<PAGE>
As filed with the Securities and Exchange Commission on May 28, 1997
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
4FRONT SOFTWARE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-0675510
(State or other juris- (I.R.S. Employer
diction of incorporation Identification
or organization) Number)
5650 GREENWOOD PLAZA BOULEVARD
ENGLEWOOD, COLORADO 80111
(303) 721-7341
(Address, including zip code, of registrant's principal executive offices)
4FRONT SOFTWARE INTERNATIONAL, INC.
1996 EQUITY INCENTIVE PLAN
(full title of the plan)
---------------
CRAIG KLEINMAN
5650 GREENWOOD PLAZA BOULEVARD
ENGLEWOOD, COLORADO 80111
(303) 721-7341
(Name and address and telephone number,
including area code, of agent for service)
---------------
Copies of all communications, including all communications sent to the agent
for service, should be sent to:
PAUL JACOBS, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
(212) 318-3000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------- ---------------------- ------------------------ ------------------------ =======================
Proposed maximum Proposed maximum
Title of Securities to be Amount to be offering price per aggregate offering Amount of
registered registered share(1) price (2) registration fee
=============================== ====================== ======================== ======================== =======================
<S> <C> <C> <C> <C>
Common Stock $.001 par
value per share........... 400,000 shares $4.125 $1,650,000 $500.00
=============================== ====================== ======================== ======================== =======================
</TABLE>
(1) Calculated by dividing the proposed maximum aggregate offering
price by the amount to be registered.
(2) The price is estimated in accordance with Rule 457(h)(1) under the
Securities Act of 1933, as amended, solely for the purpose of
calculating the registration fee and is the product resulting from
multiplying 400,000, the number of shares registered by this
Registration Statement as to which options may be granted under the
4Front Software International, Inc. 1996 Equity Incentive Plan, by
$4.125, the average of the high and low prices of the Common Stock as
reported by the Nasdaq National Market on May 23, 1997.
===============================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by 4Front Software International,
Inc. (the "Company") are incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 1997.
(ii) The description of the Company's Common Stock
contained in its Registration Statement on Form
8-A dated September 10, 1976, as amended on Form
8A/A dated May 21, 1997.
In addition to the foregoing, all documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment
indicating that all of the securities offered hereunder have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed document that is
also incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the Common Stock offered hereby has been passed on
for the Company by Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New
York, NY 10103. Certain attorneys of such firm beneficially own an
aggregate of 11,700 shares of Common Stock at May 23, 1997.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the General Corporation Law of the State of
Delaware provides that a Delaware corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation), by reason of the fact that he is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such
II-1
<PAGE>
action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no cause to believe his conduct was unlawful.
Section 145(b) provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that such person acted in any of the capacities set forth above, against
expenses actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted under similar
standards, except that no indemnification may be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine that despite the
adjudication of liability, such person is fairly and reasonably entitled to
be indemnified for such expenses which the court shall deem proper.
Section 145 further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action,
suit or proceeding referred to in subsections (a) and (b) or in the defense
of any claim, issue or matter therein, he shall be indemnified against
expenses actually and reasonably incurred by him in connection therewith;
that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the corporation may purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him or incurred by him in any such capacity or arising out of his status as
such whether or not the corporation would have the power to indemnify him
against such liabilities under such Section 145.
The Company's Certificate of Incorporation and Bylaws provide that
the Company shall indemnify certain persons, including officers, directors,
employees and agents, to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware. The Company has also
entered into indemnification agreements with its current directors and
executive officers. Reference is made to the Certificate of Incorporation and
Bylaws filed as Exhibits hereto.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
3(a) -- Certificate of Incorporation
3(b) -- Bylaws
4(a) -- 4Front Software International, Inc. 1996 Equity Incentive Plan.
4(b) -- Form of Stock Option Agreement.
5 -- Opinion of Fulbright & Jaworski L.L.P.
II-2
<PAGE>
23(a) -- Consent of KPMG
23(b) -- Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5).
24 -- Power of Attorney (included in signature page).
Item 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective dates of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; PROVIDED, HOWEVER, that paragraphs
(1)(i) and (1)(ii) do not apply if the registration statement
is on Form S-3 or Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any iability 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.
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<PAGE>
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(h) 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 Securities
Act of 1933 and is, therefore, unenforceable. In the event
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 of the registrant in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification
by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe 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 New York, State of New York on May 23, 1997.
4FRONT SOFTWARE INTERNATIONAL, INC.
By: /s/ ANIL DOSHI
-----------------------------
Anil Doshi
Chairman of the Board and
Chief Executive Officer
By: /s/ MARK ELLIS
-----------------------------
Mark Ellis
President and Chief Operating
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Anil Doshi and Mark Ellis, his true and
lawful attorneys-in-fact, each acting alone, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments including post-effective amendments to
this registration statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact or
their substitutes, each acting alone, may lawfully do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Anil Doshi
- --------------------
Anil Doshi Chairman of the Board, Chief Executive May 23, 1997
Officer and Director
/s/ Mark Ellis
- --------------------
Mark Ellis President, Chief Operating Officer and May 23, 1997
Director
/s/ Kenneth Newell
- --------------------
Kenneth Newell Chief Executive Officer of 4Front Group May 23, 1997
and Director
<PAGE>
/s/ Stephen McDonnell
- ---------------------
Stephen McDonnell Chief Financial and May 23, 1997
Accounting Officer
/s/ Craig Kleinman
- ---------------------
Craig Kleinman Secretary and Director May 23, 1997
/s/ Arthur Keith Ross
- ---------------------
Arthur Keith Ross Director May 23, 1997
/s/ Brian V. Murray
- ---------------------
Brian V. Murray Director May 23, 1997
- ---------------------
Terence W. Burt Managing Director - Services Division May 23, 1997
and Director
- ---------------------
Joel W. Jervis Managing Director - Products Division May 23, 1997
and Director
<PAGE>
INDEX TO EXHIBITS
Exhibit
NO. DESCRIPTION
- ------- -----------
3(a) Certificate of Incorporation
3(b) Bylaws
4(a) 4Front Software International, Inc.
1996 Equity Incentive Plan
4(b) Form of Stock Option Agreement
5 Opinion of Fulbright & Jaworski L.L.P.
23(a) Consent of KPMG
23(b) Consent of Fulbright & Jaworski L.L.P. (included
in Exhibit 5).
24 Power of Attorney (see signature page).
<PAGE>
EXHIBIT 3(a)
CERTIFICATE OF INCORPORATION
OF
4FRONT SOFTWARE INTERNATIONAL, INC.
--------------------------
UNDER SECTION 102 OF THE
GENERAL CORPORATION LAW
--------------------------
The undersigned, for the purpose of forming a corporation
pursuant to the provisions of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
FIRST: The name of the Corporation is 4Front Software
International, Inc.
SECOND: The address of the registered office of the
Corporation in the State of Delaware shall be at Corporation Trust
Center, 1209 Orange Street, City of Wilmington, County of New Castle
and the name of its registered agent at such address shall be The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under
the General Corporation Law of Delaware as set forth in Title 8 of
the Delaware Code 1953, as amended (the "GCL").
FOURTH: The total number of shares of all classes of stock which
the Corporation has authority to issue is thirty five million
(35,000,000) shares, consisting of thirty million (30,000,000) shares
of Common Stock, par value $.001 per share (the "Common Stock"), and
five million (5,000,000) shares of Preferred Stock, par value $.001
per share, which shall have such designations as may be authorized by
the Board of Directors from time to time (the "Preferred Stock"). The
Board of Directors is hereby authorized, subject to the provisions
contained in this Article IV, to issue the Preferred Stock from time
to time in one or more series, which Preferred Stock shall rank
senior to the Common Stock as to dividends and distribution of assets
of the Corporation on dissolution, as hereinafter provided, and shall
have such distinctive designations as may be stated in the resolution
or resolutions providing for the issuance of shares of a particular
series of Preferred Stock. In such resolution or resolutions
providing for the issuance of shares of a particular series of
Preferred Stock, the Board of Directors is hereby expressly
authorized and empowered to fix the number of shares constituting
such series and to fix the relative rights and preferences of
<PAGE>
the shares of the series so established to the full extent allowable by
law except insofar as such rights and preferences are fixed herein.
Such authorization in the Board of Directors shall expressly include
the authority to fix and determine the relative rights and
preferences of such shares in all respects including, without
limitation, the following:
1. the rate of dividend;
2. whether shares can be redeemed or called and, if so, the
redemption or call price and terms and conditions of redemption
or call;
3. the amount payable upon shares in the event of dissolution,
voluntary and involuntary liquidation or winding up of the
affairs of the Corporation;
4. purchase, retirement or sinking fund provisions, if any, for
the call, redemption or purchase of shares;
5. the terms and conditions, if any, on which shares may be
converted into Common Stock or any other securities;
6. whether or not shares have voting rights, and the extent of such
voting rights, if any; and
7. whether shares shall be cumulative, non-cumulative, or
partially cumulative as to dividends and the date from which
any cumulative dividends are to accumulate.
FIFTH: The name and mailing address of the incorporator is
Gregg J. Berman, Esq., c/o Fulbright & Jaworski L.L.P., 666 Fifth
Avenue, New York, New York 10103-3198.
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: In furtherance and not in limitation of the powers
conferred by statute, the board of directors is expressly
authorized to make, alter or repeal the by-laws of the Corporation.
EIGHTH: Meetings of stockholders may be held within or
without the State of Delaware, as the by-laws may provide. The books
of the Corporation may be kept (subject to any provision of the GCL)
outside the State of Delaware at such place or places as may be
designated from time to time by the board of directors or in the
by-laws of the Corporation. Election of directors need not be by
written ballot unless the by-laws of the Corporation shall so
provide.
<PAGE>
NINTH: Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them
and/or between this Corporation and its stockholders or any class of
them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of this Corporation
or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the
provisions of Section 291 of the GCL or on the application of
trustees in dissolution or of any receiver or receivers appointed for
this Corporation under the provisions of Section 279 of the GCL,
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the
case may be, to be summoned in such manner as the said court directs.
If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class
of stockholders of this Corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this
Corporation as consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall, if
sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all
the stockholders or class of stockholders, of this Corporation, as
the case may be, and also on this Corporation.
TENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or thereafter prescribed by statute,
and all rights conferred on the stockholders herein are granted
subject to this reservation.
ELEVENTH: A director of this Corporation shall not be
personally liable to the Corporation or its stockholders for monetary
damages for the breach of any fiduciary duty as a director, except
(i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in
good faith or that involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the GCL, as the same
exists or hereafter may be amended, or (iv) for any transaction from
which the director derived an improper personal benefit. If the GCL
is amended after the date of incorporation of the Corporation to
authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of
the Corporation shall be eliminated or limited to the fullest extent
permitted by the GCL, as so amended.
Any repeal or modification of the foregoing paragraph by
the stockholders of the Corporation shall be prospective only, and
shall not adversely affect any limitation on the personal liability
of a director of the Corporation existing at the time of such repeal
or modification.
<PAGE>
I, THE UNDERSIGNED, being the sole incorporator as named above,
for the purpose of forming a corporation pursuant to the GCL, make this
Certificate, hereby declaring and certifying that this is my act and deed and
the facts herein stated are true, and accordingly have hereunto set my hand
this 15th day of November, 1996.
/s/ Gregg J. Berman
---------------------------------
GREGG J. BERMAN, ESQ.
C/O FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103-3198
<PAGE>
EXHIBIT 3(b)
BYLAWS
OF
4 FRONT SOFTWARE INTERNATIONAL, INC.
ARTICLE I
OFFICES
SECTION 1.01. REGISTERED OFFICE. The registered office of
the corporation in the State of Delaware shall be in the City of
Wilmington, County of New Castle, and the name of its registered agent
shall be The Corporation Trust Company.
SECTION 1.02. OTHER OFFICES. The corporation may also have offices
at such other places both within and without the State of Delaware as the
Board of Directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.01. PLACE OF MEETING. All meetings of stockholders for the
election of directors shall be held at such place, either within or without
the State of Delaware, as shall be designated from time to time by the Board
of Directors and stated in the notice of the meeting.
SECTION 2.02. ANNUAL MEETING. The annual meeting of stockholders
shall be held at such date and time as shall be designated from time to time
by the Board of Directors and stated in the notice of the meeting.
SECTION 2.03. VOTING LIST. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least 10 days before
every meeting of stockholders, a complete list of the stockholders entitled
to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name
of each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least 10 days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice, or if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be inspected
by any stockholder who is present.
<PAGE>
SECTION 2.04. SPECIAL MEETING. Special meetings of the
stockholders, for any purpose or purposes, unless otherwise prescribed
by statute or by the Certificate of Incorporation, may be called by the
Chairman of the Board or by the President of the corporation or by the
Board of Directors or by written order of a majority of the directors and
shall be called by the President or the Secretary at the request in writing
of stockholders owning a majority in amount of the entire capital stock of
the corporation issued and outstanding and entitled to vote. Such
request shall state the purposes of the proposed meeting. The Chairman of
the Board or the President of the corporation or directors so calling, or
the stockholders so requesting, any such meeting shall fix the time and any
place, either within or without the State of Delaware, as the place for
holding such meeting.
SECTION 2.05. NOTICE OF MEETING. Written notice of the annual, and
each special meeting of stockholders, stating the time, place, and purpose or
purposes thereof, shall be given to each stockholder entitled to vote
thereat, not less than 10 nor more than 60 days before the meeting.
SECTION 2.06. QUORUM. The holders of a majority of the shares of the
corporation's capital stock issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum
at any meeting of stockholders for the transaction of business, except as
otherwise provided by statute or by the Certificate of Incorporation.
Notwithstanding the other provisions of the Certificate of Incorporation or
these bylaws, the holders of a majority of the shares of the corporation's
capital stock entitled to vote thereat, present in person or represented by
proxy, whether or not a quorum is present, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. If the adjournment
is for more than 30 days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
SECTION 2.07. VOTING. When a quorum is present at any meeting of the
stockholders, the vote of the holders of a majority of the shares of the
corporation's capital stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which, by express provision of the statutes,
of the Certificate of Incorporation or of these bylaws, a different vote is
required, in which case such express provision shall govern and control the
decision of such question. Every stockholder having the right to vote shall
be entitled to vote in person, or by proxy appointed by an instrument in
writing subscribed by such stockholder, bearing a date not more than three
years prior to voting, unless such instrument provides for a longer period,
and filed with the Secretary of the corporation before, or at the time of,
the meeting. If such instrument shall designate two or more persons to act as
proxies, unless such instrument shall provide the contrary, a majority of
such persons present at any meeting at which their powers thereunder are to
be exercised shall have and may exercise all the powers of voting or giving
consents thereby conferred, or if only one be present, then such powers may
be exercised by that one; or, if an even number attend and a majority do not
agree on any particular issue, each proxy so attending shall be entitled to
exercise such powers in respect of the same portion of the shares as he is of
the proxies representing such shares.
<PAGE>
SECTION 2.08. CONSENT OF STOCKHOLDERS. Whenever the vote of
stockholders at a meeting thereof is required or permitted to be taken for or
in connection with any corporate action by any provision of the statutes, the
meeting and vote of stockholders may be dispensed with if all the
stockholders who would have been entitled to vote upon the action if such
meeting were held shall consent in writing to such corporate action being
taken; or on the written consent of the holders of shares of the
corporation's capital stock having not less than the minimum percentage of
the vote required by statute for the proposed corporate action, and provided
that prompt notice must be given to all stockholders of the taking of
corporate action without a meeting and by less than unanimous written consent.
SECTION 2.09. VOTING OF STOCK OF CERTAIN HOLDERS. Shares of the
corporation's capital stock standing in the name of another corporation,
domestic or foreign, may be voted by such officer, agent, or proxy as the
bylaws of such corporation may prescribe, or in the absence of such
provision, as the Board of Directors of such corporation may determine.
Shares standing in the name of a deceased person may be voted by the executor
or administrator of such deceased person, either in person or by proxy.
Shares standing in the name of a guardian, conservator, or trustee may be
voted by such fiduciary, either in person or by proxy, but no such fiduciary
shall be entitled to vote shares held in such fiduciary capacity without a
transfer of such shares into the name of such fiduciary. Shares standing in
the name of a receiver may be voted by such receiver. A stockholder whose
shares are pledged shall be entitled to vote such shares, unless in the
transfer by the pledgor on the books of the corporation, he has expressly
empowered the pledgee to vote thereon, in which case only the pledgee, or his
proxy, may represent the stock and vote thereon.
SECTION 2.10. TREASURY STOCK. The corporation shall not vote,
directly or indirectly, shares of its own capital stock owned by it; and such
shares shall not be counted in determining the total number of outstanding
shares of the corporation's capital stock.
SECTION 2.11. FIXING RECORD DATE. The Board of Directors may fix in
advance a date, which shall not be more than 60 days nor less than 10 days
preceding the date of any meeting of stockholders, nor more than 60 days
preceding the date for payment of any dividend or distribution, or the date
for the allotment of rights, or the date when any change, or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining a consent, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting and any
adjournment thereof, or entitled to receive payment of any such dividend or
distribution, or to receive any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital
stock, or to give such consent, and in such case such stockholders and only
such stockholders as shall be stockholders of record on the date so fixed,
shall be entitled to such notice of, and to vote at, any such meeting and any
adjournment thereof, or to receive payment of such dividend or distribution,
or to receive such allotment of rights, or to exercise such rights, or to
give such consent, as the case may be, notwithstanding any transfer of any
stock on the books of the corporation after any such record date fixed as
aforesaid.
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01. POWERS. The business and affairs of the corporation
shall be managed by its Board of Directors, which may exercise all such
powers of the corporation and do all such lawful acts and things as are not
by statute or by the Certificate of Incorporation or by these bylaws directed
or required to be exercised or done by the stockholders.
SECTION 3.02. NUMBER, ELECTION AND TERM. The number of directors that
shall constitute the whole Board of Directors shall be not less than one.
Such number of directors shall from time to time be fixed and determined by
the directors and shall be set forth in the notice of any meeting of
stockholders held for the purpose of electing directors. The directors shall
be elected at the annual meeting of stockholders, except as provided in
Section 3.03, and each director elected shall hold office until his successor
shall be elected and shall qualify. Directors need not be residents of
Delaware or stockholders of the corporation.
SECTION 3.03. VACANCIES, ADDITIONAL DIRECTORS, AND REMOVAL FROM
OFFICE. If any vacancy occurs in the Board of Directors caused by death,
resignation, retirement, disqualification, or removal from office of any
director, or otherwise, or if any new directorship is created by an increase
in the authorized number of directors, a majority of the directors then in
office, though less than a quorum, or a sole remaining director, may choose a
successor or fill the newly created directorship; and a director so chosen
shall hold office until the next election and until his successor shall be
duly elected and shall qualify, unless sooner displaced. Any director may be
removed either for or without cause at any special meeting of stockholders
duly called and held for such purpose.
SECTION 3.04. REGULAR MEETING. A regular meeting of the Board
of Directors shall be held each year, without other notice than this bylaw, at
the place of, and immediately following, the annual meeting of stockholders; and
other regular meetings of the Board of Directors shall be held each year, at
such time and place as the Board of Directors may provide, by resolution, either
within or without the State of Delaware, without other notice than such
resolution.
SECTION 3.05. SPECIAL MEETING. A special meeting of the Board of
Directors may be called by the Chairman of the Board of Directors or by the
President of the corporation and shall be called by the Secretary on the
written request of any two directors. The Chairman or President so calling,
or the directors so requesting, any such meeting shall fix the time and any
place, either within or without the State of Delaware, as the place for
holding such meeting.
SECTION 3.06. NOTICE OF SPECIAL MEETING. Written notice of special
meetings of the Board of Directors shall be given to each director at least
48 hours prior to the time of such meeting. Any director may waive notice of
any meeting. The attendance of a director at any meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting
for the purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any special meeting of the Board of
Directors need be specified in the notice or waiver of notice of such
meeting,
<PAGE>
except that notice shall be given of any proposed amendment to the
bylaws if it is to be adopted at any special meeting or with respect to any
other matter where notice is required by statute.
SECTION 3.07. QUORUM. A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors, and the act of a majority of the directors present at any
meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute, by
the Certificate of Incorporation or by these bylaws. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
SECTION 3.08. ACTION WITHOUT MEETING. Unless otherwise restricted by
the Certificate of Incorporation or these bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof as provided in Article IV of these bylaws, may be taken
without a meeting, if a written consent thereto is signed by all members of
the Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board of
Directors or such committee.
SECTION 3.09. COMPENSATION. Directors, as such, shall not be
entitled to any stated salary for their services unless voted by the
stockholders or the Board of Directors; but by resolution of the Board of
Directors, a fixed sum and expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the Board of Directors or
any meeting of a committee of directors. No provision of these bylaws shall
be construed to preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
ARTICLE IV
COMMITTEE OF DIRECTORS
SECTION 4.01. DESIGNATION, POWERS AND NAME. The Board of Directors
may, by resolution passed by a majority of the whole Board of Directors,
designate one or more committees, including, if they shall so determine, an
Executive Committee, each such committee to consist of two or more of the
directors of the corporation. The committee shall have and may exercise such
of the powers of the Board of Directors in the management of the business and
affairs of the corporation as may be provided in such resolution. The
committee may authorize the seal of the corporation to be affixed to all
papers that may require it. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of such committee. In the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place
of any such absent or disqualified member. Such committee or committees shall
have such name or names and such limitations of authority as may be
determined from time to time by resolution adopted by the Board of Directors.
<PAGE>
SECTION 4.02. MINUTES. Each committee of directors shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when required.
SECTION 4.03. COMPENSATION. Members of special or standing committees
may be allowed compensation for attending committee meetings, if the Board
of Directors shall so determine.
ARTICLE V
NOTICE
SECTION 5.01. METHODS OF GIVING NOTICE. Whenever under the
provisions of applicable statutes, the Certificate of Incorporation or these
bylaws, notice is required to be given to any director, member of any
committee, or stockholder, such notice shall be in writing and delivered
personally or mailed to such director, member, or stockholder; provided that
in the case of a director or a member of any committee such notice may be
given orally or by telephone or telegram. If mailed, notice to a director,
member of a committee, or stockholder shall be deemed to be given when
deposited in the United States mail first class in a sealed envelope, with
postage thereon prepaid, addressed, in the case of a stockholder, to the
stockholder at the stockholder's address as it appears on the records of the
corporation or, in the case of a director or a member of a committee, to such
person at his business address. If sent by telegraph, notice to a director or
member of a committee shall be deemed to be given when the telegram, so
addressed, is delivered to the telegraph company.
SECTION 5.02. WRITTEN WAIVER. Whenever any notice is required to be
given under the provisions of an applicable statute, the Certificate of
Incorporation, or these bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE VI
OFFICERS
SECTION 6.01. OFFICERS. The officers of the corporation shall be a
Chairman of the Board and a Vice Chairman of the Board (if such offices are
created by the Board), a President, one or more Vice Presidents, any one or
more of which may be designated Executive Vice President or Senior Vice
President, a Secretary and a Treasurer. The Board of Directors may appoint
such other officers and agents, including Assistant Vice Presidents,
Assistant Secretaries, and Assistant Treasurers, in each case as the Board of
Directors shall deem necessary, who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
by the Board. Any two or more offices may be held by the same person. No
officer shall execute, acknowledge, verify or countersign any instrument on
behalf of the corporation in more than one capacity, if such instrument is
required by law, by these bylaws or by any act of the corporation to be
executed, acknowledged, verified, or countersigned by two or more officers.
The Chairman and Vice Chairman of the Board shall be elected from among the
directors. With the foregoing exceptions, none of the other officers need be
a director, and none of the officers need be a stockholder of the corporation.
<PAGE>
SECTION 6.02. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the Board of Directors at its first
regular meeting held after the annual meeting of stockholders or as soon
thereafter as conveniently possible. Each officer shall hold office until his
successor shall have been chosen and shall have qualified or until his death
or the effective date of his resignation or removal, or until he shall cease
to be a director in the case of the Chairman and the Vice Chairman.
SECTION 6.03. REMOVAL AND RESIGNATION. Any officer or agent elected
or appointed by the Board of Directors may be removed without cause by the
affirmative vote of a majority of the Board of Directors whenever, in its
judgment, the best interests of the corporation shall be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed. Any officer may resign at any time by giving written
notice to the corporation. Any such resignation shall take effect at the date
of the receipt of such notice or at any later time specified therein, and
unless otherwise specified therein, the acceptance of such resignation shall
not be necessary to make it effective.
SECTION 6.04. VACANCIES. Any vacancy occurring in any office
of the corporation by death, resignation, removal, or otherwise, may be
filled by the Board of Directors for the unexpired portion of the term.
SECTION 6.05. SALARIES. The salaries of all officers and
agents of the corporation shall be fixed by the Board of Directors or
pursuant to its direction; and no officer shall be prevented from receiving
such salary by reason of his also being a director.
SECTION 6.06. CHAIRMAN OF THE BOARD. The Chairman of the Board (if
such office is created by the Board) shall preside at all meetings of the
Board of Directors or of the stockholders of the corporation. The Chairman
shall formulate and submit to the Board of Directors or the Executive
Committee matters of general policy for the corporation and shall perform
such other duties as usually appertain to the office or as may be prescribed
by the Board of Directors or the Executive Committee.
SECTION 6.07. VICE CHAIRMAN OF THE BOARD. The Vice Chairman
of the Board (if such office is created by the Board) shall, in the absence or
disability of the Chairman of the Board, perform the duties and exercise the
powers of the Chairman of the Board. The Vice Chairman shall perform such other
duties as from time to time may be prescribed by the Board of Directors or the
Executive Committee or assigned by the Chairman of the Board.
SECTION 6.08. PRESIDENT. The President shall be the chief executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control the business and affairs of
the corporation. In the absence of the Chairman of the Board or the Vice
Chairman of the Board (if such offices are created by the Board), the
President shall preside at all meetings of the Board of Directors and of the
stockholders. He may also preside at any such meeting attended by the
Chairman or Vice Chairman of the Board if he is so designated by the
Chairman, or in the Chairman's absence by the Vice Chairman. He shall have
the power to appoint and remove subordinate officers, agents and employees,
except those elected or appointed by the Board of Directors. The President
shall keep the Board of Directors and the Executive Committee fully informed
and shall consult them concerning the business of the corporation. He may
sign with the Secretary or any
<PAGE>
other officer of the corporation thereunto authorized by the Board of
Directors, certificates for shares of the corporation and any deeds, bonds,
mortgages, contracts, checks, notes, drafts, or other instruments that the
Board of Directors has authorized to be executed, except in cases where the
signing and execution thereof has been expressly delegated by these bylaws or
by the Board of Directors to some other officer or agent of the corporation,
or shall be required by law to be otherwise executed. He shall vote, or give
a proxy to any other officer of the corporation to vote, all shares of stock
of any other corporation standing in the name of the corporation and in
general he shall perform all other duties normally incident to the office of
President and such other duties as may be prescribed by the stockholders, the
Board of Directors, or the Executive Committee from time to time.
SECTION 6.09. VICE PRESIDENTS. In the absence of the President, or
in the event of his inability or refusal to act, the Executive Vice President
(or in the event there shall be no Vice President designated Executive Vice
President, any Vice President designated by the Board) shall perform the
duties and exercise the powers of the President. Any Vice President may sign,
with the Secretary or Assistant Secretary, certificates for shares of the
corporation. The Vice Presidents shall perform such other duties as from time
to time may be assigned to them by the President, the Board of Directors or
the Executive Committee.
SECTION 6.10. SECRETARY. The Secretary shall (a) keep the minutes of
the meetings of the stockholders, the Board of Directors and committees of
directors; (b) see that all notices are duly given in accordance with the
provisions of these bylaws and as required by law; (c) be custodian of the
corporate records and of the seal of the corporation, and see that the seal
of the corporation or a facsimile thereof is affixed to all certificates for
shares prior to the issue thereof and to all documents, the execution of
which on behalf of the corporation under its seal is duly authorized in
accordance with the provisions of these bylaws; (d) keep or cause to be kept
a register of the post office address of each stockholder which shall be
furnished by such stockholder; (e) sign with the President, or an Executive
Vice President or Vice President, certificates for shares of the corporation,
the issue of which shall have been authorized by resolution of the Board of
Directors; (f) have general charge of the stock transfer books of the
corporation; and (g) in general, perform all duties normally incident to the
office of Secretary and such other duties as from time to time may be
assigned to him by the President, the Board of Directors or the Executive
Committee.
SECTION 6.11. TREASURER. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his duties in such
sum and with such surety or sureties as the Board of Directors shall
determine. He shall (a) have charge and custody of and be responsible for all
funds and securities of the corporation; (b) receive and give receipts for
moneys due and payable to the corporation from any source whatsoever and
deposit all such moneys in the name of the corporation in such banks, trust
companies, or other depositories as shall be selected in accordance with the
provisions of Section 7.03 of these bylaws; (c) prepare, or cause to be
prepared, for submission at each regular meeting of the Board of Directors,
at each annual meeting of the stockholders, and at such other times as may be
required by the Board of Directors, the President or the Executive Committee,
a statement of financial condition of the corporation in such detail as may
be required; and (d) in general, perform all the duties incident to the
office of Treasurer and such other duties as from time to time may be
assigned to him by the President, the Board of Directors or the Executive
Committee.
<PAGE>
SECTION 6.12. ASSISTANT SECRETARY AND TREASURER. The Assistant
Secretaries and Assistant Treasurers shall, in general, perform such duties
as shall be assigned to them by the Secretary or the Treasurer, respectively,
or by the President, the Board of Directors, or the Executive Committee. The
Assistant Secretaries and Assistant Treasurers shall, in the absence of the
Secretary or Treasurer, respectively, perform all functions and duties which
such absent officers may delegate, but such delegation shall not relieve the
absent officer from the responsibilities and liabilities of his office. The
Assistant Secretaries may sign, with the President or a Vice President,
certificates for shares of the corporation, the issue of which shall have
been authorized by a resolution of the Board of Directors. The Assistant
Treasurers shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine.
ARTICLE VII
CONTRACTS, CHECKS AND DEPOSITS
SECTION 7.01. CONTRACTS. Subject to the provisions of Section 6.01,
the Board of Directors may authorize any officer, officers, agent, or agents,
to enter into any contract or execute and deliver any instrument in the name
of and on behalf of the corporation, and such authority may be general or
confined to specific instances.
SECTION 7.02. CHECKS. All checks, demands, drafts, or other orders
for the payment of money, notes, or other evidences of indebtedness issued in
the name of the corporation, shall be signed by such officer or officers or
such agent or agents of the corporation, and in such manner, as shall be
determined by the Board of Directors.
SECTION 7.03. DEPOSITS. All funds of the corporation not
otherwise employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies, or other depositories as the
Board of Directors may select.
ARTICLE VIII
CERTIFICATES OF STOCK
SECTION 8.01. ISSUANCE. Each stockholder of this corporation shall
be entitled to a certificate or certificates showing the number of shares of
capital stock registered in his name on the books of the corporation. The
certificates shall be in such form as may be determined by the Board of
Directors, shall be issued in numerical order and shall be entered in the
books of the corporation as they are issued. They shall exhibit the holder's
name and number of shares and shall be signed by the President or a Vice
President and by the Secretary or an Assistant Secretary. If any certificate
is countersigned (1) by a transfer agent other than the corporation or any
employee of the corporation, or (2) by a registrar other than the corporation
or any employee of the corporation, any other signature on the certificate
may be a facsimile. If the corporation shall be authorized to issue more than
one class of stock or more than one series of any class, the designations,
preferences, and relative participating, optional, or other special rights of
each class of stock or series thereof and the qualifications, limitations, or
restrictions of such preferences and rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class of stock; provided that, except as otherwise
provided by statute, in lieu of the foregoing requirements there may be set
forth on the face or back of the certificate which the corporation shall
issue to represent such class or series
<PAGE>
of stock, a statement that the corporation will furnish to each stockholder
who so requests the designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations, or restrictions of such preferences and
rights. All certificates surrendered to the corporation for transfer shall be
canceled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and canceled, except
that in the case of a lost, stolen, destroyed, or mutilated certificate a new
one may be issued therefor upon such terms and with such indemnity, if any,
to the corporation as the Board of Directors may prescribe. Certificates
shall not be issued representing fractional shares of stock.
SECTION 8.02. LOST CERTIFICATES. The Board of Directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, stolen or destroyed.
When authorizing such issue of a new certificate or certificates, the Board
of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require (1) the owner of such lost, stolen, or destroyed
certificate or certificates, or his legal representative, to advertise the
same in such manner as it shall require, (2) such owner to give the
corporation a bond in such sum as it may direct as indemnity against any
claim that may be made against the corporation with respect to the
certificate or certificates alleged to have been lost, stolen, or destroyed,
or (3) both.
SECTION 8.03. TRANSFERS. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment, or authority to
transfer, it shall be the duty of the corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate, and record the
transaction upon its books. Transfers of shares shall be made only on the
books of the corporation by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney and filed with the Secretary of the
corporation or the Transfer Agent.
SECTION 8.04. REGISTERED STOCKHOLDERS. The corporation shall be
entitled to treat the holder of record of any share or shares of the
corporation's capital stock as the holder in fact thereof and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by
the laws of the State of Delaware.
ARTICLE IX
DIVIDENDS
SECTION 9.01. DECLARATION. Dividends with respect to the shares of
the corporation's capital stock, subject to the provisions of the Certificate
of Incorporation, if any, may be declared by the Board of Directors at any
regular or special meeting, pursuant to applicable law. Dividends may be paid
in cash, in property, or in shares of capital stock, subject to the
provisions of the Certificate of Incorporation.
SECTION 9.02. RESERVE. Before payment of any dividend, there may be
set aside out of any funds of the corporation available for dividends such
sum or sums
<PAGE>
as the Board of Directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think
conducive to the interest of the corporation, and the Board of Directors may
modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. THIRD PARTY ACTIONS. The corporation shall
indemnify any director or officer of the corporation, and may indemnify any
other person, who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, or conviction, or
upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 10.02. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION.
The corporation shall indemnify any director or officer and may indemnify any
other person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses as
the Court of Chancery or such other court shall deem proper.
SECTION 10.03. MANDATORY INDEMNIFICATION. To the extent
that a director, officer, employee, or agent of the corporation has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding referred to in Sections 10.01
<PAGE>
and 10.02, or in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
SECTION 10.04. DETERMINATION OF CONDUCT. The determination that a
director, officer, employee, or agent has met the applicable standard of
conduct set forth in Sections 10.01 and 10.02 (unless indemnification is
ordered by a court) shall be made (1) by the Board of Directors by a majority
vote consisting of directors who were not parties to such action, suit, or
proceeding even if less than a quorum, or (2) if there are no such directors,
or if such directors so direct, by independent legal counsel in a written
opinion, or (3) by the stockholders.
SECTION 10.05. PAYMENT OF EXPENSES IN ADVANCE. Expenses incurred in
defending a civil or criminal action, suit, or proceeding shall be paid by
the corporation in advance of the final disposition of such action, suit, or
proceeding upon receipt of an undertaking by or on behalf of the director,
officer, employee, or agent to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as
authorized in this Article X.
SECTION 10.06. INDEMNITY NOT EXCLUSIVE. The indemnification and
advancement of expenses provided or granted hereunder shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under the Certificate of
Incorporation, any other bylaw, agreement, vote of stockholders, or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
SECTION 10.07. DEFINITIONS. For purposes of this Article X:
(a) "the corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
that, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer, employee,
or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise, shall stand in the same position under this
Article X with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued;
(b) "other enterprises" shall include employee benefit plans;
(c) "fines" shall include any excise taxes assessed on a person
with respect to any employee benefit plan;
(d) "serving at the request of the corporation" shall include
any service as a director, officer, employee, or agent of the
corporation that imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee
benefit plan, its participants or beneficiaries; and
<PAGE>
(e) a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the corporation" as
referred to in this Article X.
SECTION 10.08. CONTINUATION OF INDEMNITY. The indemnification and
advancement of expenses provided or granted hereunder shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased
to be a director, officer, employee, or agent and shall inure to the benefit
of the heirs, executors, and administrators of such a person.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. SEAL. The corporate seal, if one is authorized by the
Board of Directors, shall have inscribed thereon the name of the corporation,
and the words "Corporate Seal, Delaware." The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or otherwise reproduced.
SECTION 11.02. BOOKS. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at the offices of the corporation, or at such other place or places
as may be designated from time to time by the Board of Directors.
ARTICLE XII
AMENDMENT
These bylaws may be altered, amended, or repealed by a majority of the
number of directors then constituting the Board of Directors at any regular
meeting of the Board of Directors without prior notice, or at any special
meeting of the Board of Directors if notice of such alteration, amendment, or
repeal be contained in the notice of such special meeting.
<PAGE>
EXHIBIT 4(a)
4FRONT SOFTWARE INTERNATIONAL, INC.
1996 EQUITY INCENTIVE PLAN
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC.
1996 EQUITY INCENTIVE PLAN
1. PURPOSE
-------
The purpose of the Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company and its
Subsidiaries and Affiliates, by offering them an opportunity to participate
in the Company's future performance through awards of Options. The Plan shall
be administered as two separate plans, one for the benefit of Participants
who are not Directors of the Company, which plan shall be governed by the
provisions of this Plan excepting Section 5.2 hereof, and one for the benefit
of Participants who are Directors of the Company, which plan shall be
governed by the provisions of this Plan, excepting Section 5.1 hereof.
Capitalized terms not defined in the text are defined in Section 20.
2. SHARES SUBJECT TO THE PLAN
--------------------------
2.1. NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2 and
14, the total number of Shares reserved and available for grant and
issuance pursuant to the Plan shall be 400,000 Shares, provided, however,
that the maximum number of Shares that may be issued under the Plan to
members of the Board of Directors of the Company is 10,000 Shares. Subject to
Sections 2.2 and 14, Shares reserved for issuance pursuant to Options granted
under this Plan shall again be available for grant and issuance, in
connection with future Options under the Plan, that: (a) are subject to
issuance upon exercise of an Option, but cease to be subject to such Option
for any reason other than exercise of such Option, or (b) are subject to an
Option that otherwise terminates without such Shares being issued and for
which the participant did not receive any benefits of ownership.
2.2. ADJUSTMENT OF SHARES. In the event that the number of
outstanding shares of the Company's Common Stock is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of
the Company without consideration, then: (a) the number of Shares reserved
for issuance under the Plan, and (b) the Exercise Prices of and number of
Shares subject to outstanding Options, shall be proportionately adjusted,
subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided, however,
that fractions of a Share shall not be issued, but shall either be paid in
cash at Fair Market Value or shall be rounded up to the nearest Share, as
determined by the Committee; and provided, further, that the Exercise Price
of any Option may not be decreased to below the par value of the Shares.
3. ELIGIBILITY
------------
3.1. ELIGIBILITY OF EMPLOYEES, CONSULTANTS AND INDEPENDENT
CONTRACTORS. ISOs (as defined in Section 5 below) may be granted only to
employees (including officers and directors who are also employees) of the
Company or of a Subsidiary of the Company. NQSOs may be granted to employees,
officers,
<PAGE>>
consultants, independent contractors and advisers of the Company or any
Subsidiary or Affiliate of the Company; provided, however, that such
consultants, contractors and advisers render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted both ISOs and NQSOs under the Plan.
3.2. ELIGIBILITY OF DIRECTORS. No Directors of the Company
shall be eligible to be granted Options under his Plan, other than Brian
Murray, who shall receive NQSOs for 10,000 Shares pursuant to Section 5.2
hereof.
4. ADMINISTRATION
--------------
4.1. COMMITTEE AUTHORITY. The Plan shall be administered by
the Committee or the Board acting as the Committee. Subject to the
purposes, terms and conditions of the Plan, and to the direction of the
Board, the Committee shall have full power to implement and carry out the
Plan, provided, however, that all grants of Options to Directors shall be
effected strictly in accordance with the terms of Section 5.2 hereof. Except
as otherwise provided pursuant to Sections 3.2 or 5 hereof, the Committee
shall have the authority to:
(a) construe and interpret the Plan, any Option Agreement
and any other agreement or document executed pursuant to the Plan;
(b) prescribe, amend and rescind rules and regulations
relating to the Plan:
(c) select persons to receive Options;
(d) determine the form and terms of Options;
(e) determine the number of Shares or other
consideration subject to Options;
(f) determine whether Options will be granted singly, in
combination or in tandem with, in replacement of, or as
alternatives to, other Options under the Plan or any other incentive
or compensation plan of the Company or any Subsidiary or Affiliate
of the Company;
(g) grant waivers of Plan or Option conditions;
(h) determine the vesting, exercisability and payment of
Options and to accelerate the vesting and/or exercisability of
Options, as provided herein;
(i) correct, any defect, supply any omission, or reconcile
any inconsistency in the Plan, any Option or any Option Agreement;
(j) determine whether an Option has been earned; and
<PAGE>
(k) make all other determinations necessary or
advisable for the administration of the Plan.
4.2 COMMITTEE DISCRETION. Any determination permitted to be
made by the Committee under the Plan with respect to any Option shall be
made in its sole discretion at the time of grant of the Option or, unless in
contravention of any express term of the Plan or Option, at any later time,
and such determination shall be final and binding on the Company and all
persons having an interest in any Option under the Plan.
4.3 EXCHANGE ACT REQUIREMENTS. If two or more members of
the Board are Outside Directors and Disinterested Persons, the
Committee shall be comprised of at least two members of the Board, all of
whom are Outside Directors and Disinterested Persons. It is the intent of the
Company that the Plan and Options hereunder satisfy and be interpreted in a
manner, that, in the case of Participants who are or may be Insiders,
satisfies the applicable requirements of Rule 16b-3 (or its successor) of the
Exchange Act. If any provision of the Plan or of any Option would otherwise
conflict with the intent expressed in this Section 4.3, that provision, to
the extent possible, shall be interpreted and deemed amended so as to avoid
such conflict.
5. GRANT AND EXERCISE OF OPTIONS
-----------------------------
5.1. GRANT OF OPTIONS TO PERSONS OTHER THAN DIRECTORS. Except
as otherwise limited herein, the Committee may grant Options to eligible
persons who are not Directors of the Company pursuant to this Section 5.1 and
shall determine whether such Options shall be Incentive Stock Options within
the meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the
number of Shares subject to the Option, the Exercise Price of the Option, the
period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:
5.1.1. FORM OF OPTION GRANT. Each Option granted shall
be evidenced by an Option Agreement, which shall expressly identify the
Option as an ISO or NQSO ("Stock Option Agreement"), and be in such form and
contain such provisions (which need not be the same for each Participant
receiving an Option) as the Committee shall from time to time approve, and
which shall comply with and be subject to the terms and conditions of the
Plan. The Committee may in its discretion include in any NQSO granted under
the Plan a condition that the Participant shall agree to remain in the employ
of, and to render services to, the Company or any of its Subsidiaries for a
period of time (specified in the agreement) following the date the NQSO is
granted.
5.1.2. DATE OF GRANT. The date of grant of an Option
shall be the date on which the Committee makes the determination to grant
such Option. The Stock Option Agreement and a copy of the Plan will be
delivered to the Participant within a reasonable time after the granting of
such Option.
5.1.3. EXERCISE PERIOD. Options shall be exercisable
within the times or upon the events determined by the Committee as set forth
in the Stock Option Agreement; provided, however:
<PAGE>
(a) no Option shall be exercisable after the expiration of ten
(10) years from the date the Option is granted;
(b) subject to Sections 4.1(h) and 5.3, no Option shall be
exercisable less than six (6) months after the date of grant or prior to
stockholder approval of the Plan:
(c) Each Option granted under the Plan shall be exercisable
only with respect to one-third of the total number of Shares subject to
such Option upon the expiration of six (6) months after the date of grant,
with the balance being exercisable, one-half upon the expiration of
eighteen (18) months from the date of such grant, and one-half upon the
expiration of thirty (30) months from the date of such grant; and
(d) no ISO granted to a person who directly or by attribution
owns more than Ten Percent (10%) of the total combined voting power of all
classes of stock of the Company or any Subsidiary of the Company ("Ten
Percent Stockholder") shall be exercisable after the expiration of five (5)
years from the date the Option is granted.
5.1.4. EXERCISE PRICE. The Exercise Price shall be
determined by the Committee when an Option is granted and may be not less
than 85% of the Fair Market Value of the Shares on the date of grant;
provided, however, that:
(i) the Exercise Price of an ISO shall be not less than
100% of the Fair Market Value of the Shares on the date of
grant, and
(ii) the Exercise Price of any ISO granted to a Ten
Percent Stockholder shall not be less than 110% of the Fair
Market Value of the Shares on the date of grant.
Payment for the Shares purchased may be made in accordance with Section 6 of the
Plan.
5.1.5. METHOD OF EXERCISE. Options may be exercised
only by delivery to the Company of a written stock option exercise agreement
(the "Exercise Agreement") in a form approved by the Committee (which need
not be the same for each Participant receiving an Option pursuant to the
Plan), stating the number of Shares being purchased, the restrictions imposed
on the Shares, if any, and such representations and agreements regarding
Participant's investment intent, access to information and other matters, if
any, as may be required or desirable by the Company to comply with applicable
securities laws, together with payment in full of the Exercise Price for the
number of Shares being purchased.
5.1.6. TERMINATION. Notwithstanding the exercise
periods set forth in the Stock Option Agreement, exercise of an Option
shall always be subject to the following:
<PAGE>
(a) If the Participant is Terminated for any reason
except death or Disability, then the Participant may exercise
such Participant's Options, only to the extent that such Options
would have been exercisable upon the Termination Date, no later
than thirty (30) days after the Termination Date, but in any
event, no later than the expiration date of the Options.
(b) If the Participant is terminated because of death
or Disability, then the Participant's Options which are ISO's may
be exercised, only to the extent that such Options would have been
exercisable by Participant on the Termination Date, and must be
exercised by Participant (or Participant's legal representative
or authorized assignee) no later than one hundred eighty (180)
days after the Termination Date, but in any event no later than
the expiration date of the Options.
5.1.7. LIMITATIONS ON EXERCISE. The Committee may
specify a reasonable minimum of Shares that may be purchased on any
exercise of an Option, provided that such minimum number will not prevent
Participant from exercising the Option for the full number of Shares for
which it is then exercisable.
5.1.8. LIMITATIONS ON ISOS. The aggregate Fair Market
Value (determined as of the date of grant) of Shares with respect to which
ISOs are exercisable for the first time by a Participant during any calendar
year (under the Plan or under any other incentive stock option plan of the
Company or any Affiliate or Subsidiary of the Company) shall not exceed
$100,000. If the Fair Market Value of Shares on the date of grant with
respect to which ISOs are exercisable for the first time by a Participant
during any calendar year exceeds $100,000, the Options for the first $100,000
worth of Shares to become exercisable in such calendar year shall be ISOs and
the Options for the amount in excess of $100,000 that become exercisable in
that calendar year shall be NQSOs. In the event that the Code or the
regulations promulgated thereunder are amended after the Effective Date of
the Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be automatically
incorporated herein and shall apply to any Options granted after the
effective date of such amendment.
5.1.9. MODIFICATION, EXTENSION OR RENEWAL. The
Committee may modify, extend or renew outstanding Options and authorize the
grant of new Options in substitution therefor, provided that any such action
may not, without the written consent of a Participant, impair any of such
Participant's rights under any Option previously granted. Any outstanding ISO
that is modified, extended, renewed or otherwise altered shall be treated in
accordance with Section 424(h) of the Code. The Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected, by a written notice to them; provided, however, that the Exercise
Price may not be reduced below the minimum Exercise Price that would be
permitted under Section 5.1.4 or 5.2.3 of the Plan for Options granted on the
date the action is taken to reduce the Exercise Price; provided, further,
that the Exercise Price shall not be reduced below the par value of the
Shares.
5.1.10. NO DISQUALIFICATION. Notwithstanding any
other provision in the Plan, no term of the Plan relating to ISOs shall be
interpreted,
<PAGE>
amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify the Plan under
Section 422 of the Code or, without the consent of the Participant affected,
to disqualify any ISO under Section 422 of the Code.
5.2 GRANT OF OPTIONS TO DIRECTORS
-----------------------------
Notwithstanding the provisions of Section 5.1, the
Computer shall not have discretion to grant Options, either as ISOs or
NQSOs, to Directors of the Company, but instead, all such Options shall be
granted pursuant to this Section 5.2.
5.2.1. FORM OF OPTION GRANT. Section 5.1.1 shall
apply to grants of Options to Directors.
5.2.2. FORMULA FOR GRANT OF OPTIONS TO DIRECTORS.
Options shall be granted to Directors on the following basis:
(a) Only Brian Murray shall be granted NQSOs for 10,000
shares upon approval of the Plan by the Board of Directors.
5.2.3. EXERCISE PERIOD. Options granted under this
Section 5.2 shall be exercisable within the times and upon the
events determined by the committee as set forth in the Stock
Option Agreement, provided, however:
(a) no Option shall be exercisable after the
expiration of ten (10) years from the date the Option is
granted;
(b) subject to Sections 4.1(h) and 5.3, no Option
shall be exercisable less than six (6) months after the date of
grant or prior to Stockholder approval of the Plan;
(c) each Option granted to Directors under the
Plan shall be exercisable only with respect to one-third of
the total number of Shares subject to such Option upon the
expiration of six (6) months after the date of grant, with the
balance being exercisable, one-half upon the expiration of
eighteen (18) months from the date of such grant, and one-half
upon the expiration of thirty (30) months from the date of such
grant; and
(d) no ISO granted to a person who directly or by
attribution owns more than Ten Percent (10%) of the total
combined voting power of all classes of stock of the Company
or any subsidiary of the Company ("Ten Percent Stockholder")
shall be exercisable after the expiration of five (5) years from
the date the Option is granted.
5.2.4. EXERCISE PRICE. The Exercise Price for Director
Options shall be as follows:
(a) the Exercise Price of an ISO shall be 100% of the
Fair Market Value of the Shares on the date of grant, provided,
<PAGE>
however, that the Exercise Price of any ISO granted to a Ten
Percent Stockholder shall be 110% of the Fair Market Value of
the Shares on the date of grant;
(b) the Exercise Price of a NQSO shall be 100% of the
Fair Market Value of the Shares on the date of grant; and
(c) payment for the Shares purchased may be made in
accordance with Section 6 of the Plan.
5.2.5. METHOD OF EXERCISE. Options may be exercised
only by delivery to the Company of a written stock option exercise agreement
as provided under Section 5.1.5.
5.2.6. TERMINATION. Section 5.1.6 hereof shall
apply to grants of Options to Directors.
5.2.7. LIMITATIONS ON ISOS. Section 5.1.8 hereof
shall apply to Options granted to Directors.
5.2.8. NO DISQUALIFICATION. Section 5.1.10 shall
apply to all ISOs granted to Directors hereunder.
5.3. ACCELERATED VESTING
-------------------
5.3.1. Notwithstanding Sections 5.1.3(b) and
5.2.2(b), the Committee shall have the authority to accelerate the
exercisability of Options granted pursuant to the terms of this Plan,
provided however, that the acceleration of exercisability shall be
conditioned upon inclusion in the Option agreements with Participants of such
provisions and restrictions as are necessary to permit stock issued upon
exercise of such Options to continue to qualify for the exception from
Section 16(b) of the Securities Act as is provided under Rule 16(b)(3)(a),
(b) and (c).
5.3.2. Notwithstanding anything herein to the
contrary, if a Change in Control of the Company occurs or if the Committee
determines in its sole discretion that an Acceleration Event has occurred,
then all Options shall become fully exercisable as of the date such Change in
Control occurred or the Committee determines that an Acceleration Event has
occurred, provided however, that the acceleration of exercisability shall be
subject to the imposition of such restrictions on transferability of shares
of Common Stock subject to such Options, as are necessary to permit stock
issued upon exercise of such Options to continue to qualify for the exception
from Section 16(b) of the Securities Act as is provided under Rule
16(b)(3)(a), (b) and (c).
6. PAYMENT FOR SHARE PURCHASES
---------------------------
6.1. PAYMENT. Payment for Shares purchased pursuant
to the Plan may be made in cash (by check) or, where expressly approved by
the Committee and permitted by law by:
(a) by cancellation of indebtedness of
the Company to the Participant;
<PAGE>
(b) by surrender of shares of the
Company's Common Stock that either: (1) have
been owned by Participant for more than
six (6) months and have been paid for within the
meaning of Rule 144 of the Securities Act; or
were obtained by Participant in the public
market; and, (2) are clear of all liens, claims,
encumbrances or security interests;
(c) by waiver of compensation due or
accrued to Participant for services rendered:
(d) provided that a public market for
the Company's stock exists and subject to the
ability of the Participant to sell Shares in
compliance with applicable securities laws;
(i) through a "same day sale" commitment
from the Participant and a broker-dealer
that is a member of the National
Association of Securities Dealers (an
"NASD Dealer") whereby the Participant
irrevocably elects to exercise the
Option and to sell a portion of the
Shares so purchased in order to pay the
Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise
Price directly to the Company; or
(ii) through a "margin" commitment from
the Participant and an NASD Dealer
whereby Participant irrevocably elects
to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer
in a margin account as security for a
loan from the NASD Dealer in the amount
of the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon
receipt of such Shares to forward the
Exercise Price directly to the Company;
or
(e) by any combination of the foregoing.
Notwithstanding the foregoing, the Exercise
Price of an Option held by a director who is not an employee shall be
paid either (i) in cash; or (ii) pursuant to subsection (a) of this Section
6.1, or (iii) by any combination of the foregoing (i) and (ii).
7. WITHHOLDING TAXES
-----------------
(a) WITHHOLDING GENERALLY. Whenever
Shares are to be issued in satisfaction of
Options granted under the Plan, the Company may
require the Participant to remit to the Company an
amount sufficient to satisfy federal, state and
local withholding tax requirements prior to the
delivery of any certificate or certificates for
such Shares.
8. PRIVILEGES OF STOCK OWNERSHIP
-----------------------------
<PAGE>
(a) VOTING AND DIVIDENDS. No
Participant shall have any of the rights of
a stockholder with respect to any Shares until the
Shares are issued to the Participant. After Shares
are issued to the Participant, the Participant
shall be a stockholder and have all the rights of a
stockholder with respect to such Shares, including
the right to vote and receive all dividends or
other distributions made or paid with respect to
such Shares.
(b) FINANCIAL STATEMENTS. The
Company shall provide financial statements to
each Participant annually during the period such
Participant has Options outstanding, provided,
however, that the Company shall not be required to
provide such financial statements to Participants
whose services in connection with the Company
assure them access to equivalent information.
9. TRANSFERABILITY
---------------
Options granted under the Plan, and any interest therein,
shall not be transferable or assignable by Participant, and may not be made
subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution or as consistent with the specific
Plan and Option Agreement provisions relating thereto. During the lifetime of
the Participant, an Option shall be exercisable only by the Participant, and
any elections with respect to an Option, may be made only by the Participant.
10. CERTIFICATES
------------
All certificates for Shares or other securities
delivered under the Plan shall be subject to such stock transfer orders,
legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of
the SEC or any stock exchange or automated quotation system upon which the
Shares may be listed.
11. EXCHANGE AND BUYOUT OF OPTIONS
------------------------------
The Committee may, at any time or from time to time,
authorize the Company, with the consent of the respective Participants, to
issue new Options in exchange for the surrender and cancellation of any or
all outstanding Options (other than Options granted to Directors pursuant to
Section 5.2). The Committee may at any time buy from a Participant an Option
previously granted with payment in cash, Shares or other consideration, based
on such terms and conditions as the Committee and the Participant shall agree.
12. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE
----------------------------------------------
An Option shall not be effective unless such Option is in
compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock
exchange or automated quotation system upon which the Shares may then be
listed, as they are in effect on the date of grant of the Option and also on
the date of exercise or other issuance. Notwithstanding any other provision
in the Plan, the Company shall have no
<PAGE>
obligation to issue or deliver certificates for Shares under the Plan prior
to: (a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable, and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company shall be under no obligation to register
the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company shall have no
liability for any inability or failure to do so.
13. NO OBLIGATION TO EMPLOY
-----------------------
Nothing in the Plan or any Option granted under the Plan
shall confer to be deemed to confer on any Participant any right to continue
in the employ of, or to continue any other relationship with, the Company, or
any Subsidiary or Affiliate of the Company or limit in any way the right of
the Company or any Subsidiary or Affiliate of the Company to terminate
Participant's employment or other relationship at any time, with or without
cause.
14. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
------------------------------------------
The existence of outstanding Options shall not affect in
any way the right of power of the Company or its stockholders to make or
authorize all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any other
corporate act or proceeding, whether of a similar character or otherwise.
If the Company shall effect a subdivision or
consolidation of shares or other capital readjustment,the payment of a
stock dividend, or other increase or reduction of the number of shares of its
Common Stock outstanding, without receiving compensation therefor in money,
services or property, then (i) the number, class, and per share price of
Shares subject to outstanding Options hereunder shall be appropriately
adjusted in such a manner as to entitle a Participant to receive upon
exercise thereof (and, if relevant, for the same aggregate cash
consideration), the same total number and class of shares as such Participant
would have received had such Participant exercised such Option in full
immediately prior to such event; and (ii) the number and class of shares with
respect to which Options may be granted under the Plan shall be adjusted by
substituting for the total number of shares of Common Stock then reserved
that number and class of shares of stock that would have been received by the
owner of an equal number of outstanding shares of Common Stock as the result
of the event requiring the adjustment.
After a merger of one or more corporations into the
Company, or after a consolidation of the Company and one or more
corporations in which the Company shall be the surviving corporation, each
holder of an outstanding Option shall, at no additional cost, be entitled to
receive upon exercise of such Option (subject to any required action by
stockholders of the Company) in, lieu of the number of Shares as to which
such Option shall then be so exercisable, the number and class of shares of
stock or other securities to which such holder would have been entitled
pursuant to the terms of the agreement of merger or consolidation if,
immediately
<PAGE>
prior to such merger or consolidation, such holder had been the
holder of record of a number of shares of Common Stock equal to the number of
shares as to which such Option shall be so exercised.
If the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the surviving
corporation, or if the Company is liquidated, or sells or otherwise disposes
of substantially all its assets to another corporation while unexercised
Options remain outstanding under the Plan, (i) subject to the provisions of
clause (ii) below, after the effective date of such merger, consolidation or
sale, as the case may be, each holder of an outstanding Option shall be
entitled to receive upon exercise of such Option in lieu of shares of Common
Stock, shares of such stock or other securities, cash or property as the
holders of shares of Common Stock received pursuant to the terms of the
merger, consolidation or sale; or (ii) all outstanding Options may be
canceled by the Board as of the effective date of any such merger,
consolidation, liquidation or sale provided that: (x) notice of such
cancellation shall be given to each holder of an Option, and (y) each holder
of an Option shall have the right to exercise such Option to the extent that
the same is then exercisable or, if the Board shall have accelerated the time
for exercise of all unexercised and unexpired Options, in full during the
30-day period preceding the effective date of such merger, consolidation,
liquidation or sale.
Except as expressly provided above, the issue by the
Company of shares of stock of any class, securities convertible into
shares of stock of any class, for cash, property or services, either upon
direct sale or upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of price of Shares
then subject to outstanding Options.
15. ADOPTION AND STOCKHOLDER APPROVAL
---------------------------------
The Plan shall become effective on the date that it is
adopted by the Board (the "Effective Date"). The Company shall submit the
Plan for approval by the stockholders of the Company at the next annual
meeting of stockholders of the Company to obtain the advantages under NASD,
IRS, Securities and Exchange Commission and other regulations that approval
of stockholders may bestow, provided however, that Options granted under the
Plan shall be conditioned upon stockholder approval of the Plan within one
year of adoption by the Board.
16. TERM OF PLAN
-------------
The Plan will terminate ten (10) years from the
Effective Date.
17. AMENDMENT OR TERMINATION OF PLAN
--------------------------------
The Board may at any time terminate or amend the Plan in
any respect, including without limitation amendment of any form of Option
Agreement or instrument to be executed pursuant to the Plan; provided,
however, that:
(i) the Board shall not, without the
approval of the stockholders of the Company,
amend the Plan in any manner that requires such
stockholder approval pursuant to the Code or the
<PAGE>
regulations promulgated thereunder as such
provisions apply to ISO plans or pursuant to
the Exchange Act or Rule 16b-3 (or its successor),
as amended, thereunder; and
(ii) the terms and conditions of any
awards of Options to Directors and the category of
persons eligible to be awarded such shares under
the Plan shall not be amended more than once every
six months, other than to comply with changes in
the Code or ERISA, or the rules and regulations
thereunder.
18. NONEXCLUSIVITY OF THE PLAN
--------------------------
Neither the adoption of the Plan by the Board,
the submission of the Plan to the stockholders of the Company for approval,
nor any provision of the Plan shall be construed as creating any limitations
on the power of the Board to adopt such additional compensation arrangements
as it may deem desirable, including, without limitation, the granting of
stock options and bonuses otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in
specific cases.
19. GOVERNING LAW
-------------
The Plan and all agreements, documents and instruments
entered into pursuant to the Plan shall be governed by and construed in
accordance with the internal laws of the State of Colorado, excluding that
body of law pertaining to conflict of laws.
20. DEFINITIONS
-----------
As used in the Plan, the following terms shall have
the following meanings:
"ACCELERATION EVENT" means but is not limited to, any Change
of Control of the Company or other event determined in the discretion of the
Committee.
"AFFILIATE" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is under common
control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct
or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting
securities, by contract or otherwise.
"BOARD" means the Board of Directors of the Company.
"CHANGE IN CONTROL" means the occurrence of any of the following
events:
(A) when the Company acquires actual knowledge that any
person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange
Act) directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then-outstanding
securities:
<PAGE>
(B) upon the first purchase of Common Stock pursuant to a
tender or exchange offer (other than a tender or exchange offer made by the
Company);
(C) upon the approval by the Company's shareholders of: (i) a
merger or consolidation of the Company with or into another corporation,
which does not result in any capital reorganization or reclassification or
other change in the Company's then-outstanding shares of Common Stock), (ii)
a sale or disposition of all or substantially all of the Company's assets, or
(iii) a plan of liquidation or dissolution of the Company;
(D) if during any period of two consecutive years, the
individuals who at the beginning of such period constitute the Board of
Directors of the Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by the
Company's shareholders, of each new director is approved by a vote of at
least two-thirds of the directors then still in office who were directors at
the beginning of the period; or
(E) if the Board of Directors or any designated committee
determines, in its sole discretion, that any person (such as that term is
used in Sections 13(d) and 14(d) of the Exchange Act) directly or indirectly
exercises a controlling influence over the management or policies of the
Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the committee appointed by the Board to
administer the Plan, or if no committee is appointed, the Board.
"COMPANY" means 4Front Software International, Inc., a
corporation organized under the laws of the State of Colorado, or any
successor corporation.
"DISABILITY" means a disability, whether temporary or
permanent, partial or total, within the meaning of Section 22(e)(3) of the
Code, as determined by the Committee.
"DISINTERESTED PERSON" means a Director who has not, during
the period that person is a member of the Committee and for one year prior to
service as a member of the Committee, been granted Options pursuant to the
Plan or any other plan of the Company, any Subsidiary or Affiliate of the
company, except in accordance with the requirements set forth in rule
16b-3(c)(2)(i) (and any successor regulation thereto) as promulgated by the
SEC under Section 16(b) of the Exchange Act, as such rule is amended from
time to time and as interpreted by the SEC.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXERCISE PRICE" means the price at which a holder of an
Option may purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of
a share of the Company's Common Stock determined as follows:
<PAGE>
(a) if such Common Stock is then quoted on the Nasdaq
National Market System, its last reported sale
price on the Nasdaq National Market or, if no such
reported sale takes place on such date, the average
of the closing bid and asked prices;
(b) if such Common Stock is publicly traded and is
then listed on a national securities exchange, the
last reported sale price or, if no such reported
sale takes place on such date, the average of the
closing bid and asked prices on the principal
national securities exchange on which the Common
Stock is listed or admitted to trading;
(c) if such Common Stock is publicly traded but is
not quoted on the Nasdaq National Market nor listed
or admitted to trading on a national securities
exchange, the average of the closing bid and asked
prices on such date, as reported by the Wall Street
Journal, for the over-the-counter market; or
(d) if none of the foregoing is applicable, by the
Board of Directors of the Company in good faith.
"INSIDER" means an officer or director of the
Company or other person whose transactions in the Company's Common Stock
are subject to Section 16 of the Exchange Act.
"OPTION" means an option to purchase Shares of Common
Stock of the Company pursuant to Section 5.
"OPTION AGREEMENT" means, with respect to each
Option, the signed written agreement between the Company and the
Participant setting forth the terms and conditions of the Option.
"OUTSIDE DIRECTOR" means any outside director as
defined in Section 162(m) of the Code and the regulations issued
thereunder.
"PARTICIPANT" means a person who receives an Option
under the Plan.
"PLAN" means this 4Front Software International,
Inc., 1996 Equity Incentive Plan, as amended from time to time.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SHARES" means shares of the Company's Common
Stock, without par value, reserved for issuance under the Plan, as adjusted
pursuant to Sections 2 and 14, and any security issued in respect thereto or
in replacement therefor.
"SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company
if, at the time of granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
<PAGE>
"TERMINATION" or "TERMINATED" means, for purposes of
the Plan with respect to a Participant, that the Participant has ceased to
provide services as an employee, director, consultant, independent contractor
or adviser, to the Company or a Subsidiary or Affiliate of the Company,
except in the case of sick leave, military leave, or any other leave of
absence approved by the Committee, provided, that such leave is for a period
of not more than ninety (90) days, or reinstatement upon the expiration of
such leave is guaranteed by contract or statute. The Committee shall have
sole discretion to determine whether a Participant has ceased to provide
services and the effective date on which the Participant ceased to provide
services (the "Termination Date").
<PAGE>
EXHIBIT 4(b)
4FRONT SOFTWARE INTERNATIONAL, INC.
STOCK OPTION AGREEMENT
-----------------------------------
AGREEMENT made as of the ___ day of ______________
199__, by and between 4Front Software International, Inc., a Delaware
corporation (the "Company"), and ___________________ (the "Optionee").
W I T N E S S E T H
WHEREAS, pursuant to the 4Front Software International, Inc.
1996 Equity Incentive Plan (the "Plan"), the Company desires to grant to the
Optionee and the Optionee desires to accept an option to purchase shares of
common stock, no par value, of the Company (the "Common Stock") upon the
terms and conditions set forth in this agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1 GRANT. The Company hereby grants to the Optionee an option
to purchase _____ shares of Common Stock at a purchase price per share
equal to $5.75, which price was in excess of the fair market value of the
Common Stock on the date hereof. "Fair Market Value" shall have such meaning
as set forth in Section 20 of the Plan. This option is intended to be treated
as an option which does not qualify as an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. RESTRICTIONS ON EXERCISABILITY. Except as specifically
provided otherwise herein, the option will become exercisable in accordance
with the following schedule based upon the period of the Optionee's
continuous service as an employee of the Company following the date hereof:
Period Incremental Cumulative
of Percentage of Percentage of
Continuous Option Option
SERVICE EXERCISABLE EXERCISABLE
------------------ -------------- ------------
Less than 6 months 0% 0%
6 months 33% 33%
18 months 33% 66%
30 or more months 34% 100%
No shares of Common Stock may be purchased hereunder unless the Optionee shall
have remained an employee of the Company for at least six months from the date
hereof. Unless sooner terminated, the option will expire if and to the extent it
is not exercised within ten years from the date hereof.
3. EXERCISE. The option may be exercised in whole or in part in
accordance with the above schedule by delivering to the Secretary of the
Company (a) a written notice specifying the number of shares to be purchased,
and (b) payment in full of the exercise price, together with the amount, if
any, deemed necessary by the Company to enable it to satisfy any income tax
withholding obligations with respect to the exercise (unless other
arrangements acceptable to the Company are made for the satisfaction of such
withholding obligations). The exercise price shall be payable
<PAGE>
in cash or by bank or certified check. The Company may (in its sole and absolute
discretion) permit all or part of the exercise price to be paid with
previously-owned shares of Common Stock, or in installments (together with
interest) evidenced by the Optionee's secured promissory note.
4. RIGHTS AS STOCKHOLDER. No shares of Common Stock shall be sold
or delivered hereunder until full payment for such shares has been made
(or, to the extent payable in installments, provided for). The Optionee shall
have no rights as a stockholder with respect to any shares covered by the
option until a stock certificate for such shares is issued to the Optionee.
Except as otherwise provided herein, no adjustment shall be made for
dividends or distributions of other rights for which the record date is prior
to the date such stock certificate is issued.
5. NONTRANSFERABILITY. The option is not assignable or
transferable except upon the Optionee's death to a beneficiary designated by
the Optionee or, if no designated beneficiary shall survive the Optionee,
pursuant to the Optionee's will and/or the laws of descent and distribution.
During an Optionee's lifetime, the option may be exercised only by the
Optionee or the Optionee's guardian or legal representative.
6. TERMINATION OF SERVICE OR DEATH. (a) If the Optionee is
terminated for any reason except death or disability, then the Optionee may
exercise such Optionee's options, only to the extent that such options would
have been exercisable upon the termination date of Optionee's employment, no
later than thirty (30) days after such termination date, but in any event, no
later than the expiration date of the options.
(b) If the Optionee is terminated because of death or
disability, then the Optionee's options may be exercised, only to the
extent that such options would have been exercisable by Optionee on the
termination date of Optionee's employment, and must be exercised by Optionee
(or Optionee's legal representative or authorized assignee) no later than one
hundred eighty (180) days after such termination date, but in any event no
later than the expiration date of the options.
7. SECURITIES LAWS COMPLIANCE REQUIRED. Notwithstanding
anything herein to the contrary, if the shares of Common Stock issuable
upon exercise of options granted under the Plan have not been registered
under the Securities Act of 1933, as amended, the Board of Directors may
condition the exercisability of the option upon compliance with applicable
federal and state securities laws.
<PAGE>
8. CHANGE IN CONTROL; CAPITAL CHANGES. The
existence of outstanding options shall not affect in any way the right or
power of the Company or its stockholders to make or authorize all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any other
corporate act or proceeding, whether of a similar character or otherwise.
If the Company shall effect a subdivision or consolidation of
shares or other capital readjustment, the payment of a stock dividend, or
other increase or reduction of the number of shares of its Common Stock
outstanding, without receiving compensation therefor in money, services or
property, then (i) the number, class, and per share price of shares subject
to outstanding options hereunder shall be appropriately adjusted in such a
manner as to entitle an Optionee to receive upon exercise thereof (and, if
relevant, for the same aggregate cash consideration), the same total number
and class of shares as such Optionee would have received had such Optionee
exercised such option in full immediately prior to such event; and (ii) the
number and class of shares with respect to which options may be granted under
the Plan shall be adjusted by substituting for the total number of shares of
Common Stock then reserved that number and class of shares of stock that
would have been received by the owner of an equal number of outstanding
shares of Common Stock as the result of the event requiring the adjustment.
After a merger of one or more corporations into the Company, or
after a consolidation of the Company and one more corporations in which the
Company shall be the surviving corporation, each holder of an outstanding
option shall, at no additional cost, be entitled to receive upon exercise of
such option (subject to any required action by stockholders of the Company)
in lieu of the number of shares as to which such option shall then be so
exercisable, the number and class of shares of stock or other securities to
which such holder would have been entitled pursuant to the terms of the
agreement of merger or consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of a number of
shares of Common Stock equal to the number of shares as to which such option
shall be so exercised.
If the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the surviving
corporation, or if the Company is liquidated, or sells or otherwise disposes
of substantially all its assets to another corporation while unexercised
options remain outstanding under the Plan, (i) subject to the provisions of
clause (ii) below, after the effective date of such merger, consolidation or
sale, as the case may be, each holder of an outstanding option shall be
entitled to receive upon exercise of such option in lieu of shares of Common
Stock, shares of such stock or other securities, cash or property as the
holders of shares of Common Stock received pursuant to the terms of the
merger, consolidation or sale; or (ii) all outstanding options may be
canceled by the Board as of the effective date of any such merger,
consolidation, liquidation or sale provided that: (x) notice of such
cancellation shall be given to each holder of an option, and (y) each holder
of an option shall have the right to exercise such option to the extent that
the same is then exercisable or, if the Board shall have accelerated the time
for exercise of all unexercised and unexpired options, in full during the
30-day period preceding the effective date of such merger, consolidation,
liquidation or sale.
<PAGE>
Except as expressly provided above, the issue by the Company of
shares of stock of any class, securities convertible into shares of stock
of any class, for cash, property or services, either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon conversion
of shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares then subject to
outstanding options.
9. NO RIGHTS TO CONTINUE SERVICE. Nothing in this agreement
shall give the Optionee any right to continue in the service of the
Company, or interfere in any way with the right of the Company to terminate
the service of the Optionee.
10. PROVISIONS OF PLAN. The provisions of the Plan shall
govern if and to the extent that there are inconsistencies between those
provisions and the provisions hereof. The Optionee acknowledges receipt of a
copy of the Plan prior to the execution of this agreement.
11. ADMINISTRATION. The Board of Directors of the Company will
have full power and authority to interpret and apply the provisions of this
agreement and act on behalf of the Company in connection with this agreement,
and the decision of the Board of Directors of the Company as to any matter
arising under this agreement shall be binding and conclusive as to all
persons.
12. MISCELLANEOUS.
(a) This agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
permitted assigns.
(b) This agreement shall be governed by and construed in
accordance with the laws of the State of Colorado. This agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and may not be modified except by written instrument
executed by the parties.
<PAGE>
IN WITNESS WHEREOF, this agreement has been executed as of
the date first above written.
4FRONT SOFTWARE INTERNATIONAL, INC.
By:
---------------------------------
Optionee
<PAGE>
EXHIBIT 5
May 27, 1997
4Front Software International, Inc.
5650 Greenwood Plaza Boulevard
Englewood, Colorado 80111
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), on behalf of 4Front Software
International, Inc. (the "Company"), relating to 400,000 shares of the Company's
Common Stock, $.001 par value per share (the "Shares"), to be issued under the
Company's 1996 Equity Incentive Plan (the "Plan").
As counsel for the Company, we have examined such corporate records,
other documents, and such questions of law as we have considered necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examination, advise you that in our opinion all necessary corporate proceedings
by the Company have been duly taken to authorize the issuance of the Shares
pursuant to the Plan and that the Shares being registered pursuant to the
Registration Statement, when issued and paid for under the Plan in accordance
with the terms of the Plan, will be duly authorized, validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Interests of Named Experts and Counsel" in the Registration Statement. This
consent is not be construed as an admission that we are a person whose consent
is required to be filed with the Registration Statement under the provisions of
the Act.
Very truly yours,
FULBRIGHT & JAWORSKI L.L.P.
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement on Form S-8 of 4Front Software International Inc. of our report
dated April 28, 1997, relating to the consolidated balance sheets of 4Front
Software International, Inc. and subsidiaries as of January 31, 1996 and
1997, and the related consolidated statement of earnings, retained earnings,
and cash flows for the years then ended and all related schedules, which
report appears in the January 31, 1997, annual report on Form 10-K of 4Front
Software International, Inc.
KPMG
Chartered Accountants
Registered Auditors
London, England
May 27, 1997
