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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 under Rule 14a-12
Applix, 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)(1) 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:
2
- ----------------------------------------------------
[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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APPLIX, INC.
112 TURNPIKE ROAD
WESTBORO, MASSACHUSETTS 01581-2831
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON FRIDAY, MAY 4, 2001
The Annual Meeting of Stockholders of Applix, Inc. (the "Company") will be
held at the offices of Hale and Dorr LLP, 60 State Street, Boston, Massachusetts
on Friday, May 4, 2001 at 10:00 a.m., local time, to consider and act upon the
following matters:
(1) To elect two Class I Directors for a term of three years.
(2) To approve an amendment to the Company's 1994 Equity Incentive
Plan.
(3) To approve the Company's 2001 Employee Stock Purchase Plan.
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on March 16, 2001 will be
entitled to notice of and to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors,
Patrick J. Rondeau, Clerk
Westboro, Massachusetts
March 30, 2001
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF
THE PROXY IS MAILED IN THE UNITED STATES.
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APPLIX, INC.
112 TURNPIKE ROAD
WESTBORO, MASSACHUSETTS 01581-2831
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 4, 2001
INTRODUCTION
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Applix, Inc. (the "Company") for use at the
Annual Meeting of Stockholders to be held on May 4, 2001, and at any adjournment
of that meeting. All proxies will be voted in accordance with the stockholders'
instructions, and, if no choice is specified, the proxies will be voted in favor
of the matters set forth in the accompanying Notice of Meeting. Any proxy may be
revoked by a stockholder at any time before its exercise by delivery of written
revocation or a subsequently dated proxy to the Clerk of the Company or by
voting in person at the Annual Meeting.
The Company's Annual Report for the fiscal year ended December 31, 2000 is
being mailed to stockholders, along with these proxy materials, on or about
April 5, 2001.
QUORUM REQUIREMENT
At the close of business on March 16, 2001, the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting, there were outstanding and entitled to vote an aggregate of 11,760,127
shares of Common Stock of the Company, constituting all of the outstanding
voting stock of the Company. Holders of Common Stock are entitled to one vote
per share.
The holders of a majority of the number of shares of Common Stock issued,
outstanding and entitled to vote at the Annual Meeting shall constitute a quorum
for the transaction of business at the Annual Meeting. Shares of Common Stock
represented in person or by proxy (including shares that abstain or otherwise do
not vote with respect to one or more of the matters presented for stockholder
approval) will be counted for purposes of determining whether a quorum is
present at the Annual Meeting.
VOTES REQUIRED
The affirmative vote of the holders of a plurality of the votes cast by the
holders of Common Stock is required for the election of directors. The
affirmative vote of the holders of a majority of the votes represented by the
shares of Common Stock present and voting on the matter is required for the
approval of the amendment to the 1994 Equity Incentive Plan and the approval of
the 2001 Employee Stock Purchase Plan.
Shares that abstain from voting as to a particular matter, and shares held
in "street name" by a broker or nominee that indicates on a proxy that it does
not have discretionary authority to vote as to a particular matter, will not be
voted in favor of such matter, and also will not be counted as shares voting on
such matter. Accordingly, abstentions and "broker non-votes" will have no effect
on the voting on a matter that requires the affirmative vote of a certain
percentage of the votes cast or the shares voting on that matter (such as the
election of Class I Directors, the approval of the amendment to the 1994 Equity
Incentive Plan and the approval of the 2001 Employee Stock Purchase Plan).
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BENEFICIAL OWNERSHIP OF VOTING STOCK
The following table sets forth the beneficial ownership of the Company's
Common Stock as of December 31, 2000 (1) by each holder of 5% or more of the
Company's outstanding Common Stock, (2) by each director, (3) by each of the
executive officers named in the Summary Compensation Table set forth below (the
"Named Executive Officers") and (4) by all current directors and executive
officers as a group.
NUMBER OF SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
OWNED(1) COMMON STOCK(2)
---------------- ---------------
5% Holders
Brad Fire(3)................................................ 1,150,000 9.90%
Directors
Jitendra S. Saxena(4)....................................... 645,985 5.41%
Alan Goldsworthy(5)......................................... 139,454 1.19%
David. C. Mahoney(6)........................................ 27,834 *
Alain J. Hanover(7)......................................... 31,168 *
Peter Gyenes................................................ 5,000 *
Paul Ferri(8)............................................... 37,840 *
Charles F. Kane............................................. 0 0%
John D. Loewenberg(9)....................................... 20,000 *
Other Named Executive Officers
Edward Terino(10)........................................... 111,865 *
Craig Cervo(11)............................................. 104,763 *
Bernie Thompson(12)......................................... 49,968 *
Barry Zane.................................................. 29,500 *
All current directors and executive officers as a group (12
persons)(13).............................................. 1,227,603 9.99%
- ---------------
* Less than 1%.
(1) Each person has sole investment and voting power with respect to the shares
indicated as beneficially owned, except as otherwise noted. The inclusion
herein of any shares as beneficially owned does not constitute an admission
of beneficial ownership. In accordance with Securities and Exchange
Commission ("SEC") rules, each person listed is deemed to beneficially own
any shares issuable upon the exercise of stock options held by him or her
that were exercisable on December 31, 2000 or within 60 days after December
31, 2000; any reference in these footnotes to options refers only to such
options.
(2) Number of shares deemed outstanding includes 11,619,572 shares outstanding
as of December 31, 2000, plus any shares subject to outstanding stock
options held by the person or group in question.
(3) Based on representations made to the Company by Mr. Fire in March 2001. Mr.
Fire's address is 10512 S. Highland Lane, Olathe, KS 66061.
(4) Includes 328,969 shares subject to stock options held by Mr. Saxena and
20,000 shares in a custodial account for his daughter. Mr. Saxena's address
is c/o Applix, Inc., 112 Turnpike Road, Westboro, Massachusetts 01581-2831.
(5) Includes 75,000 shares subject to stock options held by Mr. Goldsworthy.
(6) Comprised of 27,834 shares subject to stock options held by Mr. Mahoney.
(7) Includes 10,000 shares subject to stock options held by Mr. Hanover.
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(8) Includes 30,834 shares subject to stock options held by Mr. Ferri.
(9) Comprised of 15,000 shares held by Mr. Loewenberg and Linda P. Loewenberg
and 5,000 shares held by Ms. Loewenberg.
(10) Includes 45,722 shares subject to stock options held by Mr. Terino.
(11) Comprised of 104,763 shares subject to stock options held by Mr. Cervo.
(12) Comprised of 49,968 shares held by Mr. Thompson's spouse.
(13) Includes a total of 672,946 shares subject to stock options held by the
current directors and executive officers as a group.
ELECTION OF DIRECTORS
MEMBERS OF THE BOARD OF DIRECTORS
The Company's Board of Directors is divided into three classes, with
members of each class holding office for staggered three-year terms. There are
currently three Class I Directors, whose terms expire at this Annual Meeting of
Stockholders; three Class II Directors, whose terms expire at the 2002 Annual
Meeting of Stockholders; and two Class III Directors, whose terms expire at the
2003 Annual Meeting of Stockholders (in all cases subject to the election and
qualification of their successors or to their earlier death, resignation or
removal).
The persons named in the enclosed proxy will vote to elect each of Jitendra
S. Saxena and John D. Loewenberg as Class I Directors, unless authority to vote
for the election of the nominees is withheld by marking the proxy to that
effect. Each of the nominees are currently Class I Directors of the Company.
Each of Mr. Saxena and Mr. Loewenberg has indicated his willingness to serve, if
elected, but if either person should be unable or unwilling to stand for
election, proxies may be voted for a substitute nominee designated by the Board
of Directors. Proxies may not be voted for a greater number of persons than the
number of nominees named herein.
Set forth below are the names and certain information with respect to each
director of the Company, including the nominees for Class I Directors.
Class I Directors (holding office for a term expiring at this Annual Meeting.
Mr. Saxena and Mr. Loewenberg are each nominated for a term expiring at the 2004
Annual Meeting. Mr. Ferri will not stand for re-election.):
Mr. Saxena, age 55, is a founder of the Company, has been a director since
its inception in 1983 and has served as Chairman of the Board of Directors since
April 1997. Mr. Saxena has been Chief Executive Officer of Netezza, Inc., a
company providing high-end data warehousing server hardware and software, since
September 2000. Mr. Saxena served as Chief Executive Officer of the Company from
1983 until April 2000 and served as its President from its inception until April
1997.
Mr. Loewenberg, age 60, has been a director of the Company since March
2001. Mr. Loewenberg has been Managing Partner of JDL Enterprises, a consulting
company, since 1996 and also serves as an advisor to Safeguard Scientifics, a
venture capital firm focused on the Internet. Mr. Loewenberg served as interim
President and CEO of Wang Healthcare Information Systems, an electronic medical
record solution company, from March 1998 to September 1999. As a part of his
Safeguard relationship, Mr. Loewenberg served as interim CEO of FormMaker
Software Inc. (now part of DocuCorp International), a document automation
provider, from January 1997 to September 1997. Mr. Loewenberg is currently a
director of CompuCom, Diamond Cluster International, DocuCorp International and
Sanchez Computer Associates.
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Mr. Ferri, age 62, has been a director of the Company since its inception
in 1983. He has been the managing general partner of Matrix Partners, a venture
capital firm, since 1982. Mr. Ferri also serves as a director of Sycamore
Networks, Inc. and Sonus Networks, Inc.
Class II Directors (holding office for a term expiring at the 2002 Annual
Meeting):
Mr. Hanover, age 52, has been a director of the Company since July 1992. He
has been the Managing Partner of Main Street Partners LLC, a venture capital
firm, since August 2000. Mr. Hanover served as the President and Chief Executive
Officer of InCert Software Corp., a computer software development and
distribution company from October 1997 to July 2000. Mr. Hanover served as
Chairman of the Board of Directors and Chief Executive of Viewlogic Systems,
Inc., an engineering software company, from 1984 until May 1997.
Mr. Goldsworthy, age 52, has been a director of the Company and President
and Chief Executive Officer of the Company since April 2000. From January to
April 2000, Mr. Goldsworthy served as President, eBusiness Division of the
Company. Mr. Goldsworthy served as Executive Vice President and then Chief
Executive Officer of CMI-Competitive Solutions, Inc., a supplier of enterprise
resources planning solutions for the automotive supplier industry, from
September 1996 to December 1999. Mr. Goldsworthy held various sales, marketing
and operational management positions with Digital Equipment Corporation, now a
part of Compaq Computer Corporation, a computer manufacturer, from October 1981
to September 1996.
Mr. Charles F. Kane, age 43, has been a director of the Company since March
2001. Mr. Kane has served as Chief Operating Officer of Corechange, Inc., an
e-business access framework software provider, since May 2000. Before joining
Corechange, from March 2000 to May 2000, Mr. Kane served as Executive Vice
President and Chief Financial Officer of Informix Corporation, a global provider
of information management software. Mr. Kane served as Executive Vice President
and CFO of Ardent Software, Inc., a data integration software supplier, from
November 1995 to March 2000 when it was acquired by Informix Corporation.
Class III Directors (holding office for a term expiring at the 2003 Annual
Meeting):
Mr. Mahoney, age 56, has been a director of the Company since October 1992.
Mr. Mahoney has been Chairman of the Board of Directors of LeadingSide, Inc.
(formerly Dataware Technologies, Incorporated), an e-business solutions
provider, since February 2000 and President and Chief Executive Officer of
LeadingSide since January 1999. Mr. Mahoney served as President and Chief
Executive Officer of Sovereign Hill Software, Inc., a collaborative knowledge
discovery software provider, from January 1998 to December 1998, when it merged
with Dataware Technologies. He served as president of Falcon Group Consulting, a
consulting firm, from May 1997 to January 1998. Mr. Mahoney served as Chairman
of the Board and Chief Executive Officer of ePresence, Inc. (formerly Banyan
Systems, Inc.), a networking software company, from 1983 until May 1997.
Mr. Gyenes, age 55, has been a director of the Company since May 2000. Mr.
Gyenes has served as the Chief Executive Officer of Informix Corporation, a
global provider of information management software, since July 2000. Mr. Gyenes
was Chairman, President and Chief Executive Officer of Ardent Software, Inc., a
data integration software supplier, from April 1997 until the sale of Ardent to
Informix Corporation in March 2000. He served as Ardent's Executive Vice
President of Worldwide Sales and International Operations from May 1996 to March
1997. Mr. Gyenes served as President and CEO of Racal InterLan, Inc. from April
1995 to May 1996. Mr. Gyenes is a member of the Board of Directors of Informix
Corporation, Cornerstone Internet Solutions, Davox Corporation and Axis Computer
Systems. Mr. Gyenes is also a member of the Board of Trustees of the
Massachusetts Software and Internet Council.
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BOARD AND COMMITTEE MEETINGS
The standing Audit Committee of the Board of Directors is responsible for
reviewing financial reports, accounting procedures and the scope and results of
the annual audit of the Company's financial statements. The Audit Committee met
four times during 2000. During 2000, the Audit Committee was comprised of
Messrs. Ferri, Hanover, and Saxena. The current members of the Audit Committee
are Messrs. Hanover, Loewenberg and Kane.
The standing Compensation Committee of the Board of Directors is
responsible for reviewing compensation issues and making decisions concerning
the compensation (including stock option grants) of the Company's executive
officers. The Compensation Committee met twice during 2000. During 2000, the
Compensation Committee was composed of Messrs. Mahoney and Ferri. The current
members of the Compensation Committee are Messrs. Mahoney and Loewenberg.
The Board of Directors met thirteen times during 2000, and acted twice by
written consent in lieu of a meeting. Each director, except Mr. Gyenes, attended
at least 75% of the aggregate number of Board meetings and the number of
meetings held by all committees on which he then served.
COMPENSATION OF DIRECTORS
Employee directors of the Company do not receive compensation for their
services as directors. Non-employee directors receive $10,000 annually, payable
quarterly, in compensation for their services as directors. In addition,
non-employee directors are reimbursed for expenses incurred in connection with
attendance at Board meetings.
Pursuant to the 2000 Director Stock Option Plan (the "2000 Director Plan"),
(1) each outside director received an option to purchase 1,500 shares of Common
Stock on May 5, 2000, the date that the 2000 Director Plan was approved by the
Company's stockholders, (2) each outside director is eligible to receive an
option to purchase 4,000 shares of Common Stock on January 1 of each year
beginning 2001, so long as he or she continues to serve as a director and
provided he or she attended at least 75% of the meetings of the Board and any
committees on which he or she served in the preceding year and (3) each outside
director initially elected to the Board after the adoption of the 2000 Director
Plan is eligible to receive an option to purchase 10,000 shares of Common Stock
upon such director's initial election to the Board. Such options have an
exercise price equal to the fair market value of the Common Stock on the date of
grant; become exercisable in two equal annual installments on the first and
second anniversaries of the date of grant (or upon an earlier change in control
of the Company), provided the optionee continues to serve as a director of the
Company on such date; and expire seven years from the date of grant or 90 days
after the optionee ceases to serve as a director. Mr. Gyenes received an option
to purchase 10,000 shares of Common Stock on May 5, 2000, the date of his
initial election to the Board. The non-employee directors, except for Mr.
Gyenes, each received an option to purchase 4,000 shares of Common Stock at an
exercise price of $2.50 per share on January 1, 2001 pursuant to the 2000
Director Plan.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following Summary Compensation Table sets forth certain information
concerning the compensation for each of the last three fiscal years of (1) the
Chief Executive Officer (the "CEO") of the Company as of December 31, 2000, (2)
the person who served as CEO for part of the fiscal year ended December 31,
2000, (3) the two most highly compensated executive officers (other than the
CEO) whose total annual salary and bonus exceeded $100,000 and who were serving
as executive officers at the end of 2000, and (3) two executive
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officers who would have been among the four most highly compensated executive
officers other than the CEO had they been serving as executive officers at the
end of 2000.
LONG-TERM
COMPENSATION
----------------
AWARDS(2)
ANNUAL ----------------
COMPENSATION(1) NUMBER OF SHARES
FISCAL ------------------ UNDERLYING STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- --------------------------- ------ -------- ------- ---------------- ------------
Alan Goldsworthy(3)...................... 2000 $221,683 $35,000 400,000 0
President and Chief Executive Officer 0
0
Jitendra S. Saxena(4).................... 2000 $270,000 0 100,000 $69,655
Chairman and former Chief Executive
Officer................................ 1999 250,000 $40,248 80,000 0
1998 220,000 0 50,000 0
Edward Terino(5)......................... 2000 $180,000 $21,000 40,000 0
Senior Vice President, Finance, Chief
Financial 1999 127,787 $ 6,708 100,000 0
Officer and Treasurer
Craig Cervo.............................. 2000 $170,000 $17,500 25,000 0
Vice President, Product Development 1999 165,000 $13,416 30,000 0
1998 155,000 0 25,000 0
Bernie Thompson(6)....................... 2000 $117,022 0 0 $30,921
President, VistaSource, Inc.
Barry Zane(7)............................ 2000 $101,962 0 15,000 $39,076
Vice President, Technology 1999 160,000 $13,416 30,000 0
1998 150,000 0 25,000 0
- ---------------
(1) Other compensation in the form of perquisites and other personal benefits
has been omitted, in accordance with the rules of the SEC, as the aggregate
amount of such perquisites and other personal benefits constituted less than
the lesser of $50,000 or 10% of the total annual salary and bonus for each
executive officer in each fiscal year covered.
(2) The Company did not make any restricted stock awards, grant any stock
appreciation rights or make any long-term incentive plan payouts during any
fiscal year covered.
(3) Mr. Goldsworthy joined the Company in January 2000 and became President and
Chief Executive Officer in April 2000.
(4) Mr. Saxena resigned as Chief Executive Officer in April 2000. Salary for
fiscal 2000 includes amounts paid to Mr. Saxena as Chief Executive Officer
until April 2000 and amounts paid as Chairman of the Board of Directors for
the balance of fiscal 2000. All Other Compensation is comprised of a
vacation payout of $69,655.
(5) Mr. Terino joined the Company in April 1999.
(6) Mr. Thompson joined the Company in December 1999 and resigned from the
Company in October 2000. All Other Compensation is comprised of a moving
expense payment of $30,921.
(7) Mr. Zane resigned from the Company in October 2000. All Other Compensation
is comprised of a vacation payout of $39,076.
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OPTION GRANTS
The following table sets forth information regarding the granting of
options during 2000 to the Named Executive Officers:
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SHARES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION -----------------------
EXECUTIVE OFFICER GRANTED FISCAL YEAR PER SHARE (1) DATE 5% 10%
- ----------------- ---------- ------------- -------------- ---------- ---------- ----------
Alan Goldsworthy......... 200,000 14.0% $14.000 01/01/07 $1,139,881 $2,656,408
200,000 14.0% $ 6.125 05/05/07 $ 498,698 $1,162,178
Jitendra Saxena.......... 100,000(3)(4) 7.0% $ 14.00 1/6/07 $ 569,941 $1,328,204
Edward Terino............ 40,000(3) 2.8% $ 14.00 1/6/07 $ 227,976 $ 531,282
Craig Cervo.............. 25,000(3) 1.7% $ 14.00 1/6/07 $ 142,485 $ 332,051
Bernie Thompson.......... 0 0% 0 0 0 0
Barry Zane............... 15,000(3) 1.0% $ 14.00 1/6/07 $ 85,491 $ 199,231
- ---------------
(1) Options are intended to be incentive stock options at the time of grant and
generally terminate three months following termination of the executive
officer's employment with the Company or on the expiration date, whichever
occurs earlier. The exercise price of each option is equal to the fair
market value per share of the Common Stock on the date of grant. In February
2000, all outstanding options under the 1994 Equity Incentive Plan were
amended to reduce the vesting schedule from five years to four years.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. The grants shown are net of the option exercise
price, but do not include deductions for taxes or other expenses associated
with the exercise of the option or the sale of the underlying shares. The
actual gains, if any, on the exercises of stock options will depend on the
future performance of the Common Stock, the optionholder's continued
employment through the option period, and the date on which the options are
exercised.
(3) Represents option granted in January 2000. These option grants were
previously disclosed in the Company's 2000 proxy statement as grants in the
fiscal year ended December 31, 1999.
(4) See "Employment Contracts" below.
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OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information concerning each exercise
of stock options during 2000 by the Named Executive Officers and the number and
value of unexercised options held by each of the Named Executive Officers on
December 31, 2000:
-------------------------
NUMBER OF SHARES
NUMBER OF UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE FISCAL YEAR-END FISCAL YEAR-END(2)
NAME EXERCISE REALIZED(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ---------------- ----------------- ------------------------- -------------------------
Alan Goldsworthy...... 0 0 50,000/350,000 0/0
Jitendra Saxena....... 20,000 $39,600 298,261/197,339 0/0
Edward Terino......... 0 0 40,722/99,278 0/0
Craig Cervo........... 0 0 93,880/65,254 $3,164/0
Bernie Thompson....... 0 0 0/0 0/0
Barry Zane............ 0 0 57,130/0 0/0
- ---------------
(1) Represents the difference between the exercise price and the fair market
value of the Common Stock on the date of exercise.
(2) Represents the fair market value of the Common Stock on December 29, 2000,
the last trading day of 2000 ($2.50 per share), less the option exercise
price.
EMPLOYMENT CONTRACTS
The Company entered into an employment agreement with Jitendra S. Saxena on
June 27, 2000 (the "Employment Agreement"). Mr. Saxena was the founder of the
Company and served as the Chief Executive Officer of the Company from 1983 until
April 2000. The Employment Agreement provided for Mr. Saxena to continue as
Chairman of the Board of Directors on a full-time basis through July 1, 2000 and
to continue as Chairman or in such other capacity as the Board designates
through July 1, 2002. Mr. Saxena's primary role under the Employment Agreement
was to provide advice and assistance to the executive officers of the Company on
matters concerning strategy and planning. Under the Employment Agreement Mr.
Saxena was entitled to an annual salary of $270,000 and was entitled to
participate in all benefit programs, excluding vacation, for which he was
eligible. Mr. Saxena was not eligible to receive a bonus. The Employment
Agreement also included non-competition and non-solicitation provisions.
In connection with the divestiture of the Company's VistaSource division,
on March 19, 2001, the Company and Mr. Saxena entered into a supplemental
agreement which amended the terms of the Employment Agreement as follows. Mr.
Saxena's employment with the Company terminated effective as of March 19, 2001,
although Mr. Saxena continues to serve as Chairman of the Board of Directors.
Mr. Saxena will continue to receive payments of $22,500 per month (or $270,000
annually) as severance benefits but is no longer entitled to participate in any
benefit programs of the Company. Mr. Saxena surrendered to the Company for
cancellation a stock option for 100,000 shares of common stock. The Company
amended all other stock options held by Mr. Saxena to accelerate such options in
full and to extend the period of time during which Mr. Saxena may exercise such
options to October 1, 2002. The non-competition and non-solicitation provisions
of the Employment Agreement remain in effect.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In July 2000, the Board of Directors approved an Executive Stock Loan
Purchase Program in order to facilitate the purchase of Common Stock of the
Company by executives of the Company. On September 29, 2000, the persons named
below who were serving as executive officers at that time purchased Common Stock
from the Company, under the 1994 Equity Incentive Plan, for a purchase price of
$4.375 per share, which represented the fair market value of the Common Stock on
July 31, 2000. These purchases were funded by loans from the Company. The terms
of the loans are five years at an interest rate of 6% with interest payable upon
maturity of the loan. The loans provide for mandatory repayment in the event of
the sale of the shares or the termination of employment of the employee. The
employee may repay the loan any time before the loan is due. The shares
purchased through the Executive Stock Loan Program are held as collateral
against the outstanding loan.
AGGREGATE
PURCHASE AMOUNT
NUMBER OF PRICE OUTSTANDING AS
SHARES (AMOUNT OF OF JANUARY 22,
EXECUTIVE OFFICERS PURCHASED LOAN) 2001
- ------------------ --------- ----------- ---------------
Alan Goldsworthy..................................... 51,429 $225,001.88 $229,255.34
President, Chief Executive Officer
Edward Terino........................................ 41,143 $180,000.63 $183,403.38
Senior Vice President, Finance,
Chief Financial Officer and Treasurer
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the "Committee"), which
throughout 2000 was comprised of two non-employee directors (Messrs. Ferri and
Mahoney). The Committee is responsible for determining the salaries of,
establishing bonus programs for, and granting stock options to, the Company's
executive officers. In making decisions regarding executive compensation, the
Committee receives and considers input from the Company's Chief Executive
Officer.
The Committee has three general goals in determining executive
compensation. First, the Committee seeks to provide incentive for, and to
reward, the attainment of objectives that inure to the benefit of the Company
and its stockholders. Second, the Committee seeks to compensate executives in a
manner that enables the Company to attract and retain talented executives who
can contribute to the success of the Company. Third, the Committee seeks to set
the compensation of each executive at a level that it believes is fair, based on
both the executive's relative contribution to the Company and the compensation
levels of similarly situated executives in comparable companies.
The Company's executive compensation consists of three principal elements:
salary, bonuses and stock option grants.
In establishing base salaries for executive officers, the Committee
considers numerous factors such as the executive's responsibilities, the
executive's importance to the Company, the executive's performance in the prior
year, historical salary levels of the executive, and the salaries of executives
at certain other companies whose business and/or financial situation is similar
to that of the Company. To the extent it deems it appropriate, the Committee
also considers general economic conditions within the area and within the
industry. The base salaries of each of the Company's executive officers for
2000, except for Mr. Goldsworthy and Mr. Thompson who joined the Company in
January 2000 and December 1999 respectively, represented an approximately 5%
average increase over their base salaries for 1999.
The Committee believes that it is important to tie a significant portion of
the compensation of executive officers to the attainment of corporate success,
thus aligning the objectives and rewards of Company
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executives with those of the stockholders of the Company. For 2000, the
Committee established a bonus program for the executive officers based 50% on
revenue goals and 50% on net income goals. Under this program, each executive
officer was assigned a target bonus, which ranged from $50,000 to $150,000 for
Mr. Goldsworthy. If the Company's revenue and net income for 2000 was less than
80% of the revenue and net income in the Company's 2000 operating plan, none of
the target bonus would be paid to any executive. If the Company's revenue and
net income for 2000 was at least 80% of its targeted revenue and net income,
each executive officer would receive such percentage of each portion of his
target bonus as was equal to the Company's net income or revenues as a
percentage of target net income or revenues, as the case may be (e.g., if the
Company's net income was 105% of target net income, each executive would receive
105% of the portion of his target bonus that was tied to net income). Based on
the Company's fiscal 2000 performance, the executive officers would not have
received bonuses for 2000. However, in light of the adverse impact on the
Company's financial performance resulting from the delayed disposition of the
VistaSource business and the improved operating results demonstrated in the
latter part of fiscal 2000, the Committee decided to pay bonuses of 70% (or, if
lower, the average percentage bonus paid to non-executive officers of the
Company for fiscal 2000) of the fiscal 2000 target bonuses to each executive
officer.
The Committee also uses stock options as a significant element of the
compensation package of executive officers, because it believes options provide
an incentive to executives to maximize stockholder value and because they
compensate executives only to the extent that the Company's stockholders receive
a return on their investment. Moreover, because options granted to executive
officers generally become exercisable over a four-year period and terminate upon
or shortly after the termination of the executive's employment with the Company,
stock options serve as a means of retaining these executives. In determining the
total number of shares of Common Stock to be covered by option grants to
executive officers in a given year, the Committee takes into account the number
of outstanding shares of Common Stock, the number of shares reserved for
issuance under the Company's option plan, recommendations of management
concerning option grants to employees below executive level, the Company's
projected hiring needs for the coming year and the recent performance of the
Company. In making individual stock option grants to executives, the Committee
considers the same factors considered in the determination of base salary
levels, as well as the stock and option holdings of each executive and the
remaining vesting schedule of such executive's options.
In determining the compensation of the Chief Executive Officer, the
Committee considered the same factors and goals that it used in determining the
compensation of the other executive officers.
SECTION 162(M)
Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), compensation in excess of $1.0 million paid to the CEO and the four
other most highly compensated executive officers of a public company generally
will not be deductible by the company for federal income tax purposes. Certain
performance-based compensation, however, is excluded from this limitation. In
general, the Company's stock option plans are structured and administered in a
manner intended to comply with the performance-based exception to Section
162(m), thus excluding from the Section 162(m) limitation that income recognized
by executives pursuant to stock options. The Committee intends to review
periodically the potential effect of Section 162(m) and may in the future decide
to structure certain other executive compensation programs so that they comply
with the performance-based requirements of Section 162(m).
Compensation Committee (during
fiscal 2000)
David C. Mahoney
Paul J. Ferri
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of the Company's Board of Directors acts under a
written charter first adopted and approved in March 2000. A copy of this charter
is attached to this proxy statement as Appendix A. The current members of the
Audit Committee are independent directors, as defined by its charter and the
rules of the Nasdaq Stock Market.
The Audit Committee reviewed the Company's audited financial statements for
the fiscal year ended December 31, 2000 and discussed these financial statements
with the Company's management. Management is responsible for the Company's
internal controls and the financial reporting process. The Company's independent
accountants are responsible for performing an independent audit of the Company's
financial statements in accordance with generally accepted accounting principles
and to issue a report on those financial statements. The Audit Committee is
responsible for monitoring and overseeing these processes. As appropriate, the
Audit Committee reviews and evaluates, and discusses with the Company's
management, internal accounting, financial and auditing personnel and the
independent auditors, the following:
- the plan for, and the independent auditors' report on, each audit of the
Company's financial statements;
- the Company's financial disclosure documents, including all financial
statements and reports filed with the Securities and Exchange Commission
or sent to shareholders;
- changes in the Company's accounting practices, principles, controls or
methodologies;
- significant developments or changes in accounting rules applicable to the
Company; and
- the adequacy of the Company's internal controls and accounting, financial
and auditing personnel.
Management represented to the Audit Committee that the Company's financial
statements had been prepared in accordance with generally accepted accounting
principles. The Audit Committee also reviewed and discussed the audited
financial statements and the matters required by Statement on Auditing Standards
61 (Communication with Audit Committees) with PricewaterhouseCoopers, LLP, the
Company's independent auditors.
The Company's independent auditors also provided the Audit Committee with
the written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). In addition,
the Audit Committee discussed with the independent auditors their independence
from the Company.
Based on its discussions with management and the independent auditors, and
its review of the representations and information provided by management and the
independent auditors, the Audit Committee recommended to the Company's Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2000.
By the Audit Committee of the Board of Directors of Applix, Inc. (during
fiscal 2000).
Paul J. Ferri
Alain J. Hanover
Jitendra S. Saxena
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STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Common Stock of the Company between December 31, 1995 and December 31, 2000 with
the cumulative total return of (1) the CRSP Total Return Index for the Nasdaq
Stock Market (U.S.) (the "Nasdaq Composite Index") and (2) the Standard and
Poor's Computer (Software & Services) Index (the "S&P Computer Index"), over the
same period. This graph assumes the investment of $100.00 on December 31, 1995
in the Company's Common Stock and assumes any dividends are reinvested.
LOGO
- ---------------------------------------------------------------------------------------------------------------------
December 31, December 31, December 31, December 31, December 31, December 31,
1995 1996 1997 1998 1999 2000
- ---------------------------------------------------------------------------------------------------------------------
APPLIX INC. $100.00 $ 80.28 $ 19.27 $ 14.22 $ 66.29 $ 9.17
NASDAQ COMPOSITE $100.00 $123.04 $150.69 $212.51 $394.92 $237.62
S&P COMPUTER INDEX $100.00 $155.46 $216.56 $392.40 $725.67 $342.87
- ---------------------------------------------------------------------------------------------------------------------
PROPOSAL TO APPROVE AN AMENDMENT
TO THE 1994 EQUITY INCENTIVE PLAN
The Company's 1994 Equity Incentive Plan (the "Incentive Plan") currently
authorizes awards of restricted stock and grants of incentive and non-statutory
stock options to employees, officers and employee directors of, and consultants
and advisors to, the Company and its subsidiaries to purchase up to 4,490,157
shares of the Company's Common Stock. On February 26, 2001, the Board of
Directors of the Company adopted, subject to stockholder approval, an amendment
(the "Amendment") to the Incentive Plan, providing for an increase in the number
of shares of the Company's Common Stock available for issuance under the
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Incentive Plan from 4,490,157 to 5,490,157 and an increase in the maximum number
of shares with respect to which options and restricted stock awards may be
granted to any employee in one calendar year under the Incentive Plan from
65,000 to 400,000.
The Board of Directors believes that awards under the Incentive Plan,
including stock options, have been and will continue to be an important
compensation element in attracting and retaining key employees who are expected
to contribute to the Company's growth and success. THE BOARD OF DIRECTORS OF THE
COMPANY BELIEVES THAT THIS AMENDMENT IS IN THE BEST INTERESTS OF THE COMPANY AND
ITS STOCKHOLDERS AND RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
SUMMARY OF THE INCENTIVE PLAN
The Incentive Plan was initially adopted by the Company's Board of
Directors in April 1994 and approved by its stockholders in May 1994. The
Incentive Plan will terminate in April 2004, unless earlier terminated according
to the terms of the Incentive Plan.
Stock options entitle the optionee to purchase Common Stock from the
Company for a specified exercise price during a period specified in the
applicable option agreement. Restricted stock awards under the Incentive Plan
entitle the recipient to purchase Common Stock from the Company under terms
which provide for vesting over a period of time and a right of repurchase in
favor of the Company of the unvested portion of the Common Stock subject to the
award upon the termination of the recipient's employment or other relationship
with the Company. As option grants and stock awards under the Incentive Plan are
discretionary, the Company cannot now determine the number of options to be
granted or awards to be made to any particular executive officer, executive
officers as a group, or non-executive officers and employees as a group. Subject
to approval of the Amendment, the maximum number of shares with respect to which
options and restricted stock awards may be granted to any employee under the
Incentive Plan in one calendar year may not exceed 400,000 shares of Common
Stock.
The Incentive Plan is administered by both the Board of Directors and its
Compensation Committee, which select the persons to whom restricted stock awards
and stock options are granted and determine the number of shares of Common Stock
covered by each award or option, its purchase price or exercise price, its
vesting schedule and (in the case of stock options) its expiration date.
As of December 31, 2000, 2,987,852 shares of Common Stock were issuable
pursuant to stock options outstanding under the Incentive Plan and 592,298
additional shares remained available for future option grants or restricted
stock awards under the Incentive Plan. The outstanding stock options generally
become exercisable over a four-year period, are nontransferable, and expire
either seven or 10 years after the date of grant (subject to earlier termination
in the event of the termination of the optionee's employment with the Company).
To date, no restricted stock awards have been made under the Incentive Plan. As
of March 1, 2001, 375 employees of the Company were eligible to receive options
or restricted stock awards under the Incentive Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the United States federal income tax
consequences that generally will arise with respect to awards granted under the
Incentive Plan and with respect to the sale of Common Stock acquired under the
Incentive Plan. This summary is based on the federal tax laws in effect of the
date of this proxy statement. Changes to these laws could alter the tax
consequences described below.
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INCENTIVE STOCK OPTIONS
In general, a participant will not recognize taxable income upon the grant
or exercise of an incentive stock option. Instead, a participant will recognize
taxable income with respect to an incentive stock option only upon the sale of
Common Stock acquired through the exercise of the option ("ISO Stock"). The
exercise of an incentive stock option, however, may subject the participant to
the alternative minimum tax.
Generally, the tax consequences of selling ISO Stock will vary with the
length of time that the participant has owned the ISO Stock at the time it is
sold. If the participant sells ISO Stock after having owned it for at least two
years from the date the option was granted (the "Grant Date") and one year from
the date the option was exercised (the "Exercise Date"), then the participant
will recognize long-term capital gain in an amount equal to the excess of the
sale price of the ISO Stock over the exercise price.
If the participant sells ISO Stock for more than the exercise price prior
to having owned it for at least two years from the Grant Date and one year from
the Exercise Date (a "Disqualifying Disposition"), then all or a portion of the
gain recognized by the participant will be ordinary compensation income and the
remaining gain, if any, will be a capital gain. This capital gain will be a
long-term capital gain if the participant has held the ISO Stock for more than
one year prior to the date of sale.
If a participant sells ISO Stock for less than the exercise price, then the
participant will recognize capital loss in an amount equal to the excess of the
exercise price over the sale price of the ISO Stock. This capital loss will be a
long-term capital loss if the participant has held the ISO Stock for more than
one year prior to the date of sale.
NONSTATUTORY STOCK OPTIONS
As in the case of an incentive stock option, a participant will not
recognize taxable income upon the grant of a non-statutory stock option. Unlike
the case of an incentive stock option, however, a participant who exercises a
non-statutory stock option generally will recognize ordinary compensation income
in an amount equal to the excess of the fair market value of the Common Stock
acquired through the exercise of the option ("NSO Stock") on the Exercise Date
over the exercise price.
With respect to any NSO Stock, a participant will have a tax basis equal to
the exercise price plus any income recognized upon the exercise of the option.
Upon selling NSO Stock, a participant generally will recognize capital gain or
loss in an amount equal to the difference between the sale price of the NSO
Stock and the participant's tax basis in the NSO Stock. This capital gain or
loss will be a long-term capital gain or loss if the participant has held the
NSO stock for more than one year prior to the date of the sale.
TAX CONSEQUENCES TO THE COMPANY
The grant of an award under the Incentive Plan generally will have no tax
consequences to the Company. Moreover, in general, neither the exercise of an
incentive stock option nor the sale of any Common Stock acquired under the
Incentive Plan will have any tax consequences to the Company. The Company
generally will be entitled to a business-expense deduction, however, with
respect to any ordinary compensation income recognized by a participant under
the Incentive Plan, including as a result of the exercise of a non-statutory
stock option or a Disqualifying Disposition. Any such deduction will be subject
to the limitations of Section 162(m) of the Code.
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PROPOSAL TO APPROVE THE 2001 EMPLOYEE
STOCK PURCHASE PLAN
On February 26, 2001, the Board of Directors adopted the Company's 2001
Employee Stock Purchase Plan (the "2001 Stock Purchase Plan"). The purpose of
the 2001 Stock Purchase Plan is to encourage ownership of stock of the Company
by employees whose continued services are essential to the Company's future
progress, and to provide them with an incentive to continue as employees of the
Company. The Board of Directors of the Company believes that the 2001 Stock
Purchase Plan will enhance the ability of the Company to attract and retain
qualified employees and will provide further incentive to employees as a result
of their equity interest in the Company. THE BOARD OF DIRECTORS OF THE COMPANY
BELIEVES THAT THE APPROVAL OF THE 2001 STOCK PURCHASE PLAN IS IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE IN FAVOR OF
THIS PROPOSAL.
SUMMARY OF PLAN
All employees of the Company and certain of the Company's subsidiaries (the
"Designated Subsidiaries"), including executive officers and directors who are
employees who have been employed by the Company or a Designated Subsidiary prior
to enrolling in the 2001 Employee Stock Purchase Plan and prior to the date that
an offering commences under the 2001 Stock Purchase Plan and who are customarily
employed for more than 20 hours per week and for more than five months in a
calendar year by the Company or a Designated Subsidiary are eligible to
participate in the 2001 Stock Purchase Plan. However, no employee will be
eligible to participate in the 2001 Stock Purchase Plan if he or she possesses
5% or more of the total combined voting power or value of the stock of Company's
or any parent or subsidiary corporation immediately after the grant of an option
under the 2001 Stock Purchase Plan. No employee may purchase shares of stock
with an aggregate value of more than $25,000 per calendar year under the 2001
Stock Purchase Plan (and all other employee stock purchase plans of the Company
and its subsidiaries), determined by the value of such shares as of the
applicable offering commencement dates. As of February 28, 2001, approximately
372 employees of the Company were eligible to participate in the plan. Because
participation in the 2001 Stock Purchase Plan is at the election of the
Company's employees, the benefits to be received by any particular executive
officer, by all current executive officers as a group or by non-executive
officer employees as a group cannot be determined by the Company at this time.
A total of 800,000 shares of Common Stock are available for issuance under
the 2001 Stock Purchase Plan. The 2001 Stock Purchase Plan will be conducted in
a series of offerings. The first offering commenced on April 1, 2001 and will
continue until July 31, 2001. Subsequent offerings will commence on each
February 1 and August 1, or the first business day thereafter, and continue for
six month periods. To participate in an offering under the 2001 Stock Purchase
Plan, an employee must authorize the Company to deduct from 1% to 10% of his or
her base pay during the offering period. At the end of each offering period, the
accumulated payroll deductions of each participating employee will be used to
purchase shares of Common Stock at the purchase price for that offering period.
The purchase price of the shares in each offering period will be 85% of the
closing price per share of the Common Stock on the Nasdaq National Market on
either the first day or last day of the offering period, whichever is lower. The
maximum number of shares of Common Stock that may be issued in any offering is
200,000.
The Board of Directors of the Company may at any time terminate or amend
the 2001 Stock Purchase Plan; provided, however that no such amendment shall be
made to the 2001 Stock Purchase Plan (a) without approval of the stockholders of
the Company if approval of such amendment is required by Section 423 of the
Code, or (b) which would cause the plan to fail to comply with Section 423 of
the Code.
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The 2001 Stock Purchase Plan will be administered by the Board of Directors
or by a Committee appointed by the Board, which is authorized to make rules and
regulations for the administration and interpretation of the 2001 Stock Purchase
Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the United States federal income tax
consequences that generally will arise with respect to purchases made under the
2001 Stock Purchase Plan and with respect to the sale of Common Stock acquired
under the 2001 Stock Purchase Plan. This summary is based on the federal tax
laws in effect of the date of this proxy statement. Changes to these laws could
alter the tax consequences described below.
TAX CONSEQUENCES TO PARTICIPANTS
In general, a participant will not recognize taxable income upon enrolling
in the 2001 Stock Purchase Plan or upon purchasing shares of Common Stock at the
end of an offering. Instead, if a participant sells Common Stock acquired under
the 2001 Stock Purchase Plan at a sale price that exceeds the price at which the
participant purchased the Common Stock, then the participant will recognize
taxable income in an amount equal to the excess of the sale price of the Common
Stock over the price at which the participant purchased the Common Stock. A
portion of that taxable income will be ordinary income, and a portion may be
capital gain.
If the participant sells the Common Stock more than one year after
acquiring it and more than two years after the date on which the offering
commenced (the "Grant Date"), then the participant will be taxed as follows. If
the sale price of the Common Stock is higher than the price at which the
participant purchased the Common Stock, then the participant will recognize
ordinary compensation income in an amount equal to the lesser of:
- fifteen percent of the fair market value of the Common Stock on the Grant
Date; and
- the excess of the sale price of the Common Stock over the price at which
the participant purchased the Common Stock.
Any further income will be long-term capital gain. If the sale price of the
Common Stock is less than the price at which the participant purchased the
Common Stock, then the participant will recognize long-term capital loss in an
amount equal to the excess of the price at which the participant purchased the
Common Stock over the sale price of the Common Stock.
If the participant sells the Common Stock within one year after acquiring
it or within two years after the Grant Date (a "Disqualifying Disposition"),
then the participant will recognize ordinary compensation income in an amount
equal to the excess of the fair market value of the Common Stock on the date
that it was purchased over the price at which the participant purchased the
Common Stock. The participant will also recognize capital gain in an amount
equal to the excess of the sale price of the Common Stock over the fair market
value of the Common Stock on the date that it was purchased, or capital loss in
an amount equal to the excess of the fair market value of the Common Stock on
the date that it was purchased over the sale price of the Common Stock. This
capital gain or loss will be a long-term capital gain or loss if the participant
has held the Common Stock for more than one year prior to the date of the sale
and will be a short-term capital gain or loss if the participant has held the
Common Stock for a shorter period.
TAX CONSEQUENCES TO THE COMPANY
The offering of Common Stock under the 2001 Stock Purchase Plan will have
no tax consequences to the Company. Moreover, in general, neither the purchase
nor the sale of Common Stock acquired under the 2001
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Stock Purchase Plan will have any tax consequences to the Company except that
the Company will be entitled to a business-expense deduction with respect to any
ordinary compensation income recognized by a participant upon making a
Disqualifying Disposition. Any such deduction will be subject to the limitations
of Section 162(m) of the Tax Code.
TAX CONSEQUENCES TO PARTICIPANTS IF APPLIX STOCKHOLDERS DO NOT APPROVE THE 2001
STOCK PURCHASE PLAN
In order for the 2001 Stock Purchase Plan to qualify as an "employee stock
purchase plan" under Section 423 of the Code, the stockholders of Applix must
approve the 2001 Stock Purchase Plan within 12 months of its adoption by the
Board. The Board approved the 2001 Stock Purchase Plan on February 26, 2001.
Under the Code, the Applix stockholders must approve the 2001 Stock Purchase
Plan within one year of the Board approval. Accordingly, if the Applix
stockholders approve the 2001 Stock Purchase Plan on or before such one year
anniversary, the tax consequences of the 2001 Stock Purchase Plan to
participants will be as described above.
If the Applix stockholders do not approve the 2001 Stock Purchase Plan on
or before such date, the 2001 Stock Purchase Plan will remain in existence and
there will be the following tax consequences to participants. Options granted
under the 2001 Stock Purchase Plan will be treated as non-statutory stock
options. As such, a participant generally will recognize ordinary compensation
income upon the exercise of the option in an amount equal to the excess of the
fair market value of the Common Stock acquired through the exercise of the
option (the "NSO Stock") on the exercise date over the purchase price.
A participant will have a tax basis for any NSO Stock equal to the purchase
price plus any income recognized upon the exercise of the option. Upon selling
NSO Stock, a participant generally will recognize capital gain or loss in an
amount equal to the difference between the sale price of the NSO Stock and the
participant's tax basis in the NSO Stock. This capital gain or loss will be a
long-term capital gain or loss if the participant has held the NSO Stock for
more than one year prior to the date of the sale and will be a short-term
capital gain or loss if the participant has held the NSO Stock for a shorter
period.
The Company will be entitled to a business-expense deduction with respect
to any ordinary compensation income recognized by a participant upon the
exercise of a non-statutory stock option.
OTHER MATTERS
MATTERS TO BE CONSIDERED AT THE MEETING
The Board of Directors does not know of any other matters which may come
before the Annual Meeting. However, if any other matters are properly presented
to the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote, or otherwise act, in accordance with their judgment
on such matters.
INDEPENDENT PUBLIC AUDITORS
The Board of Directors is not soliciting the ratification by the
stockholders of independent auditors for the current fiscal year because it has
not yet made its selection of independent auditors. The Board of Directors may
consider a product distribution relationship with an affiliate of
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), which has served as the
Company's independent auditors since 1993. If this relationship is consummated,
the independence of PricewaterhouseCoopers as auditors for the Company may be
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compromised. As a result, the Board of Directors may select another accounting
firm to serve as independent auditors for fiscal 2001.
Representatives of PricewaterhouseCoopers are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions from
stockholders.
AUDIT FEES
PricewaterhouseCoopers billed the Company an aggregate of $136,657.77 in
fees for professional services rendered in connection with the audit of the
Company's financial statements for the fiscal year ended December 31, 2000 and
the reviews of the financial statements included in each of the Company's
Quarterly Reports on Form 10-Q during such fiscal year.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PricewaterhouseCoopers did not bill the Company for any professional
services rendered to the Company and its affiliates for the fiscal year ended
December 31, 2000 in connection with financial information systems design or
implementation, the operation of the Company's information system or the
management of its local area network.
ALL OTHER FEES
PricewaterhouseCoopers billed the Company an aggregate of $96,203.00 in
fees for other services rendered to the Company and its affiliates for the
fiscal year ended December 31, 2000.
SOLICITATION OF PROXIES
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews, and the Company reserves the right to retain
outside agencies for the purpose of soliciting proxies. Brokers, custodians and
fiduciaries will be requested to forward proxy soliciting material to the owners
of stock held in their names, and, as required by law, the Company will
reimburse them for their out-of-pocket expenses in this regard.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be included in the Company's proxy
statement for the 2002 Annual Meeting of Stockholders must be received by the
Company at its principal office not later than December 4, 2001.
If a stockholder who wishes to make a proposal at the 2002 Annual
Meeting -- other than one that will be included in the Company's proxy
materials -- does not notify the Company by February 16, 2002, the proxies that
management solicits for the meeting will have discretionary authority to vote on
the stockholder's proposal if it is properly brought before the meeting.
SECTIONS 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of copies of reports filed by the directors and
executive officers of the Company pursuant to Section 16(a) of the Exchange Act
or written representations from certain persons required to file reports under
Section 16(a) of the Exchange Act that no Form 5 filing was required for such
person, the
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Company believes that during 2000 all filings required to be made by its
Reporting Persons were timely made in accordance with the requirements of the
Exchange Act.
By Order of the Board of Directors,
Patrick J. Rondeau, Clerk
March 30, 2001
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
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APPENDIX A
APPLIX, INC.
AUDIT COMMITTEE CHARTER
I. MEMBERSHIP
A. The Audit Committee shall consist of at least three independent,
financially literate members of the board of directors meeting the
requirements set forth in Sections I.B and I.C. below.
B. Independence. A director is independent if he or she is not an officer
or employee of the Company or its subsidiaries, if he or she has no
relationship which, in the opinion of the Company's board of directors,
would interfere with his or her exercise of independent judgment in
carrying out the responsibilities of a director, and if he or she:
1. Has not been an employee of the Company or any affiliate of the
Company in the current year or in any of the past three years;
2. Has no immediate family member who has been employed by the Company
or an affiliate of the Company in any of the past three years (an
immediate family member includes a person's spouse, parents,
children, siblings, mother-in-law, father-in-law, brother-in-law,
sister-in-law, son-in-law, daughter-in-law, and anyone who resides in
a person's home);
3. Is not employed as an executive of an entity other than the Company
having a compensation committee which includes any of the Company's
executives;
4. Did not within the last fiscal year receive from the Company or any
affiliate of the Company compensation -- other than benefits under at
tax qualified retirement plan, compensation for director service or
nondiscretionary compensation -- greater than $60,000; and
5. Has not in any of the past three years been a partner in, or
controlling shareholder or executive of, a for profit business
organization to which the Company made or from which the Company
received payment (other than payment arising solely from investments
in the Company's securities) that exceeds the greater of: (i)
$200,000; or (ii) more than 5% of the Company's or business
organization's consolidated gross revenues.
Under exceptional and limited circumstances, one director who has a relationship
making him or her not independent, and who is not a Company employee or an
immediate family member of a Company employee, may serve on the Audit Committee
if the board of directors determines that the director's membership on the Audit
Committee is required by the best interests of the Company and its shareholders,
and discloses in the next annual proxy statement after such determination the
nature of the relationship and the reasons for the determination.
C. Financial Literacy. Each member of the Audit Committee must be able to
read and understand fundamental financial statements, including the
Company's balance sheet, income statement, and cash flow statement, or
must become able to do so within a reasonable time after his or her
appointment to the Audit Committee. At least one member of the Audit
Committee must have past employment experience in finance or
accounting, professional certification in accounting, or other
comparable experience or background which result in the member having
financial sophistication (such as being or having been a chief
executive officer, chief financial officer or other senior officer with
financial oversight responsibilities).
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D. Chairman. Unless a Chairman is elected by the board of directors, the
Audit Committee shall elect a Chairman by majority vote.
II. RESPONSIBILITIES OF THE AUDIT COMMITTEE
The Audit Committee shall assist the board of directors in fulfilling their
responsibilities to shareholders concerning the Company's accounting and
reporting practices, and shall facilitate open communication between the Audit
Committee, board of directors, outside auditors, and management. The Audit
Committee shall discharge its responsibilities, and shall assess the information
provided by the Company's management and the outside auditor, in accordance with
its business judgment. The responsibilities set forth herein do not reflect or
create any duty or obligation of the Audit Committee to plan, conduct, oversee
or determine the appropriate scope of any audit, or to determine that the
Company's financial statements are complete, accurate, fairly presented, or in
accordance with Generally Accepted Accounting Principles or applicable law. In
exercising its business judgment, the Audit Committee shall rely on the
information and advice provided by the Company's management and/or its outside
auditor.
A. The Audit Committee shall review and reassess the adequacy of this
charter at least annually.
B. The outside auditor shall be accountable to the Audit Committee and the
board of directors, which together shall have the ultimate authority
and responsibility to nominate the outside auditor to be proposed for
shareholder approval in any proxy statement, and to select, evaluate,
and (where appropriate) replace the outside auditor.
C. The Audit Committee shall ensure that they receive from the outside
auditor the written disclosures and letter from the outside auditor
required by Independence Standards Board Standard No. 1, as modified or
amended.
D. The Audit Committee shall discuss with the outside auditor its
independence, and shall actively engage in a dialogue with the outside
auditor regarding any disclosed relationships or services that might
impact the objectivity and independence of the auditor. The Audit
Committee shall take, or recommend that the full board of directors
take, appropriate action to oversee the independence of the outside
auditor.
E. The Audit Committee shall review and discuss with the Company's
management the Company's audited financial statements.
F. The Audit Committee shall direct and request that the outside auditor
represent that it has communicated to the Audit Committee all matters
which should be communicated in accordance with Statement on Accounting
Standards Nos. 61 and 71, as amended, including: changes in significant
accounting policies or their application; accounting for unusual
transactions; the effect and application of significant accounting
policies in controversial areas or emerging areas for which there is a
lack of authoritative guidance or consensus; the process used by
management to formulate sensitive accounting estimates and the basis
for the accountants conclusions concerning the reasonableness of those
estimates; adjustments arising from audits that could have a
significant impact on the Company's financial reporting process;
disagreements with management about matters that could be significant
to the Company's financial statements; and any serious difficulties
encountered in dealing with management related to the performance of
the audit.
G. Based upon its discharge of its responsibilities pursuant to Sections
II.C through II.F and any other information, discussion or
communication that the Audit Committee in its business judgment deems
relevant, the Audit Committee shall consider whether they will
recommend to the board of directors
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that the Company's audited financial statements be included in the
Company's annual reports on Forms 10-K.
H. The Audit Committee shall prepare for inclusion in any proxy or
information statement of the Company relating to an annual meeting of
security holders at which directors are to be elected (or special
meeting or written consents in lieu of such meeting), the report
described in 17 C.F.Rsec.228.306.
I. The Audit Committee shall annually inform the outside auditor, the
Chief Financial Officer, the Controller, and the most senior other
person, if any, responsible for the internal audit activities, that
they should promptly contact the Audit Committee or its Chairman about
any significant issue or disagreement concerning the Company's
accounting practices or financial statements that is not resolved to
their satisfaction. Where such communications are made to the Chairman,
he or she shall confer with the outside auditor concerning any such
communications, and shall notify the other members of the Audit
Committee of any communications which the outside auditor or the
Chairman in the exercise of his or her business judgment believes
should be considered by the Audit Committee prior to its next scheduled
meeting.
J. The Audit Committee shall direct the outside auditor to use its best
efforts to perform all reviews of interim financial information prior
to disclosure by the Company of such information, and to discuss
promptly with the Chairman of the Audit Committee and the Chief
Financial Officer any matters identified in connection with the
auditor's review of interim financial information which are required to
be discussed by Statement on Auditing Standards No. 61. The Chairman of
the Audit Committee shall discuss any such matters with the outside
auditor, and shall notify the other members of the Audit Committee of
any discussions which the outside auditor or the Chairman in the
exercise of his or her business judgment believes should be considered
by the Audit Committee prior to disclosure or filing of the interim
financial information, or the Audit Committee's next scheduled meeting.
K. The Audit Committee shall direct management to advise the Audit
Committee in the event that the Company proposes to disclose or file
interim financial information prior to completion of review by the
outside auditor.
L. The Audit Committee shall prepare minutes of its meetings that shall be
presented to the Board of Directors for review. The Audit Committee may
determine that some or all of its minutes shall not be made available
to members of management who are directors of the Company.
M. The Audit Committee shall regularly report to the board of directors
concerning any action the Audit Committee in the exercise of its
business judgment believes the board of directors should consider.
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APPENDIX B
APPLIX, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
February 26, 2001
The purpose of this Plan is to provide eligible employees of Applix, Inc. (the
"Company") and certain of its subsidiaries with opportunities to purchase shares
of the Company's common stock, $.0025 par value (the "Common Stock"), commencing
on February 1, 2001. Eight Hundred Thousand (800,000) shares of Common Stock in
the aggregate have been approved for this purpose. This Plan is intended to
qualify as an "employee stock purchase plan" as defined in Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
promulgated thereunder, and shall be interpreted consistent therewith.
1. ADMINISTRATION. The Plan will be administered by the Company's Board
of Directors (the "Board") or by a Committee appointed by the Board (the
"Committee"). The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.
2. ELIGIBILITY. All employees of the Company, including Directors who are
employees, and all employees of any subsidiary of the Company (as defined in
Section 424(f) of the Code) designated by the Board or the Committee from time
to time (a "Designated Subsidiary"), are eligible to participate in any one or
more of the offerings of Options (as defined in Section 9) to purchase Common
Stock under the Plan provided that:
(a) they are customarily employed by the Company or a Designated
Subsidiary for more than 20 hours a week and for more than five months in a
calendar year; and
(b) they have been employed by the Company or a Designated Subsidiary
prior to enrolling in the Plan; and
(c) they are employees of the Company or a Designated Subsidiary on
the first day of the applicable Plan Period (as defined below).
No employee may be granted an option hereunder if such employee,
immediately after the option is granted, owns 5% or more of the total combined
voting power or value of the stock of the Company or any subsidiary. For
purposes of the preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply in determining the stock ownership of an employee, and all
stock which the employee has a contractual right to purchase shall be treated as
stock owned by the employee.
3. OFFERINGS. The Company will make one or more offerings ("Offerings")
to employees to purchase stock under this Plan. The first Offering (the "First
Offering") will begin on April 1, 2001 (the "First Offering Commencement Date").
All subsequent Offerings will begin each August 1 and February 1, or the first
business day thereafter (the "Offering Commencement Dates"). The First Offering
Commencement Date will begin a period of four months and each other Offering
Commencement Date will begin a six-month period (each, a
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"Plan Period") during which payroll deductions will be made and held for the
purchase of Common Stock at the end of the Plan Period. The Board or the
Committee may, at its discretion, choose a different Plan Period of twelve (12)
months or less for subsequent Offerings. The maximum number of shares of Common
Stock that may be issued in any Offering is 200,000.
4. PARTICIPATION. An employee eligible on the Offering Commencement Date
of any Offering may participate in such Offering by completing and forwarding a
payroll deduction authorization form to the employee's appropriate payroll
office at least five (5) days prior to the applicable Offering Commencement
Date. The form will authorize a regular payroll deduction from the Compensation
received by the employee during the Plan Period. Unless an employee files a new
form or withdraws from the Plan, his deductions and purchases will continue at
the same rate for future Offerings under the Plan as long as the Plan remains in
effect. The term "Compensation" means the amount of money reportable on the
employee's Federal Income Tax Withholding Statement, excluding overtime, shift
premium, incentive or bonus awards, allowances and reimbursements for expenses
such as relocation allowances for travel expenses, income or gains on the
exercise of Company stock options or stock appreciation rights, and similar
items, whether or not shown on the employee's Federal Income Tax Withholding
Statement, but including, in the case of salespersons, sales commissions to the
extent determined by the Board or the Committee.
5. DEDUCTIONS. The Company will maintain payroll deduction accounts for
all participating employees. With respect to any Offering made under this Plan,
an employee may authorize a payroll deduction in any dollar amount at a rate of
between 1% and 10% of the Compensation he or she receives during the Plan Period
or such shorter period during which deductions from payroll are made, with any
change in compensation during the Plan Period to result in an automatic
corresponding change in the dollar amount withheld.
No employee may be granted an Option (as defined in Section 9) which
permits his rights to purchase Common Stock under this Plan and any other
employee stock purchase plan (as defined in Section 423(b) of the Code) of the
Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the
fair market value of such Common Stock (determined at the Offering Commencement
Date of the Plan Period) for each calendar year in which the Option is
outstanding at any time.
6. DEDUCTION CHANGES. An employee may decrease or discontinue his payroll
deduction once during any Plan Period, by filing a new payroll deduction
authorization form. However, an employee may not increase his payroll deduction
during a Plan Period. If an employee elects to discontinue his payroll
deductions during a Plan Period, but does not elect to withdraw his funds
pursuant to Section 8 hereof, funds deducted prior to his election to
discontinue will be applied to the purchase of Common Stock on the Exercise Date
(as defined below).
7. INTEREST. Interest will not be paid on any employee accounts, except
to the extent that the Board or the Committee, in its sole discretion, elects to
credit employee accounts with interest at such per annum rate as it may from
time to time determine.
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8. WITHDRAWAL OF FUNDS. An employee may at any time prior to the close of
business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee's account and
thereby withdraw from participation in an Offering. Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Plan Period. The employee may participate in any subsequent Offering in
accordance with terms and conditions established by the Board or the Committee.
9. PURCHASE OF SHARES. On the Offering Commencement Date of each Plan
Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, the largest number of whole shares of Common Stock of the Company
as does not exceed the number of shares determined by multiplying $2,083 by the
number of full months in the Offering Period and dividing the result by the
closing price (as defined below) on the Offering Commencement Date of such Plan
Period.
The purchase price for each share purchased will be 85% of the closing
price of the Common Stock on (i) the first business day of such Plan Period or
(ii) the Exercise Date, whichever closing price shall be less. Such closing
price shall be (a) the closing price on any national securities exchange on
which the Common Stock is listed, (b) the closing price of the Common Stock on
the Nasdaq National Market or (c) the average of the closing bid and asked
prices in the over-the-counter-market, whichever is applicable, as published in
THE WALL STREET JOURNAL. If no sales of Common Stock were made on such a day,
the price of the Common Stock for purposes of clauses (a) and (b) above shall be
the reported price for the next preceding day on which sales were made.
Each employee who continues to be a participant in the Plan on the Exercise
Date shall be deemed to have exercised his Option at the Option Price on such
date and shall be deemed to have purchased from the Company the number of full
shares of Common Stock reserved for the purpose of the Plan that his accumulated
payroll deductions on such date will pay for, but not in excess of the maximum
number determined in the manner set forth above.
Any balance remaining in an employee's payroll deduction account at the end
of a Plan Period will be automatically refunded to the employee.
10. ISSUANCE OF CERTIFICATES. Certificates representing shares of Common
Stock purchased under the Plan may be issued only in the name of the employee,
in the name of the employee and another person of legal age as joint tenants
with rights of survivorship, or (in the Company's sole discretion) in the name
of a brokerage firm, bank or other nominee holder designated by the employee.
The Company may, in its sole discretion and in compliance with applicable laws,
authorize the use of book entry registration of shares in lieu of issuing stock
certificates.
11. RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF EMPLOYMENT. In the event
of a participating employee's termination of employment prior to the last
business day of a Plan Period, no payroll deduction shall be taken from any pay
due and owing to an employee and the balance in the employee's account shall be
paid to the employee or, in the event of the employee's death, (a) to a
beneficiary previously designated in a revocable notice signed by the
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employee (with any spousal consent required under state law) or (b) in the
absence of such a designated beneficiary, to the executor or administrator of
the employee's estate or (c) if no such executor or administrator has been
appointed to the knowledge of the Company, to such other person(s) as the
Company may, in its discretion, designate. If, prior to the last business day of
the Plan Period, the Designated Subsidiary by which an employee is employed
shall cease to be a subsidiary of the Company, or if the employee is transferred
to a subsidiary of the Company that is not a Designated Subsidiary, the employee
shall be deemed to have terminated employment for the purposes of this Plan.
12. OPTIONEES NOT STOCKHOLDERS. Neither the granting of an Option to an
employee nor the deductions from his pay shall constitute such employee a
stockholder of the shares of Common Stock covered by an Option under this Plan
until such shares have been purchased by and issued to him.
13. RIGHTS NOT TRANSFERABLE. Rights under this Plan are not transferable
by a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
14. APPLICATION OF FUNDS. All funds received or held by the Company under
this Plan may be combined with other corporate funds and may be used for any
corporate purpose.
15. ADJUSTMENT IN CASE OF CHANGES AFFECTING COMMON STOCK. In the event of
a subdivision of outstanding shares of Common Stock, or the payment of a
dividend in Common Stock, the number of shares approved for this Plan, and the
share limitation set forth in Section 9, shall be increased proportionately, and
such other adjustment shall be made as may be deemed equitable by the Board or
the Committee. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.
16. MERGER. If the Company shall at any time merge or consolidate with
another corporation and the holders of the capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 80%
by voting power of the capital stock of the surviving corporation ("Continuity
of Control"), the holder of each Option then outstanding will thereafter be
entitled to receive at the next Exercise Date upon the exercise of such Option
for each share as to which such Option shall be exercised the securities or
property which a holder of one share of the Common Stock was entitled to upon
and at the time of such merger or consolidation, and the Board or the Committee
shall take such steps in connection with such merger or consolidation as the
Board or the Committee shall deem necessary to assure that the provisions of
Section 15 shall thereafter be applicable, as nearly as reasonably may be, in
relation to the said securities or property as to which such holder of such
Option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or in the
event of a sale of all or substantially all of the assets of the Company while
unexercised Options remain outstanding under the Plan, then (a) subject to the
provisions of clauses (b) and (c), after the effective date of such transaction,
each holder of an outstanding Option shall be entitled, upon exercise of such
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Option, to receive in lieu of shares of Common Stock, shares of such stock or
other securities as the holders of shares of Common Stock received pursuant to
the terms of such transaction; or (b) all outstanding Options may be cancelled
by the Board or the Committee as of a date prior to the effective date of any
such transaction and all payroll deductions shall be paid out to the
participating employees; or (c) all outstanding Options may be cancelled by the
Board or the Committee as of the effective date of any such transaction,
provided that notice of such cancellation shall be given to each holder of an
Option, and each holder of an Option shall have the right to exercise such
Option in full based on payroll deductions then credited to his account as of a
date determined by the Board or the Committee, which date shall not be less than
ten (10) days preceding the effective date of such transaction.
17. AMENDMENT OF THE PLAN. The Board may at any time, and from time to
time, amend this Plan in any respect, except that (a) if the approval of any
such amendment by the shareholders of the Company is required by Section 423 of
the Code, such amendment shall not be effected without such approval, and (b) in
no event may any amendment be made which would cause the Plan to fail to comply
with Section 423 of the Code.
18. INSUFFICIENT SHARES. In the event that the total number of shares of
Common Stock specified in elections to be purchased in any Offering exceeds the
maximum number of shares available for such Offering, the Board or the Committee
will allot the shares then available on a pro rata basis.
19. TERMINATION OF THE PLAN. This Plan may be terminated at any time by
the Board. Upon termination of this Plan all amounts in the accounts of
participating employees shall be promptly refunded.
20. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and deliver
Common Stock under this Plan is subject to listing on a national stock exchange
or quotation on the Nasdaq National Market (to the extent the Common Stock is
then so listed or quoted) and the approval of all governmental authorities
required in connection with the authorization, issuance or sale of such stock.
21. GOVERNING LAW. The Plan shall be governed by Massachusetts law except
to the extent that such law is preempted by federal law.
22. ISSUANCE OF SHARES. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the Company, or from any other proper source.
23. NOTIFICATION UPON SALE OF SHARES. Each employee agrees, by entering
the Plan, to promptly give the Company notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased.
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24. EFFECTIVE DATE AND APPROVAL OF SHAREHOLDERS. The Plan shall take
effect on February 26, 2001 subject to approval by the shareholders of the
Company as required by Section 423 of the Code, which approval must occur within
twelve months of the adoption of the Plan by the Board.
Adopted by the Board of Directors
on February 26, 2001
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APPENDIX C
APPLIX, INC.
1994 EQUITY INCENTIVE PLAN
1. PURPOSE.
The purpose of this plan (the "Plan") is to secure for Applix, Inc. (the
"Company") and its shareholders the benefits arising from capital stock
ownership by employees, officers and directors of, and consultants or advisors
to, the Company and its parent and subsidiary corporations who are expected to
contribute to the Company's future growth and success. Except where the context
otherwise requires, the term "Company" shall include the parent and all present
and future subsidiaries of the Company as defined in Sections 424(e) and 424(f)
of the Internal Revenue Code of 1986, as amended or replaced from time to time
(the "Code).
2. TYPE OF OPTIONS AND AWARDS; ADMINISTRATION.
(a) TYPES OF OPTIONS AND AWARDS. Options granted pursuant to the Plan shall
be authorized by action of the Board of Directors of the Company (or a Committee
designated by the Board of Directors) and may be either incentive stock options
("Incentive Stock Options") meeting the requirements of Section 422 of the Code
or non-statutory options which are not intended to meet the requirements of
Section 422 of the Code ("Non-Statutory Options"). Awards granted pursuant to
the Plan shall be authorized by action of the Board of Directors of the Company
(or a Committee designated by the Board of Directors) and shall meet the
requirements of Section 13 of the Plan.
(b) ADMINISTRATION.
(i) The Plan will be administered by the Board of Directors of the
Company, whose construction and interpretation of the terms and provisions of
the Plan shall be final and conclusive. The Board of Directors may in its sole
discretion (x) grant options to purchase shares of the Company's Common Stock
(as defined in Section 4 of the Plan), and issue shares upon exercise of such
options as provided in the Plan and (y) make awards for the purchase of shares
of Common Stock pursuant to Section 13 of the Plan. The Board shall have
authority, subject to the express provisions of the Plan, to construe the
respective option agreements, awards and the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the terms and
provisions of the respective option agreements and awards, which need not be
identical, and to make all other determinations in the judgment of the Board of
Directors necessary or desirable for the administration of the Plan. The Board
of Directors may correct any defect or supply any omission or reconcile any
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inconsistency in the Plan or in any option agreement or award in the manner and
to the extent it shall deem expedient to carry the Plan into effect and it shall
be the sole and final judge of such expediency. No director or person acting
pursuant to authority delegated by the Board of Directors shall be liable for
any action or determination made in good faith.
(ii) The Board of Directors may, to the full extent permitted by or
consistent with applicable laws or regulations and Section 3(b) of this Plan,
delegate any or all of its powers under the Plan to a committee (the
"Committee") appointed by the Board of Directors, and if the Committee is so
appointed all references to the Board of Directors in the Plan shall mean and
relate to such Committee. Unless all members of the Board of Directors are
"outside directors" within the meaning of Section 162(m) of the Code, as such
term is interpreted from time to time, the Board shall appoint such a Committee
of two or more directors, all of whom are outside directors, and shall delegate
to such Committee all of its powers under the Plan, except that the Board's
concurrent approval shall be required for any amendment to the Plan which may be
adopted by the Committee; and provided, that any failure of any director or
Committee member to satisfy the definition of outside director shall not
invalidate any action taken by the Board or Committee with respect to any
participant in the Plan, whether or not such person is a "covered employee"
within the meaning of Section 162(m) of the Code, as such term is interpreted
from time to time.
(c) APPLICABILITY OF RULE 16b-3. Those provisions of the Plan which make
express reference to Rule 16b-3 promulgated under the Securities and Exchange
Act of 1934 (the "Exchange Act") or, any successor rules ("Rule 16b-3") or which
are required in order for certain option transactions to qualify for exemption
under Rule 16b-3 shall apply only to such persons as are required to file
reports under Section 16(a) of the Exchange Act (a "Reporting Person").
(d) APPLICABILITY OF SECTION 162(m). Those provisions of the Plan which are
required by or make express reference to Section 162(m) of the Code or any
regulations thereunder, or any successor section of the Code or regulations
thereunder ("Section 162(m)") shall apply only upon the Company's becoming a
company that is subject to Section 162(m). Notwithstanding any provisions in
this Plan to the contrary, whenever the Board of Directors is authorized to
exercise its discretion in the administration or amendment of this Plan or any
option hereunder or otherwise, the Board may not exercise such discretion in a
manner that would cause any outstanding option that would otherwise qualify as
performance-based compensation under Section 162(m) to fail to so qualify under
Section 162(m).
3. ELIGIBILITY.
(a) GENERAL. Options and awards may be granted or made to persons who are,
at the time of grant, employees, officers or directors of, or consultants or
advisors to, the Company; PROVIDED, that the class of employees to whom
Incentive Stock Options may be granted shall be limited to all employees of the
Company. A person who has been granted an option or award may, if he or she is
otherwise eligible, be granted additional options or
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awards if the Board of Directors shall so determine. Subject to adjustment as
provided in Section 16 below, the maximum number of shares with respect to which
options or awards may be granted to any employee under the Plan in any one
calendar year shall not exceed 400,000 shares of common stock.
(b) GRANT OF OPTIONS TO DIRECTORS AND OFFICERS. The selection of a director
or an officer (as the terms "director" and "officer" are defined for purposes of
Rule 16b-3) as a participant, the timing of the option grant or award, the
exercise price of the option or the sale price of the award and the number of
shares for which an option or award may be granted to such director or officer
shall be determined either (i) by the Board of Directors or (ii) by a committee
of the Board of Directors having full authority to act in the matter, composed
solely of "Non-Employee Directors" within the meaning of Rule 16b-3, as such
term is interpreted from time to time.
4. STOCK SUBJECT TO PLAN.
Subject to adjustment as provided in Section 16 below, the total number of
shares which may be issued and sold under the Plan is 5,490,157 shares of Common
Stock, $.0025 par value per share ("Common Stock"). Except as may be prohibited
by Rule 16b-3, (i) if an option granted under the Plan shall expire or terminate
for any reason without having been exercised in full, the unpurchased shares
subject to such option shall again be available for subsequent option grants or
awards under the Plan, and (ii) if restricted stock awarded under the Plan shall
be repurchased by the Company, the repurchased shares subject to such award
shall again be available for subsequent option grants or awards under the Plan.
5. FORMS OF OPTION AGREEMENTS.
As a condition to the grant of an option under the Plan, each recipient of
an option shall execute an option agreement in such form not inconsistent with
the Plan as may be approved by the Board of Directors. Such option agreements
may differ among recipients.
6. PURCHASE PRICE UPON EXERCISE OF OPTIONS.
(a) GENERAL. Subject to Section 3(b), the purchase price per share of
Common Stock deliverable upon the exercise of an option shall be determined by
the Board of Directors, PROVIDED, HOWEVER, that in the case of an Incentive
Stock Option, or an option intended to qualify as performance-based compensation
within the meaning of Section 162(m), the exercise price shall not be less than
100% of the fair market value of such stock, as determined by the Board of
Directors, at the time of grant of such option, or less than 110% of such fair
market value in the case of options described in Section 11(b).
(b) PAYMENT OF PURCHASE PRICE. Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Company
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in an amount equal to the exercise price of such options, or, to the extent
provided in the applicable option agreement, (i) by delivery to the Company of
shares of Common Stock of the Company already owned by the optionee having a
fair market value equal in amount to the exercise price of the options being
exercised or (ii) by any other means (including without limitation by delivery
of a promissory note of the optionee payable on such terms as are specified by
the Board of Directors) which the Board of Directors determines are consistent
with the purpose of the Plan and with applicable laws and regulation (including,
without limitation, the provisions of Rule 16b-3 and Regulation T promulgated by
the Federal Reserve Board). The fair market value of any shares of the Company's
Common Stock or other non-cash consideration which may be delivered upon
exercise of an option shall be determined in such manner as may be prescribed by
the Board of Directors.
7. OPTION PERIOD.
Each option and all rights thereunder shall expire on such date as shall be
set forth in the applicable option agreement, except that such date, in the case
of an Incentive Stock Option, shall in no case be later than ten years after the
date on which the option is granted.
8. EXERCISE OF OPTIONS.
Each option granted under the Plan shall be exercisable either in full or
in installments at such time or times and during such period as shall be set
forth in the agreement evidencing such option, subject to the provisions of the
Plan.
9. NONTRANSFERABILITY OF OPTIONS.
Unless otherwise provided in the agreement granting an option pursuant to
this Plan, an option shall not be assignable or transferable by the person to
whom it is granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution, and, during the life of the optionee,
shall be exercisable only by the optionee; provided, however, that Non-Statutory
Options may be transferred pursuant to a qualified domestic relations order (as
defined in Rule 16b-3).
10. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP.
The Board of Directors shall determine the period of time during which an
optionee may exercise an option following (i) the termination of the optionee's
employment or other relationship with the Company or (ii) the death or
disability of the optionee. Such periods shall be set forth in the agreement
evidencing such option.
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11. INCENTIVE STOCK OPTIONS.
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(a) EXPRESS DESIGNATION. All Incentive Stock Options granted under the Plan
shall, at the time of grant, be specifically designated as such in the option
agreement covering such Incentive Stock Options.
(b) 10% SHAREHOLDER. If any employee to whom an Incentive Stock Option is
to be granted under the Plan is, at the time of the grant of such option, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (after taking into account the attribution
of stock ownership rules of Section 424(d) of the Code), then the following
special provisions shall be applicable to the Incentive Stock Option granted to
such individual:
(i) The purchase price per share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the fair market value of
one share of Common Stock at the time of grant; and
(ii) The option exercise period shall not exceed five years from the
date of grant.
(c) DOLLAR LIMITATION. For so long as the Code shall so provide, options
granted to any employee under the Plan (and any other incentive stock option
plans of the Company) which are intended to constitute Incentive Stock Options
shall not constitute Incentive Stock Options to the extent that such options, in
the aggregate, become exercisable for the first time in any one calendar year
for shares of Common Stock with an aggregate fair market value (determined as of
the respective date or dates of grant) of more than $100,000.
(d) TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY. No Incentive Stock
Option may be exercised unless, at the time of such exercise, the optionee is,
and has been continuously since the date of grant of his or her option, employed
by the Company, except that:
(i) an Incentive Stock Option may be exercised within the period of
three months after the date the optionee ceases to be an employee of the Company
(or within such lesser period as may be specified in the applicable option
agreement), PROVIDED, that the agreement with respect to such option may
designate a longer exercise period and that the exercise after such three-month
period shall be treated as the exercise of a non-statutory option under the
Plan;
(ii) if the optionee dies while in the employ of the Company, or
within three months after the optionee ceases to be such an employee, the
Incentive Stock Option may be exercised, by the person to whom it is transferred
by will or the laws of descent and
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distribution, within the period of one year after the date of death (or within
such lesser period as may be specified in the applicable option agreement); and
(iii) if the optionee becomes disabled (within the meaning of Section
22(e)(3) of the Code or any successor provision thereto) while in the employ of
the Company, the Incentive Stock Option may be exercised within the period of
one year after the date the optionee ceases to be such an employee because of
such disability (or within such lesser period as may be specified in the
applicable option agreement).
For all purposes of the Plan and any option or award granted hereunder,
"employment" shall be defined in accordance with the provisions of Section
1.421-7(h) of the Income Tax Regulations (or any successor regulations).
Notwithstanding the foregoing provisions, no stock option may be exercised after
its expiration date.
12. ADDITIONAL PROVISIONS.
(a) ADDITIONAL OPTION PROVISIONS. The Board of Directors may, in its sole
discretion, include additional provisions in any option granted under the Plan,
including without limitation restrictions on transfer, repurchase rights,
commitments to pay cash bonuses, to make, arrange for or guaranty loans or to
transfer other property to optionees upon exercise of options, or such other
provisions as shall be determined by the Board of Directors; PROVIDED THAT such
additional provisions shall not be inconsistent with any other term or condition
of the Plan.
(b) ACCELERATION, EXTENSION, ETC. The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all or any particular option or options granted under the
Plan may be exercised.
13. AWARDS.
A restricted stock award ("award") shall consist of the sale and issuance
by the Company of shares of Common Stock, and purchase by the recipient of such
shares, subject to the terms, conditions and restrictions described in the
document evidencing the award and in this Section 13 and elsewhere in the Plan.
(a) EXECUTION OF RESTRICTED STOCK AWARD AGREEMENT. As a condition to an
award under the Plan, each recipient of an award shall execute an agreement in
such form, which may differ among recipients, as shall be specified by the Board
of Directors at the time of such award.
(b) PRICE. The Board of Directors shall determine the price at which shares
of Common Stock shall be sold to recipients of awards under the Plan. The Board
of Directors
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may, in its discretion, issue shares pursuant to awards without the payment of
any cash purchase price by the recipients or issue shares pursuant to awards at
a purchase price below the then fair market value of the Common Stock. If a
purchase price is required to be paid, it shall be paid in cash or by check
payable to the order of the Company at the time that the award is accepted by
the recipient, or by such other means as may be approved by the Board of
Directors.
(c) NUMBER OF SHARES. The award shall specify the number of shares of
Common Stock granted thereunder.
(d) RESTRICTIONS ON TRANSFER. In addition to such other terms, conditions
and restrictions upon awards as shall be imposed by the Board of Directors, all
shares issued pursuant to an award shall be subject to the following
restrictions:
(1) All shares of Common Stock subject to an award (including any
shares issued pursuant to paragraph (e) of this Section) shall be subject to
certain restrictions on disposition and obligations of resale to the Company as
provided in subparagraph (2) below for the period specified in the document
evidencing the award, and shall not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of until such restrictions lapse. The period
during which such restrictions are applicable is referred to as the "Restricted
Period."
(2) In the event that a recipient's employment with the Company (or
consultancy or advisory relationship, as the case may be) is terminated within
the Restricted Period, whether such termination is voluntary or involuntary,
with or without cause, or because of the death or disability of the recipient,
the Company shall have the right and option for a period of three months
following such termination to buy for cash that number of the shares of Common
Stock purchased under the award as to which the restrictions on transfer and the
forfeiture provisions contained in the award have not then lapsed, at a price
equal to the price per share originally paid by the recipient. If such
termination occurs within the last three months of the applicable restrictions,
the restrictions and repurchase rights of the Company shall continue to apply
until the expiration of the Company's three month option period.
(3) Notwithstanding subparagraphs (1) and (2) above, the Board of
Directors may, in its discretion, either at the time that an award is made or at
any time thereafter, waive its right to repurchase shares of Common Stock upon
the occurrence of any of the events described in this paragraph (d) or remove or
modify any part or all of the restrictions. In addition, the Board of Directors
may, in its discretion, impose upon the recipient of an award at the time of
such award such other restrictions on any shares of Common Stock issued pursuant
to such award as the Board of Directors may deem advisable.
(e) ADDITIONAL SHARES. Any shares received by a recipient of an award as a
stock
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dividend on, or as a result of stock splits, combinations, exchanges of shares,
reorganizations, mergers, consolidations or otherwise with respect to, shares of
Common Stock received pursuant to such award shall have the same status and
shall bear the same restrictions, all on a proportional basis, as the shares
initially purchased pursuant to such award.
(f) TRANSFERS IN BREACH OF AWARD. If any transfer of shares purchased
pursuant to an award is made or attempted contrary to the terms of the Plan and
of such award, the Board of Directors shall have the right to purchase for the
account of the Company those shares from the owner thereof or his or her
transferee at any time before or after the transfer at the price paid for such
shares by the person to whom they were awarded under the Plan. In addition to
any other legal or equitable remedies which it may have, the Company may enforce
its rights by specific performance to the extent permitted by law. The Company
may refuse for any purpose to recognize as a shareholder of the Company any
transferee who receives any shares contrary to the provisions of the Plan and
the applicable award or any recipient of an award who breaches his or her
obligation to resell shares as required by the provisions of the Plan and the
applicable award, and the Company may retain and/or recover all dividends on
such shares which were paid or payable subsequent to the date on which the
prohibited transfer or breach was made or attempted.
(g) ADDITIONAL AWARD PROVISIONS. The Board of Directors may, in its sole
discretion, include additional provisions in any award granted under the Plan,
including without limitation commitments to pay cash bonuses, make, arrange for
or guarantee loans or transfer other property to recipients upon the grant of
awards, or such other provisions as shall be determined by the Board of
Directors.
14. GENERAL RESTRICTIONS.
(a) INVESTMENT REPRESENTATIONS. The Company may require any person to whom
an option or award is granted, as a condition of exercising such option or
purchasing the shares subject to the award, to give written assurances in
substance and form satisfactory to the Company to the effect that such person is
acquiring the Common Stock subject to the option or award for his or her own
account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws.
(b) COMPLIANCE WITH SECURITIES LAWS. Each option and award shall be subject
to the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject to such
option or award upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares thereunder, such option or award may not be exercised, in whole or in
part, unless such listing, registration, qualification, consent or approval, or
satisfaction of such condition
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shall have been effected or obtained on conditions acceptable to the Board of
Directors. Nothing herein shall be deemed to require the Company to apply for or
to obtain such listing, registration or qualification, or to satisfy such
condition.
15. RIGHTS AS A SHAREHOLDER.
The holder of an option or recipient of an award shall have no rights as a
shareholder with respect to any shares covered by the option or award
(including, without limitation, any rights to receive dividends or non-cash
distributions with respect to such shares) until the date of issue of a stock
certificate to him or her for such shares. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
16. ADJUSTMENT PROVISIONS FOR RECAPITALIZATIONS AND RELATED TRANSACTIONS.
(a) GENERAL. If, through or as a result of any merger, consolidation, sale
of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased or decreased or are exchanged for a different number or kind of
shares or other securities of the Company, or additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportional adjustment shall be made in (x) the maximum number
and kind of shares reserved for issuance under the Plan, (y) the number and kind
of shares or other securities subject to then outstanding options under the
Plan, and (z) the price for each share subject to any then outstanding options
under the Plan or repurchase rights of the Company, without changing the
aggregate purchase price as to which such options remain exercisable, provided
that no adjustment shall be made pursuant to this Section 16 if such adjustment
would cause the Plan to fail to comply with Section 422 of the Code.
(b) BOARD AUTHORITY TO MAKE ADJUSTMENTS. Any adjustments under this Section
16 will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued under the Plan on account of
any such adjustments.
17. MERGER, CONSOLIDATION, ASSET SALE, LIQUIDATION, ETC.
(a) GENERAL. In the event of a consolidation or merger in which outstanding
shares of Common Stock are exchanged for securities, cash or other property of
any other corporation or business entity or in the event of a liquidation of the
Company or sale of all or substantially all of the assets of the Company, the
Board of Directors of the Company, or the board of directors of any corporation
assuming the obligations of the Company, may, in its discretion, take any one or
more of the following actions, as to outstanding options and
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awards: (i) provide that such options shall be assumed, or equivalent options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), PROVIDED that any such options substituted for Incentive
Stock Options shall meet the requirement of Section 424(a) of the Code, (ii)
upon written notice to the optionees, provide that all unexercised options will
terminate immediately prior to the consummation of such transaction unless
exercised by the optionee within a specified period following the date of such
notice, (iii) in the event of a merger under the terms of which holders of the
Common Stock of the Company will receive upon consummation thereof a cash
payment for each share surrendered in the merger (the "Merger Price"), make or
provide for a cash payment to the optionees equal to the difference between (A)
the Merger Price times the number of shares of Common Stock subject to such
outstanding options (to the extent then exercisable at prices not in excess of
the Merger Price) and (B) the aggregate exercise price of all such outstanding
options in exchange for the termination of such options, and (iv) provide that
all or any outstanding options shall become exercisable in full immediately
prior to such event; provided, however, that the Board of Directors may not take
any action which would cause any option granted under the Plan to fail to
qualify as performance-based compensation within the meaning of Section 162(m).
(b) SUBSTITUTE OPTIONS. The Company may grant options under the Plan in
substitution for options held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.
18. NO SPECIAL EMPLOYMENT RIGHTS.
Nothing contained in the Plan or in any option or award shall confer upon
any recipient of an award or optionee any right with respect to the continuation
of his or her employment by the Company or interfere in any way with the right
of the Company at any time to terminate such employment or to increase or
decrease the compensation of the optionee.
19. OTHER EMPLOYEE BENEFITS.
Except as to plans which by their terms include such amounts as
compensation, neither the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise nor the value of an award granted to an employee will
constitute compensation with respect to which any other employee benefits of
such employee are determined, including, without limitation, benefits under any
bonus, pension, profit-sharing, life insurance or salary continuation plan,
except as otherwise specifically determined by the Board of Directors.
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20. AMENDMENT OF THE PLAN.
(a) The Board of Directors may at any time, and from time to time, modify
or amend the Plan in any respect, except that if at any time the approval of the
shareholders of the Company is required as to such modification or amendment
under Section 422 of the Code or any successor provision with respect to
Incentive Stock Options or is retired to ensure that any compensation
attributable to any option under the Plan is deductible by the Company for
federal income tax purposes under Section 162(m), the Board of Directors may not
effect such modification or amendment without such approval.
(b) The termination or any modification or amendment of the Plan shall not,
without the consent of an optionee or recipient of an award, affect his or her
rights under an option or award previously granted to him or her. With the
consent of the optionee or recipient of the award affected, the Board of
Directors may amend outstanding option agreements or awards in a manner not
inconsistent with the Plan. The Board of Directors shall have the right to amend
or modify (i) the terms and provisions of the Plan and of any outstanding
Incentive Stock Options granted under the Plan to the extent necessary to
qualify any or all such options for such favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive
stock options under Section 422 of the Code and (ii) the terms and provisions of
the Plan and of any outstanding option or award to the extent necessary to
ensure the qualification of the Plan under Rule 16b-3, or is required to ensure
that any compensation attributable to any option under the Plan is deductible by
the Company for federal income tax purposes under Section 162(m), or any
successor rule.
21. WITHHOLDING.
(a) The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee or recipient of an award any federal, state or
local taxes of any kind required by law to be withheld with respect to any
shares issued upon exercise of options under the Plan or the purchase of shares
subject to the award. Subject to the prior approval of the Company, which may be
withheld by the Company in its sole discretion, the optionee or recipient of an
award may elect to satisfy such obligations, in whole or in part, (i) by causing
the Company to withhold shares of Common Stock otherwise issuable pursuant to
the exercise of an option or the purchase of shares subject to an award or (ii)
by delivering to the Company shares of Common Stock already owned by the
optionee or award recipient. The shares so delivered or withheld shall have a
fair market value equal to such withholding obligation. The fair market value of
the shares used to satisfy such withholding obligation shall be determined by
the Company as of the date that the amount of tax to be withheld is to be
determined. An optionee or award recipient who has made an election pursuant to
this Section 21(a) may only satisfy his or her withholding obligation with
shares of Common Stock which are not subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirement.
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(b) Notwithstanding the foregoing, in the case of a Reporting Person, no
election to use shares for the payment of withholding taxes shall be effective
unless made in compliance with any applicable requirements of Rule 16b-3 (unless
it is intended that the transaction not qualify for exemption under Rule 16b-3).
(c) If the recipient of an award under the Plan elects, in accordance with
Section 83(b) of the Code, to recognize ordinary income in the year of
acquisition of any shares awarded under the Plan, the Company will require at
the time of such election an additional payment for withholding tax purposes
based on the difference, if any, between the purchase price of such shares and
the fair market value of such shares as of the date immediately preceding the
date of the award.
22. CANCELLATION AND NEW GRANT OF OPTIONS, ETC.
The Board of Directors shall have the authority to effect, at any time and
from time to time, with the consent of the affected optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
cancelled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options.
23. EFFECTIVE DATE AND DURATION OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall become effective when adopted by the
Board of Directors, but no option granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
shareholders. If such shareholder approval is not obtained within twelve months
after the date of the Board's adoption of the Plan, options previously granted
under the Plan shall not vest and shall terminate and no options shall be
granted thereafter. Amendments to the Plan not requiring shareholder approval
shall become effective when adopted by the Board of Directors; amendments
requiring shareholder approval (as provided in Section 20) shall become
effective when adopted by the Board of Directors, but no option issued after the
date of such amendment shall become exercisable unless and until such amendment
shall have been approved by the Company's shareholders. If such shareholder
approval is not obtained within twelve months of the Board's adoption of such
amendment, any options granted on or after the date of such amendment shall
terminate to the extent that such amendment was required to enable the Company
to grant such option to a particular optionee. Subject to this limitation,
options and awards may be granted under the Plan at any time after the effective
date and before the date fixed for termination of the Plan.
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(b) TERMINATION. Unless sooner terminated in accordance with Section 17,
the Plan shall terminate upon the close of business on the day next preceding
the
(c) tenth anniversary of the date of its adoption by the Board of
Directors. Options outstanding on such date shall continue to have force and
effect in accordance with the provisions of the instruments evidencing such
options.
24. PROVISION FOR FOREIGN PARTICIPANTS.
The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.
25. ADOPTION OF THE PLAN.
The Plan was adopted by the Board of Directors on April 11, 1994 and
approved by the stockholders on May 20, 1994. It was amended by the Board of
Directors on March 13, 1997 and by the stockholders on May 8, 1997; further
amended by the Board of Directors on March 23, 1998 and by the stockholders on
May 8, 1998; further amended by the Board of Directors on February 10, 1999 and
the stockholders on May 7, 1999; further amended by the Board of Directors on
March 17, 2000 and by the stockholders on May 5, 2000; and further amended by
the Board of Directors on February 26, 2001.
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PROXY PROXY
APPLIX, INC.
ANNUAL MEETING OF STOCKHOLDERS - MAY 4, 2001
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, having received notice of the Annual Meeting and
management's Proxy Statement therefor, and revoking all prior proxies, hereby
appoint(s) Edward Terino and Patrick J. Rondeau, and each of them (with full
power of substitution), as proxies of the undersigned to attend the Annual
Meeting of Stockholders of Applix, Inc. (the "Company") to be held on Friday,
May 4, 2001 and any adjourned sessions thereof, and there to vote and act upon
the following matters in respect of all shares of Common Stock of the Company
which the undersigned would be entitled to vote or act upon, with all powers the
undersigned would possess if personally present.
Attendance of the undersigned at the meeting or at any adjourned session
thereof will not be deemed to revoke this proxy unless the undersigned shall
affirmatively indicate thereat the intention of the undersigned to vote said
shares in person. If the undersigned hold(s) any of the shares of the Company in
a fiduciary, custodial or joint capacity or capacities, this proxy is signed by
the undersigned in every such capacity as well as individually.
IN THEIR DISCRETION, THE NAMED PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING, OR ANY ADJOURNMENT
THEREOF.
1. To elect the following individuals as Class I Directors:
Nominees: Jitendra S. Saxena
John D. Loewenberg
FOR [ ] WITHHOLD AUTHORITY [ ]
FOR, except vote withheld from the following nominee(s):
- -----------------------------------------------
2. To approve an amendment to the Company's 1994 Equity Incentive Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To approve the Company's 2001 Employee Stock Purchase Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
46
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN WITH RESPECT TO ANY ELECTION TO OFFICE OR
PROPOSAL SPECIFIED ABOVE, THIS PROXY WILL BE VOTED FOR SUCH ELECTION TO OFFICE
OR PROPOSAL.
-------------------------
Signature(s)
-------------------------
Printed Name(s)
-------------------------
Date
Important: Please sign name(s) exactly as appearing hereon. When signing as
attorney, executor, administrator or other fiduciary, please give your full
title as such. Joint owners should each sign personally. If a corporation, sign
in full corporate name, by authorized officer. If a partnership, please sign in
partnership name, by authorized person.