As filed with the Securities and Exchange Registration No. 333-________
Commission on June 17, 1998
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
DATASTREAM SYSTEMS, INC.
(Exact name of Registrant as Specified in its Charter)
Delaware 57-0813674
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
50 Datastream Plaza
Greenville, South
Carolina 29605
(Address of Principal
Executive Offices)
___________________
DATASTREAM SYSTEMS, INC.
1997 EUROPEAN STOCK OPTION PLAN
(DUTCH, U.K. AND FRENCH SUB-PLAN VERSIONS)
AND
DATASTREAM SYSTEMS, INC.
1998 STOCK OPTION PLAN
(Full Title of the Plans)
___________________
Larry G. Blackwell
Chairman of the Board, President and Chief Executive Officer
Datastream Systems, Inc.
50 Datastream Plaza
Greenville, South Carolina 29605
(864) 422-5001
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a copy to:
B. Lynn Walsh, Esq.
Hunton & Williams
NationsBank Plaza - Suite 4100
600 Peachtree Street, N. E.
Atlanta, Georgia 30308-2216
(404) 888-4000
___________________
CALCULATION OF REGISTRATION FEE
===============================================================================
Proposed Proposed
Title of securities Amount to be maximum maximum Amount of
to be registered registered(1) offering price aggregate registration
per share(2) offering fee
price(2)
===============================================================================
Common Stock, $.01 1,110,000 $21.82 $24,220,200 $7,144.96
par value........... shares
===============================================================================
(1) Pursuant to Rule 416(a) the number of shares of Common Stock registered
hereunder includes such indeterminate number of additional shares of Common
Stock as may be offered or issued in the future to prevent dilution resulting
from stock splits, stock dividends or similar transactions.
(2) Estimated solely for the purpose of computing the registration fee.
This amount was calculated pursuant to Rule 457(c) on the basis of $21.82 per
share, which was the average of the high and low prices of the Registrant's
Common Stock on June 15, 1998, as reported on the Nasdaq National Market.
<PAGE>
==============================================================================
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
==============================================================================
Item 1. Plan Information.
Not required to be filed with the Securities and Exchange Commission
(the "Commission").
Item 2. Registrant Information and Employee Plan Annual Information.
Not required to be filed with the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Datastream Systems, Inc. (the
"Company") with the Commission are incorporated herein by reference and made
a part hereof:
(i) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997 (File No. 000-25590), as filed with the
Commission March 31, 1998;
(ii) The Company's Current Report on Form 8-K (File No.
000-25590), as filed with the Commission on April 14, 1998;
(iii) The Company's Amendment No. 1 to Form 10-K for the year
ended December 31, 1997 (File No. 000-25590), as filed with
the Commission April 16, 1998;
(iv) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998 (File No. 000-25590), as filed with
the Commission May 13, 1998; and
(v) The description of the Common Stock contained in the
Company's Registration Statement on Form 8-A (Registration
No. 000-25590), including any amendments or reports filed
for the purpose of updating such description, as filed with
the Commission February 17, 1995.
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, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in the Registration Statement and to be part hereof from the date
of filing of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document that is
incorporated by reference herein modifies or supersedes such earlier
statement. Any such 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.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware provides that a
corporation may indemnify its directors and officers against civil and
criminal liabilities. Directors and officers may be indemnified against
expenses if they acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the corporation and, with
respect to any criminal action, if they had no reasonable cause to believe
their conduct was unlawful. A director or officer may be indemnified against
expenses incurred in connection with a derivative suit if he acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification may be made
without court approval if such person was adjudged liable for negligence or
misconduct in the performance of his or her duty to the corporation. The
statutory indemnification is not exclusive of any rights provided by any
by-law, agreement, vote of shareholders or disinterested directors or
otherwise.
Article VII of the Company's Amended and Restated Certificate of
Incorporation sets forth the extent to which the Company's directors and
officers may be indemnified against liabilities and other monetary expenses
which they may incur while serving in such capacities. Such indemnification
will be provided to the full extent permitted and in the manner required by
the General Corporation Law of Delaware. Article XII of the Company's
By-laws also provides that the directors and officers of the Company will be
indemnified against any losses incurred in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director or officer of the Company or served with another corporation,
partnership, joint venture, trust or other enterprise at the request of the
Company and will provide advances, for expenses incurred in defending any
such action, suit or proceeding, upon receipt of an undertaking by or on
behalf of such officer or director to repay such advances, if it is
ultimately determined that he is not entitled to indemnification by the
Company.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description
- - ----------- -----------
4.1* Amended and Restated Certificate of Incorporation of
Datastream Systems, Inc.
4.2** Amendment to Amended and Restated Certificate of
Incorporation of Datastream Systems, Inc., dated January
12, 1998.
4.3*** By-Laws of Datastream Systems, Inc.
4.4+ Specimen Stock Certificate.
5 Opinion of Hunton & Williams.
23.1 Consent of KPMG Peat Marwick LLP, independent certified
public accountants.
23.2 Consent of Hunton & Williams (included as part of Exhibit
5).
24 Power of Attorney (included on signature page hereto).
99.1(a) Datastream Systems, Inc. 1997 European Stock Option Plan
(Dutch (Sub-Plan) Version)
99.1(b) Datastream Systems, Inc. 1997 European Stock Option Plan
(U.K. (Sub-Plan) Version)
99.1(c) Datastream Systems, Inc. 1997 European Stock Option Plan
(French (Sub-Plan) Version)
99.2 Datastream Systems, Inc. 1998 Stock Option Plan
_____________________________
* Incorporated herein by reference to Exhibit 3.1 in the Company's
Registration Statement on Form S-1 (Registration No. 33-89498).
** Incorporated herein by reference to Exhibit 3.1(a) in the Company's
Annual Report on Form 10-K filed March 31, 1998 (File No. 000-25590).
*** Incorporated herein by reference to Exhibit 3.2 in the Company's
Registration Statement on Form S-1 (Registration No. 33-89498).
+ Incorporated herein by reference to Exhibit 4.2 in the Company's
Registration Statement on Form S-1 (Registration No. 33-89498).
Item 9. Undertakings.
(a) The Company 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 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; and
(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.
2. That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act,
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Greenville, South Carolina on this 17th day of June, 1998.
DATASTREAM SYSTEMS, INC.
By: /S/ Larry G. Blackwell
------------------------
Larry G. Blackwell
Chairman of the Board, President
and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby authorizes each of Larry G. Blackwell and Daniel H.
Christie to execute in the name of each such person, and to file any
amendment, including any post-effective amendment, to the Registration
Statement making such changes in the Registration Statement as the Registrant
deems appropriate, and appoints each of Messrs. Blackwell and Christie as
attorney-in-fact to sign in his behalf individually and in each capacity
stated below and file all amendments and post-effective amendments to the
Registration Statement.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities
indicated on the 17th day of June, 1998.
Signature Title
Chairman of the Board, President
/S/ Larry G. Blackwell and Chief Executive Officer
- - ------------------------------ (principal executive officer)
Larry G. Blackwell
Chief Financial Officer
/S/ Daniel H. Christie (principal financial and
- - ------------------------------ accounting officer)
Daniel H. Christie
/S/ Kenneth D. Tracy Director
- - ------------------------------
Kenneth D. Tracy
/S/ Richard T. Brock Director
- - ------------------------------
Richard T. Brock
/S/ John M. Sterling, Jr. Director
- - ------------------------------
John M. Sterling, Jr.
/S/ Ira D. Cohen Director
- - ------------------------------
Ira D. Cohen
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1* Amended and Restated Certificate of Incorporation of
Datastream Systems, Inc.
4.2** Amendment to Amended and Restated Certificate of
Incorporation of Datastream Systems, Inc., dated January
12, 1998.
4.3*** By-Laws of Datastream Systems, Inc.
4.4+ Specimen Stock Certificate.
5 Opinion of Hunton & Williams.
23.1 Consent of KPMG Peat Marwick LLP, independent certified
public accountants.
23.2 Consent of Hunton & Williams (included as part of Exhibit
5).
24 Power of Attorney (included on signature page hereto).
99.1(a) Datastream Systems, Inc. 1997 European Stock Option Plan
(Dutch (Sub-Plan) Version)
99.1(b) Datastream Systems, Inc. 1997 European Stock Option Plan
(U.K. (Sub-Plan) Version)
99.1(c) Datastream Systems, Inc. 1997 European Stock Option Plan
(French (Sub-Plan) Version)
99.2 Datastream Systems, Inc. 1998 Stock Option Plan
______________________________
* Incorporated herein by reference to Exhibit 3.1 in the Company's
Registration Statement on Form S-1 (Registration No. 33-89498).
** Incorporated herein by reference to Exhibit 3.1(a) in the Company's
Annual Report on Form 10-K filed March 31, 1998 (File No. 000-25590).
*** Incorporated herein by reference to Exhibit 3.2 in the Company's
Registration Statement on Form S-1 (Registration No. 33-89498).
+ Incorporated herein by reference to Exhibit 4.2 in the Company's
Registration Statement on Form S-1 (Registration No. 33-89498).
<PAGE>
EXHIBIT 5
(Hunton and Williams Letterhead appears here)
June 17, 1998
Datastream Systems, Inc.
50 Datastream Plaza
Greenville, South Carolina 29605
Re: Datastream Systems, Inc. 1997 European Stock Option Plan
and Datastream Systems, Inc. 1998 Stock Option Plan
Ladies and Gentlemen:
We have served as counsel for Datastream Systems, Inc., a Delaware
corporation (the "Company"), in connection with the registration on a Form
S-8 Registration Statement (the "Registration Statement") under the
Securities Act of 1933, as amended, of an aggregate of 610,000 shares of the
Company's authorized common stock, $.01 par value per share (the "Common
Stock"), under the Datastream Systems, Inc. 1997 European Stock Option Plan
(the "1997 Plan") and an aggregate of 500,000 shares of Common Stock under
the Datastream Systems, Inc. 1998 Stock Option Plan (the "1998 Plan").
We have examined and are familiar with originals or copies (certified
or otherwise identified to our satisfaction) of such documents, corporate
records and other instruments relating to the organization of the Company and
to the authorization and issuance of the shares of Common Stock subject to
the 1997 Plan and the 1998 Plan, as appropriate, as we have deemed necessary
and advisable.
Based upon the foregoing and having regard for such legal consideration
as we deem relevant, it is our opinion that the shares of Common Stock under
the 1997 Plan and the 1998 Plan will be, when issued in accordance with the
terms of each such plan, legally issued, fully paid and non-assessable.
We do hereby consent to the filing of this Opinion as Exhibit 5 to the
Registration Statement.
Very truly yours.
/s/ Hunton & Williams
Hunton & Williams
08058
07688
08086
<PAGE>
EXHIBIT 23.1
Independent Auditors' Consent
-----------------------------
The Board of Directors
Datastream Systems, Inc.:
We consent to incorporation by reference in this Registration Statement on
Form S-8 of Datastream Systems, Inc. of our report dated January 23, 1998,
relating to the consolidated balance sheets of Datastream Systems, Inc. and
Subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of
the years in the three-year period ended December 31, 1997, and related
schedule, which reports appear in the December 31, 1997 annual report on Form
10-K of Datastream Systems, Inc.
Greenville, South Carolina /s/ KPMG Peat Marwick
LLP
June 17, 1998
<PAGE>
EXHIBIT 99.1(a)
TERMS AND CONDITIONS
OF DATASTREAM SYSTEMS, INC.
1997 EUROPEAN STOCK OPTION PLAN
DUTCH (SUB-PLAN) VERSION
1. Definitions
(a) "Affiliate" means (a) any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at
the time of granting of the Option, each of the corporations (other than the
Company) 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, or
(b) 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.
(b) "Disability" means a disability of an Optionee such
that the Optionee is entitled to disability retirement benefits under the
Dutch "WAO" (Wet op de Arbeidsongeschiktheid) or such that the Optionee is
entitled to recover benefits under any long-term disability plan or policy
maintained by the Company or an Affiliate. The determination of whether a
disability exists shall be made by the Committee and shall be substantiated
by competent medical advice.
(c) "Employee" means any person who is employed by the
Company or an Affiliate as meant in article 7:610 Dutch Civil Code.
(d) "Fair Market Value" with regard to a date means the
closing price at which Common Stock shall have been sold on the last trading
date prior to that date as reported by the Nasdaq National Market System (or,
if applicable, as reported by a national securities exchange selected by the
Committee (as defined in the Plan) on which the shares of Common Stock are
then actively traded) and published in The Wall Street Journal; provided
that, for purposes of granting Options other than incentive stock options,
Fair Market Value of the shares of Common Stock may be determined by the
Committee by reference to the average market value determined over a period
certain or as of specified dates, to a tender offer price for the shares of
Common Stock (if settlement of an award is triggered by such an event) or to
any other reasonable measure of fair market value. If at the time of the
determination of Fair Market Value shares of Common Stock are not actively
traded on any market described above, Fair Market Value means the fair market
value of a share of Common Stock as determined by the Committee taking into
account such facts and circumstances deemed to be material by the Committee
to the value of the Common Stock in the hands of the Optionee; provided,
however, for purposes of determining the Option price per share for an
incentive stock option, Fair Market Value shall be determined by the
Committee without regard to any restriction other than a restriction which,
by its terms, will never lapse. Fair Market Value as determined by the
Committee shall be final, binding and conclusive upon each Optionee.
(e) "Termination for Cause" means a termination of the
employment relationship between the Optionee and the Company or an Affiliate
due to any of the following reasons: (1) willful and continued failure
(other than any such failure resulting from his incapacity during physical or
mental illness) to substantially perform his duties with the Company or an
Affiliate continuing 30 days after notice by the Company to the Optionee of
such failure; (2) any act of fraud, misappropriation, dishonesty,
embezzlement or similar conduct against the Company or an Affiliate, as
finally determined through arbitration or final judgment of a court of
competent jurisdiction (which arbitration or judgment, due to the passage of
time or otherwise, is not subject to further appeal); or (3) conviction of
the Optionee for a felony or any other crime involving moral turpitude (which
conviction, due to the passage of time or otherwise, is not subject to
further appeal); or (4) termination by the employer of the employment
agreement as meant in article 7:678 Dutch Civil Code (ontslag op staande
voet).
2. Term And Exercise Of Option
---------------------------
(a) Except as otherwise provided in this Agreement,
Optionee shall have the right to exercise the Option from time to time during
the Exercise Period with respect to all or any part of the vested Option
Shares.
(b) (1) As a condition to exercising this Option,
Optionee must deliver to the President of the Company on any business day (A)
written notice, signed by the person exercising the Option, specifying the
number of Option Shares being exercised and, if required, making the
representations and covenants in substantially the same form as provided in
the Notice of Exercise, attached as Exhibit A hereto; (B) payment in cash or
in shares of Common Stock that have been held by the Optionee for at least
six months of the Purchase Price (defined in Section 3); (C) payment in cash
of the tax withholding liability arising from the exercise; and (D) an
executed shareholders' agreement, containing terms and conditions
substantially similar to any shareholders' agreement executed by and
applicable to the holders of a majority of the shares of Common Stock, if so
required by the Committee.
(1) In lieu of payment of all tax withholding by
Optionee as provided above, Optionee may elect to have the number of Option
Shares he is to receive upon exercise of an Option reduced by the smallest
number of whole Option Shares which, when multiplied by the fair market value
of the Shares determined as of the Tax Date (defined below), is sufficient to
satisfy required federal, state, and local, if any, withholding taxes arising
from:
(A) the Withholding Election must be made
prior to the date on which the amount of tax required to be withheld is
determined (the "Tax Date") by executing and delivering to the Company a
properly completed Notice of Withholding Election, attached as Exhibit B
hereto;
(B) any Withholding Election made will be
irrevocable; however, the Committee may at its sole discretion disapprove and
give no effect to any Withholding Election; and
(C) if the Optionee is required to file
beneficial ownership reports pursuant to Subsection (a) of Section 16 of the
Securities Exchange Act of 1934 (the "Act"), at any time during the period in
which the Option is exercisable, then:
(i) no Option to which any Withholding
Election relates may be exercised until the earlier of either (I) one year
after the Company has been subject to the reporting requirements of Section
15 of the Act and has filed all reports and statements required to be filed
pursuant to that Section during that year, or (II) at least six months after
the date of grant (except in the event of death or Disability of the Optionee
prior to the expiration of the six-month period; and
(ii) the Withholding Section must be
made either (A) at least six months prior to the Tax Date, or (B) prior to
the Tax Date and in any ten business day period beginning on the third
business day following the release of the Company's quarterly or annual
summary statement of sales and earnings.
Upon receipt of such notice and payment in full of the Purchase Price
and tax withholding liability, the Company shall cause to be issued a
certificate representing the shares of Common Stock purchased.
(c) Except as otherwise provided in this Agreement, the
Option shall terminate on the earliest of (1) the last day of the Exercise
Period; (2) the date the Committee exercises its right pursuant to Section 8
to terminate the Option; (3) thirty (30) days after Optionee ceases to be an
Employee, except if such termination is due to Termination for Cause, death
or Disability, (4) one-hundred eighty (180) days after Optionee ceases to be
an Employee if such termination is due to death or Disability; or (5) if
Optionee ceases to be an Employee as a result of a Termination for Cause, the
time of such termination.
(d) The price paid by the Company shall be payable at the
Company's option (1) by delivery to the Optionee of the entire price in the
form of cash or check; or (2) by payment of four substantially equal annual
installments, the first installment being due at the date of termination of
the Option and the second, third and fourth installment being due on the
first, second and third anniversaries of the date of termination of the
Option, respectively.
3. Purchase Price. Optionee must pay to the Company the
Exercise Price (subject to adjustment pursuant to Section 8) multiplied by
the number of the Option Shares being acquired through the exercise of this
Option (the "Purchase Price"). Shares of Common Stock tendered by the
Optionee in satisfaction of the Purchase Price shall be credited at their
Fair Market Value.
4. Non-Transferability of Option. Except for any transfer of
the Option by bequest or inheritance, the Optionee shall not have the right
to make or permit to exist any transfer or hypothecation, whether outright or
as security, with or without consideration, voluntary or involuntary, of all
or any part of any right, title or interest in the Option. Any such
disposition not made in accordance with this Agreement shall be deemed null
and void. The Option shall be exercisable during the lifetime of Optionee
only by Optionee, and after his death by a legatee or legatees under
Optionee's last will and testament or by his personal representative or
representatives, who shall be bound by the same terms of this Agreement as
apply to the Optionee.
5. Restrictions on Transfer of Option Shares. Except as
provided in this Agreement or for any transfer of Option Shares by gift,
bequest, or inheritance to the Optionee's or a subsequent shareholder's
family member, estate, heirs, or legatees or for any transfer after the
closing of an initial public offering of Common Stock, the Optionee shall not
have the right to make or permit to exist any transfer or hypothecation,
whether outright or as security, with or without consideration, voluntary or
involuntary, of all or any part of any right, title or interest (including
but not limited to, voting rights) in or to any Option Shares. Any such
disposition not made in accordance with this Agreement shall be deemed null
and void. Any permitted transferee under this Section shall be bound by the
same terms of this Agreement as apply to the Optionee.
6. No Rights as Shareholder. Optionee, or his permitted
transferee under Section 4, shall have no rights as a stockholder with
respect to any Option Shares until the issuance of a stock certificate to him
for such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights on or with respect to Option Shares purchased
pursuant to this Option for which the record date is prior to the date of
exercise hereof, except as provided in Section 8 below.
7. Repurchase Rights.
-----------------
(a) (1) At all times prior to the closing of an initial
public offering of Common Stock, or (2) within ninety (90) days following a
Termination for Cause, the Company shall have the right to repurchase from
the Optionee all Option Shares. For this purpose, a notice of exercise given
by the Company to the Optionee pursuant to this Section 7 shall be effective
to perfect the Company's right of repurchase, subject to the remaining
provisions of this Section 7.
(b) (1) The Company upon exercising this right of
repurchase shall give written notice to the Optionee of the number of shares
of Option Shares to be repurchased, of the repurchase price, which shall be
determined pursuant to Section 7(c) hereof, and of the time and date of the
closing of the repurchase of the Option Shares, which shall be no later than
sixty (60) days from the date of the notice and shall be held at the
principal office of the Company. At closing, the Company shall deliver the
application portion of the repurchase price and the Optionee shall deliver
the Option Shares to be repurchased duly endorsed for transfer and with all
required revenue stamps attached, and the title to the Option Shares shall be
transferred to the Company free and clear of all liens, claims, and
encumbrances, however described, except for restrictions imposed by
applicable securities laws.
(1) If the Company decides to repurchase less than
all of the Option Shares owned by the Optionee, the Company shall employ such
method as it shall deem appropriate in determining the number of Option
Shares to be repurchased.
(2) The price for Option Shares repurchased by the
Company shall be payable by delivery to the Optionee at the closing of the
entire repurchase price in the form of cash or check; provided, however, the
Company may pay the entire repurchase price in four substantially equal
annual installments consisting of principal and interest at the "Prime Rate"
reported in the Wall Street Journal on the first business day preceding the
date of repurchase, the first installment being due at the closing and the
second, third, and fourth installment being due on the first, second, and
third anniversaries of the closing, respectively.
(3) If the Optionee fails to consummate the sale or
deliver the Option Shares certificates properly assigned when requested to do
so, the Company, or its designee, shall cancel the Option Shares certificates
of the Optionee and deposit the payment pursuant to Section 7(b)(3) hereof
which was to be made to the Optionee in exchange for the certificates to the
credit or account of the Optionee with escrow with any clearinghouse bank in
the City of Greenville, South Carolina, at the expense and risk of the
Optionee, or his successors or assigns, whereupon the Company shall treat the
Option Shares represented thereby as having been repurchased by the Company
or its designees.
(c) The repurchase price for each Option Share shall be
an amount equal to the Fair Market Value, except if the Option Shares are
repurchased by the Company pursuant to written notice given within ninety
(90) days following a Termination for Cause, in which case the repurchase
price for each Option Share shall be the lower of Fair Market Value or the
Exercise Price paid by the Optionee.
8. Change in Capitalization. The total number of Option
Shares to be received upon exercise of the Option (both as to the number of
Option Shares and the Purchase Price) shall be appropriately adjusted for any
change in par value, split-up, stock split, reverse stock split,
reclassification, merger, consolidation, distribution of stock dividends or
similar capital adjustments, to the end that the Optionee's proportionate
interest in value shall be maintained as before the occurrence of the event.
The adjustment shall be made without change in the total price applicable to
the unexercised portion of the Option and with a corresponding adjustment in
the Exercise Price.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. Any adjustment may provide for the elimination of any fractional
Option Shares.
Notwithstanding any other provision of this Agreement, the Committee
reserves the right in the event of a sale of substantially all of the Common
Stock or property of the Company or the merger or consolidation of the
Company, or a dissolution or liquidation of the Company to terminate the
Option in consideration of the payment to the Optionee of the difference
between (1) and (2) where (1) equals the Fair Market Value of the unexercised
Option Shares to the extent vested and (2) equals the Purchase Price of the
unexercised Option Shares to the extent vested.
9. Governing Laws. This Agreement shall be construed,
administered and enforced according to the laws of the State of Delaware;
provided, however, the Option may not be exercised except, in the reasonable
judgment of the Board of Directors, in compliance with exemptions under
applicable state securities laws of the state in which Optionee resides,
and/or any other applicable securities laws. In addition, the Participant
hereby acknowledges that this Option may have been granted prior to the time
the interest represented hereby was registered under applicable South
Carolina securities laws and that, as a result, the Participant may have the
right to rescind the grant of the Option. This Agreement, therefore,
constitutes an offer to so rescind the prior grant for the consideration
payable to the Optionee specified by Section 35-1-1530 of the South Carolina
Uniform Securities Act. Because, however, the Participant has not paid any
consideration for the grant, the Participant desires to decline such offer,
and does hereby waive such right of rescission with respect to this Option as
of the date hereof. The Company agrees to use its best efforts to register
the Option (as well as the Stock into which it is convertible) under
applicable federal and state securities laws as soon as practicable, and in
any event prior to the date on which any portion of the Option is vested
hereunder.
10. Successors. This Agreement shall inure to the benefit of
the heirs, legal representatives, successors and permitted assigns of the
Company and Optionee.
11. Notice. Any notice which either party hereto may be
required or permitted to give to the other shall be in writing, and may be
delivered personally or by mail, postage prepaid, addressed as follows: to
the President of the Company, or to the Company (attention of the President),
at 50 Datastream Plaza, Greenville, South Carolina 29605, or at any other
address as the Company, by notice to Optionee, may designate in writing from
time to time; to Optionee, at Optionee's address as shown on the records of
the Company, or at any other address as Optionee, by notice to the Company,
may designate in writing from time to time.
12. Severability. In the event that any one or more of the
provisions or portion thereof contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, the
same shall not invalidate or otherwise affect any other provisions of this
Agreement, and this Agreement shall be construed as if the invalid, illegal
or unenforceable provision or portion thereof had never been contained herein.
13. Entire Agreement. Subject to the terms and conditions of
the Datastream Systems, Inc. 1995 Stock Option Plan, which is incorporated
herein by reference, this Agreement expresses the entire understanding and
agreement of the parties hereto with respect to such terms, restrictions and
limitations.
14. Headings. Section headings used herein are for convenience
of reference only and shall not be considered in construing this Agreement.
15. Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and
provisions of this Agreement, the party or parties who are thereby aggrieved
shall have the right to specific performance and injunction in addition to
any and all other rights and remedies at law or in equity, and all such
rights and remedies shall be cumulative.
16. Resolution of Disputes. Any determination or
interpretation by the Committee shall be final, binding and conclusive on all
persons affected thereby.
17. Compliance with Securities Laws. Notwithstanding anything
contained herein to the contrary, no purported exercise of the Option shall
be effective without the written approval of the Company, which may be
withheld to the extent that its exercise, either individually or in the
aggregate together with the exercise of other previously exercised stock
options and/or offers and sales pursuant to any prior or contemplated
offering of securities, would, in the sole and absolute judgment of the
Company, require the filing of a registration statement with the United
States Securities and Exchange Commission, or with the securities commission
of any state. The Company shall avail itself of any exemptions from
registration contained in applicable federal and state securities laws which,
in its sole and absolute discretion, it deems reasonable and not unduly
burdensome or costly. The Optionee shall deliver to the Company, prior to
the exercise of the Option, such information, representations and warranties
as the Company may request in order for the Company to be able to satisfy
itself that the Common Stock to be acquired pursuant to the exercise of the
Option is being acquired in accordance with the terms of an applicable
exemption from the securities registration requirements of applicable federal
and state securities laws.
* * * * *
<PAGE>
EXHIBIT 99.1(b)
TERMS AND CONDITIONS
OF DATASTREAM SYSTEMS, INC.
1997 EUROPEAN STOCK OPTION PLAN
UNITED KINGDOM (SUB-PLAN) VERSION
1. Definitions
-----------
(a) "Affiliate" means (a) any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at
the time of granting of the Option, each of the corporations (other than the
Company) 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, or
(b) 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.
(b) "Disability" means a disability of an Optionee such
that the Optionee is entitled to disability retirement benefits under the
federal Social Security Act or such that the Optionee is entitled to recover
benefits under any long-term disability plan or policy maintained by the
Company or an Affiliate. The determination of whether a disability exists
shall be made by the Committee and shall be substantiated by competent
medical advice.
(c) "Employee" means any person who is employed by the
Company or an Affiliate for purposes of the Federal Insurance Contributions
Act.
(d) "Fair Market Value" with regard to a date means the
closing price at which Common Stock shall have been sold on the last trading
date prior to that date as reported by the Nasdaq National Market System (or,
if applicable, as reported by a national securities exchange selected by the
Committee (as defined in the Plan) on which the shares of Common Stock are
then actively traded) and published in The Wall Street Journal; provided
that, for purposes of granting Options other than incentive stock options,
Fair Market Value of the shares of Common Stock may be determined by the
Committee by reference to the average market value determined over a period
certain or as of specified dates, to a tender offer price for the shares of
Common Stock (if settlement of an award is triggered by such an event) or to
any other reasonable measure of fair market value. If at the time of the
determination of Fair Market Value shares of Common Stock are not actively
traded on any market described above, Fair Market Value means the fair market
value of a share of Common Stock as determined by the Committee taking into
account such facts and circumstances deemed to be material by the Committee
to the value of the Common Stock in the hands of the Optionee; provided,
however, for purposes of determining the Option price per share for an
incentive stock option, Fair Market Value shall be determined by the
Committee without regard to any restriction other than a restriction which,
by its terms, will never lapse. Fair Market Value as determined by the
Committee shall be final, binding and conclusive upon each Optionee.
(e) "Termination for Cause" means a termination of the
employment relationship between the Optionee and the Company or an Affiliate
due to any of the following reasons: (1) willful and continued failure
(other than any such failure resulting from his incapacity during physical or
mental illness) to substantially perform his duties with the Company or an
Affiliate continuing 30 days after notice by the Company to the Optionee of
such failure; (2) any act of fraud, misappropriation, dishonesty,
embezzlement or similar conduct against the Company or an Affiliate, as
finally determined through arbitration or final judgment of a court of
competent jurisdiction (which arbitration or judgment, due to the passage of
time or otherwise, is not subject to further appeal); or (3) conviction of
the Optionee for a felony or any other crime involving moral turpitude (which
conviction, due to the passage of time or otherwise, is not subject to
further appeal).
2. Term And Exercise Of Option
---------------------------
(a) Except as otherwise provided in this Agreement,
Optionee shall have the right to exercise the Option from time to time during
the Exercise Period with respect to all or any part of the vested Option
Shares. Election of payment in shares may incur extra P.A.Y.E withholding
taxes.
(b) (1) As a condition to exercising this Option,
Optionee must deliver to the President of the Company on any business day (A)
written notice, signed by the person exercising the Option, specifying the
number of Options shares being exercised and, if required making the
representations and covenants in substantially the same form as provided in
the Notice of Exercise, attached as Exhibit A hereto; (B) (i) payment in
cash or (ii) in shares of Common Stock that have been held by the
Optionee for at least six months of the Purchase Price (defined in Section
3); (C) payment in cash of the tax withholding liability arising from the
exercise; and (D) an executed shareholders' agreement, containing terms and
conditions substantially similar to any shareholders' agreement executed by
and applicable to the holders of the majority of the share holders of the
shares of Common Stock, if so required by the Committee.
(2) Upon receipt of such notice and payment in full
of the Purchase Price and tax withholding liability, the Company shall
cause to be issued a certificate representing the shares of Common Stock
purchased.
(c) Except as otherwise provided in this Agreement, the
Option shall terminate on the earliest of (1) the last day of the Exercise
Period; (2) the date the Committee exercises its right pursuant to Section 8
to terminate the Option; (3) thirty (30) days after Optionee ceases to be an
Employee, except if such termination is due to Termination for Cause, death
or Disability, (4) one-hundred eighty (180) days after Optionee ceases to be
an Employee if such termination is due to death or Disability; or (5) if
Optionee ceases to be an Employee as a result of a Termination for Cause, the
time of such termination.
(d) The price paid by the Company shall be payable at the
Company's option (1) by delivery to the Optionee of the entire price in the
form of cash or check; or (2) by payment of four substantially equal annual
installments, the first installment being due at the date of termination of
the Option and the second, third and fourth installment being due on the
first, second and third anniversaries of the date of termination of the
Option, respectively.
3. Purchase Price. Optionee must pay to the Company the
Exercise Price (subject to adjustment pursuant to Section 8) multiplied by
the number of the Option Shares being acquired through the exercise of this
Option (the "Purchase Price"). Shares of Common Stock tendered by the
Optionee in satisfaction of the Purchase Price shall be credited at their
Fair Market Value.
4. Non-Transferability of Option. Except for any transfer of
the Option by bequest or inheritance, the Optionee shall not have the right
to make or permit to exist any transfer or hypothecation, whether outright or
as security, with or without consideration, voluntary or involuntary, of all
or any part of any right, title or interest in the Option. Any such
disposition not made in accordance with this Agreement shall be deemed null
and void. The Option shall be exercisable during the lifetime of Optionee
only by Optionee, and after his death by a legatee or legatees under
Optionee's last will and testament or by his personal representative or
representatives, who shall be bound by the same terms of this Agreement as
apply to the Optionee.
5. Restrictions on Transfer of Option Shares. Except as
provided in this Agreement or for any transfer of Option Shares by gift,
bequest, or inheritance to the Optionee's or a subsequent shareholder's
family member, estate, heirs, or legatees or for any transfer after the
closing of an initial public offering of Common Stock, the Optionee shall not
have the right to make or permit to exist any transfer or hypothecation,
whether outright or as security, with or without consideration, voluntary or
involuntary, of all or any part of any right, title or interest (including
but not limited to, voting rights) in or to any Option Shares. Any such
disposition not made in accordance with this Agreement shall be deemed null
and void. Any permitted transferee under this Section shall be bound by the
same terms of this Agreement as apply to the Optionee.
6. No Rights as Shareholder. Optionee, or his permitted
transferee under Section 4, shall have no rights as a stockholder with
respect to any Option Shares until the issuance of a stock certificate to him
for such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights on or with respect to Option Shares purchased
pursuant to this Option for which the record date is prior to the date of
exercise hereof, except as provided in Section 8 below.
7. Repurchase Rights.
(a) (1) At all times prior to the closing of an initial
public offering of Common Stock, or (2) within ninety (90) days following a
Termination for Cause, the Company shall have the right to repurchase from
the Optionee all Option Shares. For this purpose, a notice of exercise given
by the Company to the Optionee pursuant to this Section 7 shall be effective
to perfect the Company's right of repurchase, subject to the remaining
provisions of this Section 7.
(b) (1) The Company upon exercising this right of
repurchase shall give written notice to the Optionee of the number of shares
of Option Shares to be repurchased, of the repurchase price, which shall be
determined pursuant to Section 7(c) hereof, and of the time and date of the
closing of the repurchase of the Option Shares, which shall be no later than
sixty (60) days from the date of the notice and shall be held at the
principal office of the Company. At closing, the Company shall deliver the
application portion of the repurchase price and the Optionee shall deliver
the Option Shares to be repurchased duly endorsed for transfer and with all
required revenue stamps attached, and the title to the Option Shares shall be
transferred to the Company free and clear of all liens, claims, and
encumbrances, however described, except for restrictions imposed by
applicable securities laws.
(1) If the Company decides to repurchase less than
all of the Option Shares owned by the Optionee, the Company shall employ such
method as it shall deem appropriate in determining the number of Option
Shares to be repurchased.
(2) The price for Option Shares repurchased by the
Company shall be payable by delivery to the Optionee at the closing of the
entire repurchase price in the form of cash or check; provided, however, the
Company may pay the entire repurchase price in four substantially equal
annual installments consisting of principal and interest at the "Prime Rate"
reported in the Wall Street Journal on the first business day preceding the
date of repurchase, the first installment being due at the closing and the
second, third, and fourth installment being due on the first, second, and
third anniversaries of the closing, respectively.
(3) If the Optionee fails to consummate the sale or
deliver the Option Shares certificates properly assigned when requested to do
so, the Company, or its designee, shall cancel the Option Shares certificates
of the Optionee and deposit the payment pursuant to Section 7(b)(3) hereof
which was to be made to the Optionee in exchange for the certificates to the
credit or account of the Optionee with escrow with any clearinghouse bank in
the City of Greenville, South Carolina, at the expense and risk of the
Optionee, or his successors or assigns, whereupon the Company shall treat the
Option Shares represented thereby as having been repurchased by the Company
or its designees.
(c) The repurchase price for each Option Share shall be
an amount equal to the Fair Market Value, except if the Option Shares are
repurchased by the Company pursuant to written notice given within ninety
(90) days following a Termination for Cause, in which case the repurchase
price for each Option Share shall be the lower of Fair Market Value or the
Exercise Price paid by the Optionee.
8. Change in Capitalization. The total number of Option
Shares to be received upon exercise of the Option (both as to the number of
Option Shares and the Purchase Price) shall be appropriately adjusted for any
change in par value, split-up, stock split, reverse stock split,
reclassification, merger, consolidation, distribution of stock dividends or
similar capital adjustments, to the end that the Optionee's proportionate
interest in value shall be maintained as before the occurrence of the event.
The adjustment shall be made without change in the total price applicable to
the unexercised portion of the Option and with a corresponding adjustment in
the Exercise Price.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. Any adjustment may provide for the elimination of any fractional
Option Shares.
Notwithstanding any other provision of this Agreement, the Committee
reserves the right in the event of a sale of substantially all of the Common
Stock or property of the Company or the merger or consolidation of the
Company, or a dissolution or liquidation of the Company to terminate the
Option in consideration of the payment to the Optionee of the difference
between (1) and (2) where (1) equals the Fair Market Value of the unexercised
Option Shares to the extent vested and (2) equals the Purchase Price of the
unexercised Option Shares to the extent vested.
9. Governing Laws. This Agreement shall be construed,
administered and enforced according to the laws of the State of Delaware;
provided, however, the Option may not be exercised except, in the reasonable
judgment of the Board of Directors, in compliance with exemptions under
applicable securities laws of the country in which Optionee resides, and/or
any other applicable securities laws. In addition, the Participant hereby
acknowledges that this Option may have been granted prior to the time the
interest represented hereby was registered under applicable South Carolina
securities laws and that, as a result, the Participant may have the right to
rescind the grant of the Option. This Agreement, therefore, constitutes an
offer to so rescind the prior grant for the consideration payable to the
Optionee specified by Section 35-1-1530 of the South Carolina Uniform
Securities Act. Because, however, the Participant has not paid any
consideration for the grant, the Participant desires to decline such offer,
and does hereby waive such right of rescission with respect to this Option as
of the date hereof. The Company agrees to use its best efforts to register
the Option (as well as the Stock into which it is convertible) under
applicable securities laws as soon as practicable, and in any event prior to
the date on which any portion of the Option is vested hereunder.
10. Successors. This Agreement shall inure to the benefit of
the heirs, legal representatives, successors and permitted assigns of the
Company and Optionee.
11. Notice. Any notice which either party hereto may be
required or permitted to give to the other shall be in writing, and may be
delivered personally or by mail, postage prepaid, addressed as follows: to
the President of the Company, or to the Company (attention of the President),
at 50 Datastream Plaza, Greenville, South Carolina 29605, or at any other
address as the Company, by notice to Optionee, may designate in writing from
time to time; to Optionee, at Optionee's address as shown on the records of
the Company, or at any other address as Optionee, by notice to the Company,
may designate in writing from time to time.
12. Severability. In the event that any one or more of the
provisions or portion thereof contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, the
same shall not invalidate or otherwise affect any other provisions of this
Agreement, and this Agreement shall be construed as if the invalid, illegal
or unenforceable provision or portion thereof had never been contained herein.
13. Entire Agreement. Subject to the terms and conditions of
the Datastream Systems, Inc. 1997 Stock Option Plan, which is incorporated
herein by reference, this Agreement expresses the entire understanding and
agreement of the parties hereto with respect to such terms, restrictions and
limitations.
14. Headings. Section headings used herein are for convenience
of reference only and shall not be considered in construing this Agreement.
15. Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and
provisions of this Agreement, the party or parties who are thereby aggrieved
shall have the right to specific performance and injunction in addition to
any and all other rights and remedies at law or in equity, and all such
rights and remedies shall be cumulative.
16. Resolution of Disputes. Any determination or
interpretation by the Committee shall be final, binding and conclusive on all
persons affected thereby.
17. Compliance with Securities Laws. Notwithstanding anything
contained herein to the contrary, no purported exercise of the Option shall
be effective without the written approval of the Company, which may be
withheld to the extent that its exercise, either individually or in the
aggregate together with the exercise of other previously exercised stock
options and/or offers and sales pursuant to any prior or contemplated
offering of securities, would, in the sole and absolute judgment of the
Company, require the filing of a registration statement with the United
States Securities and Exchange Commission, or with the securities commission
of any state. The Company shall avail itself of any exemptions from
registration contained in applicable TAX and securities laws which, in its
sole and absolute discretion, it deems reasonable and not unduly burdensome
or costly. The Optionee shall deliver to the Company, prior to the exercise
of the Option, such information, representations and warranties as the
Company may request in order for the Company to be able to satisfy itself
that the Common Stock to be acquired pursuant to the exercise of the Option
is being acquired in accordance with the terms of an applicable exemption
from the securities registration requirements of applicable securities laws.
* * * * *
<PAGE>
EXHIBIT 99.1(c)
TERMS AND CONDITIONS
OF DATASTREAM SYSTEMS, INC.
1997 EUROPEAN STOCK OPTION PLAN
FRENCH (SUB-PLAN) VERSION
1. Definitions
-----------
(a) "Affiliate" means (a) any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at
the time of granting of the Option, each of the corporations (other than the
Company) 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, or
(b) 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.
(b) "Disability" means a disability of an Optionee such
that the Optionee is entitled to disability retirement benefits under the
federal Social Security Act or such that the Optionee is entitled to recover
benefits under any long-term disability plan or policy maintained by the
Company or an Affiliate. The determination of whether a disability exists
shall be made by the Committee and shall be substantiated by competent
medical advice.
(c) "Employee" means any person who is employed by the
Company or an Affiliate for purposes of the Federal Insurance Contributions
Act.
(d) "Fair Market Value" with regard to a date means the
closing price at which Common Stock shall have been sold on the last trading
date prior to that date as reported by the Nasdaq National Market System (or,
if applicable, as reported by a national securities exchange selected by the
Committee (as defined in the Plan) on which the shares of Common Stock are
then actively traded) and published in The Wall Street Journal; provided
that, for purposes of granting Options other than incentive stock options,
Fair Market Value of the shares of Common Stock may be determined by the
Committee by reference to the average market value determined over a period
certain or as of specified dates, to a tender offer price for the shares of
Common Stock (if settlement of an award is triggered by such an event) or to
any other reasonable measure of fair market value. If at the time of the
determination of Fair Market Value shares of Common Stock are not actively
traded on any market described above, Fair Market Value means the fair market
value of a share of Common Stock as determined by the Committee taking into
account such facts and circumstances deemed to be material by the Committee
to the value of the Common Stock in the hands of the Optionee; provided,
however, for purposes of determining the Option price per share for an
incentive stock option, Fair Market Value shall be determined by the
Committee without regard to any restriction other than a restriction which,
by its terms, will never lapse. Fair Market Value as determined by the
Committee shall be final, binding and conclusive upon each Optionee.
(e) "Termination for Cause" means a termination of the
employment relationship between the Optionee and the Company or an Affiliate
due to any of the following reasons: (1) willful and continued failure
(other than any such failure resulting from his incapacity during physical or
mental illness) to substantially perform his duties with the Company or an
Affiliate continuing 30 days after notice by the Company to the Optionee of
such failure; (2) any act of fraud, misappropriation, dishonesty,
embezzlement or similar conduct against the Company or an Affiliate, as
finally determined through arbitration or final judgment of a court of
competent jurisdiction (which arbitration or judgment, due to the passage of
time or otherwise, is not subject to further appeal); or (3) conviction of
the Optionee for a felony or any other crime involving moral turpitude (which
conviction, due to the passage of time or otherwise, is not subject to
further appeal).
2. Term and Exercise of Option
(a) Except as otherwise provided in this Agreement,
Optionee shall have the right to exercise the Option from time to time during
the Exercise Period with respect to all or any part of the vested Option
Shares. Election of payment in shares may incur extra French withholding
taxes.
The sale of shares acquired according to the plan may
occur any time after the required vesting periods have been satisfied,
however sale of the shares acquired under the plan may lose favorable tax
treatment if they are sold before being held for five years from the date the
option is granted.
(b) (1) As a condition to exercising this Option,
Optionee must deliver to the President of the Company on any business day (A)
written notice, signed by the person exercising the Option, specifying the
number of Options shares being exercised and, if required making the
representations and covenants in substantially the same form as provided in
the Notice of Exercise, attached as Exhibit A hereto; (B) (i) payment in
cash or (ii) in shares of Common Stock that have been held by the
Optionee for at least six months of the Purchase Price (defined in Section
3); (C) payment in cash of the tax withholding liability arising from the
exercise; and (D) an executed shareholders' agreement, containing terms and
conditions substantially similar to any shareholders' agreement executed by
and applicable to the holders of the majority of the share holders of the
shares of Common Stock, if so required by the Committee.
(2) Upon receipt of such notice and payment in full
of the Purchase Price and tax withholding liability, the Company shall cause
to be issued a certificate representing the shares of Common Stock purchased.
(3) Vesting periods are determined based on the
number of shares granted per the schedule below:
Number of Shares Vesting period % vested per year
Less than 500 1 year 100%
1000 2 years 50%
2000 3 years 33.3%
More than 3000 4 years 25%
(c) Except as otherwise provided in this Agreement, the
Option shall terminate on the earliest of (1) the last day of the Exercise
Period; (2) the date the Committee exercises its right pursuant to Section 8
to terminate the Option; (3) thirty (30) days after Optionee ceases to be an
Employee, except if such termination is due to Termination for Cause, death
or Disability, (4) one-hundred eighty (180) days after Optionee ceases to be
an Employee if such termination is due to death or Disability; or (5) if
Optionee ceases to be an Employee as a result of a Termination for Cause, the
time of such termination.
(d) The price paid by the Company shall be payable at the
Company's option (1) by delivery to the Optionee of the entire price in the
form of cash or check; or (2) by payment of four substantially equal annual
installments, the first installment being due at the date of termination of
the Option and the second, third and fourth installment being due on the
first, second and third anniversaries of the date of termination of the
Option, respectively.
3. Purchase Price. Optionee must pay to the Company the
Exercise Price (subject to adjustment pursuant to Section 8) multiplied by
the number of the Option Shares being acquired through the exercise of this
Option (the "Purchase Price"). Shares of Common Stock tendered by the
Optionee in satisfaction of the Purchase Price shall be credited at their
Fair Market Value.
4. Non-Transferability of Option. Except for any transfer of
the Option by bequest or inheritance, the Optionee shall not have the right
to make or permit to exist any transfer or hypothecation, whether outright or
as security, with or without consideration, voluntary or involuntary, of all
or any part of any right, title or interest in the Option. Any such
disposition not made in accordance with this Agreement shall be deemed null
and void. The Option shall be exercisable during the lifetime of Optionee
only by Optionee, and after his death by a legatee or legatees under
Optionee's last will and testament or by his personal representative or
representatives, who shall be bound by the same terms of this Agreement as
apply to the Optionee.
5. Restrictions on Transfer of Option Shares. Except as
provided in this Agreement or for any transfer of Option Shares by gift,
bequest, or inheritance to the Optionee's or a subsequent shareholder's
family member, estate, heirs, or legatees or for any transfer after the
closing of an initial public offering of Common Stock, the Optionee shall not
have the right to make or permit to exist any transfer or hypothecation,
whether outright or as security, with or without consideration, voluntary or
involuntary, of all or any part of any right, title or interest (including
but not limited to, voting rights) in or to any Option Shares. Any such
disposition not made in accordance with this Agreement shall be deemed null
and void. Any permitted transferee under this Section shall be bound by the
same terms of this Agreement as apply to the Optionee.
6. No Rights as Shareholder. Optionee, or his permitted
transferee under Section 4, shall have no rights as a stockholder with
respect to any Option Shares until the issuance of a stock certificate to him
for such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights on or with respect to Option Shares purchased
pursuant to this Option for which the record date is prior to the date of
exercise hereof, except as provided in Section 8 below.
7. Repurchase Rights.
(a) (1) At all times prior to the closing of an initial
public offering of Common Stock, or (2) within ninety (90) days following a
Termination for Cause, the Company shall have the right to repurchase from
the Optionee all Option Shares. For this purpose, a notice of exercise given
by the Company to the Optionee pursuant to this Section 7 shall be effective
to perfect the Company's right of repurchase, subject to the remaining
provisions of this Section 7.
(b) (1) The Company upon exercising this right of
repurchase shall give written notice to the Optionee of the number of shares
of Option Shares to be repurchased, of the repurchase price, which shall be
determined pursuant to Section 7(c) hereof, and of the time and date of the
closing of the repurchase of the Option Shares, which shall be no later than
sixty (60) days from the date of the notice and shall be held at the
principal office of the Company. At closing, the Company shall deliver the
application portion of the repurchase price and the Optionee shall deliver
the Option Shares to be repurchased duly endorsed for transfer and with all
required revenue stamps attached, and the title to the Option Shares shall be
transferred to the Company free and clear of all liens, claims, and
encumbrances, however described, except for restrictions imposed by
applicable securities laws.
(1) If the Company decides to repurchase less than
all of the Option Shares owned by the Optionee, the Company shall employ such
method as it shall deem appropriate in determining the number of Option
Shares to be repurchased.
(2) The price for Option Shares repurchased by the
Company shall be payable by delivery to the Optionee at the closing of the
entire repurchase price in the form of cash or check; provided, however, the
Company may pay the entire repurchase price in four substantially equal
annual installments consisting of principal and interest at the "Prime Rate"
reported in the Wall Street Journal on the first business day preceding the
date of repurchase, the first installment being due at the closing and the
second, third, and fourth installment being due on the first, second, and
third anniversaries of the closing, respectively.
(3) If the Optionee fails to consummate the sale or
deliver the Option Shares certificates properly assigned when requested to do
so, the Company, or its designee, shall cancel the Option Shares certificates
of the Optionee and deposit the payment pursuant to Section 7(b)(3) hereof
which was to be made to the Optionee in exchange for the certificates to the
credit or account of the Optionee with escrow with any clearinghouse bank in
the City of Greenville, South Carolina, at the expense and risk of the
Optionee, or his successors or assigns, whereupon the Company shall treat the
Option Shares represented thereby as having been repurchased by the Company
or its designees.
(c) The repurchase price for each Option Share shall be
an amount equal to the Fair Market Value, except if the Option Shares are
repurchased by the Company pursuant to written notice given within ninety
(90) days following a Termination for Cause, in which case the repurchase
price for each Option Share shall be the lower of Fair Market Value or the
Exercise Price paid by the Optionee.
8. Change in Capitalization. The total number of Option
Shares to be received upon exercise of the Option (both as to the number of
Option Shares and the Purchase Price) shall be appropriately adjusted for any
change in par value, split-up, stock split, reverse stock split,
reclassification, merger, consolidation, distribution of stock dividends or
similar capital adjustments, to the end that the Optionee's proportionate
interest in value shall be maintained as before the occurrence of the event.
The adjustment shall be made without change in the total price applicable to
the unexercised portion of the Option and with a corresponding adjustment in
the Exercise Price.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. Any adjustment may provide for the elimination of any fractional
Option Shares.
Notwithstanding any other provision of this Agreement, the Committee
reserves the right in the event of a sale of substantially all of the Common
Stock or property of the Company or the merger or consolidation of the
Company, or a dissolution or liquidation of the Company to terminate the
Option in consideration of the payment to the Optionee of the difference
between (1) and (2) where (1) equals the Fair Market Value of the unexercised
Option Shares to the extent vested and (2) equals the Purchase Price of the
unexercised Option Shares to the extent vested.
9. Governing Laws. This Agreement shall be construed,
administered and enforced according to the laws of the State of Delaware;
provided, however, the Option may not be exercised except, in the reasonable
judgment of the Board of Directors, in compliance with exemptions under
applicable securities laws of the country in which Optionee resides, and/or
any other applicable securities laws. In addition, the Participant hereby
acknowledges that this Option may have been granted prior to the time the
interest represented hereby was registered under applicable South Carolina
securities laws and that, as a result, the Participant may have the right to
rescind the grant of the Option. This Agreement, therefore, constitutes an
offer to so rescind the prior grant for the consideration payable to the
Optionee specified by Section 35-1-1530 of the South Carolina Uniform
Securities Act. Because, however, the Participant has not paid any
consideration for the grant, the Participant desires to decline such offer,
and does hereby waive such right of rescission with respect to this Option as
of the date hereof. The Company agrees to use its best efforts to register
the Option (as well as the Stock into which it is convertible) under
applicable securities laws as soon as practicable, and in any event prior to
the date on which any portion of the Option is vested hereunder.
10. Successors. This Agreement shall inure to the benefit of
the heirs, legal representatives, successors and permitted assigns of the
Company and Optionee.
11. Notice. Any notice which either party hereto may be
required or permitted to give to the other shall be in writing, and may be
delivered personally or by mail, postage prepaid, addressed as follows: to
the President of the Company, or to the Company (attention of the President),
at 50 Datastream Plaza, Greenville, South Carolina 29605, or at any other
address as the Company, by notice to Optionee, may designate in writing from
time to time; to Optionee, at Optionee's address as shown on the records of
the Company, or at any other address as Optionee, by notice to the Company,
may designate in writing from time to time.
12. Severability. In the event that any one or more of the
provisions or portion thereof contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, the
same shall not invalidate or otherwise affect any other provisions of this
Agreement, and this Agreement shall be construed as if the invalid, illegal
or unenforceable provision or portion thereof had never been contained herein.
13. Entire Agreement. Subject to the terms and conditions of
the Datastream Systems, Inc. 1997 Stock Option Plan, which is incorporated
herein by reference, this Agreement expresses the entire understanding and
agreement of the parties hereto with respect to such terms, restrictions and
limitations.
14. Headings. Section headings used herein are for convenience
of reference only and shall not be considered in construing this Agreement.
15. Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and
provisions of this Agreement, the party or parties who are thereby aggrieved
shall have the right to specific performance and injunction in addition to
any and all other rights and remedies at law or in equity, and all such
rights and remedies shall be cumulative.
16. Resolution of Disputes. Any determination or
interpretation by the Committee shall be final, binding and conclusive on all
persons affected thereby.
17. Compliance with Securities Laws. Notwithstanding anything
contained herein to the contrary, no purported exercise of the Option shall
be effective without the written approval of the Company, which may be
withheld to the extent that its exercise, either individually or in the
aggregate together with the exercise of other previously exercised stock
options and/or offers and sales pursuant to any prior or contemplated
offering of securities, would, in the sole and absolute judgment of the
Company, require the filing of a registration statement with the United
States Securities and Exchange Commission, or with the securities commission
of any state. The Company shall avail itself of any exemptions from
registration contained in applicable tax and securities laws which, in its
sole and absolute discretion, it deems reasonable and not unduly burdensome
or costly. The Optionee shall deliver to the Company, prior to the exercise
of the Option, such information, representations and warranties as the
Company may request in order for the Company to be able to satisfy itself
that the Common Stock to be acquired pursuant to the exercise of the Option
is being acquired in accordance with the terms of an applicable exemption
from the securities registration requirements of applicable securities laws.
* * * * *
<PAGE>
EXHIBIT 99.2
DATASTREAM SYSTEMS, INC.
1998 STOCK OPTION PLAN
SECTION I. DEFINITIONS
Whenever used herein, the masculine pronoun shall be deemed to include
the feminine, and the singular to include the plural, unless the context
clearly indicates otherwise, and the following capitalized words and phrases
are used herein with the meaning thereafter ascribed:
1.1 "Board" means the Board of Directors of the Company.
1.2 "Change of Control" means (i) an acquisition by any individual,
entity or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the
Exchange Act (a "Person") of beneficial ownership of 50 percent or more of
the total outstanding Voting Securities of the Company, other than any
acquisition by the Company or any employee benefit plan that the Company
sponsors, (ii) any sale, exchange, merger, consolidation, reorganization,
tender offer for shares of Stock or other similar business transaction
involving the Company (a "business transaction"), unless, following such
business transaction, more than 50 percent of the total outstanding Voting
Securities of the Company (or other entity surviving such business
transaction) is then beneficially owned, directly or indirectly, by all or
substantially all of the Persons who were beneficial owners of the Voting
Securities of the Company immediately before such business transaction, and
(iii) the sale or other disposition of all or substantially all of the assets
of the Company, other than to a corporation with respect to which following
such sale or other disposition more than 50 percent of the total outstanding
Voting Securities of such corporation is then beneficially owned, directly or
indirectly, by all or substantially all of the Persons who were beneficial
owners of the Voting Securities of the Company immediately before such sale
or other disposition.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Committee" means the committee consisting of two or more
Non-Employee Directors appointed by the Board to administer the Plan.
1.5 "Company" means Datastream Systems, Inc., a Delaware corporation.
1.6 "Disposition" means any conveyance, sale, transfer, assignment,
pledge or hypothecation, whether outright or as security, inter vivos or
testamentary, with or without consideration, voluntary or involuntary.
1.7 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
1.8 "Exercise Price" means the price per share of Stock purchasable
under any Option.
1.9 "Fair Market Value" with regard to a date means the closing price
at which Stock shall have been sold on the last trading date prior to that
date as reported by the Nasdaq National Market System (or, if applicable, as
reported by a national securities exchange selected by the Committee on which
the shares of Stock are then actively traded) and published in The Wall
Street Journal; provided that, for purposes of granting Options other than
incentive stock options, Fair Market Value of the shares of Stock may be
determined by the Committee by reference to the average market value
determined over a period certain or as of specified dates, to a tender offer
price for the shares of Stock (if settlement of an award is triggered by such
an event) or to any other reasonable measure of fair market value. If at the
time of the determination of Fair Market Value shares of Stock are not
actively traded on any market described above, Fair Market Value means the
fair market value of a share of Stock as determined by the Committee taking
into account such facts and circumstances deemed to be material by the
Committee to the value of the Stock in the hands of the Participant;
provided, however, for purposes of determining the Option price per share for
an incentive stock option, Fair Market Value shall be determined by the
Committee without regard to any restriction other than a restriction which,
by its terms, will never lapse. Fair Market Value as determined by the
Committee shall be final, binding and conclusive upon each Participant.
1.10 "Non-Employee Director" means a director who (i) is not a current
employee or officer of the Company or any of its Subsidiaries, and has never
been an officer of the Company or any of its Subsidiaries, (ii) does not
receive compensation, either directly or indirectly, from the Company or any
of its Subsidiaries for services rendered in any capacity other than as a
director, (iii) does not possess an interest in any other transaction for
which disclosure would be required pursuant to Regulation S-K 404(a)
promulgated under the Exchange Act, and (iv) is not engaged in any business
relationship for which disclosure would be required pursuant to Regulation
S-K 404(b) promulgated under the Exchange Act.
1.11 "Option" means a non-qualified stock option or an incentive stock
option.
1.12 "Over 10% Owner" means an individual who at the time an incentive
stock option is granted owns Stock possessing more than 10% of the total
combined voting power of the Company or one of its Subsidiaries, determined
by applying the attribution rules of Code Section 424(d).
1.13 "Participant" means an individual who receives an Option
hereunder.
1.14 "Plan" means the Datastream Systems, Inc. 1998 Stock Option Plan.
1.15 "Securities Act" means the Securities Act of 1933, as amended
from time to time.
1.16 "Stock" means the Company's common stock, $.01 par value.
1.17 "Stock Option Agreement" means an agreement between the Company
and a Participant or other documentation evidencing an award of an Option.
1.18 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
the granting of an 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 the chain.
1.19 "Voting Securities" means the shares of capital stock of an
entity entitled to vote generally in the election of that entity's directors.
SECTION 2. THE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a) provide
incentive to selected employees and consultants of the Company and its
Subsidiaries to stimulate their efforts toward the continued success of the
Company and to operate and manage the business of the Company in a manner
that will provide for the long-term growth and profitability of the Company;
(b) encourage stock ownership by selected employees and consultants by
providing them with a means to acquire a proprietary interest in the Company;
and (c) provide a means of obtaining, rewarding and retaining select
employees and consultants.
2.2 Stock Subject to the Plan. Subject to adjustment in accordance
with Section 4.2 hereof, 500,000 shares of Stock (the "Maximum Plan Shares")
are hereby reserved exclusively for issuance pursuant to Options. At no time
shall the Company have outstanding Options and shares of Stock issued in
respect of Options granted under this Plan in excess of the Maximum Plan
Shares; for this purpose, the shares of Stock attributable to the nonvested,
unpaid, unexercised, unconverted or otherwise unsettled portion of any Option
that is forfeited or canceled or expires or terminates for any reason without
becoming vested, paid, exercised, converted or otherwise settled in full
shall again be available for purposes of the Plan.
2.3 Administration of the Plan. The Plan shall be administered by
the Committee. The Committee shall have full authority in its discretion to
determine the persons to whom Options shall be granted and the terms and
provisions of Options, subject to the Plan. Subject to the provisions of the
Plan, the Committee shall have full and conclusive authority to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the respective Stock Option
Agreements, to accelerate the time at which Options can be exercised, and to
make all other determinations necessary or advisable for the proper
administration of the Plan. The Committee's determinations under the Plan
need not be uniform and may be made by it selectively among persons who
receive, or are eligible to receive, awards under the Plan (whether or not
such persons are similarly situated). The Committee's decisions shall be
final and binding on all Participants.
2.4 Eligibility and Limits. Options may be granted only to employees
and consultants of the Company and its Subsidiaries; provided, however, that
an incentive stock option may only be granted to an employee of the Company
or any Subsidiary. Only directors who are also employees of the Company may
receive grants of Options under this Plan. In the case of incentive stock
options, if the aggregate Fair Market Value (determined as of the date an
incentive stock option is granted) of Stock with respect to which Options
intended to meet the requirements of Code Section 422 become exercisable for
the first time by an individual during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, then the number of
incentive stock option(s) granted under this Plan which cause the $100,000
limitation to be exceeded shall be treated as non-qualified stock option(s).
SECTION 3. TERMS OF OPTIONS
3.1 Terms and Conditions of Options. No more than 500,000 shares of
Stock shall be reserved and available for issuance as Options under the Plan.
3.1.1 Number of Option Shares. The number of shares of Stock as
to which an Option shall be granted shall be determined by the
Committee in its sole discretion, subject to the provisions of Section
2.2 as to the total number of shares available for grants under the
Plan. Notwithstanding the preceding, to the extent required under
Section 162(m) of the Code and the regulations thereunder for
compensation to be treated as qualified performance-based compensation,
the maximum number of shares of Stock with respect to which Options may
be granted during any one year period to any employee shall not exceed
200,000.
3.1.2 Stock Option Agreement. Each Option shall be evidenced by
a Stock Option Agreement in such form and containing such terms,
conditions and restrictions as the Committee may determine to be
appropriate. Each Stock Option Agreement shall be subject to the terms
of the Plan and any provisions contained in the Stock Option Agreement
that are inconsistent with the Plan shall be null and void.
3.1.3 Type of Option. At the time any Option is granted, the
Committee shall determine whether the Option is intended to be an
incentive stock option described in Code Section 422 or a non-qualified
stock option that is not governed by Code Section 422, and the Option
shall be clearly identified as to its status as an incentive stock
option or a non-qualified stock option. At the time any incentive
stock option granted under the Plan is exercised, the Company shall be
entitled to legend the certificates representing the shares of Stock
purchased pursuant to the Option to clearly identify them as
representing the shares purchased upon the exercise of an incentive
stock option. An incentive stock option may only be granted within 10
years from the earlier of the date the Plan is adopted by the Board or
approved by the Company's stockholders.
3.1.4 Exercise Price. Subject to adjustment in accordance with
Section 4.2 and the other provisions of this Section 3, the Exercise
Price of an Option shall be as set forth in the applicable Stock Option
Agreement. Notwithstanding the preceding, the Exercise Price under an
incentive stock option shall not be less than the Fair Market Value of
the underlying Stock on the date the Option is granted, and with
respect to each grant of an incentive stock option to a Participant who
is an Over 10% Owner, the Exercise Price shall not be less than 110% of
the Fair Market Value of the underlying Stock on the date the Option is
granted.
3.1.5 Option Term. Any incentive stock option granted to a
Participant who is not an Over 10% Owner shall not be exercisable after
the expiration of 10 years after the date the Option is granted. Any
incentive stock option granted to a Participant who is an Over 10%
Owner shall not be exercisable after the expiration of five years after
the date the Option is granted. The term of any non-qualified stock
option shall be as specified in the applicable Stock Option Agreement.
3.1.6 Payment. Payment for all shares of Stock purchased
pursuant to the exercise of an Option shall be made in any form or
manner authorized by the Committee in the Stock Option Agreement,
including, but not limited to, (i) cash, (ii) by delivery to the
Company of a number of shares of Stock which have been owned by the
Participant for at least six months prior to the date of exercise
having an aggregate Fair Market Value of not less than the product of
the Exercise Price multiplied by the number of shares the Participant
intends to purchase upon exercise of the Option on the date of
delivery; (iii) in a cashless exercise through a broker; or (iv) by
having a number of shares of Stock withheld, the Fair Market Value of
which as of the date of exercise is sufficient to satisfy the Exercise
Price. In its discretion, the Committee also may authorize (at the
time an Option is granted or thereafter) Company financing to assist
the Participant as to payment of the Exercise Price on such terms as
may be offered by the Committee in its discretion. Any such financing
shall require the payment by the Participant of interest on the amount
financed at a rate not less than the "applicable federal rate" under
the Code. If a Stock Option Agreement so provides, the Participant may
be granted a new Option to purchase a number of shares of Stock equal
to the number of previously-owned shares of Stock tendered in payment
for each share of Stock purchased pursuant to the terms of the Stock
Option Agreement. Any such new Option shall be subject to the terms
and conditions of the Stock Option Agreement pursuant to which such new
Option is granted. Payment of the Exercise Price shall be made at the
time the Option or any part thereof is exercised, and no shares of
Stock shall be issued or delivered upon exercise of an Option until
full payment has been made by the Participant. The holder of an
Option, as such, shall have none of the rights of a stockholder until
delivery of the certificate(s) representing the Stock the Participant
has purchased.
3.1.7 Conditions to the Exercise of an Option. Each Option shall
be exercisable by the Participant at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the
Committee shall specify in the Stock Option Agreement; provided,
however, that subsequent to the grant of an Option, the Committee, at
any time before complete termination of such Option, may accelerate the
time or times at which such Option may be exercised in whole or in
part, and may permit the Participant or any other designated person to
exercise the Option, or any portion thereof, for all or part of the
remaining Option term, notwithstanding any provision of the Stock
Option Agreement to the contrary.
3.1.8 Termination of Incentive Stock Option. With respect to an
incentive stock option, in the event of termination of employment of a
Participant for any reason other than death or disability, the Option
or portion thereof held by the Participant which is unexercised shall
expire, terminate, and become unexercisable no later than the
expiration of three months after the date of termination of employment;
provided, however, that in the case of a holder whose termination of
employment is due to death or disability ("disability" meaning
"disabled" within the meaning of Code Section 22(e)(3)), one year shall
be substituted for such three month period. For purposes of this
Subsection 3.1.8, termination of employment of the Participant shall
not be deemed to have occurred if the Participant is employed by
another corporation (or a parent or subsidiary corporation of such
other corporation) which has assumed the incentive stock option of the
Participant in a transaction to which Code Section 424(a) is applicable.
3.1.9 Special Provisions for Certain Substitute Options.
Notwithstanding anything to the contrary in this Section 3, any Option
issued in substitution for an option previously issued by another
entity, which substitution occurs in connection with a transaction to
which Code Section 424(a) is applicable, may provide for an exercise
price computed in accordance with such Code Section and the regulations
thereunder and may contain such other terms and conditions as the
Committee may prescribe to cause such substitute Option to contain as
nearly as possible the same terms and conditions (including the
applicable vesting and termination provisions) as those contained in
the previously-issued option being replaced thereby.
3.1.10 Date of Grant. The date an Option is granted shall
be the date on which the Committee has approved the terms and
conditions of the Option and has determined the recipient of the Option
and the number of shares covered by the Option and has taken all such
other action necessary to complete the grant of the Option.
3.1.11 Nonassignability. Options shall not be transferable
or assignable except by will or by the laws of descent and
distribution. Such Options shall be exercisable, during the
Participant's lifetime, only by the Participant; or in the event of the
death of the Participant, by the legal representatives of the
Participant's estate or if no legal representative has been appointed,
by the successor in interest determined under the Participant's will.
Notwithstanding the two prior sentences, however, if the applicable
Stock Option Agreement so provides, a Participant may assign all or any
portion of an Option granted to him that is not an incentive stock
option to (i) his spouse or lineal descendants, (ii) one or more trusts
for the benefit of his spouse or lineal descendants, (iii) a
partnership of which his spouse or lineal descendants are the only
partners, or (iv) a tax exempt organization as described in
Section 501(c)(3) of the Code, as may be permitted under Securities
Exchange Commission Rule 16b-3 as in effect from time to time. In that
event, the spouse, lineal descendant, trust, partnership or tax exempt
organization will be entitled to all of the rights of the Participant
with respect to the assigned portion of such Option, and such Option
will continue to be subject to all of the terms and conditions that
governed the Option during the period that it was held by the
Participant; provided, however, that such assignee may not further
assign the Option except by will or by the laws of descent and
distribution. Any such assignment will be permitted only if the
Participant does not receive any consideration therefore.
Additionally, in order for an assignment by a Participant to be
effective, (i) at least 30 days prior to the date of assignment, the
Participant must notify the Company in writing of the date of the
assignment, the Option or portion thereof to be assigned and the name,
address, telephone number and social security or employer
identification number of the assignee, (ii) at the time of assignment,
the Participant must execute an appropriate written agreement that the
Company provides to evidence the assignment and to agree to remit any
applicable withholding the Company may require and (iii) at the time of
assignment, the assignee pursuant to a written agreement that the
Company provides must agree to be bound by the same terms and
conditions that governed the Option during the period it was held by
the Participant.
3.2 Treatment of Option Upon Termination of Employment. Except as
otherwise provided by Plan Subsection 3.1.8, any Option granted to a
Participant whose employment with the Company has been terminated may be
canceled, accelerated or continued, as provided in the applicable Stock
Option Agreement, or, in the absence of such provision, as the Committee may
determine. The portion of any grant exercisable in the event of continuation
may be adjusted by the Committee to reflect the Participant's period of
service from the date of grant through the date of the Participant's
termination of employment or such other factors as the Committee determines
are relevant to its decision to continue the award.
SECTION 4. GENERAL PROVISIONS
4.1 Withholding. Whenever the Company proposes or is required to
issue or transfer shares of Stock under the Plan, the Company shall require
the recipient to remit to the Company, as a condition to exercising the
Option, an amount sufficient to satisfy any federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares. A Participant may pay the withholding tax:
(i) in cash; (ii) if the Stock Option Agreement so provides, by delivery to
the Company of a number of shares of Common Stock which has been owned by the
Participant for at least six months prior to the date of exercise which, when
multiplied by the Fair Market Value of the shares of Stock determined as of
the Tax Date (defined below), is sufficient to satisfy federal, state and
local, if any, withholding taxes arising from exercise of an Option; or (iii)
if the Stock Option Agreement so provides, a Participant may elect to have
the number of shares of Stock he is to receive reduced by the smallest number
of whole shares of Stock which, when multiplied by the Fair Market Value of
the shares of Stock determined as of the Tax Date is sufficient to satisfy
federal, state and local, if any, withholding taxes arising from exercise of
an Option (clauses (ii) and (iii) each being a "Withholding Election"). A
Participant may make a Withholding Election only if both of the following
conditions are met:
4.1.1 The Withholding Election must be made on or prior to the
date on which the amount of tax required to be withheld is determined
(the "Tax Date") by executing and delivering to the Company a properly
completed notice of Withholding Election as prescribed by the
Committee; and
4.1.2 Any Withholding Election made will be irrevocable except on
six months advance written notice delivered to the Company; however,
the Committee may in its sole discretion disapprove and give no effect
to the Withholding Election.
4.2 Changes In Capitalization; Merger; Liquidation.
-----------------------------------------------
4.2.1 The number of shares of Stock reserved for the grant of
Options; the number of shares of Stock reserved for issuance upon the
exercise or payment, as applicable, of each outstanding Option; and the
Exercise Price of each outstanding Option shall be proportionately
adjusted for any increase or decrease in the number of issued shares of
Stock resulting from a subdivision or combination of shares of Stock or
the payment of a stock dividend in shares of Stock to holders of
outstanding shares of Stock or any other increase or decrease in the
number of shares of Stock outstanding effected without receipt of
consideration by the Company.
4.2.2 In the event of or in anticipation of a sale, exchange,
merger, consolidation, reorganization, tender offer for shares of Stock
or other similar business transaction involving the Company, the
Committee may make such adjustments with respect to awards and take
such other action as it deems necessary or appropriate to reflect such
sale, exchange, merger, consolidation, reorganization, tender offer or
other similar business transaction including, without limitation, the
substitution of new awards, the termination or adjustment of
outstanding awards, the acceleration of awards, or the removal of
restrictions on outstanding awards. Notwithstanding the foregoing
sentence, however, in the event of or in anticipation of a sale,
exchange, merger, consolidation, reorganization, tender offer for
shares of Stock or other similar business transaction involving the
Company that would result in a Change of Control, any Option granted
hereunder shall become immediately exercisable in full, and shall
remain so, regardless of any provisions contained in the applicable
Stock Option Agreement with respect thereto limiting the exercisability
of the Option for any length of time or terminating the Option prior to
the expiration of its remaining term, subject to all the terms hereof
and of the Stock Option Agreement with respect thereto not inconsistent
with this sentence. Any adjustment pursuant to this Section 4.2 may
provide, in the Committee's discretion, for the elimination without
payment therefor of any fractional shares that might otherwise become
subject to any Option, but shall not otherwise diminish the
then-current value of the Option.
4.2.3 The existence of the Plan and the Options granted pursuant
to the Plan shall not limit or otherwise adversely affect in any way
the right or power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or
business structure, any merger or consolidation of the Company, any
issue of debt or equity securities having preferences or priorities as
to the Stock or the rights thereof, the dissolution or liquidation of
the Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding.
4.3 Cash Awards. The Committee may, at any time and in its
discretion, grant to any holder of an Option the right to receive, at such
times and in such amounts as determined by the Committee in its discretion, a
cash amount which is intended to reimburse such person for all or a portion
of the federal, state and local income taxes imposed upon such person as a
consequence of the receipt of the Option or the exercise of rights thereunder.
4.4 Compliance with Code. All incentive stock options to be granted
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all incentive stock options granted hereunder shall be construed
in such a manner as to effectuate that intent. However, no Option that is
intended to be an incentive stock option shall be invalid for failure to
qualify as an incentive stock option. A Participant shall notify the Company
of any sale or other Disposition of Stock acquired pursuant to an incentive
stock option if such sale or other Disposition occurs (i) within two years of
grant of the incentive stock option or (ii) within one year of the issuance
of the Stock to the Participant. Such notice shall be in writing and
directed to the Secretary of the Company.
4.5 Right to Terminate Employment. Nothing in the Plan or in any
Option shall confer upon any Participant the right to continue as an employee
or consultant of the Company or any Subsidiary or affect the right of the
Company or any Subsidiary to terminate the Participant's employment or other
relationship with the Company or any Subsidiary at any time.
4.6 Non-alienation of Benefits. Other than as specifically permitted
in Section 3.1.11, no benefit under the Plan shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
or charge; and any attempt to do so other than as specifically permitted
thereunder shall be void. No such benefit shall, prior to receipt, be in any
manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the recipient.
4.7 Restrictions on Delivery and Sale of Shares; Legends. Each
Option is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification
of the shares covered by such Option upon any securities exchange or under
any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Option, the assignment of such Option or
the purchase or delivery of shares thereunder, the delivery of any or all
shares pursuant to such Option may be withheld unless and until such listing,
registration or qualification shall have been affected. If a registration
statement is not in effect under the Securities Act, or any applicable state
securities laws with respect to the shares of Stock purchasable or otherwise
deliverable under Options then outstanding, the Committee may require, as a
condition of assignment or exercise of the Option or as a condition to any
other delivery of Stock pursuant to an Option, that the Participant or other
recipient of an Option represent, in writing, that the shares received
pursuant to the Option are being acquired for investment and not with a view
to distribution and agree that the shares will not be disposed of except
pursuant to an effective registration statement, unless the Company shall
have received an opinion of counsel that such disposition is exempt from such
requirement under the Securities Act and any applicable state securities
laws. The Company may include on certificates representing shares delivered
pursuant to an Option such legends referring to the foregoing representations
or restrictions or any other applicable restrictions on resale as the
Company, in its discretion, shall deem appropriate.
4.8 Termination and Amendment of the Plan. The Board at any time may
amend or terminate the Plan without stockholder approval; provided, however,
that the Board may condition any amendment on the approval of stockholders of
the Company if such approval is necessary or advisable with respect to tax,
securities or other applicable laws. No such termination or amendment
without the consent of the Participant holding an Option shall adversely
affect the rights of such Participant with respect to such Option.
4.9 Choice of Law. The laws of the State of Delaware shall govern
the Plan, to the extent not preempted by federal law.
4.10 Effective Date of Plan. The Plan became effective on May 8,
1998, the date of its approval by the Board, subject, however, to the
subsequent approval of the Plan by the Company's stockholders within twelve
months after the Board's approval of the Plan.
