<PAGE>
As filed with the Securities and Exchange Commission on June 17, 1998
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
CBT GROUP PUBLIC LIMITED COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------------
REPUBLIC OF IRELAND N.A.
(STATE OR OTHER JURISDICTION OF I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1005 HAMILTON COURT
MENLO PARK, CALIFORNIA 94025
(ADDRESS, INCLUDING ZIP CODE, OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)
----------------------
THE FOREFRONT GROUP, INC. AMENDED AND RESTATED 1992 STOCK OPTION PLAN
THE FOREFRONT GROUP, INC. AMENDED AND RESTATED 1996 STOCK OPTION PLAN
THE FOREFRONT GROUP, INC. 1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
----------------------
ELIZABETH K. ROEMER
VICE PRESIDENT AND GENERAL COUNSEL
CBT GROUP PLC
1005 HAMILTON COURT
MENLO PARK, CA 94025
(650) 614-5900
(NAME, ADDRESS, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
----------------------
COPY TO:
ALAN K. AUSTIN
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE AGGREGATE OFFERING REGISTRATION
PER SHARE PRICE FEE
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ordinary Shares issuable upon exercise
of outstanding options under The
ForeFront Group, Inc. Amended and
Restated 1992 Stock Option Plan 288,578 $11.64 (1) $ 3,359,048 (1) $ 991 (1)
- - ----------------------------------------------------------------------------------------------------------------------
Ordinary Shares issuable upon exercise
of outstanding options under The
ForeFront Group, Inc. Amended and
Restated 1996 Stock Option Plan 798,780 $16.90 (1) $13,499,382 (1) $3,983 (1)
- - ----------------------------------------------------------------------------------------------------------------------
Ordinary Shares issuable upon exercise
of outstanding options under The
ForeFront Group, Inc. 1996
Non-Employee Directors' Stock Option
Plan 18,822 $15.68 (1) $ 295,129 (1) $ 88 (1)
- - ----------------------------------------------------------------------------------------------------------------------
TOTAL 1,106,180 $17,153,559 $ 5,062 (1)
======================================================================================================================
</TABLE>
(1) Computed pursuant to Rule 457(h) solely for the purpose of determining the
registration fee. The proposed maximum offering price represents the
weighted average exercise price per share of the stock options registered
hereunder.
<PAGE>
CBT GROUP PUBLIC LIMITED COMPANY
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
- - --------------------------------------------------
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------
The following documents and information previously filed by CBT Group
Public Limited Company (the "Registrant" or "Company") with the Securities and
Exchange Commission (the "Commission") are hereby incorporated by reference in
this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
(b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1998.
(c) The Company's Current Report on Form 8-K dated June 12, 1998.
(d) The description of the Company's Ordinary Shares as contained in the
Company's Registration Statement on Form 8-A filed on March 9, 1995
and Amendment No. 1 thereto on Form 8-A/A filed on April 10, 1995.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act on or after the date of this
Registration Statement, and 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 this Registration Statement and to be part hereof from the date of
filing such documents.
Item 4. DESCRIPTION OF SECURITIES
-------------------------
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
--------------------------------------
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
The Company's Articles of Association authorize the Company to
indemnify the directors and officers of the Company against certain liabilities
and expenses incurred by such persons in connection with claims made by reason
of their being such a director or officer. The Company's subsidiary, CBT
Systems USA Ltd., has entered into indemnification agreements with its directors
and officers and directors and
<PAGE>
officers of the Company serving at the request of CBT Systems USA Ltd. The
indemnification agreements under certain circumstances require the Company,
among other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers (other than liabilities arising from willful misconduct of a culpable
nature) and to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified. The Company has obtained
directors and officers' insurance providing indemnification for certain of the
Company's directors, officers, affiliates or employees for certain liabilities.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
-----------------------------------
Not applicable.
Item 8. EXHIBITS
--------
Exhibit
Number Document
- - --------- ---------------------------------------------------
4.1 The ForeFront Group, Inc. Amended and Restated 1992 Stock Option
Plan
4.2 The ForeFront Group, Inc. 1996 Non-Employee Directors' Stock
Option Plan
4.3 The ForeFront Group, Inc. Amended and Restated 1996 Stock Option
Plan
5.1 Opinion of Binchys, Solicitors with respect to the securities
being registered
23.1 Consent of Ernst & Young, Chartered Accountants
23.2 Consent of Binchys, Solicitors (contained in Exhibit 5.1)
24.1 Power of Attorney (See Signature Page)
Item 9. UNDERTAKINGS
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement 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.
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended, 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 Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Menlo Park, State of California, on this 16 day of
June, 1998.
CBT GROUP PUBLIC LIMITED COMPANY
By: /s/ James J. Buckley
_______________________________
James J. Buckley, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James J. Buckley and Richard Y. Okumoto,
and each of them, as his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully and to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ William G. McCabe
- - --------------------------- Chairman of the Board June 16, 1998
William G. McCabe
/s/ James J. Buckley
- - --------------------------- President, Chief Executive June 16, 1998
James J. Buckley Officer (Principal Executive
Officer) and Director
</TABLE>
<PAGE>
/s/ Richard Y. Okumoto
- - --------------------------- Vice President, Finance, and June 16, 1998
Richard Y. Okumoto Chief Financial Officer
(Principal Financial Officer),
and U.S. Representative
/s/ John P. Hayes
- - --------------------------- Group Financial Controller June 16, 1998
John P. Hayes (Principal Accounting Officer)
and Director
- - --------------------------- Director June ____, 1998
Gregory M. Priest
- - --------------------------- Director June ____, 1998
Patrick J. McDonagh
/s/ John Grillos
- - --------------------------- Director June 16, 1998
John Grillos
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
Number Document
- - --------- ---------------------------------------------------
4.1 The ForeFront Group, Inc. Amended and Restated 1992 Stock Option
Plan
4.2 The ForeFront Group, Inc. 1996 Non-Employee Directors' Stock
Option Plan
4.3 The ForeFront Group, Inc. Amended and Restated 1996 Stock Option
Plan
5.1 Opinion of Binchys, Solicitors with respect to the securities
being registered
23.1 Consent of Ernst & Young, Chartered Accountants
23.2 Consent of Binchys, Solicitors (contained in Exhibit 5.1)
24.1 Power of Attorney (See Signature Page)
<PAGE>
EXHIBIT 4.1
THE FOREFRONT GROUP, INC.
AMENDED AND RESTATED 1992
STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Amended and Restated 1992
--------------------
Stock Option Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to
Employees and Consultants of the Company and its Subsidiaries and to promote the
success of the Company's business. Options granted under this Plan may be
incentive stock options (as defined under Section 422 of the Code) or
nonqualified stock options, as determined by the Administrator at the time of
grant of an option and subject to the applicable provisions of Section 422 of
the Code, as amended, and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees, as
applicable, that is administering the Plan pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Company" means The ForeFront Group, Inc., a Delaware corporation.
(f) "Consultant" means any consultant or advisor to the Company or any
Parent or Subsidiary and any director of the Company whether compensated for
such services or not, provided that if and in the event the Company registers
any class of any equity security pursuant to the Exchange Act, the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
(g) "Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship by the Company or
any Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: (i) any leave of absence approved by the Board,
including sick leave, military leave, or any other personal leave; provided,
however, that for purposes of Incentive Stock Options, such leave is for a
period of not more than ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (ii)
in the case of transfers between locations of the Company or between the
Company, its Subsidiaries or its successor.
<PAGE>
(h) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" means, as of any date, the value of Stock
determined as follows:
(i) If the Stock is listed on any established stock exchange or a
national market system including without limitation the National Market System
of the National Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported, as quoted on such
system or exchange or the exchange with the greatest volume of trading in Stock
for the last market trading day prior to the time of determination) as reported
in the Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Stock is quoted on the NASDAQ System (but not on the
National Market System thereof) or regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be the
mean between the high and low asked prices for the Stock; or
(iii) In the absence of an established market for the Stock, the
Fair Market Value thereof shall be determined in good faith by the
Administrator.
(k) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(l) "Nonqualified Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(m) "Option" means a stock option granted pursuant to the Plan.
(n) "Optioned Stock" means the Stock subject to an Option.
(o) "Optionee" means an Employee or Consultant who receives an Option.
(p) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(q) "Plan" means this Amended and Restated 1992 Stock Option Plan.
(r) "Share" means a share of the Stock, as adjusted in accordance with
Section 12 of the Plan.
-2-
<PAGE>
(s) "Stock" means the Common Stock, par value $.01 per share, of the
Company;
(t) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
-------------------------
the Plan, the maximum number of shares of Stock which may be optioned and sold
under the Plan is 1,620,810 shares. The shares may be authorized, but unissued,
or reacquired Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan.
4. Administration of the Plan.
--------------------------
(a) Procedure.
---------
(i) Administration With Respect to Directors and Officers. With
-----------------------------------------------------
respect to grants of Options to Employees who are also officers or directors of
the Company, the Plan shall be administered by (A) the Board or (B) a Committee
designated by the Board to administer the Plan, which Committee shall be
constituted in such a manner as to permit the Plan to comply with Rule 16b-3
promulgated under the Exchange Act or any successor thereto ("Rule 16b-3") with
respect to a plan intended to qualify thereunder as a discretionary plan. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by Rule
16b-3 with respect to a plan intended to qualify thereunder as a discretionary
plan. Notwithstanding the foregoing, the Plan shall not be administered by the
Board if (a) the Company and its officers and directors are then subject to the
requirements of Section 16 of the Exchange Act and (b) the Board's
administration of the Plan would prevent the Plan from complying with Rule 16b-
3.
(ii) Multiple Administrative Bodies. If permitted by Rule 16b-3,
------------------------------
the Plan may be administered by different bodies with respect to directors, non-
director officers and Employees who are neither directors nor officers.
(iii) Administration With Respect to Consultants and Other
----------------------------------------------------
Employees. With respect to grants of Options to Employees or Consultants who are
- - ---------
neither directors nor officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the legal requirements relating to
the administration of incentive stock option plans, if any, of corporate and
securities laws applicable to the Company and of the Code (the "Applicable
-3-
<PAGE>
Laws"). Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time the
Board may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove all members of
the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Stock, in
accordance with Section 2(j) of the Plan;
(ii) to select the officers, Consultants and Employees to whom
Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the number of shares of Stock to be covered by
each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, the per share exercise price for the Shares to be issued pursuant
to the exercise of an Option and any restriction or limitation, or any vesting
acceleration or waiver of forfeiture restrictions regarding any Option or
other award and/or the shares of Stock relating thereto, based in each case on
such factors as the Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what circumstances an
Option may be bought-out for cash under subsection 9(f);
(viii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an award under
this Plan shall be deferred either automatically or at the election of the
participant (including providing for and determining the amount, if any, of any
deemed earnings on any deferred amount during any deferral period); and
(ix) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Stock covered by such
Option shall have declined since the date the Option was granted.
-4-
<PAGE>
(c) Effect of Committee's Decision. All decisions, determinations and
------------------------------
interpretations of the Administrator shall be final and binding on all Optionees
and any other holders of any Options. Neither the Board, the Committee nor any
member thereof shall be liable for any act, omission, interpretation,
construction or determination made in connection with the Plan in good faith,
and the members of the Board and of the Committee shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including counsel fees) arising therefrom to the full extent
permitted by law.
5. Eligibility.
-----------
(a) Nonqualified Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonqualified Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonqualified Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with respect
to continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with his right or the Company's right to terminate
his employment or consulting relationship at any time, with or without cause,
unless otherwise agreed in writing by the Company and such Optionee.
6. Term of Plan. The Plan shall become effective upon its adoption by
------------
the Board of Directors subject only to approval by the holders of a majority of
the outstanding Shares within 12 months after such date. It shall continue in
effect until June 9, 2002 unless extended by the Board or sooner terminated
under Section 14 of the Plan. No grants of Options will be made pursuant to the
Plan after June 9, 2002.
7. Term of Option. The term of each Option shall be the term stated in
--------------
the Option Agreement; provided, however, that in the case of an Incentive Stock
Option, the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
However, in the case of an Option granted to an Optionee who, at the time the
Option is granted, owns Stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of
-5-
<PAGE>
the Option shall be five (5) years from the date of grant thereof or such
shorter term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
---------------------------------------
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
In the case of an Incentive Stock Option:
(i) granted to an Employee who, at the time of the grant of such
Incentive Stock Option, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(ii) granted to any Employee, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other shares of the Company's capital stock
which (x) in the case of shares of the Company's capital stock acquired upon
exercise of an Option either have been owned by the Optionee for more than six
months on the date of surrender or were not acquired, directly or indirectly,
from the Company, and (y) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised, (5) authorization for the Company to retain from the total
number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (6) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (7) any combination of the foregoing methods
of payment, or (8) such other consideration and method of payment for the
issuance of Shares to the extent permitted under applicable laws.
9. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan. An Option may not be exercised for a fraction of a Share.
-6-
<PAGE>
An Option shall be deemed to be exercised, and the Optionee deemed to
be a stockholder of the Shares being purchased upon exercise, when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board, consist
of any consideration and method of payment allowable under Section 8(b) of the
Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment. In the event of termination of an
-------------------------
Optionee's relationship as a Consultant (unless such termination is for purposes
of becoming an Employee of the Company) or Continuous Status as an Employee with
the Company (as the case may be), such Optionee may, but only within ninety (90)
days (or such other period of time as is determined by the Board, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option and not exceeding ninety (90) days) after the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise his Option to the extent
that Optionee was entitled to exercise it at the date of such termination. To
the extent that Optionee was not entitled to exercise the Option at the date of
such termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section
----------------------
9(b) above, in the event of termination of an Optionee's relationship as a
Consultant or Continuous Status as an Employee as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), Optionee may,
but only within twelve (12) months from the date of such termination (but in no
event later than the expiration date of the term of such Option as set forth in
the Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that Optionee was
not entitled to exercise the Option at the date of termination, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option may be exercised, at any time within twelve (12) months following the
date of death (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by the Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if the Optionee's estate (or
such other person who acquired the right to exercise the Option) does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
-7-
<PAGE>
(e) Rule 16b-3. Options granted to persons subject to Section 16(b)
----------
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer to buy
-----------------
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
10. Non-Transferability of Options. The Option may not be sold, pledged,
------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Stock Withholding to Satisfy Withholding Tax Obligations. At the
--------------------------------------------------------
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option, that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The
Fair Market Value of the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined (the "Tax Date").
All elections by an Optionee to have Shares withheld for this purpose shall
be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the particular
Shares of the Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator; and
(d) if the Optionee is subject to Rule 16b-3, the election must comply
with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
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<PAGE>
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option is exercised but such
Optionee shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.
12. Changes in the Company's Capital Structure. The existence of
------------------------------------------
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Stock outstanding, without receiving
compensation therefor in money, services or property, then (a) the number,
class, and per share price of shares of Stock subject to outstanding Options
hereunder shall be appropriately adjusted in such a manner as to entitle an
Optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class of shares as he would have
received had he exercised his Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of shares of Stock then
reserved for issuance under the Plan shall be adjusted by substituting for the
total number and class of shares of Stock then reserved that number and class of
shares of stock that would have been received by the owner of an equal number of
outstanding shares of each class of Stock as the result of the event requiring
the adjustment.
Unless otherwise expressly provided in an Option Agreement (as defined in
Section 17), upon a Corporate Change (as defined below), notwithstanding any
other term of this Plan, any and all outstanding Options not fully vested and
exercisable shall vest in full and be immediately exercisable, and any other
restrictions on such Options including, without limitation, requirements
concerning the achievement of specific goals shall terminate.
As used in this Plan, a "Corporate Change" shall be deemed to have occurred
upon, and shall mean (A) the acquisition after August 14, 1995 by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a "Person"), of beneficial ownership (within the meaning
of Rule l3d-3 promulgated under the Exchange Act) of 80% or more of either (i)
the then outstanding shares of Stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
the following transactions shall not constitute a Corporate Change: (u) any
acquisition by virtue of the conversion of preferred stock of the Company
outstanding on August 14, 1995, (v) customary transactions with and between
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underwriters and selling group members with respect to a bona fide public
offering of securities, (w) any acquisition directly from the Company (excluding
an acquisition by virtue of the exercise of a conversion privilege), (x) any
acquisition by the Company, (y) any acquisition by any employee benefit plan(s)
(or related trust(s)) sponsored or maintained by the Company or any corporation
controlled by the Company or (z) any acquisition by any entity pursuant to a
reorganization, merger or consolidation, if, immediately following such
reorganization, merger or consolidation the conditions described in clauses (i),
(ii) and (iii) of clause B of this paragraph are satisfied; or (B) the approval
by the stockholders of the Company of a reorganization, merger or consolidation,
in each case, unless immediately following such reorganization, merger or
consolidation (i) more than 60% of, respectively, the then outstanding shares of
common stock (or other equivalent securities) of the entity resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such entity entitled to vote generally in
the election of directors (or other similar governing body) is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities immediately
prior to such reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such reorganization, merger
or consolidation, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person (excluding the
Company, any employee benefit plan(s) (or related trust(s)) of the Company
and/or its subsidiaries or such entity resulting from such reorganization,
merger or consolidation and any Person beneficially owning, immediately prior to
such reorganization, merger or consolidation, directly or indirectly, 80% or
more of the Outstanding Company Common Stock or Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 80%
or more of, respectively, the then outstanding shares of common stock (or other
equivalent securities) of the entity resulting from such reorganization, merger
or consolidation or the combined voting power of the then outstanding voting
securities of such entity entitled to vote generally in the election of
directors (or other similar governing body) and (iii) at least a majority of the
members of the board of directors (or other similar governing body) of the
entity resulting from such reorganization, merger or consolidation were members
of the Incumbent Board (as defined below) at the time of the execution of the
initial agreement providing for such reorganization, merger or consolidation.
The "Incumbent Board" shall mean individuals who as of August 14, 1995,
constitute the Company's Board of Directors; provided, however, that any
individual becoming a director subsequent to such date whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either (i) an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act), or an actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Company's Board of Directors or (ii) a
plan or agreement to replace a majority of the members of the Board of Directors
then comprising the Incumbent Board.
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<PAGE>
The Company intends that this Paragraph 12 shall comply with the
requirements of Rule l6b-3 and any future rules promulgated in substitution
therefor under the Exchange Act during the term of the Plan. Should any
provision of this Paragraph 12 not be necessary to comply with the requirements
of Rule 16b-3 or should any additional provisions be necessary for this
Paragraph 12 to comply with the requirements of Rule 16b-3, the Board of
Directors may amend the Plan to add to or modify the provisions of the Plan
accordingly.
Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number, class, or price of shares of Stock then
subject to outstanding Options.
13. Time of Granting Options. The date of grant of an Option shall, for
------------------------
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.
14. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of
any Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3
under the Exchange Act or with Section 422 of the Code (or any other
applicable law or regulation, including the applicable requirements of the
NASD or an established stock by the Optionee and the Company.
(b) Effect of Amendment or Termination. Any such amendment or
----------------------------------
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of such Option and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
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<PAGE>
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan,
---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
17. Agreements. Options shall be evidenced by written agreements ("Option
----------
Agreement") in such form as the applicable Administrator shall approve from time
to time.
18. Information to Optionees. The Company shall provide to each Optionee,
------------------------
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are generally provided
to all stockholders of the Company. The Company shall not be required to provide
such information to persons whose duties in connection with the Company assure
their access to equivalent information.
19. Governing Law; Construction. All rights and obligations under the
---------------------------
Plan shall be governed by, and the Plan shall be construed in accordance with,
the laws of the State of Delaware without regard to the principles of conflicts
of laws. Titles and headings to Sections herein are for purposes of reference
only, and shall in no way limit, define or otherwise affect the meaning or
interpretation of any provisions of the Plan.
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<PAGE>
EXHIBIT 4.2
THE FOREFRONT GROUP, INC.
1996 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
PURPOSE OF THE PLAN
THE FOREFRONT GROUP, INC. 1996 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
(the "Plan") is intended to promote the interests of THE FOREFRONT GROUP, INC.,
a Delaware corporation (the "Company"), and its stockholders by helping to award
and retain highly-qualified independent directors and allowing them to develop a
sense of proprietorship and personal involvement in the development and
financial success of the Company. Accordingly, the Company shall grant to
directors of the Company who are not employees of the Company or any of its
subsidiaries ("Nonemployee Directors") the option ("Option") to purchase shares
of the common stock of the Company ("Stock"), as hereinafter set forth. Options
granted under the Plan shall be options which do not constitute incentive stock
options, within the meaning of section 422(b) of the Internal Revenue Code of
1986, as amended.
II. OPTION AGREEMENTS
Each Option shall be evidenced by a written agreement in the form attached
to the Plan.
III. ELIGIBILITY OF OPTIONEE
Options may be granted only to individuals who are Nonemployee Directors of
the Company. Each Nonemployee Director who is elected to the Board of Directors
of the Company (the "Board") for the first time after the effective date of the
Plan shall receive, as of the date of his or her election and without the
exercise of the discretion of any person or persons, an Option exercisable for
20,000 shares of Stock (subject to adjustment in the same manner as provided in
Paragraph VII hereof with respect to shares of Stock subject to Options then
outstanding). As of the date of the annual meeting of the stockholders of the
Company in each year that the Plan is in effect as provided in Paragraph VI
hereof, each Nonemployee Director then in office who is not then entitled to
receive an Option pursuant to the preceding sentence shall receive, without the
exercise of the discretion of any person or persons, an Option exercisable for
5,000 shares of Stock (subject in each case to adjustment in the same manner as
provided in Paragraph VII hereof with respect to shares of Stock subject to
Options then outstanding). If, as of any date that the Plan is in effect, there
are not sufficient shares of Stock available under the Plan to allow for the
grant to each Nonemployee Director of an Option for the number of shares
provided herein, each Nonemployee Director shall receive an Option for his or
her pro-rata share of the total number of shares of Stock then available under
the Plan. All Options granted under the Plan shall be at the Option price set
forth in Paragraph V hereof and shall be subject to adjustment as provided in
Paragraph VII hereof.
<PAGE>
IV. SHARES SUBJECT TO THE PLAN
The aggregate number of shares which may be issued under Options granted
under the Plan shall not exceed 150,000 shares of Stock. Such shares may
consist of authorized but unissued shares of Stock or previously issued shares
of Stock acquired by the Company. Any of such shares which remain unissued and
which are not subject to outstanding Options at the termination of the Plan
shall cease to be subject to the Plan, but, until termination of the Plan, the
Company shall at all times make available a sufficient number of shares to meet
the requirements of the Plan. Should any Option hereunder expire or terminate
prior to its exercise in full, the shares theretofore subject to such Option
which may be issued under the Plan shall be subject to adjustment in the same
manner as provided in Paragraph VII hereof with respect to shares of Stock
subject to Options then outstanding. Exercise of an Option shall result in a
decrease in the number of shares of Stock which may thereafter be available,
both for purposes of the Plan and for sale to any one individual, by the number
of shares as to which the Option is exercised.
V. OPTION PRICE
The purchase price of Stock issued under each Option shall be the fair
market value of Stock subject to the Option as of the date the Option is
granted. For all purposes under the Plan, the fair market value of a share of
Stock on a particular date shall be equal to the mean of the high and low sales
prices of the Stock (i) reported by the Nasdaq Stock Market on that date or (ii)
if the Stock is listed on a national stock exchange, reported on the stock
exchange composite tape on that date; or, in either case, if no prices are
reported on that date, on the last preceding date on which such prices of the
Stock are so reported. If the Stock is traded over the counter at the time a
determination of its fair market value is required to be made hereunder, its
fair market value shall be deemed to be equal to the average between the
reported high and low or closing bid and asked prices of Stock on the most
recent date on which Stock was publicly traded. In the event Stock is not
publicly traded at the time a determination of its value is required to be made
hereunder, the determination of its fair market value shall be made by the Board
in such manner as it deems appropriate.
VI. TERM OF PLAN
The Plan shall be effective on the date the Plan is approved by the
stockholders of the Company. Except with respect to Options then outstanding,
if not sooner terminated under the provisions of Paragraph VIII, the Plan shall
terminate upon and no further Options shall be granted after the expiration of
ten years from the date the Plan is approved by the stockholders of the Company.
VII. RECAPITALIZATION OR REORGANIZATION
A. The existence of the Plan and the Options granted hereunder shall
not affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization,
or other change in the Company's capital structure or its business, any merger
or consolidation of the Company, any issue of debt or equity securities, the
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<PAGE>
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.
B. The shares with respect to which Options may be granted are shares
of Stock as presently constituted, but if, and whenever, prior to the expiration
of an Option theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on Stock
without receipt of consideration by the Company, the number of shares of Stock
with respect to which such Option may thereafter be exercised (i) in the event
of an increase in the number of outstanding shares shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.
C. If the Company recapitalizes, reclassifies its capital stock, or
otherwise changes its capital structure (a "recapitalization"), the number and
class of shares of Stock covered by an Option theretofore granted shall be
adjusted so that such Option shall thereafter cover the number and class of
shares of stock and securities to which the optionee would have been entitled
pursuant to the terms of the recapitalization if, immediately prior to the
recapitalization, the optionee had been the holder of record of the number of
shares of Stock then covered by such Option.
D. Any adjustment provided for in Subparagraph (B) or (C) above shall
be subject to any required stockholder action.
E. Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into shares of
stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to Options theretofore granted or the purchase
price per share.
VIII. AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Options have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided, that no change in any Option theretofore granted may be
made which would impair the rights of the optionee without the consent of such
optionee and provided, further, that the Board may not make any alteration or
amendment which would materially increase the benefits accruing to participants
under the Plan, increase the aggregate number of shares which may be issued
pursuant to the provisions of the Plan, change the class of individuals eligible
to receive Options under the Plan or extend the term of the Plan, without the
approval of the stockholders of the Company.
IX. SECURITIES LAWS
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<PAGE>
A. The Company shall not be obligated to issue any Stock pursuant to
any Options granted under the Plan at any time when the offering of the shares
covered by such Option have not been registered under the Securities Act of
1933, as amended, and such other state and federal laws, rules or regulations as
the Company deems applicable and, in the opinion of legal counsel for the
Company, there is no exemption from the registration requirements of such laws,
rules or regulations available for the offering and sale of such shares.
B. It is intended that the Plan and any grant of an Option made to a
person subject to Section 16 of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), meet all of the requirements of Rule 16b-3, as currently in
effect or as hereinafter modified or amended ("Rule 16b-3"), promulgated under
the 1934 Act. If any provision of the Plan or any such Option would disqualify
the Plan or such Option under, or would otherwise not comply with, Rule 16b-3,
such provision or Option shall be construed or deemed amended to conform to Rule
16b-3.
NONEMPLOYEE DIRECTOR'S STOCK OPTION AGREEMENT
AGREEMENT made as of the _____ day of __________, 19_____, between THE
FOREFRONT GROUP, INC., a Delaware corporation (the "Company"), and
____________________ ("Director").
To carry out the purposes of THE FOREFRONT GROUP, INC. 1996 NONEMPLOYEE
DIRECTORS' STOCK OPTION PLAN (the "Plan"), by affording Director the opportunity
to purchase shares of common stock of the Company ("Stock"), and in
consideration of the mutual agreements and other matters set forth herein and in
the Plan, the Company and Director hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants the Director
the right and option ("Option") to purchase all or any part of an aggregate of
_______ shares of Stock, on the terms and conditions set forth herein and in the
Plan, which Plan is incorporated herein by reference as a part of this
Agreement. This Option shall not be treated as an incentive stock option within
the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code").
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be $________ per share, which has been determined
to be not less than the fair market value of the Stock at the date of grant of
this Option. For all purposes of this Agreement, fair market value of Stock
shall be determined in accordance with the provisions of the Plan.
3. EXERCISE OF OPTION. Subject to the earlier expiration of this Option
as herein provided, this Option may be exercised, by written notice to the
Company at its principal executive offices addressed to the attention of Chief
Executive Officer, at any time and from time to time after the date of grant
hereof, but, except as otherwise provided below, this Option shall not be
exercisable for more than a percentage of the aggregate number of shares offered
by this Option determined by the number of full calendar months from the first
day of the calendar month coincident with or next
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<PAGE>
following the date of grant hereof to the date of such exercise, in accordance
with the following schedule:
PERCENTAGE OF SHARES
NUMBER OF FULL CALENDAR MONTHS THAT MAY BE PURCHASED
- - ------------------------------- ------------------------------
(5000 shares) (20,000 shares)
Less than 1 month.................... 0.00% 0.00%
1 month but less than 2 months....... 8.33% 4.17%
2 months but less than 3 months...... 16.67% 8.33%
3 months but less than 4 months...... 25.00% 12.50%
4 months but less than 5 months...... 33.33% 16.67%
5 months but less than 6 months...... 41.67% 20.83%
6 months but less than 7 months...... 50.00% 25.00%
7 months but less than 8 months...... 58.33% 29.67%
8 months but less than 9 months...... 66.67% 33.33%
9 months but less than 10 months..... 75.00% 37.50%
10 months but less than 11 months.... 83.33% 41.67%
11 months but less than 12 months.... 91.67% 45.83%
12 months but less than 13 months.... 100.00% 50.00%
13 months but less than 14 months.... 100.00% 54.17%
14 months but less than 15 months.... 100.00% 58.33%
15 months but less than 16 months.... 100.00% 62.50%
16 months but less than 17 months.... 100.00% 66.67%
17 months but less than 18 months.... 100.00% 70.83%
18 months but less than 19 months.... 100.00% 75.00%
19 months but less than 20 months.... 100.00% 79.17%
20 months but less than 21 months.... 100.00% 83.33%
21 months but less than 22 months.... 100.00% 87.50%
22 months but less than 23 months.... 100.00% 91.67%
23 months but less than 24 months.... 100.00% 95.83%
24 months or more.................... 100.00% 100%
Notwithstanding the foregoing, if (i) the Company shall not be the
surviving entity in any merger, consolidation or other reorganization (or
survives only as a subsidiary of an entity other than a previously wholly-owned
subsidiary of the Company), (ii) the Company sells, leases or exchanges or
agrees to sell, lease or exchange all or substantially all of its assets to any
other person or entity (other than a wholly-owned subsidiary of the Company),
(iii) the Company is to be dissolved and liquidated, (iv) any person or entity,
including a "group" as contemplated by Section 13(d)(3) of the
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<PAGE>
Securities Exchange Act of 1934, acquires or gains ownership or control
(including, without limitation, power to vote) of more than 50% of the
outstanding shares of the Company's voting stock (based upon voting power), or
(v) as a result of or in connection with a contested election of directors,
the persons who were directors of the Company before such election shall cease
to constitute a majority of the Board of Directors of the Company (each such
event is referred to herein as a "Corporate Change"), then effective as of the
earlier of (1) the date of approval by the stockholders of the Company of such
merger, consolidation, reorganization, sale, lease or exchange of assets or
dissolution or such election of directors or (2) the date of such Corporate
Change, this Option shall be exercisable in full.
This Option and all rights granted hereunder are not transferable by
Director other than by will or the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code or Title 1 of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and may be exercised during Director's lifetime only by Director or
Director's guardian or legal representative. This Option may be exercised only
while Director remains a member of the Board of Directors of the Company (the
"Board") and will terminate and cease to be exercisable upon Director's
termination of membership on the Board, except that:
(a) If Director's membership on the Board terminates by reason of
disability, this Option may be exercised in full by Director (or Director's
estate or the person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Director) at any time during
the period of one year following such termination.
(b) If Director dies while a member of the Board, Director's estate, or the
person who acquires this Option by will or the laws of descent and distribution
or otherwise by reason of the death of Director, may exercise this Option in
full at any time during the period of one year following the date of Director's
death.
(c) If Director's membership on the Board terminates for any reason other
than as described in (a) or (b) above, this Option may be exercised by Director
at any time during the period of two years following such termination, or by
Director's estate (or the person who acquires this Option by will or the laws of
descent and distribution or otherwise by reason of the death of Director) during
a period of one year following Director's death if Director dies during such two
year period, but in each case only as to the number of shares Director was
entitled to purchase hereunder upon exercise of this Option as of the date
Director's membership on the Board so terminates.
This Option shall not be exercisable in any event after the expiration of
ten years from the date of grant hereof. The purchase price of shares as to
which this Option is exercised shall be paid in full at the time of exercise (A)
in cash (including check, bank draft or money order payable to the order of the
Company), (B) by delivering to the Company shares of Stock having a fair market
value equal to the purchase price, or (C) any combination of cash or Stock. No
fraction of a share of Stock shall be issued by the Company upon exercise of an
Option or accepted by the Company in payment of the purchase price thereof;
rather, Director shall provide a cash payment for such amount as is necessary to
effect the issuance and acceptance of only whole shares of Stock. Unless and
until a
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<PAGE>
certificate or certificates representing such shares shall have been issued by
the Company to Director, Director (or the person permitted to exercise this
Option in the event of Director's death) shall not be or have any of the
rights or privileges of a stockholder of the Company with respect to shares
acquirable upon an exercise of this Option.
4. WITHHOLDING OF TAX. To the extent that the exercise of this Option or
the disposition of shares of Stock acquired by exercise of this Option results
in compensation income to Director for federal or state income tax purposes,
Director shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Stock as the Company may require
to meet its obligation under applicable tax laws or regulations, and, if
Director fails to do so, the Company is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Director any tax required to be
withheld by reason of such resulting compensation income. Upon an exercise of
this Option, the Company is further authorized in its discretion to satisfy any
such withholding requirement out of any cash or shares of Stock distributable to
Director upon such exercise.
5. STATUS OF STOCK. The Company intends to register for issuance under
the Securities Act of 1933, as amended (the "Act"), the shares of Stock
acquirable upon exercise of this Option, and to keep such registration effective
throughout the period this Option is exercisable. In the absence of such
effective registration or an available exemption from registration under the
Act, issuance of shares of Stock acquirable upon exercise of this Option will be
delayed until registration of such shares is effective or an exemption from
registration under the Act is available. The Company intends to use its best
efforts to ensure that no such delay will occur. In the event exemption from
registration under the Act is available upon an exercise of this Option,
Director (or the person permitted to exercise this Option in the event of
Director's death or incapacity), if requested by the Company to do so, will
execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with applicable
securities laws.
Director agrees that the shares of Stock which Director may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable federal or state securities
laws. Director also agrees (i) that the certificates representing the shares of
Stock purchased under this Option may bear such legend or legends as the Company
deems appropriate in order to assure compliance with applicable securities laws,
(ii) that the Company may refuse to register the transfer of the shares of Stock
purchased under this Option on the stock transfer records of the Company if such
proposed transfer would in the opinion of counsel satisfactory to the Company
constitute a violation of any applicable securities law and (iii) that the
Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the shares of Stock purchased under this Option.
6. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Director.
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7. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Director has executed
this Agreement, all as of the day and year first above written.
THE FOREFRONT GROUP, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
DIRECTOR
__________________________________
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EXHIBIT 4.3
THE FOREFRONT GROUP, INC.
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Amended and Restated
1996 Stock Option Plan are to attract and retain the best available personnel
for positions of substantial responsibility, to provide additional incentive
to Employees and Consultants of the Company and its Subsidiaries and to
promote the success of the Company's business. Options granted under this
Plan may be incentive stock options (as defined under Section 422 of the Code,
and limited to 750,000 shares) or nonqualified stock options, as determined by
the Administrator at the time of grant of an option and subject to the
applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. This Amended and Restated 1996 Stock Option
Plan amends and restates in its entirety the 1996 Nonqualified Stock Option
Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its
Committees, as applicable, that is administering the Plan pursuant to
Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Company" means The ForeFront Group, Inc., a Delaware
corporation.
(f) "Consultant" means any consultant or advisor to the Company
or any Parent or Subsidiary and any director of the Company whether
compensated for such services or not, provided that if and in the event the
Company registers any class of any equity security pursuant to the Exchange
Act, the term Consultant shall thereafter not include directors who are not
compensated for their services or are paid only a director's fee by the
Company.
(g) "Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: (i) any leave of absence approved by the Board,
including sick leave, military leave, or any other personal leave; provided,
however, that for purposes of Incentive Stock Options, such leave is for a
period of not more than ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or
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unless provided otherwise pursuant to Company policy adopted from time to
time; or (ii) in the case of transfers between locations of the Company or
between the Company, its Subsidiaries or its successor.
(h) "Employee" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" means, as of any date, the value of Stock
determined as follows:
(i) If the Stock is listed on any established stock exchange or
a national market system including without limitation the National Market
System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported, as quoted
on such system or exchange or the exchange with the greatest volume of trading
in Stock for the last market trading day prior to the time of determination)
as reported in the Wall Street Journal or such other source as the
Administrator deems reliable;
(ii) If the Stock is quoted on the NASDAQ System (but not on
the National Market System thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high and low asked prices for the Stock; or
(iii) In the absence of an established market for the Stock,
the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(k) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
(l) "Nonqualified Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(m) "Option" means a stock option granted pursuant to the Plan.
(n) "Optioned Stock" means the Stock subject to an Option.
(o) "Optionee" means an Employee or Consultant who receives an
Option.
(p) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
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(q) "Plan" means this Amended and Restated 1996 Stock Option Plan.
(r) "Share" means a share of the Stock, as adjusted in
accordance with Section 12 of the Plan.
(s) "Stock" means the Common Stock, par value $.01 per share, of
the Company;
(t) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12
of the Plan, the maximum number of shares of Stock which may be optioned
and sold under the Plan is 2,000,000 shares. The shares may be
authorized, but unissued, or reacquired Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available
for future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Administration With Respect to Directors and Officers. With
respect to grants of Options to Employees who are also officers or directors
of the Company, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the Board to administer the Plan, which Committee
shall be constituted in such a manner as to permit the Plan to comply with
Rule 16b-3 promulgated under the Exchange Act or any successor thereto ("Rule
16b-3") with respect to a plan intended to qualify thereunder as a
discretionary plan. Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From time to
time the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and thereafter directly administer the Plan, all
to the extent permitted by Rule 16b-3 with respect to a plan intended to
qualify thereunder as a discretionary plan. Notwithstanding the foregoing, the
Plan shall not be administered by the Board if (a) the Company and its
officers and directors are then subject to the requirements of Section 16 of
the Exchange Act and (b) the Board's administration of the Plan would prevent
the Plan from complying with Rule 16b-3.
(ii) Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to directors,
non-director officers and Employees who are neither directors nor officers.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options to Employees or Consultants who
are neither directors nor
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officers of the Company, the Plan shall be administered by (A) the Board or
(B) a Committee designated by the Board, which Committee shall be constituted
in such a manner as to satisfy the legal requirements relating to the
administration of incentive stock option plans, if any, of corporate and
securities laws applicable to the Company and of the Code (the "Applicable
Laws"). Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time
the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and thereafter directly administer the Plan, all
to the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Stock, in
accordance with Section 2(j) of the Plan;
(ii) to select the officers, Consultants and Employees to whom
Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the number of shares of Stock to be covered
by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, the per share exercise price for the Shares to be issued pursuant
to the exercise of an Option and any restriction or limitation, or any vesting
acceleration or waiver of forfeiture restrictions regarding any Option or
other award and/or the shares of Stock relating thereto, based in each case on
such factors as the Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what circumstances an Option
may be bought-out for cash under subsection 9(f);
(viii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an award under
this Plan shall be deferred either automatically or at the election of the
participant (including providing for and determining the amount, if any, of
any deemed earnings on any deferred amount during any deferral period); and
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(ix) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Stock covered by
such Option shall have declined since the date the Option was granted.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options. Neither the
Board, the Committee nor any member thereof shall be liable for any act,
omission, interpretation, construction or determination made in connection
with the Plan in good faith, and the members of the Board and of the
Committee shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including
counsel fees) arising therefrom to the full extent permitted by law.
5. Eligibility.
(a) Nonqualified Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees, and may
not be granted for more than 750,000 shares at any time. An Employee or
Consultant who has been granted an Option may, if he is otherwise eligible, be
granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonqualified Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonqualified Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's
right to terminate his employment or consulting relationship at any time, with
or without cause, unless otherwise agreed in writing by the Company and
such Optionee.
6. Term of Plan. The Plan shall become effective upon its adoption by
the Board of Directors subject only to approval by the holders of a majority of
the outstanding Shares within 12 months after such date. It shall continue in
effect until June 30, 2006 unless extended by the Board or sooner terminated
under Section 14 of the Plan. No grants of Options will be made pursuant to the
Plan after June 30 2006.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that in the case of an Incentive
Stock Option, the term shall be
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no more than ten (10) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement. However, in the case of an
Option granted to an Optionee who, at the time the Option is granted, owns
Stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
In the case of an Incentive Stock Option:
(i) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.
(ii) granted to any Employee, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other shares of the Company's capital stock
which (x) in the case of shares of the Company's capital stock acquired upon
exercise of an Option either have been owned by the Optionee for more than six
months on the date of surrender or were not acquired, directly or indirectly,
from the Company, and (y) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised, (5) authorization for the Company to retain from the
total number of Shares as to which the Option is exercised that number of
Shares having a Fair Market Value on the date of exercise equal to the exercise
price for the total number of Shares as to which the Option is exercised, (6)
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of
sale or loan proceeds required to pay the exercise price, (7) any
combination of the foregoing methods of payment, or (8) such other
consideration and method of payment for the issuance of Shares to the extent
permitted under applicable laws.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the
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Administrator, including performance criteria with respect to the Company
and/or the Optionee, and as shall be permissible under the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised, and the Optionee deemed to
be a stockholder of the Shares being purchased upon exercise, when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board,
consist of any consideration and method of payment allowable under Section
8(b) of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares
as to which the Option is exercised.
(b) Termination of Employment. In the event of termination of an
Optionee's relationship as a Consultant (unless such termination is for
purposes of becoming an Employee of the Company) or Continuous Status as an
Employee with the Company (as the case may be), such Optionee may, but only
within ninety (90) days (or such other period of time as is determined by the
Board, with such determination in the case of an Incentive Stock Option being
made at the time of grant of the Option and not exceeding ninety (90) days)
after the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
his Option to the extent that Optionee was entitled to exercise it at the date
of such termination. To the extent that Optionee was not entitled to exercise
the Option at the date of such termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of an Optionee's
relationship as a Consultant or Continuous Status as an Employee as a result of
his total and permanent disability (as defined in Section 22(e)(3) of the Code),
Optionee may, but only within twelve (12) months from the date of such
termination (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination. To
the extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee,
the Option may be exercised, at any time within twelve (12) months following
the date of death (but in no event later than the expiration date of the term
of such Option as set forth in the Option Agreement), by the Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that Optionee was not entitled
to exercise the Option at the date of termination, or if the Optionee's
estate (or such other person who acquired the right to exercise the
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Option) does not exercise such Option to the extent so entitled within the
time specified herein, the Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted,
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than
by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
11. Stock Withholding to Satisfy Withholding Tax Obligations.
At the discretion of the Administrator, Optionees may satisfy withholding
obligations as provided in this paragraph. When an Optionee incurs tax
liability in connection with an Option, which tax liability is subject to tax
withholding under applicable tax laws, and the Optionee is obligated to pay the
Company an amount required to be withheld under applicable tax laws, the
Optionee may satisfy the withholding tax obligation by electing to have the
Company withhold from the Shares to be issued upon exercise of the Option, that
number of Shares having a Fair Market Value equal to the amount required to be
withheld. The Fair Market Value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined (the "Tax
Date").
All elections by an Optionee to have Shares withheld for this purpose
shall be made in writing in a form acceptable to the Administrator and shall
be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator; and
(d) if the Optionee is subject to Rule 16b-3, the election must
comply with the applicable provisions of Rule 16b-3 and shall be subject to
such additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
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In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.
12. Changes in the Company's Capital Structure. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of shares of the Stock outstanding,
without receiving compensation therefor in money, services or property, then (a)
the number, class, and per share price of shares of Stock subject to outstanding
Options hereunder shall be appropriately adjusted in such a manner as to entitle
an Optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class of shares as he would have
received had he exercised his Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of shares of Stock then
reserved for issuance under the Plan shall be adjusted by substituting for the
total number and class of shares of Stock then reserved that number and class of
shares of stock that would have been received by the owner of an equal number of
outstanding shares of each class of Stock as the result of the event requiring
the adjustment.
Unless otherwise expressly provided in an Option Agreement (as defined
in Section 17), upon a Corporate Change (as defined below),
notwithstanding any other term of this Plan, any and all outstanding Options not
fully vested and exercisable shall vest in full and be immediately exercisable,
and any other restrictions on such Options including, without limitation,
requirements concerning the achievement of specific goals shall terminate.
As used in this Plan, a "Corporate Change" shall be deemed to have
occurred upon, and shall mean (A) the acquisition after July 19, 1996 by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) (a "Person"), of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 80% or more of
either (i) the then outstanding shares of Stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
the following transactions shall not constitute a Corporate Change: (u) any
acquisition by virtue of the conversion of preferred stock of the Company
outstanding on July 19, 1996, (v) customary transactions with and between
underwriters and selling group
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members with respect to a bona fide public offering of securities, (w) any
acquisition directly from the Company (excluding an acquisition by virtue of
the exercise of a conversion privilege), (x) any acquisition by the Company,
(y) any acquisition by any employee benefit plan(s) (or related trust(s))
sponsored or maintained by the Company or any corporation controlled by the
Company or (z) any acquisition by any entity pursuant to a reorganization,
merger or consolidation, if, immediately following such reorganization, merger
or consolidation the conditions described in clauses (i), (ii) and (iii) of
clause B of this paragraph are satisfied; or (B) the approval by the
stockholders of the Company of a reorganization, merger or consolidation, in
each case, unless immediately following such reorganization, merger or
consolidation (i) more than 60% of, respectively, the then outstanding shares
of common stock (or other equivalent securities) of the entity resulting from
such reorganization, merger or consolidation and the combined voting power of
the then outstanding voting securities of such entity entitled to vote
generally in the election of directors (or other similar governing body) is
then beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such reorganization, merger or consolidation
in substantially the same proportions as their ownership, immediately prior to
such reorganization, merger or consolidation, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding the Company, any employee benefit plan(s) (or
related trust(s)) of the Company and/or its subsidiaries or such entity
resulting from such reorganization, merger or consolidation and any Person
beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 80% or more of the Outstanding Company
Common Stock or Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 80% or more of, respectively, the
then outstanding shares of common stock (or other equivalent securities) of
the entity resulting from such reorganization, merger or consolidation or the
combined voting power of the then outstanding voting securities of such entity
entitled to vote generally in the election of directors (or other similar
governing body) and (iii) at least a majority of the members of the board of
directors (or other similar governing body) of the entity resulting from such
reorganization, merger or consolidation were members of the Incumbent Board
(as defined below) at the time of the execution of the initial agreement
providing for such reorganization, merger or consolidation. The "Incumbent
Board" shall mean individuals who as of July 19, 1996, constitute the
Company's Board of Directors; provided, however, that any individual becoming
a director subsequent to such date whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of either (i) an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act), or an actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Company's Board of Directors or
(ii) a plan or agreement to replace a majority of the members of the Board of
Directors then comprising the Incumbent Board.
The Company intends that this Paragraph 12 shall comply with the
requirements of Rule 16b-3 and any future rules promulgated in substitution
therefor under the Exchange Act during
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the term of the Plan. Should any provision of this Paragraph 12 not be
necessary to comply with the requirements of Rule 16b-3 or should any
additional provisions be necessary for this Paragraph 12 to comply with the
requirements of Rule 16b-3, the Board of Directors may amend the Plan to add
to or modify the provisions of the Plan accordingly.
Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock
of any class, for cash or property, or for labor or services either upon
direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number, class, or price of
shares of Stock then subject to outstanding Options.
13. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by the
Administrator. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights
of any Optionee under any grant theretofore made, without his or her
consent. In addition, to the extent necessary and desirable to comply with
Rule 16b-3 under the Exchange Act or with Section 422 of the Code (or any
other applicable law or regulation, including the applicable
requirements of the NASD or an established stock exchange), the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such
a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee
and the Board, which agreement must be in writing and signed by the Optionee
and the Company. Adoption of this Plan by the Board of Directors and
stockholders of the Company shall not affect any Options already granted, and
such Options shall remain in full force and effect as Nonqualified Stock Options
as if this Plan had not been adopted.
15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act
of 1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
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<PAGE>
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion
of counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been
obtained.
17. Agreements. Options shall be evidenced by written agreements
("Option Agreement') in such form as the applicable Administrator shall
approve from time to time.
18. Information to Optionees. The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are generally
provided to all stockholders of the Company. The Company shall not be required
to provide such information to persons whose duties in connection with the
Company assure their access to equivalent information.
19. Governing Law; Construction. All rights and obligations under the
Plan shall be governed by, and the Plan shall be construed in accordance
with, the laws of the State of Delaware without regard to the principles
of conflicts of laws. Titles and headings to Sections herein are for purposes
of reference only, and shall in no way limit, define or otherwise affect
the meaning or interpretation of any provisions of the Plan.
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<PAGE>
Exhibit 5.1
[Letterhead of Binchys, Solicitors]
June 16, 1998
CBT Group Public Limited Company,
Beech Hill,
Clonskeagh,
Dublin 4.
Dear Sirs,
Registration Statement on Form S-8
- - ----------------------------------
We have examined the Registration Statement on Form S-8 to be filed by you with
the Securities and Exchange Commission on or about June 16, 1998 (the
"Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of 288,578 additional ordinary shares (which
will be represented by 288,578 American Depositary Shares of the Company) in the
capital of the Company reserved for issuance under The ForeFront Group, Inc.
Amended and Restated 1992 Stock Option Plan (the "1992 Plan"), the 798,780
additional ordinary shares (which will be represented by 798,780 American
Depositary Shares of the Company) in the capital of the Company reserved for
issuance under The ForeFront Group, Inc. 1996 Non-Employee Directors' Stock
Option Plan (the "Non-Employee Plan") and the 18,822 additional ordinary shares
(which will be represented by 18,822 American Depositary Shares of the Company)
in the capital of the Company reserved for issuance under The ForeFront Group,
Inc. Amended and Restated 1996 Stock Option Plan (the "1996 Plan") (together the
"Shares").
As your legal counsel, we have examined the rules of the 1992 Plan, the Non-
Employee Plan and the 1996 Plan and are familiar with the proceedings proposed
to be taken by you in connection with the issuance of the Shares under the 1992
Plan, the Non-Employee Plan and the 1996 Plan respectively.
It is our opinion that the Shares will be, if issued in the manner referred to
in the 1992 Plan, the Non-Employee Plan and the 1996 Plan, as the case may be,
on application by the Optionees under the said Plans for the Shares pursuant
to such Plans and pursuant to the respective agreements that accompany those
Plans, legally and validly issued and fully paid.
We consent to the use of this opinion as an exhibit to the Registration
Statement on Form S-8 and further consent to the use of our name, wherever
appearing in the said Registration Statement, including any Prospectus
constituting a part thereof and any amendments thereto.
Yours faithfully
/s/ Binchys
- - ------------------
BINCHYS
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) for the registration of an aggregate of 1,106,180 Ordinary Shares which
will be represented by American Depositary Receipts pertaining to The ForeFront
Group, Inc. Amended and Restated 1992 Stock Option Plan, The ForeFront Group,
Inc. 1996 Non-Employee Directors' Stock Option Plan and The ForeFront Group,
Inc. Amended and Restated 1996 Stock Plan of our report dated January 20, 1998
with respect to the consolidated financial statements and schedule of CBT Group
PLC (the "Company") included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 filed with the Securities and Exchange Commission.
ERNST & YOUNG
Chartered Accountants
Dublin, Ireland
June 12, 1998
