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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CENTURA SOFTWARE CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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[GUPTA LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 24, 1996
TO THE SHAREHOLDERS OF GUPTA CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Gupta
Corporation (the "Company") will be held on Tuesday, September 24, 1996, at 3:00
p.m., local time, at Hyatt Rickey's in Palo Alto, located at 4219 El Camino
Real, Palo Alto, California 94306 for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected and qualified;
2. To approve an amendment to the Company's 1995 Stock Option Plan to
increase the number of shares of Common Stock reserved for issuance
thereunder by 1,000,000 shares to an aggregate of 2,000,000 shares;
3. To approve an amendment to the Company's 1992 Employee Stock Purchase
Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by 100,000 shares to an aggregate of 400,000
shares;
4. To approve the adoption of the 1996 Directors' Stock Option Plan and
the reservation of 500,000 shares of Common Stock for issuance
thereunder;
5. To approve an amendment to the Company's Amended and Restated Articles
of Incorporation to change the name of the Company to Centura Software
Corporation;
6. To ratify the appointment of Price Waterhouse LLP as the Company's
independent public accountants for the fiscal year ending December 31,
1996; and
7. To transact such other business as may properly come before the
meeting or any postponement or adjournment(s) thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on August 21, 1996 are
entitled to notice of and to vote at the meeting and any adjournment(s) thereof.
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as
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promptly as possible in the postage-prepaid envelope enclosed for that purpose.
Any shareholder attending the meeting may vote in person even if such
shareholder returned a proxy card.
BY ORDER OF THE BOARD OF DIRECTORS
CRAIG W. JOHNSON
SECRETARY
Menlo Park, California
August 26, 1996
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[GUPTA LOGO]
_____________
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 24, 1996
____________________________
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
Gupta Corporation (the "Company"), a California corporation, for use at the
Annual Meeting of Shareholders to be held on Tuesday, September 24, 1996 at
3:00 p.m., local time, or at any postponement or adjournment(s) thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting of
Shareholders. The Annual Meeting will be held at Hyatt Rickey's in Palo Alto,
located at 4219 El Camino Real, Palo Alto, California 94306. The telephone
number at that location is (415) 493-8000.
The Company's principal executive offices are located at 1060 Marsh Road,
Menlo Park, California 94025. The Company's telephone number at that location
is (415) 321-9500.
This Proxy contains information that was also included in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange Commission
on July 18, 1996, as well as immaterial corrections to certain information
that was previously filed.
SOLICITATION
These proxy solicitation materials were mailed on or about August 26, 1996
to all shareholders entitled to vote at the meeting. The costs of soliciting
these proxies will be borne by the Company. These costs will include the
expenses of preparing and mailing proxy materials for the Annual Meeting and
reimbursement paid to brokerage firms and others for their expenses incurred in
forwarding solicitation material regarding the Annual Meeting to beneficial
owners of the Company's Common Stock. The Company may conduct further
solicitation personally, telephonically or by facsimile through its officers,
directors and regular employees, none of whom will receive additional
compensation for assisting with the solicitation.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
Asa Drew, Inspector of Elections) a written notice of revocation or a duly
executed proxy bearing a later date or by attending the meeting of shareholders
and voting in person.
VOTING
Every shareholder voting for the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of shares held by such
shareholder, or distribute the shareholder's votes on the same principle among
as many candidates as the shareholder thinks fit, provided that votes cannot be
cast for more than six candidates. However, no shareholder shall be entitled to
cumulate votes unless the candidate's name has been placed in nomination prior
to the voting and the shareholder, or any other shareholder, has given
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notice at the meeting prior to the voting of the intention to cumulate the
shareholder's votes. On all other matters, each share has one vote.
Votes cast in person or by proxy at the Annual Meeting will be tabulated by
the Inspector of Elections with the assistance of the Company's transfer agent.
The Inspector of Elections will also determine whether or not a quorum is
present. Except with respect to the election of directors where cumulative
voting is invoked and except in certain other specific circumstances, the
affirmative vote of a majority of shares REPRESENTED AND VOTING at a duly held
meeting at which a quorum is present is required under California law for
approval of proposals presented to shareholders. In general, California law
also provides that a quorum consists of a majority of the shares ENTITLED TO
VOTE, represented either in person or by proxy. The Inspector of Elections will
treat abstentions as shares that are present and ENTITLED TO VOTE for purposes
of determining the presence of a quorum but as not VOTING for purposes of
determining the approval of any matter submitted to the shareholders for a vote.
Any proxy which is returned using the form of proxy enclosed and which is not
marked as to a particular item will be voted for the election of directors, for
approval of the amendment to the Company's 1995 Stock Option Plan to increase
the number of shares of Common Stock reserved for issuance thereunder by
1,000,000 shares to an aggregate of 2,000,000 shares, for approval of the
amendment to the Company's 1992 Employee Stock Purchase Plan to increase the
number of shares of Common Stock reserved for issuance thereunder by 100,000
shares to an aggregate of 400,000 shares, for approval of adoption of the 1996
Directors' Stock Option Plan and the reservation of 500,000 shares of Common
Stock for issuance thereunder, for approval of the adoption of the amendment to
the Company's Amended and Restated Articles of Incorporation to change the
Company's name to Centura Software Corporation, and for ratification of the
appointment of the designated independent auditors and as the proxy holders deem
advisable on other matters that may come before the meeting, as the case may be,
with respect to the item not marked. If a broker indicates on the enclosed
proxy or its substitute that it does not have discretionary authority as to
certain shares to vote on a particular matter ("broker non-votes"), those shares
will not be considered as VOTING with respect to that matter. While there is no
definitive specific statutory or case law authority in California concerning the
proper treatment of abstentions and broker non-votes, the Company believes that
the tabulation procedures to be followed by the Inspector of Elections are
consistent with the general statutory requirements in California concerning
voting of shares and determination of a quorum.
RECORD DATE AND SHARE OWNERSHIP
Only shareholders of record at the close of business on August 21, 1996 are
entitled to notice of and to vote at the meeting. As of the record date,
__________ shares of the Company's Common Stock, par value $____ per share, were
issued and outstanding.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company that are intended to be presented
by such shareholders at the Company's 1997 Annual Meeting of Shareholders must
be received by the Company no later than March 15, 1997 in order that they may
be considered for inclusion in the proxy statement and form of proxy relating to
that meeting.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
The Company's bylaws currently provide for seven directors. At the Annual
Meeting, the Board of Directors has nominated six directors to be elected to
serve until the next Annual Meeting and until their successors are elected and
qualified at the meeting. The Company's Board of Directors proposes to fill the
remaining seat (resulting from a director who has chosen not to seek reelection
for reasons unrelated to the Company) at such time as it has identified a
qualified candidate. Unless otherwise instructed, the proxy holders will vote
the proxies received by them for the Company's six nominees named below, five of
whom are presently directors of the Company. In the event that any nominee of
the Company is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy. In the event
that additional persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them in such a manner in
accordance with cumulative voting as will assure the election of as many of the
nominees listed below as possible, and, in such event, the specific nominees to
be voted for will be determined by the proxy holders. Assuming a quorum is
present, the six nominees for director receiving the greatest number of votes
cast at the Annual Meeting will be elected, up to the number of directors
authorized by the Company's bylaws. The term of office of each person elected
as a director will continue until the next Annual Meeting of Shareholders or
until his or her successor has been elected and qualified.
The names of the nominees and certain other information about them as of
August 21, 1996 are set forth below:
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- --------------- --- ---------------------------------------- --------
Umang P. Gupta 46 Chairman of the Board of Directors 1983
Samuel M. Inman 45 President and Chief Executive Officer ___
(Principal Executive Officer)
D. Bruce Scott 43 Co-founder of inquiry.com inc. 1984
William O. Grabe 58 General Partner of General Atlantic 1992
Partners, an investment firm
Max D. Hopper 61 Principal and Chief Executive Officer of 1995
Max D. Hopper Associates, Inc.; retired
Senior Vice President of AMR Corporation
and retired Chairman of The SABRE Group
Anthony Sun 44 General Partner of Venrock Associates, a 1988
venture capital firm
Except as set forth below, each of the nominees has been engaged in the
principal occupation set forth next to his name above during the past five
years. There is no family relationship between any director or executive
officer of the Company.
Mr. Gupta has served as Chairman of the Board of Directors since the
inception of the Company and as Chief Executive Officer and President of the
Company since inception until April 1995. Prior to founding the Company,
Mr. Gupta served in various positions at Oracle Corporation, a relational
database
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software corporation, from 1981 to 1984. He served most recently at Oracle
Corporation as Vice President and General Manager of the Microcomputer Products
Division, from 1983 to 1984.
Mr. Inman served as President and Chief Operating Officer of the Company
from April 1995 until January 1996, at which time he was appointed as President
and Chief Executive Officer (Principal Executive Officer). Immediately prior to
joining the Company, Mr. Inman served as an independent consultant to a number
of high technology companies from 1994 until April 1995. Mr. Inman served as
President and Chief Operating Officer of Ingram Micro Inc., a worldwide
distributor of microcomputer products, from 1993 to 1994. Prior to assuming
this position, Mr. Inman served as President of IBM's Personal Computer Company
for the Americas from July 1992 to September 1993, President of IBM's National
Distribution Division from March 1991 to July 1992, Director for IBM's
Enterprise Systems Marketing Division from November 1988 to March 1991, and
prior to this he served in various other positions within IBM. Mr. Inman is a
graduate of Purdue University, where he earned a B.S. degree in mathematics.
Mr. Scott has served as a director since November 1984. Effective April
30, 1995, Mr. Scott resigned as Senior Vice President of Database Products, in
which position he had served since January 1994. In May 1995, Mr. Scott co-
founded inquiry.com inc., an internet company. From July 1993 to January 1994,
Mr. Scott served as Senior Vice President, Research and Development, Database
and Connectivity Products for the Company. Prior to assuming this position,
Mr. Scott was Senior Vice President and General Manager of Database Server
Products from July 1992 to June 1993, Senior Vice President, Research and
Development from January 1989 to June 1992, and Vice President from December
1984 to January 1989. Prior to joining the Company, Mr. Scott served as Manager
of Database Development at Victor Technologies, a computer manufacturer
corporation, from 1982 to 1983. Mr. Scott served as Senior Member of Technical
Staff at Oracle Corporation from 1977 to 1982.
Mr. Grabe has served as a director since July 1992. He has been a General
Partner of General Atlantic Partners, an investment firm, since April 1992.
From February 1984 until March 1992, Mr. Grabe was a Vice President at IBM.
Mr. Grabe is a director of Compuware Corporation, a computer systems software
corporation. Mr. Grabe is also a director of Baan N.Y., an enterprise solutions
planning software company, Integrated Systems Solutions Corporation, a wholly-
owned subsidiary of IBM, CODA Plc, a financial accounting software company and
Gartner Group, an information systems consulting company. He is also a director
of several other privately held companies in the computer software and services
industry.
Mr. Hopper has served as a director since April 1995. Mr. Hopper has been
Principal and Chief Executive Officer of Max D. Hopper Associates, Inc., a
consulting firm specializing in creating benefits from the strategic use of
advanced information technologies since January 1995. Prior to forming Max D.
Hopper Associates, Inc., Mr. Hopper served at AMR Corporation, an air
transportation company and provider of information services to the travel and
transportation industry, as Senior Vice President from 1985 through January 1995
as well as Chairman of The SABRE Group from April 1993 through January 1995.
Mr. Hopper served as Executive Vice President for Bank of America from 1982
through 1985. Mr. Hopper is also a director of the Gartner Group and Computer
Language Research, Inc.
Mr. Sun has served as a director since September 1988. He has been a
general partner of Venrock Associates, a venture capital firm, since August
1979. Mr. Sun is also a director of Komag, Inc., a manufacturer of data storage
components, Cognex Corporation, a manufacturer of vision systems for industrial
applications, Conductus Inc., a manufacturer of superconducting electronics,
Inference Inc., a
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client server help desk software company, Worldtalk Communications Corporation,
an applications router company and Fractal Design Inc., a multimedia software
company.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors held a total of six meetings during the fiscal year
ended December 31, 1995. The Board of Directors has an Audit Committee and a
Compensation Committee. It does not have a nominating committee or a committee
performing the functions of a nominating committee.
The Audit Committee of the Board of Directors currently consists of
directors Grabe and Sun, and held four meetings during 1995. The Audit
Committee recommends engagement of the Company's independent auditors, and is
primarily responsible for approving the services performed by the Company's
independent auditors and for reviewing and evaluating the Company's accounting
principles and its system of internal accounting controls.
The Compensation Committee of the Board of Directors currently consists of
directors Grabe and Sun, and held seven meetings during 1995. The Compensation
Committee establishes the compensation for the Company's executive officers,
including the Company's Chief Executive Officer.
No incumbent director attended fewer than 75% of the aggregate number of
meetings of the Board of Directors and meetings of the committees of the Board
of Directors that he was eligible to attend.
COMPENSATION OF DIRECTORS
Directors are reimbursed for out-of-pocket travel expenses associated with
their attendance at Board meetings. Directors received no cash compensation for
their services on the Board of Directors. Nonemployee directors of the Company
are automatically granted options to purchase shares of the Company's Common
Stock pursuant to the terms of the Company's 1996 Directors' Stock Option Plan
(the "Directors' Option Plan") provided that such nonemployee director agrees to
cancel all options granted to such director from the Company's 1995 Directors'
Stock Option Plan, except that each affected director will retain certain
options to purchase 20,000 shares of the Company's Common Stock granted to the
director under the Company's 1986 Incentive Stock Option Plan. Under the
Directors' Option Plan, each nonemployee director receives an option to purchase
50,000 shares of Common Stock on the date on which the later of the following
events occur: the effective date of the Directors' Option Plan or the date on
which such person first becomes a nonemployee director of the Company. Each
option granted under the Directors' Option Plan becomes exercisable in
installments of 1/48th of the shares subject to such option on each of the first
forty-eight (48) monthly anniversaries of the date of grant of the option and
each option granted under the 1986 Incentive Stock Option Plan becomes
exercisable in installments of 25% of the shares subject to such option on each
of the first, second, third and fourth anniversaries of the date of grant of the
option. Options granted under the Directors' Option Plan and the 1986 Incentive
Stock Option Plan have an exercise price equal to the fair market value of the
Company's Common Stock on the date of grant, and a term of ten years.
REQUIRED VOTE
The six nominees receiving the highest number of affirmative votes of
shares of the Company's Common Stock present at the Annual Meeting in person or
by proxy and entitled to vote shall be elected as directors.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES LISTED ABOVE.
PROPOSAL NO. 2
APPROVAL OF THE AMENDMENT TO THE 1995 STOCK OPTION PLAN
At the Annual Meeting, shareholders are being asked to approve an amendment
to the 1995 Stock Option Plan (the "1995 Option Plan") to increase the number of
shares of Common Stock reserved for issuance thereunder by 1,000,000 shares to
an aggregate of 2,000,000 shares.
GENERAL
The Company's 1995 Option Plan was adopted by the Board of Directors in
March 1995 to replace the 1986 Incentive Stock Option Plan which had 160,970
shares available for grant thereunder as of April 19, 1995 and which expired in
accordance with its terms in July 1996. The Board of Directors initially
reserved 1,000,000 shares of Common Stock for issuance under the 1995 Option
Plan. On July 23, 1996, the Board of Directors approved an amendment to
increase the number of shares reserved for issuance under the 1995 Option Plan
by 1,000,000 shares to a total of 2,000,000 shares, for which shareholder
approval is being requested. The Board of Directors believes that, in order to
attract qualified employees to the Company and to provide incentives to its
current employees, it is necessary to grant options to purchase Common Stock to
such employees pursuant to the 1995 Option Plan. Accordingly, shareholders are
being asked to approve the proposed amendment to the 1995 Option Plan.
The 1995 Option Plan provides for the granting to employees of incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and for the granting of nonstatutory options to
employees and consultants. See "United States Federal Income Tax Information"
below for information concerning the tax treatment of both incentive stock
options and nonstatutory stock options.
As of July 31, 1996, no shares had been issued upon exercise of options
granted under the 1995 Option Plan, options to purchase 601,999 shares were
outstanding and 398,001 shares remained available for future grant (not
including the additional 1,000,000 shares reserved by the Board of Directors,
for which shareholder approval is being requested). As of July 31, 1996, the
fair market value of all shares of Common Stock subject to outstanding options
was $3,310,995 based on the closing sale price of $5 1/2 for the Company's
Common Stock as reported on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") National Market System on such date.
As of December 31, 1995, (i) options to purchase 0 shares of Common Stock
were outstanding under the 1995 Option Plan and held by all current executive
officers as a group (9 persons), (ii) no options were outstanding and held by
current directors who are not executive officers (5 persons) and (iii) options
to purchase 37,500 shares of Common Stock were outstanding and held by all
employees, including current officers who are not executive officers, as a group
(299 persons as of July 31, 1996). For information with respect to options to
purchase Common Stock of the Company granted in 1995 under the 1995 Option Plan
and under the Company's 1986 Incentive Stock Option Plan to the Company's Chief
Executive Officer and the four most highly compensated executive officers of the
Company whose annual salary and bonus exceeded $100,000 for 1995, and to
additional executive officers with respect to option repricings, see
"Compensation of Executive Officers -- Stock Option Grants in 1995" and "Report
of the Compensation Committee."
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The 1995 Option Plan is not a qualified deferred compensation plan under
Section 401(a) of the Code, and is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
AMENDMENT TO INCREASE NUMBER OF RESERVED SHARES
The Board of Directors believes that in order to attract and retain highly
qualified employees and consultants and to provide such employees and
consultants with adequate incentive through their proprietary interest in the
Company, it is necessary to amend the 1995 Option Plan to reserve an additional
1,000,000 shares of Common Stock for issuance thereunder. At the Annual Meeting
of Shareholders, the shareholders are being asked to approve the above amendment
to the 1995 Option Plan.
PURPOSE
The purposes of the 1995 Option Plan are to attract and retain the best
available personnel for the Company, to give employees, officers, directors and
consultants of the Company or its subsidiary a greater personal stake in the
success of the business, and to provide such persons with added incentive to
continue and advance in their employment or services to the Company.
ADMINISTRATION
The 1995 Option Plan may be administered by the Board of Directors or a
committee designated by the Board (the "Administrator"). The 1995 Option Plan
is currently being administered by the Board of Directors and the Compensation
Committee of the Board. The Compensation Committee has the exclusive authority
to grant stock options and otherwise administer the 1995 Option Plan with
respect to the Company's directors and officers eligible to participate in the
1995 Option Plan. Members of the Board of Directors receive no additional
compensation for their services in connection with the administration of the
1995 Option Plan. All questions of interpretation of the 1995 Option Plan are
determined by the Administrator and decisions of the Administrator are final and
binding upon all participants.
ELIGIBILITY
The 1995 Option Plan provides that options may be granted to employees
(including officers and directors who are also employees) and consultants of the
Company. Incentive stock options may be granted only to employees. The
Administrator selects the optionees and determines the number of shares and the
exercise price to be associated with each option (except in the case of an
optionee-employee who is also a director, in which case the Compensation
Committee alone determines the number of shares and the exercise price to be
associated with each option). In making such determination, there are taken
into account the duties and responsibilities of the optionee, the value of the
optionee's services, the optionee's present and potential contribution to the
success of the Company, and other relevant factors. As of July 31, 1996 there
are approximately 240 employees eligible to participate in the 1995 Option Plan.
The 1995 Option Plan provides that the maximum number of shares of Common
Stock which may be granted under options to any one employee during any fiscal
year shall be 250,000, subject to adjustment as provided in the 1995 Option
Plan. There is also a limit on the aggregate market value of shares subject to
all incentive stock options that may be granted to an optionee during any
calendar year.
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TERMS OF OPTIONS
The terms of options granted under the 1995 Option Plan are determined by
the Administrator. Each option is evidenced by a stock option agreement between
the Company and the optionee and is subject to the following additional terms
and conditions:
(a) EXERCISE OF THE OPTION The optionee must earn the right to exercise
the option by continuing to work for the Company. The Administrator determines
when options are exercisable. An option is exercised by giving written notice
of exercise to the Company specifying the number of full shares of Common Stock
to be purchased, and by tendering payment of the purchase price to the Company.
The method of payment of the exercise price of the shares purchased upon
exercise of an option is determined by the Administrator.
(b) EXERCISE PRICE The exercise price of options granted under the 1995
Option Plan is determined by the Administrator, and must be at least equal to
the fair market value of the shares on the date of the first grant, in the case
of incentive stock options, and 85% of the fair market value of the shares on
the date of the grant, in the case of nonstatutory stock options, as determined
by the Administrator, based upon the closing price on the NASDAQ National Market
on the date of grant. Incentive stock options granted to shareholders owning
more than 10% of the Company's outstanding stock are subject to the additional
restriction that the exercise price on such options must be at least 110% of the
fair market value on the date of the grant. Nonstatutory stock options granted
to a covered employee under Section 162(m) of the Code are subject to the
additional restriction that the exercise price on such options must be at least
100% of the fair market value on the date of grant.
(c) TERMINATION OF EMPLOYMENT If the optionee's employment or consulting
relationship with the Company is terminated for any reason other than death or
total and permanent disability, options under the 1995 Option Plan may be
exercised not later than ninety days after the date of such termination to the
extent the option was exercisable on the date of such termination. In no event
may an option be exercised by any person after the expiration of its term.
(d) DISABILITY. If an optionee is unable to continue his or her
employment or consulting relationship with the Company as a result of his total
and permanent disability, options may be exercised within six months (or such
other period of time not exceeding twelve months as is determined by the
Administrator) after the date of termination and may be exercised only to the
extent the option was exercisable on the date of termination, but in no event
may the option be exercised after its termination date.
(e) DEATH. If an optionee should die while employed or retained by the
Company, and such optionee has been continuously employed or retained by the
Company since the date of grant of the option, the option may be exercised
within six months after the date of death (or such other period of time, not
exceeding six months, as is determined by the Administrator) by the optionee's
estate or by a person who acquired the right to exercise the option by bequest
or inheritance to the extent the optionee would have been entitled to exercise
the option had the optionee continued living and remained employed or retained
by the Company for three months after the date of death, but in no event may the
option be exercised after its termination date.
If an optionee should die within one month (or such other period of time
not exceeding three months as is determined by the Administrator) after the
optionee has ceased to be continuously employed or retained by the Company, the
option may be exercised within three months after the date of death by the
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optionee's estate or by a person who acquired the right to exercise the option
by bequest or inheritance to the extent that the optionee was entitled to
exercise the option at the date of termination, but in no event may the option
be exercised after its termination date.
(f) TERMINATION OF OPTIONS: Incentive stock options granted under the
1995 Option Plan expire ten years from the date of grant unless a shorter period
is provided in the option agreement. Incentive stock options and nonstatutory
stock options granted to shareholders owning more than 10% of the Company's
outstanding stock may not have a term of more than five years and five years and
one day, respectively.
(g) NONTRANSFERABILITY OF OPTIONS: Options are nontransferable by the
optionee, other than by will or the laws of descent and distribution, and are
exercisable only by the optionee during his or her lifetime or, in the event of
death, by a person who acquires the right to exercise the option by bequest or
inheritance or by reason of the death of the optionee.
(h) ACCELERATION OF OPTION: In the event of a merger of the Company with
or into another corporation or sale of substantially all of the Company's
assets, the Administrator shall either accomplish a substitution or assumption
of options or give written notice of the acceleration of the optionee's right to
exercise his or her outstanding options in full at any time within thirty days
of such notice. The Administrator may, in its discretion, make provisions for
the acceleration of the optionee's right to exercise his or her outstanding
options in full.
Effective July 14, 1995, the Board adopted a resolution amending the Option
Plan such that each employee stock option issued under the Option Plan is to
accelerate by 50% of the unvested portion of such option upon an acquisition of
the Company in which the employee-optionee is not offered a comparable position
with the successor company.
(i) OTHER PROVISIONS. The option agreement may contain such other terms,
provisions and conditions not inconsistent with the 1995 Option Plan as may be
determined by the Administrator.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION
In the event any change is made in the Company's capitalization, such as a
stock split or dividend, that results in an increase or decrease in the number
of outstanding shares of Common Stock without receipt of consideration by the
Company, appropriate adjustment shall be made in the option price, the number of
shares subject to each option, the annual limitation of grants to employees, as
well as the number of shares available for issuance under the 1995 Option Plan.
In the event of the proposed dissolution or liquidation of the Company, all
outstanding options automatically terminate unless otherwise provided by the
Administrator.
AMENDMENT AND TERMINATION
The Board of Directors may amend the 1995 Option Plan at any time or from
time to time or may terminate it without approval of the shareholders; provided,
however, that shareholder approval is required for any amendment to the 1995
Option Plan that: (i) increases the number of shares that may be issued under
the 1995 Option Plan, (ii) modifies the standards of eligibility, (iii) modifies
the limitation on grants to employees described in the 1995 Option Plan or
results in other changes which would require shareholder approval to qualify
options granted under the 1995 Option Plan as performance-based compensation
under Section 162(m) of the Code, or (iv) so long as the Company has a class of
equity
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securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), materially increases the benefits to
participants that may accrue under the 1995 Option Plan. However, no action by
the Board of Directors or shareholders may alter or impair any option previously
granted under the 1995 Option Plan. The 1995 Option Plan shall terminate in
March 2005, provided that any options then outstanding under the 1995 Option
Plan shall remain outstanding until they expire by their terms.
UNITED STATES FEDERAL INCOME TAX INFORMATION
The following is a brief summary of the U.S. federal income tax
consequences of transactions under the 1995 Option Plan based on federal income
tax laws in effect on the date of this Proxy Statement. This summary is not
intended to be exhaustive and does not address all matters which may be relevant
to a particular optionee based on his or her specific circumstances. The
summary addresses only current U.S. federal income tax law and expressly does
not discuss the income tax laws of any state, municipality, non-U.S. taxing
jurisdiction or gift, estate or other tax laws other than federal income tax
law. The Company advises all optionees to consult their own tax advisor
concerning tax implication of option grants and exercises and the disposition of
stock acquired upon such exercises, under the 1995 Stock Option Plan.
Options granted under the 1995 Option Plan may be either incentive stock
options ("ISOs"), which are intended to qualify for the special tax treatment
provided by Section 422 of the Code, or nonstatutory options ("NSOs"), which
will not so qualify. If an option granted under the 1995 Option Plan is an
incentive stock option, the optionee will recognize no income upon grant of the
incentive stock option and will incur no tax liability due to the exercise
except to the extent that such exercise causes the optionee to incur alternative
minimum tax. (See discussion below). The Company will not be allowed a
deduction for federal income tax purposes as a result of the exercise of an
incentive stock option regardless of the applicability of the alternative
minimum tax. Upon the sale or exchange of the shares more than two years after
grant of the option and one year after exercise of the option by the optionee,
any gain will be treated as a long-term capital gain. If both of these
holding periods are not satisfied, the optionee will recognize ordinary
income equal to the difference between the exercise price and the lower of
the fair market value of the Common Stock at the date of the option exercise
or the sale price of the Common Stock. The Company will be entitled to a
deduction in the same amount as the ordinary income recognized by the
optionee. Any gain or loss recognized on a disposition of the shares prior
to completion of both of the above holding periods in excess of the amount
treated as ordinary income will be characterized as long-term capital gain if
the sale occurs more than one year after exercise of the option or as
short-term capital gain if the sale is made earlier. For individual
taxpayers, the current U.S. federal income tax rate on long-term capital
gains is capped at 28%, whereas the maximum rate on other income is 39.6%.
Capital losses for individual taxpayers are allowed in full against capital
gains plus $3,000 of other income.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time he or she is granted a nonstatutory option. However, upon
its exercise, the optionee will recognize ordinary income for tax purposes
measured by the excess of the fair market value of the shares over the
exercise price. The income recognized by an optionee who is also an employee
of the Company will be subject to income and employment tax withholding by
the Company by payment in cash by the optionee or out of the optionee's
current earnings. Upon the sale of such shares by the optionee, any
difference between the sale price and the fair market value of the shares as
of the date of exercise of the option will be treated as capital gain or
loss, and will qualify for long-term capital gain or loss treatment if the
shares have been held for more than one year.
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ALTERNATIVE MINIMUM TAX
The exercise of an incentive stock option may subject the optionee to the
alternative minimum tax under Section 55 of the Code. The alternative minimum
tax is calculated by applying a tax rate of 26% to alternative minimum taxable
income of joint filers up to $175,000 ($87,500 for married taxpayers filing
separately) and 28% to alternative minimum taxable income above that amount.
Alternative minimum taxable income is equal to (i) taxable income adjusted for
certain items, plus (ii) items of tax preference less (iii) an exemption
amount of $45,000 for joint returns, $33,750 for unmarried individual returns
and $22,500 in the case of married taxpayers filing separately (which
exemption amounts are phased out for upper income taxpayers). Alternative
minimum tax will be due if the tax determined under the foregoing formula
exceeds the regular tax of the taxpayer for the year.
In computing alternative minimum taxable income, shares purchased upon
exercise of an incentive stock option are treated as if they had been acquired
by the optionee pursuant to exercise of a nonstatutory stock option. As a
result, the optionee recognizes alternative minimum taxable income equal to the
excess of the fair market value of the Common Stock on the date of exercise over
the option exercise price. Because the alternative minimum tax calculation may
be complex, optionees should consult their own tax advisors prior to
exercising incentive stock options.
If an optionee pays alternative minimum tax, the amount of such tax may be
carried forward as a credit against any subsequent year's regular tax in excess
of the alternative minimum tax for such year.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present at the Annual Meeting in person or by proxy and
entitled to vote is required to approve the amendment to the 1995 Option Plan
and the reservation of an additional 1,000,000 shares of Common Stock for
issuance thereunder.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE 1995 OPTION PLAN AND THE RESERVATION OF AN ADDITIONAL 1,000,000
SHARES OF COMMON STOCK FOR ISSUANCE THEREUNDER.
PROPOSAL NO. 3
APPROVAL OF THE AMENDMENT
TO THE 1992 EMPLOYEE STOCK PURCHASE PLAN
At the Annual Meeting, shareholders are being asked to approve an amendment
to the 1992 Employee Stock Purchase Plan (the "Purchase Plan") to increase the
number of shares of Common Stock reserved for issuance thereunder by 100,000
shares to an aggregate of 400,000 shares. The Purchase Plan provides for
employee purchases of the Company's Common Stock through accumulated payroll
deductions. Employees make such purchases by participation in regular offering
periods from which they may withdraw at any time. The amendment will provide
sufficient additional stock to continue the Company's policy of equity ownership
by employees as an incentive for employees to exert maximum efforts for the
success of the Company.
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GENERAL AND PURPOSE
The Purchase Plan was adopted by the Board of Directors in October 1992 and
was approved by the shareholders in January 1993. A total of 300,000 shares of
Common Stock were initially reserved for issuance thereunder. The Purchase
Plan, and the right of participants to make purchases thereunder, is intended to
qualify under the provisions of Section 423 of the Code. The Purchase Plan is
not a qualified deferred compensation plan under Section 401(a) of the Code, and
is not subject to the provisions of ERISA.
As of July 31, 1996, a total of 244,709 shares had been issued to the
Company's employees under the Purchase Plan and 55,291 shares remain available
for future issuance. The average per share issuance price for shares purchased
by employees under the Purchase Plan to date was approximately $8.2592 and the
total net value realized by employees as a group from the purchase of such
shares was $2,021,088.36. As of July 31, 1996, approximately 260 employees were
eligible to participate in the Purchase Plan, of which 45 were participating.
PURPOSE
The purpose of the Purchase Plan is to provide employees of the Company
(and any of its subsidiaries designated by the Board of Directors) who
participate in the Purchase Plan with an opportunity to purchase Common Stock of
the Company through payroll deductions.
ADMINISTRATION
The Purchase Plan may be administered by the Board of Directors or a
committee appointed by the Board of Directors. The Purchase Plan is currently
being administered by a committee appointed by Board. All questions of
interpretation of the Purchase Plan are determined by the Board of Directors or
its committee, and its decisions are final and binding upon all participants.
Members of the Board of Directors or its committee who are eligible employees
are permitted to participate in the Purchase Plan, provided that any such
eligible member may not vote on any matter affecting the administration of the
Purchase Plan or the grant of any option pursuant to it, or serve on a committee
appointed to administer the Purchase Plan. No charges for administrative or
other costs may be made against the payroll deductions of a participant in the
Purchase Plan. Members of the Board of Directors receive no additional
compensation for their services in connection with the administration of the
Purchase Plan.
ELIGIBILITY
Any person who is customarily employed by the Company (or any of its
designated subsidiaries) for at least 20 hours per week and more than five
months in any calendar year is eligible to participate in the Purchase Plan
after being employed by the Company for at least three months, provided that the
employee was not eligible to participate during the offering period on any prior
offering date and subject to certain limitations imposed by Section 5(a) and
423(b) of the Code and limitations on stock ownership as set forth in the
Purchase Plan. See "Purchase of Stock; Exercise of Option."
OFFERING DATES
In general, the Purchase Plan is implemented by a series of six-month
offering periods commencing on or about February 1 and August 1 of each year.
The Board of Directors has the power to change the duration and/or frequency of
the offering periods with respect to future offerings without shareholder
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approval if such change is announced at least fifteen (15) days prior to the
scheduled beginning of the first offering period to be affected.
PARTICIPATION IN THE PLAN
Eligible employees may participate in the Plan by completing a subscription
agreement on the form provided by the Company and filing it with the Company
prior to the applicable offering date, unless a later time for filing the
subscription agreement is set by the Board for all eligible employees with
respect to a given offering. The subscription agreement currently authorizes
payroll deductions of up to ten percent of the participant's eligible
compensation on the date of the purchase.
PURCHASE PRICE
The purchase price per share at which shares are sold under the Purchase
Plan is 85 percent of the lower of the fair market value of the Common Stock on
the offering date or on the applicable exercise date. The fair market value
shall be the closing price of the Common Stock on the NASDAQ National Market as
of such date or, if such price is not reported, the mean of the bid and asked
prices per share reported by NASDAQ, or if listed on a stock exchange, the
closing price on such exchange as reported in THE WALL STREET JOURNAL.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
The purchase price of the shares is accumulated by payroll deductions
during the six-month offering period. The deductions may be up to ten percent
of a participant's eligible compensation received on each payday during the
offering period. Eligible compensation is defined in the Purchase Plan to
include the regular straight time gross earnings excluding payments for
overtime, shift premium, incentive compensation, bonuses and commissions. A
participant may discontinue his or her participation in the Purchase Plan at any
time during the offering period prior to an exercise date, and may decrease or
increase the rate of his or her payroll deductions once during the offering
period by completing and filing a new subscription agreement. Payroll
deductions shall commence on the first payroll following the offering date and
shall continue until his or her participation is terminated as provided in the
Purchase Plan. No interest accrues on the payroll deductions of a participant
in the Purchase Plan.
PURCHASE OF STOCK; EXERCISE OF OPTION
By executing a subscription agreement to participate in the Purchase Plan,
the participant is entitled to have shares placed under option. The maximum
number of shares placed under option to a participant in an offering period is
the number determined by dividing $12,500 by the fair market value of one share
of the Company's Common Stock on the offering date. Within this limit, the
number of shares purchased by a participant will be determined by dividing the
amount of the participant's total payroll deductions accumulated during each
exercise period by the lower of (i) 85% of the fair market value of the Common
Stock on the offering date, or (ii) 85% of the fair market value of the Common
Stock on the applicable exercise date. See "Payment of Purchase Price; Payroll
Deductions" for additional limitations on payroll deductions. Unless the
participant's participation is discontinued, each participant's option for the
purchase of shares will be exercised automatically at the end of each exercise
period at the applicable price. See "Withdrawal." Notwithstanding the
foregoing, no participant shall be permitted to subscribe for shares under the
Purchase Plan if immediately after the grant of the option he or she would own
5% or more of the voting power or value of all classes of stock of the Company
or of any of its subsidiaries (including stock which may be purchased under the
Purchase Plan or pursuant to any other options), nor
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shall any participant be granted an option which would permit the participant to
buy pursuant to all employee stock purchase plans of the Company more than
$25,000 worth of stock (determined at the fair market value of the shares at the
time the option is granted) in any calendar year. Furthermore, if the number of
shares which would otherwise be placed under option at the beginning of an
offering period exceeds the number of shares then available under the Purchase
Plan, a pro rata allocation of the available shares shall be made in as
equitable a manner as is practicable.
WITHDRAWAL
While each participant in the Purchase Plan is required to sign a
subscription agreement authorizing payroll deductions, the participant's
interest may be increased or decreased once during any given offering period by
completing and filing a new subscription agreement with the Company. In
addition, a participant's interest may be terminated in whole, but not in part,
by delivering written notice of such withdrawal to the Company. Such withdrawal
may be elected at any time prior to the end of the applicable three-month period
prior to an exercise date under the Purchase Plan. Any withdrawal by the
participant of accumulated payroll deductions for a given offering period
automatically terminates the participant's interest in that offering period.
A participant's withdrawal from an offering period does not have an effect
upon such participant's eligibility to participate in subsequent offering
periods under the Purchase Plan; however, the participant may not re-enroll in
the same offering period after withdrawal.
TERMINATION OF EMPLOYMENT
Upon termination of the participant's continuous status as an employee
prior to the exercise date of an offering period for any reason, including
retirement or death, the contributions credited to his or her account will be
returned to him or her, without interest, or, in the case of his or her death,
to the person or persons entitled thereto, and his or her option will be
automatically terminated.
In the event an employee fails to remain in continuous status as an
employee of the Company for at least twenty (20) hours per week during the
offering period in which the employee is a participant, he or she will be deemed
to have elected to withdraw from the Purchase Plan and the contributions
credited to his or her account will be returned to him or her, without interest,
and his or her option terminated.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION
In the event any change, such as a stock split or stock dividend, is made
in the Company's capitalization which results in an increase or decrease in the
number of outstanding shares of Common Stock without receipt of consideration by
the Company, appropriate adjustments will be made in the shares subject to
purchase and in the purchase price per share, as well as in the number of shares
available for issuance under the Purchase Plan. In the event of the proposed
dissolution or liquidation of the Company, the offering period will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board of Directors or its committee.
NONTRANSFERABILITY
No rights or accumulated payroll deductions of a participant under the
Purchase Plan may be pledged, assigned or transferred for any reason and any
such attempt may be treated by the Company as an election to withdraw from the
Purchase Plan.
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REPORTS
Individual accounts will be maintained for each participant in the Purchase
Plan. Each participant shall receive promptly after each exercise date a report
of such participant's account setting forth the total amount of the
participant's contributions, the per share purchase price and the number of
shares purchased and the remaining cash balance, if any, to be returned or
carried over to the next offering period.
AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors may at any time amend or terminate the Purchase
Plan, except that such termination shall not affect options previously granted
nor may any amendment make any change in any option granted prior thereto which
adversely affects the rights of any participant. No amendment may be made to
the Purchase Plan without prior shareholder approval with respect to any change
for which shareholder approval is required to comply with the rules regarding
"discretionary plans" under Section 16 of the Exchange Act and Rule 16b-3 or
under Section 423 of the Code (or any successor provisions thereto).
FEDERAL INCOME TAX ASPECTS OF THE PURCHASE PLAN
The following is a brief summary of the U.S. federal income tax
consequences of transactions under the 1992 Employee Stock Purchase Plan
based on federal income tax laws in effect on the date of this Proxy
Statement. This summary is not intended to be exhaustive and does not
address all matters which may be relevant to a particular participant based
on his or her specific circumstances. The summary addresses only current
U.S. federal income tax law and expressly does not discuss the income tax
laws of any state, municipality, non-U.S. taxing jurisdiction or gift, estate
or other tax laws other than federal income tax law. The Company advises all
participants to consult their own tax advisor concerning tax implication of
purchases and the disposition of stock acquired pursuant to the 1992 Employee
Stock Purchase Plan.
GENERAL TAX INFORMATION. The Purchase Plan, and the right of participants
to make purchases thereunder, is intended to qualify for the federal income tax
treatment provided to employee stock purchase plans and their participants under
the provisions of Sections 421 and 423 of the Code. Under these provisions, no
income will be taxable to a participant until the shares purchased under the
Purchase Plan are sold or otherwise disposed of. Upon sale or other disposition
of the shares, the participant will generally be subject to tax in an amount
which depends upon the holding period of the shares. If the shares are sold or
otherwise disposed of more than two years from the first day of the offering
period and one year from the date the shares are purchased, the participant will
recognize ordinary income measured as the lesser of (a) the excess of the fair
market value of the shares at the time of such sale or disposition over the
purchase price, or (b) an amount equal to 15 percent of the fair market value of
the shares as of the first day of the offering period. Any additional gain will
be treated as long-term capital gain. If the shares are sold or otherwise
disposed of before the expiration of either of these holding periods, the
participant will recognize ordinary income generally measured as the excess of
the fair market value of the shares on the date the shares are purchased over
the purchase price. Any additional gain or loss on such sale or disposition
will be long-term or short-term capital gain or loss, depending on whether or
not the disposition occurs more than one year after the date the shares are
purchased. The Company is not entitled to a deduction for amounts taxed as
ordinary income or capital gain to a participant except to the extent of
ordinary income recognized by a participant upon a sale or disposition of shares
prior to the expiration of the holding periods described above. Capital losses
are allowed in full against capital gains plus $3,000 of other income.
The ordinary income reported under the rules described above, added to the
actual purchase price of the shares, determines the tax basis of the shares for
the purpose of determining capital gain or loss on a sale or exchange of the
shares.
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The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Purchase Plan, does not purport to be complete, and does not
discuss the income tax laws of any municipality, state or foreign country in
which an optionee may reside.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present at the Annual Meeting in person or by proxy and
entitled to vote is required to approve the amendment to the 1992 Purchase Plan
and the reservation of an additional 100,000 shares of Common Stock for issuance
thereunder.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR" THE APPROVAL OF THE
AMENDMENT TO THE 1992 PURCHASE PLAN AND THE RESERVATION OF AN ADDITIONAL 100,000
SHARES OF COMMON STOCK FOR ISSUANCE THEREUNDER.
PROPOSAL NO. 4
APPROVAL OF 1996 DIRECTORS' STOCK OPTION PLAN
At the Annual Meeting, shareholders are being asked to approve adoption of
the 1996 Directors' Stock Option Plan (the "Directors Option Plan") effective as
of January 22, 1995 and the reservation of 500,000 shares of Common Stock for
issuance thereunder.
GENERAL AND PURPOSE
The Directors Option Plan was adopted by the Board of Directors in January
1996 to replace the 1995 Directors Stock Option Plan which was terminated at
that time and the Board has reserved a total of 500,000 shares of Common Stock
for issuance thereunder.
The Directors' Option Plan provides for the grant of nonstatutory stock
options to nonemployee directors of the Company to replace those previously
issued pursuant to the 1995 Directors Stock Option Plan which are to be
canceled. The Directors' Option Plan is designed to work automatically and not
to require administration; however, to the extent administration is necessary,
it will be provided by the Board of Directors.
The purpose of the Directors' Option Plan is to provide an incentive for
directors to continue to serve the Company as directors and to assist the
Company in recruiting highly qualified individuals when vacancies occur on the
Board of Directors.
GRANT AND EXERCISE OF OPTION
The Directors' Option Plan provides that each person who is a nonemployee
director shall be automatically granted an option to purchase 50,000 shares of
Common Stock on the date on which the later of the following events occur: the
effective date of the Directors' Option Plan or the date on which such person
first becomes a nonemployee director, whether through election by the
shareholders of the Company or appointment by the Board of Directors to fill a
vacancy, provided that such nonemployee director agrees to cancel all options
granted to such director from the Company's 1995 Directors' Stock Option Plan,
except that each affected director will retain certain options to purchase
20,000 shares of the Company's
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Common Stock granted to the director under the Company's 1986 Incentive Stock
Option Plan. The Directors' Option Plan provides for neither a maximum nor a
minimum number of shares subject to options that may be granted to any one
nonemployee director, but does provide for the number of shares that may be
included in any grant and the method of making a grant. No option granted under
the Directors' Option Plan is transferable by the optionee other than by will or
the laws of descent or distribution, and each option is exercisable, during the
lifetime of the optionee, only by such optionee.
The Directors' Option Plan provides that each option granted thereunder
becomes exercisable in installments cumulatively as to 1/48th of the shares on
each of the first forty-eight (48) monthly anniversaries of the date of grant of
the option. The options will remain exercisable for up to ninety days following
the optionee's termination of service as a director of the Company, unless such
termination is a result of death, in which case the options will remain
exercisable for up to a six-month period (or such lesser period as is determined
by the Board), or disability, in which case the options will remain exercisable
for up to a six-month period (or such other period not exceeding twelve months
as is determined by the Board).
EXERCISE PRICE AND TERM OF OPTIONS
The exercise price of all stock options granted under the Directors' Option
Plan shall be equal to the fair market value of a share of the Company's Common
Stock on the date of grant of the option, which is defined to be the closing
sale price of the Company's Common Stock on the NASDAQ National Market on the
immediately preceding trading date. Options granted under the Directors' Option
Plan have a term of ten years.
MERGER OR SALE OF ASSETS
In the event of the dissolution or liquidation of the Company, a sale of
all or substantially all of the assets of the Company, the merger of the Company
with or into another corporation in which the Company is not the surviving
corporation or any other capital reorganization in which more than 50% of the
shares of the Company entitled to vote are exchanged, each nonemployee director
shall have a reasonable time within which to exercise the option, including any
part of the option that would not otherwise be exercisable, prior to the
effectiveness of such dissolution, liquidation, sale, merger or reorganization,
at the end of which time the option shall terminate, or the right to exercise
the option, including any part of the option that would not otherwise be
exercisable, or receive a substitute option with comparable terms, as to an
equivalent number of shares of stock of the corporation succeeding the Company
or acquiring its business by reason of such dissolution, liquidation, sale,
merger or reorganization.
AMENDMENT AND TERMINATION
The Board of Directors may at any time amend or terminate the Director's
Option Plan, except that such termination cannot affect options previously
granted without the agreement of any optionee so affected. Notwithstanding the
foregoing, the provisions regarding the grant of options under the Directors'
Option Plan may be amended only once in any six-month period, other than to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
If not terminated earlier, the Directors' Option Plan will expire in 2006.
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U.S. FEDERAL INCOME TAX INFORMATION
Options granted under the Directors' Option Plan are nonstatutory stock
options. An optionee will not recognize any taxable income at the time he or
she is granted a nonstatutory option. However upon its exercise, the optionee
will recognize ordinary income for tax purposes measured by the excess of the
then fair market value of the shares over the option price. Because the
optionee is a director of the Company, the date of taxation (and the date of
measurement of taxable ordinary income) may be deferred unless the optionee
files an election with the Internal Revenue Service under Section 83(b) of the
Code. Upon resale of such shares by the optionee, any difference between the
sale price and the exercise price, to the extent not recognized as ordinary
income as provided above will be treated as capital gain (or loss), and will be
long-term capital gain if the optionee has held the shares more than one year.
For individual taxpayers, the current federal income tax rate on long-term
capital gains is capped at 28%, whereas the maximum rate on other income is
39.6%. Capital losses for individual taxpayers are allowed under U.S. tax laws
in full against capital gains plus $3,000 of other income. The Company will be
entitled to a tax deduction in the amount and at the time that the optionee
recognizes ordinary income with respect to shares acquired upon exercise of a
nonstatutory option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Directors' Option Plan, does not purport to be complete, and
does not discuss the income tax laws of any municipality, state or foreign
country in which an optionee may reside. The Company advises all eligible
directors to consult their own tax advisors concerning tax implications of
option grants and exercises and the disposition of stock acquired upon such
exercises under the Directors' Option Plan.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the Company's Common
Stock present at the Annual Meeting in person or by proxy and entitled to vote
is required to approve adoption of the Directors' Option Plan and the
reservation of 500,000 shares of Common Stock for issuance thereunder.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
DIRECTORS' OPTION PLAN AND THE RESERVATION OF 500,000 SHARES OF COMMON STOCK FOR
ISSUANCE THEREUNDER.
PROPOSAL NO. 5
APPROVAL OF AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION TO EFFECT NAME CHANGE
The Company is asking the shareholders to vote on a proposal to amend the
Company's Amended and Restated Articles of Incorporation (the "Restated
Articles") in order to change the name of the Company from Gupta Corporation to
Centura Software Corporation. The Board of Directors has unanimously approved
such an amendment to the Restated Articles. If the corporate name change is
approved by the shareholders, it is anticipated that the Company's Common Stock
will be traded under the symbol "CNTR."
The Company desires to change the name of the Company from Gupta
Corporation to Centura Software Corporation in order to take advantage of the
goodwill associated with the Company's new "Centura" line of software products
and to avoid possible confusion in the industry and the marketplace as to the
origin of Centura products.
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Upon consummation of the proposed change of name it will not be necessary
to surrender stock certificates. Instead, when certificates are presented for
transfer, new stock certificates bearing the name Centura Software Corporation,
will be issued.
If any action, suit, proceeding or claim has been instituted, made or
threatened, relating to the name change, which makes effectuation of the name
change inadvisable in the opinion of the Company's Board of the Directors or
there exists any other circumstance which would make consummation of the name
change inadvisable in the opinion of the Board of Directors, the proposal to
amend the Restated Articles may be terminated by the Board of Directors either
before or after approval of the name change by the shareholders.
REQUIRED VOTE
Approval of adoption of the Certificate of Amendment in order to change the
name of the Company requires the affirmative vote of the holders of a majority
of the shares of the Company's Common Stock present at the Annual Meeting in
person or by proxy and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS
PROPOSAL TO ADOPT THE CERTIFICATE OF AMENDMENT WHEREBY THE COMPANY'S NAME WILL
BE CHANGED TO CENTURA SOFTWARE CORPORATION.
PROPOSAL NO. 6
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Price Waterhouse LLP,
independent public accountants, to audit the financial statements of the Company
for the fiscal year ending December 31, 1996, and recommends that the
shareholders vote for ratification of this appointment. In the event the
shareholders do not ratify such appointment, the Board of Directors will
reconsider its selection. Price Waterhouse LLP has also audited the Company's
financial statements for the fiscal years ending December 31, 1993, 1994 and
1995. Representatives of Price Waterhouse LLP are expected to be present at the
meeting with the opportunity to make a statement if they desire to do so, and
are expected to be available to respond to appropriate questions.
On October 4, 1995, Arthur Andersen LLP resigned as independent accountants
to audit the financial statements of the Company for the 1995 fiscal year.
Subsequent to such resignation, the Company received a letter dated January 2,
1996 from Arthur Andersen advising the Company that it had withdrawn its reports
issued with respect to its audits of the Company's December 31, 1993 and 1994
financial statements. Disagreement between the Company and Arthur Andersen
regarding restatement of the Company's financial results for its quarter ended
March 31, 1994 and the timing of revenue recognition for certain transactions
reported in that quarter are described in detail in the Company's report on Form
8-K filed with the Securities and Exchange Commission (the "Commission") on
October 11, 1995, as amended by Form 8-K/A (Amendment No. 1) filed with the
Commission on October 26, 1995 (the "Form 8-K/A").
During the two most recent fiscal years and subsequent interim periods
prior to October 4, 1995, there were no disagreements with Arthur Andersen LLP
on any matter of accounting principles or practices, financial statement
disclosure, auditing scope or procedure, or any reportable events, except the
Company's disagreement with Arthur Andersen regarding the Company's restatement
of its financial
-19-
<PAGE>
results for the quarter ended March 31, 1994, as described in the Form 8K/A.
The reports of Arthur Andersen LLP on the financial statements of the Registrant
for the years ended December 31, 1993 and December 31, 1994 contained no adverse
opinion or other disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.
Effective January 2, 1996, the Board of Directors of the Company engaged
the accounting firm of Price Waterhouse LLP ("Price Waterhouse") as independent
accountants to audit the Company's financial statements for the fiscal years
ended December 31, 1993, December 31, 1994, and December 31, 1995. The
Company's audit committee of its Board of Directors approved these actions.
The Company has not consulted with the independent accounting and audit
group at Price Waterhouse LLP responsible for performing future independent
accounting work during the preceding two years or subsequent interim periods
through September 31, 1995 on (i) either the application of accounting
principles or type of opinion Price Waterhouse might issue on the Company's
financial statements or (ii) the Company's disagreement with Arthur Andersen
regarding the Company's restatement of its financial results for its quarter
ended March 31, 1994 as described in the Form 8-K/A. Through its outside
litigation counsel the Company previously engaged the Dispute Analysis and
Corporate Recovery Consulting Unit of Price Waterhouse as litigation consultants
to provide expert witness testimony in connection with the securities class
action litigation filed against the Company and various of its officers and
directors in May 1994, as described in the Company's report on the Form 8-K
filed with the Commission on January 11, 1996.
The Company has requested that Arthur Andersen furnish a letter addressed
to the SEC stating whether Arthur Andersen LLP agrees with the above statements.
REQUIRED VOTE
The ratification of the appointment of Price Waterhouse LLP as the
Company's independent public accountants requires the affirmative vote of the
holders of a majority of the shares of the Company's Common Stock present at
the Annual Meeting in person or by proxy and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF PRICE
WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR
ENDING DECEMBER 31, 1996.
-20-
<PAGE>
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock as of June 30, 1996 as to (i) each person who is known by the
Company to beneficially own more than five percent of the Company's Common
Stock, (ii) each of the Company's directors, (iii) each of the executive
officers named in the Summary Compensation Table beginning on page ___ and
(iv) all directors and executive officers as a group.
5% SHAREHOLDERS, DIRECTORS, SHARES BENEFICIALLY
NAMED EXECUTIVE OFFICERS, OWNED(1)
-------------------
AND DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP NUMBER(2) PERCENT OF TOTAL
- ----------------------------------------------- ---------- --------------
Umang P. Gupta. . . . . . . . . . . . . . 2,199,774 17.21%
Novell, Inc. (3). . . . . . . . . . . . . 1,057,000 8.39%
2180 Fortune Drive
San Jose, CA 95131
D. Bruce Scott (4). . . . . . . . . . . . 619,401 4.91%
Anthony Sun (5) . . . . . . . . . . . . . 502,112 3.98%
Kanwal S. Rekhi (6) . . . . . . . . . . . 27,917 *
William O. Grabe. . . . . . . . . . . . . 33,750 *
Max. D. Hopper. . . . . . . . . . . . . . 6,250 *
Samuel M. Inman (7) . . . . . . . . . . . 95,000 *
Richard J. Heaps. . . . . . . . . . . . . 58,346 *
Earl M. Stahl . . . . . . . . . . . . . . 75,209 *
John G. McAughtry . . . . . . . . . . . . 33,750 *
All directors and executive officers . . 3,746,505 28.38%
as a group (14 persons) (2)(4)(5)(6)(7)(8)
____________________
* Less than 1%
(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock.
(2) Includes with respect to each named person the following shares subject to
stock options exercisable within 60 days of June 30, 1996: Mr. Gupta -
168,332; Mr. Scott - 6,250; Mr. Sun - 27,917; Mr. Rekhi - 27,917; Mr. Grabe
- 33,750; Mr. Hopper - 6,250; Mr. Inman - 80,000; Mr. Heaps - 40,973; Mr.
Stahl - 70,209, Mr. McAughtry - 33,750.
(3) Novell, Inc. and the Company are parties to a marketing agreement to
promote the sale of the Company's products through Novell's authorized
resellers. See "Certain Relationships and Related Transactions."
-21-
<PAGE>
(4) Includes 6,000 shares held for the benefit of Mr. Scott's children.
Excludes 4,500 shares held by members of Mr. Scott's family, as to which
Mr. Scott disclaims beneficial ownership. Excludes 477,758 shares
transferred to Mr. Scott's ex-wife pursuant to a final divorce decree dated
March 1, 1996, as to which Mr. Scott disclaims beneficial ownership.
Mr. Scott resigned his position as an executive officer in April 1995 and
has been on leave from the Company since January 1995. Mr. Scott will
stand for reelection to the Company's Board of Directors.
(5) Includes 450,042 shares held by Venrock Associates. Because Mr. Sun, a
director of the Company, is a general partner of Venrock Associates, he may
be deemed to be a beneficial owner of such shares. Mr. Sun disclaims
beneficial ownership of such shares.
(6) Includes 4,000 shares held for the benefit of Mr. Rekhi's children.
Mr. Rekhi disclaims beneficial ownership of such shares. Mr. Rekhi is not
standing for reelection to the Company's Board of Directors for reasons not
related to the Company.
(7) Mr. Inman has served as President and Chief Executive Officer (Principal
Executive Officer) since January 1996 and served as President and Chief
Operating Officer from April 1995 through December 1995.
(8) Includes 598,752 shares subject to options held by directors and officers
that are exercisable within 60 days of June 30, 1996.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT AND
THE PERFORMANCE GRAPH ON PAGE ___ SHALL NOT BE INCORPORATED BY REFERENCE INTO
ANY SUCH FILINGS.
REPORT OF THE COMPENSATION COMMITTEE
GENERAL
The Company's executive compensation policies are determined by the
Compensation Committee of the Board of Directors. The Compensation Committee
(the "Committee") is composed of two nonemployee directors. The Chairman of the
Board of Directors served on the Committee during the formative years of the
Company, but resigned his membership on the Committee during 1993.
The objective of the Company's executive compensation program is to align
executive compensation with the Company's business objectives and performance,
and to enable the Company to attract, retain and reward executives who
contribute to the long-term business success of the Company. The Company's
executive compensation program is based on the same four basic principles that
guide compensation decisions for all employees of the Company:
- - The Company compensates for demonstrated and sustained performance.
- - The Company compensates competitively.
- - The Company strives for equity and fairness in the administration of
compensation.
- - The Company believes that each employee should understand how his or her
compensation is determined.
-22-
<PAGE>
The Company believes in compensating its executives for demonstrated and
sustained levels of performance in their individual jobs. The achievement of
higher levels of performance and contribution are rewarded by higher levels of
compensation. In order to ensure that it compensates its executives
competitively, the Company regularly compares its compensation practices to
those of other companies of comparable size within similar industries. Through
the use of independent compensation surveys and analysis, employee compensation
training, and periodic pay reviews, the Company strives to ensure that
compensation is administered equitably and fairly and that a balance is
maintained between how executives are paid relative to other employees and
relative to executives with similar responsibilities in comparable companies.
The Committee meets at lease twice annually: once late in the year to
establish the compensation program for the next fiscal year and once, mid-year,
to evaluate how effectively the program is meeting its objectives.
Additionally, the Committee may hold special meetings to approve the
compensation program of a newly hired executive or an executive whose scope of
responsibility has significantly changed. Each year, the Committee meets with
the CEO and the Director, Human Resources regarding executive compensation
projections for the next three years and proposals for executive compensation
for the next operating year. Compensation plans are based on compensation
surveys and assessments as to the demonstrated and sustained performance of the
individual executives. The Committee then independently reviews the performance
of the CEO and the Company, and develops the annual compensation plan for the
CEO based on competitive compensation data and the Committee's evaluation of the
CEO's demonstrated and sustained performance and its expectation as to his
future contributions in leading the Company. The Committee presents for
adoption its findings on the compensation of each individual executive at a
subsequent meeting of the full Board of Directors.
COMPENSATION OF EXECUTIVE OFFICERS
During 1995, the Company's executive compensation program was comprised of
the following key components:
BASE SALARY. The Company sets the base salaries of its executives at the
levels of comparably sized companies engaged in similar industries.
CASH-BASED INCENTIVES. The Company's executives participate in a cash
incentive program. The program includes all of the Company's executives and is
contingent on the achievement of specific Company-wide goals in the areas of
customer satisfaction, operating profit, revenue performance, asset management
and the achievement of specific individual performance goals that are measured
objectively, as well as individual performance goals that are measured
subjectively. Participants in this program include the CEO and vice presidents.
The Company's cash incentives are structured so that the total of base salary
and cash incentives when taken together, will compensate executives at market
levels when company-wide and individual goals are achieved. The cash incentive
elements are sensitive to performance achievement versus plan, and payment of
these cash bonuses ranges from no bonus payment when performance is below
established targets, to bonus amounts somewhat above market levels when
performance targets are exceeded.
EQUITY-BASED INCENTIVES. Stock options are an important component of the
total compensation of executives, and are designed to align the interests of
each executive with those of the shareholders. Each year the Committee
considers the grant to executives of stock option awards under the Company's
1986 Incentive Stock Option Plan and 1995 Stock Option Plan. The Committee
believes that stock options
-23-
<PAGE>
provide added incentive for the executives to influence the strategic direction
of the Company, and to create and increase value for customers, shareholders and
employees. The option grants utilize four-year vesting periods to encourage
executives to continue contributing to the Company. The number of stock option
shares that are granted to individual executives is, in part, based on
independent survey data reflecting competitive stock option practices.
The CEO's base salary for 1995 was established by the Committee at a level
somewhat comparable to the base salaries of comparably sized companies engaged
in similar industries.
REPORT ON REPRICED OPTIONS
In June 1994 and July 1995, the Committee determined that it was in the
best interest of the Company to offer to reprice the then-existing stock option
grants of the Company with exercise prices in excess of the then-current fair
market value of the Company's Common Stock. Excluded from the repricing actions
were the CEO and two senior vice presidents.
The objectives of the Company's Stock Option Plans (the "Stock Option
Plans") are to promote the interests of the Company by providing employees and
certain consultants or independent contractors an incentive to acquire a
proprietary interest in the Company and to continue to render services to the
Company. It was the view of the Committee that stock options with exercise
prices substantially above the current market price of the Company's Common
Stock were viewed negatively by most employees of the Company, and provided
little, if any, equity incentive to the optionees. The Committee thus concluded
that such option grants seriously undermined the specific objectives of the
Stock Options Plans and should properly be repriced. In making this decision,
the Committee also considered the fairness of such a determination in relation
to other shareholders. In the opinion of the Committee, the shareholders' long-
term best interests were clearly served by the retention and motivation of
optionees.
In this context, the Committee decided that effective June 14, 1994 and
July 27, 1995 (each a "Grant Date") all Company employees (except executive
officers) holding stock options with exercise prices in excess of the fair
market value of the Company's Common Stock could receive a one-for-one repricing
of their then-existing unexercised stock options with a new exercise price set
at $10.75 per share, the fair market value of the Company's Common Stock on the
first Grant Date (June 14, 1994). The second repricing allowed employees to
receive a one-for-one repricing of their then-existing unexercised stock options
with a new exercise price set at $9.00 per share, the fair market value of the
Company's Common Stock on the second Grant Date (July 27, 1995). On January 5,
1996 the Company completed a subsequent repricing through a one-for-one stock
option exchange of unvested stock options for all employees.
None of the Company's non-employee members of the Board of Directors
received any repriced stock options. It is the opinion of the Committee that
this program succeeded in its objectives of building employee morale and
providing new incentives for the Company's employees and management.
COMPENSATION COMMITTEE
William Grabe
Anthony Sun
-24-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors Grabe and Sun comprised the Compensation Committee of the Board
of Directors during 1995. None of these persons has ever been an officer or
employee of the Company or any of its subsidiaries, nor were there any
compensation committee interlocks or other relationships during 1995 requiring
disclosure under item 402(j) of Regulation S-K of the Securities and Exchange
Commission.
COMPENSATION OF EXECUTIVE OFFICERS
The table on the next page shows the compensation received by (a) the
individual who served as the Company's Chief Executive Officer during 1995; (b)
the four other most highly compensated individuals who were serving as executive
officers of the Company at the fiscal year ended December 31, 1995; and (c) the
compensation received by each such individual for the Company's two preceding
fiscal years.
-25-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- AWARDS
------
OTHER ANNUAL STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(2) COMPENSATION($)(3) OPTIONS COMPENSATION($)(4)
- --------------------------- ---- ------------ ----------- ------------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Umang P. Gupta 1995 211,250 -- -- 200,000 537
Chairman of the Board 1994 200,000 -- -- -- 522
and Chief Executive Officer 1993 178,000 75,000 -- -- 1,016
Samuel M. Inman 1995 182,693 112,500 -- 479,999 --
President and Chief 1994 -- -- -- -- --
Executive Officer (Principle 1993 -- -- -- -- --
Executive Officer)
Richard Heaps 1995 140,114 47,500 -- 85,000 189
Senior Vice President 1994 125,908 13,000 -- 40,000 154
and General Counsel 1993 107,022 6,249 17,939 -- 61
Earl M. Stahl 1995 154,167 9,000 -- 85,000 205
Senior Vice President, 1994 134,750 23,500 -- 40,000 184
Engineering and Chief 1993 119,587 9,600 -- -- 48
Technical Officer
John G. McAughtry 1995 130,000 15,000 59,067 50,000 307
Vice President, Asia/ 1994 125,000 62,100 66,780 - 328
Pacific and Latin American 1993 -- -- 22,115 -- 174
Operations
</TABLE>
________
(1) Includes amounts deferred under the Company's 401(k) plan.
(2) Includes bonuses earned in the indicated year and paid in the subsequent
year. Excludes bonuses paid in the indicated year but earned in the
preceding year.
(3) Comprised of commissions paid to Mr. McAughtry in 1993, 1994 and 1995 and
to Mr. Heaps in 1993.
(4) Comprised of premiums paid by the Company under the Company's group term
life insurance policy.
-26-
<PAGE>
STOCK OPTION GRANTS IN 1995
The following table sets forth information for the executive officers named
in the Summary Compensation Table with respect to grants of options to purchase
Common Stock of the Company made in 1995 and the value of all options held by
such executive officers on December 31, 1995.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
OPTIONS STOCK PRICE
OPTIONS GRANTED TO EXERCISE OR APPRECIATION FOR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION OPTION TERM (2)
----------------------
NAME (SHARES)(1) FISCAL YEAR (PER SHARE) DATE 5% 10%
- ------------------ ------------ ------------ ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Umang P. Gupta 200,000 (3) 11% 10.75 04/03/05 1,352,123 3,426,546
Samuel M. Inman 239,999 (4) 13% 10.75 04/10/05 1,622,541 4,111,838
240,000 (4) 13% 6.6250 12/14/05 999,942 2,534,051
Earl M. Stahl 40,000 (5) 2% 10.75 03/14/05 270,425 685,309
45,000 (5) 3% 6.6250 12/14/05 187,489 475,134
Richard J. Heaps 20,000 (6) 1% 9.00 07/14/05 113,201 286,874
65,000 (6) 4% 6.6250 12/14/05 270,818 686,305
John G. McAughtry 10,000 (7) 1% 9.00 01/16/05 56,601 143,437
53,000 (7) 3% 6.6250 12/14/05 220,821 559,603
</TABLE>
___________________
(1) All options were granted pursuant to the Company's 1995 Stock Option Plan.
No stock appreciation rights (SARs) were granted during 1995. The Company
granted options to employees for an aggregate of 1,778,699 shares of Common
Stock during 1995.
(2) Potential realizable values are reported net of the option exercise price
but before taxes associated with exercise. These amounts represent certain
assumed rates of appreciation only. Actual realized gains, if any, on
stock option exercises are dependent on future performance of the Company's
Common Stock, as well as the optionee's continued employment through the
vesting period.
(3) Granted April 3, 1995. Exercisable at the rate of 25% of the shares
subject to the option on each yearly anniversary of the date of grant.
(4) Granted April 3, 1995 and December 14, 1995, respectively. The April 3,
1995 option is exercisable at the rate of 12,000 shares per quarter
commencing July 1, 1995, and of which 48,000 shares will be considered by
the Board for certain accelerated vesting on the basis of Mr. Inman's job
performance. The December 14, 1995 option is exercisable at the rate of
25% of the shares subject to the option on the first yearly anniversary of
the date of grant and thereafter at the rate of 1/48th of such shares on
each monthly anniversary of the date of grant.
-27-
<PAGE>
(5) Granted March 14, 1995 and December 14, 1995, respectively. The March 14,
1995 option is exercisable at the rate of 25% of the shares subject to the
option on each yearly anniversary of the date of grant. The December 14,
1995 option is exercisable at the rate of 25% of the shares subject to the
option on the first yearly anniversary of the date of grant and thereafter
at the rate of 1/48th of such shares on each monthly anniversary of the
date of grant.
(6) Granted July 14, 1995 and December 14, 1995, respectively. Each option is
exercisable at the rate of 25% of the shares subject to such option on the
first yearly anniversary of the date of grant and thereafter at the rate of
1/48th of such shares on each monthly anniversary of the date of grant.
(7) Granted January 16, 1995 and December 14, 1995, respectively. Each option
is exercisable at the rate of 25% of the shares subject to such option on
the first yearly anniversary of the date of grant and thereafter at the
rate of 1/48th of such shares on each monthly anniversary of the date of
grant.
OPTION REPRICINGS
The following table provides information regarding the repricing of certain
options held by any of the Company's executive officers during the last ten
completed fiscal years.
<TABLE>
<CAPTION>
Number of Exercise Expiration
Shares Market Price at New Date of
Date of Under Price at time of Exercise Original
Employee Title Repricing Repricing Repricing Repricing Price Option
- ------------------ ------------------ --------- --------- --------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert Bramley Vice President 6/14/94 10,000 $10.75 $16.88 $10.75 12/17/03
Technical Services 7/27/95 10,000 $ 9.00 $10.75 $ 9.00 12/17/03
Richard J. Heaps Senior 7/27/95 40,000 $ 9.00 $10.75 $ 9.00 6/14/04
Vice President and
General Counsel
Michael Keddington Vice President, 7/27/95 80,000 $ 9.00 $ 9.75 $ 9.00 7/14/05
North American
Sales
John G. McAughtry Vice President, 6/14/94 30,000 $10.75 $20.00 $10.75 7/21/03
Asia Pacific and 6/14/94 10,000 $10.75 $16.88 $10.75 12/17/03
Latin America 7/27/95 30,000 $ 9.00 $10.75 $ 9.00 7/21/03
7/27/95 10,000 $ 9.00 $10.75 $ 9.00 12/17/03
Helmut Wilke Vice President, 6/14/94 10,000 $10.75 $16.88 $10.75 12/17/03
European 7/27/95 10,000 $ 9.00 $10.75 $ 9.00 12/17/03
Operations 7/27/95 40,000 $ 9.00 $10.75 $ 9.00 6/14/04
</TABLE>
-28-
<PAGE>
AGGREGATED OPTION EXERCISES IN 1995
AND YEAR-END OPTION VALUES
The following table sets forth information for the executive officers named
in the Summary Compensation Table with respect to exercises in 1995 of options
to purchase Common Stock of the Company.
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS OPTIONS AT
ACQUIRED AT 12/31/95 12/31/95
ON VALUE (EXERCISABLE/ (EXERCISABLE/
NAME EXERCISE REALIZED(1) UNEXERCISABLE)(2) UNEXERCISABLE)(3)
- ----------------- -------- ----------- ----------------- -----------------
Umang P. Gupta -- -- -- --
Samuel M. Inman -- -- -- --
Richard J. Heaps -- -- -- --
Earl M. Stahl 5,000 $42,500 43,542/116,458 $81,069/$15,181
John G. McAughtry -- -- -- --
________________
(1) Value realized is calculated based on the closing price of the Company's
Common Stock as reported in the NASDAQ National Market on the date of
exercise minus the exercise price of the option, and does not necessarily
indicate that the optionee sold such stock.
(2) No stock appreciation rights (SARs) were outstanding during 1995.
(3) Based on the closing price of the Company's Common Stock as reported on the
NASDAQ National Market on December 29, 1995 of $5 1/8 per share minus the
exercise price of the options.
-29-
<PAGE>
PERFORMANCE GRAPH
The following graph summarizes cumulative total shareholder return data
(assuming reinvestment of dividends) for the period since the Company's stock
was first registered under Section 12 of the Securities Exchange Act of 1934
(February 4, 1993). The graph assumes that $100 was invested (i) on February 4,
1993 in the Common Stock of Gupta Corporation at a price per share of $18.00,
the price at which such stock was first offered to the public on that date,
(ii) on January 31, 1993 in the Standard & Poor's 500 Stock Index and (iii) on
January 31, 1993 in the S&P High Technology Composite Index. The stock price
performance on the following graph is not necessarily indicative of future stock
price performance.
COMPARISON OF 34 MONTH CUMULATIVE TOTAL RETURN *
AMONG GUPTA CORPORATION, THE S & P INDEX
AND THE S & P HIGH TECH COMPOSITE INDEX
(INSERT GRAPH HERE)
* $100 invested on 2/4/93 in stock or on 1/31/93 in Indices including
reinvestment of dividends. Fiscal year ending December 31.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
2/4/93 6/30/93 12/31/93 6/30/94 12/31/94 6/30/95 12/31/95
------ ------- -------- ------- -------- ------- --------
Gupta Corporation . . . . . . . . . . . . 100 97 109 51 63 54 28
Standard & Poor's 500 Index . . . . . . . 100 104 109 105 111 133 152
S & P High Technology Composite Index . . 100 107 117 116 137 189 197
</TABLE>
-30-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is a party to a reseller agreement with Novell, Inc., a
beneficial owner of more than five percent of the Company's Common Stock, under
which the Company agreed to pay Novell certain quarterly sales commissions and
trademark license fees. During the fiscal year ended December 31, 1995, the
amount of such commissions and fees paid or accruing to Novell was approximately
$666,000. The reseller agreement with Novell terminates in September 1996.
The Company has entered into indemnification agreements with each of its
directors and executive officers, which may require the Company, among other
things, to indemnify them against certain liabilities that may arise by reason
of their status or service as directors or officers, to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified, and to obtain directors' and officers' liability insurance if
available on reasonable terms.
The Company has entered into an employment agreement with Sam Inman dated
April 10, 1995 with respect to Mr. Inman's employment as President and Chief
Operating Officer of the Company. Pursuant to this agreement, Mr. Inman
received a base salary of not less than $210,000 per year and is entitled to
earn a target bonus of $150,000 per year, based upon achievement of financial
and other goals, provided, however, that Mr. Inman is guaranteed a minimum bonus
of $150,000 during the initial year of this agreement. In addition, pursuant to
the agreement, Mr. Inman was granted an option to acquire up to 240,000 shares
of the Company's Common Stock at an exercise price of $10.25 per share which
shares vest at the rate of 12,000 shares per quarter commencing July 1, 1995,
and of which 48,000 shares will be considered by the Board for certain
accelerated vesting on the basis of Mr. Inman's job performance. All shares
subject to the option will vest on acquisition or change of control of the
Company. Pursuant to the agreement, upon termination of Mr. Inman's employment
without cause, Mr. Inman is entitled to severance in the amount of his base
salary and any additional benefits provided under the agreement for a period of
one year.
The Company and Earl Stahl entered into a loan agreement dated August 31,
1995 pursuant to which Mr. Stahl borrowed $300,000 in connection with his
purchase of a new home. This loan will be forgiven at the rate of $40,000 of
principal on each yearly anniversary of the loan, provided that Mr. Stahl is
employed by the Company on such date. As of July 31, 1996, principal and
interest totaling $316,610 is outstanding under this loan and the largest
aggregate amount outstanding under this loan during 1995 was $306,040. Interest
accrues at the rate of 6.04% per year compounded annually. The loan is due in
August 1999, or earlier, within six months after termination of Mr. Stahl's
employment with the Company for cause.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities
to file with the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and holders of more than
ten percent of the Company's Common Stock are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
-31-
<PAGE>
To the Company's knowledge, based solely upon review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1995 all
Section 16(a) filing requirements applicable to the Company's officers,
directors and holders of more than ten percent of the Company's Common Stock
were complied with.
OTHER MATTERS
The Board of Directors knows of no other matters to be submitted to the
meeting. If any other matters properly come before the meeting, then the
persons named in the enclosed form of proxy will vote the shares they represent
in such manner as the Board may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
CRAIG W. JOHNSON
SECRETARY
Dated: August 26, 1996
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Appendix A
GUPTA CORPORATION
1995 STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees and Consultants
of the Company and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" shall mean the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "APPLICABLE LAWS" shall have the meaning set forth in Section
4(a) below.
(c) "BOARD" shall mean the Board of Directors of the Company.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" shall mean the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan, if one is appointed.
(f) "COMMON STOCK" shall mean the Common Stock of the Company.
(g) "COMPANY" shall mean Gupta Corporation, a California corporation.
(h) "CONSULTANT" shall mean any person who is engaged by the Company
or any Parent or Subsidiary to render consulting services and is compensated for
such consulting services.
(i) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Administrator; provided that such leave is for
a period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute. For purposes of this Plan, a change
in status from an Employee to a Consultant or from a Consultant to an Employee
will not constitute a termination of employment.
(j) "DIRECTOR" shall mean a member of the Board.
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(k) "EMPLOYEE" shall mean any person, including Officers, Named
Executives and those Directors who are also employees of the Company, who are
employed by the Company or any Parent or Subsidiary of the Company. The payment
by the Company of a director's fee to the Director shall not be sufficient to
constitute "employment" of such Director by the Company.
(l) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(m) "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sales
price for such stock as quoted on such system on the date of determination (if
for a given day no sales were reported, the closing bid on that day shall be
used), as such price is reported in THE WALL STREET JOURNAL or such other source
as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but
not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the bid and asked prices for the Common Stock or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(n) "INCENTIVE STOCK OPTION" shall mean an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable option agreement.
(o) "NAMED EXECUTIVE" shall mean any individual who, on the last day
of the Company's fiscal year, is the chief executive officer of the Company (or
is acting in such capacity) or among the four highest compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.
(p) "NONSTATUTORY STOCK OPTION" shall mean an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable option
agreement.
(q) "OFFICER" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(r) "OPTION" shall mean a stock option granted pursuant to the Plan.
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(s) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
(t) "OPTIONEE" shall mean an Employee or Consultant who receives an
Option.
(u) "PARENT" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(v) "PLAN" shall mean this 1995 Stock Option Plan.
(w) "RULE 16b-3" shall mean Rule 16b-3 promulgated under the Exchange
Act as the same may be amended from time to time, or any successor provision.
(x) "SHARE" shall mean a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.
(y) "SUBSIDIARY" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 14 of
the Plan, the maximum aggregate number of shares that may be optioned and sold
under the Plan is 1,000,000 shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares that were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. Notwithstanding any other provision of the Plan, shares
issued under the Plan and later repurchased by the Company shall not become
available for future grant or sale under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) COMPOSITION OF ADMINISTRATOR.
(i) MULTIPLE ADMINISTRATIVE BODIES. If permitted by
Rule 16b-3, and by the legal requirements relating to the administration of
incentive stock option plans, if any, of applicable securities laws and the
Code (collectively, the "Applicable Laws"), the Plan may (but need not) be
administered by different administrative bodies with respect to Directors,
Officers and Employees who are neither Directors nor Officers.
(ii) ADMINISTRATION WITH RESPECT TO DIRECTORS AND OFFICERS.
With respect to grants of Options to Employees or Consultants who are also
Officers or Directors of the Company, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan in compliance with Rule 16b-3 as it
applies to a plan intended to qualify thereunder as a discretionary plan and
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Section 162(m) of the Code as it applies so as to qualify grants of Options to
Named Executives as performance-based compensation, or (B) a Committee
designated by the Board to administer the Plan, which Committee shall be
constituted in such a manner as to permit the Plan to comply with Rule 16b-3 as
it applies to a plan intended to qualify thereunder as a discretionary plan, to
qualify grants of Options to Named Executives as performance-based compensation
under Section 162(m) of the Code and to satisfy the Applicable Laws.
(iii) ADMINISTRATION WITH RESPECT TO OTHER PERSONS. With
respect to grants of Options to Employees or Consultants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A)
the Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws.
(iv) GENERAL. Once a Committee has been appointed pursuant to
subsection (ii) or (iii) of this Section 4(a), such Committee shall continue
to serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of any Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies (however caused) and remove
all members of a Committee and thereafter directly administer the Plan, all to
the extent permitted by the Applicable Laws and, in the case of a Committee
appointed under subsection (ii), to the extent permitted by Rule 16b-3 as it
applies to a plan intended to qualify thereunder as a discretionary plan, and to
the extent required under Section 162(m) of the Code to qualify grants of
Options to Named Executives as performance-based compensation.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(m) of the Plan;
(ii) to select the Employees and Consultants to whom Options
may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or any vesting
acceleration or waiver of forfeiture restrictions regarding any
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Option and/or the shares of Common Stock relating thereto, based in each case on
such factors as the Administrator shall determine, in its sole discretion);
(vii) to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with respect to an award
under this Plan shall be deferred either automatically or at the election of the
participant (including providing for and determining the amount, if any, of
any deemed earnings on any deferred amount during any deferral period); and
(viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;
(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.
5. ELIGIBILITY.
(a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options may be granted
only to Employees and Consultants. Incentive Stock Options may be granted only
to Employees. An Employee or Consultant who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options.
(b) TYPE OF OPTIONS. Each Option shall be designated in the written
option agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designations, to the extent that the
aggregate Fair Market Value of shares with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
For purposes of this Section 5(b), Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.
(c) NO EMPLOYMENT RIGHTS. The Plan shall not confer upon any
Optionee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.
6. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the shareholders of the
Company as described in Section 20 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 16 of the
Plan.
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7. TERM OF OPTION. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that in the case of an Incentive Stock
Option, the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
However, in the case of an Option granted to an Optionee who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.
8. LIMITATION ON GRANTS TO EMPLOYEES. Subject to adjustment as provided
in this Plan, the maximum number of Shares which may be subject to Options
granted to any one Employee under this Plan for any fiscal year of the Company
shall be 250,000.
9. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be such price as is determined
by the Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant;
(B) granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of the grant;
(B) granted to a person who, at the time of the grant of
such Option, is a Named Executive of the Company, the per share Exercise Price
shall be no less than 100% of the Fair Market Value on the date of grant;
(C) granted to any person other than a Named Executive,
the per Share exercise price shall be no less than 85% of the Fair Market Value
per Share on the date of grant.
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(b) PERMISSIBLE CONSIDERATION. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of
(1) cash, (2) check, (3) promissory note, (4) other Shares that (x) in the
case of Shares acquired upon exercise of an Option either have been owned by the
Optionee for more than six months on the date of surrender or were not acquired,
directly or indirectly, from the Company, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) authorization from the Company to
retain from the total number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value on the date of exercise equal to the
exercise price for the total number of Shares as to which the Option is
exercised, (6) delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds required to pay the exercise price, (7)
delivery of an irrevocable subscription agreement for the Shares that
irrevocably obligates the option holder to take and pay for the Shares not more
than twelve months after the date of delivery of the subscription agreement,
(8) any combination of the foregoing methods of payment, or (9) such other
consideration and method of payment for the issuance of Shares to the extent
permitted under Applicable Laws. In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.
10. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 9(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 14 of the Plan.
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Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) TERMINATION OF STATUS AS AN EMPLOYEE OR CONSULTANT. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant, such Optionee may, but only within thirty (30) days (or such other
period of time, not exceeding three (3) months in the case of an Incentive Stock
Option or six (6) months in the case of a Nonstatutory Stock Option, as is
determined by the Administrator, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the Option) after the
date of such termination (but in no event later than the date of expiration of
the term of such Option as set forth in the Option Agreement), exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination. To the extent that the Optionee was not entitled to
exercise the Option at the date of such termination, or if the optionee does not
exercise such Option (which he or she was entitled to exercise) within the time
specified herein, the Option shall terminate.
(c) DISABILITY OF OPTIONEE. Notwithstanding the provisions of
Section 10(b) above, in the event of termination of an Optionee's Continuous
Status as an Employee or Consultant as a result of his or her total and
permanent disability (as defined in Section 22(e)(3) of the Code), he or she
may, but only within six (6) months (or such other period of time not exceeding
twelve (12) months as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option) from the date of such termination (but in no event later
than the date of expiration of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent he or she was
entitled to exercise it at the date of such termination. To the extent that he
or she was not entitled to exercise the Option at the date of termination, or if
he does not exercise such Option (which he was entitled to exercise) within the
time specified herein, the Option shall terminate.
(d) DEATH OF OPTIONEE. In the event of the death of an Optionee:
(i) during the term of the Option who is at the time of his
death an Employee or Consultant of the Company and who shall have been in
Continuous Status as an Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time within six (6) months (or such
other period of time, not exceeding six (6) months, as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option) following the date of death (but
in no event later than the date of expiration of the term of such Option as set
forth in the Option Agreement), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance but only to
the extent of the right to exercise that would have accrued had the Optionee
continued living and remained in Continuous Status as an Employee or Consultant
three (3) months (or such other period of time as is determined by the
Administrator as provided above) after the date of death, subject to the
limitation set forth in Section 5(b); or
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(ii) within thirty (30) days (or such other period of time not
exceeding three (3) months as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option) after the termination of Continuous Status as an Employee
or Consultant, the Option may be exercised, at any time within six (6) months
following the date of death (but in no event later than the date of expiration
of the term of such Option as set forth in the Option Agreement), by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of termination.
(e) RULE 16b-3. Options granted to persons subject to Section 16(b)
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
11. WITHHOLDING TAXES. As a condition to the exercise of Options granted
hereunder, the Optionee shall make such arrangements as the Administrator may
require for the satisfaction of any federal, state, local or foreign withholding
tax obligations that may arise in connection with the exercise, receipt or
vesting of such Option. The Company shall not be required to issue any Shares
under the Plan until such obligations are satisfied.
12. STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (a) by cash payment, or (b) out of Optionee's current
compensation, (c) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares that (i) in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six
months on the date of surrender, and (ii) have a fair market value on the date
of surrender equal to or less than Optionee's marginal tax rate times the
ordinary income recognized, or (d) by electing to have the Company withhold from
the Shares to be issued upon exercise of the Option that number of Shares having
a fair market value equal to the amount required to be withheld. For this
purpose, the fair market value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined (the "Tax
Date").
Any surrender by an Officer or Director of previously owned
Shares to satisfy tax withholding obligations arising upon exercise of this
Option must comply with the applicable provisions of Rule 16b-3 and shall be
subject to such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption from Section 16 of the Exchange
Act with respect to Plan transactions.
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All elections by an Optionee to have Shares withheld to satisfy
tax withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the particular
Shares of the Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator;
(d) if the Optionee is an Officer or Director, the election must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option is exercised but such
Optionee shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.
13. NON-TRANSFERABILITY OF OPTIONS. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution. The designation of a
beneficiary by an Optionee will not constitute a transfer. An Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
transferee permitted by this Section 13.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.
(a) ADJUSTMENTS. Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each outstanding
Option, the number of shares of Common Stock that have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, the maximum number of shares of Common Stock for which Options may be
granted to any employee under Section 8 of the Plan, and the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
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conclusive. 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 of Common Stock subject to an Option.
(b) CORPORATE TRANSACTIONS. In the event of the proposed dissolution
or liquidation of the Company, the Option will terminate immediately prior to
the consummation of such proposed action, unless otherwise provided by the
Administrator. The Administrator may, in the exercise of its sole discretion in
such instances, declare that any Option shall terminate as of a date fixed by
the Administrator and give each Optionee the right to exercise his or her Option
as to all or any part of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, the Option shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Administrator
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to some or all of the Optioned Stock, including Shares as to which
the Option would not otherwise be exercisable. If the Administrator makes an
Option exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Administrator shall notify the Optionee that the
Option shall be exercisable for a period of thirty (30) days from the date of
such notice, and the Option will terminate upon the expiration of such period.
15. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.
16. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided that, the following revisions or amendments shall require approval of
the shareholders of the Company in the manner described in Section 20 of the
Plan:
(i) any increase in the number of Shares subject to the Plan,
other than in connection with an adjustment under Section 14 of the
Plan;
(ii) any change in the designation of the class of persons
eligible to be granted Options;
(iii) any change in the limitation on grants to employees as
described in Section 8 of the Plan or other changes which would
require shareholder approval to
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qualify options granted hereunder as performance-based compensation
under Section 162(m) of the Code; or
(iv) if the Company has a class of equity securities registered
under Section 12 of the Exchange Act at the time of such revision or
amendment, any material increase in the benefits accruing to
participants under the Plan.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
17. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned relevant provisions of law.
18. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
19. OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such forms as the Board shall approve.
20. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law
and the rules of any stock exchange and, in particular, shall be solicited
substantially in accordance with Section 14(a) of the Exchange Act and the rules
and regulations promulgated thereunder.
12
<PAGE>
21. INFORMATION TO OPTIONEES. The Company shall provide to each
Optionee, during the period for which such Optionee has one or more Options
outstanding, copies of all annual reports and other information which are
provided to all shareholders of the Company.
13
<PAGE>
GUPTA CORPORATION
1995 STOCK PLAN
NOTICE OF STOCK OPTION GRANT
Optionee's Name and Address:
- --------------------------
- --------------------------
- --------------------------
You have been granted an option to purchase Common Stock of Gupta
Corporation, (the "Company") as follows:
Date of Grant:
Option Price Per Share: $
Total Number of Shares Granted:
Total Price of Shares Granted: $
Type of Option: Shares Incentive Stock Option
----
Shares Nonstatutory Stock Option
----
Term/Expiration Date:
Vesting Commencement Date:
Vesting Schedule:
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Termination Period: This Option may be exercised for a
period of 30 days after termination
of employment or consulting
relationship except as set out in
Sections 6 and 7 of the Stock
Option Agreement (but in no event
later than the normal Expiration
Date).
By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the 1995 Stock Plan and the Stock Option Agreement, both
of which are attached to and made a part of this document.
OPTIONEE: GUPTA CORPORATION
By:
- --------------------------- ----------------------
Signature
Title:
- --------------------------- ----------------------
Print Name
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<PAGE>
GUPTA CORPORATION
STOCK OPTION AGREEMENT
1. GRANT OF OPTION. Gupta Corporation, a California corporation (the
"Company"), hereby grants to the Optionee named in the attached Notice of Stock
Option Grant (the "Optionee"), an option (the "Option") to purchase the total
number of shares of Common Stock (the "Shares") set forth in the Notice of Stock
Option Grant, at the exercise price per share set forth in the Notice of Stock
Option Grant (the "Exercise Price") subject to the terms, definitions and
provisions of the 1995 Stock Option Plan (the "Plan") adopted by the Company,
which is incorporated in this Agreement by reference. In the event of a
conflict between the terms of the Plan and the terms of this Agreement, the
terms of the Plan shall govern. Unless otherwise defined in this Agreement, the
terms used in this Agreement shall have the meanings defined in the Plan.
If designated an Incentive Stock Option in the Notice of Stock Option
Grant, this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code and, if not so designated, this Option is
intended to be a Nonstatutory Option.
2. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the Exercise Schedule set out in the Notice of Stock Option
Grant and with the provisions of Sections 9 and 10 of the Plan as follows:
(a) Right to Exercise.
(i) This Option may not be exercised for a fraction of a share.
(ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Sections 5, 6 and 7 below, subject to the limitations contained in paragraphs
(iii) and (iv) below.
(iii) In no event may this Option be exercised after the date
of expiration of the term of this Option as set forth in the Notice of Stock
Option Grant.
(iv) If designated an Incentive Stock Option in the Notice of
Stock Option Grant, in the event that the Shares subject to this Option (and all
other Incentive Stock Options granted to Optionee by the Company or any Parent
or Subsidiary) that are exercisable for the first time by the Optionee in any
calendar year have an aggregate fair market value (determined for each Share as
of the Date of Grant of the option covering such Share) that exceeds $100,000,
the Shares in excess of $100,000 shall be treated as subject to a Nonstatutory
Stock Option, in accordance with Section 5 of the Plan.
(b) Method of Exercise.
(i) This Option shall be exercisable by delivering to the
Company a written notice of exercise (in the form attached as Exhibit A), which
shall state the election to exercise the Option, the number of Shares in respect
of which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to
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<PAGE>
such shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company. The written notice shall be accompanied by payment of the Exercise
Price. This Option shall be deemed to be exercised upon receipt by the Company
of such written notice accompanied by the Exercise Price.
(ii) As a condition to the exercise of this Option, the
Optionee agrees to make adequate provision for federal, state or other tax
withholding obligations, if any, which arise upon the exercise of the Option or
disposition of Shares, whether by withholding, direct payment to the Company, or
otherwise as the Company may direct.
(iii) No Shares will be issued pursuant to the exercise of an
Option unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to the Optionee on the date on which
the Option is exercised with respect to such Shares.
3. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of
the following, or a combination of the following, at the election of the
Optionee and as specified on the notice of exercise form: (a) cash; (b) check;
(c) surrender of other shares of Common Stock of the Company which either have
been owned by the Optionee for more than six (6) months on the date of surrender
or were not acquired, directly or indirectly, from the Company, and which have a
Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised; [or (d) delivery of a
properly executed exercise notice together with irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds
required to pay the exercise price,] [wish to add any of the other alternatives
mentioned in Plan?]
4. RESTRICTIONS ON EXERCISE. This Option may not be exercised until such
time as the Plan has been approved by the stockholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of
this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.
5. TERMINATION OF RELATIONSHIP. In the event of termination of
Optionee's Continuous Status as an Employee or Consultant (as the case may be),
Optionee may, to the extent otherwise so entitled at the date of such
termination (the "Termination Date"), exercise this Option during the
Termination Period set out in the Notice of Stock Option Grant. To the extent
that Optionee was not entitled to exercise this Option at the date of such
termination, or if Optionee does not exercise this Option within the time
specified in the Notice of Stock Option Grant, the Option shall terminate.
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<PAGE>
6. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 5
above, in the event of termination of Optionee's Continuous Status as an
Employee or Consultant (as the case may be) as a result of total and permanent
disability (as defined in Section 22(e)(3) of the Code), Optionee may, but only
within six (6) months from the date of termination of employment (but in no
event later than the date of expiration of the term of this Option as set forth
in the Notice of Stock Option Grant), exercise the Option to the extent
otherwise so entitled at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of termination, or
if Optionee does not exercise such Option (to the extent otherwise so entitled)
within the time specified in this Agreement, the Option shall terminate.
7. DEATH OF OPTIONEE. In the event of the death of Optionee while an
Employee or Consultant of the Company and having been in Continuous Status as an
Employee or Consultant (as the case may be) since the date of grant of the
Option, the Option may be exercised, at any time within six (6) months following
the date of death (but in no event later than the date of expiration of the term
of this Option as set forth in the Notice of Stock Option Grant), by Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance to the extent the Optionee was entitled to exercise such Option
on the date of death.
8. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution.
The designation of a beneficiary does not constitute a transfer. An Option may
be exercised during the lifetime of Optionee only by the Optionee or a
transferee permitted by this section. The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.
9. TERM OF OPTION. This Option may be exercised only within the term set
out in the Notice of Stock Option Grant, and may be exercised during such term
only in accordance with the Plan and the terms of this Option.
10. NO ADDITIONAL EMPLOYMENT RIGHTS. Optionee understands and agrees that
the vesting of Shares pursuant to the Exercise Schedule is earned only by
continuing as an Employee or Consultant at the will of the Company (not through
the act of being hired, being granted this Option or acquiring Shares under this
Agreement). Optionee further acknowledges and agrees that nothing in this
Agreement, nor in the Plan which is incorporated in this Agreement by reference,
shall confer upon Optionee any right with respect to continuation as an Employee
or Consultant with the Company, nor shall it interfere in any way with his or
her right or the Company's right to terminate his or her employment or
consulting relationship at any time, with or without cause.
11. TAX CONSEQUENCES. Optionee acknowledges that he or she has read the
brief summary set forth below of certain of the federal tax consequences of
exercise of this Option and disposition of the Shares under the law in effect as
of the date of grant. OPTIONEE UNDERSTANDS THAT THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
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<PAGE>
(a) EXERCISE OF INCENTIVE STOCK OPTION. If this Option is an
Incentive Stock Option, there will be no regular federal income tax liability
upon the exercise of the Option, although the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price will be
treated as an item of alternative minimum taxable income and may subject the
Optionee to the alternative minimum tax in the year of exercise.
(b) EXERCISE OF NONSTATUTORY STOCK OPTION. If this Option is a
Nonstatutory Stock Option, Optionee may incur regular federal income tax
liability upon the exercise of the Option. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price. In addition, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(c) DISPOSITION OF SHARES. If this Option is an Incentive Stock
Option and if Shares transferred pursuant to the Option are held for more than
one year after exercise and more than two years after the Date of Grant, any
gain realized on disposition of the Shares will be treated as long-term capital
gain for federal income tax purposes. If Shares purchased under an Incentive
Stock Option are disposed of before the end of either of such two holding
periods, then any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
excess, if any, of the lesser of (i) the fair market value of the Shares on the
date of exercise, or (ii) the sales proceeds, over the Exercise Price. If this
Option is a Nonstatutory Stock Option, then gain realized on the disposition of
Shares will be treated as long-term or short-term capital gain depending on
whether or not the disposition occurs more than one year after the exercise
date.
(d) NOTICE OF DISQUALIFYING DISPOSITION. If this Option is an
Incentive Stock Option, and if Optionee sells or otherwise disposes of any of
the Shares acquired pursuant to the Incentive Stock Option on or before the
later of (i) the date two years after the Date of Grant, or (ii) the date one
year after transfer of such Shares to the Optionee upon exercise of the
Incentive Stock Option, the Optionee shall notify the Company in writing within
thirty (30) days after the date of any such disposition. Optionee agrees that
Optionee may be subject to income tax withholding by the Company on the
compensation income recognized by the Optionee from the early disposition by
payment in cash or out of the current earnings paid to the Optionee.
12. SIGNATURE. This Stock Option Agreement shall be deemed executed by
the Company and the Optionee upon execution by such parties of the Notice of
Stock Option Grant attached to this Stock Option Agreement.
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<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
To: Gupta Corporation
Attn: Stock Plan Administrator
Subject: NOTICE OF INTENTION TO EXERCISE STOCK OPTION
This is official notice that the undersigned ("Optionee") intends to
exercise Optionee's option to purchase __________ shares of Gupta Corporation
Common Stock under the Company's 1995 Stock Option Plan, as amended, and the
Stock Option Agreement dated _______________, as follows:
Number of Shares: ________________________________
Purchase Price: ________________________________
Method of Payment of
Purchase Price: ______ Cash or check (enclosed)
______ Delivery of shares with fair market
value equal to Purchase Price
[______ Other permitted method]
Social Security No.: ________________________________
The shares should be issued as follows:
Name:
--------------------------------------
Address:
-----------------------------------
--------------------------------------
--------------------------------------
Signed:
-----------------------------------
Date:
-----------------------------------
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<PAGE>
Appendix B
GUPTA CORPORATION
1992 EMPLOYEE STOCK PURCHASE PLAN
AMENDED DECEMBER 16, 1994
The following constitute the provisions of the 1992 Employee Stock Purchase
Plan of Gupta Corporation.
1. PURPOSE. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company. It is the intention of the Company to have the Plan
qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal
Revenue Code of 1986, as amended. The provisions of the Plan shall,
accordingly, be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. DEFINITIONS.
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(c) "COMMON STOCK" shall mean the Common Stock of the Company.
(d) "COMPANY" shall mean Gupta Corporation, a California
corporation.
(e) "COMPENSATION" shall mean all regular straight time gross
earnings, excluding payments for overtime, shift premium, incentive
compensation, incentive payments, bonuses, commissions and other compensation.
(f) "CONTINUOUS STATUS AS AN EMPLOYEE" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period of
not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(g) "CONTRIBUTIONS" shall mean all amounts credited to the account of
a participant pursuant to the Plan.
(h) "DESIGNATED SUBSIDIARIES" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(i) "EMPLOYEE" shall mean any person, including an officer, who is
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries.
<PAGE>
(j) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(k) "EXERCISE DATE" shall mean the last day of each Offering Period
of the Plan.
(l) "OFFERING DATE" shall mean the first business day of each
Offering Period of the Plan, except that in the case of an individual who
becomes an eligible Employee after the first business day of an Offering Period
but prior to the first business day of the last calendar quarter of such
Offering Period, the term "Offering Date" shall mean the first business day of
the calendar quarter coinciding with or next succeeding the day on which that
individual becomes an eligible Employee.
Options granted after the first business day of an Offering
Period will be subject to the same terms as the options granted on the first
business day of such Offering Period except that they will have a different
grant date (thus, potentially, a different exercise price) and, because they
expire at the same time as the options granted on the first business day of such
Offering Period, a shorter term.
(m) "OFFERING PERIOD" shall mean a period of three (3) months.
(n) "PLAN" shall mean this Employee Stock Purchase Plan.
(o) "REPORTING PERSON" shall mean an officer, director or other
employee who is subject to Section 16 of the Exchange Act.
(p) "SUBSIDIARY" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. ELIGIBILITY.
(a) Any person who is an Employee as of the Offering Date of a given
Offering Period shall be eligible to participate in such Offering Period under
the Plan, provided that such person was not eligible to participate in such
Offering Period as of any prior Offering Date, and further, subject to the
requirements of Section 5(a) and the limitations imposed by Section 423(b) of
the Code.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) if such option would permit
his or her rights to purchase stock under all employee stock purchase plans
(described in Section 423 of the Code) of the Company and its Subsidiaries to
accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of fair
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market value of such stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time.
4. OFFERING PERIODS. The Plan shall be implemented by a series of
Offering Periods, with new Offering Periods commencing on or about January 1,
April 1, July 1, and October 1 of each year (or at such other time or times as
may be determined by the Board of Directors). The first Offering Period shall
commence on the effective date of the Registration Statement on Form S-1 for the
initial public offering of the Company's Common Stock and continue until June
30, 1993. The Plan shall continue until terminated in accordance with
Section 19 hereof. The Board of Directors of the Company shall have the power
to change the duration and/or the frequency of Offering Periods 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 affected.
5. PARTICIPATION.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement on the form provided by the Company and
filing it with the Company's payroll office prior to the applicable Offering
Date, unless a later time for filing the subscription agreement is set by the
Board for all eligible Employees with respect to a given offering. The
subscription agreement shall set forth the percentage of the participant's
Compensation (which shall be not less than 1% and not more than 10%) to be paid
as Contributions pursuant to the Plan.
(b) Payroll deductions shall commence on the first payroll following
the Offering Date and shall end on the last payroll paid on or prior to the
Exercise Date of the offering to which the subscription agreement is applicable,
unless sooner terminated by the participant as provided in Section 10.
6. METHOD OF PAYMENT OF CONTRIBUTIONS.
(a) The participant shall elect to have payroll deductions made on
each payday during the Offering Period in an amount not less than one
percent (1%) and not more than ten percent (10%) of such participant's
Compensation on each such payday; provided that the aggregate of such payroll
deductions during the Offering Period shall not exceed ten percent (10%) of the
participant's aggregate Compensation during said Offering Period. All payroll
deductions made by a participant shall be credited to his or her account under
the Plan. A participant may not make any additional payments into such account.
(b) A participant may discontinue his or her participation in the
Plan as provided in Section 10. If a participant desires to change the rate of
his or her contributions, he or she may do so effective as of the beginning of
the next Offering Period following the date of filing of a new subscription
agreement.
(c) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar
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year that the aggregate of all payroll deductions accumulated with respect to
such Offering Period and any other Offering Period ending within the same
calendar year equal $25,000. Payroll deductions shall re-commence at the rate
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 Section 10.
7. GRANT OF OPTION.
(a) On the Offering Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on the Exercise Date a number of shares of the Company's Common Stock
determined by dividing such Employee's Contributions accumulated prior to such
Exercise Date and retained in the participant's account as of the Exercise Date
by the lower of (i) eighty-five percent (85%) of the fair market value of a
share of the Company's Common Stock on the Offering Date, or (ii) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Exercise Date; provided however, that the maximum number of shares an
Employee may purchase during each Offering Period shall be determined at the
Offering Date by dividing $6,250 by the fair market value of a share of the
Company's Common Stock on the Offering Date, and provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b) and 12.
The fair market value of a share of the Company's Common Stock shall be
determined as provided in Section 7(b).
(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Offering Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion based on the closing
price of the Common Stock for such date (or, in the event that the Common Stock
is not traded on such date, on the immediately preceding trading date), as
reported by the National Association of Securities Dealers Automated Quotation
(NASDAQ) National Market System or, if such price is not reported, the mean of
the bid and asked prices per share of the Common Stock as reported by NASDAQ or,
in the event the Common Stock is listed on a stock exchange, the fair market
value per share shall be the closing price on such exchange on such date (or, in
the event that the Common Stock is not traded on such date, on the immediately
preceding trading date), as reported in THE WALL STREET JOURNAL. For purposes
of the Offering Date under the first Offering Period under the Plan, the fair
market value of a share of the Common Stock of the Company shall be the Price to
Public as set forth in the final prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424 under the Securities Act of 1933, as
amended.
8. EXERCISE OF OPTION. Unless a participant withdraws from the Plan as
provided in paragraph 10, his or her option for the purchase of shares will be
exercised automatically on the Exercise Date of the Offering Period, and the
maximum number of full shares subject to option will be purchased at the
applicable option price with the accumulated Contributions in his or her
account. The shares purchased upon exercise of an option hereunder shall be
deemed to be transferred to the participant on the Exercise Date. If the
participant is a Reporting Person, the shares purchased upon exercise of an
option shall not be sold or otherwise transferred by the participant within six
(6)
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months after the Exercise Date. During his or her lifetime, a participant's
option to purchase shares hereunder is exercisable only by him or her.
9. DELIVERY. As promptly as practicable after the Exercise Date of each
Offering Period, the Company shall arrange the delivery to each participant, as
appropriate, of a certificate representing the shares purchased upon exercise of
his or her option. Any cash remaining to the credit of a participant's account
under the Plan after a purchase by him or her of shares at the termination of
each Offering Period, or which is insufficient to purchase a full share of
Common Stock of the Company, shall be returned to said participant.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time prior to
the Exercise Date of the Offering Period by giving written notice to the
Company. All of the participant's Contributions credited to his or her account
will be paid to him or her promptly after receipt of his or her notice of
withdrawal and his or her option for the current period will be automatically
terminated, and no further Contributions for the purchase of shares will be made
during the Offering Period.
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Exercise Date of the Offering Period for any reason,
including retirement or death, the Contributions credited to his or her account
will be returned to him or her or, in the case of his or her death, to the
person or persons entitled thereto under Section 14, and his or her option will
be automatically terminated.
(c) In the event an Employee fails to remain in Continuous Status as
an Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the Contributions credited to his
or her account will be returned to him or her and his or her option terminated.
(d) A participant's withdrawal from an offering will not have any
effect upon his or her eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Company.
11. INTEREST. No interest shall accrue on the Contributions of a
participant in the Plan.
12. STOCK.
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 300,000 shares, subject
to adjustment upon changes in capitalization of the Company as provided in
Section 18. If the total number of shares which would otherwise be subject to
options granted pursuant to Section 7(a) on the Offering Date of an Offering
Period exceeds the number of shares then available under the Plan (after
deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a pro
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rata allocation of the shares remaining available for option grant in as uniform
a manner as shall be practicable and as it shall determine to be equitable. In
such event, the Company shall give written notice of such reduction of the
number of shares subject to the option to each Employee affected thereby and
shall similarly reduce the rate of Contributions, if necessary.
(b) The participant will have no interest or voting right in shares
covered by his or her option 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
his or her spouse.
13. ADMINISTRATION. The Board, or a committee named by the Board, shall
supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the
Plan and not inconsistent with the Plan, to construe and interpret the Plan, and
to make all other determinations necessary or advisable for the administration
of the Plan. The composition of the committee shall be in accordance with the
requirements to obtain or retain any available exemption from the operation of
Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder.
14. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to the end of the
Offering Period but prior to delivery to him or her of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to the Exercise Date of the Offering Period.
If a participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the participant
(and his or her spouse, if any) at any time by written notice. 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 Company 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 Company), the Company,
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 Company, then to such other person as the
Company may designate.
15. TRANSFERABILITY. Neither Contributions 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 Section 14) 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 in accordance with Section 10.
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16. USE OF FUNDS. All Contributions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such Contributions.
17. REPORTS. Individual accounts will be maintained for each participant
in the Plan. Statements of account will be given to participating Employees
promptly following the Exercise Date, which statements will set forth the
amounts of Contributions, the per share purchase price, the number of shares
purchased and the remaining cash balance, if any.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but have not yet been placed under option (collectively, the
"Reserves"), as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration". Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issue 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 of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each option under the
Plan shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, to shorten the Offering Period then in
progress by setting a new Exercise Date (the "New Exercise Date"). If the Board
shortens the Offering Period then in progress in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
each participant in writing, at least ten (10) days prior to the New Exercise
Date, that the Exercise Date for his or her option has been changed to the New
Exercise Date and that his or her option will be exercised automatically on the
New Exercise Date, unless prior to such date he or she has withdrawn from the
Offering Period as provided in Section 10. For purposes of this paragraph, an
option granted under the Plan shall be deemed to be assumed if, following the
sale of assets or merger, the option confers the right to purchase, for each
share of option stock subject to the option immediately prior to the sale of
assets or merger, the consideration (whether stock, cash or other securities or
property) received in the sale of assets or merger by holders of Common Stock
for each share of Common Stock held on the effective date of the transaction
(and if such holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however,
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that if such consideration received in the sale of assets or merger was not
solely common stock of the successor corporation or its parent (as defined in
Section 424(e) of the Code), the Board may, with the consent of the successor
corporation and the participant, provide for the consideration to be received
upon exercise of the option to be solely common stock of the successor
corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock and the sale of assets or
merger.
The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.
19. AMENDMENT OR TERMINATION.
(a) The Board of Directors of the Company may at any time terminate
or amend the Plan. Except as provided in Section 18, no such termination may
affect options previously granted, nor may an amendment make any change in any
option theretofore granted which adversely affects the rights of any
participant. In addition, to the extent necessary to comply with Rule 16b-3
under the Exchange Act, or under Section 423 of the Code (or any successor rule
or provision or any applicable law or regulation), the Company shall obtain
shareholder approval in such a manner and to such a degree as so required.
(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been adversely affected, the Board
(or its committee) shall be entitled to change the Offering Periods, limit the
frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.
20. NOTICES. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
21. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
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promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
22. TERM OF PLAN; EFFECTIVE DATE. The Plan shall become effective upon
the earlier to occur of its adoption by the Board of Directors or its approval
by the shareholders of the Company. It shall continue in effect for a term of
twenty (20) years unless sooner terminated under Section 19.
23. 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.
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New Election ______
Change of Election ______
Gupta Corporation
EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
1. I, ________________________, hereby elect to participate in the Gupta
Corporation Employee Stock Purchase Plan (the "Plan") for the Offering Period
______________, 19__ to _______________, 19__, and subscribe to purchase shares
of the Company's Common Stock in accordance with this Subscription Agreement and
the Plan.
2. I elect to have Contributions in the amount of ____% of my
Compensation, as those terms are defined in the Plan, applied to this purchase.
I understand that this amount must not be less than 1% and not more than 10% of
my Compensation during the Offering Period. (Please note that no fractional
percentages are permitted).
3. I hereby authorize payroll deductions from each paycheck during the
Offering Period at the rate stated in Item 2 of this Subscription Agreement. I
understand that all payroll deductions made by me shall be credited to my
account under the Plan and that I may not make any additional payments into such
account. I understand that all payments made by me shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined
in accordance with the Plan. I further understand that, except as otherwise set
forth in the Plan, shares will be purchased for me automatically on the Exercise
Date of the Offering Period unless I otherwise withdraw from the Plan by giving
written notice to the Company for such purpose.
4. I understand that I may discontinue at any time prior to the Exercise
Date my participation in the Plan as provided in Section 10 of the Plan. I also
understand that if I desire to change the rate of my contributions, I can do so
EFFECTIVE FOR THE NEXT OFFERING PERIOD by completing and filing with the Company
a new Subscription Agreement.
5. I have received a copy of the Company's most recent description of the
Plan and a copy of the complete "Gupta Corporation 1992 Employee Stock Purchase
Plan." I understand that my participation in the Plan is in all respects
subject to the terms of the Plan.
<PAGE>
6. Shares purchased for me under the Plan should be issued in the name(s)
of (name of employee or employee and spouse only):
________________________
________________________
7. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:
NAME: (Please print) _____________________________________
(First) (Middle) (Last)
____________________ _____________________________________
(Relationship) (Address)
_____________________________________
8. FOR EMPLOYEES WHO ARE NOT SEC REPORTING PERSONS. I understand that I
may dispose of any shares received by me pursuant to the Plan at any time.
Furthermore, I understand that if I dispose of any shares received by me
pursuant to the Plan within 2 years after the Offering Date (the first day of
the Offering Period during which I purchased such shares) or within 1 year after
the date of the end of the Offering Period, I will be treated for federal income
tax purposes as having received ordinary compensation income at the time of such
disposition in an amount equal to the excess of the fair market value of the
shares at the time such shares were transferred to me over the price which I
paid for the shares, regardless of whether I disposed of the shares at a price
less than their fair market value at transfer. The remainder of the gain or
loss, if any, recognized on such disposition will be treated as capital gain or
loss.
I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING WITHIN 30 DAYS AFTER
THE DATE OF ANY SUCH DISPOSITION, AND I WILL MAKE ADEQUATE PROVISION FOR
FEDERAL, STATE OR OTHER TAX WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON
THE DISPOSITION OF THE COMMON STOCK. I understand that if applicable tax laws
change, the Company may be obligated to withhold from my compensation the amount
necessary to meet any applicable withholding obligation including any
withholding necessary to make available to the Company any tax deductions or
benefits attributable to the sale or early disposition of Common Stock by me.
9. FOR EMPLOYEES WHO ARE SEC REPORTING PERSONS. I understand that I may
not dispose of any shares received by me pursuant to the Plan within 6 months
after the date of the end of the Offering Period. Furthermore, I understand
that if I dispose of any shares received by me pursuant to the Plan within 2
years after the Offering Date (the first day of the Offering Period during which
I purchased such shares) or within 1 year after the date of the end of the
Offering Period, I will be treated for federal income tax purposes as having
received ordinary compensation income at the time
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of such disposition in an amount equal to the excess of the fair market value of
the shares at the time such shares were transferred to me over the price which I
paid for the shares, regardless of whether I disposed of the shares at a price
less than their fair market value at transfer. The remainder of the gain or
loss, if any, recognized on such disposition will be treated as capital gain or
loss.
I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING WITHIN 30 DAYS AFTER
THE DATE OF ANY SUCH DISPOSITION, AND I WILL MAKE ADEQUATE PROVISION FOR
FEDERAL, STATE OR OTHER TAX WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON
THE DISPOSITION OF THE COMMON STOCK. I understand that if applicable tax laws
change, the Company may be obligated to withhold from my compensation the amount
necessary to meet any applicable withholding obligation including any
withholding necessary to make available to the Company any tax deductions or
benefits attributable to the sale or early disposition of Common Stock by me.
10. If I dispose of such shares at any time after expiration of the 2-
year and 1-year holding periods, I understand that I will be treated for federal
income tax purposes as having received compensation income only to the extent of
an amount equal to the LESSER of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for
the shares under the option, or (2) 15% of the fair market value of the shares
on the Offering Date. The remainder of the gain or loss, if any, recognized on
such disposition will be treated as capital gain or loss.
I UNDERSTAND THAT THIS TAX SUMMARY IS ONLY A SUMMARY AND IS SUBJECT TO
CHANGE.
11. I hereby agree to be bound by the terms of the Plan. The
effectiveness of this Subscription Agreement is dependent upon my eligibility to
participate in the Plan.
SIGNATURE: __________________________________
SOCIAL SECURITY #: __________________________
DATE: _______________________________________
SPOUSE'S SIGNATURE (necessary
if beneficiary is not spouse):
___________________________________
(Signature)
___________________________________
(Print name)
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Gupta Corporation
EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
I, __________________________, hereby elect to withdraw my participation in
the Gupta Corporation Employee Stock Purchase Plan (the "Stock Purchase Plan")
for the Offering Period _________. This withdrawal covers all Contributions
credited to my account and is effective on the date designated below.
I understand that all Contributions credited to my account will be paid to
me within ten (10) business days of receipt by the Company of this Notice of
Withdrawal and that my option for the current period will automatically
terminate, and that no further Contributions for the purchase of shares can be
made by me during the Offering Period.
The undersigned further understands and agrees that he or she shall be
eligible to participate in succeeding offering periods only by delivering to the
Company a new Subscription Agreement.
If the undersigned is an officer, director of Gupta Corporation or other
person subject to Section 16 of the Securities Exchange Act of 1934, the
undersigned further understands that under rules promulgated by the U.S.
Securities and Exchange Commission he or she may not re-enroll in the Stock
Purchase Plan for a period of six (6) months after withdrawal.
Dated:___________________ ________________________________
Signature of Employee
_________________________________
Social Security Number
<PAGE>
Appendix C
GUPTA CORPORATION
1996 DIRECTORS' STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this Directors' Stock Option
Plan are to attract and retain the best available personnel for service as
Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued
service on the Board.
All options granted hereunder shall be nonstatutory stock options.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(c) "COMMON STOCK" shall mean the Common Stock of the Company.
(d) "COMPANY" shall mean Gupta Corporation, a California corporation.
(e) "CONTINUOUS STATUS AS A DIRECTOR" shall mean the absence of any
interruption or termination of service as a Director.
(f) "DIRECTOR" shall mean a member of the Board.
(g) "EMPLOYEE" shall mean any person, including any officer or
director, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.
(h) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(i) "OPTION" shall mean a stock option granted pursuant to the Plan.
All options shall be nonstatutory stock options (i.e., options that are not
intended to qualify as incentive stock options under Section 422 of the Code).
(j) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
(k) "OPTIONEE" shall mean an Outside Director who receives an Option.
(l) "OUTSIDE DIRECTOR" shall mean a Director who is not an Employee.
(m) "PARENT" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
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(n) "PLAN" shall mean this 1996 Directors' Stock Option Plan.
(o) "SHARE" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(p) "SUBSIDIARY" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 500,000 Shares (the "POOL") of Common Stock. The Shares may
be authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan. If Shares which were acquired upon exercise of an
Option are subsequently repurchased by the Company, such Shares shall not in any
event be returned to the Plan and shall not become available for future grant
under the Plan.
4. ADMINISTRATION OF AND GRANTS OF OPTIONS UNDER THE PLAN.
(a) ADMINISTRATOR. Except as otherwise required herein, the Plan
shall be administered by the Board.
(b) PROCEDURE FOR GRANTS. All grants of Options hereunder shall be
automatic and nondiscretionary and shall be made strictly in accordance with the
following provisions:
(i) No person shall have any discretion to select which
Outside Directors shall be granted Options or to determine the number of Shares
to be covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted an
Option to purchase Shares (the "OPTION") as follows: (A) with respect to
persons who are Outside Directors on the effective date of this Plan, as
determined in accordance with Section 6 hereof, 50,000 shares on such effective
date, and (B) with respect to any other person, 50,000 shares on the date on
which such person first becomes an Outside Director, whether through election by
the shareholders of the Company or appointment by the Board of Directors to fill
a vacancy.
(iii) Notwithstanding the provisions of subsection (ii) hereof,
in the event that a grant would cause the number of Shares subject to
outstanding Options plus the number of Shares previously purchased upon exercise
of Options to exceed the Pool, then each such automatic grant shall be for that
number of Shares determined by dividing the total number of Shares remaining
available for grant by the number of Outside Directors receiving an Option on
such date on the automatic grant date. Any further grants shall then be
deferred until such time, if any, as additional Shares become available for
grant under the Plan through action of the
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shareholders to increase the number of Shares which may be issued under the Plan
or through cancellation or expiration of Options previously granted hereunder.
(iv) Notwithstanding the provisions of subsection (ii) hereof,
any grant of an Option made before the Company has obtained shareholder approval
of the Plan in accordance with Section 17 hereof shall be conditioned upon
obtaining such shareholder approval of the Plan in accordance with Section 17
hereof.
(v) The terms of each Option granted hereunder shall be as
follows:
(1) the Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof;
(2) the exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of the Option, determined in
accordance with Section 8 hereof; and
(3) the Option shall become exercisable in
installments cumulatively as to 1/48th of the Shares subject to the Option on
each of the first forty-eight monthly anniversaries of the date of grant of the
Option.
(c) POWERS OF THE BOARD. Subject to the provisions and restrictions
of the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with
Section 8(b) of the Plan, the fair market value of the Common Stock; (ii) to
determine the exercise price per share of Options to be granted, which exercise
price shall be determined in accordance with Section 8(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted hereunder; and (vi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(d) EFFECT OF BOARD'S DECISION. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
(e) SUSPENSION OR TERMINATION OF OPTION. If the President or his or
her designee reasonably believes that an Optionee has committed an act of
misconduct, the President may suspend the Optionee's right to exercise any
option pending a determination by the Board of Directors (excluding the Outside
Director accused of such misconduct). If the Board of Directors (excluding the
Outside Director accused of such misconduct) determines an Optionee has
committed an act of embezzlement, fraud, dishonesty, nonpayment of an obligation
owed to the Company, breach of fiduciary duty or deliberate disregard of the
Company rules resulting in loss, damage or injury to the Company, or if an
Optionee makes an unauthorized disclosure of any Company trade secret or
confidential information, engages in any conduct constituting unfair
competition, induces any Company customer to breach a contract with the Company
or induces any principal for whom the Company acts as agent to terminate such
agency relationship, neither the Optionee nor his or her estate shall be
entitled to exercise any option whatsoever. In making such
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determination, the Board of Directors (excluding the Outside Director accused of
such misconduct) shall act fairly and shall give the Optionee an opportunity to
appear and present evidence on Optionee's behalf at a hearing before the Board
or a committee of the Board.
5. ELIGIBILITY. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof. An Outside Director who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.
The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his or her directorship at any time.
6. TERM OF PLAN; EFFECTIVE DATE. The Plan shall become effective on the
date on which it is adopted by resolution of the Company's Board of Directors.
It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 13 of the Plan.
7. TERM OF OPTIONS. The term of each Option shall be ten (10) years from
the date of grant thereof.
8. EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be 100% of the fair market
value per Share on the date of grant of the Option.
(b) FAIR MARKET VALUE. The fair market value shall be determined by
the Board; PROVIDED, HOWEVER, that where there is a public market for the Common
Stock, the fair market value per Share shall be the mean of the bid and asked
prices of the Common Stock in the over-the-counter market on the day immediately
preceding the date of grant, as reported in THE WALL STREET JOURNAL (or, if not
so reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation ("Nasdaq") System) or, in the event the Common Stock
is traded on the Nasdaq National Market or listed on a stock exchange, the fair
market value per Share shall be the closing price on such system or exchange on
the day immediately preceding the date of grant of the Option (or, in the event
that the Common Stock is not traded on such date, on the immediately preceding
trading date), as reported in THE WALL STREET JOURNAL.
(c) FORM OF CONSIDERATION. The consideration to be paid for the
Shares to be issued upon exercise of an Option shall consist entirely of cash,
check, other Shares of Common Stock having a fair market value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised (which, if acquired from the Company, shall have been
held for at least six months), or any combination of such methods of payment
and/or any other consideration or method of payment as shall be permitted under
applicable corporate law.
9. EXERCISE OF OPTION.
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(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable at such times as are set forth in
Section 4(b) hereof; provided, however, that no Options shall be exercisable
prior to shareholder approval of the Plan in accordance with Section 17 hereof
has been obtained.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be
issued to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) TERMINATION OF STATUS AS A DIRECTOR. If an Outside Director
ceases to serve as a Director, he or she may, but only within ninety (90) days
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination. Notwithstanding the foregoing, in no event may the Option
be exercised after its term set forth in Section 7 has expired. To the extent
that such Outside Director was not entitled to exercise an Option at the date of
such termination, or does not exercise such Option (which he or she was entitled
to exercise) within the time specified herein, the Option shall terminate.
(c) DISABILITY OF OPTIONEE. Notwithstanding Section 9(b) above, in
the event a Director is unable to continue his or her service as a Director with
the Company as a result of his or her total and permanent disability (as defined
in Section 22(e)(3) of the Code), he or she may, but only within six (6) months
(or such other period of time not exceeding twelve (12) months as is determined
by the Board) from the date of such termination, exercise his or her Option to
the extent he or she was entitled to exercise it at the date of such
termination. Notwithstanding the foregoing, in no event may the Option be
exercised after its term set forth in Section 7 has expired. To the extent that
he or she was not entitled to exercise the Option at the date of termination, or
if he or she does not exercise such Option (which he or she was entitled to
exercise) within the time specified herein, the Option shall terminate.
(d) DEATH OF OPTIONEE. In the event of the death of an Optionee:
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(i) During the term of the Option who is, at the time of his
or her death, a Director of the Company and who shall have been in Continuous
Status as a Director since the date of grant of the Option, the Option may be
exercised, at any time within six (6) months following the date of death, by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
would have accrued had the Optionee continued living and remained in Continuous
Status as Director for six (6) months (or such lesser period of time as is
determined by the Board) after the date of death. Notwithstanding the
foregoing, in no event may the Option be exercised after its term set forth in
Section 7 has expired.
(ii) Three (3) months after the termination of Continuous
Status as a Director, the Option may be exercised, at any time within six (6)
months following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of termination.
Notwithstanding the foregoing, in no event may the option be exercised after its
term set forth in Section 7 has expired.
10. NONTRANSFERABILITY OF OPTIONS. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution or pursuant to a qualified
domestic relations order (as defined by the Code or the rules thereunder). The
designation of a beneficiary by an Optionee does not constitute a transfer. An
Option may be exercised during the lifetime of an Optionee only by the Optionee
or a transferee permitted by this Section.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.
(a) ADJUSTMENT. Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each outstanding
Option, and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
PROVIDED, HOWEVER, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. 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
of Common Stock subject to an Option.
(b) CORPORATE TRANSACTIONS. In the event of (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the
Company's assets, (iii) a merger or consolidation in which the Company is not
the surviving corporation, or (iv) any other capital
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<PAGE>
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, the Company shall give to the Eligible
Director, at the time of adoption of the plan for liquidation, dissolution,
sale, merger, consolidation or reorganization, either a reasonable time
thereafter within which to exercise the Option, including Shares as to which the
Option would not be otherwise exercisable, prior to the effectiveness of such
liquidation, dissolution, sale, merger, consolidation or reorganization, at the
end of which time the Option shall terminate, or the right to exercise the
Option, including Shares as to which the Option would not be otherwise
exercisable (or receive a substitute option with comparable terms), as to an
equivalent number of shares of stock of the corporation succeeding the Company
or acquiring its business by reason of such liquidation, dissolution, sale,
merger, consolidation or reorganization.
12. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
PROVIDED THAT, to the extent necessary and desirable to comply with Rule 16b-3
under the Exchange Act (or any other applicable law or regulation), the Company
shall obtain approval of the shareholders of the Company to Plan amendments to
the extent and in the manner required by such law or regulation.
Notwithstanding the foregoing, the provisions set forth in Section 4 of this
Plan (and any other Sections of this Plan that affect the formula award terms
required to be specified in this Plan by Rule 16b-3) shall not be amended more
than once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan that would impair the rights of any Optionee shall not
affect Options already granted to such Optionee and such Options shall remain in
full force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares, if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.
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<PAGE>
15. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
16. OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
17. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company at or prior to the first annual
meeting of shareholders held subsequent to the granting of an Option hereunder.
If such shareholder approval is obtained at a duly held shareholders' meeting,
it may be obtained by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present or represented and entitled to vote
thereon. If such shareholder approval is obtained by written consent, it may be
obtained by the written consent of the holders of a majority of the outstanding
shares of the Company. Options may be granted, but not exercised, before such
shareholder approval.
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF GUPTA CORPORATION FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD SEPTEMBER 24, 1996
The undersigned shareholder of Gupta Corporation, a California corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and
Proxy Statement, each dated August 26, 1996, and hereby appoints Sam Inman and
Richard Heaps or either of them, proxies and attorneys-in-fact, with full power
to each of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the Annual Meeting of Shareholders of Gupta
Corporation to be held on Tuesday, September 24, 1996 at 3:00 p.m., local time,
at Hyatt Rickey's in Palo Alto, located at 4219 El Camino Real, Palo Alto,
California 94306 and at any adjournment or postponement thereof, and to vote all
shares of Common Stock which the undersigned would be entitled to vote if then
and there personally present, on the matters set forth below:
1. ELECTION OF DIRECTORS:
___ FOR all nominees listed below (except as indicated).
___ WITHHOLD authority to vote for all nominees listed below.
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
Umang P. Gupta, Samuel M. Inman, D. Bruce Scott, William O. Grabe, Max
D. Hopper, Anthony Sun.
2. PROPOSAL TO APPROVE THE AMENDMENT TO THE COMPANY'S 1995 STOCK OPTION
PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK FOR ISSUANCE THEREUNDER BY
1,000,000 SHARES TO AN AGGREGATE OF 2,000,000 SHARES:
____FOR ____AGAINST ____ABSTAIN
3. PROPOSAL TO APPROVE THE AMENDMENT TO THE COMPANY'S 1992 EMPLOYEE STOCK
PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK FOR ISSUANCE
THEREUNDER BY 100,000 SHARES TO AN AGGREGATE OF 400,000 SHARES.
4. PROPOSAL TO APPROVE THE ADOPTION OF THE 1996 DIRECTORS' STOCK OPTION
PLAN AND THE RESERVATION OF 500,000 SHARES OF COMMON STOCK FOR ISSUANCE
THEREUNDER:
____FOR ____AGAINST ____ABSTAIN
5. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION TO CHANGE THE COMPANY'S NAME TO CENTURA SOFTWARE
CORPORATION:
____FOR ____AGAINST ____ABSTAIN
6. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1996:
____FOR ____AGAINST ____ABSTAIN
and, in their discretion, upon such other matter or matters that may properly
come before the meeting and any postponement(s) or adjournment(s) thereof.
PLEASE SIGN ON REVERSE SIDE AND RETURN IMMEDIATELY
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF DIRECTORS; (2) FOR APPROVAL
OF THE AMENDMENT TO THE COMPANY'S 1995 STOCK OPTION PLAN TO INCREASE THE NUMBER
OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE THEREUNDER BY 1,000,000 SHARES
TO AN AGGREGATE OF 2,000,000 SHARES; (3) FOR APPROVAL OF THE AMENDMENT TO THE
COMPANY'S 1992 EMPLOYEE STOCK PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK RESERVED FOR ISSUANCE THEREUNDER BY 100,000 SHARES TO AN AGGREGATE
OF 400,000 SHARES; (4) FOR APPROVAL OF THE ADOPTION OF THE 1996 DIRECTORS' STOCK
OPTION PLAN AND THE RESERVATION OF 500,000 SHARES OF COMMON STOCK FOR ISSUANCE
THEREUNDER; (5) FOR APPROVAL OF THE COMPANY'S CHANGE OF NAME TO CENTURA SOFTWARE
CORPORATION; (6) FOR RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS, AND AS SAID PROXIES DEEM ADVISABLE
ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.
______________________________________ Date:__________________________
Signature
______________________________________ Date:__________________________
Signature
(This Proxy should be marked, dated, signed by the shareholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.)
