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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
ORCAD, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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ORCAD, INC.
9300 S.W. NIMBUS AVENUE
BEAVERTON, OR 97008
(503) 671-9500
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 19, 1997
------------------------
To the Shareholders of OrCAD, Inc.:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders (the
"Annual Meeting") of OrCAD, Inc. (the "Company") will be held on Thursday, June
19, 1997, at 1:30 p.m., local time, at the Crowne Plaza, 14811 Kruse Oaks Blvd.,
Lake Oswego, Oregon 97035 for the following purposes:
1. ELECTION OF DIRECTORS. To elect five directors;
2. AMENDMENT OF 1995 STOCK INCENTIVE PLAN. To approve and adopt
amendments to the Company's 1995 Stock Incentive Plan;
3. RATIFICATION OF APPOINTMENT OF AUDITORS. To ratify the
appointment by the Board of Directors of KPMG Peat Marwick LLP as
independent auditors of the Company for the fiscal year ending
December 31, 1997; and
4. OTHER BUSINESS. To transact such other business as may properly
come before the meeting or any adjournments thereof.
The Board of Directors of the Company has fixed the close of business on
April 24, 1997 as the record date for the determination of shareholders entitled
to notice of and to vote at the Annual Meeting. Only shareholders of record at
the close of business on that date will be entitled to notice of and to vote at
the Annual Meeting or any adjournments thereof.
By Order of the Board,
/s/ MICHAEL F. BOSWORTH
Michael F. Bosworth
President, Chief Executive Officer,
and Chairman of the Board
Beaverton, Oregon
April 30, 1997
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE DATE, SIGN AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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ORCAD, INC.
9300 S.W. NIMBUS AVENUE
BEAVERTON, OR 97008
(503) 671-9500
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PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 19, 1997
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INTRODUCTION
GENERAL
This Proxy Statement is being furnished to the shareholders of OrCAD, Inc.,
a Delaware corporation ("OrCAD" or the "Company"), as part of the solicitation
of proxies by the Company's Board of Directors (the "Board of Directors") from
holders of the outstanding shares of OrCAD common stock, par value $.01 per
share (the "Common Stock"), for use at the Company's Annual Meeting of
Shareholders to be held at 1:30 p.m. on June 19, 1997, and at any adjournments
or postponements thereof, (the "Annual Meeting"). At the Annual Meeting,
shareholders will be asked to elect five members of the Board of Directors,
approve amendments to the Company's 1995 Stock Incentive Plan, ratify the
appointment by the Board of Directors of KPMG Peat Marwick LLP as independent
auditors of the Company for the fiscal year ending December 31, 1997, and
transact such other business as may properly come before the meeting or any
adjournments or postponements thereof. This Proxy Statement, together with the
enclosed proxy card, is first being mailed to shareholders of OrCAD on or about
May 8, 1997.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
The Board of Directors has fixed the close of business on April 24, 1997,
as the record date for the determination of the shareholders entitled to notice
of and to vote at the Annual Meeting. Accordingly, only holders of record of
shares of Common Stock at the close of business on such date will be entitled to
vote at the Annual Meeting, with each such share entitling its owner to one vote
on all matters properly presented at the Annual Meeting. On the record date,
there were approximately 1,458 beneficial holders of the 6,712,641 shares of
Common Stock then outstanding. The presence, in person or by proxy, of a
majority of the total number of outstanding shares of Common Stock entitled to
vote at the Annual Meeting is necessary to constitute a quorum at the Annual
Meeting.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Annual Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. EXECUTED BUT UNMARKED PROXIES
WILL BE VOTED FOR THE ELECTION OF THE FIVE NOMINEES FOR ELECTION TO THE BOARD OF
DIRECTORS, FOR APPROVAL OF THE AMENDMENTS TO THE COMPANY'S 1995 STOCK INCENTIVE
PLAN AND FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997. The
Board of Directors does not know of any matters other than those described in
the Notice of Annual Meeting that are to come before the Annual Meeting. If any
other matters are properly brought before the Annual Meeting, the persons named
in the proxy will vote the shares represented by such proxy upon such matters as
determined by a majority of the Board of Directors.
A shareholder may revoke a proxy at any time prior to its exercise by
filing a written notice of revocation with, or by delivering a duly executed
proxy bearing a later date to, Corporate Secretary, OrCAD, Inc., 9300 S.W.
Nimbus Avenue, Beaverton, Oregon 97008, or by attending the Annual Meeting and
voting in person. All valid, unrevoked proxies will be voted at the Annual
Meeting.
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ELECTION OF DIRECTORS
At the Annual Meeting, five directors will be elected. Unless otherwise
specified on the proxy, it is the intention of the persons named in the proxy to
vote the shares represented by each properly executed proxy for the election as
directors of the persons named below as nominees. The Board of Directors
believes that the nominees will stand for election and will serve if elected as
directors. However, if any person nominated by the Board of Directors fails to
stand for election or is unable to accept election, the proxies will be voted
for the election of such other person as the Board of Directors may recommend.
INFORMATION AS TO NOMINEES. The following table sets forth the names of
the Board of Directors' nominees for election as a director. Also set forth is
certain other information with respect to each such person's age at April 24,
1997, principal occupation or employment during the past five years, the periods
during which he has served as a director of OrCAD and positions currently held
with OrCAD.
DIRECTOR
AGE SINCE POSITIONS HELD WITH ORCAD
--- -------- ------------------------------------
Nominees:
Michael F. Bosworth................. 49 1991 President, Chief Executive Officer,
and Chairman of the Board
Stephen W. Director................. 53 1991 Director
John C. Savage...................... 49 1991 Director
Richard P. Magnuson................. 41 1991 Director
James B. Moon....................... 50 1995 Director
Michael F. Bosworth. Mr. Bosworth was named Chairman of the Board of
Directors in February 1997 and has served as President, Chief Executive Officer
and a member of the Board of Directors of the Company since October 1991. From
April 1986 through September 1991, he served as President and Chief Executive
Officer of Context Corporation, initially a subsidiary of Mentor Graphics
Corporation and later a division of Mentor Graphics Corporation.
Stephen W. Director. Dr. Director has served as a member of the Board of
Directors of the Company since January 1991. In July 1996, Dr. Director accepted
the position of Dean of Engineering at the University of Michigan. Dr. Director
served as the Dean of the College of Engineering and U.A., and Helen Whitaker
University Professor of Electrical and Computer Engineering at Carnegie Mellon
University from July 1991 through June 1996. In 1982 he founded the SRC-CMU
Research Center for Computer-Aided Design and served as its Director from 1982
to 1989. Dr. Director also serves on the Technical Advisory Boards of Nextwave,
Inc., LSI Logic Corporation and Autogate Logic, Inc.
John C. Savage. Mr. Savage has served as a member of the Board of
Directors of the Company since September 1991. Since June 1990, Mr. Savage has
been Managing General Partner of Glenwood Capital Partners, L.P., and since 1995
has been General Partner of Redwood Partners; both are affiliated venture buyout
firms. Mr. Savage also serves as a director of FileNet Corporation and Mattson
Technology, Inc.
Richard P. Magnuson. Mr. Magnuson has served as a member of the Board of
Directors of the Company since September 1991. He is a private venture capital
investor. He served as General Partner of Menlo Ventures, a private venture
capital firm, from 1984 to 1996. Mr. Magnuson serves as a director of two public
companies: Rogue Wave Software and California Water Service Company. He also
serves as a director of several privately-held companies.
James B. Moon. Mr. Moon has served as a member of the Board of Directors
of the Company since December 1995. Mr. Moon has served as the President and the
Chief Executive Officer of Protocol Systems, Inc. since 1987. Mr. Moon also
serves as the Chairman of the Board of Directors of Protocol Systems, Inc.
Board of Directors Committees and Nominations by Shareholders. The Board
of Directors acts as a nominating committee for selecting nominees for election
as directors. The Company's bylaws also permit shareholders to make nominations
for the election of directors, if such nominations are made pursuant to
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timely notice in writing to the Company's Secretary. To be timely, notice must
be delivered to, or mailed to and received at, the principal executive offices
of the Company not less than 60 days nor more than 90 days prior to the date of
the meeting, provided that at least 60 days' notice or prior public disclosure
of the date of the meeting is given or made to shareholders. If less than 60
days' notice or prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must be received by
the Company not later than the close of business on the tenth day following the
date on which such notice of the date of the meeting was mailed or such public
disclosure was made. A shareholder's notice of nomination must also set forth
certain information specified in Article II, Section 2.10 of the Company's
bylaws concerning each person the shareholder proposes to nominate for election
and the nominating shareholder.
The Board of Directors has appointed a standing Audit Committee which,
during the fiscal year ended December 31, 1996, conducted one meeting. The
members of the Audit Committee currently are Messrs. Savage and Magnuson. The
Audit Committee reviews the scope of the independent annual audit, the
independent public accountants' letter to the Board of Directors concerning the
effectiveness of the Company's internal financial and accounting controls and
the Board of Directors' response to that letter, if deemed necessary. The Board
of Directors also has appointed a Compensation Committee which reviews executive
compensation and makes recommendations to the full Board regarding changes in
compensation, and also administers the Company's stock option plans. During the
fiscal year ended December 31, 1996, the Compensation Committee held 6 meetings.
The members of the Compensation Committee currently are Messrs. Savage and
Magnuson.
During 1996 the Company's Board of Directors held 6 meetings. Each
incumbent director attended more than 75% of the aggregate of the total number
of meetings held by the Board of Directors and the total number of meetings held
by all committees of the Board on which he served during the period that he
served.
Director Compensation. The members of the Company's Board of Directors
were not compensated for their service on the Board in 1996, but were reimbursed
for out-of-pocket and travel expenses incurred in attending Board meetings.
Beginning in 1997, the nonemployee members of the Board of Directors will
receive an annual cash stipend of $5,000. In addition, under the Company's 1995
Stock Option Plan for Nonemployee Directors, each person who becomes a
nonemployee director automatically receives an initial option to purchase 20,000
shares of the Company's Common Stock at the time such person is first elected to
the Board of Directors. Each nonemployee director automatically receives
additional annual grants of options to purchase 5,000 shares after each annual
meeting of shareholders, provided the nonemployee director continues to serve in
that capacity. Options vest and become exercisable on the date of grant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE ELECTION OF ITS NOMINEES FOR DIRECTOR. If a quorum is present, the Company's
bylaws provide that directors are elected by a plurality of the votes cast by
the shares entitled to vote. Abstentions and broker non-votes are counted for
purposes of determining whether a quorum exists at the Annual Meeting, but are
not counted and have no effect on the determination of whether a plurality
exists with respect to a given nominee.
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MANAGEMENT
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers of the Company.
NAME AGE POSITION
------------------------------------- --- -------------------------------------------
Greg Applegate....................... 36 Vice President of Sales
Michael F. Bosworth.................. 49 President, Chief Executive Officer,
and Chairman of the Board
P. David Bundy....................... 42 Vice President of Finance and Secretary
Gerald Fahrenkopf.................... 44 Vice President of Research and Development
Stuart A. Harrington................. 36 Vice President
James Plymale........................ 30 Vice President of Marketing
Information concerning the principal occupation of Mr. Bosworth is set
forth under the heading "Election of Directors." Information concerning the
principal occupation during at least the last five years of the executive
officers of the Company who are not also directors of the Company is set forth
below.
Greg Applegate. Mr. Applegate has served as the Company's Vice President
of Sales since November 1996. Prior to that, he was the Company's Director of
Sales. Mr. Applegate joined the Company in October 1993. Prior to joining the
Company he spent 4 years as a Senior Sales Representative with INTERSOLV, Inc.
P. David Bundy. Mr. Bundy has served as the Company's Vice President of
Finance and Corporate Secretary since November 1991. Mr. Bundy served as
Controller upon joining the Company in October 1989.
Gerald Fahrenkopf. Mr. Fahrenkopf has served as the Company's Vice
President of Research and Development since June 1994. From March through May
1994, he served as the Company's Vice President of Marketing, and as Vice
President of Engineering Services from March 1993 to March 1994. Mr. Fahrenkopf
joined OrCAD in 1988.
James Plymale. Mr. Plymale has served as the Company's Vice President of
Marketing since October 1995. From June 1993 through October 1995, he served as
the Company's Director of Product Marketing, and from March 1992 through June
1993, he served as the Company's Product Marketing Manager. From 1990 to March
1992, Mr. Plymale served in various capacities at Phase III Logic.
Stuart A. Harrington. Mr. Harrington has served as Vice President of the
Company since December 1995, and has served as President of OrCAD Japan K.K.
since December 1995. Mr. Harrington was a founder of Intelligent Systems, Japan
and served as its President from 1990 through November 1995.
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EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation of the Company's Chief Executive Officer and each of the four other
most highly compensated executive officers of the Company (the "named executive
officers") for the fiscal years ending December 31, 1995 and 1996.
LONG-TERM
COMPENSATION
------------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION STOCK
-------------------- OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS GRANTED COMPENSATION
- ------------------------------------ ---- -------- ------- ------------ ------------
Michael F. Bosworth................. 1996 $149,972 $46,667 $ -- $ 5,806(1)
President, Chief Executive 1995 139,130 22,639 62,854 1,488(1)
Officer,
and Chairman of the Board
P. David Bundy...................... 1996 94,972 12,537 -- 3,167(1)
Vice President of Finance 1995 88,402 4,528 11,428 850(1)
and Secretary
Gerald Fahrenkopf................... 1996 114,972 21,593 -- 4,086(1)
Vice President of 1995 114,540 13,584 8,571 1,119(1)
Research and Development
Stuart A. Harrington................ 1996 195,430 -- -- 21,721(2)
Vice President 1995 16,286(3) -- -- --
James Plymale....................... 1996 104,972 17,065 -- 3,356(1)
Vice President of Marketing 1995 94,580 9,056 14,285 801(1)
- ---------------
(1) Represents matching contribution to 401(k) Plan on behalf of named executive
officer.
(2) Represents rent allowance paid on behalf of named executive officer.
(3) Mr. Harrington became a Vice President of the Company in December 1995.
STOCK OPTIONS
No options were granted to the named executive officers during the year
ended December 31, 1996.
OPTION EXERCISES AND HOLDINGS
The following table provides information, with respect to the named
executive officers, concerning the exercise of stock options during the year
ended December 31, 1996, and unexercised options held as of December 31, 1996.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1996 DECEMBER 31, 1996(2)
ACQUIRED ON VALUE --------------------------- --------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ----------- ----------- ----------- ------------- ----------- ------------
Michael F. Bosworth.......... 50,000 $ 532,000 62,084 76,478 $ 574,082 $634,319
P. David Bundy............... 5,000 52,000 26,550 11,306 258,989 89,239
Gerald Fahrenkopf............ 5,000 50,750 27,810 10,046 274,550 82,678
Stuart A. Harrington......... -- -- -- -- -- --
James Plymale................ 17,000 192,550 5,701 20,155 44,738 172,700
- ---------------
(1) The value realized is based on the difference between the market price at
the time of exercise of the options and the applicable exercise price.
(2) Represents the total gain which would be realized if all in-the-money
options held at December 31, 1996 were exercised, determined by multiplying
the number of shares underlying the options by the difference
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between the per share option exercise price and the fair market value of $10.50
per share at December 31, 1996. An option is in-the-money if the fair market
value of the underlying shares exceeds the exercise price of the option.
APPROVAL OF AMENDMENTS TO 1995 STOCK INCENTIVE PLAN
The Company maintains its 1995 Stock Incentive Plan (the "1995 Plan") to
provide incentives to the Company's key employees and others who provide
services to the Company. The Board of Directors believes that the availability
of stock incentives is an important factor in the Company's ability to attract
and retain the best available personnel for positions of substantial
responsibility and to provide an incentive for them to exert their best efforts
on behalf of the Company. A total of 2,000,000 shares of Common Stock have been
reserved for issuance under the 1995 Plan.
The Board of Directors has approved, and recommends shareholder adoption
of, amendments to the 1995 Plan to conform its provisions to certain
requirements of the regulations promulgated under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code") and certain other amendments that
principally relate to the elimination of certain restrictions in the 1995 Plan
that are no longer necessary or appropriate based on recent changes to the rules
promulgated by the Securities and Exchange Commission under Section 16 of the
Securities Exchange Act of 1934.
The following discussion is intended only as a summary of the material
provisions of the 1995 Plan. Shareholders are encouraged to review the complete
copy of the 1995 Plan, which is included herein as Appendix A and marked to
indicate the proposed amendments, in its entirety before voting on this
proposal.
The 1995 Plan, which was approved by the Company's shareholders on December
15, 1995, provides for grants of both "incentive stock options" within the
meaning of Section 422 of the Code and "non-qualified stock options" which are
not qualified for treatment under Section 422 of the Code, and for direct stock
grants and sales to employees or consultants of the Company. As of April 24,
1997, approximately 129 persons were eligible to participate in the 1995 Plan.
In addition, the 1995 Plan has been amended to include nonemployee directors
within the definition of "consultant," making such persons eligible to
participate in the 1995 Plan. Because the directors, officers and employees of
the Company who may participate in the 1995 Plan and the amount of their options
will be determined by the Compensation Committee in its discretion, it is not
possible to state the names or positions of, or the number of options that may
be granted to, the Company's directors, officers and employees. However, as
amended, no employee may receive options under the 1995 Plan for more than
100,000 shares of Common Stock in any one fiscal year, except that options for
up to an additional 100,000 shares of Common Stock may be granted in connection
with a person's initial employment with the Company.
The administration of the 1995 Plan has been delegated to the Compensation
Committee of the Board of Directors (the "Committee"). In addition to
determining who will be granted options, the Committee has the authority and
discretion to determine when options will be granted and the number of options
to be granted and whether the options will be incentive stock options or
non-qualified stock options. Only "employees" of the Company as that term is
defined in the Code will be entitled to receive Incentive Stock Options. See
"Federal Income Tax Consequences" below. The Committee also may determine the
time or times when each option becomes exercisable, the duration of the exercise
period for options and the form or forms of the instruments evidencing options
granted under the Plan. The Committee also may construe the Plan and the
provisions in the instruments evidencing options granted under the Plan to
participants and is empowered to make all other determinations deemed necessary
or advisable for the administration of the Plan.
The term of each option granted under the 1995 Plan will be ten years from
the date of grant, or such shorter period as may be established at the time of
the grant. An option granted under the 1995 Plan may be exercised at such times
and under such conditions as determined by the Compensation Committee. If a
person who has been granted an option ceases to be an employee or consultant of
the Company, such person may exercise that option only during the three month
period after the date of termination, and only to the extent that the option was
exercisable on the date of termination. If a person who has been granted an
option ceases
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to be an employee or consultant as a result of such person's total and permanent
disability, such person may exercise that option at any time within twelve
months after the date of termination, but only to the extent that the option was
exercisable on the date of termination. The 1995 Plan has been amended to
provide that, except as otherwise provided by the Compensation Committee at the
time an option is granted, no option granted under the 1995 Plan is transferable
other than at death, and each option is exercisable during the life of the
optionee only by the optionee. In the event of the death of a person who has
received an option, the option generally may be exercised by a person who
acquired the option by bequest or inheritance during the twelve month period
after the date of death to the extent that such option was exercisable at the
date of death.
The exercise price of incentive stock options granted under the 1995 Plan
may not be less than the fair market value of a share of Common Stock on the
last market trading day prior to the date of grant of the option. For
nonqualified stock options, the 1995 Plan has been amended to provide that the
exercise price may be less than, equal to, or greater than the fair market value
of the Common Stock on the date of grant, provided that the Compensation
Committee must specifically determine that any option grant at an exercise price
less than fair market value is in the best interests of the Company. The
consideration to be paid upon exercise of an option, including the method of
payment, will be determined by the Compensation Committee and may consist
entirely of cash, check, shares of Common Stock, such other consideration and
method of payment permitted by applicable law or any combination of such methods
of payment as permitted by the Compensation Committee. The Compensation
Committee has the authority to reset the price of any stock option after the
original grant and before exercise. In the event of stock dividends, splits, and
similar capital changes, the 1995 Plan provides for appropriate adjustments in
the number of shares available for option and the number and option prices of
shares subject to outstanding options.
In the event of a proposed sale of all or substantially all of the assets
of the Company, or a merger of the Company with and into another corporation,
outstanding options shall be assumed or equivalent options shall be substituted
by such successor corporation, unless the Committee provides all option holders
with the right to immediately exercise all of their options, whether vested or
unvested. In the event of a proposed dissolution or liquidation of the Company,
outstanding options will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. In such a situation,
the Board is authorized to give option holders the right to immediately exercise
all of their options, whether vested or unvested.
The 1995 Plan will continue in effect until December 2005, unless earlier
terminated by the Board of Directors, but such termination will not affect the
terms of any options outstanding at that time. The Board of Directors may amend,
terminate or suspend the 1995 Plan at any time. Amendments to the 1995 Plan must
be approved by shareholders if required by applicable tax, securities or other
law or regulation.
The issuance of shares of Common Stock upon the exercise of options is
subject to registration with the Securities and Exchange Commission of the
shares reserved by the Company under the 1995 Plan.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax discussion set forth below is included for general
information only. Optionees are urged to consult their tax advisors to determine
the particular tax consequences applicable to them, including the application
and effect of foreign, state and local income and other tax laws.
Incentive Stock Options . Certain options authorized to be granted under
the 1995 Plan are intended to qualify as incentive stock options for federal
income tax purposes. Under federal income tax law currently in effect, the
optionee will recognize no income upon grant or upon a proper exercise of an
incentive stock option. If an employee exercises an incentive stock option and
does not dispose of any of the option shares within two years following the date
of grant and within one year following the date of exercise, then any gain
realized upon subsequent disposition of the shares will be treated as income
from the sale or exchange of a capital asset. If an employee disposes of shares
acquired upon exercise of an incentive stock option before the expiration or
either the one-year holding period or the two-year waiting period, any amount
realized will be taxable as ordinary compensation income in the year of such
disqualifying disposition to the extent that the lesser of the fair market value
of the shares on the exercise date or the proceeds of the sale of the shares
exceeds the exercise price.
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Non-qualified Stock Options. Certain options authorized to be granted
under the 1995 Plan will be treated as non-qualified stock options for federal
income tax purposes. Under federal income tax law presently in effect, no income
is realized by the grantee of a non-qualified stock option pursuant to the 1995
Plan until the option is exercised. At the time of exercise of a non-qualified
stock option, the optionee will realize ordinary compensation income, and the
Company will be entitled to a deduction, in the amount by which the market value
of the shares subject to the option at the time of exercise exceeds the exercise
price. Upon the sale of shares acquired upon exercise of a non-qualified stock
option, the excess of the amount realized from the sale over the market value of
the shares on the date of exercise will be taxable.
Consequences to the Company. The Company recognizes no deduction at the
time of grant or exercise of an incentive stock option. The Company will
recognize a deduction at the time of exercise of a non-qualified stock option on
the difference between the option price and the fair market value of the shares
on the date of grant. The Company also will recognize a deduction to the extent
the optionee recognizes income upon a disqualifying disposition of shares
underlying an incentive stock option.
Under Section 162(m) of the Code, publicly-held companies may be limited as
to income tax deductions to the extent total remuneration (including
compensation received through the exercise of stock options) for certain
executive officers exceeds $1 million in any one year. However, Section 162(m)
provides an exception for "performance-based" remuneration, including stock
options. Section 162(m) requires that certain actions must be taken by a
compensation committee of two or more outside directors and that the material
terms of such remuneration must be approved by a majority vote of the
shareholders in order for stock options to qualify as "performance-based"
remuneration. The regulations adopted pursuant to Section 162(m) which establish
the requirements for options to be treated as "performance-based" remuneration
require stock option plans to set forth the maximum number of options that may
be awarded to any employee in any one year. Accordingly, the Board of Directors
approved an amendment to the 1995 Plan to establish a limitation on the number
of options that may be awarded to any employee under the 1995 Plan in any
calendar year of 100,000, except that options for up to an additional 100,000
shares may be granted in connection with a person's initial employment with the
Company. If the proposed amendments to the 1995 Plan are not approved, stock
options granted under the 1995 Plan will not qualify as "performance-based"
remuneration under Section 162(m).
BOARD RECOMMENDATION
For the reasons discussed above, the Board recommends a vote FOR approval
of the amendments to the Company's 1995 Stock Incentive Plan. This proposal must
be approved by the affirmative vote of a majority of the shares of Common Stock
present in person or by proxy at the Annual Meeting. Abstentions and broker
non-votes are counted for purposes of determining whether a quorum exists at the
Annual Meeting. Abstentions are treated as "no" votes in determining whether the
proposal is approved. Broker non-votes are not counted and have no effect on the
results of the vote on the proposal. PROXIES SOLICITED BY THE BOARD WILL BE
VOTED FOR APPROVAL OF THE AMENDMENTS TO THE 1995 STOCK INCENTIVE PLAN UNLESS A
VOTE AGAINST THE PROPOSAL OR ABSTENTION IS SPECIFICALLY INDICATED.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
SECTION 16(A) BENEFICIAL REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act") requires the Company's directors and officers, and persons who own more
than 10% of a registered class of the Company's equity securities, to file
initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission. Such persons also are required to furnish
the Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such reports received by it
with respect to fiscal 1996, or written representations from certain reporting
persons, the Company believes that all filing requirements applicable to its
directors, officers and persons who own more than 10% of a registered class of
the Company's equity securities have been complied with for fiscal 1996, except
for one Form 4 filed late for Glenwood Capital Investment Partners.
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STOCK OWNED BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the ownership
of the Common Stock as of April 24, 1997, with respect to: (i) each person known
by the Company to beneficially own more than 5% of the outstanding shares of
Common Stock, (ii) each of the Company's directors, (iii) each of the Company's
nominees for election as director, (iv) each of the Company's named executive
officers, and (v) all directors and executive officers as a group.
SHARES OF COMMON
STOCK
BENEFICIALLY PERCENT OF COMMON
NAME AND BUSINESS ADDRESS OWNED(1) STOCK OUTSTANDING
----------------------------------------------------- ---------------- -----------------
FMR Corp.(2)......................................... 532,200 7.9%
82 Devonshire Street
Boston, MA 02109
Granahan Investment Management, Inc.(3).............. 393,000 5.9
275 Wyman Street, Suite 270
Waltham, MA 02154
Scudder, Stevens & Clark, Inc.(4).................... 393,000 5.9
45 Park Avenue
New York, NY 10154
President and Fellows of Harvard College(5).......... 359,200 5.4
c/o Harvard Management Company, Inc.
600 Atlantic Avenue
Boston, MA 02210
Greg Applegate....................................... 6,613 *
Michael F. Bosworth.................................. 139,395 2.1
P. David Bundy....................................... 29,961 *
Stephen W. Director.................................. 18,710 *
Gerald Fahrenkopf.................................... 30,868 *
Stuart A. Harrington................................. 106,617 1.6
Richard P. Magnuson.................................. 11,073 *
James B. Moon........................................ 12,089 *
James Plymale........................................ 10,441 *
John C. Savage(6).................................... 38,524 *
Executive Officers and Directors as a group (10
persons)........................................... 414,851 6.0
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* less than one percent
(1) Beneficial ownership is determined in accordance with rules of the SEC, and
includes voting power and investment power with respect to shares. Shares
issuable upon the exercise of outstanding stock options that are currently
exercisable or become exercisable within 60 days from April 24, 1997 are
considered outstanding for the purpose of calculating the percentage of
Common Stock owned by such person, but not for the purpose of calculating
the percentage of Common Stock owned by any other person. The number of
shares that are issuable upon the exercise of options that are currently
exercisable or exercisable within 60 days of April 24, 1997, is as follows:
Mr. Director -- 18,710, Mr. Savage -- 5,000; Mr. Magnuson -- 11,073; Mr.
Moon -- 12,089; Mr. Bosworth -- 76,538; Mr. Bundy -- 29,627; Mr.
Plymale -- 10,441; Mr. Fahrenkopf -- 30,868; Mr. Harrington -- -0-, and all
directors and officers as a group -- 200,959. The table does not include
shares subject to options that will be granted to Messrs. Director, Savage,
Magnuson and Moon under the 1995 Stock Option Plan for Nonemployee Directors
immediately after the Annual Meeting.
(2) This information as to beneficial ownership is based on a Schedule 13G filed
by FMR Corp., Edward C. Johnson 3d, Chairman of FMR Corp. and Abigail P.
Johnson, a director of FMR Corp., on February 12, 1997. The Schedule 13G
states that, as of December 31, 1996, Fidelity Management & Research
Company, Boston, Massachusetts, a wholly owned subsidiary of FMR Corp., was
the beneficial owner of 532,200 shares of Common Stock owned by the Fidelity
Low-Priced Stock Fund (the "Fund") an
9
12
investment company, as to which it serves as investment adviser. According
to the Schedule 13G, Mr. Johnson, Ms. Johnson and FMR Corp. have sole
dispositive power and no voting power with respect to the 532,200 shares of
Common Stock owned by the Fund.
(3) This information as to beneficial ownership is based on a Schedule 13G filed
by Granahan Investment Management, Inc. with the Securities and Exchange
Commission on February 13, 1997. The Schedule 13G states that, as of
December 31, 1996, Granahan Investment Management, Inc. had sole voting
power with respect to 14,000 shares of Common Stock and sole dispositive
power with respect to 393,000 shares of Common Stock.
(4) This information as to beneficial ownership is based on a Schedule 13G filed
by Scudder, Stevens & Clark, Inc. with the Securities and Exchange
Commission on February 10, 1997. The Schedule 13G states that, as of
December 31, 1996, Scudder, Stevens & Clark, Inc. had sole voting power with
respect to 154,700 shares of Common Stock, shared voting power with respect
to 100,000 shares of Common Stock and sole dispositive power with respect to
393,000 shares of Common Stock.
(5) This information as to beneficial ownership is based on a Schedule 13G filed
by the President and Fellows of Harvard College with the Securities and
Exchange Commission on February 14, 1997. The Schedule 13G states that, as
of December 31, 1996, the President and Fellows of Harvard College had sole
voting and dispositive power with respect to 359,200 shares of Common Stock.
(6) Includes 33,524 shares beneficially owned by Glenwood Capital Associates.
Mr. Savage is a director of the Company and is a General Partner of Glenwood
Capital Associates. Mr. Savage may be deemed to share voting and investment
powers with respect to those entities but disclaims beneficial ownership of
such shares held by entities affiliated with Glenwood Capital Associates
except to the extent Mr. Savage has a pecuniary interest.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP to act as
independent auditors for the Company for the fiscal year ending December 31,
1997, subject to ratification of such appointment by the Company's shareholders.
Unless otherwise indicated, properly executed proxies will be voted in
favor of ratifying the appointment of KPMG Peat Marwick LLP to audit the books
and accounts of the Company for the fiscal year ending December 31, 1997. No
determination has been made as to what action the Board of Directors would take
if the shareholders do not ratify the appointment.
A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting and will be given an opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the proxy statement and
form of proxy relating to the Company's 1998 annual meeting of shareholders must
be received by the Company not later than December 30, 1997, pursuant to the
proxy soliciting regulations of the Securities and Exchange Commission (the
"SEC"). In addition, the Company's Bylaws require that notice of shareholder
proposals and nominations for director be delivered to the Secretary of the
Company not less than 60 days nor more than 90 days prior to the date of an
annual meeting, unless notice or public disclosure of the date of the meeting
occurs less than 60 days prior to the date of such meeting, in which event,
shareholders may deliver such notice not later than the 10th day following the
day on which notice of the date of the meeting was mailed or public disclosure
thereof was made. Nothing in this paragraph shall be deemed to require the
Company to include in its proxy statement and form of proxy for such meeting any
shareholder proposal which does not meet the requirements of the SEC in effect
at the time.
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13
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any other matters to be presented for action by the shareholders at the
1997 Annual Meeting. If, however, any other matters not now known are properly
brought before the meeting, the persons named in the accompanying proxy will
vote such proxy in accordance with the determination of a majority of the Board
of Directors.
COST OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
use of the mails, proxies may be solicited personally or by telephone by
directors, officers and employees of the Company, who will not be specially
compensated for such activities. Such solicitations may be made personally, or
by mail, facsimile, telephone, telegraph or messenger. The Company will also
request persons, firms and companies holding shares in their names or in the
name of their nominees, which are beneficially owned by others, to send proxy
materials to and obtain proxies from such beneficial owners. The Company will
reimburse such persons for their reasonable expenses incurred in that
connection.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1996 accompanies this Proxy Statement. The Company is
required to file an Annual Report on Form 10-KSB for the year ended December 31,
1996 with the Securities and Exchange Commission. Shareholders may obtain a copy
of the Form 10-KSB (without exhibits) by writing to Secretary, OrCAD Inc., 9300
S.W. Nimbus Avenue, Beaverton, OR 97008.
By Order of the Board of Directors
/s/ MICHAEL F. BOSWORTH
Michael F. Bosworth
President, Chief Executive Officer,
and Chairman of the Board
Beaverton, Oregon
April 30, 1997
11
14
APPENDIX A
ORCAD, INC.
AMENDED 1995 STOCK INCENTIVE PLAN*
1. PURPOSES OF THE PLAN.
The purposes of this Stock Incentive Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to provide
additional incentive to the Employees and Consultants of the Company and to
promote the success of the Company's business.
Options granted hereunder may be either "incentive stock options," as
defined in Section 422 of the Internal Revenue Code of 1986, as amended, or
"nonqualified stock options," at the discretion of the Board and as reflected in
the terms of the written option agreement. In addition, shares of the Company's
Common Stock may be Sold hereunder independent of any Option grant.
2. DEFINITIONS.
As used herein, the following definitions shall apply:
2.1 "Administrator" shall mean the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4.1 of the
Plan.
2.2 "Board" shall mean [the Committee, if one has been appointed, or]
the Board of Directors of the Company[, if no Committee is appointed].
2.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.4 "Committee" shall mean a Committee appointed by the Board in
accordance with Section 4.1 of the Plan.
2.5 "Common Stock" shall mean the Common Stock of the Company.
2.6 "Company" shall mean OrCAD, Inc., a Delaware corporation.
2.7 "Consultant" shall mean any person who is engaged by the Company
or any PARENT OR Subsidiary to render consulting services AND IS
COMPENSATED FOR SUCH CONSULTING SERVICES AND ANY DIRECTOR OF THE COMPANY
WHETHER COMPENSATED FOR SUCH SERVICES OR NOT[, provided that the term
"Consultant" shall not include Directors who are only paid a director's fee
or who are not compensated by the Company for their services as Directors].
2.8 "Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of: (i) any sick leave, military leave,
or any other leave of absence approved by the COMPANY [Board]; provided,
however, that for purposes of Incentive Stock Options, any such leave is
for a period of not more than ninety days or reemployment upon the
expiration of such leave is guaranteed by contract or statute, PROVIDED
FURTHER, THAT ON THE NINETY-FIRST DAY OF SUCH LEAVE (WHERE REEMPLOYMENT IS
NOT GUARANTEED BY CONTRACT OR STATUTE) THE OPTIONEE'S INCENTIVE STOCK
OPTION SHALL AUTOMATICALLY CONVERT TO A NONQUALIFIED STOCK OPTION; or (ii)
transfers between locations of the Company or between the Company, its
Parent, its Subsidiaries or its successor.
2.9 "Director" shall mean a member of the Board.
2.10 "Disability" shall mean total and permanent disability as
defined in Section 22(e)(3) of the Code.
- ---------------
* NOTE: Material in BOLDFACE (other than headings) is new, and deleted material
has been bracketed.
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15
2.11 "Employee" shall mean any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the
Company. Neither the payment of a director's fee by the Company nor service
as a Director shall be sufficient to constitute "employment" by the
Company.
2.12 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
2.13 "Incentive Stock Option" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code.
2.14 "Nonqualified Stock Option" shall mean an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code.
2.15 "Notice of Grant" shall mean a written notice evidencing certain
terms and conditions of an individual Option grant. The Notice of Grant is
part of the Option Agreement.
2.16 "Officer" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
2.17 "Option" shall mean a stock option granted pursuant to the Plan.
2.18 "Option Agreement" shall mean a written agreement between the
Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
2.19 "Optioned Stock" shall mean the Common Stock subject to an
Option.
2.20 "Optionee" shall mean an Employee or Consultant who receives an
Option.
2.21 "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
2.22 "Plan" shall mean this 1995 Stock Incentive Plan.
2.23 "Rule 16b-3" shall mean Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.
2.24 "Sale" or "Sold" shall include, with respect to the sale of
Shares under the Plan, the sale of Shares for consideration in the form of
cash or notes, as well as a grant of Shares for consideration in the form
of past or future services.
2.25 "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
2.26 "Subsidiary" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 11 of the Plan, the maximum aggregate
number of Shares which may be optioned and/or Sold under the Plan is 2,000,000
(post-split) shares of Common Stock. The Shares may be authorized, but unissued,
or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
Option grants and/or Sales under the Plan; provided, however, that Shares that
have actually been issued under the Plan shall not be returned to the Plan and
shall not become available for future distribution under the Plan.
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16
4. ADMINISTRATION OF THE PLAN.
4.1 Procedure.
4.1.1 Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are neither
Directors nor Officers.
4.1.2 Administration With Respect to Directors and Officers
Subject to Section 16(b). With respect to Option grants made to
Employees who are also Officers or Directors subject to Section 16(b) of
the Exchange Act, the Plan shall be administered by (A) the Board, if
the Board may administer the Plan in compliance with the rules governing
a plan intended to qualify as a discretionary plan under Rule 16b-3, or
(B) a Committee designated by the Board to administer the Plan, which
Committee shall be constituted to comply with the rules, IF ANY,
governing a plan intended to qualify as a discretionary plan under Rule
16b-3. 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, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all
members of the Committee and thereafter directly administer the Plan,
all to the extent permitted by the rules, if any, governing a plan
intended to qualify as a discretionary plan under Rule 16b-3. With
respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan or
action by the Administrator fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the
Administrator.
4.1.3 Administration With Respect to Other Persons. With respect
to Option grants made 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 to satisfy the legal requirements
relating to the administration of stock option plans under state
corporate and securities laws and the Code. Once appointed, such
Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the Committee
and appoint additional members, remove members (with or without cause)
and substitute new members, fill vacancies (however caused), and remove
all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by the legal requirements relating to
the administration of stock option plans under state corporate and
securities laws and the Code.
4.2 Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
4.2.1 to grant Incentive Stock Options in accordance with Section
422 of the Code, or Nonqualified Stock Options;
4.2.2 to authorize Sales of Shares of Common Stock hereunder;
4.2.3 to determine, upon review of relevant information and in
accordance with Section 8.2 of the Plan, the fair market value of the
Common Stock;
4.2.4 to determine the exercise/purchase price per Share of Options
to be granted or Shares to be Sold, which exercise/purchase price shall
be determined in accordance with Section 8.1 of the Plan;
4.2.5 to determine the Employees or Consultants to whom, and the
time or times at which, Options shall be granted and the number of
Shares to be represented by each Option;
4.2.6 to determine the Employees or Consultants to whom, and the
time or times at which, Shares shall be Sold and the number of Shares to
be Sold;
4.2.7 to interpret the Plan;
A-3
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4.2.8 to prescribe, amend and rescind rules and regulations
relating to the Plan;
4.2.9 to determine the terms and provisions of each Option granted
(which need not be identical) and, with the consent of the holder
thereof, modify or amend each Option;
4.2.10 to determine the terms and provisions of each Sale of Shares
(which need not be identical) and, with the consent of the purchaser
thereof, modify or amend each Sale;
4.2.11 to accelerate or defer (with the consent of the Optionee)
the exercise date of any Option;
4.2.12 to accelerate or defer (with the consent of the Optionee or
purchaser of Shares) the vesting restrictions applicable to Shares Sold
under the Plan or pursuant to Options granted under the Plan;
4.2.13 to authorize any person to execute on behalf of the Company
any instrument required to effectuate the grant of an Option or Sale of
Shares previously granted or authorized by the Board;
4.2.14 to determine the restrictions on transfer, vesting
restrictions, repurchase rights, or other restrictions applicable to
Shares issued under the Plan;
4.2.15 to effect, at any time and from time to time, with the
consent of the affected Optionees, the cancellation of any or all
outstanding Options under the Plan and to grant in substitution therefor
new Options under the Plan covering the same or different numbers of
Shares, but having an Option price per Share consistent with the
provisions of Section 8 of this Plan as of the date of the new Option
grant;
4.2.16 to establish, on a case-by-case basis, different terms and
conditions pertaining to exercise or vesting rights upon termination of
employment, whether at the time of an Option grant or Sale of Shares, or
thereafter;
4.2.17 to approve forms of agreement for use under the Plan;
4.2.18 to reduce the exercise price of any Option to the then
current fair market value if the fair market value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted; [and]
4.2.19 TO DETERMINE WHETHER AND UNDER WHAT CIRCUMSTANCES AN OPTION
MAY BE SETTLED IN CASH UNDER SUBSECTION 9.5 INSTEAD OF COMMON STOCK; AND
4.2.20 to make all other determinations deemed necessary or
advisable for the administration of the Plan.
4.3 Effect of Board'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 granted under the Plan or
Shares Sold under the Plan.
5. ELIGIBILITY.
5.1 Persons Eligible. Options may be granted and/or Shares Sold only
to Employees and Consultants. Incentive Stock Options may be granted only
to Employees. An Employee or Consultant who has been granted an Option or
Sold Shares may, if he or she is otherwise eligible, be granted an
additional Option or Options or Sold additional Shares.
5.2 ISO Limitation. To the extent that the aggregate fair market
value of shares subject to an Optionee's Incentive Stock Options granted by
the Company, any Parent or Subsidiary, which (ii) become exercisable for
the first time 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. For purposes of this Section 5.2,
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 of grant.
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18
5.3 Section 5.2 Limitations. Section 5.2 of the Plan shall apply only
to an Incentive Stock Option evidenced by an Option Agreement which sets
forth the intention of the Company and the Optionee that such Option shall
qualify as an Incentive Stock Option. Section 5.2 of the Plan shall not
apply to any Option evidenced by a Option Agreement which sets forth the
intention of the Company and the Optionee that such Option shall be a
Nonqualified Stock Option.
5.4 No Right to Continued Employment. The Plan shall not confer upon
any Optionee any right with respect to continuation of employment or
consulting relationship with the Company, nor shall it interfere in any way
with his or her right or the Company's right to terminate his employment or
consulting relationship at any time.
5.5 OTHER LIMITATIONS. THE FOLLOWING LIMITATIONS SHALL APPLY TO
GRANTS OF OPTIONS TO EMPLOYEES:
5.5.1 NO EMPLOYEE SHALL BE GRANTED, IN ANY FISCAL YEAR OF THE
COMPANY, OPTIONS TO PURCHASE MORE THAN 100,000 SHARES.
5.5.2 IN CONNECTION WITH HIS OR HER INITIAL EMPLOYMENT, AN
EMPLOYEE MAY BE GRANTED OPTIONS TO PURCHASE UP TO AN ADDITIONAL 100,000
SHARES WHICH SHALL NOT COUNT AGAINST THE LIMIT SET FORTH IN SUBSECTION
5.5.1 ABOVE.
5.5.3 THE FOREGOING LIMITATIONS SHALL BE ADJUSTED PROPORTIONATELY
IN CONNECTION WITH ANY CHANGE IN THE COMPANY'S CAPITALIZATION AS
DESCRIBED IN SECTION 11.
5.5.4 IF AN OPTION IS CANCELED IN THE SAME FISCAL YEAR OF THE
COMPANY IN WHICH IT WAS GRANTED (OTHER THAN IN CONNECTION WITH A
TRANSACTION DESCRIBED IN SECTION 11, THE CANCELED OPTION SHALL BE
COUNTED AGAINST THE LIMITS SET FORTH IN SUBSECTIONS 5.5.1 AND 5.5.2)
ABOVE. FOR THIS PURPOSE, IF THE EXERCISE PRICE OF AN OPTION IS REDUCED,
THE TRANSACTION WILL BE TREATED AS A CANCELLATION OF THE OPTION AND THE
GRANT OF A NEW OPTION.
6. TERM OF PLAN.
The Plan shall become effective upon the earlier to occur of its adoption
by the Board or its approval by the stockholders of the Company as described in
Section 17 of the Plan. It shall continue in effect for a term of ten (10)
years, unless sooner terminated under Section 13 of the Plan.
7. TERM OF OPTION.
The term of each Option shall be stated in the Notice of Grant; provided,
however, that in the case of an Incentive Stock Option, the term shall be ten
(10) years from the date of grant or such shorter term as may be provided in the
Notice of Grant. However, in the case of an Incentive Stock Option granted to an
Optionee who, at the time the Incentive Stock 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 Incentive
Stock Option shall be five (5) years from the date of grant thereof or such
shorter term as may be provided in the Notice of Grant.
8. EXERCISE/PURCHASE PRICE AND CONSIDERATION.
8.1 Exercise/Purchase Price. The per-Share exercise/purchase price
for the Shares to be issued pursuant to exercise of an Option or a Sale
shall be such price as is determined by the Administrator, but shall be
subject to the following:
8.1.1 In the case of an Incentive Stock Option
(a) granted to an Employee who, at the time of the grant of such
Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no
less than one hundred ten percent (110%) of the fair market value per
Share on the date of the grant.
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(b) granted to any other Employee, the per Share exercise price
shall be no less than one hundred percent (100%) of the fair market
value per Share on the date of grant.
8.1.2 In the case of a Nonqualified Stock Option or Sale THE PER
SHARE EXERCISE/PURCHASE PRICE DETERMINED BY THE ADMINISTRATOR.
[(a) granted or Sold to a person who, at the time of the grant
of such Option or authorization of such Sale, 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/purchase price shall be no less than one hundred ten
percent (110%) of the fair market value per Share on the date of the
grant or authorization of Sale, unless otherwise expressly
determined by the Administrator.]
[(b) granted or Sold to any other person, the per Share
exercise/purchase price shall be no less than eighty-five percent
(85%) of the fair market value per Share on the date of grant or
authorization of Sale, unless otherwise expressly determined by the
Administrator.]
[(c)] Any determination to ESTABLISH AN OPTION EXERCISE PRICE OR
EFFECT A SALE OF COMMON STOCK [sell stock] at less than fair market
value on the date of the OPTION grant or authorization of Sale shall
be accompanied by an express finding by the Administrator specifying
that the sale is in the best interest of the Company, and specifying
both the fair market value and the OPTION EXERCISE [grant] or S[s]ale
price of the COMMON Sstock.
[8.1.3 IN THE CASE OF AN OPTION GRANTED OR SALE AUTHORIZED ON OR
AFTER THE EFFECTIVE DATE OF REGISTRATION OF ANY CLASS OF EQUITY SECURITY
OF THE COMPANY PURSUANT TO SECTION 12 OF THE EXCHANGE ACT AND PRIOR TO
SIX (6) MONTHS AFTER THE TERMINATION OF SUCH REGISTRATION, THE PER SHARE
EXERCISE/PURCHASE PRICE SHALL BE NO LESS THAN ONE HUNDRED PERCENT (100%)
OF THE FAIR MARKET VALUE PER SHARE ON THE DATE OF GRANT OR AUTHORIZATION
OF SALE.]
8.2 Fair Market Value. The fair market value per Share shall be
determined by the Administrator in its discretion; provided, however, that
where there is a public market for the Common Stock, the fair market value
per Share shall be the closing price of the Common Stock (or the closing
bid if no sales were reported) for the last market trading day prior to the
date of grant of the Option or authorization of Sale or other
determination, as reported in The Wall Street Journal (or, if not so
reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation (NASDAQ) System) or, in the event the Common
Stock is listed on a stock exchange, the fair market value per Share shall
be the closing price on such exchange for the last market trading day prior
to the date of grant of the Option or authorization of Sale or other
determination, as reported in The Wall Street Journal.
8.3 Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option or pursuant to a Sale, including the
method of payment, shall be determined by the Administrator. In the case of
an Incentive Stock Option, the Administrator shall determine the acceptable
form of consideration at the time of grant. Such consideration may consist
of:
8.3.1 cash;
8.3.2 check;
8.3.3 transfer to the Company of Shares which
(a) in the case of Shares acquired upon exercise of an Option,
have been owned by the Optionee for more than six months on the date
of surrender, and
(b) HAVE [having] a fair market value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
8.3.4 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; [instructions to the Company to withhold from the Shares that
would otherwise be]
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[issued on the exercise that number of Shares having a fair market value
at the time of such exercise equal to the Option exercise price;]
8.3.5 such other consideration and method of payment for the
issuance of Shares to the extent permitted by legal requirements
relating to the administration of stock option plans under state
corporate and securities laws and the Code; or
8.3.6 any combination of the foregoing methods of payment.
If the fair market value of the number of whole Shares transferred or the
number of whole Shares surrendered is less than the total exercise price of the
Option, the shortfall must be made up in cash or by check. Notwithstanding the
foregoing provisions of this Section 8.3, the consideration for Shares to be
issued pursuant to a Sale may not include, in whole or in part, the
consideration set forth in subsections (iii) and (iv) above.
9. EXERCISE OF OPTION.
9.1 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.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under the Option Agreement and
Section 8.3 of the Plan. Each Optionee who exercises an Option shall, upon
notification of the amount due (if any) and prior to or concurrent with delivery
of the certificate representing the Shares, pay to the Company amounts necessary
to satisfy applicable federal, state and local tax withholding requirements. An
Optionee must also provide a duly executed copy of any stock transfer agreement
then in effect and determined to be applicable by the Administrator. Until the
issuance (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
9.2 Termination of Employment or Consulting Relationship. In the
event that an Optionee's Continuous Status as an Employee or Consultant
terminates (other than upon the Optionee's death or Disability) the
Optionee may exercise his or her Option, but only within such period of
time as is determined by the Administrator, and only to the extent that the
Optionee was entitled to exercise it at the date of termination (but in no
event later than the expiration of the term of such Option as set forth in
the Notice of Grant). In the case of an Incentive Stock Option, the
Administrator shall determine such period of time (in no event to exceed
ninety (90) days from the date of termination) when the Option is granted.
If, at the date of termination, the Optionee is not entitled to exercise
his or her entire Option, the Shares covered by the unexercisable portion
of the Option shall revert to the Plan. If, after termination, the Optionee
does not exercise his or her Option with the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
9.3 Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of
the Optionee's Disability, the Optionee may exercise his or her
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Option at any time within twelve (12) months from the date of such
termination, but only to the extent that the Optionee was entitled to
exercise it at the date of such termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant).
If, at the date of termination, the Optionee is not entitled to exercise
his or her entire Option, the Shares covered by the unexercisable portion
of the Option shall revert to the Plan. If, after termination, the Optionee
does not exercise his or her Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
9.4 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 the no event later than the expiration of the term of
such Option as set forth in the Notice of Grant), 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 that the Optionee was entitled to
exercise the Option at the date of death. If, at the time of death, the
Optionee was not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the
Plan. If, after death, the Optionee's estate or a person who acquired the
right to exercise the Option by bequest or inheritance does not exercise
the Option within the time specified herein, the Option shall terminate,
and the Shares covered by such Option shall revert to the Plan.
9.5 BUYOUT PROVISIONS. THE ADMINISTRATOR MAY AT ANY TIME OFFER TO
BUYOUT 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 SUCH OFFER IS MADE.
10. NONTRANSFERABILITY OF OPTIONS.
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE OPTION AGREEMENT, a[A]n
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 and distribution,
and may be exercised during the lifetime of the Optionee only by the Optionee
or, if incapacitated, by his or her legal guardian or legal representative.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
11.1 Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option and the number of shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options
have yet been granted or Sales made or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per
share of Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall
not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Administrator, whose determination in
that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
11.2 Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, each outstanding Option will
terminate immediately prior to the consummation of such proposed action,
unless otherwise provided by the Administrator. The Administrator may, in
the exercise of its sole discretion in such instances, declare that any
Option shall terminate as of a date fixed by the Board and give each
Optionee the right to exercise his or her Option as to all or any part of
the Optioned Stock, including Shares as to which the Option would not
otherwise be exercisable.
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11.3 Merger or Asset Sale. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each outstanding Option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or a Parent or Subsidiary of such successor corporation, unless
the Administrator determines, in the exercise of its sole discretion and in
lieu of such assumption or substitution, that the Optionee shall have the
right to exercise the Option as to all of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. If the
Administrator makes an Option fully exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice or such shorter
period as the Administrator may specify in the notice, and the Option will
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option shall be considered assumed if, following the merger
or sale of assets, the Option confers the right to purchase, for each Share
of Optioned Stock subject to the Option immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities
or property) received in the merger or sale of assets by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor
corporation and the Optionee, provide for the consideration to be received
upon the exercise of the Option, for each Share of Optioned Stock subject
to the Option, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration
received by holders of Common Stock in the merger or sale of assets.
12. 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. Notice of
the determination shall be given to each Optionee within a reasonable time after
the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
13.1 Amendment and Termination. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable.[;
provided, however, that if required to qualify the Plan under Rule 16b-3
promulgated under Section 16 of the Exchange Act no amendment shall be made
more than once every six months that would change the amount, price or
timing of the option grants, other than to comport with changes in the Code
or the rules and regulations promulgated thereunder; and provided, further,
that, if required to qualify the Plan under Rule 16b-3, no amendment shall
be made without the approval of the stockholders of the Company in the
manner described in Section 17 of the Plan if the amendment would:]
[13.1.1 increase the number of Shares subject to the Plan, other
than in connection with an adjustment under Section 11 of the Plan;]
[13.1.2 make a change in the designation of the class of Employees
or Consultants eligible to be granted Options; or]
[13.1.3 if the Company has a class of equity security registered
under Section 12 of the Exchange Act at the time of such revision or
amendment, cause any material increase in the benefits accruing to
participants under the Plan.]
13.2 Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to
comply with Rule 16b-3 or with Section 422 of the Code (or any successor
rule or statute or other applicable law, rule or regulation, including the
requirements of any exchange or quotation system on which the Common Stock
is listed or quoted). Such stockholder approval, if required, shall be
obtained in such a manner and to such a degree as is required by the
applicable law, rule or regulation.
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13.3 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 Administrator, which agreement must be in writing and
signed by the Optionee and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES.
Shares shall not be issued pursuant to the exercise of an Option or a Sale
unless the exercise of such Option or consummation of the Sale 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, applicable state securities laws, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
(including NASDAQ) 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.
15. RESERVATION OF SHARES.
The Company, during the term of this Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
16. LIABILITY OF COMPANY.
16.1 Inability to Obtain Authority. 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.
As a condition to the exercise of an Option or a Sale, the Company may
require the person exercising such Option or to whom Shares are being Sold
to represent and warrant at the time of any such exercise or Sale 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.
16.2 Grants Exceeding Allotted Shares. If the Optioned Stock covered
by an Option exceeds, as of the date of grant, the number of Shares which
may be issued under the Plan without additional stockholder approval, such
Option shall be void with respect to such excess Optioned Stock, unless
stockholder approval of an amendment sufficiently increasing the number of
Shares subject to the Plan is timely obtained in accordance with Section 13
of the Plan.
17. STOCKHOLDER APPROVAL.
Continuance of the Plan shall be subject to approval by the stockholders of
the Company within twelve months before or after the date the Plan is adopted.
Such stockholder approval shall be obtained in the manner and to the degree
required under applicable federal and state law.
[18. SIX MONTH HOLDING PERIOD FOR AFFILIATES.]
[If the Company registers any class of any equity security pursuant to
Section 12 of the Exchange Act, then from the effective date of such
registration until six (6) months after the termination of such registration
(the Public Period), these limits will apply to each Officer, Director and
beneficial owner of ten percent (10%) or more of any class of equity securities
of the Company (Affiliates.) During the Public Period, any Affiliate shall hold
Shares Sold hereunder at least six months from the date of Sale. During the
Public Period, at least six months must elapse from the date of grant of an
Option to an Affiliate to the date the Affiliate disposes of the Shares acquired
upon exercise of the Option, or (if the Option is disposed of other than by
exercise) to the date of disposition of the Option itself.]
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Please mark
your vote as / X /
indicated in
this example.
FOR WITHHOLD
the nominees AUTHORITY
listed below (except to vote for all
as indicated below) nominees listed below
1. Election of five directors. / / / /
Nominees: Michael F. Bosworth, John C. Savage
Stephen W. Director, Richard P. Magnuson
and James B. Moon
INSTRUCTION: To withhold authority to vote for any nominee
write that nominee's name in this space.
--------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of amendments to the Company's 1995 / / / / / /
Stock Incentive Plan.
FOR AGAINST ABSTAIN
3. Ratification of appointment of auditors. / / / / / /
4. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting or any adjournments or
postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. UNLESS DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1, FOR
PROPOSALS 2 AND 3, AND IN ACCORDANCE WITH THE RECOMMENDATIONS OF A MAJORITY OF
THE BOARD OF DIRECTORS AS TO OTHER MATTERS. The undersigned hereby
acknowledges receipt of the Company's Proxy Statement and hereby revokes any
proxy or proxies previously given.
Please sign below exactly as your name appears on this
Proxy Card. If shares are registered in more than one
name, all such persons should sign. A corporation
should sign in its full corporate name by a duly
authorized officer, stating his/her title. Trustees,
guardians, executors and administrators should sign in
their official capacity, giving their full title as
such. If a partnership, please sign in the partnership
name by authorized person(s).
If you receive more than one Proxy Card, please sign
and return all such cards in the accompanying envelope.
- -------------------------- ---------------------------- ------------------------
Typed or Printed Name(s) Authorized Signature Title or Authority, if
Applicable
25
PROXY
OrCAD, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of OrCAD, Inc., a Delaware corporation (the
"Company"), hereby appoints Michael F. Bosworth and P. David Bundy, or
either or them, with full power of substitution in each, as proxies to cast all
votes which the undersigned shareholder is entitled to cast at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held at 1:00 p.m. local
time, on Thursday, June 19, 1997, at the Crowne Plaza, 14811 Kruse Oaks Blvd.,
Lake Oswego, Oregon, and any adjournments or postponements thereof upon the
matters listed herein.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD TODAY, USING THE ENCLOSED ENVELOPE.
(CONTINUED ON REVERSE SIDE)