<PAGE> 1
As filed with the Securities and Exchange Commission on August 31, 1998
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
NETMANAGE, INC.
(Exact name of issuer as specified in its charter)
DELAWARE 77-0252226
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10725 N. DE ANZA BLVD.
CUPERTINO, CA 95014
(Address of principal executive offices)
----------------------
OUTSTANDING OPTIONS ORIGINALLY GRANTED UNDER THE FOLLOWING
STOCK PLANS OF FTP SOFTWARE, INC. AND ASSUMED BY THE REGISTRANT:
FTP SOFTWARE, INC. STOCK OPTION PLAN
FTP SOFTWARE, INC. 1997 EMPLOYEE EQUITY INCENTIVE PLAN
FTP SOFTWARE, INC. 1996 EXECUTIVE EQUITY INCENTIVE PLAN
OPTION GRANTED UNDER THE FIREFOX 1994 SHARE OPTION SCHEME ASSUMED
BY FTP SOFTWARE, INC.
FTP SOFTWARE, INC. AMENDED AND RESTATED 1993 NON-EMPLOYEE
DIRECTORS' STOCK OPTION PLAN
(Full title of the plans)
----------------------
ZVI ALON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NETMANAGE, INC.
10725 N. DE ANZA BLVD.
CUPERTINO, CA 95014
(408) 973-7171
(Name, address and telephone number of agent for service)
----------------------
Copy to:
DAVID J. SEGRE, ESQ.
DANIEL R. MITZ, ESQ.
Wilson Sonsini Goodrich & Rosati,
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
----------------------
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<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Amount to be Offering Price Aggregate Amount of
Title of Securities to be Registered Registered Per Share(1) Offering Price(1) Registration Fee
- ------------------------------------ ---------- ------------ ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value, of
Registrant to be issued upon
exercise of options granted under 1,024,451 $11.99 $12,286,996 $3,625
the FTP Software, Inc. ("FTP")
Stock Option Plan
Common Stock, $0.01 par value, of
Registrant to be issued upon
exercise of options granted under 1,779,244 $ 5.15 $ 9,170,143 $2,705
the FTP 1997 Employee Equity
Incentive Plan
Common Stock, $0.01 par value, of
Registrant to be issued upon
exercise of options granted under 1,066,035 $ 6.27 $ 6,633,093 $1,972
the FTP 1996 Executive Equity
Incentive Plan
Common Stock, $0.01 par value, of
Registrant to be issued upon
exercise of option granted under 286 $10.03 $ 2,868 $ 1
the Firefox 1994 Share Option
Scheme
Common Stock, $0.01 par value, of
Registrant to be issued upon
exercise of options granted under
the FTP Amended and Restated 195,335 $16.26 $ 3,176,251 $ 936
1993 Non-Employee Directors'
Stock Option Plan
Total 4,065,351 $ 31,319,237 $9,240
</TABLE>
================================================================================
- ----------
(1) Calculated in accordance with Rule 457(h)(i) under the Securities Act of
1933, as amended, based upon the weighted average of the exercise prices of
the options granted under each plan.
================================================================================
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
NetManage, Inc. (the "Registrant") hereby incorporates by reference in this
registration statement the following documents heretofore filed with the
Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998.
(c) The Registrant's Current Report on Form 8-K as filed with the
Commission on June 19, 1998.
(d) The description of the Registrant's Common Stock contained in its
Registration Statement on Form 8-A as filed with the Commission on
August 2, 1993 pursuant to Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), including any amendment or
report filed for the purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this registration statement which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities
The class of securities to be offered is registered under Section 12 of the
Exchange Act.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Delaware law authorizes corporations to eliminate the personal liability of
directors to corporations and their stockholders for monetary damages for breach
or alleged breach of the
II-1
<PAGE> 4
directors' "duty of care." While the relevant statute does not change directors'
duty of care, it enables corporations to limit available relief to equitable
remedies such as injunction or rescission. The statute has no effect on
directors' duty of loyalty, acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, illegal payment of
dividends and approval of any transaction from which a director derives an
improper personal benefit.
The Registrant has adopted provisions in its Certificate of Incorporation
which eliminate the personal liability of its directors to the Registrant and
its stockholders for monetary damages for breach or alleged breach of their duty
of care. The Bylaws of the Registrant provide for indemni fication of its
directors, officers, employees and agents to the full extent permitted by the
General Corporation Law of the State of Delaware, the Registrant's state of
incorporation, including those circumstances in which indemnification would
otherwise be discretionary under Delaware Law. Section 145 of the General
Corporation Law of the State of Delaware provides for indemnification in terms
sufficiently broad to indemnify such individuals, under certain circumstances,
for liabilities (including reimbursement of expenses incurred) arising under the
Securities Act of 1933, as amended.
The Registrant has entered into agreements with each of its directors and
executive officers to indemnify such persons against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred (including
expenses of a derivative action) in connection with any proceeding, whether
actual or threatened, to which any such person may be made a party by reason of
the fact that such person is or was a director or officer of the Registrant or
any of its affiliated enterprises, provided such person acted in good faith and
in a manner such person reasonably believed to be in or not opposed to the best
interests of the Registrant and, with respect to any criminal proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The indemnification
agreements also set forth certain procedures that will apply in the event of a
claim for indemnification thereunder.
Item 7. Exemption From Registration Claimed
Not applicable.
Item 8. Exhibits
4.1 FTP Software, Inc. Stock Option Plan
4.2 FTP Software, Inc. 1997 Employee Equity Incentive Plan
4.3 FTP Software, Inc. 1996 Executive Equity Incentive Plan
4.4 FTP Software, Inc. Firefox 1994 Share Option Scheme
4.6 FTP Software, Inc. Amended and Restated 1993 Non-Employee Directors'
Stock Option Plan
II-2
<PAGE> 5
5.1 Opinion of counsel as to legality of securities being registered
23.1 Consent of Independent Public Accountants
23.2 Consent of Counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (See Registration Statement Signature Page)
Item 9. Undertakings
The undersigned registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) (1) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(h) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cupertino, State of California, on August 31, 1998.
NETMANAGE, INC.
By: /s/ ZVI ALON
------------------------------------
Zvi Alon
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Zvi Alon and Gary R. Anderson, jointly
and severally, attorneys-in-fact, each with the power of substitution, for him
and in all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-8, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
behalf of the Registrant and in the capacities indicated on August 31, 1998.
<TABLE>
<CAPTION>
Signature Title
- ----------------------------- -----------------------------------------------
<S> <C>
/s/ ZVI ALON Chairman of the Board, President and Chief
- ----------------------------- Executive Officer (Principal Executive Officer)
Zvi Alon
/s/ GARY R. ANDERSON Chief Financial Officer, Senior Vice President,
- ----------------------------- Finance and Secretary (Principal Financial and
Gary R. Anderson Accounting Officer)
/s/ JOHN BOSCH Director
- -----------------------------
John Bosch
/s/ UZIA GALIL Director
- -----------------------------
Uzia Galil
/s/ SHELLEY HARRISON, PH.D. Director
- -----------------------------
Shelley Harrison, Ph.D.
/s/ DARRYL MILLER Director
- -----------------------------
Darrell Miller
/s/ ABRAHAM OSTROVSKY Director
- -----------------------------
Abraham Ostrovsky
</TABLE>
II-4
<PAGE> 7
<TABLE>
<CAPTION>
Exhibit Index
<S> <C>
4.1 FTP Software, Inc. Stock Option Plan
4.2 FTP Software, Inc. 1997 Employee Equity Incentive Plan
4.3 FTP Software, Inc. 1996 Executive Equity Incentive Plan
4.4 FTP Software, Inc. Firefox 1994 Share Option Scheme
4.6 FTP Software, Inc. Amended and Restated 1993 Non-Employee Directors'
Stock Option Plan
5.1 Opinion of counsel as to legality of securities being registered
23.1 Consent of Independent Public Accountants
23.2 Consent of Counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (See Registration Statement Signature Page)
</TABLE>
<PAGE> 1
EXHIBIT 4.1
FTP SOFTWARE, INC.
STOCK OPTION PLAN
(ASSUMED BY NETMANAGE, INC.)
1. PURPOSE OF THE PLAN. Under the Stock Option Plan (the "Plan") of FTP
Software, Inc. (the "Company") options may be granted to eligible employees to
purchase shares of the Company's capital stock. The Plan is designed to enable
the Company and its subsidiaries to attract, retain and motivate their employees
by providing for or increasing the proprietary interests of such employees in
the Company. The Plan provides for options which qualify as incentive stock
options ("Incentive Options") under Section 422A of the Internal Revenue Code of
1986, as amended (the "Code"), as well as options which do not so qualify.
2. STOCK SUBJECT TO PLAN. The maximum number of shares of stock for which
options granted hereunder may be exercised shall be 3,300,000 shares of common
stock $.01 par value, subject to the adjustments provided in Sections 7 and 12.
Shares of stock subject to the unexercised portions of any options granted under
this Plan which expire or terminate or are cancelled may again be subject to
options under the Plan. However, if stock appreciation rights are granted with
respect to any options under this Plan, the total number of shares of stock for
which further options may be granted under this Plan shall be irrevocably
reduced not only when there is an exercise of an option granted under this Plan,
but also when such option is surrendered upon an exercise of a stock
appreciation right granted under this Plan, in either case by the number of
shares covered by the portion of such option which is exercised or surrendered.
3. ELIGIBLE EMPLOYEES. The employees eligible to be considered for the
grant of options hereunder are any persons regularly employed by the Company or
its parent(s) or subsidiaries in a managerial, professional, or technical
capacity on a full-time, basis. Notwithstanding the above, an employee is not
eligible if he owns stock possessing more than 10% of the total combined voting
power of all stock of the company or its parents or subsidiaries unless the
option price is at least 110% of the fair market value of the stock subject to
the option and such option by its terms is not exercisable after the expiration
of five years from the date such option is granted. For purposes of this
paragraph, an employee is deemed to own stock if it is owned by himself, his
brothers, sisters, half-brothers, half-sisters, spouse, ancestors and lineal
descendants. Stock owned directly or indirectly by or for a corporation,
partnership or trust is treated as owned proportionately by or for its
shareholders, partners or beneficiaries.
4. $100,000 INCENTIVE STOCK OPTION EXERCISE LIMITATION. The aggregate fair
market value of the stock for which Incentive Options granted to any one
eligible employee under this Plan and under all stock option plans of the
Company, its parent(s) and subsidiaries, may by their terms first become
exercisable during any calendar year shall not exceed $100,000, determining fair
market value of the stock subject to any option as of the time that option is
granted.
5. MINIMUM EXERCISE PRICE. The exercise price for each option granted
hereunder shall not be less than 100% of the fair market value of the stock at
the date of the grant of the option.
<PAGE> 2
6. NONTRANSFERABILITY. Any option granted under this Plan shall by its
terms be nontransferable by the optionee other than by will or the laws of
descent and distribution and is exercisable during the optionee's lifetime only
by him or by his guardian or legal representative.
7. ADJUSTMENTS. If the outstanding shares of stock of the class then
subject to this Plan are increased or decreased, or are changed into or
exchanged for a different number or kind of shares or securities, as a result of
one or more reorganizations, recapitalizations, stock splits, reverse stock
splits, stock dividends or the like, appropriate adjustments shall be made in
the number and/or kind of shares or securities for which options may thereafter
be granted under this Plan and for which options then outstanding under this
Plan may thereafter be exercised. Any such adjustments in outstanding options
shall be made without changing the aggregate exercise price applicable to the
unexercised portions of such options.
8. MAXIMUM OPTION TERM. No option granted under this Plan may be exercised
in whole or in part more than ten years after its date of grant.
9. PLAN DURATION. Options may not be granted under this Plan more than ten
years after the date of the adoption of this Plan, or of shareholder approval
thereof, whichever is earlier.
10. PAYMENT. Payment for stock purchased under any exercise of an option
granted under this Plan shall be made in full in cash concurrently with such
exercise, except that, if and to the extent that the Board or the Committee so
provides, such payment may be made in whole or in part (a) with shares of the
same class of stock which have been held for at least six months (unless the
Board or the Committee approves a shorter period) and which shares have a fair
market value on the last business day preceding the date of exercise equal to
the exercise price or (b) at such time as the stock is registered under Section
12 of the Securities Exchange Act of 1934 (the "Exchange Act"), by delivery of
an unconditional and irrevocable undertaking by a broker to deliver to the
Company sufficient funds to pay the exercise price.
11. ADMINISTRATION. The Plan shall be administered by the Company's board
of directors (the "Board") or, in the discretion of the Board, by a committee
(the "Committee") of not less than three members of the Board from and after the
time that the common stock is registered under Section 12 of the Exchange Act,
the Plan shall be administered by a committee of at least three directors, all
of whom are disinterested within the meaning of Rule 16b-3 under the Exchange
Act.
The interpretation and construction by the Committee of any term or
provision of the Plan or of any option granted under it shall be final, unless
otherwise determined by the Board in which event such determination by the Board
shall be final. The Committee may from time to time adopt rules and regulations
for carrying out this Plan and, subject to the provisions of this Plan, may
prescribe the form or forms of the instruments evidencing any option granted
under this Plan.
Subject to the provisions of this Plan, the Board or, by delegation from
the Board, the Committee shall have full and final authority in its discretion
to select the employees to be granted options, to grant such options and to
determine the number of shares to be subject thereto, the exercise prices, the
terms of exercise, expiration date and other pertinent provisions thereof.
12. CORPORATE REORGANIZATIONS. Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the Company as a
result of which the outstanding securities of the class then subject to options
hereunder are changed into or exchanged for cash or
<PAGE> 3
property or securities not of the Company's issue, or upon a sale of
substantially all the property of the Company to, or the acquisition of stock
representing more than eighty percent (80%) of the voting power of the stock of
the Company then outstanding by, another corporation or person, the Plan shall
terminate, and all options theretofore granted hereunder shall terminate, unless
provision be made in writing in connection with such transaction for the
continuance of the Plan and/or for the assumption of options theretofore
granted, or the substitution for such options of options covering the stock of a
successor employer corporation, or a parent or a subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices, in which
event the Plan and options theretofore granted shall continue in the manner and
under the terms so provided. If the Plan and unexercised options shall terminate
pursuant to the foregoing sentence, all persons entitled to exercise any
unexercised portions of options then outstanding shall have the right, at such
time prior to the consummation of the transaction causing such termination as
the Company shall designate, to exercise, the unexercised portions of their
options, including the portions thereof which would, but for this paragraph
entitled "Corporate Reorganizations," not yet be exercisable.
13. STOCK APPRECIATION RIGHTS. If the instrument evidencing the option so
provides, an option granted under this Plan (herein sometimes referred to as the
"corresponding option") may include the right (a "Stock Appreciation Right") to
receive an amount equal to some or all of the excess of the fair market value
(determined in a manner specified in the instrument evidencing the corresponding
option) of the shares subject to unexercised portions of the corresponding
option over the aggregate exercise price for such shares under the corresponding
option as of the date the Stock Appreciation Right is exercised. The amount
payable upon exercise of a Stock Appreciation Right may be paid in cash or in
shares of the class then subject to the corresponding option (valued on the
basis of their fair market value, determined as specified with respect to the
measurement of the amount payable as aforesaid), or in combination of cash such
shares so valued. No Stock Appreciation Right may be exercised in whole or in
part (a) other than in connection with the contemporaneous surrender without the
exercise of such corresponding option, or the portion thereof that corresponds
to the portion of the Stock Appreciation Right being exercised, or (b) except to
the extent that the corresponding option or such portion thereof is exercisable
on the date of exercise of the Stock Appreciation Right by the person exercising
the Stock Appreciation Right, or (c) unless the class of stock then subject to
the corresponding option is then "publicly traded." For this purpose, a class of
stock is "publicly traded" if it is listed or admitted to unlisted trading
privileges on a national securities exchange or if bid and offer quotations
therefor are reported on the automated quotation system ("NASDAQ") operated by
the National Association of Securities Dealers, Inc. or on any then operative
successor to the NASDAQ system.
14. RESTRICTED STOCK. If the instrument evidencing the option so provides,
shares of stock issued on exercise of an option granted under this Plan may upon
issuance be subject to the following restrictions (and, as used herein,
"restricted stock" means shares issued on exercise of options granted under this
Plan which are still subject to restrictions imposed under this Section 14 that
have not yet expired or terminated):
a. shares of restricted stock may not be sold or otherwise transferred or
hypothecated;
b. if the employment of the holder of shares of restricted stock with the
Company or a subsidiary is terminated for any reason other than his
death, normal or early retirement in accordance with his employer's
established policies or practices, or total disability, the Company
(or any subsidiary designated by it shall have the option for sixty
(60) days after such termination of employment to purchase for cash
all or any
<PAGE> 4
part of his restricted stock at the lesser of (i) the price paid
therefor by the holder, or (ii) the fair market value of the
restricted stock on the date of such termination of employment
determined in a manner specified in the instrument evidencing the
option); and
c. as to the shares of stock affected thereby, any additional
restrictions that may be imposed on particular shares of restricted
stock as specified in the instrument evidencing the option.
The restrictions imposed under this Section 14 shall apply as well to all
shares or other securities issued in respect of restricted stock in connection
with any stock split, reverse stock split, stock dividend, recapitalization,
reclassification, spin-off, split-off, merger, consolidation or reorganization,
but such restrictions shall expire or terminate at such time or times as shall
be specified therefor in the instrument evidencing the option which provides for
the restrictions.
15. FINANCIAL ASSISTANCE. The Company is vested with authority under this
Plan to assist any employee to whom an option is granted hereunder (including
any director or officer of the Company or any of its subsidiaries who is also an
employee) in the payment of the purchase price payable on exercise of that
option, by lending the amount of such purchase price to such employee on such
terms and at such rates of interest and upon such security (or unsecured) as
shall have been authorized by or under authority of the Board.
16. AMENDMENT AND TERMINATION. The Board may alter, amend, suspend or
terminate this Plan, provided that no such action shall deprive an optionee,
without his consent, of any option granted to the optionee pursuant to this Plan
or of any of his rights under such option. No such action will, without the
approval of the stockholders of the Company, effectuate a change for which
stockholder approval is required in order for the Plan to continue to qualify
for the award of Incentive Options under Section 422 of the Code and to continue
to qualify under Rule 16b-3 promulgated under Section 16 of the Exchange Act.
<PAGE> 1
EXHIBIT 4.2
FTP SOFTWARE, INC.
1997 EMPLOYEE EQUITY INCENTIVE PLAN
(ASSUMED BY NETMANAGE, INC.)
1. PURPOSE
The purpose of this Employee Equity Incentive Plan (the "Plan") is to
advance the interests of FTP Software, Inc. (the "Company") by enhancing its
ability to attract and retain qualified employees and encourage them to make
significant contributions to the success of the Company and its subsidiaries
through ownership of shares of the Company's common stock ("Stock").
The Plan is intended to accomplish these goals by enabling the Company to
grant awards hereunder ("Awards") in the form of Options, Stock Appreciation
Rights, Restricted Stock and Unrestricted Stock Awards, or combinations thereof,
all as defined and more fully described below.
2. ADMINISTRATION
The Plan will be administered by a committee (the "Committee") of the Board
of Directors (the "Board of Directors" or the "Board") of the Company consisting
of one or more directors. If the Committee consists of more than one director, a
majority of the members of the Committee shall constitute a quorum, and all
determinations of the Committee shall be made by a majority of its members. Any
determination of the Committee under the Plan may be made without notice or
meeting of the Committee by a writing signed by a majority of the Committee
members or, if applicable, the sole Committee member.
The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to: (a) grant Awards at such time or times as it may choose; (b) determine
the size of each Award, including the number of shares of Stock subject to the
Award; (c) determine the type or types of each Award; (d) determine the terms
and conditions of each Award; (e) waive compliance by the holder of an Award
with any obligations to be performed by such holder under the Award and waive
any term or condition of an Award; (f) amend or cancel an existing Award in
whole or in part (and if an Award is canceled, grant another Award in its place
on such terms as the Committee shall specify), except that the Committee may
not, without the consent of the holder of an Award, take any action under this
clause with respect to such Award if such action would adversely affect the
rights of such holder; (g) prescribe the form or forms of instruments that are
required or deemed appropriate under the Plan, including any written notices and
elections required of Participants (as defined below), and change such forms
from time to time; (h) adopt, amend and rescind rules and regulations for the
administration of the Plan; and (i) interpret the Plan and decide any questions
and settle all controversies and disputes that may arise in connection with the
Plan. Such determinations and actions of the Committee, and all other
determinations and actions of the Committee made or taken under authority
granted by any provision of the Plan, shall be conclusive and shall bind all
parties. Nothing in this paragraph shall be construed as limiting the power of
the Committee to make adjustments under Section 7.3 or Section 8.6.
<PAGE> 2
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on January 20, 1997.
No Award may be granted under the Plan after January 20, 2007, but Awards
previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 8.6 below, the maximum
aggregate number of shares of Stock that may be delivered under the Plan is
2,780,000 which number shall be automatically increased from time to time by the
number of shares as to which each option granted under the Company's Stock
Option Plan remains unexercised as of the time of any termination or forfeiture
of such option occurring after the Effective Date of this Plan, with each such
automatic increase to be effective at the time of such termination or
forfeiture. If any Award requiring exercise by the Participant for delivery of
Stock terminates without having been exercised in full, or if any Award payable
in Stock or cash is satisfied in cash rather than Stock, the number of shares of
Stock as to which such Award was not exercised or for which cash was substituted
shall be available for future grants.
Stock delivered under the Plan may be either authorized but unissued Stock
or previously issued Stock acquired by the Company and held in treasury. No
fractional shares of Stock may be delivered under the Plan.
Subject to Sections 7.3 and 8.6(a): (i) the maximum aggregate number of
shares of Stock as to which Options may be granted under the Plan to any
Participant during any calendar year is 1,000,000; (ii) the maximum aggregate
number of shares of Stock as to which Stock Appreciation Rights may be granted
under the Plan to any Participant during any calendar year is 1,000,000; and
(iii) the maximum aggregate number of shares of Stock as to which Restricted
Stock Awards may be granted under the Plan is 100,000. For purposes of this
paragraph, except as otherwise provided in regulations or other guidelines
issued under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), any repricing of an Option or Stock Appreciation Right shall be
treated as a new grant and shall count against the applicable limit set forth in
this paragraph.
5. ELIGIBILITY AND PARTICIPATION
Those eligible to receive Awards under the Plan ("Participants") are all
full-time employees of the Company or any of its subsidiaries ("Employees")
other than those who are eligible to participate in the Company's 1996 Executive
Equity Incentive Plan. A "subsidiary" for purposes of the Plan shall be a
corporation in which the Company owns, directly or indirectly, stock possessing
50% or more of the total combined voting power of all classes of stock. A
"parent" of another corporation for purposes of the Plan shall be any
corporation which owns, directly or indirectly, stock possessing 50% or more of
the total combined voting power of all classes of stock of such other
corporation.
<PAGE> 3
6. TYPES OF AWARDS
6.1. OPTIONS.
(a) NATURE OF OPTIONS. An Option is an Award entitling the holder on
exercise thereof to purchase Stock at a specified exercise price.
Both "incentive stock options," as defined in Section 422 of the Code (any
Option intended to qualify as an incentive stock option being hereinafter
referred to as an "ISO"), and Options that are not incentive stock options, may
be granted under the Plan.
(b) EXERCISE PRICE. The exercise price of an Option shall be determined by
the Committee subject to the following:
(1) The exercise price of an ISO shall not be less than 100% (110% in
the case of an ISO granted to a ten-percent shareholder) of the fair market
value of the Stock subject to the Option, determined as of the time the Option
is granted. A "ten-percent shareholder" is any person who at the time of grant
owns, directly or indirectly, or is deemed to own by reason of the attribution
rules of Section 424(d) of the Code, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any of its
subsidiaries.
(2) In no case may the exercise price paid for Stock which is part of
an original issue of authorized Stock be less than the par value per share of
the Stock.
(3) The Committee may reduce the exercise price of an Option at any
time after the time of grant, but in the case of an Option originally awarded as
an ISO, only with the consent of the Participant.
(c) DURATION OF OPTIONS. The latest date on which an Option may be
exercised shall be the tenth anniversary (fifth anniversary, in the case of an
ISO granted to a ten-percent shareholder) of the date on which the Option was
granted, or such earlier date as may have been specified by the Committee at the
time the Option was granted.
(d) EXERCISE OF OPTIONS. Options granted under any single Award shall
become exercisable at such time or times, and on such conditions, as the
Committee may specify; provided, however, that if the Committee does not so
specify, 25% of the shares subject to the Award may be purchased commencing one
year after the date of grant, and an additional 25% of such shares may be
purchased commencing on the second, third and fourth anniversaries of the date
of grant. The Committee may at any time and from time to time (i) accelerate the
time at which all or any part of an Option may be exercised, (ii) provide for
the acceleration of the exercisability of an Option upon the occurrence of
certain events, and (iii) extend the time by which an Option must be exercised
(e.g., following death or termination) up to the latest date by which such
Option could have been exercised without regard to Section 7; provided, that an
extension of an ISO under (iii) shall not be effective without the consent of
the holder of the ISO.
Any exercise of an Option must be in writing, signed by the proper person
and delivered or mailed to the Company, accompanied by (i) any documents
required by the Committee and (ii)
<PAGE> 4
payment in full in accordance with paragraph (e) below for the number of shares
for which the Option is exercised.
(e) PAYMENT FOR STOCK. Stock purchased on exercise of an Option must be
paid for as follows: (i) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (ii) if so permitted by the
instrument evidencing the Option (or in the case of an Option which is not an
ISO, by the Committee at or after grant of the Option), (A) through the delivery
of shares of Stock which have been outstanding for at least six months (unless
the Committee expressly approves a shorter period) and which have a fair market
value on the last business day preceding the date of exercise equal to the
exercise price, or (B) by delivery of a promissory note of the Option holder to
the Company, payable on such terms as are specified by the Committee, or (C) by
delivery of an unconditional and irrevocable undertaking by a broker to deliver
promptly to the Company sufficient funds to pay the exercise price, or (D) by
any combination of the foregoing permissible forms of payment; provided, that if
the Stock delivered upon exercise of the Option is an original issue of
authorized Stock, at least so much of the exercise price as represents the par
value of such Stock must be paid other than by the Option holder's promissory
note or personal check.
(f) FAIR MARKET VALUE. For all purposes under this Plan, "fair market
value" shall mean with respect to the Common Stock and at any date, (i) the
reported closing price of such stock on the Nasdaq National Market or New York
Stock Exchange or other established stock exchange on such date, or if no sale
of such stock shall have been made on the Nasdaq National Market or such an
exchange on that date, on the preceding date on which there was such a sale,
(ii) if such stock is not then quoted on the Nasdaq National Market and is not
then listed on such an exchange, the average of the closing bid and asked prices
per share for such stock in the over-the-counter market as quoted on the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") on such date, or (iii) if such stock is not then listed on such an
exchange or quoted on NASDAQ or the Nasdaq National Market, an amount determined
in good faith by the Committee in its sole discretion.
6.2. STOCK APPRECIATION RIGHTS.
(a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right ("SAR")
is an Award entitling the holder on exercise of the Right to receive an amount,
in cash or Stock or a combination thereof (such form to be determined by the
Committee), determined in whole or in part by reference to appreciation in Stock
value.
In general, a Stock Appreciation Right entitles the Participant to receive,
with respect to each share of Stock as to which the Right is exercised, the
excess of the share's fair market value on the date of exercise over its fair
market value on the date the Right was granted.
(b) GRANT OF STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be
granted only in tandem with Options granted under the Plan. A Stock Appreciation
Right granted in tandem with an Option which is not an ISO may be granted either
at or after the time the Option is granted. A Stock Appreciation Right granted
in tandem with an ISO may be granted only at the time the Option is granted.
<PAGE> 5
(c) RULES APPLICABLE TO SAR AWARDS.
(1) The Stock Appreciation Right shall be exercisable only at such
time or times, and to the extent, that the related Option is exercisable and
shall be exercisable in accordance with the procedure required for exercise of
the related Option.
(2) The Stock Appreciation Right shall terminate and no longer be
exercisable upon the termination or exercise of the related Option, except that
a Stock Appreciation Right granted with respect to less than the full number of
shares covered by an Option will not be reduced until the number of shares as to
which the related Option has been exercised or has terminated exceeds the number
of shares not covered by the Stock Appreciation Right.
(3) The Option shall terminate and no longer be exercisable upon the
exercise of the related Stock Appreciation Right.
(4) The Stock Appreciation Right shall be transferable only with the
related Option.
(5) A Stock Appreciation Right granted in tandem with an ISO may be
exercised only when the fair market value of the Stock subject to the Option
exceeds the exercise price of such Option.
6.3. RESTRICTED AND UNRESTRICTED STOCK.
(a) NATURE OF RESTRICTED STOCK AWARD. A Restricted Stock Award entitles the
holder to acquire, for a purchase price specified by the Committee (but in no
event less than par value), shares of Stock subject to the restrictions
described in paragraph (d) below ("Restricted Stock").
(b) ACCEPTANCE OF AWARD. A Participant who is granted a Restricted Stock
Award will have no rights with respect to such Award unless the Participant
accepts the Award by written instrument delivered or mailed to the Company
accompanied by payment in full of the specified purchase price of the shares
covered by the Award. Payment may be by certified or bank check or other
instrument acceptable to the Committee.
(c) RIGHTS AS A STOCKHOLDER. A Participant who receives Restricted Stock
shall have all the rights of a stockholder with respect to the Stock, including
voting and dividend rights, subject to the restrictions described in paragraph
(d) below and any other conditions imposed by the Committee at the time of
grant. Unless the Committee otherwise determines, certificates evidencing shares
of Restricted Stock shall remain in the possession of the Company until such
shares are free of all restrictions under the Plan.
(d) RESTRICTIONS. Except as otherwise specifically provided by the Plan,
Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of, and if the Participant dies or otherwise suffers a
Status Change (as defined in Section 7.2 below) for any reason, must be offered
to the Company for purchase at the price originally paid for the Stock. These
restrictions shall lapse at such time or times, and on such conditions, as the
Committee may specify. The Committee may at any time accelerate the time at
which the restrictions on all or any part of the shares of Restricted Stock
shall lapse. Upon lapse of all restrictions, Stock shall cease to be restricted
for purposes of the Plan.
<PAGE> 6
(e) NOTICE OF ELECTION. Any Participant making an election under Section
83(b) of the Code with respect to Restricted Stock must provide a copy thereof
to the Company within 10 days of the filing of such election with the Internal
Revenue Service.
(f) OTHER AWARDS SETTLED WITH RESTRICTED STOCK. The Committee may, at the
time any Award described in this Section 6 is granted, provide that any or all
the Stock delivered pursuant to the Award will be Restricted Stock.
(g) UNRESTRICTED STOCK. The Committee may, in its sole discretion, approve
the sale to any Participant of shares of Stock free of restrictions under the
Plan for a price which is not less than the par value of the Stock.
7. EVENTS AFFECTING OUTSTANDING AWARDS
7.1. DEATH.
If a Participant dies, the following shall apply:
(a) All Options and Stock Appreciation Rights held by the Participant
immediately prior to death, to the extent then exercisable, may be exercised by
the Participant's executor or administrator or the person or persons to whom the
Option or Right is transferred by will or the applicable laws of descent and
distribution, at any time within the one-year period ending with the first
anniversary of the Participant's death (or such shorter or longer period as the
Committee may determine at any time), and shall terminate on the last day of
such period. In no event, however, shall an Option or Stock Appreciation Right
remain exercisable beyond the latest date on which it could have been exercised
without regard to this Section 7.1. Except as otherwise determined by the
Committee, all Options and Stock Appreciation Rights held by a Participant
immediately prior to death that are not then exercisable shall terminate at
death.
(b) Except as otherwise determined by the Committee, all Restricted
Stock held by the Participant must be transferred to the Company upon the
Participant's death (and, in the event the certificates representing such
Restricted Stock are held by the Company, such Restricted Stock shall be deemed
to be so transferred at such time without any further action by the Participant)
in accordance with Section 6.3(d) above.
7.2. TERMINATION OF SERVICE (OTHER THAN BY DEATH).
If a Participant ceases to be an Employee for any reason other than
death (such termination of the employment relationship being hereinafter
referred to as a "Status Change"), the following shall apply:
(a) Except as otherwise determined by the Committee, all Options and
Stock Appreciation Rights held by the Participant that were not exercisable
immediately prior to the Status Change shall terminate at the time of the Status
Change. Any Options or SARs that were exercisable immediately prior to the
Status Change shall continue to be exercisable for a period of three months
following the date of such Status Change (or such longer period as the Committee
may determine at any time), and shall terminate on the last day of such period,
unless the Award provides by its terms for immediate termination in the event of
a Status Change or unless the Status Change results from a termination for cause
as determined by the Committee in its sole discretion, provided,
<PAGE> 7
however, if such Status Change results from the Participant's permanent and
total disability, such three-month period shall be increased to a one-year
period. In no event, however, shall an Option or Stock Appreciation Right remain
exercisable beyond the latest date on which it could have been exercised without
regard to this Section 7.2. For purposes of this paragraph, a Status Change
shall not be deemed to have resulted by reason of (i) a bona fide leave of
absence approved for purposes of the Plan by the Committee, or (ii) a transfer
of employment between the Company and a subsidiary or between subsidiaries, or
to the employment of a corporation (or a parent or subsidiary corporation of
such corporation) issuing or assuming an option in a transaction to which
Section 424(a) of the Code applies.
(b) Except as otherwise determined by the Committee, all Restricted
Stock held by the Participant at the time of the Status Change must be
transferred to the Company (and, in the event the certificates representing such
Restricted Stock are held by the Company, such Restricted Stock shall be deemed
to be so transferred at such time without any further action by the Participant)
in accordance with Section 6.3 above.
7.3. CERTAIN CORPORATE TRANSACTIONS.
Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company as a result of which the
outstanding securities of the class then subject to options hereunder are
changed into or exchanged for cash or property or securities not of the
Company's issue, or upon a sale of substantially all the property of the Company
to, or the acquisition of stock representing more than eighty percent (80%) of
the voting power of the stock of the Company then outstanding by, another
corporation or person, the Plan shall terminate, and all options theretofore
granted hereunder shall terminate, unless provision be made in writing in
connection with such transaction for the continuance of the Plan and/or for the
assumption of options theretofore granted, or the substitution for such options
of options covering the stock of a successor employer corporation, or a parent
or a subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices, in which event the Plan and options theretofore granted
shall continue in the manner and under the terms so provided. If the Plan and
unexercised options shall terminate pursuant to the foregoing sentence, all
persons entitled to exercise any unexercised portions of options then
outstanding shall have the right, at such time prior to the consummation of the
transaction causing such termination as the Company shall designate, to exercise
the unexercised portions of their options, including the portions thereof which
would, but for this Section 7.3, not yet be exercisable.
8. GENERAL PROVISIONS
8.1. DOCUMENTATION OF AWARDS.
Awards will be evidenced by such written instruments, if any, as may be
prescribed by the Committee from time to time. Such instruments may be in the
form of agreements to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which shall evidence agreement by the Participant
to the terms thereof.
<PAGE> 8
8.2. RIGHTS AS A STOCKHOLDER, DIVIDEND EQUIVALENTS.
Except as specifically provided by the Plan, the receipt of an Award shall
not give a Participant any rights as a stockholder; the Participant will obtain
such rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, upon actual receipt of the Stock issued under the Award.
However, the Committee may, on such conditions as it deems appropriate, provide
that a Participant will receive a benefit in lieu of cash dividends that would
have been payable on any or all Stock subject to the Participant's Award had
such Stock been outstanding from the date of grant of the Award. Without
limitation, the Committee may provide for payment to the Participant of amounts
representing such dividends, either currently or in the future, or for
investment of such amounts on behalf of the Participant.
8.3. CONDITIONS ON DELIVERY OF STOCK.
The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove restrictions from shares previously delivered under the
Plan (i) until all conditions of the applicable Award have been satisfied or
removed, (ii) until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with, (iii) if the
outstanding Stock is at the time listed on any stock exchange or the Nasdaq
National Market, until the shares to be delivered have been listed or authorized
to be listed on such exchange or such Market upon official notice of issuance,
and (iv) until all other legal matters in connection with the issuance and
delivery of such shares have been approved by the Company's counsel. If the sale
of Stock issuable under the Plan has not been registered under the Securities
Act of 1933, as amended, the Company may require, as a condition to exercise of
the Award, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate legend restricting
transfer.
If an Award is exercised by the Participant's legal representative, the
Company shall be under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as to the authority of such representative.
8.4. TAX WITHHOLDING.
The Company shall withhold from any cash payment made pursuant to an Award
an amount sufficient to satisfy all federal, state and local withholding tax
requirements (the "withholding requirements").
In the case of an Award pursuant to which Stock may be delivered, the
Committee shall have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock.
If and to the extent that such withholding is required, the Committee may permit
the Participant or such other person to elect at such time and in such manner as
the Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, shares of Stock having a value
calculated to satisfy the withholding requirement.
If at the time an ISO is exercised, the Committee determines that the
Company could be liable for withholding requirements with respect to a
disposition of any of the shares of Stock received upon exercise, the Committee
may require as a condition of exercise that the person
<PAGE> 9
exercising the ISO agree (i) to inform the Company promptly of any disposition
(within the meaning of Section 424(c) of the Code) of Stock received upon
exercise, and (ii) to give such security as the Committee deems adequate to meet
the potential liability of the Company for the withholding requirements and to
augment such security from time to time in any amount reasonably deemed
necessary by the Committee to preserve the adequacy of such security.
8.5. NONTRANSFERABILITY OF AWARDS.
No Award (other than an Award in the form of an outright transfer of cash
or Unrestricted Stock) may be transferred other than by will or by the laws of
descent and distribution, and during a Participant's lifetime an Award requiring
exercise may be exercised only by him or her (or in the event of the
Participant's incapacity, the person or persons legally appointed to act on the
Participant's behalf).
8.6. ADJUSTMENTS IN THE EVENT OF CERTAIN TRANSACTIONS.
(a) In the event of a stock dividend, stock split or combination of shares,
recapitalization or other change in the Company's capitalization, or other
distribution to common stockholders other than normal cash dividends, after the
effective date of the Plan, the Committee shall make any appropriate adjustments
to the maximum number of shares that may be delivered under the Plan and,
subject to paragraph (c) of this Section 8.6, the other limitations set forth in
Section 4 above.
(b) In any event referred to in paragraph (a) of this Section 8.6, the
Committee shall also make any appropriate adjustments to the number and kind of
shares of stock or securities with respect to which Awards are then outstanding
or subsequently granted, any exercise prices relating to Awards and any other
provision of Awards affected by such change. The Committee may also make such
adjustments to take into account material changes in law or in accounting
practices or principles, mergers, consolidations, acquisitions, dispositions or
similar corporate transactions, or any other event, if it is determined by the
Committee that adjustments are appropriate to avoid distortion in the operation
of the Plan.
(c) In the case of ISOs, or for purposes of making adjustments to the
per-Participant limits set forth in the third paragraph of Section 4, the
adjustments described above in this Section 8.6 shall be made only to the extent
consistent with continued qualification of the option under Section 422 of the
Code (in the case of an ISO) or the rules under Section 162(m) of the Code (in
the case of the limitations set forth in the third paragraph of Section 4).
8.7. EMPLOYMENT RIGHTS, ETC.
Neither the adoption of the Plan nor the grant of Awards shall confer upon
any person any right to continued retention by the Company or any subsidiary as
an Employee or otherwise, or affect in any way the right of the Company or any
subsidiary to terminate an employment relationship. Except as specifically
provided by the Committee in any particular case, the loss of existing or
potential profit in Awards granted under the Plan will not constitute an element
of damages in the event of termination of an employment relationship even if the
termination is in violation of an obligation of the Company to the Participant.
<PAGE> 10
8.8. DEFERRAL OF PAYMENTS.
The Committee may agree at any time, upon request of the Participant, to
defer the date on which any payment under an Award will be made.
8.9. PAST SERVICES AS CONSIDERATION.
Where a Participant purchases Stock under an Award for a price equal to the
par value of the Stock, the Committee may determine that such price has been
satisfied by past services rendered by the Participant.
9. EFFECT, AMENDMENT, SUSPENSION AND TERMINATION
Neither adoption of the Plan nor the grant of Awards to a Participant shall
affect the Company's right to grant to such Participant awards that are not
subject to the Plan, to issue to such Participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
Employees.
The Company may at any time or times amend the Plan or any outstanding
Award for any purpose which may at the time be permitted by law, or may at any
time terminate or suspend the Plan as to any further grants of any or all types
of Awards.
As adopted by the Board of Directors of the Company on January 20, 1997.
<PAGE> 1
EXHIBIT 4.3
FTP SOFTWARE, INC.
1996 EXECUTIVE EQUITY INCENTIVE PLAN
(ASSUMED BY NETMANAGE, INC.)
1. PURPOSE
The purpose of this Executive Equity Incentive Plan (the "Plan") is to
advance the interests of FTP Software, Inc. (the "Company") by enhancing its
ability to attract and retain executive officers and encourage them to make
significant contributions to the success of the Company and its subsidiaries
through ownership of shares of the Company's common stock ("Stock").
The Plan is intended to accomplish these goals by enabling the Company to
grant awards hereunder ("Awards") in the form of Options, Stock Appreciation
Rights, Restricted Stock and Unrestricted Stock Awards, or combinations thereof,
all as defined and more fully described below.
2. ADMINISTRATION
The Plan will be administered by a committee (the "Committee") of the Board
of Directors (the "Board of Directors" or the "Board") of the Company. The
Committee shall consist of at least two directors, each of whom shall be a
"Non-Employee Director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). A majority of the members
of the Committee shall constitute a quorum, and all determinations of the
Committee shall be made by a majority of its members. Any determination of the
Committee under the Plan may be made without notice or meeting of the Committee
by a writing signed by a majority of the Committee members.
The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to: (a) grant Awards at such time or times as it may choose; (b) determine
the size of each Award, including the number of shares of Stock subject to the
Award; (c) determine the type or types of each Award; (d) determine the terms
and conditions of each Award; (e) waive compliance by the holder of an Award
with any obligations to be performed by such holder under the Award and waive
any term or condition of an Award; (f) amend or cancel an existing Award in
whole or in part (and if an Award is canceled, grant another Award in its place
on such terms as the Committee shall specify), except that the Committee may
not, without the consent of the holder of an Award, take any action under this
clause with respect to such Award if such action would adversely affect the
rights of such holder; (g) prescribe the form or forms of instruments that are
required or deemed appropriate under the Plan, including any written notices and
elections required of Participants (as defined below), and change such forms
from time to time; (h) adopt, amend and rescind rules and regulations for the
administration of the Plan; and (i) interpret the Plan and decide any questions
and settle all controversies and disputes that may arise in connection with the
Plan. Such determinations and actions of the Committee, and all other
determinations and actions of the Committee made or taken under authority
granted by any provision of the Plan, shall be conclusive and shall bind all
parties. Nothing in this paragraph shall be construed as limiting the power of
the Committee to make adjustments under Section 7.3 or Section 8.6.
<PAGE> 2
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on the date on which it is approved by the
stockholders of the Company.
No Award may be granted under the Plan after the tenth anniversary of the
approval of the Plan by the stockholders of the Company, but Awards previously
granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 8.6 below, the maximum
aggregate number of shares of Stock that may be delivered under the Plan is
1,500,000. If any Award requiring exercise by the Participant for delivery of
Stock terminates without having been exercised in full, or if any Award payable
in Stock or cash is satisfied in cash rather than Stock, the number of shares of
Stock as to which such Award was not exercised or for which cash was substituted
shall be available for future grants.
Stock delivered under the Plan may be either authorized but unissued Stock
or previously issued Stock acquired by the Company and held in treasury. No
fractional shares of Stock may be delivered under the Plan.
Subject to Sections 7.3 and 8.6(a): (i) the maximum aggregate number of
shares of Stock as to which Options may be granted under the Plan to any
Participant during any calendar year is 1,000,000; (ii) the maximum aggregate
number of shares of Stock as to which Stock Appreciation Rights may be granted
under the Plan to any Participant during any calendar year is 1,000,000; and
(iii) the maximum aggregate number of shares of Stock as to which Restricted
Stock Awards may be granted under the Plan is 100,000. For purposes of this
paragraph, except as otherwise provided in regulations or other guidelines
issued under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), any repricing of an Option or Stock Appreciation Right shall be
treated as a new grant and shall count against the applicable limit set forth in
this paragraph.
5. ELIGIBILITY AND PARTICIPATION
Those eligible to receive Awards under the Plan ("Participants") are
employees of the Company or any of its subsidiaries who are identified from time
to time by the Board of Directors as executive officers of the Company. A
"subsidiary" for purposes of the Plan shall be a corporation in which the
Company owns, directly or indirectly, stock possessing 50% or more of the total
combined voting power of all classes of stock. A "parent" of another corporation
for purposes of the Plan shall be any corporation which owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power of
all classes of stock of such other corporation.
6. TYPES OF AWARDS
6.1. OPTIONS.
(a) NATURE OF OPTIONS. An Option is an Award entitling the holder on
exercise thereof to purchase Stock at a specified exercise price.
<PAGE> 3
Both "incentive stock options," as defined in Section 422 of the Code (any
Option intended to qualify as an incentive stock option being hereinafter
referred to as an "ISO"), and Options that are not incentive stock options, may
be granted under the Plan.
(b) EXERCISE PRICE. The exercise price of an Option shall be determined by
the Committee subject to the following:
(1) The exercise price of an ISO shall not be less than 100% (110% in
the case of an ISO granted to a ten-percent shareholder) of the fair market
value of the Stock subject to the Option, determined as of the time the Option
is granted. A "ten-percent shareholder" is any person who at the time of grant
owns, directly or indirectly, or is deemed to own by reason of the attribution
rules of Section 424(d) of the Code, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any of its
subsidiaries.
(2) In no case may the exercise price paid for Stock which is part of
an original issue of authorized Stock be less than the par value per share of
the Stock.
(3) The Committee may reduce the exercise price of an Option at any
time after the time of grant, but in the case of an Option originally awarded as
an ISO, only with the consent of the Participant.
(c) DURATION OF OPTIONS. The latest date on which an Option may be
exercised shall be the tenth anniversary (fifth anniversary, in the case of an
ISO granted to a ten-percent shareholder) of the date on which the Option was
granted, or such earlier date as may have been specified by the Committee at the
time the Option was granted.
(d) EXERCISE OF OPTIONS. Options granted under any single Award shall
become exercisable at such time or times, and on such conditions, as the
Committee may specify; provided, however, that if the Committee does not so
specify, 25% of the shares subject to the Award may be purchased commencing one
year after the date of grant, and an additional 25% of such shares may be
purchased commencing on the second, third and fourth anniversaries of the date
of grant. The Committee may at any time and from time to time (i) accelerate the
time at which all or any part of an Option may be exercised, (ii) provide for
the acceleration of the exercisability of an Option upon the occurrence of
certain events, and (iii) extend the time by which an Option must be exercised
(e.g., following death or termination) up to the latest date by which such
Option could have been exercised without regard to Section 7; provided, that an
extension of an ISO under (iii) shall not be effective without the consent of
the holder of the ISO.
Any exercise of an Option must be in writing, signed by the proper person
and delivered or mailed to the Company, accompanied by (i) any documents
required by the Committee and (ii) payment in full in accordance with paragraph
(e) below for the number of shares for which the Option is exercised.
(e) PAYMENT FOR STOCK. Stock purchased on exercise of an Option must be
paid for as follows: (i) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (ii) if so permitted by the
instrument evidencing the Option (or in the case of an Option which is not an
ISO, by the Committee at or after grant of the Option), (A) through the delivery
of shares of Stock which have been outstanding for at least six months (unless
the Committee expressly approves a
<PAGE> 4
shorter period) and which have a fair market value on the last business day
preceding the date of exercise equal to the exercise price, or (B) by delivery
of a promissory note of the Option holder to the Company, payable on such terms
as are specified by the Committee, or (C) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (D) by any combination of the
foregoing permissible forms of payment; provided, that if the Stock delivered
upon exercise of the Option is an original issue of authorized Stock, at least
so much of the exercise price as represents the par value of such Stock must be
paid other than by the Option holder's promissory note or personal check.
(f) FAIR MARKET VALUE. For all purposes under this Plan, "fair market
value" shall mean with respect to the Common Stock and at any date, (i) the
reported closing price of such stock on the Nasdaq National Market or New York
Stock Exchange or other established stock exchange on such date, or if no sale
of such stock shall have been made on the Nasdaq National Market or such an
exchange on that date, on the preceding date on which there was such a sale,
(ii) if such stock is not then quoted on the Nasdaq National Market and is not
then listed on such an exchange, the average of the closing bid and asked prices
per share for such stock in the over-the-counter market as quoted on the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") on such date, or (iii) if such stock is not then listed on such an
exchange or quoted on NASDAQ or the Nasdaq National Market, an amount determined
in good faith by the Committee in its sole discretion.
6.2. STOCK APPRECIATION RIGHTS.
(a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right ("SAR")
is an Award entitling the holder on exercise of the Right to receive an amount,
in cash or Stock or a combination thereof (such form to be determined by the
Committee), determined in whole or in part by reference to appreciation in Stock
value.
In general, a Stock Appreciation Right entitles the Participant to receive,
with respect to each share of Stock as to which the Right is exercised, the
excess of the share's fair market value on the date of exercise over its fair
market value on the date the Right was granted.
(b) GRANT OF STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be
granted only in tandem with Options granted under the Plan. A Stock Appreciation
Right granted in tandem with an Option which is not an ISO may be granted either
at or after the time the Option is granted. A Stock Appreciation Right granted
in tandem with an ISO may be granted only at the time the Option is granted.
(c) RULES APPLICABLE TO SAR AWARDS.
(1) The Stock Appreciation Right shall be exercisable only at such
time or times, and to the extent, that the related Option is exercisable and
shall be exercisable in accordance with the procedure required for exercise of
the related Option.
(2) The Stock Appreciation Right shall terminate and no longer be
exercisable upon the termination or exercise of the related Option, except that
a Stock Appreciation Right granted with respect to less than the full number of
shares covered by an Option will not be reduced until the number of shares as to
which the related Option has been exercised or has terminated exceeds the number
of shares not covered by the Stock Appreciation Right.
<PAGE> 5
(3) The Option shall terminate and no longer be exercisable upon the
exercise of the related Stock Appreciation Right.
(4) The Stock Appreciation Right shall be transferable only with the
related Option.
(5) A Stock Appreciation Right granted in tandem with an ISO may be
exercised only when the fair market value of the Stock subject to the Option
exceeds the exercise price of such Option.
6.3. RESTRICTED AND UNRESTRICTED STOCK.
(a) NATURE OF RESTRICTED STOCK AWARD. A Restricted Stock Award entitles the
holder to acquire, for a purchase price specified by the Committee (but in no
event less than par value), shares of Stock subject to the restrictions
described in paragraph (d) below ("Restricted Stock").
(b) ACCEPTANCE OF AWARD. A Participant who is granted a Restricted Stock
Award will have no rights with respect to such Award unless the Participant
accepts the Award by written instrument delivered or mailed to the Company
accompanied by payment in full of the specified purchase price of the shares
covered by the Award. Payment may be by certified or bank check or other
instrument acceptable to the Committee.
(c) RIGHTS AS A STOCKHOLDER. A Participant who receives Restricted Stock
shall have all the rights of a stockholder with respect to the Stock, including
voting and dividend rights, subject to the restrictions described in paragraph
(d) below and any other conditions imposed by the Committee at the time of
grant. Unless the Committee otherwise determines, certificates evidencing shares
of Restricted Stock shall remain in the possession of the Company until such
shares are free of all restrictions under the Plan.
(d) RESTRICTIONS. Except as otherwise specifically provided by the Plan,
Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of, and if the Participant dies or otherwise suffers a
Status Change (as defined in Section 7.2 below) for any reason, must be offered
to the Company for purchase at the price originally paid for the Stock. These
restrictions shall lapse at such time or times, and on such conditions, as the
Committee may specify. The Committee may at any time accelerate the time at
which the restrictions on all or any part of the shares of Restricted Stock
shall lapse. Upon lapse of all restrictions, Stock shall cease to be restricted
for purposes of the Plan.
(e) NOTICE OF ELECTION. Any Participant making an election under Section
83(b) of the Code with respect to Restricted Stock must provide a copy thereof
to the Company within 10 days of the filing of such election with the Internal
Revenue Service.
(f) OTHER AWARDS SETTLED WITH RESTRICTED STOCK. The Committee may, at the
time any Award described in this Section 6 is granted, provide that any or all
the Stock delivered pursuant to the Award will be Restricted Stock.
(g) UNRESTRICTED STOCK. The Committee may, in its sole discretion, approve
the sale to any Participant of shares of Stock free of restrictions under the
Plan for a price which is not less than the par value of the Stock.
<PAGE> 6
7. EVENTS AFFECTING OUTSTANDING AWARDS
7.1. DEATH.
If a Participant dies, the following shall apply:
(a) All Options and Stock Appreciation Rights held by the Participant
immediately prior to death, to the extent then exercisable, may be exercised by
the Participant's executor or administrator or the person or persons to whom the
Option or Right is transferred by will or the applicable laws of descent and
distribution, at any time within the one-year period ending with the first
anniversary of the Participant's death (or such shorter or longer period as the
Committee may determine at any time), and shall terminate on the last day of
such period. In no event, however, shall an Option or Stock Appreciation Right
remain exercisable beyond the latest date on which it could have been exercised
without regard to this Section 7.1. Except as otherwise determined by the
Committee, all Options and Stock Appreciation Rights held by a Participant
immediately prior to death that are not then exercisable shall terminate at
death.
(b) Except as otherwise determined by the Committee, all Restricted
Stock held by the Participant must be transferred to the Company upon the
Participant's death (and, in the event the certificates representing such
Restricted Stock are held by the Company, such Restricted Stock shall be deemed
to be so transferred at such time without any further action by the Participant)
in accordance with Section 6.3(d) above.
7.2. TERMINATION OF SERVICE (OTHER THAN BY DEATH).
If a Participant ceases to be an Employee for any reason other than death
(such termination of the employment relationship being hereinafter referred to
as a "Status Change"), the following shall apply:
(a) Except as otherwise determined by the Committee, all Options and
Stock Appreciation Rights held by the Participant that were not exercisable
immediately prior to the Status Change shall terminate at the time of the Status
Change. Any Options or SARs that were exercisable immediately prior to the
Status Change shall continue to be exercisable for a period of three months
following the date of such Status Change (or such longer period as the Committee
may determine at any time), and shall terminate on the last day of such period,
unless the Award provides by its terms for immediate termination in the event of
a Status Change or unless the Status Change results from a termination for cause
as determined by the Committee in its sole discretion, provided, however, if
such Status Change results from the Participant's permanent and total
disability, such three-month period shall be increased to a one-year period. In
no event, however, shall an Option or Stock Appreciation Right remain
exercisable beyond the latest date on which it could have been exercised without
regard to this Section 7.2. For purposes of this paragraph, a Status Change
shall not be deemed to have resulted by reason of (i) a bona fide leave of
absence approved for purposes of the Plan by the Committee, or (ii) a transfer
of employment between the Company and a subsidiary or between subsidiaries, or
to the employment of a corporation (or a parent or subsidiary corporation of
such corporation) issuing or assuming an option in a transaction to which
Section 424(a) of the Code applies.
(b) Except as otherwise determined by the Committee, all Restricted
Stock held by the Participant at the time of the Status Change must be
transferred to the Company (and, in the
<PAGE> 7
event the certificates representing such Restricted Stock are held by the
Company, such Restricted Stock shall be deemed to be so transferred at such time
without any further action by the Participant) in accordance with Section 6.3
above.
7.3. CERTAIN CORPORATE TRANSACTIONS.
Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company as a result of which the
outstanding securities of the class then subject to options hereunder are
changed into or exchanged for cash or property or securities not of the
Company's issue, or upon a sale of substantially all the property of the Company
to, or the acquisition of stock representing more than eighty percent (80%) of
the voting power of the stock of the Company then outstanding by, another
corporation or person, the Plan shall terminate, and all options theretofore
granted hereunder shall terminate, unless provision be made in writing in
connection with such transaction for the continuance of the Plan and/or for the
assumption of options theretofore granted, or the substitution for such options
of options covering the stock of a successor employer corporation, or a parent
or a subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices, in which event the Plan and options theretofore granted
shall continue in the manner and under the terms so provided. If the Plan and
unexercised options shall terminate pursuant to the foregoing sentence, all
persons entitled to exercise any unexercised portions of options then
outstanding shall have the right, at such time prior to the consummation of the
transaction causing such termination as the Company shall designate, to exercise
the unexercised portions of their options, including the portions thereof which
would, but for this Section 7.3, not yet be exercisable.
8. GENERAL PROVISIONS
8.1. DOCUMENTATION OF AWARDS.
Awards will be evidenced by such written instruments, if any, as may be
prescribed by the Committee from time to time. Such instruments may be in the
form of agreements to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which shall evidence agreement by the Participant
to the terms thereof.
8.2. RIGHTS AS A STOCKHOLDER, DIVIDEND EQUIVALENTS.
Except as specifically provided by the Plan, the receipt of an Award shall
not give a Participant any rights as a stockholder; the Participant will obtain
such rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, upon actual receipt of the Stock issued under the Award.
However, the Committee may, on such conditions as it deems appropriate, provide
that a Participant will receive a benefit in lieu of cash dividends that would
have been payable on any or all Stock subject to the Participant's Award had
such Stock been outstanding from the date of grant of the Award. Without
limitation, the Committee may provide for payment to the Participant of amounts
representing such dividends, either currently or in the future, or for
investment of such amounts on behalf of the Participant.
<PAGE> 8
8.3. CONDITIONS ON DELIVERY OF STOCK.
The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove restrictions from shares previously delivered under the
Plan (i) until all conditions of the applicable Award have been satisfied or
removed, (ii) until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with, (iii) if the
outstanding Stock is at the time listed on any stock exchange or the Nasdaq
National Market, until the shares to be delivered have been listed or authorized
to be listed on such exchange or such Market upon official notice of issuance,
and (iv) until all other legal matters in connection with the issuance and
delivery of such shares have been approved by the Company's counsel. If the sale
of Stock issuable under the Plan has not been registered under the Securities
Act of 1933, as amended, the Company may require, as a condition to exercise of
the Award, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate legend restricting
transfer.
If an Award is exercised by the Participant's legal representative, the
Company shall be under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as to the authority of such representative.
8.4. TAX WITHHOLDING.
The Company shall withhold from any cash payment made pursuant to an Award
an amount sufficient to satisfy all federal, state and local withholding tax
requirements (the "withholding requirements").
In the case of an Award pursuant to which Stock may be delivered, the
Committee shall have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock.
If and to the extent that such withholding is required, the Committee may permit
the Participant or such other person to elect at such time and in such manner as
the Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, shares of Stock having a value
calculated to satisfy the withholding requirement.
If at the time an ISO is exercised, the Committee determines that the
Company could be liable for withholding requirements with respect to a
disposition of any of the shares of Stock received upon exercise, the Committee
may require as a condition of exercise that the person exercising the ISO agree
(i) to inform the Company promptly of any disposition (within the meaning of
Section 424(c) of the Code) of Stock received upon exercise, and (ii) to give
such security as the Committee deems adequate to meet the potential liability of
the Company for the withholding requirements and to augment such security from
time to time in any amount reasonably deemed necessary by the Committee to
preserve the adequacy of such security.
8.5. NONTRANSFERABILITY OF AWARDS.
No Award (other than an Award in the form of an outright transfer of cash
or Unrestricted Stock) may be transferred other than by will or by the laws of
descent and distribution, and during a Participant's lifetime an Award requiring
exercise may be exercised only by him or her (or in the
<PAGE> 9
event of the Participant's incapacity, the person or persons legally appointed
to act on the Participant's behalf).
8.6. ADJUSTMENTS IN THE EVENT OF CERTAIN TRANSACTIONS.
(a) In the event of a stock dividend, stock split or combination of shares,
recapitalization or other change in the Company's capitalization, or other
distribution to common stockholders other than normal cash dividends, after the
effective date of the Plan, the Committee shall make any appropriate adjustments
to the maximum number of shares that may be delivered under the Plan and,
subject to paragraph (c) of this Section 8.6, the other limitations set forth in
Section 4 above.
(b) In any event referred to in paragraph (a) of this Section 8.6, the
Committee shall also make any appropriate adjustments to the number and kind of
shares of stock or securities with respect to which Awards are then outstanding
or subsequently granted, any exercise prices relating to Awards and any other
provision of Awards affected by such change. The Committee may also make such
adjustments to take into account material changes in law or in accounting
practices or principles, mergers, consolidations, acquisitions, dispositions or
similar corporate transactions, or any other event, if it is determined by the
Committee that adjustments are appropriate to avoid distortion in the operation
of the Plan.
(c) In the case of ISOs, or for purposes of making adjustments to the
per-Participant limits set forth in the third paragraph of Section 4, the
adjustments described above in this Section 8.6 shall be made only to the extent
consistent with continued qualification of the option under Section 422 of the
Code (in the case of an ISO) or the rules under Section 162(m) of the Code (in
the case of the limitations set forth in the third paragraph of Section 4).
8.7. EMPLOYMENT RIGHTS, ETC.
Neither the adoption of the Plan nor the grant of Awards shall confer upon
any person any right to continued retention by the Company or any subsidiary as
an Employee or otherwise, or affect in any way the right of the Company or any
subsidiary to terminate an employment relationship. Except as specifically
provided by the Committee in any particular case, the loss of existing or
potential profit in Awards granted under the Plan will not constitute an element
of damages in the event of termination of an employment relationship even if the
termination is in violation of an obligation of the Company to the Participant.
8.8. DEFERRAL OF PAYMENTS.
The Committee may agree at any time, upon request of the Participant, to
defer the date on which any payment under an Award will be made.
8.9. PAST SERVICES AS CONSIDERATION.
Where a Participant purchases Stock under an Award for a price equal to the
par value of the Stock, the Committee may determine that such price has been
satisfied by past services rendered by the Participant.
<PAGE> 10
9. EFFECT, AMENDMENT, SUSPENSION AND TERMINATION
Neither adoption of the Plan nor the grant of Awards to a Participant shall
affect the Company's right to grant to such Participant awards that are not
subject to the Plan, to issue to such Participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
Employees.
The Company may at any time or times amend the Plan or any outstanding
Award for any purpose which may at the time be permitted by law, or may at any
time terminate or suspend the Plan as to any further grants of any or all types
of Awards, provided that (except to the extent expressly required or permitted
by the Plan) no such amendment will, without the approval of the stockholders of
the Company, effectuate a change for which stockholder approval is required by
the rules of the National Association of Securities Dealers, Inc. applicable to
the Company.
As adopted by the Board of Directors of the Company on July 22, 1996 and by the
stockholders of the Company on August 22, 1996.
<PAGE> 1
EXHIBIT 4.4
FIREFOX COMMUNICATIONS
LIMITED
1994 SHARE OPTION SCHEME
(ASSUMED BY NETMANAGE, INC.)
<PAGE> 2
FIREFOX COMMUNICATIONS LIMITED
1994 SHARE OPTION SCHEME
(ASSUMED BY NETMANAGE, INC.)
INDEX OF RULES
<TABLE>
<CAPTION>
Rule Page
- ---- ----
<S> <C> <C>
1. Definitions 1
2. Eligibility 3
3. Invitations to apply for options 3
4. Option Price 4
5. Applications for Options 4
6. Grant of Options 5
7. Non-transferability of Options 5
8. Exercise of Options 6
9. Manner of Exercise of Options 8
10. Overall Limits on the Granting of Options 9
11. Offers of Take-over; Reconstruction or Winding-up 9
12. Variation of Capital 12
13. Alteration of the Scheme 13
14. Miscellaneous 14
</TABLE>
<PAGE> 3
RULES OF
FIREFOX COMMUNICATIONS LIMITED
1994 SHARE OPTION SCHEME
(ASSUMED BY NETMANAGE, INC.)
Definitions
1. In this Scheme (unless the context otherwise requires):
(1) "Application Date" in relation to any invitation to apply for an
Option means such date (being not more than 21 days after the day on
which that invitation was issued) as shall be determined by the Board
to be the latest date by which an application for the grant of an
Option must be received by the Board in response to that invitation;
(2) "Auditors" means the auditors of the Company for the time being;
(3) "the Board" means the board of directors of the Company;
(4) "the Company" means Firefox Communications Limited (registered in
England with No. 2417148);
(5) "control" has the same meaning as in Section 840 of the Taxes Act;
(6) "Date of Grant" in relation to any Option means the date on which that
Option is granted in accordance with rule 6(1) below;
(7) "Employee" means a director or employee of any company within the
Group who is required to devote substantially the whole of his time to
his duties and in any event not less than 25 hours per week (excluding
meal breaks);
(8) "the Group" means the Company and each and every Subsidiary of the
Company;
(9) "Option" means a subsisting right to acquire by purchase Shares which
is granted in accordance with and subject to the rules of the Scheme
and has not been exercised in full;
(10) "an Option-Holder" means a person who has an Option, or upon the death
of such a person, his personal representatives;
(11) "Option Price" means the price at which an Employee may acquire a
Share upon the exercise of an Option (as determined in accordance with
rule 4 below);
(12) "the Scheme" means the Firefox Communications Limited 1994 Share
Option Scheme as set out herein and altered or added to from time to
time in accordance with rule 14 below;
(13) "Shares" means fully-paid Ordinary shares in the capital of the
Company;
<PAGE> 4
(14) "Subsidiary" means a company which is under the control of the
Company;
(15) "the Taxes Act" means the Income and Corporation Taxes Act 1988;
(16) Words and expressions not defined in this rule 1 have the same
meanings as in Section 135 of the Taxes Act 1988;
(17) any reference in the Scheme to any enactment includes a reference to
that enactment from time to time modified extended or re-enacted;
(18) words denoting the masculine gender shall include the feminine;
(19) words denoting the singular shall include the plural and vice versa.
Eligibility
2. (1) Options shall not be granted to, nor exercised by any person unless
(subject to rules 8(4)-(6) below) he is an Employee;
(2) Subject to rule 2(1) above the Board shall have an absolute discretion
as to the selection of persons to whom invitations to apply for
Options may be issued.
Invitations to Apply for Options
3. (1) The Board may at any time, if it, in its discretion so decides, issue
to persons who are, or may at the intended Date of Grant be, Employees
invitations in writing to apply for Option;
(2) Each such invitation shall specify:
(a) the maximum number of Shares in respect of which the Employee is
invited to apply for an Option;
(b) the Option Price;
(c) the form and manner in which the Employee may apply for an
Option;
(d) the Application Date;
(e) the special conditions (if any) subject to which such an Option
would be capable of being exercised as determined by the Board
pursuant to rule 8(3); and shall otherwise be in such form as the
Board may from time to time prescribe.
Option Price
4. Subject to any adjustment pursuant to rule 13 below, the Option Price shall
be determined by the Board.
<PAGE> 5
Applications for Options
5. Each Employee to whom an invitation is issued may apply for an Option by
submitting to the Board an application in writing which:
(a) is received by the Board at the registered office of the Company,
or at such other address as may be stipulated in the invitation,
not later than the Application Date; and
(b) specifies the number of Shares in respect of which the
application for an Option is made, being not greater than the
number of Shares specified in the invitation; and
and is otherwise in such form as the Board may from time to time
prescribe.
Grant of Options
6. (1) Subject to rule 6(2) below, within the period of 30 days beginning
with the first of the days (as mentioned in rule 4 above) by reference
to which the Option Price is determined in respect of Options for
which invitations to apply are issued on any occasion, the Board may,
if it so decides, grant to each Employee who has duly submitted an
application in accordance with rule 5 above an Option over the number
of Shares in respect of which his application is made or such lesser
number of Shares as the Board may determine;
(2) As soon as reasonably practicable after an Option has been granted in
accordance with rule 6(1) above the Board shall issue to the
Option-holder an option certificate which specifies:
(a) the Date of Grant;
(b) the number of Shares in respect of which the Option is granted;
(a) the Option Price;
(b) the last date on which the Option may be exercised by reason of
rule 8(1) below
and is otherwise in such form as the Board may from time to time
prescribed;
(3) No consideration shall be paid to the Board for the grant of the
Option and such option certificate shall be sealed with the Company's
seal.
Non-Transferability of Options
7. An Option shall immediately cease to be exercisable if:
(a) (except as provided in rule 11(4) - exchange of options upon a
takeover) the Option-holder purports to transfer or assign
(otherwise than to personal representatives on death), mortgage,
charge or otherwise dispose of the Option or any part thereof; or
<PAGE> 6
(b) the Option-holder is adjudicated bankrupt or a bankruptcy order
is made against the Option-holder pursuant to chapter 1 of part
IX of The Insolvency Act 1986.
Exercise of Options
8. (1) No Option may be exercised later than the seventh anniversary of the
Date of Grant;
(2) The exercise of an Option may be made wholly or partly conditional
upon the performance of the Company and/or any Subsidiary and/or the
Option-holder over such period and measured against such criteria as
may be determined by the Board. Any such determination may include
provision for any Option to become wholly or partly unconditional
during any part or parts of such period from time to time if events
happen which cause the Board to consider reasonably that a varied
condition would be a fairer measure of performance and no more
difficult to satisfy than it would have been without the variation.
The Board shall notify to each Option-holder in writing the nature of
any such condition applicable to his Option and when the exercise of
such Option has become unconditional;
(3) If an Option-holder dies then, subject to rule 8(1), Options granted
to him may be exercised by his personal representatives within the
period of 12 months beginning with the date of his death and shall
cease to be exercisable at the end of that period;
(4) If an Option-holder ceases to be an Employee by reason of:
(a) injury or disability (evidenced to the satisfaction of the
Board); or
(b) the transfer or sale of the undertaking or part of the
undertaking in which the Employee is employed to a person who is
not a member of the Group, or who would not be a member of a
group including the Company and the acquiring company referred to
in rule 11(4);
then, subject to rules 8(1) and 8(3) above, Options granted to
him may only be exercised within the period referred to in rule
8(6) below and shall otherwise cease to be exercisable;
(5) Subject to rule 8(5)(c) below, if an Option-holder ceases to be an
Employee for any reason other than those set out in rules 8(4) (a) and
(b) above then, subject to rules 8(1) and 8(3) above, options granted
to him may only be exercised:
(a) with the approval of the Board given in writing; and
(b) (unless otherwise provided by the Board) within the period
referred to in rule 8(6) below
and shall otherwise cease to be exercisable SAVE THAT if no such
approval is given by the Board to the Option-holder within the period
of 3 months beginning with the date on which such Option-holder ceases
to be an Employee then such Options shall cease to be exercisable at
the end of that period 3 months;
<PAGE> 7
(c) An Option-holder shall not be regarded as having ceased to be an
Employee by reason of the transfer of the office or employment to
a member of a group including the Company and the acquiring
company referred to in rule 11(4);
(6) The period mentioned in rules 8(4) and 8(5) (b) above is 6 months
beginning with the date on which the Option-holder ceases to be an
Employee.
Manner of Exercise of Options
9. (1) An option shall be exercised only by the Option-holder serving a
written notice upon the Board which:
(a) specifies the number of Shares in respect of which that Option is
exercised which in any event shall not exceed the number of
Shares in respect of which that Option subsists and which have
not been specified for this purpose in a prior notice serviced by
the Option-holder in accordance with this rule 9;
(b) is accompanied by payment of an amount equal to the product of
the number of Shares specified in the notice and the Option
Price; and
(c) unless the Board otherwise permits, is accompanied by the option
certificate in respect of that Option;
and is otherwise in such form as the Board may from time to time
prescribe;
(2) Subject to rule 9(3) below, within the period of 30 days beginning
with the date on which the Company receives a notice of exercise which
complies with rule 9(1) above, the Board shall issue the number of
Shares specified in that notice to the Option-holder;
(3) As soon as reasonably practicable after the issue of any Shares
pursuant to rule 9(2) above, the Board on behalf of the Company shall
register in the name of the Option- holder the Shares issued to the
Option-holder pursuant to rule 9(20(b) above and issue to such
registered shareholder a definitive share certificate; and
If the Option remains partially unexercised, the Board shall either
amend the option certificate issued to the Option-holder pursuant to
rule 6(3) above so as to indicate the number of Shares in respect of
which the Option subsists, or issue to the Option- holder a new option
certificate which shall contain all the information which would have
been contained in such an amended option;
(4) The registration of any person as the registered holder of any shares
acquired under the Scheme shall be subject to the Memorandum and
Articles of Association of the Company and to obtaining any consents
required under any statutory or regulatory provision;
(5) All Shares issued under the Scheme shall rank pari passu in all
respects with the Shares for the time being in issue save as regards
any rights attaching to such Shares by reference to a record date
prior to the date of such transfer.
<PAGE> 8
Overall Limits on the Granting of Options
10. Subject to rule 13 below, the number of Shares in respect of which Options
may be granted on any day, when added to the number of Shares in respect of
which options have previously been granted under the Scheme or any other
share option scheme approved by the Inland Revenue under Schedule 9 of the
Taxes Act 1988 (and, if not exercised, have not then ceased to be
exercisable) shall not exceed 5 percent of the Shares in issue on that day.
Offers of Take-over, Reconstruction or Winding-up
11. (1) If:
(a) a general offer to acquire the whole of the Issued Share Capital
is made subject to a condition that if it is satisfied the person
making the offer will have control of the Company; or
(b) a general offer is made to acquire all the shares in the Company
of the same class as the Shares, the Board will give notice in
writing to the Option-holder that such an offer has been made,
and if such notice is given, Options may be exercised within such
period as the Board, may specify in the notice;
(2) If, as a result of any such general offer as is mentioned in rule
11(1) above, the Company shall come under the control of another
person or persons, the Option- holder shall be entitled to exercise
his Option within the period of 6 months of he date when the person
making the offer has obtained control of the Company and any condition
subject to which the offer is made has been satisfied;
(3) If any time any person becomes entitled to acquire shares in the
Company under Section 428-430 of the Companies Act 1985 the
Option-holder shall be entitled to exercise his Option at any time
when that person remains so entitled or bound;
(4) If any company (in this clause referred to as "the acquiring
company;):
(a) obtains control of the Company as a result of making a general
offer as mentioned in rule 11(1) above; or
(b) obtains control of the Company in pursuance of a compromise or
arrangement sanctioned by the court made under Section 425 of the
Companies Act 1985; or
(c) becomes bound or entitled to acquire Shares under Sections 428 to
430 of the Companies Act 1985 an Option-holder may, at any time
within the appropriate period as mentioned in rule 11(5) below,
by agreement with the acquiring company, release his Option in
consideration of the grant to him of rights to acquire shares in
the acquiring company or any other company falling within
sub-paragraphs (b) or (c) of paragraph 10 of Schedule 9 Taxes Act
1988 (read and construed as if reference in those provisions to
the company concerned were references to the acquiring company);
<PAGE> 9
PROVIDED THAT:
such rights will be exercisable only in accordance with the
provisions of this Scheme (read and construed as if all
references to the Company and to the shares in rules 8, 11 and
12, were references to the company in respect of whose shares
such rights are granted and to the shares in that company);
(5) In rule 1194) "the appropriate period" means:
(a) in a case falling within paragraph (a), the period of six
months beginning with the time when the person making the
offer has obtained control of the company and any condition
subject to which the offer is made has been satisfied;
(b) in a case falling within paragraph (b), the period of six
months beginning with the time when the court sanctions the
compromise or arrangements, and
(c) in a case falling within paragraph (c), the period during
which the acquiring company remains bound or entitled as
mentioned in that paragraph.
(6) For the purposes of this rule a person shall be deemed to have
control of a company if he and others acting in concert with him
have together obtained control of it;
(7) If notice is given to shareholders of the Company of a general
meeting of the Company at which a resolution for the voluntary
winding-up of the Company is to be proposed, an Option may,
subject to rule 8(1) above, be exercised at any time before the
commencement of the winding-up;
(8) All Options shall immediately cease to be exercisable upon the
commencement of a winding-up of the Company.
Variation of Capital
12. (1) In the event of any increase or variation of the Issued Ordinary Share
Capital by way of capitalization or rights issue, or sub-division,
consolidation or reduction, the Board may make such adjustments as it
considers appropriate:
(a) to the number of Shares which are subject to any Option, and/or
(b) to the Option price payable for each Share under any such Option,
and/or;
(c) to any other term of any such Option, and/or
(d) where such an Option has been exercised but no Shares have been
issued in accordance with rule 9(2) above, to the number of
Shares which may be so issued and the price payable for each such
Share;
<PAGE> 10
PROVIDED THAT;
except in the case of a capitalization issue, any such adjustment is
confirmed in writing by the Auditors to be in their opinion fair and
reasonable.
(2) As soon as reasonably practicable after making any adjustment pursuant
to rule 12(1) above, the Board shall give notice in writing thereof to
every Option-holder affected thereby and shall at the written request
of any such Option-holder and upon the surrender of any option
certificates which holds deliver to him a revised option certificate
in respect of his Option.
Alteration of the Scheme
13. (1) The Board may make any alteration or addition to the Scheme as may be
necessary or desirable to ensure that the Scheme is not
disadvantageous to shareholders of the Company;
PROVIDED THAT;
no alterations or addition shall be made to the advantage of
Option-holders to:
rule 4 (Option Price);
rule 6(1) (grant of option);
rule 7(non-transferability of Options);
rule 8 (exercise of Options);
rule 9(5) (rights attaching to Shares);
rule 11 (offer of Take-over, reconstruction or winding up of the
Company); and
this rule 13
without the prior approval by ordinary resolution of the shareholders
of the Company in general meeting SAVE THAT the provisions of this
rule 14 shall not apply to the extent that such alteration or addition
is necessary in order to comply with or take account of the
requirements of any statutory or regulatory provision whether in the
United Kingdom or elsewhere;
(2) As soon as reasonably practicable after making any alteration or
addition under this rule 13, the Board shall give notice in writing
thereof to any Option-holder affected thereby.
Miscellaneous
14. (1) The Company shall at all times keep available sufficient Shares to
satisfy the exercise in full of all the Options for the time being
remaining capable of being exercised under the Scheme;
(2) The Board may from time to time make and vary such rules and
regulations not inconsistent herewith and establish such procedure for
the administration and implementation of the Scheme as they think fit
and in the event of any dispute or
<PAGE> 11
disagreement as to the interpretation of the Scheme or of any such
rules, regulation or procedure or as to any question or right arising
from or related to the Scheme, the decision of the Board shall (except
as regards any matter required to be determined by the Auditors
hereunder) be final and binding upon all persons;
(3) In any matter in which they are required to act hereunder, the
Auditors shall be deemed to be acting as experts and not as
arbitrators and the Arbitration Acts 1950-1979 shall not apply hereto;
(4) Option-holders shall be entitled to receive copies of all accounts
circular and notices (other than proxy or voting forms) sent to
holders of Shares but shall have no right to attend general meetings
of the Company;
(5) Except as otherwise provided in the Scheme, any notice or document to
be given to any person in accordance or in connection with the Scheme
shall be duly given if delivered to him (if he is an Employee) at his
place of work or sent through the post in a pre-paid envelope to the
address last known to the Board to be his address and if so sent shall
be deemed to have been duly given on the date of posting. Any notice
or document so sent to an Option-holder shall be deemed to have been
duly given notwithstanding that such Option-holder is then deceased
(and whether or not the Company has notice of his death) except where
his legal personal representatives have established their title to the
satisfaction of the Board and supplied to the Board an address to
which documents are to be sent;
(6) The rights and obligations of an Option-holder under the terms of his
employment with the Company or any of its Subsidiaries shall not be
affected by his participation in the Scheme and the Scheme shall
afford an Option-holder no additional rights to compensation or damage
in consequence of the termination of his employment for any reason
whatsoever;
(7) The costs of the administration and implementation of the Scheme shall
be borne by the Company.
<PAGE> 1
EXHIBIT 4.6
SOFTWARE, INC.
AMENDED AND RESTATED
1993 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(ASSUMED BY NETMANAGE, INC.)
1. PURPOSE. The purpose of this Amended and Restated 1993 Non-Employee
Directors' Stock Option Plan (the "Plan") is to advance the interests of FTP
Software Inc. (the "Company") by enhancing the ability of the Company to attract
and retain non-employee directors who are in a position to make significant
contributions to the success of the Company and to reward directors for such
contributions through ownership of shares of the Company's Common Stock (the
"Stock").
2. ADMINISTRATION. The Plan shall be administered by a committee (the
"Committee") of the Board of Directors (the "Board") of the Company designated
by the Board for that purpose. Unless and until a Committee is appointed, the
Plan shall be administered by the entire Board, and references in the Plan to
the "Committee" shall be deemed references to the Board. The Committee shall
have authority, not inconsistent with the express provisions of the Plan: (a) to
(i) issue options to purchase Stock granted in accordance with the formula set
forth in Section 4.a hereof to Eligible Directors (as defined below) and (ii)
grant additional options to purchase Stock to Eligible Directors pursuant to
Section 4.b hereof (an option granted under either Section 4.a or 4.b hereof is
referred to herein as an "Option"); (b) to prescribe the form or forms of
instruments evidencing awards and any other instruments required under the Plan
and to change such forms from time to time; (c) to adopt, amend and rescind
rules and regulations for the administration of the Plan; and (d) to interpret
the Plan and to decide any questions and settle all controversies and disputes
that may arise in connection with the Plan. Such determinations of the Committee
shall be conclusive and shall bind all parties.
3. ELIGIBILITY OF DIRECTORS FOR STOCK OPTIONS. Directors eligible to
receive Options ("Eligible Directors") shall be those directors who are not, at
the time they become an Eligible Director, employees of the Company or of any
subsidiary of the Company and (i) who are directors on the Effective Date of
this Plan (which shall be the eligibility date for such directors) or (ii) who
are first elected a director of the Company after the Effective Date of this
Plan (which election date shall be the eligibility date for any such director).
4. GRANT OF OPTIONS; EXERCISE PRICE.
a. Each Eligible Director shall receive the following automatic option
grants:
i. Each Eligible Director shall, on the date he or she is first
elected or appointed as a director of the Company, automatically be granted an
Option to purchase 20,000 shares of Stock of the Company (subject to adjustment
as provided in Sections 5 and 10) at an exercise price equal to the Fair Market
Value of the Stock on the effective date of grant; provided, however, that if an
<PAGE> 2
Eligible Director is elected to or appointed to less than a full three-year term
of office, the number of shares subject to such Option shall be reduced to that
number obtained by multiplying 20,000 by a fraction, the numerator of which is
the number of days in the term of office for which such Eligible Director is
elected or appointed and the denominator of which is 1,096;
ii. thereafter, each Eligible Director shall, on each of the first and
second anniversaries of date he or she is first elected or appointed as a
director of the Company, and provided that such person is then serving as a
director of the Company, automatically be granted an Option to purchase 10,000
shares of Stock of the Company (subject to adjustment as provided in Sections 5
and 10) at an exercise price equal to the Fair Market Value of the Stock on the
effective date of grant; provided, however, that (A) if the term of office of
such Eligible Director is more than one year but less than two years, the number
of shares subject to the Option to be granted on such first anniversary shall be
reduced to that number obtained by multiplying 10,000 by a fraction, the
numerator of which is the number of days in the second year of the term of
office of such Eligible Director and the denominator of which is 365 and (B) and
if the term of office of such Eligible Director is more than two years but less
than three years, the number of shares subject to the Option to be granted on
such second anniversary shall be reduced to that number obtained by multiplying
10,000 by a fraction, the numerator of which is the number of days in the third
year of the term of office of such Eligible Director and the denominator of
which is 365; and
iii. thereafter, with respect to each Eligible Director who is elected
to a new three-year term of office, such Eligible Director shall automatically
be granted (A) on the date of such election, an Option to purchase 20,000 shares
of Stock of the Company (subject to adjustment as provided in Sections 5 and 10)
and (B) on each of the first and second anniversaries of such re-election, an
Option to purchase 10,000 shares of Stock of the Company (in each case subject
to adjustment as provided in Sections 5 and 10), provided that such person is
then serving as a director of the Company, in each case at an exercise price
equal to the Fair Market Value of the Stock on the effective date of grant.
b. The Committee may, at such time or times as it may choose, grant
additional Options to any Eligible Director, with the number of shares of Stock
subject to each such Option and the terms and conditions of each such Option to
be determined by the Committee subject to the other provisions of this Plan
(other than Sections 4.a and 7.a hereof). The exercise price of each such Option
shall not be less than the Fair Market Value of the Stock on the effective date
of grant.
c. All Options granted under this Plan shall expire on the tenth
anniversary of the effective date of grant.
5. NUMBER OF SHARES. The number of shares of Stock of the Company which may
be issued upon the exercise of Options granted under the Plan, including shares
forfeited pursuant to Section 7, shall not exceed 500,000 in the aggregate,
subject to increase under Section 10, which increases and appropriate
adjustments as a result thereof shall be made by the Committee, whose
determination shall be binding on all persons.
6. STOCK TO BE DELIVERED. Shares of Stock to be delivered pursuant to an
Option granted under this Plan may constitute an original issue of authorized
Stock or may consist of previously issued Stock acquired by the Company, as
shall be determined by the Board. The Board and the proper officers of the
Company shall take any appropriate action required for such delivery. No
fractional shares shall be delivered under the Plan.
<PAGE> 3
The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan (a) until all conditions of the Option have been satisfied,
(b) until, in the opinion of the Company's counsel, all applicable federal and
state laws and regulations have been complied with, (c) if the outstanding Stock
is at the time listed on NASDAQ or any other stock exchange, until the shares to
be delivered have been listed or authorized to be listed on NASDAQ or such other
exchange upon official notice of notice of issuance, and (d) until all other
legal matters in connection with the issuance and delivery of such shares have
been approved by the Company's counsel. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the Options, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act and may require that the certificates evidencing such
Stock bear an appropriate legend restricting transfer.
If an Option is exercised by the Eligible Director's legal
representative, the Company will be under no obligation to deliver Stock
pursuant to such exercise until the Company is satisfied as to the authority of
such representative.
7. EXERCISABILITY; EXERCISE; PAYMENT OF EXERCISE PRICE.
a. (i) All Options granted under Section 4.a.i and clause (A) of Section
4.a.iii of the Plan shall become exercisable as to 6,667 shares after one year
from the effective date of the grant, as to an additional 6,667 shares after two
years from the effective date of grant, and as to the final 6,666 shares after
three years from the effective date of grant so that the Options are 100%
exercisable three years from the effective date of the grant; provided, however,
that if an Eligible Director is granted an Option for fewer than 20,000 shares
as a result of the proviso to the first sentence of Section 4.a.i, such Option
shall become exercisable as follows: at the scheduled end of the term of office
of such Eligible Director, the lesser of 6,667 shares or the full amount of the
Option; if the scheduled term of office exceeds one year, at one year prior to
the scheduled end of such term of office, the lesser of 6,667 shares or the
remainder of such Option; if the scheduled term of office exceeds two years, at
two years prior to the scheduled end of such term of office, the remainder of
such Option.
(ii) All Options granted under Section 4.a.ii and clause (B) of
Section 4.a.iii of the Plan shall be exercisable in full immediately upon grant.
b. Each Option granted under Section 4.b hereof shall become exercisable at
such time or times, and on such conditions, as the Committee may specify;
provided, however, that if the Committee does not so specify, one-third of the
shares subject to such Option may be purchased commencing one year after the
effective date of grant, and an additional one-third of such shares may be
purchased commencing on each of the second and third anniversaries of the
effective date of grant.
c. The Committee may at any time and from time to time (i) accelerate the
time at which all or any part of an Option may be exercised, (ii) provide for
the acceleration of the exercisability of an Option upon the occurrence of
certain events and (iii) extend the time by which an Option must be exercised
(e.g., following death or termination) up to the latest date by which such
Option could have been exercised without regard to Section 8 hereof. The
Committee may reduce the exercise price of an Option at any time after the time
of grant, but in no event may the exercise price paid for Stock which is part of
an original issue of authorized Stock be less than the par value per share of
the Stock.
<PAGE> 4
d. Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (1) any documents
required by the Committee and (2) payment in full as provided below for the
number of shares for which the Option is exercised.
e. The exercise price of Stock purchased on exercise of an Option must be
paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) through the delivery of shares
of Stock which have been outstanding and held by the Option holder for at least
six months and which have a Fair Market Value on the last business day preceding
the date of exercise equal to the exercise price, or (3) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (4) by any combination of
the permissible forms of payment.
f. To the extent shares of Stock covered under an Option are not delivered
because the Option lapses or is terminated, such forfeited shares may be
regranted in another Option within the limits set forth in Section 5.
8. TERMINATION OF OPTIONS.
a. If an Eligible Director ceases to be a director by reason of death or
total and permanent disability (as determined by the Committee), the following
will apply:
All Options held by the Eligible Director that are not exercisable on
the thirtieth day after termination of the Eligible Director's status as a
director will terminate as of such date. All Options that are exercisable as of
said thirtieth day will continue to be exercisable until the earlier of (1) the
first anniversary of the date on which the Eligible Director's status as a
director ended or (2) the date on which the Option would have terminated had the
Eligible Director remained a director. If the Eligible Director has died or is
totally or permanently disabled, the Option may be exercised within such limits
by the Eligible Director's legal representative.
b. If an Eligible Director's service with the Company terminates for any
reason other than death or incapacity as provided above, all options held by the
director that are not then exercisable shall terminate. Options that are
exercisable on the date of such termination shall continue to be exercisable
until the earlier of (1) three months thereafter or (2) the date on which the
Option would have terminated had the director remained an Eligible Director, and
after completion of that period, such Options shall terminate to the extent not
previously exercised, expired or terminated.
c. Certain Corporate Transactions. In the event of a consolidation or
merger in which the Company is not the surviving corporation or which results in
the acquisition of substantially all the Company's outstanding Stock by a single
person or entity or by a group of persons and/or entities acting in concert, or
in the event of the sale or transfer of substantially all the Company's assets
or a dissolution or liquidation of the Company (a "covered transaction"), all
outstanding Options under the Plan will terminate as of the effective date of
the covered transaction, provided that each such outstanding Option not
otherwise exercisable shall become immediately exercisable in full 20 days prior
to the effective date thereof.
<PAGE> 5
9. GENERAL PROVISIONS.
a. Documentation of Options. Options will be evidenced by written
instruments prescribed by the Committee from time to time. Such instruments may
be in the form of agreements, to be executed by both an Eligible Director and
the Company, or certificates, letters or similar instruments, which need not be
executed by an Eligible Director but acceptance of which will evidence agreement
to the terms thereof.
b. Rights as a Stockholder. An option holder shall not have the rights of a
stockholder with respect to Options under the Plan except as to Stock actually
received by him or her under the Plan.
c. Tax Withholding. The Eligible Director or other appropriate person shall
remit to the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the Committee with
regard to such requirements, prior to the delivery of any Stock. If and to the
extent that such withholding is required, the Committee may permit the Eligible
Director or such other person to elect at such time and in such manner as the
Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirement.
d. Nontransferability of Options. No Option may be transferred other than
by will or by the laws of descent and distribution, and during a director's
lifetime an Option may be exercised only by the director (or, in the event of
the director's incapacity, the person or persons legally appointed to act on the
director's behalf).
10. ADJUSTMENTS IN THE EVENT OF CERTAIN TRANSACTIONS.
a. In the event of a stock dividend, stock split or combination of shares,
recapitalization or other change in the Company's capitalization, or other
distribution to common stockholders other than normal cash dividends, the
Committee will make any appropriate adjustments to the maximum number of shares
that may be delivered under the Plan under Section 5 above.
b. In any event referred to in paragraph (a), the Committee will also make
any appropriate adjustments to the number and kind of shares of stock or
securities subject to Options then outstanding or subsequently granted, exercise
prices relating to Options and any other provision of Options affected by such
change. The Committee may also make such adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, if it is determined by the Committee that adjustments are
appropriate to avoid distortion in the operation of the Plan.
11. FAIR MARKET VALUE. For purposes of the Plan, Fair Market Value of a
share of Stock on any date will be the average of the bid and asked prices in
the over-the-counter market with respect to such Stock, as reported by the
National Association of Securities Dealers, Inc. ("NASD") Automated Quotations
System or such other similar system then in use (or by the appropriate
equivalent closing price if the Stock is then listed on any stock exchange or is
included in the NASD National Market System), on that date; or, if on any such a
date such Stock is not quoted by any such organization, the average of the
closing bid and asked prices with respect to such Stock, as furnished by a
professional market maker making a market in such Stock selected by the
Committee; or if such prices are not available, the fair market value of such
Stock as of such date as determined in good
<PAGE> 6
faith by the Committee; provided, however, that the Fair Market Value of shares
subject to Options granted on the Effective Date shall be the price per share to
the public of the Common Stock issued in the Company's IPO.
12. EFFECTIVE DATE AND TERM. This Plan, having been approved by the Board
of Directors on September 1, 1993, shall become, in accordance with the terms of
the approving vote of the Board, effective on the effectiveness of the Company's
first Registration Statement on Form S-1 for the registration of the sale of its
Common Stock under the Securities Act of 1933, as amended ("IPO") (the
"Effective Date"), subject to approval of this Plan by vote of a majority of the
shareholders of the Company present and eligible to vote on the question at an
annual or special meeting of stockholders held not later than September 1, 1994.
Options may be granted under the Plan prior to the date of stockholder approval,
and options so granted shall be effective on the effective date of grant subject
to stockholder approval of the Plan as provided in this Section. No Options may
be awarded under this Plan after November 1, 2003, but the Plan shall continue
thereafter while previously awarded Options remain subject to the Plan.
13. EFFECT OF TERMINATION, AND AMENDMENT. Neither adoption of the Plan nor
the grant of Options to an Eligible Director shall confer upon any person any
right to continued status as a director with the Company or any subsidiary or
affect in any way the right of the Company or subsidiary to terminate a director
relationship at any time or affect the Company's right to grant to such director
options or other stock awards that are not subject to the Plan, to issue to such
director stock as a bonus or otherwise, or to adopt other plans or arrangements
under which stock may be issued to directors. The Committee may at any time
terminate the Plan as to any further grants of Options. The Committee may at any
time or times amend the Plan for any purpose which may at the time be permitted
by law.
<PAGE> 1
EXHIBIT 5.1
August 31, 1998
NetManage, Inc.
10725 N. De Anza Blvd.
Cupertino, CA 95014
RE: REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about August 31, 1998 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 4,065,351 shares of your Common Stock
reserved for issuance upon exercise of outstanding stock options originally
granted under the FTP Software, Inc. Stock Option Plan, 1997 Employee Equity
Incentive Plan, 1996 Executive Equity Incentive Plan, Amended and Restated
1993 Non-Employee Directors' Stock Option Plan and the Firefox 1994 Share Option
Scheme (collectively, the "Plans") assumed by NetManage, Inc. As your legal
counsel, we have examined the proceedings taken and are familiar with the
proceedings proposed to be taken by you in connection with the sale and issuance
of such Common Stock under the Plans.
It is our opinion that, when issued and sold in the manner referred to in
the Plans and pursuant to the stock option certificates which accompany the
Plans, the Common Stock issued and sold thereby will be legally and validly
issued, fully paid and non-assessable.
We are members of the Bar of the California. We express no opinion as to
any matter relating to the laws of any jurisdiction other than the federal laws
of the Untied States of America, the laws of the State of California and the
General Corporation Law of the State of Delaware.
<PAGE> 2
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including any Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
------------------------------------
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
NetManage, Inc.:
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our report dated
January 26, 1998, included in NetManage, Inc.'s Form 10-K for the year ended
December 31, 1997.
Arthur Andersen LLP
San Jose, California
August 26, 1998
