account for investment only. Certificates issued
representing Shares granted upon the exercise of any Option may be marked
with an appropriate legend noting restrictions on their transfer or other
disposition to insure compliance with any applicable agreements or
provisions of the law.
1. Capital Adjustments. The number of Shares subject to the Plan, and the
number and price of Shares subject to any Option then outstanding, shall be
proportionately adjusted to reflect, as deemed equitable and appropriate by
the Board of Directors of the Company, any stock dividend, stock split or
share combination of the Common Stock or recapitalization of the Company.
In the event of any merger, consolidation, sale of substantially all the
assets, reorganization, dissolution or liquidation of the Company, in con-
nection with which all the outstanding shares of the Company's Common Stock
are converted into or exchangeable for other securities or other property,
each outstanding Option shall terminate, but the Optionees shall have the
right, immediately prior to such event, to exercise their Options in full
without regard to the vesting schedule otherwise applicable, thereto; pro-
vided, however, that in the case of a merger, consolidation, sale of sub-
stantially all the assets or reorganization, the parties thereto may pro-
vide that the Optionees shall not have such right, but in that case the Op-
tions, to the extent not previously exercised, shall continue in effect and
subject to the applicable vesting schedule but shall pertain not to the re-
maining Option Shares but to the securities or other property unto or for
which the remaining Option Shares would have been convertible or exchange-
able if they had been outstanding at the effective time of the transaction
(e.g. in the case of a merger of the Company into another company, if each
share of Common Stock of the Company is converted into two shares of a pre-
ferred stock of the acquiring company, the Optionee shall be entitled upon
exercise and payment of the Option Price to acquire two shares of that pre-
ferred stock).
2. Terms and Amendment of Plan. The Plan shall be effective on January 3, 1994
and shall expire on January 3, 2004 (except as to Options outstanding on
that date). The adoption of the Plan is subject to approval by the
stockholders of the Company, and any Options granted hereunder prior to
such approval shall provide that they may not be exercised unless and until
such approval has been obtained.
The Board, by majority vote and without stockholder approval, may terminate
the Plan at any time and from time to time amend the Plan in such respects
as it shall deem advisable to conform to any change in the applicable law
or for any other purpose, but shall not, without stockholder approval, (a)
increase the number of Shares that may be issued under the Plan (except by
operation of Section 7); (b) change the class of persons eligible to
receive options under the Plan, if such action would be treated as the
adoption of a new plan for purposes of Section 423(b) of the Code.
An amendment of this Plan shall not, without the written consent of an
Optionee, adversely affect such Optionee's rights and privileges under an
Option theretofore granted.
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333- ) pertaining to the Network Imaging Corporation Amended and
Restated 1997 Director Stock Option Plan, Network Imaging Corporation Employee
Stock Purchase Plan and the 1994 Key Employee Incentive Stock Option Plan of
Network Imaging Corporation, of our reports dated February 27, 1998, with
respect to the 1997 and 1996 consolidated financial statements and schedule of
Network Imaging Corporation included in its Annual Report (Form 10-K) for the
year ended December 31, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Vienna, Virginia
March 23, 1998
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 29, 1996 which appears on page
F-3 of Network Imaging Corporation's Annual Report on Form 10-K for the year
ended December 31, 1997.
PRICE WATERHOUSE LLP
Falls Church, Virginia
March 17, 1998
