<PAGE>
As filed with the Securities and Exchange Commission on May __, 1998
REGISTRATION STATEMENT NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________________
SEGUE SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-4188982
(State of incorporation) (I.R.S. Employer Identification Number)
1320 Centre Street
NEWTON CENTRE, MASSACHUSETTS 02159
(617) 796 - 1000
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
NON-QUALIFIED STOCK OPTION GRANT AGREEMENTS, EACH DATED AS OF SEPTEMBER 5, 1997
(Full Title of the Plans)
-------------------------
Stephen B. Butler
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Segue Software, Inc.
1320 Centre Street
NEWTON CENTRE, MASSACHUSETTS 02159
(617) 796 - 1000
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
____________________________
With a copy to:
Jeffrey C. Hadden, Esq.
Goodwin, Procter & Hoar LLP
Exchange Place
53 State Street
Boston, Massachusetts 02109-2881
(617) 570-1000
_____________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
Being Registered Registered Offering Price Per Share Aggregate Offering Price Registration Fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 315,556 shares (1) $ 9.00 $2,840,004 $ 837.80
value $.01 per share 40,000 shares (1) 18.00 720,000 212.40
------------------- ---------
355,556 shares $1,051.00
=====================================================================================================================
</TABLE>
(1) Plus such additional number of shares as may be required pursuant to the
Non-Qualified Stock Option Grant Agreement (dated as of September 5, 1997)
relating to 315,556 shares of Common Stock or the Non-Qualified Stock
Option Grant Agreement (dated as of September 5, 1997) relating to 40,000
shares of Common Stock in the event of a stock dividend, stock split,
recapitalization or other similar event.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUSES
Item 1. Plan Information.*
----------------
Item 2. Registrant Information and Employee Plan Annual Information.*
-----------------------------------------------------------
* Information required by Part I to be contained in the Section 10(a)
Prospectuses is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act of 1933, as amended (the "Securities Act") and the
Introductory Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
Segue Software, Inc. (the "Company") hereby incorporates by reference the
documents listed in (a) through (c) below, which have previously been filed with
the Securities and Exchange Commission.
(a) The Company's Annual Report on Form 10-K, containing audited financial
statements for the fiscal year ended December 31, 1997, filed with the
Securities and Exchange Commission (the "Commission") pursuant to
Section 13(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on March 30, 1998;
(b) All other reports filed since December 31, 1997 pursuant to Section
13(a) or 15(d) of the Exchange Act; and
(c) The description of the Company's common stock contained in its
Registration Statement on Form 8-A, filed with the Commission on
February 16, 1996, as amended, under Section 12 of the Exchange Act and
any amendments or reports filed for the purpose of updating such
description.
In addition, all documents subsequently filed with the Commission by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment hereto which indicates that
all securities offered hereunder have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this registration statement and to be a part hereof from the date
of filing of such documents.
Item 4. Description of Securities.
-------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Subsection (a) of Section 145 of the Delaware General Corporation Law (the
"DGCL") empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that the person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
<PAGE>
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. Under subsection (a) the termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which the
person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the person's conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that the
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Subsection (d) of Section 145 of the DGCL permits indemnification under
subsections (a) and (b) of Section 145 only if authorized in the specific case
following a determination that the individual seeking indemnification has met
the standard of conduct required by the applicable subsection. Such
determination shall be made (1) by a majority vote of the directors who are not
parties to such action, suit or proceeding, even though less than a quorum, or
(2) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the stockholders.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section
145, or in the defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection therewith; that indemnification provided
for by Section 145 shall not be deemed exclusive of any other rights to which
the indemnified party may be entitled; that indemnification provided for by
Section 145 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of such person's heirs, executors and
administrators; and that the corporation has the power to purchase and maintain
insurance on behalf of a director or officer of the corporation against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such whether or not the
corporation would have the power to indemnify him or her against such
liabilities under Section 145.
Article VII of the Company's Amended and Restated Certificate of
Incorporation, as amended (the "Certificate"), and Article V of the Company's
By-laws provides for indemnification by the Company, to the fullest extent
permitted by Section 145 of the DGCL, the same exists or may hereafter be
amended, of its directors, officers, and certain persons serving at the request
of the Company as a director, officer, employee or agent of another company, or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter "Indemnitee") against all
expense, liability and loss (including attorney's fees, judgments, fines, ERISA
exise taxes or penalities and amounts paid in settlement) reasonably incurred or
suffered by the Indemnitee in connection with the defense or settlement of any
threatened, pending or completed legal proceeding, whether civil, criminal,
administrative or investigative, in which said Indemnitee is involved by reason
of his relationship with the Company.
Article VIII of the Company's Certificate provides that no director of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases, or (iv)
for any transaction from which the director derived an improper personal
benefit. In addition, the Certificate provides that if the DGCL is amended to
authorize the further elimination or limitation of the liability of directors,
then the liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the DGCL as so amended.
2
<PAGE>
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
The following is a complete list of exhibits filed or incorporated by
reference as part of this registration statement.
Exhibits
- --------
4.1 Segue Software, Inc. Amended and Restated Certificate of Incorporation
(incorporated herein by reference to exhibit 3.2 of the Company's
Registration Statement on Form S-1 (File No. 333-1488) as filed with the
Commission on February 16, 1996).
4.2 Segue Software, Inc. By-laws (incorporated herein by reference to
exhibit 3.3 of the Company's Registration Statement on Form S-1 (File
No. 333-1488) as filed with the Commission on February 16, 1996).
*4.3 Non-Qualified Stock Option Grant Agreement (dated as of September 5,
1997) relating to 40,000 shares of Common Stock
*4.4 Non-Qualified Stock Option Grant Agreement (dated as of September 5,
1997) relating to 315,556 shares of Common Stock
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being registered.
23.1 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1).
*23.2 Consent of Coopers & Lybrand L.L.P.
24.1 Powers of Attorney (included on page 5 of this registration statement).
*Filed herewith
Item 9. Undertakings.
------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(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. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above shall
-------- -------
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to 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) 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 Securities and
Exchange 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.
4
<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 Newton, Commonwealth of Massachusetts, on May 5,
1998.
SEGUE SOFTWARE, INC.
By: /s/ STEPHEN B. BUTLER
---------------------
Stephen B. Butler
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Segue Software, Inc. hereby severally constitute Stephen B. Butler
and J. Jeffrey Bingenheimer, and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us and
in our names in the capacities indicated below, the registration statement filed
herewith and any and all amendments to said registration statement, and
generally to do all such things in our names and in our capacities as officers
and directors to enable Segue Software, Inc. to comply with the provisions of
the Securities Act of 1933 and all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may be signed
by our said attorneys, or any of them, to said registration statement and any
and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ STEPHEN B. BUTLER President, Chief Executive Officer, May 5, 1998
- ----------------------------- (Principal Executive Officer)
Stephen B. Butler Director
/s/ J. JEFFREY BINGENHEIMER Vice President and Chief Financial Officer May 5, 1998
- ----------------------------- (Principal Financial and Accounting Officer)
J. Jeffrey Bingenheimer
/s/ LEONARD E. BAUM Director May 5, 1998
- -----------------------------
Leonard E. Baum
Director May 5, 1998
- -----------------------------
John J. Cullinane
/s/ RONALD D. FISHER Director May 5, 1998
- -----------------------------
Ronald D. Fisher
Director May 5, 1998
- -----------------------------
John R. Levine
/s/ MILTON E. MOHR Director May 5, 1998
- -----------------------------
Milton E. Mohr
/s/ HOWARD L. MORGAN Director May 5, 1998
- -----------------------------
Howard L. Morgan
/s/ JAMES H. SIMONS Director May 5, 1998
- -----------------------------
James H. Simons
</TABLE>
5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
4.1 Segue Software, Inc. Amended and Restated Certificate of
Incorporation (incorporated herein by reference to exhibit 3.2 of the
Company's Registration Statement on Form S-1 (File No. 333-1488) as
filed with the Commission on February 16, 1996).
4.2 Segue Software, Inc. By-laws (incorporated herein by reference to
exhibit 3.2 of the Company's Registration Statement on Form S-1 (File
No. 333-1488) as filed with the Commission on February 16, 1996).
*4.3 Non-Qualified Stock Option Grant Agreement (dated as of September 5,
1997) relating to 40,000 shares of Common Stock
*4.4 Non-Qualified Stock Option Grant Agreement (dated as of September 5,
1997) relating to 315,556 shares of Common Stock
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being registered.
23.1 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1).
*23.2 Consent of Coopers & Lybrand L.L.P.
24.1 Powers of Attorney (included on page 5 of this registration
statement).
*Filed herewith
<PAGE>
EXHIBIT 4.3
SEGUE SOFTWARE, INC.
NON-QUALIFIED STOCK OPTION GRANT AGREEMENT
This Non-Qualified Stock Option Grant Agreement (this "Agreement") is made
as of September 5, 1997, by and between Segue Software, Inc., a Delaware
corporation (the "Company"), and Stephen B. Butler, an employee of the Company
(hereinafter called "Optionee").
Section 1. Definitions. Unless otherwise specified or unless the context
-----------
otherwise requires, the following terms, as used in this Agreement, have the
following meanings:
Affiliate means a corporation which, for purposes of Section 424 of
---------
the Code, is a parent or subsidiary of the Company, direct or
indirect.
Board means the Board of Directors of the Company.
-----
Code means the United States Internal Revenue Code of 1986, as
----
amended.
Common Stock means the Company's common stock, par value $.01 per
------------
share.
Disability or Disabled means permanent and total disability as defined
---------- --------
in Section 22(e)(3) of the Code.
Fair Market Value of a share of Common Stock means:
-----------------
(1) If the Common Stock is listed on a national securities exchange
or traded in the over-the-counter market and sales prices are
regularly reported for the Common Stock, either (a) the average
of the closing or last prices of the Common Stock on the
Composite Tape or other comparable reporting system for the ten
(10) consecutive trading days immediately preceding the
applicable date or (b) the closing or last price of the Common
Stock on the Composite Tape or other comparable reporting system
for the trading day immediately preceding the applicable date, as
the Board shall determine.
(2) If the Common Stock is not traded on a national securities
exchange but is traded on the over-the-counter market, if sales
prices are not regularly reported for the Common Stock for the
trading days or day referred to in clause (1), and if bid and
asked prices for the Common Stock are regularly reported, either
(a) the average of the mean between the bid and the asked price
for the Common Stock at the close of trading in the over-the-
counter market for the ten (10) trading days on which Common
Stock was traded immediately preceding the applicable date or (b)
the mean between the bid and the asked price for the Common Stock
at the close of trading in the over-the-counter market for the
<PAGE>
trading day on which Common Stock was traded immediately
preceding the applicable date, as the Board shall determine; and
(3) If the Common Stock is neither listed on a national securities
exchange nor traded in the over-the-counter market, such value as
the Board, in good faith, shall determine.
Optionee's Survivors means the legal representatives of Optionee
--------------------
and/or any person or persons who acquired Optionee's rights to the
Option (as hereinafter defined) by will or by the laws of descent and
distribution.
Shares means shares of the Common Stock as to which the Option (as
------
hereinafter defined) has been granted hereunder or any shares of
capital stock into which the Shares are changed or for which they are
exchanged pursuant to Section 14 hereof. The Shares issued upon
exercise of the Option (as hereinafter defined) may be authorized and
unissued shares or shares held by the Company in its treasury, or
both.
Section 2. Grant of the Option. The Company hereby grants to Optionee the
-------------------
right and option (the "Option") to purchase on or prior to September 5, 2007
(the "Expiration Date") all or any portion of an aggregate number of shares of
Common Stock at an exercise price per share in accordance with a vesting
schedule, all as fully set forth on the "Notice of Stock Options and Option
Agreement" attached hereto and subject to the terms and conditions set forth
hereinafter.
Section 3. Manner of Exercise. The Option (or any part or portion
------------------
thereof) shall be exercised by giving written notice to the Company at its
principal office address, together with provision for payment of the full
purchase price in accordance with this Section 3 for the Shares as to which such
Option is being exercised, and upon compliance with any other condition(s) set
forth in this Agreement. Such written notice shall be signed by Optionee, shall
state the number of Shares with respect to which the Option is being exercised
and shall contain any representation required by this Agreement. Payment of the
purchase price for the Shares as to which such Option is being exercised shall
be made (a) in United States dollars in cash or by check, or (b) at the
discretion of the Board, through delivery of shares of Common Stock that are not
then subject to restrictions under any Company plan or agreement and that have
been held by Optionee for at least six (6) months, or (c) at the discretion of
the Board, by delivery of Optionee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the applicable Federal
rate, as defined in Section 1274(d) of the Code, or (d) at the discretion of the
Board, in accordance with a cashless exercise program established with a
securities brokerage firm, and approved by the Board, or (e) at the discretion
of the Board, by any combination of (a), (b), (c) and (d) above.
The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to Optionee (or to Optionee's Survivors, as the case
2
<PAGE>
may be). In determining what constitutes "reasonably promptly," it is expressly
understood that the delivery of the Shares may be delayed by the Company in
order to comply with any law or regulation which requires the Company to take
any action with respect to the Shares prior to their issuance. The Shares
shall, upon delivery, be evidenced by an appropriate certificate or certificates
for fully paid, non-assessable Shares.
Notwithstanding any other provision hereof, no portion of the Option shall
be exercisable after the Expiration Date.
Section 4. Acceleration of Exercise. The Board shall have the right to
------------------------
accelerate the exercisability of all or any portion of the Option.
Section 5. Amendment or Modification. The Board may, in its discretion,
-------------------------
amend any term or condition of the Option; provided, however, that any such
amendment shall be made only with the consent of Optionee, or in the event of
the death of Optionee, Optionee's Survivors, if the amendment is adverse to
Optionee.
Section 6. Rights as a Stockholder. Optionee shall have no rights as a
-----------------------
stockholder with respect to any Shares covered by the Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of Optionee.
Section 7. Transfer and Assignment. The Option shall not be transferable
-----------------------
by Optionee other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act or the rules thereunder;
provided, however, that the designation of a beneficiary of the Option by
Optionee shall not be deemed a transfer prohibited by this Section 7. Except as
provided in the preceding sentence, the Option shall be exercisable, during
Optionee's lifetime, only by Optionee (or by his or her legal representative)
and shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process. Any attempted transfer, assignment, pledge, hypothecation
or other disposition of the Option or of any rights granted hereunder contrary
to the provisions of this Agreement, or the levy of any attachment or similar
process upon the Option, shall be null and void.
Section 8. Termination of Service Other Than "For Cause". Except as
---------------------------------------------
otherwise provided in this Agreement, in the event of a termination of service
of Optionee (whether as an employee, director or consultant) with the Company or
an Affiliate before Optionee has exercised the Option in full, the following
rules apply:
(a) If Optionee ceases to be an employee, director or consultant of
the Company or of an Affiliate (for any reason other than termination "for
cause", Disability, or death for which events there are special rules in
Sections 9, 10, and 11, respectively), then Optionee may exercise the Option to
3
<PAGE>
the extent that the Option is exercisable on the date of such termination of
service, within three (3) months after the date of such termination, or until
the Expiration Date, if earlier. Subject to Section 3, any portion of the
Option that is not exercisable at such time shall terminate immediately and be
of no further force or effect.
(b) The provisions of this Section 8, and not the provisions of
Section 10 or 11, shall apply to Optionee if Optionee subsequently becomes
disabled or dies after the termination of employment, director status or
consultancy; provided, however, in the case of Optionee's disability or death
within three (3) months after the termination of employment, director status or
consulting, such Disabled Optionee or Optionee's Survivors may exercise the
Option within one (1) year after the date of Optionee's disability or death, but
in no event after the Expiration Date.
(c) Notwithstanding anything herein to the contrary, if subsequent to
the termination of employment, termination of director status or termination of
consultancy, of Optionee but prior to the exercise of the Option, the Board
determines that, either prior or subsequent to the Optionee's termination,
Optionee engaged in conduct which would constitute "cause", then Optionee shall
forthwith cease to have any right to exercise the Option.
(d) If Optionee is absent from work with the Company or with an
Affiliate because of temporary disability (any disability other than a permanent
and total Disability) or who is on leave of absence for any purpose, then
Optionee shall not, during the period of any such absence, be deemed, by virtue
of such absence alone, to have terminated Optionee's employment, director status
or consultancy with the Company or with an Affiliate, except as the Board may
otherwise expressly provide.
(e) The Option shall not be affected by any change of employment or
other service within or among the Company and any Affiliates, so long as
Optionee continues to be an employee, director or consultant of the Company or
any Affiliate, provided, however, if Optionee's employment by either the Company
or an Affiliate should cease (other than to become an employee of an Affiliate
or the Company), such termination shall affect Optionee's rights under the
Option in accordance with the terms of this Agreement.
Section 9. Termination of Service "For Cause". Except as otherwise
----------------------------------
provided in this Agreement, the following rules apply if Optionee's service
(whether as an employee, director or consultant) with the Company or an
Affiliate is terminated "for cause" prior to the time that the Option has been
exercised in full:
(a) As of the date Optionee is notified that his service is terminated
"for cause," the Option shall terminate immediately and be of no further force
or effect.
(b) For purposes of this Section 9, "cause" shall include (and is not
limited to) dishonesty with respect to the employer, insubordination,
substantial malfeasance or nonfeasance of duty, unauthorized disclosure of
4
<PAGE>
confidential information, and conduct substantially prejudicial to the business
of the Company or any Affiliate. The determination of the Board as to the
existence of cause will be conclusive on Optionee and the Company.
(c) "Cause" is not limited to events which have occurred prior to a
Optionee's termination of service, nor is it necessary that the Board's finding
of "cause" occur prior to termination. If the Board determines, subsequent to
Optionee's termination of service but prior to the exercise of the Option, that
either prior or subsequent to Optionee's termination Optionee engaged in conduct
which would constitute "cause", then Optionee's right to exercise the Option is
forfeited.
Section 10. Termination of Service for Disability. Except as otherwise
-------------------------------------
provided in this Agreement, if Optionee ceases to be an employee, director or
consultant of the Company or of an Affiliate by reason of Disability, then
Optionee may exercise the Option to the extent exercisable but not exercised on
the date of Disability. Optionee may exercise such rights only within a period
of not more than one (1) year after the date that Optionee became Disabled,
notwithstanding that Optionee might have been able to exercise the Option as to
some or all of the Shares on a later date if he had not become disabled and had
continued to be an employee, director or consultant or until the Expiration
Date, if earlier.
The Board shall make the determination as to whether a Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and
Optionee, in which case such procedure shall be used for such determination).
If requested, Optionee shall be examined by a physician selected or approved by
the Board, the cost of which examination shall be paid for by the Company.
Section 11. Termination of Service by Reason of Death. Except as
-----------------------------------------
otherwise provided in this Agreement, in the event of the death of Optionee
while he is an employee, director or consultant of the Company or of an
Affiliate, the Option may be exercised by Optionee's Survivors to the extent
exercisable but not exercised on the date of death. If Optionee's Survivors
wish to exercise the Option, they must take all necessary steps to exercise the
Option within one (1) year after the date of death of Optionee, notwithstanding
that the decedent might have been able to exercise the Option as to some or all
of the Shares on a later date if he had not died and had continued to be an
employee, director or consultant or until the Expiration Date, if earlier.
Section 12. Purchase for Investment.
-----------------------
Unless the offering and sale of the Shares to be issued upon the exercise
of the Option shall have been effectively registered under the Securities Act of
1933, as now in force or hereafter amended (the "1933 Act"), the Company shall
be under no obligation to issue the Shares covered by such exercise unless and
until the following conditions have been fulfilled:
(a) Optionee shall warrant to the Company, prior to the receipt of
such Shares, that he is acquiring such Shares for his own account, for
5
<PAGE>
investment, and not with a view to, or for sale in connection with, the
distribution of any such Shares, in which event Optionee shall be bound by the
provisions of the following legend which shall be endorsed upon the
certificate(s) evidencing the Shares issued pursuant to such exercise or such
grant:
The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by
any person, including a pledgee, unless (1) either (a) a
Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or (b)
the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such
Act is then available, and (2) there shall have been compliance
with all applicable state securities laws.
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance with the 1933
Act without registration thereunder.
The Company may delay issuance of the Shares until completion of any action
or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).
Section 13. Dissolution or Liquidation of the Company. Upon the
-----------------------------------------
dissolution or liquidation of the Company, the Option or any part thereof which
as of such date has not been exercised will terminate and become null and void;
provided, however, that if the rights of Optionee or Optionee's Survivors have
not otherwise terminated and expired, Optionee or Optionee's Survivors will have
the right immediately prior to such dissolution or liquidation to exercise the
Option to the extent that the Option is exercisable as of the date immediately
prior to such dissolution or liquidation.
Section 14. Adjustments to the Shares. Upon the occurrence of any of the
-------------------------
following events, the rights of Optionee with respect to the Option or any part
thereof which has not previously been exercised in full shall be adjusted as
hereinafter provided:
(a) Stock Dividends and Stock Splits. If the shares of Common Stock
--------------------------------
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of the Option shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) Consolidations or Mergers. If the Company is to be consolidated
-------------------------
with or acquired by another entity in a merger, sale of all or substantially all
of the Company's assets or otherwise (an "Acquisition"), the Board or the board
6
<PAGE>
of directors of any entity assuming the obligations of the Company hereunder
(the "Successor Board"), shall, as to the Option, either (i) make appropriate
provision for the continuation of the Option by substituting on an equitable
basis for the Shares then subject to the Option either the consideration payable
with respect to the outstanding shares of Common Stock in connection with the
Acquisition or securities of any successor or acquiring entity; or (ii) upon
written notice to Optionee, provide that the Option must be exercised (either to
the extent then exercisable or, at the discretion of the Board, the Option being
made fully exercisable for purposes of this subsection), within a specified
number of days of the date of such notice, at the end of which period the Option
shall terminate; or (iii) terminate the Option in exchange for a cash payment
equal to the excess of the Fair Market Value of the shares subject to such
Option (either to the extent then exercisable or, at the discretion of the
Board, the Option being made fully exercisable for purposes of this subsection)
over the exercise price thereof.
(c) Recapitalization or Reorganization. In the event of a
----------------------------------
recapitalization or reorganization of the Company (other than a transaction
described in subsection (b) above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, Optionee, upon exercising the Option, shall be entitled to receive
for the purchase price paid upon such exercise the securities he would have
received if he had exercised such Option prior to such recapitalization or
reorganization.
Section 15. Issuance of Securities. Except as expressly provided herein,
----------------------
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to the Option. Except as expressly provided herein, no adjustments
shall be made for dividends paid in cash or in property (including without
limitation, securities) of the Company.
Section 16. Fractional Shares. No fractional share shall be issued under
-----------------
this Agreement and Optionee shall receive from the Company cash in lieu of such
fractional share equal to the Fair Market Value thereof.
Section 17. Tax Withholding. In the event that any federal, state, or
---------------
local income taxes, employment taxes, Federal Insurance Contributions Act
withholdings or other amounts are required by applicable law or governmental
regulation to be withheld from Optionee's salary, wages or other remuneration in
connection with the exercise of the Option, Optionee shall advance in cash to
the Company, or to any Affiliate of the Company which employs or employed
Optionee, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock, is
authorized by the Board (and permitted by law). For purposes hereof, the fair
market value of the shares withheld for purposes of payroll withholding shall be
determined in the manner provided in Section 1 above, as of the most recent
practicable date prior to the date of exercise. If the fair market value of the
shares withheld is less than the amount of payroll withholdings required,
Optionee may be required to advance the difference in cash to the Company or the
7
<PAGE>
Affiliate employer. The Board in its discretion may condition the exercise of
the Option for less than the then Fair Market Value on Optionee's payment of
such additional withholding.
Section 18. No Special Employment Rights. Nothing in this Agreement shall
----------------------------
be deemed to prevent the Company or an Affiliate from terminating the
employment, consultancy or director status of Optionee, nor to prevent Optionee
from terminating his or her own employment, consultancy or director status or to
give Optionee a right to be retained in employment or other service by the
Company or any Affiliate for any period of time.
Section 19. General Provisions.
------------------
(a) Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with the laws of the State of Delaware.
(b) Notices. Any notices required or permitted by the terms of this
-------
Agreement shall mailed or delivered to the Company at its principal place of
business and shall be mailed or delivered to Optionee at the address set forth
below or, in either case, at such other address as one party may subsequently
furnish to the other party in writing.
8
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
THE COMPANY:
-----------
SEGUE SOFTWARE, INC.
By: /s/ J. JEFFREY BINGENHEIMER
------------------------------
Name: J. Jeffrey Bingenheimer
Title: Chief Financial Officer
OPTIONEE:
--------
/s/ STEPHEN B. BUTLER
---------------------------------------
Stephen B. Butler
Optionee's Address:
_________________________________
_________________________________
_________________________________
_________________________________
9
<PAGE>
Segue Software, Inc.
ID: 95-4188982
1320 Centre Street
Newton, MA 02159
NOTICE OF GRANT OF STOCK OPTIONS AND OPTION AGREEMENT
-----------------------------------------------------
Stephen B. Butler Option Number: A0000566
133 Hillside Avenue Plan:
Needham, MA USA 02194 ID: ###-##-####
- --------------------------------------------------------------------------------
Effective 9/5/97, you have been granted a(n) Non-Qualified Stock Option to buy
40,000 shares of Segue Software, Inc. (the Company) stock at $18.0000 per share.
The total option price of the shares granted is $720,000.00
Shares in each period will become fully vested on the date shown.
Shares Vest Type Full Vest Expiration
------ ------------ --------- ----------
10,000 On Vest Date 9/4/98 9/5/07
10,000 On Vest Date 9/4/99 9/5/07
10,000 On Vest Date 9/4/00 9/5/07
10,000 On Vest Date 9/4/01 9/5/07
- --------------------------------------------------------------------------------
By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the attached Agreement on Form S-8 and the Option Agreement, all of which are
attached and made a part of this document.
- --------------------------------------------------------------------------------
______________________________ __________________________
Segue Software, Inc. Date
______________________________ __________________________
Stephen B. Butler Date
10
<PAGE>
EXHIBIT 4.4
SEGUE SOFTWARE, INC.
NON-QUALIFIED STOCK OPTION GRANT AGREEMENT
This Non-Qualified Stock Option Grant Agreement (this "Agreement") is made
as of September 5, 1997, by and between Segue Software, Inc., a Delaware
corporation (the "Company"), and Stephen B. Butler, an employee of the Company
(hereinafter called "Optionee").
Section 1. Definitions. Unless otherwise specified or unless the context
-----------
otherwise requires, the following terms, as used in this Agreement, have the
following meanings:
Affiliate means a corporation which, for purposes of Section 424 of
---------
the Code, is a parent or subsidiary of the Company, direct or
indirect.
Board means the Board of Directors of the Company.
-----
Code means the United States Internal Revenue Code of 1986, as
----
amended.
Common Stock means the Company's common stock, par value $.01 per
------------
share.
Disability or Disabled means permanent and total disability as defined
---------- --------
in Section 22(e)(3) of the Code.
Fair Market Value of a share of Common Stock means:
-----------------
(1) If the Common Stock is listed on a national securities exchange
or traded in the over-the-counter market and sales prices are
regularly reported for the Common Stock, either (a) the average
of the closing or last prices of the Common Stock on the
Composite Tape or other comparable reporting system for the ten
(10) consecutive trading days immediately preceding the
applicable date or (b) the closing or last price of the Common
Stock on the Composite Tape or other comparable reporting system
for the trading day immediately preceding the applicable date, as
the Board shall determine.
(2) If the Common Stock is not traded on a national securities
exchange but is traded on the over-the-counter market, if sales
prices are not regularly reported for the Common Stock for the
trading days or day referred to in clause (1), and if bid and
asked prices for the Common Stock are regularly reported, either
(a) the average of the mean between the bid and the asked price
for the Common Stock at the close of trading in the over-the-
counter market for the ten (10) trading days on which Common
Stock was traded immediately preceding the applicable date or (b)
the mean between the bid and the asked price for the Common Stock
at the close of trading in the over-the-counter market for the
trading day on which Common Stock was traded immediately
preceding the applicable date, as the Board shall determine; and
<PAGE>
(3) If the Common Stock is neither listed on a national securities
exchange nor traded in the over-the-counter market, such value as
the Board, in good faith, shall determine.
Optionee's Survivors means the legal representatives of Optionee
--------------------
and/or any person or persons who acquired Optionee's rights to the
Option (as hereinafter defined) by will or by the laws of descent and
distribution.
Shares means shares of the Common Stock as to which the Option (as
------
hereinafter defined) has been granted hereunder or any shares of
capital stock into which the Shares are changed or for which they are
exchanged pursuant to Section 14 hereof. The Shares issued upon
exercise of the Option (as hereinafter defined) may be authorized and
unissued shares or shares held by the Company in its treasury, or
both.
Section 2. Grant of the Option. The Company hereby grants to Optionee the
-------------------
right and option (the "Option") to purchase on or prior to September 5, 2007
(the "Expiration Date") all or any portion of an aggregate number of shares of
Common Stock at an exercise price per share in accordance with a vesting
schedule, all as fully set forth on the "Notice of Stock Options and Option
Agreement" attached hereto and subject to the terms and conditions set forth
hereinafter.
Section 3. Manner of Exercise. The Option (or any part or portion
------------------
thereof) shall be exercised by giving written notice to the Company at its
principal office address, together with provision for payment of the full
purchase price in accordance with this Section 3 for the Shares as to which such
Option is being exercised, and upon compliance with any other condition(s) set
forth in this Agreement. Such written notice shall be signed by Optionee, shall
state the number of Shares with respect to which the Option is being exercised
and shall contain any representation required by this Agreement. Payment of the
purchase price for the Shares as to which such Option is being exercised shall
be made (a) in United States dollars in cash or by check, or (b) at the
discretion of the Board, through delivery of shares of Common Stock that are not
then subject to restrictions under any Company plan or agreement and that have
been held by Optionee for at least six (6) months, or (c) at the discretion of
the Board, by delivery of Optionee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the applicable Federal
rate, as defined in Section 1274(d) of the Code, or (d) at the discretion of the
Board, in accordance with a cashless exercise program established with a
securities brokerage firm, and approved by the Board, or (e) at the discretion
of the Board, by any combination of (a), (b), (c) and (d) above.
The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to Optionee (or to Optionee's Survivors, as the case
2
<PAGE>
may be). In determining what constitutes "reasonably promptly," it is expressly
understood that the delivery of the Shares may be delayed by the Company in
order to comply with any law or regulation which requires the Company to take
any action with respect to the Shares prior to their issuance. The Shares
shall, upon delivery, be evidenced by an appropriate certificate or certificates
for fully paid, non-assessable Shares.
Notwithstanding any other provision hereof, no portion of the Option shall
be exercisable after the Expiration Date.
Section 4. Acceleration of Exercise. The Board shall have the right to
------------------------
accelerate the exercisability of all or any portion of the Option.
Section 5. Amendment or Modification. The Board may, in its discretion,
-------------------------
amend any term or condition of the Option; provided, however, that any such
amendment shall be made only with the consent of Optionee, or in the event of
the death of Optionee, Optionee's Survivors, if the amendment is adverse to
Optionee.
Section 6. Rights as a Stockholder. Optionee shall have no rights as a
-----------------------
stockholder with respect to any Shares covered by the Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of Optionee.
Section 7. Transfer and Assignment. The Option shall not be transferable
-----------------------
by Optionee other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act or the rules thereunder;
provided, however, that the designation of a beneficiary of the Option by
Optionee shall not be deemed a transfer prohibited by this Section 7. Except as
provided in the preceding sentence, the Option shall be exercisable, during
Optionee's lifetime, only by Optionee (or by his or her legal representative)
and shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process. Any attempted transfer, assignment, pledge, hypothecation
or other disposition of the Option or of any rights granted hereunder contrary
to the provisions of this Agreement, or the levy of any attachment or similar
process upon the Option, shall be null and void.
Section 8. Termination of Service Other Than "For Cause". Except as
---------------------------------------------
otherwise provided in this Agreement, in the event of a termination of service
of Optionee (whether as an employee, director or consultant) with the Company or
an Affiliate before Optionee has exercised the Option in full, the following
rules apply:
(a) If Optionee ceases to be an employee, director or consultant of
the Company or of an Affiliate (for any reason other than termination "for
cause", Disability, or death for which events there are special rules in
3
<PAGE>
Sections 9, 10, and 11, respectively), then Optionee may exercise the Option to
the extent that the Option is exercisable on the date of such termination of
service, within three (3) months after the date of such termination, or until
the Expiration Date, if earlier. Subject to Section 3, any portion of the
Option that is not exercisable at such time shall terminate immediately and be
of no further force or effect.
(b) The provisions of this Section 8, and not the provisions of
Section 10 or 11, shall apply to Optionee if Optionee subsequently becomes
disabled or dies after the termination of employment, director status or
consultancy; provided, however, in the case of Optionee's disability or death
within three (3) months after the termination of employment, director status or
consulting, such Disabled Optionee or Optionee's Survivors may exercise the
Option within one (1) year after the date of Optionee's disability or death, but
in no event after the Expiration Date.
(c) Notwithstanding anything herein to the contrary, if subsequent to
the termination of employment, termination of director status or termination of
consultancy, of Optionee but prior to the exercise of the Option, the Board
determines that, either prior or subsequent to the Optionee's termination,
Optionee engaged in conduct which would constitute "cause", then Optionee shall
forthwith cease to have any right to exercise the Option.
(d) If Optionee is absent from work with the Company or with an
Affiliate because of temporary disability (any disability other than a permanent
and total Disability) or who is on leave of absence for any purpose, then
Optionee shall not, during the period of any such absence, be deemed, by virtue
of such absence alone, to have terminated Optionee's employment, director status
or consultancy with the Company or with an Affiliate, except as the Board may
otherwise expressly provide.
(e) The Option shall not be affected by any change of employment or
other service within or among the Company and any Affiliates, so long as
Optionee continues to be an employee, director or consultant of the Company or
any Affiliate, provided, however, if Optionee's employment by either the Company
or an Affiliate should cease (other than to become an employee of an Affiliate
or the Company), such termination shall affect Optionee's rights under the
Option in accordance with the terms of this Agreement.
Section 9. Termination of Service "For Cause". Except as otherwise
----------------------------------
provided in this Agreement, the following rules apply if Optionee's service
(whether as an employee, director or consultant) with the Company or an
Affiliate is terminated "for cause" prior to the time that the Option has been
exercised in full:
(a) As of the date Optionee is notified that his service is terminated
"for cause," the Option shall terminate immediately and be of no further force
or effect.
(b) For purposes of this Section 9, "cause" shall include (and is not
limited to) dishonesty with respect to the employer, insubordination,
substantial malfeasance or nonfeasance of duty, unauthorized disclosure of
4
<PAGE>
confidential information, and conduct substantially prejudicial to the business
of the Company or any Affiliate. The determination of the Board as to the
existence of cause will be conclusive on Optionee and the Company.
(c) "Cause" is not limited to events which have occurred prior to a
Optionee's termination of service, nor is it necessary that the Board's finding
of "cause" occur prior to termination. If the Board determines, subsequent to
Optionee's termination of service but prior to the exercise of the Option, that
either prior or subsequent to Optionee's termination Optionee engaged in conduct
which would constitute "cause", then Optionee's right to exercise the Option is
forfeited.
Section 10. Termination of Service for Disability. Except as otherwise
-------------------------------------
provided in this Agreement, if Optionee ceases to be an employee, director or
consultant of the Company or of an Affiliate by reason of Disability, then
Optionee may exercise the Option to the extent exercisable but not exercised on
the date of Disability. Optionee may exercise such rights only within a period
of not more than one (1) year after the date that Optionee became Disabled,
notwithstanding that Optionee might have been able to exercise the Option as to
some or all of the Shares on a later date if he had not become disabled and had
continued to be an employee, director or consultant or until the Expiration
Date, if earlier.
The Board shall make the determination as to whether a Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and
Optionee, in which case such procedure shall be used for such determination).
If requested, Optionee shall be examined by a physician selected or approved by
the Board, the cost of which examination shall be paid for by the Company.
Section 11. Termination of Service by Reason of Death. Except as
-----------------------------------------
otherwise provided in this Agreement, in the event of the death of Optionee
while he is an employee, director or consultant of the Company or of an
Affiliate, the Option may be exercised by Optionee's Survivors to the extent
exercisable but not exercised on the date of death. If Optionee's Survivors
wish to exercise the Option, they must take all necessary steps to exercise the
Option within one (1) year after the date of death of Optionee, notwithstanding
that the decedent might have been able to exercise the Option as to some or all
of the Shares on a later date if he had not died and had continued to be an
employee, director or consultant or until the Expiration Date, if earlier.
Section 12. Purchase for Investment.
-----------------------
Unless the offering and sale of the Shares to be issued upon the exercise
of the Option shall have been effectively registered under the Securities Act of
1933, as now in force or hereafter amended (the "1933 Act"), the Company shall
be under no obligation to issue the Shares covered by such exercise unless and
until the following conditions have been fulfilled:
(a) Optionee shall warrant to the Company, prior to the receipt of
such Shares, that he is acquiring such Shares for his own account, for
5
<PAGE>
investment, and not with a view to, or for sale in connection with, the
distribution of any such Shares, in which event Optionee shall be bound by the
provisions of the following legend which shall be endorsed upon the
certificate(s) evidencing the Shares issued pursuant to such exercise or such
grant:
The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by
any person, including a pledgee, unless (1) either (a) a
Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or (b)
the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such
Act is then available, and (2) there shall have been compliance
with all applicable state securities laws.
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance with the 1933
Act without registration thereunder.
The Company may delay issuance of the Shares until completion of any action
or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).
Section 13. Dissolution or Liquidation of the Company. Upon the
-----------------------------------------
dissolution or liquidation of the Company, the Option or any part thereof which
as of such date has not been exercised will terminate and become null and void;
provided, however, that if the rights of Optionee or Optionee's Survivors have
not otherwise terminated and expired, Optionee or Optionee's Survivors will have
the right immediately prior to such dissolution or liquidation to exercise the
Option to the extent that the Option is exercisable as of the date immediately
prior to such dissolution or liquidation.
Section 14. Adjustments to the Shares. Upon the occurrence of any of the
-------------------------
following events, the rights of Optionee with respect to the Option or any part
thereof which has not previously been exercised in full shall be adjusted as
hereinafter provided:
(a) Stock Dividends and Stock Splits. If the shares of Common Stock
--------------------------------
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of the Option shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) Consolidations or Mergers. If the Company is to be consolidated
-------------------------
with or acquired by another entity in a merger, sale of all or substantially all
6
<PAGE>
of the Company's assets or otherwise (an "Acquisition"), the Board or the board
of directors of any entity assuming the obligations of the Company hereunder
(the "Successor Board"), shall, as to the Option, either (i) make appropriate
provision for the continuation of the Option by substituting on an equitable
basis for the Shares then subject to the Option either the consideration payable
with respect to the outstanding shares of Common Stock in connection with the
Acquisition or securities of any successor or acquiring entity; or (ii) upon
written notice to Optionee, provide that the Option must be exercised (either to
the extent then exercisable or, at the discretion of the Board, the Option being
made fully exercisable for purposes of this subsection), within a specified
number of days of the date of such notice, at the end of which period the Option
shall terminate; or (iii) terminate the Option in exchange for a cash payment
equal to the excess of the Fair Market Value of the shares subject to such
Option (either to the extent then exercisable or, at the discretion of the
Board, the Option being made fully exercisable for purposes of this subsection)
over the exercise price thereof.
(c) Recapitalization or Reorganization. In the event of a
----------------------------------
recapitalization or reorganization of the Company (other than a transaction
described in subsection (b) above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, Optionee, upon exercising the Option, shall be entitled to receive
for the purchase price paid upon such exercise the securities he would have
received if he had exercised such Option prior to such recapitalization or
reorganization.
Section 15. Issuance of Securities. Except as expressly provided herein,
----------------------
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to the Option. Except as expressly provided herein, no adjustments
shall be made for dividends paid in cash or in property (including without
limitation, securities) of the Company.
Section 16. Fractional Shares. No fractional share shall be issued under
-----------------
this Agreement and Optionee shall receive from the Company cash in lieu of such
fractional share equal to the Fair Market Value thereof.
Section 17. Tax Withholding. In the event that any federal, state, or
---------------
local income taxes, employment taxes, Federal Insurance Contributions Act
withholdings or other amounts are required by applicable law or governmental
regulation to be withheld from Optionee's salary, wages or other remuneration in
connection with the exercise of the Option, Optionee shall advance in cash to
the Company, or to any Affiliate of the Company which employs or employed
Optionee, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock, is
authorized by the Board (and permitted by law). For purposes hereof, the fair
market value of the shares withheld for purposes of payroll withholding shall be
determined in the manner provided in Section 1 above, as of the most recent
practicable date prior to the date of exercise. If the fair market value of the
shares withheld is less than the amount of payroll withholdings required,
Optionee may be required to advance the difference in cash to the Company or the
7
<PAGE>
Affiliate employer. The Board in its discretion may condition the exercise of
the Option for less than the then Fair Market Value on Optionee's payment of
such additional withholding.
Section 18. No Special Employment Rights. Nothing in this Agreement shall
----------------------------
be deemed to prevent the Company or an Affiliate from terminating the
employment, consultancy or director status of Optionee, nor to prevent Optionee
from terminating his or her own employment, consultancy or director status or to
give Optionee a right to be retained in employment or other service by the
Company or any Affiliate for any period of time.
Section 19. General Provisions.
------------------
(a) Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with the laws of the State of Delaware.
(b) Notices. Any notices required or permitted by the terms of this
-------
Agreement shall mailed or delivered to the Company at its principal place of
business and shall be mailed or delivered to Optionee at the address set forth
below or, in either case, at such other address as one party may subsequently
furnish to the other party in writing.
8
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
THE COMPANY:
-----------
SEGUE SOFTWARE, INC.
By: /s/ J. JEFFREY BINGENHEIMER
------------------------------
Name: J. Jeffrey Bingenheimer
Title: Chief Financial Officer
OPTIONEE:
--------
/s/ STEPHEN B. BUTLER
---------------------------------------
Stephen B. Butler
Optionee's Address:
_________________________________
_________________________________
_________________________________
_________________________________
9
<PAGE>
Segue Software, Inc.
ID: 95-4188982
1320 Centre Street
Newton, MA 02159
NOTICE OF GRANT OF STOCK OPTIONS AND OPTION AGREEMENT
-----------------------------------------------------
Stephen B. Butler Option Number: A0000560
133 Hillside Avenue Plan:
Needham, MA USA 02194 ID: ###-##-####
- --------------------------------------------------------------------------------
Effective 9/5/97, you have been granted a(n) Non-Qualified Stock Option to buy
315,556 shares of Segue Software, Inc. (the Company) stock at $9.0000 per share.
The total option price of the shares granted is $2,840,004.00.
Shares in each period will become fully vested on the date shown.
Shares Vest Type Full Vest Expiration
------ ------------ --------- ----------
78,889 On Vest Date 9/4/98 9/5/07
78,889 On Vest Date 9/4/99 9/5/07
78,889 On Vest Date 9/4/00 9/5/07
78,889 On Vest Date 9/4/01 9/5/07
- -------------------------------------------------------------------------------
By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the attached Agreement on Form S-8 and the Option Agreement, all of which are
attached and made a part of this document.
- --------------------------------------------------------------------------------
________________________________ __________________________
Segue Software, Inc. Date
________________________________ __________________________
Stephen B. Butler Date
10
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF GOODWIN, PROCTER & HOAR LLP APPEARS HERE]
May 5, 1998
Segue Software, Inc.
1320 Centre Street
Newton Centre, Massachusetts 02159
Re: Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
This opinion is furnished in connection with the registration, pursuant to
the Securities Act of 1933, as amended (the "Act"), of 355,556 shares of common
stock, par value $.01 per share (the "Shares"), of Segue Software, Inc., a
Delaware corporation (the "Company").
In connection with rendering this opinion, we have examined the Amended &
Restated Certificate of Incorporation and By-Laws of the Company; such records
of the corporate proceedings of the Company as we deemed material; a
registration statement on Form S-8 under the Act relating to the Shares (the
"Registration Statement") and the prospectus contained therein (the
"Prospectus"); those certain Non-Qualified Stock Option Grant Agreements each
dated as of September 5, 1997, by and between the Company and Stephen B. Butler
(the "Butler Agreements"); and such other certificates, receipts, records and
documents as we considered necessary for the purposes of this opinion. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as certified, photostatic or facsimile copies, the authenticity of the originals
of such copies and the authenticity of telephonic confirmations of public
officials and others. As to facts material to our opinion, we have relied upon
certificates or telephonic confirmations of public officials and certificates,
documents, statements and other information of the Company or representatives or
officers thereof.
We are attorneys admitted to practice in the Commonwealth of Massachusetts.
We express no opinion concerning the laws of any jurisdictions other than the
laws of the United States of America, the Commonwealth of Massachusetts and the
General Corporation Law of the State of Delaware.
Based upon the foregoing, we are of the opinion that when the Shares have
been issued and paid for in accordance with the terms of the Prospectus and the
Butler Agreements, as the case may be, the Shares will be legally issued, fully
paid and nonassessable shares of common stock, par value $.01 per share, of the
Company.
<PAGE>
Segue Software, Inc.
May 5, 1998
Page 2
The foregoing assumes that all requisite steps will be taken to comply with
the requirements of the Act and applicable requirements of state laws regulating
the offer and sale of securities.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
--------------------------------
GOODWIN, PROCTER & HOAR LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Segue Software, Inc. on Form S-8 of our report dated February 5, 1998, on our
audits of the consolidated financial statements of Segue Software, Inc. as of
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997, which report is included in the Annual Report on Form 10-K of
Segue Software, Inc. for the year ended December 31, 1997.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
May 7, 1998
