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EXHIBIT 4.3
CAYENNE SOFTWARE, INC.
AMENDED 1996 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
SECTION 1. PURPOSE OF THE PLAN.
This Amended 1996 Incentive and Nonqualified Stock Option Plan (the "Plan") of
Cayenne Software, Inc., a Massachusetts corporation (the "Company"), is designed
to provide additional incentive to present and future executives, key employees
and consultants of the Company, which shall include its subsidiaries as defined
in Section 424 of the Internal Revenue Code of 1986, as amended (the "Code").
The Company intends that this purpose will be effected by the granting of
incentive stock options ("Incentive Stock Options") as defined in Section 422 of
the Code and nonqualified stock options ("Nonqualified Options") under the Plan
which afford such executives, key employees and consultants an opportunity to
acquire or increase their proprietary interest in the Company through the
acquisition of shares of its Common Stock, $ .01 par value (the "Common Stock").
By encouraging stock ownership by such executives, salaried employees and
consultants, the Company seeks to attract and retain on a continuing basis the
services of persons of exceptional competence and seeks to furnish an added
incentive for them to increase their efforts on behalf of the Company.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Board of Directors (the "Board") or a
committee of the Board (the "Committee") consisting of at least two directors.
All questions of interpretation and application of the Plan, of Incentive Stock
Options and Nonqualified Options granted hereunder (collectively, the "Options",
and individually, an "Option"), and of the value of shares of Common Stock
subject to an Option, shall be subject to the determination of the Committee,
which determination shall be final and binding; provided, however, that the
Committee shall not modify, extend or renew any Incentive Stock Option.
SECTION 3. OPTION SHARES.
The stock subject to the Options and other provisions of the Plan shall be
shares of the Company's Common Stock. The total amount of the Common Stock with
respect to which Options may be granted shall not exceed in the aggregate
2,000,000 shares; provided, however, that the class and aggregate number of
shares which may be subject to Options granted hereunder shall be subject to
adjustment in accordance with the provisions of Section 16 hereof. Such shares
may be treasury shares or authorized but unissued shares.
In the event that any outstanding Option for any reason shall expire or
terminate prior to exercise, the shares of Common Stock allocable to the
unexercised portion of such Option may again be subject to an Option under the
Plan.
SECTION 4. AUTHORITY TO GRANT OPTIONS.
The Committee may grant Options from time to time to such eligible
employees and consultants of the Company as it shall determine. Subject to any
applicable limitations set forth in the Plan or established from time to time by
the Committee, the number of shares of Common Stock to be covered by any Option
shall be as determined by the
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Committee.
SECTION 5. LIMITATION ON AMOUNT OF OPTIONS WHICH MAY BE GRANTED.
The aggregate fair market value (determined at the time the Option is granted)
of the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any optionee during any calendar year (under
the Plan and any other plans of the Company or any parent or subsidiary for the
issuance of Incentive Stock Options) shall not exceed $100,000 (or such greater
amount as may from time to time be permitted with respect to incentive stock
options by the Code or any other applicable law or regulation).
SECTION 6. ELIGIBILITY.
Incentive Stock Options may be granted only to officers and other employees of
the Company or its subsidiaries, including members of the Board who are also
employees of the Company or its subsidiaries. Nonqualified Options may be
granted to officers or other employees of the Company or its subsidiaries, to
members of the Board (regardless of whether they are also employees) and to
consultants and other individuals providing services to the Company or its
subsidiaries.
No Incentive Stock Option shall be granted to an individual who, at the time
said Option is granted, owns (including ownership attributed pursuant to Section
424 of the Code) more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any subsidiary or parent (a
"greater-than-ten-percent-stockholder"); notwithstanding the above, a
greater-than-ten-percent-stockholder may be granted an Incentive Stock Option
provided that the purchase price per share shall not be less than one hundred
and ten percent (110%) of the fair market value of the stock at the time such
Option is granted, and further provided that no such Option shall be exercisable
to any extent after the expiration of five (5) years from the date it is
granted.
Except as otherwise provided, for all purposes of the Plan the term "subsidiary"
shall mean any corporation of which 50% or more of its outstanding voting stock
is at the time owned by the Company or by one or more subsidiaries or by the
Company and one or more subsidiaries.
SECTION 7. OPTION PRICE.
The price at which shares may be purchased pursuant to Options shall be
specified by the Committee at the time the Option is granted; provided, however,
that the option price of any Incentive Stock Option shall not be less than one
hundred percent (100%) (one hundred and ten percent (110%) in the case of a
greater-than-ten-percent-stockholder) of the fair market value of the shares of
Common Stock on the date such Option is granted. For the purpose of the Plan,
the fair market value of the Common Stock shall be the closing price per share
on the date of grant of the Option as reported by a nationally recognized stock
exchange, or, if the Common Stock is not listed on such an exchange, as reported
by the National Association of Securities Dealers Automated Quotation System,
Inc. ("NASDAQ"), or, if the Common Stock is not quoted on NASDAQ, the fair
market value as determined by the Committee.
SECTION 8. DURATION OF OPTIONS.
The Committee in its discretion may provide that an Option shall be exercisable
during any specified period of time from the date such Option is granted;
provided, however, that no Incentive Stock Option shall be exercisable after the
expiration of ten (10) years (five years
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in the case of a greater-than-ten-percent-stockholder) from the date that such
Option is granted.
SECTION 9. AMOUNT EXERCISABLE; VESTING OF SHARES PURCHASED; REPURCHASE OF
UNVESTED SHARES; RESTRICTION ON TRANSFER OF CERTAIN SHARES.
Each Option may be exercised, so long as it is valid and outstanding, from time
to time in part or as a whole, subject to any limitations with respect to the
number of shares for which the Option may be exercised at a particular time and
to such other conditions as the Committee in its discretion may specify upon
granting the Option.
The Committee may in its discretion provide upon the grant of any Option
hereunder that the Company shall have an option to repurchase, upon such terms
and conditions as determined by the Committee, all or any number of shares
purchased upon exercise of such Option. The repurchase price per share payable
by the Company shall be such amount or be determined by such formula as is fixed
by the Committee at the time the Option for the shares subject to repurchase is
granted. In the event the Committee shall grant Options subject to the Company's
repurchase option, such Option shall carry a legend satisfactory to counsel for
the Company referring to the Company's repurchase option.
The shares of stock issuable upon exercise of an Option by any executive
officer, director or beneficial owner of more than ten percent (10%) of the
Common Stock of the Company may not be sold or transferred (except that such
shares may be issued upon exercise of such Option) by such officer, director or
beneficial owner for a period of six (6) months following the grant of such
Option.
SECTION 10. EXERCISE OF OPTIONS.
Subject to the provisions of Section 13 hereof, Options shall be exercised by
the delivery of written notice to the Company setting forth the number of shares
with respect to which the Option is to be exercised, and specifying the address
to which the certificates for such shares are to be mailed, together with (a)
cash, certified check, bank draft or postal or express money order payable to
the order of the Company for an amount equal to the option price of such shares;
or (b) with the consent of the Company, shares of Common Stock of the Company
having a fair market value equal to the option price of such shares; or (c) with
the consent of the Committee, a personal recourse note issued by the optionee to
the Company in a principal amount equal to such aggregate exercise price and
with such other terms, including interest rate and maturity, as the Committee
may determine in its discretion; provided that the interest rate borne by such a
note shall not be less than the lowest applicable federal rate, as defined in
Section 1274(d) of the Code; or (d) with the consent of the Committee, such
other consideration that is acceptable to the Committee and that has a fair
market value, as determined by the Committee, equal to such aggregate exercise
price, including any broker-directed cashless exercise/resale procedure adopted
by the Committee; or (e) with the consent of the Company, a combination of any
of the foregoing. For the purpose of the preceding sentence, the fair market
value of the shares of Common Stock so delivered to the Company shall be
determined in accordance with procedures adopted by the Committee. As promptly
as practicable after receipt of such written notification and payment, the
Company shall deliver to the optionee certificates for the number of shares with
respect to which such Option has been so exercised, issued in the optionee's
name; provided, however, that such delivery shall be deemed effected for all
purposes when a stock transfer agent of the Company shall have deposited such
certificates in the Unites States mail, addressed to the optionee, at the
address specified pursuant to this
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Section 10.
SECTION 11. TRANSFERABILITY OF OPTIONS.
Options shall not be transferable by the optionee otherwise than by will or
under the laws of descent and distribution, and shall be exercisable, during his
or her lifetime, only by that person.
SECTION 12. TERMINATION OF EMPLOYMENT OR SERVICES OR DEATH OF OPTIONEE.
Except as may be otherwise expressly provided herein, Options may be not
exercised after the earlier of:
(i) the date of expiration thereof; or
(ii) the date of termination of the optionee's employment with or
services to the Company by it for cause (as determined by the Company),
or voluntarily by the optionee; or (iii) ninety (90) days after termination of
the optionee's employment with or services to the Company by it without cause.
12.1 TEMPORARY LEAVE. Whether authorized temporary leave of absence, or absence
on military or government service, shall constitute termination of the
employment or consultant relationship between the Company and the optionee shall
be determined by the Committee at the time thereof.
12.2 DEATH OR DISABILITY. In the event the optionee as an employee shall be
retired in good standing from the employ of the Company for reasons of
disability under the then established rules of the Company or in the event of
the death of the holder of an Option while an employee or consultant of the
Company and before the date of expiration of such Option, such Option may be
exercised until the earlier of such date of expiration or one (1) year following
the date of such retirement for reason of disability or such death, to the
extent the optionee was entitled to exercise such Option immediately before his
death. After the death of the optionee, his executors, administrators or any
person or persons to whom his Option may be transferred by will or by the laws
of descent and distribution, shall have the right to exercise the Option.
12.3 RETIREMENT. If, before the date of expiration of the Option, the optionee
as an employee shall be retired in good standing from the employ of the Company
for reasons of age under the then established rules of the Company, the Option
may be exercised until the earlier of such date of expiration or ninety (90)
days after the date of such retirement, to the extent to which the optionee was
entitled to exercise such Option immediately prior to such retirement.
12.4 EMPLOYMENT RELATIONSHIP; CONSULTANT RELATIONSHIP. An employment
relationship between the Company and the optionee shall be deemed to exist
during any period in which the optionee is employed by the Company. A consultant
relationship between the Company and the optionee shall be deemed to exist
during any period in which the optionee renders services as a consultant or
otherwise on an independent contractor basis to the Company.
SECTION 13. REQUIREMENTS OF LAW.
The Company shall not be required to sell or issue any shares under any Option
if the issuance of such shares shall constitute a violation by the optionee or
by the Company of any provision of any law, regulation or order of any
governmental authority. Without limiting the generality of the foregoing, upon
exercise of any Option, the Company
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shall not be required to issue such shares unless the Committee has received
evidence satisfactory to it to the effect that the holder of such Option will
not transfer such shares except pursuant to a registration statement in effect
under the Securities Act of 1933, as now in effect or hereafter amended (the
"Act"), and under the applicable securities laws of any State, unless the
Company has received an opinion of counsel satisfactory to the Company, in form
and substance satisfactory to the Company, to the effect that such registration
is not required. Any determination in this connection by the Committee shall be
final, binding and conclusive. In the event the shares issuable on exercise of
an Option are not registered under the Act, the Company may imprint the
following legend or any other legend which counsel for the Company considers
necessary or advisable to comply with the Act or other applicable laws:
The shares of stock represented by this certificate have not been registered
under the Securities Act of 1933 or under the securities laws of any State and
may not be sold or transferred except upon such registration or upon receipt by
the Corporation of an opinion of counsel satisfactory to the Corporation, in
form and substance satisfactory to the Corporation, that registration is not
required for such sale or transfer.
The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Act; and in the event any shares are so
registered the Company may remove any legend on certificates representing such
shares. The Company shall not be obligated to take any other affirmative action
in order to cause the exercise of an Option or the issuance of shares pursuant
thereto to comply with any other law, regulation or order of any governmental
authority.
SECTION 14. NO RIGHTS AS STOCKHOLDER.
No optionee shall have rights as a stockholder with respect to shares covered by
his Option until the date of issuance of a stock certificate for such shares;
and, except as otherwise provided in Section 16 hereof, no adjustment for
dividends, or otherwise, shall be made if the record date therefor is prior to
the date of issuance of such certificate.
SECTION 15. EMPLOYMENT OBLIGATION.
The granting of any Option shall not impose upon the Company any obligation to
employ or continue to employ, or to retain the services of or to continue to
retain the services of, any optionee; and the right of the Company to terminate
the employment or services of any officer, other employee or consultant shall
not be diminished or affected by reason of the fact that an Option has been
granted to him.
SECTION 16. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
The existence of outstanding Options shall not affect in any way the right or
power of the Company or its stockholders to make or authorize, without
limitations, any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of Common Stock, or any issue of
bonds, debentures, preferred or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
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If the Company shall effect a subdivision or consolidation or shares or other
capital readjustment, the payment of a stock dividend, or other increase or
reduction of the number of shares of the Common Stock outstanding, without
receiving compensation therefor in money, services or property, then (i) the
number, class, and per share price of shares of stock subject to outstanding
Options hereunder shall be appropriately adjusted in such a manner as to entitle
an optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class of shares as he would have
received as a result of the event requiring the adjustment had he exercised his
Option in full immediately prior to such event; and (ii) the number and class of
shares with respect to which Options may be granted under the Plan shall be
adjusted by substituting for the total number of shares of Common Stock then
reserved that number and class of shares of stock that would have been received
by the owner of an equal number of outstanding shares of Common Stock as the
result of the event requiring the adjustment.
After a merger of one or more corporations into the Company, or after a
consolidation of the Company and one or more corporations in which (i) the
Company shall be the surviving corporation, and (ii) the stockholders of the
Company immediately prior to such merger or consolidation own after such merger
or consolidation shares representing at least fifty percent (50%) of the voting
power of the Company, each holder of an outstanding Option shall, at no
additional cost, be entitled upon exercise of such Option to receive (subject to
any required action by stockholders) in lieu of the number of shares as to which
such Option shall then be so exercisable, the number and class of shares of
stock or other securities to which such holder would have been entitled pursuant
to the terms of the agreement of merger or consolidation if, immediately prior
to such merger or consolidation, such holder had been the holder of record of a
number of shares of Common Stock equal to the number of shares as to which such
Option shall be so exercised.
If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation, or if
there is a merger or consolidation where the Company is the surviving
corporation but the stockholders of the Company immediately prior to such merger
or consolidation do not own after such merger or consolidation shares
representing fifty percent (50%) of the voting power of the Company, or if the
Company is liquidated, or sells or otherwise disposes of substantially all its
assets to another corporation while unexercised Options remain outstanding under
the Plan, (i) subject to the provisions of clause (iii) below, after the
effective date of such merger, consolidation, liquidation, sale or disposition,
as the case may be, each holder of an outstanding Option shall be entitled, upon
exercise of such Option, to receive, in lieu of shares of Common Stock, shares
of such stock or other securities, cash or property as the holders of shares of
Common Stock received pursuant to the terms of the merger, consolidation,
liquidation, sale or disposition; (ii) the Committee may accelerate the time for
exercise of all unexercised and unexpired Options to and after a date prior to
the effective date of such merger, consolidation, liquidation, sale or
disposition, as the case may be, specified by the Committee; or (iii) all
outstanding Options may be cancelled by the Committee as of the effective date
of any such merger, consolidation, liquidation, sale or disposition provided
that (x) notice of such cancellation shall be given to each holder of an Option
and (y) each holder of an Option shall have the right to exercise such Option to
the extent that the same is then exercisable or, if the Committee shall have
accelerated the time for exercise of all unexercised and unexpired Options, in
full during the 30-day period preceding the effective date of such merger,
consolidation, liquidation, sale or disposition.
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Except as hereinbefore expressly provided, the issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, for cash or property, or for labor or services either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock then
subject to outstanding Options.
SECTION 17. AMENDMENT OR TERMINATION OF PLAN.
The Committee may modify, revise or terminate this Plan at any time and from
time to time, except that the class of executives, employees and consultants
eligible to receive Options and the aggregate number of shares issuable pursuant
to this Plan shall not be changed or increased, other than by operation of
Section 16 hereof, without the consent of the stockholders of the Company;
provided, however, that no amendment shall modify (within the meaning of Section
424(h) of the Code) any Incentive Stock Option outstanding on the date of such
amendment.
SECTION 18. WRITTEN AGREEMENT.
Each Option granted hereunder shall be embodied in a written option agreement
which shall be subject to the terms and conditions prescribed above and shall be
signed by the President, any Vice President or the Treasurer of the Company for
and in the name and on behalf of the Company. Such an option agreement shall
contain such other provisions as the Committee in its discretion shall deem
advisable.
SECTION 19. EFFECTIVE DATE AND DURATION OF PLAN.
The Plan shall become effective upon its adoption by the Board of Directors, and
shall be submitted to the stockholders of the Company at the next Annual Meeting
or Special Meeting in Lieu of Annual Meeting following the adoption of the Plan
by the Board of Directors. Options may not be granted under the Plan more than
(10) years after said effective date. The Plan shall terminate (i) when the
total amount of the Common Stock with respect to which Options may be granted
shall have been issued upon the exercise of Options or (ii) by action of the
Committee pursuant to Section 17 hereof, whichever shall first occur.
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