EXHIBIT 4.1
AMERICAN SOFTWARE, INC.
1991 EMPLOYEE STOCK OPTION PLAN
(Amended and Restated Effective August 27, 1998)
1. PURPOSE. This Plan shall be known as the "1991 Employee Stock Option
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Plan" (hereinafter referred to as "the Plan" or "this Plan"). The purpose of
the Plan is to provide certain key employees of American Software, Inc. (the
"Company") and its subsidiaries with additional incentive to increase their
efforts on the Company's behalf and to remain in the employ of the Company or
any of its subsidiaries by granting key employees from time to time options to
purchase Class A Common Shares of the Company.
The options granted under this Plan may, but need not, constitute
"incentive stock options" (referred to herein as "Incentive" options) within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). An option granted which does not constitute an Incentive option shall
for purposes of the Plan constitute a "Non-Qualified" option. The terms
"subsidiary" or "subsidiaries" mean and include any corporation or other entity
at least a majority of the outstanding voting shares of which is, at the time,
directly or indirectly owned by the Company or by one or more subsidiaries.
2. SHARES. The shares to be optioned under the Plan shall be the Company's
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Class A Common Shares, $0.10 par value (the "Shares"), which Shares may either
be authorized but unissued Shares or treasury Shares. The aggregate number of
Shares for which options may be granted under the Plan shall (subject to the
provisions of paragraph 8) be (i) 3,600,000 Shares (inclusive of the total
number of Shares with respect to which no options have been granted under the
Company's Incentive Stock Option Plan and Nonqualified Stock Option Plan
(collectively the "Prior Plans") on the Effective Date as provided in paragraph
15), plus (ii) the total number of Shares as to which options granted under the
Prior Plans or this Plan terminate (including options terminated upon the
granting of replacement options or otherwise) or expire without being wholly
exercised. New options may be granted under this Plan covering the number of
Shares to which such termination or expiration relates.
3. ADMINISTRATION. The Plan shall be administered by the Employee Stock
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Option Plan Committee (the "Committee") of the Company's Board of Directors (the
"Board"). The Committee shall consist of such members (not less than two) of
the Board as shall be appointed from time to time by the Board. No member of
the Committee while serving as such shall be eligible for participation in the
Plan. Subject to the provisions of the Plan, the Committee shall have exclusive
power to select the employees to whom options will be granted under the Plan, to
determine the number of options to be awarded to each employee selected and to
determine the time or times when options will be awarded. The Committee shall
have full power and authority to administer and interpret the Plan and to adopt
such rules, regulations, agreements and instruments for implementing the Plan
and for the conduct of its business as the Committee deems
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necessary or advisable. The Committee's interpretation of the Plan, and all
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all persons having any interest in
the Plan or in any options granted hereunder.
4. ELIGIBILITY. Participants in the Plan shall be selected by the Committee
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from among key personnel of the Company or a subsidiary; provided, however, that
no director, officer or 10% shareholder (as such terms are defined pursuant to
Section 16 of the Securities Exchange Act of 1934, as amended) of the Company
shall be eligible to participate in the Plan. Options held by a person who
subsequently becomes a director, officer or 10% shareholder shall not be
affected by this restriction. Options shall be granted to individuals solely in
connection with their employment with the Company or a subsidiary.
5. GRANT OF OPTIONS. The Committee may from time to time grant options to
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purchase Shares to such of the eligible employees as may be selected by the
Committee and for such number or numbers of shares as may be determined by the
Committee. Each grant of an option pursuant to this Plan shall be granted
within ten years from the date this Plan is adopted by the Board. Each grant of
an option pursuant to this Plan shall be made upon such terms and conditions as
may be determined by the Committee at the time of grant, subject to the terms,
conditions and limitations set forth in this Plan.
An individual optionee may be granted (i) an Incentive option, (ii) a Non-
Qualified option, or (iii) an Incentive option and a Non-Qualified option at the
same time.
6. TERMS, CONDITIONS AND FORM OF OPTIONS. Each option shall be evidenced by
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a written agreement ("option agreement") in such form as the Board shall from
time to time approve, which agreement shall comply with and be subject to the
following terms and conditions:
6.1 OPTION EFFECTIVE DATE. Each option agreement shall specify an
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effective date, which shall be the date on which the option is granted by the
Committee.
6.2 OPTION TERM. (a) An option shall in no event be exercisable after the
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expiration of ten years from the effective date of the option. In addition,
and in limitation of the above, the option period of any option shall terminate
three months after the termination of the option holder's employment by the
Company for any reason except the Retirement (as hereinafter defined), death or
disability of the option holder-employee (the "optionee").
(b) (i) The term "Retirement" means the voluntary termination of
employment by an option holder whose age and/or years of employment qualify that
employee for normal retirement under the policies of the Company in effect from
time to time.
(ii) For any option granted on or before August 23, 1994, the
Committee may in its discretion amend that option, on an individual basis, to
permit the exercise of such option beyond the date of Retirement, through the
expiration date of the option.
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(iii) The Committee may in its discretion provide in standard option
grant agreements that any option granted after August 23, 1994 may be exercised
after the date of Retirement, through the expiration date of the option.
(iv) Notwithstanding the foregoing, no option may be exercised after
the expiration of ten years from the effective date of the option, nor may an
option be exercised beyond the amount which is vested as of the date of
Retirement.
(c) In the event of termination of employment due to the death or
disability of an optionee, the option period of the option held by him upon the
date of such termination shall terminate upon the earlier of (a) twelve months
after the date of the optionee's death or termination due to disability, as the
case may be, or (b) the date of termination of such option as determined by his
option agreement. In the event of termination of an optionee's employment due
to the death of the optionee, such optionee's options may be exercised during
the 12-month period by his estate or by the person who acquired the right to
exercise such options through bequest or inheritance.
As used herein, "disability" shall mean the inability of the employee to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or has lasted or can be expected to last for a continuous period of at
least twelve months.
No transfer of an option by an optionee by will or by the laws of descent
and distribution shall be effective unless the Company shall have been furnished
with written notice thereof and a copy of the will and/or such other evidence as
the Committee may deem necessary to establish the validity of the transfer and
the acceptance by the successor-in-interest or successors-in-interest of the
terms and conditions of the option.
(d) If an optionee is placed on leave of absence status by the Company or
any subsidiary, any then exercisable option shall be suspended at such time. If
an optionee is placed on lay-off status by the Company or any subsidiary, any
then exercisable option may be exercised during the following period of three
months and shall be suspended thereafter. In either case, the unexercised
portion of the option shall either (i) terminate three months after the
optionee's termination of employment with the Company and its subsidiaries or
(ii) be reinstated upon such optionee being re-employed from leave of absence or
lay-off status by the Company or any subsidiary.
6.3 EXERCISE PRICE. The exercise price of options shall be the price per
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share fixed by the Committee (the "Exercise Price"); provided, however, that the
Exercise Price per Share for Incentive options shall not be less than the fair
market value of a Share on the date the option is granted. In the event that
the Shares are then listed on an established stock exchange, such fair market
value shall be deemed to be the closing price of the Shares on such stock
exchange on the day the option is granted or, if no sale of the Shares shall
have been made on any stock exchange
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on that day, the fair market value shall be determined as such price for the
next preceding day upon which a sale shall have occurred. In the event that the
Shares are not listed upon an established exchange but are quoted on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), the fair market value shall be deemed to be the closing price for
the Shares as quoted on NASDAQ on the day the option is granted. If no sale of
the Shares shall have been made on NASDAQ on that day, the fair market value
shall be determined by such prices on the next preceding day on which a sale
shall have occurred. In the event that the Shares are neither listed on an
established stock exchange nor quoted on NASDAQ, the fair market value on the
day the option is granted shall be determined by the Committee.
6.4 NONTRANSFERABILITY OF OPTIONS. An option shall not be transferable by
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the optionee otherwise than by will, by the laws of descent and distribution or
by a qualified domestic relations order, and shall be exercised during the
lifetime of the optionee only by the optionee or by his guardian or legal
representative. No option or interest therein may be transferred, assigned,
pledged or hypothecated by the optionee during his lifetime, whether by
operation of law or otherwise, or be made subject to execution, attachment or
similar process.
7. EXERCISE OF OPTIONS. An option granted pursuant to this Plan shall be
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exercisable at any time within the option period, subject to the terms and
conditions of such option. Exercise of any option shall be made by the
delivery, during the period that such option is exercisable, to the Company in
person or by mail of (i) written notice from the optionee stating that he is
exercising such option and (ii) the payment of the aggregate purchase price of
all Shares as to which such option is then exercised. Such aggregate purchase
price shall be paid to the Company at the time of exercise. Payment shall
normally be made by cash or check; provided, however, that in its sole
discretion the Committee may approve of payment in whole or in part by the
giving of a note with adequate stated interest or by the surrender of common
stock. Upon the exercise of an option in compliance with the provisions of this
paragraph, and upon the receipt by the Company of the payment for said Shares,
the Company shall (i) deliver or cause to be delivered to the optionee so
exercising his option a certificate or certificates for the number of Shares
with respect to which the option is so exercised and payment is so made, and
(ii) register or cause such Shares to be registered in the name of the
exercising optionee.
8. CHANGES IN CAPITAL STRUCTURE. Appropriate adjustments shall be made to
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the price of the Shares and the number of Shares subject to outstanding options
and the number of Shares issuable under this Plan if there are any changes in
the Shares by reason of stock dividends, stock splits, reverse stock splits,
mergers, recapitalizations or consolidations.
9. CONTROLLING TERMS. Option agreements pertaining to options granted
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pursuant hereto may include conditions that are more (but not less) restrictive
to the optionee than the conditions contained herein and, in such event, the
more restrictive conditions shall apply.
10. TERMINATION OF THE PLAN. This Plan shall terminate upon the close of
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business of the day preceding the tenth anniversary of the approval of this Plan
by the Board unless it shall have been
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sooner terminated by the Board or by reason of there having been granted and
fully exercised stock options covering all of the Shares subject to this Plan.
Upon such termination, no further options may be granted hereunder. If, after
termination of this Plan upon the tenth anniversary hereof or by Board action as
provided above, there are outstanding options which have not been fully
exercised, such options shall remain in effect in accordance with their terms
and shall remain subject to the terms of this Plan.
11. AMENDMENT OR DISCONTINUANCE OF PLAN. The Board may amend, suspend or
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discontinue this Plan at any time without restriction; provided, however, that
the Board may not alter, amend, discontinue, revoke or otherwise impair any
outstanding options which have been granted pursuant to this Plan and which
remain unexercised, except in the event that there is secured the written
consent of the holder of the outstanding option proposed to be so altered or
amended. Nothing contained in this paragraph, however, shall in any way
condition or limit the termination of an option, as hereinabove provided, where
reference is made to termination of employment of an optionee, or as provided in
an option agreement.
12. LIMITATION OF RIGHTS.
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12.1 NO IMPLIED EMPLOYMENT AGREEMENT. Neither this Plan nor the granting
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of an option nor any other action taken pursuant to this Plan, shall constitute
or be evidence of any agreement or understanding, express or implied, that the
Company or any subsidiary will retain any person as an employee for any period
of time.
12.2 NO RIGHTS AS SHAREHOLDER. An optionee shall have no rights as a
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shareholder with respect to Shares covered by his option until the date of
exercise of the option, and, except as provided in paragraph 8, no adjustment
will be made for dividends or other rights for which the record date is before
the date of such exercise.
13. LIQUIDATION OF THE COMPANY. In the event of the complete liquidation or
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dissolution of the Company, other than as an incident to a merger,
reorganization or other adjustment referred to in paragraph 8, any options
granted pursuant to this Plan and remaining unexercised shall be deemed canceled
without regard to or limitation by any other provisions of this Plan.
14. INTENTION OF CONSTRUCTION. To the extent options granted hereunder are
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intended to constitute Incentive options and comply with Section 422 of the Code
and all provisions of this Plan, all such options and all option agreements
relating thereto shall be construed in such a manner as to effectuate that
intent.
15. SHAREHOLDER APPROVAL; EFFECTIVE DATE. This Plan shall become effective
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on the date it is approved by the shareholders of the Company (the "Effective
Date").
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