SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, For Use Of The
Commission Only (As Permitted By
Rule 14A-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ADVENT SOFTWARE, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange ActRule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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[_] 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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Notes:
ADVENT SOFTWARE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On April 30, 1998
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Advent Software, Inc., a Delaware corporation (the "Company"), will be held on
Thursday, April 30, 1998 at 9:00 a.m., local time, at the Sheraton Palace Hotel
located at Two New Montgomery Street, San Francisco, California 94105, for the
following purposes:
1. To elect directors to serve for the ensuing year and until their successors
are duly elected and qualified.
2. To approve an amendment to the Company's 1992 Stock Plan to increase
the number of shares of Common Stock reserved for issuance thereunder
by 500,000 shares.
3. To approve an amendment to the Company's 1995 Employee Stock Purchase
Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by 200,000 shares.
4. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
accountants for the Company for the fiscal year ending December 31,
1998.
5. To transact such other business as may properly come before the meeting or
any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 26, 1998 are
entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, you are
urged to sign and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the Annual Meeting may vote in person even if he or she has returned a proxy.
Irv H. Lichtenwald
Secretary
San Francisco, California
March 30, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO COMPLETE
AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
ADVENT SOFTWARE, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
PROCEDURAL MATTERS
General
The enclosed Proxy is solicited on behalf of Advent Software, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held on Thursday,
April 30, 1998 at 9:00 a.m., local time, and at any adjournment thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting of
Stockholders.
The Annual Meeting will be held at the Sheraton Palace Hotel located at
Two New Montgomery Street, San Francisco, California 94105. The Company's
telephone number is (415) 543-7696.
These proxy solicitation materials were mailed on or about March 30,
1998, together with the Company's 1997 Annual Report to Stockholders, to all
stockholders entitled to vote at the meeting.
Record Date
Stockholders of record at the close of business on March 26, 1998 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. As
of the Record Date, approximately 7,900,000 shares of the Company's common
stock, $.01 par value (the "Common Stock"), were issued and outstanding. For
information regarding security ownership by management and by the beneficial
owners of more than 5% of the Company's Common Stock, see "Beneficial Security
Ownership of Management and Certain Beneficial Owners."
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
the Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the meeting and voting in person.
Voting and Solicitation
Each stockholder is entitled to one vote for each share of Common Stock
on all matters presented at the Annual Meeting. Stockholders do not have the
right to cumulate their votes in the election of directors.
The cost of soliciting proxies will be borne by the Company. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation materials to such beneficial owners. Proxies may also be solicited
by certain of the Company's directors, officers and regular employees, without
additional compensation, personally or by telephone, telegram, letter or
facsimile.
Quorum; Abstentions; Broker Non-Votes
The required quorum for the transaction of business at the Annual
Meeting is a majority of the shares of Common Stock outstanding on the Record
Date. A plurality of the votes duly cast is required for the election of
directors. The affirmative vote of a majority of the votes duly cast is required
to ratify the appointment of auditors. The Company intends to include
abstentions and broker non-votes as present or represented for purposes of
establishing a quorum for the transaction of business, but to exclude broker
non-votes from the tabulation of voting results on the election of directors or
on issues requiring approval of a majority of the votes cast.
Deadline for Receipt of Stockholder Proposals
Proposals of stockholders of the Company which are intended to be
presented by such stockholders at the Company's 1999 Annual Meeting of
Stockholders must be received by the Company no later than December 11, 1998 in
order to be considered for inclusion in the proxy statement and form of proxy
relating to that meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
The Company's Bylaws authorize a Board of five directors. A board of
five directors is to be elected at the Annual Meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
Company's five nominees named below, all of whom are presently directors of the
Company. In the event that any nominee of the Company is unable or declines to
serve as a director at the time of the Annual Meeting, the proxies will be voted
for any nominee who shall be designated by the present Board of Directors to
fill the vacancy. It is not expected that any nominee will be unable or will
decline to serve as a director. The term of office of each person elected as a
director will continue until the next Annual Meeting of Stockholders or until a
successor has been elected and qualified.
The name of and certain information regarding each nominee are set
forth below.
Name Age(1) Principal Occupation
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Stephanie G. DiMarco...... 40 Chairman of the Board and Chief
Executive Officer
Frank H. Robinson......... 54 Management Consultant
Wendell G. Van Auken...... 53 General Partner, Mayfield Fund
William F. Zuendt......... 51 President and Chief Operating Officer
(Retired), Wells Fargo and Company
Monte Zweben.............. 34 Entrepreneur in Residence,
Institutional Venture Partners and
Matrix Partners
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(1) As of the Record Date, March 26, 1998
Ms. DiMarco founded Advent in June 1983 and, since such date, has served as
its Chief Executive Officer. She also served as Advent's President until April
of 1997. She became Chairman of the Board in September 1995. Ms. DiMarco holds a
B.S. in Business Administration from the University of California at Berkeley.
Mr. Robinson has been a director of Advent since February 1985. Since 1982,
Mr. Robinson has been a management consultant specializing in the development of
technology-based products and services. Mr. Robinson holds an M.B.A. and a B.A.
in Physics from the State University of New York at Buffalo.
Mr. Van Auken has been a director of Advent since September 1995. Mr. Van
Auken has been a general partner of Mayfield Fund, a venture capital firm, since
1986. Mr. Van Auken holds an M.B.A. from Stanford University and a B.E.E. from
Rensselaer Polytechnic Institute. Mr. Van Auken is a director of Montgomery
Street Income Securities, Inc., an investment company.
Mr. Zuendt became a director in August 1997. Mr. Zuendt retired as
president and chief operating officer of Wells Fargo & Company and its principal
subsidiary, Wells Fargo Bank, in 1997. Mr. Zuendt joined Wells Fargo in 1973
with responsibility for its computer systems and operations. Throughout the
1980's he directed Wells Fargo's retail banking business and was elected
president in 1994. Mr. Zuendt earned a BS degree in mathematics from Rensselaer
Polytechnic Institute and an MBA degree from Stanford University. Mr. Zuendt is
a director of 3Com Corporation, a global data networking company; TriStrata
Security Inc., an information
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security management company; and PanOceanic Bulk
Carriers Limited, an international dry bulk cargo shipping company. Mr. Zweben
became a director in November 1997.
Mr. Zweben founded Red Pepper Software in 1992 and served as Chief
Executive Officer, President and Chairman until its $250 million merger with
PeopleSoft in December of 1996. Prior to starting Red Pepper, Mr. Zweben
co-managed the principal artificial intelligence lab at NASA's Ames Research
Center. Mr. Zweben received an M.S. degree in Computer Science and Industrial
Management at Carnegie-Mellon University. He is a director at Pangea Systems, an
Oakland based bio-informatics company and Entrepreneur in Residence at
Institutional Venture Partners and Matrix Partners.
Board Meetings and Committees
The Board of Directors held a total of six meetings (including
regularly scheduled and special meetings) during fiscal 1997. No incumbent
director during the last fiscal year, while a member of the Board of Directors,
attended fewer than 75% of the aggregate of (i) the total number of meetings of
the Board of Directors and (ii) the total number of meetings held by all
committees on which such director served.
The Board of Directors of the Company has two standing committees: an Audit
Committee and a Compensation Committee. It does not have a nominating committee
or a committee performing the functions of a nominating committee.
The Audit Committee, which currently consists of, Messrs. Zuendt and
Van Auken, is responsible for (i) recommending engagement of the Company's
independent auditors, (ii) approving the services performed by such auditors,
(iii) consulting with such auditors and reviewing with them the results of their
examination, (iv) reviewing and approving any material accounting policy changes
affecting the Company's operating results, (v) reviewing the Company's control
procedures and personnel, and (vi) reviewing and evaluating the Company's
accounting principles and its system of internal accounting controls. The Audit
Committee held one meeting during fiscal 1997.
The Compensation Committee, which currently consists of Messrs.
Robinson and Zweben, is responsible for (i) reviewing and approving the
compensation and benefits for the Company's officers and other employees, (ii)
administering the Company's stock purchase and stock option plans, and (iii)
making recommendations to the Board of Directors regarding such matters. The
Compensation Committee held one meeting during fiscal 1997.
Compensation of Directors
Directors who are employees of the Company do not receive additional
compensation for their services as directors of the Company. However,
nonemployee members of the Board of Directors receive an annual cash retainer of
$5,000 and $1,250 for attendance at each meeting of the Board of Directors or
any committee thereof.
In addition, nonemployee directors participate in the Company's 1995
Director Option Plan (the "Director Plan"). The Director Plan was approved by
the Board in October 1995 and was ratified by stockholders in November 1995, at
which time a total of 75,000 shares of Common Stock were reserved for issuance
thereunder. As of March 26, 1998, there were 48,000 options outstanding under
the Director Plan. The Director Plan became effective on the date of the
Company's initial public offering on November 15, 1995, and is currently
administered by the Board of Directors. Under the Director Plan, each
nonemployee director is automatically granted a non-qualified option to purchase
10,000 shares on the date upon which such person first becomes a director (the
"Initial Option") with an exercise price equal to the fair market value of the
Company's Common Stock as of the date of grant. Thereafter, each nonemployee
director is automatically granted an option to purchase 2,000 shares of Common
Stock on December 1 of each year, except in the year the Director Plan was
adopted ("Subsequent Option"), provided he or she has served as a director for
at least six months as of such date.
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Options granted under the Director Plan have a term of ten years unless
terminated sooner upon termination of the optionee's status as a director or
otherwise pursuant to the Director Plan. Such options are transferable by the
optionee only in certain limited circumstances and each option is exercisable
during the lifetime of the director only by such director or a permitted
transferee. Initial Options granted under the Director Plan vest as to 20% of
the shares on the first anniversary date of grant and as to the remaining
shares, ratably each month over the ensuing four years. Subsequent Options begin
to vest on the fourth anniversary of the date of grant and vest ratably each
month over the next 12 month period. The Director Plan is designed to work
automatically, without administration; however, to the extent administration is
necessary, the Director Plan has been structured so that options granted to
nonemployee directors who administer the Company's other employee benefit plans
shall qualify as transactions exempt from Section 16(b) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), pursuant to Rule 16b-3
promulgated thereunder.
Required Vote
The five nominees receiving the highest number of affirmative votes of
the shares present or represented and entitled to be voted for them shall be
elected as directors, whether or not such affirmative votes constitute a
majority of the shares voted. Votes withheld from any director are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, but they have no legal effect under Delaware law.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE.
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO THE COMPANY'S
1992 STOCK PLAN
General
The 1992 Stock Plan as amended (the "Option Plan") was adopted by the
Board of Directors and approved by the stockholders in August 1992. In February
1998, the Board of Directors approved an amendment to the Option Plan to
increase the number of shares reserved for issuance thereunder by an additional
500,000 shares for a cumulative aggregate of 2,288,000 shares reserved for
issuance thereunder. The Option Plan provides for the grant to employees of the
Company of incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), for the grant of
nonstatutory stock options and stock purchase rights to employees and
consultants of the Company. The Option Plan may be administered by the Board or
a committee approved by the Board. As of March 26, 1998, there were
approximately 100,000 shares of Common Stock available for issuance under the
Option Plan.
Proposal
At the Annual Meeting the stockholders are being requested to approve
the amendment approved by the Board of Directors in February 1998 to the Option
Plan to increase the number of shares reserved for issuance thereunder by
500,000 shares for a cumulative aggregate of 2,788,000 shares reserved for
issuance thereunder, of which options to purchase appromixately 600,000 shares
would be available for future grants under the Option Plan. The amendment to
increase the number of shares reserved under the Option Plan is proposed in
order to give the Board of Directors greater flexibility to grant stock options
and stock purchase rights. The Company believes that granting stock options
motivates high levels of performance and provides an effective means of
recognizing employee contributions to the success of the Company. The Company
believes that this policy is of great value in recruiting and retaining highly
qualified technical and other key personnel who are in great demand as well as
rewarding and incenting current employees. The Board of Directors believes that
the ability to grant options and stock purchase rights will be important to the
future success of the Company by allowing it to accomplish these objectives.
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Summary of the Option Plan
Certain features of the Option Plan are outlined below.
Administration. The Option Plan may be administered by the Board or a
committee of the Board (the "Administrator"), which committee is required to be
constituted to comply with Section 16(b) of the Exchange Act and applicable
laws. Subject to the other provisions of the Option Plan, the Administrator has
the power to determine the terms of any options and stock purchase rights
granted, including the exercise price, the number of shares subject to the
option or stock purchase right and the exercisability thereof. The Option Plan
is currently administered by the Compensation Committee of the Board of
Directors.
Eligibility and Terms of Options. The Option Plan provides that
nonstatutory stock options and stock purchase rights may be granted only to
employees and consultants. Incentive stock options may be granted only to
employees. An optionee who has been granted an option may, if he or she is
otherwise eligible, be granted additional options or stock purchase rights. With
respect to any optionee who owns stock possessing more than 10% of the voting
power of all classes of stock of the Company (a "10% Stockholder"), the exercise
price of any incentive stock option granted must equal at least 110% of the fair
market value on the grant date and the maximum term of the option must not
exceed five years. The term of all other options under the Option Plan may not
exceed ten years. The Administrator selects the optionees and determines the
number of shares to be subject to each option. In making such determination,
there is taken into account the duties and responsibilities of the employee or
consultant, the value of his or her services, his or her present and potential
contribution to the success of the Company, the anticipated number of years of
future service and other relevant factors.
Terms and Conditions of Options. Each option granted under the Option
Plan is evidenced by a written stock option agreement between the optionee and
the Company and is subject to the following terms and conditions:
(a) Exercise Price. The Administrator determines the exercise
price of options to purchase shares of Common Stock at the time the
options are granted. However, the exercise price of an incentive stock
option must not be less than 100% (110% if issued to a 10% Stockholder)
of the fair market value of the Common Stock on the date the option is
granted. For so long as the Company's Common Stock is traded on the
Nasdaq National Market, the fair market value of a share of Common
Stock shall be the closing sale price for such stock (or the closing
bid if no sales were reported) as quoted on the Nasdaq National Market
on the date the option is granted.
(b) Exercise of the Option. Each stock option agreement will
specify the term of the option and the date when the option is to
become exercisable. The terms of such vesting are determined by the
Administrator. Options granted under the Option Plan have a ten-year
term and to date generally become exercisable over five years at a rate
of one-fifth of the shares subject to the options at the end of one
year from the date of grant and 1/60th each month thereafter. An option
is exercised by giving written notice of exercise to the Company,
specifying the number of full shares of Common Stock to be purchased
and by tendering full payment of the purchase price to the Company.
(c) Form of Consideration. The consideration to be paid for
the shares of Common Stock issued upon exercise of an option shall be
determined by the Administrator and is set forth in the option
agreement. Such form of consideration may vary for each option, and may
consist entirely of cash, check, promissory note, other shares of the
Company's Common Stock meeting certain criteria, any combination
thereof, or any other legally permissible form of consideration as may
be provided in the Option Plan or the option agreement.
(d) Termination of Employment. In the event an optionee's
continuous status as an employee or consultant terminates for any
reason (other than upon the optionee's death or disability), the
optionee may exercise his or her option to the extent that the optionee
was entitled to exercise it at the date of such termination, but only
within such period of time set forth in the option agreement (not to
exceed three months in the case of an incentive stock option) from the
date of such termination (and in no event later
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than the expiration of the term of such option as set forth in the
option agreement). If no period of time is specified in the option
agreement, the optionee may exercise his or her option for three
months following the date of such termination, subject to the same
limitations set forth above. Options granted under the Option Plan to
date have generally provided that optionees may exercise their options
within ninety days from the date of termination of employment (other
than for death or disability).
(e) Disability. In the event an optionee's continuous status
as an employee or consultant terminates as a result of permanent and
total disability (as defined in Section 22(e)(3) of the Code), the
optionee may exercise his or her option to the extent that the optionee
was entitled to exercise it at the date of such termination, within
twelve months from the date of such termination (but in no event later
than the expiration of the term of such option as set forth in the
option agreement).
(f) Death. In the event of an optionee's death, the optionee's
estate or a person who acquired the right to exercise the deceased
optionee's option by bequest or inheritance may exercise the option to
the extent that the optionee was entitled to exercise it at the date of
death, within twelve months following the date of death (but in no
event later than the expiration of the term of such option as set forth
in the option agreement).
(g) Termination of Options. Excluding incentive stock options
issued to 10% Stockholders, options granted under the Option Plan
expire on the date set forth in the option agreement (not to exceed ten
years from the date of grant). Incentive stock options granted to 10%
Stockholders expire five years from the date of grant (or such shorter
period set forth in the option agreement). No option may be exercised
by any person after the expiration of its term.
(h) Nontransferability of Options. An option is
nontransferable by the optionee, other than by will or the laws of
descent and distribution, and is exercisable during the optionee's
lifetime only by the optionee. In the event of the optionee's death,
options may be exercised by a person who acquires the right to exercise
the option by bequest or inheritance.
(i) Value Limitation. If the aggregate fair market value of
all shares of Common Stock subject to an optionee's incentive stock
option which are exercisable for the first time during any calendar
year exceeds $100,000, the excess options shall be treated as
nonstatutory options.
(j) Other Provisions. The stock option agreement may contain
such other terms, provisions and conditions not inconsistent with the
Option Plan as may be determined by the Administrator.
Terms And Conditions Of Stock Purchase Rights. Each stock purchase
right granted under the Option Plan shall be evidenced by a written offer which
sets forth the terms, conditions and restrictions related to the offer,
including the number of shares subject to the offer, the price per share, and
the time in which the offeree must accept the offer (which may not exceed ninety
days from the date the Administrator granted the stock purchase right). The
offer must be accepted by executing a purchase agreement with such terms and
conditions as determined by the Administrator. The stock purchased pursuant to a
stock purchase right shall be subject to a repurchase option (unless the
Administrator determines otherwise) upon any termination of the purchaser's
employment with the Company (including termination as a result of death or
disability). Pursuant to such repurchase option, the Company shall be able to
repurchase any shares of stock as to which the repurchase option has not lapsed
at the price per share originally paid by the purchaser. The Administrator shall
determine the rate at which the repurchase option lapses. A purchaser of stock
pursuant to a stock purchase right shall have the rights equivalent to those of
a stockholder.
Adjustment Upon Changes In Capitalization; Corporate Transactions. In the
event of changes in the outstanding Common Stock of the Company by reason of any
stock splits, reverse stock splits, stock dividends, mergers, recapitalizations
or other change in the capital structure of the Company, an appropriate
adjustment shall be made by the Administrator in the following: (i) the number
of shares of Common Stock subject to the Option Plan, (ii) the number and class
of shares of stock subject to any option or stock purchase right outstanding
under the Option Plan, (iii) and the exercise price of any such outstanding
option or stock purchase right. The
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determination of the Administrator as to which adjustments shall be made shall
be conclusive. In the event of a proposed dissolution or liquidation of the
Company, all outstanding options will terminate immediately prior to the
consummation of such proposed action. The Board of Directors in its sole
discretion may in such circumstances declare that any outstanding option or
stock purchase right shall terminate as of a date fixed by the Board of
Directors and give each optionee the right to exercise his or her option or
stock purchase right, including as to shares for which the option or stock
purchase right would not otherwise be exercisable.
Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding option or stock purchase right will be assumed or an
equivalent option or right substituted by the successor corporation or a parent
or subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option or stock purchase
right, the optionee shall have the right to exercise the option or stock
purchase right as to all of the optioned stock, including shares as to which it
would not otherwise be exercisable, for a period of not more than fifteen days
after the Administrator grants the optionee notice of such right.
Amendment and Termination of the Option Plan. The Board may at any time
amend, alter, suspend or terminate the Option Plan. The Company shall obtain
stockholder approval of any amendment to the Option Plan in such a manner and to
such a degree as is necessary and desirable to comply with Rule 16b-3 under the
Exchange Act or Section 422 of the Code (or any other applicable law or
regulation, including the requirements of any exchange or quotation system on
which the Common Stock is traded). Any amendment or termination of the Option
Plan shall not affect options already granted and such options shall remain in
full force and effect as if the Option Plan had not been amended or terminated,
unless mutually agreed otherwise between the optionee and the Company, which
agreement must be in writing and signed by the optionee and the Company. In any
event, the Option Plan shall terminate in August 2002. Any options outstanding
under the Option Plan at the time of its termination shall remain outstanding
until they expire by their terms.
Federal Tax Information
Options granted under the Option Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or nonstatutory options.
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon sale or exchange of the shares more than two years after grant of the
option and one year after exercise of the option, any gain or loss is treated as
long-term capital gain or loss. Net capital gains on shares held between 12 and
18 months are currently taxed at a maximum federal rate of 28%. Net capital
gains on shares held for more than 18 months are capped at 20%. Capital losses
are allowed in full against capital gains and up to $3,000 against other income.
If these holding periods are not satisfied, the optionee recognizes ordinary
income at the time of disposition equal to the difference between the exercise
price and the lower of (i) the fair market value of the shares at the date of
the option exercise or (ii) the sale price of the shares. Any gain or loss
recognized on such a premature disposition of the shares in excess of the amount
treated as ordinary income is treated as long-term or short-term capital gain or
loss, depending on the holding period. A different rule for measuring ordinary
income upon such a premature disposition may apply if the optionee is also an
officer, director, or 10% stockholder of the Company. The Company is entitled to
a deduction in the same amount as the ordinary income recognized by the
optionee.
All of the options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by an employee
of the Company is subject to tax withholding by the Company. The Company is
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee. Upon a disposition of such
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shares by the optionee, any difference between the sale price and the optionee's
exercise price, to the extent not recognized as taxable income as provided
above, is treated as long-term or short-term capital gain or loss, depending on
the holding period. Net capital gains on shares held between 12 and 18 months
are currently taxed at a maximum federal rate of 28%. Net capital gains on
shares held for more than 18 months are capped at 20%. Capital losses are
allowed in full against capital gains and up to $3,000 against other income.
The granting of a stock purchase right is not a taxable event. However,
at the time the right is exercised, the purchaser of the resulting restricted
stock recognizes ordinary income as the repurchase option of the Company lapses
equal to the difference between the fair market value of the shares of the time
of such lapse and the price paid for such shares, if any (the "Spread"). Under
current federal tax law, the purchaser may elect to include the Spread as
ordinary income for the year of the award. If the election is made, the
purchaser will not incur additional tax liability until the sale or disposition
of the shares. If the shares are forfeited following such an election, the
purchaser's basis in such forfeited shares is the price paid for the shares. The
Company is entitled to federal tax deduction in the same amount and at the same
time as the employee realizes ordinary income.
The Company will be entitled to a tax deduction in the same amount as
the ordinary income recognized by the optionee with respect to shares acquired
upon exercise of a nonstatutory option.
The foregoing is only a summary of the effect of federal income
taxation upon the optionee and the Company with respect to the grant and
exercise of options under the Option Plan; it does not purport to be complete,
and it does not discuss the tax consequences of the optionee's death or the
income tax laws of any municipality, state or foreign country in which an
optionee may reside.
Participation in the Option Plan
The following table sets forth information with respect to options
granted under the Option Plan during the fiscal year ended December 31, 1997 to
(i) each of the officers named in the Summary Compensation Table on page 14
hereof, (ii) all executive officers as a group, and (iii) all other employees
(excluding executive officers) as a group:
Weighted
Shares Subject Average
to Options Exercise Price
Name and Position Granted Per Share
----------------- ------- ---------
Stephanie G. DiMarco, Chairman of the Board and Chief
Executive Officer................................................. 150,000 $ 28.38
Peter M. Caswell, President and Chief Operating Officer.............. 120,000 26.88
Lily S. Chang, Executive Vice President and Chief
Technology Officer.............................................. 15,000 25.00
Irv H. Lichtenwald, Senior Vice President, Chief Financial
Officer and Secretary............................................. 15,000 25.00
All executive officers as a group (4 persons)........................ 300,000 27.44
All other employees (excluding executive officers) as a group........ 536,000 26.70
Required Vote
The affirmative vote of the holders of a majority of the Common Stock
present or represented at the Annual Meeting is required to approve and ratify
the amendment to the Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT OF THE
OPTION PLAN. THE EFFECT OF AN ABSTENTION IS THE SAME AS A VOTE
AGAINST THE AMENDMENT OF THE OPTION PLAN.
-8-
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO THE COMPANY'S
1995 EMPLOYEE STOCK PURCHASE PLAN
General
The Company's 1995 Employee Stock Purchase Plan (the "Purchase Plan")
was adopted by the Board of Directors in October 1995, and subsequently ratified
by the stockholders as of the effective date of the public offering. Under the
Purchase Plan, the Company maintains offering periods of a six-month duration
commencing on the first trading day following termination of the prior offering
period. The Purchase Plan is administered by the Company's Board of Directors,
and is open to all individuals employed by the Company or its subsidiaries on
the commencement day of an offering if such individuals are employed by the
Company for at least 20 hours per week and at least five months per year.
Individuals who hold 5% or more of the Company's Common Stock (directly or upon
exercise of option(s)) are not eligible to participate. The Purchase Plan
permits eligible employees to purchase Common Stock through payroll deductions,
which may not exceed 10% of an employee's compensation, excluding bonuses (or
$25,000 in any calendar year), at a price equal to 85% of the lower of the
closing sale price to the Common Stock reported on the NASDAQ national market at
the beginning and the end of each six month operating period, except that with
respect to the first offering period, the beginning price was equal to the
initial public offering and price set forth on the cover page of the Prospectus.
Proposal
At the Annual Meeting the stockholders are being requested to approve
an amendment to the Purchase Plan to increase the number of shares reserved for
issuance thereunder by 200,000 shares, for an aggregate of 300,000 shares having
been reserved for issuance thereunder. As of December 31, 1997, an aggregate of
9,000 shares were available for issuance under the Purchase Plan (without giving
effect to the proposed amendment). The amendment to increase the number of
shares reserved under the Purchase Plan is proposed in order to allow
individuals employed by the Company to continue to purchase shares of Common
Stock of the Company through payroll deductions at a 15% discount to market
price. The Company believes that allowing employees to continue to purchase
shares of the Company's Common Stock through the Purchase Plan motivates
high-levels of performance and provides an effective means of encouraging
employee commitment to the success of the Company. The Company believes that
this policy is of great value in recruiting and retaining new employees and
allowing existing employees to participate in the success of the Company. The
Board of Directors believes that the ability to grant participation in the
Purchase Plan will be important to the future success of the Company by allowing
it to accomplish these objectives.
Summary of the Purchase Plan
General. The Purchase Plan is intended to qualify under Sections 421 and
423 of the Code as an "Employee Stock Purchase Plan."
Administration. The Purchase Plan is administered by the Board of Directors
or a Committee of the Board.
Eligibility. Only employees employed by the Company or its subsidiaries
on the first day of an offering period may participate in the Purchase Plan. For
this purpose, an "employee" is any person who is regularly employed at least 20
hours per week and at least five months per calendar year by the Company or any
of its subsidiaries. No employee shall be granted an option under the Purchase
Plan if (i) immediately after the grant of the option, the employee (or any
person whose stock would be attributed to the employee pursuant to Section
424(d) of the Code), would own 5% or more of the total combined voting power or
value of the stock of the Company or any of its subsidiaries or (ii) which
permits such participant's right to purchase stock under all Employee Stock
Purchase Plans of the Company and its subsidiaries to accrue at a rate which
exceeds $25,000 worth of stock (determined with reference to the fair market
value of the Common Stock on the first day
-9-
of the offering period) in a calendar year. Subject to these eligibility
criteria, the Purchase Plan permits eligible employees to purchase Common Stock
through payroll deductions subject to certain limitations described below.
Offering. The Purchase Plan has consecutive and overlapping 24-month
offering periods that begin every six months, commencing on the first Trading
Day (as defined in the Purchase Plan) on or after March 1 and September 1 of
each year. Each 24-month offering period includes four six-month purchase
periods during which payroll deductions are accumulated and, at the end of
which, shares of Common Stock are purchased with a participant's accumulated
payroll deductions. The Board has the power to change the duration of future
offering periods, if such change is made at least five days prior to the
scheduled beginning of the first offering period to be affected. The first day
of an offering period is referred to as the "Enrollment Date," and the last day
of the purchase period is referred to as the "Exercise Date."
Purchase Price. The purchase price per share which shares will be sold
in an offering under the Purchase Plan is the lower of (i) 85% of the fair
market value of a share of Common Stock on the Enrollment Date, or (ii) 85% of
the fair market value of a share of Common Stock on the relevant Exercise Date.
The fair market value of the Common Stock on a given date is generally
determined with reference to the closing sale price of the Common Stock for such
date.
Payment of Purchase Price; Payroll Deductions. The purchase price of
the shares is accumulated by payroll deductions over the offering period. The
Purchase Plan provides that the aggregate of such payroll deductions during the
offering period shall not exceed 10% of the participant's total compensation
during said offering period, nor $21,250 in any given calendar year. During the
offering period, a participant may discontinue his or her participation in the
Purchase Plan, and may decrease or increase the rate of payroll deductions in an
offering period within limits set by the Board of Directors.
Withdrawal. A participant may terminate his or her participation in the
Purchase Plan at any time by giving the Company a written notice of withdrawal.
In such event the payroll deductions credited to participant's account will be
returned, without interest, to such participant. Payroll deductions will not
resume unless a new Subscription Agreement is delivered in connection with a
subsequent offering period.
Termination of Employment. Termination of a participant's employment
for any reason, including death, cancels his or her participation in the
Purchase Plan immediately. In such event, the payroll deductions credited to the
participant's account will be returned without interest to such participant, his
or her designated beneficiaries or the executors or administrators of his or her
estate.
Adjustments upon Changes in Capitalization. In the event of any changes
in the capitalization of the Company effective without receipt of consideration
by the Company, such as a stock split, stock dividend, combination or
reclassification of the Common Stock resulting in an increase or decrease in the
number of shares of Common Stock, proportionate adjustments will be made by the
Board and the shares subject to purchase and in the price per share under the
Purchase Plan. In the event of liquidation or dissolution of the Company, the
offering periods then in progress will terminate immediately prior to the
consummation of such event unless otherwise provided by the Board. In the event
of a sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each option under the
Purchase Plan shall be assumed or an equivalent option shall be substituted by
each successor corporation or a parent or subsidiary of such successor
corporation, unless the Board determines to shorten the offering period then in
progress by setting a new Exercise Date. If the Board shortens the offering
period in lieu of assumption or substitution in the event of a merger or sale of
assets, the Board shall provide notice to each participant of at least ten
business days prior to the new Exercise Date that the Exercise Date has been
changed to the new Exercise Date and that his or her option will be
automatically exercised on the new Exercise Date unless prior to such date the
participant has withdrawn from the offering period.
Amendment and Termination. The Board may at any time and for any reason
amend or terminate the Purchase Plan, except that no such termination shall
affect options previously granted and no amendment shall make any change in an
option grant prior thereto that adversely affects the right of any participant.
Stockholder
-10-
approval for amendments to the Purchase Plan shall be obtained in such a manner
and to such a degree as required to comply with Section 16(b)(3) of the Exchange
Act or with Section 423 of the Code (or any successor rule or provision or any
other applicable law or regulation).
Federal Tax Information
No income will be taxable to a participant until the shares purchased
under the Purchase Plan are sold or otherwise disposed of. Upon sale or other
disposition of the shares, the participant will generally be subject to tax in
an amount that depends upon the holding period. If the shares are sold or
otherwise disposed of more than two years from the Enrollment Date and one year
from the applicable Exercise Date, the participant will recognize ordinary
income measured as the lesser of (a) the excess of the fair market value of the
shares at the time of such sale or disposition over the purchase price or (b) an
amount equal to 15% of the fair market value of the shares as of the Enrollment
Date. Any additional gain will be treated as long-term capital gain. If the
shares are sold or otherwise disposed of before the expiration of these holding
periods, the participant will recognize ordinary income generally measured as
the excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such sale or
disposition will be long-term or short-term capital gain or loss, depending on
the holding period. The Company generally is not entitled to a deduction for
amounts taxed as ordinary income or capital gain to a participant except to the
extent of ordinary income recognized by participants upon a sale or disposition
of shares prior to the expiration of the holding periods described above.
Required Vote
The affirmative vote of the holders in majority of the Common Stock
presented or represented at the Annual Meeting is required to approve and ratify
the amendment to the Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT OF THE PURCHASE PLAN.
THE EFFECT OF AN ABSTENTION IS THE SAME AS A VOTE AGAINST THE AMENDMENT OF THE
OPTION PLAN.
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P.,
independent accountants, to audit the financial statements of the Company for
the fiscal year ending December 31, 1998. Coopers & Lybrand L.L.P. has audited
the Company's financial statements since 1989. A representative of Coopers &
Lybrand L.L.P. is expected to be present at the meeting, will have the
opportunity to make a statement, and is expected to be available to respond to
appropriate questions.
Required Vote
The Board of Directors has conditioned its appointment of the Company's
independent accountants upon the receipt of the affirmative vote of a majority
of the shares represented, in person or by proxy, and voting at the Annual
Meeting, which shares voting affirmatively also constitute at least a majority
of the required quorum. In the event that the stockholders do not approve the
selection of Coopers & Lybrand L.L.P., the appointment of the independent
accountants will be reconsidered by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF COOPERS & LYBRAND, L.L.P., AS INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR ENDING
DECEMBER 31, 1998. THE EFFECT OF AN ABSTENTION IS THE SAME AS A VOTE AGAINST THE
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT ACCOUNTANTS.
-11-
BENEFICIAL SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of Common Stock
of the Company as of March 26, 1998 for the following: (i) each person or entity
who is known by the Company to own beneficially more than 5% of the outstanding
shares of the Company's Common Stock; (ii) each of the Company's directors;
(iii) the Company's Chief Executive Officer and each of the officers ("Named
Officers") named in the Summary Compensation Table on page 14 hereof; and (iv)
all directors and executive officers of the Company as a group.
Shares Percentage
Beneficially Beneficially
5% Stockholders, Directors and Officers Owned(1) Owned (1)
- - --------------------------------------- -------- ---------
5% STOCKHOLDERS(2)
DiMarco/Harleen Revocable Trust(3).............. 955,154 12.1%
c/o Advent Software, Inc.
301 Brannan Street
San Francisco, CA 94107
Amerindo Investment Advisors, Inc............... 758,500 9.6
One Embarcadero Center, Suite 2300
San Francisco, CA 94111
Maurice J. Duca................................. 598,126 7.6
1485 East Valley Rd.
Santa Barbara, CA 93108
Scudder Kemper Investments, Inc................. 579,600 7.3
345 Park Avenue
New York, NY 10154
Fleming Robert, Inc............................ 413,230 5.2
320 Park Avenue, 11th Floor
New York, New York 10022
John W. Glynn, Jr.(4)(5)(6)..................... 483,900 6.1
3000 Sand Hill Road
Building 4, Suite 235
Menlo Park, CA 94025
Daryl Messinger(4)(6)........................... 452,900 5.7
3000 Sand Hill Road
Building 4, Suite 235
Menlo Park, CA 94025
Steve Rosston(4)(6)............................. 452,900 5.7
3000 Sand Hill Road
Building 4, Suite 235
Menlo Park, CA 94025
DIRECTORS AND NAMED OFFICERS
Frank H. Robinson(7)............................ 31,832 *
Wendell G. Van Auken(8)......................... 35,302 *
Monte Zweben.................................... -- *
William F. Zuendt............................... 3,000 *
Stephanie G. DiMarco(3)......................... 1,150,154 14.6
Peter M. Caswell(9)............................. 145,876 1.8
Lily S. Chang(10)............................... 128,731 1.6
Irv H. Lichtenwald(11).......................... 31,000 *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP
(8 persons)(12).............................. 1,525,895 19.3
- - -------------------------
* Less than 1%
-12-
(1) The number and percentage of shares beneficially owned is determined under
rules of the Securities and Exchange Commission ("SEC"), and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares
as to which the individual has sole or shared voting power or investment
power and also any shares which the individual has the right to acquire
within sixty days of March 26, 1998 through the exercise of any stock
option or other right. Unless otherwise indicated in the footnotes, each
person has sole voting and investment power (or shares such powers) with
respect to the shares shown as beneficially owned.
(2) This information was obtained from filings made with the SEC pursuant to
Sections 13(d) or 13(g) of the Exchange Act.
(3) Ms. DiMarco is also Chairman of the Board and Chief Executive Officer of
the Company. Includes 955,154 shares held by the DiMarco/Harleen Revocable
Trust and 155,000 shares held by the DiMarco/Harleen Charitable Remainder
Trust as to which Ms. DiMarco shares voting and dispositive power. In
addition, includes options to purchase 40,000 shares of Common Stock
exercisable within 60 days of March 26, 1997.
(4) Includes shared voting power for the following: Crown Associates III, L.P.
owns 70,950 shares of common stock, Crown-Glynn Associates, L.P. owns
35,030 shares of common stock, The Crown Trust owns 143,120 shares of
common stock, Glynn Emerging Opportunity Fund owns 42,800 shares of common
stock, Glynn Investment owns 14,200 shares of common stock, Glynn Buckley
owns 15,600 shares of common stock, McMorgan Fund II owns 30,500 shares of
common stock, Glynn Capital Management owns 95,900 shares of common stock
and Glynn Peterson owns 4,800 shares of common stock.
(5) Mr. Glynn is a Managing Director of Crown Capital Management and
Crown-Glynn Advisors. Mr. Glynn is sole owner of Glynn Capital Management.
(6) Mr. Glynn, Mr. Messinger and Mr. Rosston are General Partners of Crown
Partners III, L.P., a Delaware limited partnership and Crown-Glynn
Partners, L.P., a Delaware partnership.
(7) Includes options to purchase 14,832 shares of Common Stock exercisable
within sixty days of March 26, 1998.
(8) Includes options to purchase 5,166 shares of Common Stock exercisable
within sixty days of March 26, 1998.
(9) Includes options to purchase 143,455 shares of Common Stock exercisable
within sixty days of March 26, 1998.
(10) Includes options to purchase 35,581 shares of Common Stock exercisable
within sixty days of March 26, 1998.
(11) Includes options to purchase 13,749 shares of Common Stock exercisable
within sixty days of March 26, 1998.
(12) Includes options held by executive officers and directors of the Company to
purchase 252,783 shares of Common Stock exercisable within sixty days of
March 26, 1998.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act ("Section 16(a)") requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the
Securities and Exchange Commission (the "SEC") and the National Association of
Securities Dealers, Inc. Such officers, directors and ten-percent stockholders
are also required by SEC rules to furnish the Company with copies of all such
forms that they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons that all
Forms 5 required for such persons were filed, the Company believes that during
fiscal 1997 all Section 16(a) filing requirements applicable to its officers,
directors and ten-percent stockholders were complied with.
-13-
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was formed in October 1995 and is
currently composed of Messrs. Van Auken and Zuendt. No interlocking relationship
exists between any member of the Company's Board of Directors or Compensation
Committee and any member of the board of directors or compensation committee of
any other Company, nor has any such interlocking relationship existed in the
past. No member of the Compensation Committee is or was formerly an officer or
an employee of the Company or its subsidiaries.
During 1995, 1996 and 1997, Mr. Frank H. Robinson, a director of the
Company, served as a consultant to the Company and was paid $34,000, $38,000 and
$32,000, respectively, in consulting fees for his services.
The Company has entered into indemnification agreements with each of
its directors and officers. Such agreements require the Company to indemnify
such individuals to the fullest extent permitted by law.
EXECUTIVE OFFICER COMPENSATION
Summary Compensation Table
The following table shows, as to the Chief Executive Officer and each
of the four other most highly compensated executive officers whose salary plus
bonus exceeded $100,000 during the last fiscal year, information concerning
compensation paid for services to the Company in all capacities during the last
three fiscal years.
Long-Term
Compensation
---------------
Awards
---------------
Annual Compensation Securities All Other
--------------------- Underlying Compensation
Name and Principal Position Year Salary($) Bonus($)(1) Options (#) ($)(2)
--------------------------- ---- --------- ----------- ----------- --------
Stephanie G. DiMarco....................... 1997 $313,110 $ -- 150,000 $ 5,124(3)
Chairman of the Board and 1996 275,581 -- -- 7,425(3)
Chief Executive Officer 1995 253,584 65,350 -- 2,989(3)(4)
- - -------------------------------------------- ------ ------- ------- ------- ------
Peter M. Caswell........................... 1997 281,828 -- 120,000 5,516(3)
President and Chief Operating Officer 1996 233,641 -- 10,000 8,024(3)
1995 203,765 -- 10,000 3,768(3)
- - -------------------------------------------- ------ ------- ------- ------- ------
Lily S. Chang.............................. 1997 268,935 -- 15,000 2,294
Executive Vice President and 1996 232,151 -- 10,000 5,447
Chief Technology Officer 1995 211,285 350 10,000 3,054
- - -------------------------------------------- ------- -------- ------- ------- ------
Irv H. Lichtenwald(5)...................... 1997 230,516 -- 15,000 5,715(3)
Senior Vice President, Chief Financial 1996 194,671 -- -- 7,240(3)
Officer and Secretary 1995 141,622 37,500 140,000 1,190(3)
- - -------------------------
(1) Includes bonuses earned or accrued with respect to services rendered in the
fiscal year indicated, whether or not such bonus was actually paid during
such fiscal year.
(2) Unless otherwise indicated, consists of profit sharing matching amounts
earned pursuant to the 401(k) Plan.
(3) Includes amounts paid for health care benefits.
(4) Includes amounts paid by the Company for premiums for a life insurance
policy payable to beneficiaries designated by Ms. DiMarco.
(5) Mr. Lichtenwald began working for the Company on March 20, 1995.
-14-
CERTAIN TRANSACTIONS
In April 1997 the Board of Directors of the Company approved and issued
a $200,000 loan to Peter Caswell, President and Chief Operating Officer of the
Company, secured by Mr. Caswell's stock and options in the Company. The largest
amount outstanding in 1997 was $200,000. In February 1998 the Board forgave
$50,000 of the debt based upon Mr. Caswell's meeting certain performance goals,
and the total amount currently outstanding is $150,000. The loan is due April
2001, or upon termination of Mr. Caswell's employment with the Company if
earlier, and accrues interest at a rate of 8%.
Option Grants in Last Fiscal Year
The following table shows, as to each of the officers named in the
Summary Compensation Table, information concerning stock options granted during
the fiscal year ended December 31, 1997.
OPTION GRANTS IN FISCAL 1997
Individual Grants
--------------------------------------------------------
Potential Realizable Value
Number of Percent of at Assumed Annual Rates of
Securities Total Options Stock Price Appreciation for
Underlying Granted to Option Term(4)
Options Employees in Exercise Expiration ---------------------
Name Granted(1) Fiscal Year(2) Price Date(3) 5% 10%
---- ---------- -------------- ----- ------- -- ---
Stephanie G. DiMarco...... 150,000 17.9% 28.38 2/04/07 2,677,180 6,784,465
Peter M. Caswell.......... 60,000 7.2 28.75 5/13/07 1,085,025 2,749,650
Peter M. Caswell.......... 60,000 7.2 25.00 11/11/07 943,500 2,391,000
Lily S. Chang............. 15,000 1.8 25.00 11/11/07 235,875 597,750
Irv H. Lichtenwald........ 15,000 1.8 25.00 11/11/07 235,875 597,750
- - -------------------------
(1) All options in this table are incentive stock options and were granted
under the 1992 Stock Option Plan and have exercise prices equal to the fair
market value on the date of grant. All such options have ten-year terms and
vest over a five-year period at the rate of one-fifth at the end of one
year from the date of grant and 1/60th each month thereafter.
(2) The Company granted options to purchase 836,000 shares of Common Stock to
employees in fiscal 1997.
(3) Options may terminate before their expiration upon the termination of
optionee's status as an employee or consultant, the optionee's death or an
acquisition of the Company.
(4) Potential realizable value assumes that the stock price increases from the
exercise price from the date of grant until the end of the option term (10
years) at the annual rate specified (5% and 10%). Annual compounding
results in total appreciation of approximately 62.9% (at 5% per year) and
159.4% (at 10% per year). The assumed annual rates of appreciation are
specified in SEC rules and do not represent the Company's estimate or
projection of future stock price growth. The Company does not necessarily
agree that this method can properly determine the value of an option.
-15-
Option Exercises and Holdings
The following table sets forth, for each of the officers in the Summary
Compensation Table, certain information concerning stock options exercised
during fiscal 1997, and the number of shares subject to both exercisable stock
options as of December 31, 1997. Also reported are values for "in-the-money"
options that represent the positive spread between the respective exercise
prices of outstanding stock options and the fair market value of the Company's
Common Stock as of December 31, 1997.
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND FISCAL 1997 YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Options at Fiscal Year End Fiscal Year End($)(1)
Acquired on Value --------------------------- -------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
Stephanie G. DiMarco...... -- $ -- -- 150,000 $ -- $ 37,500
Peter M. Caswell.......... 2,921 64,560 112,244 154,835 2,635,150 889,380
Lily S. Chang............. 30,000 587,000 22,081 37,919 524,015 447,735
Irv H. Lichtenwald........ 32,000 748,750 6,249 77,751 142,653 1,541,847
- - -------------------------
(1) Market value of underlying securities based on the closing price of
Company's Common Stock on December 31, 1997 (the last trading day of
fiscal 1997) on the Nasdaq National Market of $28.625 minus the exercise
price.
-16-
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee")
consists of directors Monte F. Zweben and Frank H. Robinson, neither of whom is
an employee or officer of the Company. The Committee sets policy and administers
the Company's cash and equity incentive programs for the purpose of attracting
and retaining highly skilled executives who will promote the Company's business
goals and build long-term stockholder value. The Committee is also responsible
for reviewing and making recommendations to the Board of Directors regarding all
forms of compensation to be provided to the executive officers and directors of
the Company, including stock compensation and loans, and all bonus and stock
compensation to all employees.
To the extent appropriate, the Company intends to take the necessary
steps to conform its compensation practices to comply with the $1 million
compensation deduction cap under Section 162(m) of the Internal Revenue Code of
1986, as amended.
Compensation Philosophy and Policies
The policy of the Committee is to attract and retain key personnel
through the payment of competitive base salaries and to encourage and reward
performance through bonuses and stock ownership. The Committee's objectives are
to:
- ensure that the executive team has clear goals and accountability with
respect to corporate performance;
- establish pay opportunities that are competitive based on prevailing
practices for the industry, the stage of growth, and the labor markets
in which the Company operates;
- independently assess operating results on a regular basis in light of
expected Company performance; and
- align pay incentives with the long-term interests of the Company's
stockholders.
Elements of Compensation
Compensation for officers and key employees includes both cash and
equity elements.
Cash compensation consists of base salary, which is determined on the
basis of the level of responsibility, expertise and experience of the employee,
and competitive conditions in the industry. The Committee believes that the
salaries of its officers fall within the software industry norm. In addition,
cash bonuses may be awarded to officers and other key employees; however, no
executive officer received a cash bonus in 1997. Compensation of sales personnel
also includes sales commissions tied to quarterly targets.
Ownership of the Company's Common Stock is a key element of executive
compensation. Officers and other employees of the Company are eligible to
participate in the 1992 Stock Plan (the "Option Plan") and the 1995 Employee
Stock Purchase Plan (the "Purchase Plan"), which were adopted prior to the
Company's initial public offering in November 1995. The Option Plan permits the
Board of Directors or the Committee to grant stock options to employees on such
terms as the Board or the Committee may determine. The Committee has the sole
authority to grant stock options to executive officers of the Company and is
currently administering stock option grants to all employees. In determining the
size of a stock option grant to a new officer or other key employee, the
Committee takes into account equity participation by comparable employees within
the Company, external competitive circumstances and other relevant factors.
Additional options may be granted to current employees to reward exceptional
performance or to provide additional unvested equity incentives. The Purchase
Plan permits employees to acquire Common Stock of the Company through payroll
deductions and promotes broad-based equity participation throughout the Company.
The Committee believes that such stock plans align the interests of the
employees with the long-term interests of the stockholders.
-17-
The Company also maintains a 401(k) Plan to provide retirement benefits
through tax deferred salary deductions for all its employees. The Company
matches up to 50% of an employee's contribution, not to exceed $500 per
employee.
1997 Executive Compensation
Executive compensation for 1997 included base salary, cash and
equity-based incentive compensation and, in the case of sales executives, sales
commissions. Cash incentive compensation is designed to motivate executives to
attain corporate, business unit and individual goals. The Company's policy is to
have a significant portion of an executive's total compensation at risk based on
the Company's overall performance. Since 1996, the Company has maintained a
profit sharing plan for its employees, and certain executive officers
participated in this program in 1997. Executive officers, like other employees,
were eligible for option grants under the Option Plan.
Chief Executive Officer Compensation
Compensation for the Chief Executive Officer is determined by a process
similar to that discussed above for executive officers. The Chief Executive
Officer's target base pay level has been analyzed using data for comparable
software companies. Ms. DiMarco receives no other material compensation or
benefits not provided to all executive officers.
The Committee has considered the potential impact of Section 162(m) of
the Internal Revenue Code of 1986, as amended, which limits the tax
deductibility of cash compensation paid to individual executive officers to $1
million per officer. The cash compensation to be paid to the Company's executive
officers in fiscal 1996 is not expected to exceed the $1 million limit per
individual officer.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Monte F. Zweben
Frank H. Robinson
-18-
Comparison of Total Cumulative Stockholder Return
The following graph sets forth the Company's total cumulative
stockholder return as compared to the Standard & Poor's 500 Index and the Nasdaq
Computer & Data Processing Index for the period November 16, 1995 (the date of
the Company's initial public offering) through December 31, 1996. Total
stockholder return assumes $100 invested at the beginning of the period in the
Common Stock of the Company, the stock represented in the Standard & Poor's 500
Index and the stocks represented in the Nasdaq Computer & Data Processing Index,
respectively.
COMPARISON OF 25 MONTH CUMULATIVE TOTAL RETURN*
Among Advent Software, Inc., the S&P 500 Index
and the Nasdaq Computer & Data Processing Index
[PERFORMANCE GRAPH APPEARS HERE]
- - -----------
$100 invested on 11/16/95 in Stock or Index including reinvestment of dividends.
Fiscal year ending December 31.
Cumulative Total Return
-----------------------
11/16/95 12/95 12/96 12/97
-------- ----- ----- -----
Advent Software, Inc. 100 99 169 159
S&P 500 100 103 127 169
Nasdaq Computer & Data Processing 100 100 124 152
-19-
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting.
If any other matters properly come before the meeting, it is the intention of
the persons named in the enclosed proxy card to vote the shares they represent
as the Company may recommend.
It is important that your shares be represented at the meeting,
regardless of the number of shares which you hold. You are, therefore, urged to
execute and return, at your earliest convenience, the accompanying proxy card in
the envelope which has been enclosed.
THE BOARD OF DIRECTORS
San Francisco, California
March 30, 1998
ADVENT SOFTWARE, INC.
1992 STOCK PLAN
(amended effective May 13, 1997)
1. Purposes of the Plan. The purposes of this 1992 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or non-statutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. Stock purchase rights may also be granted
under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a Committee appointed by the Board of Directors
in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means Advent Software, Inc., a Delaware corporation.
(g) "Consultant" means any person, who is engaged by the Company or
any Parent or Subsidiary to render consulting or advisory services and is
compensated for such services. The term Consultant shall not include
directors who are not compensated for their services or who are paid only a
director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship with the Company, any Parent or
Subsidiary is not interrupted or terminated. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of:
(i) sick leave; (ii) military leave; (iii) any other leave of absence
approved by the Administrator, provided that such leave is for a period of
not more than ninety (90) days, unless reemployment upon the expiration of
such leave is guaranteed by contract or statute, or unless provided
otherwise pursuant to Company policy adopted from time to time; or (iv) in
the case of transfers between locations of the Company or between the
Company, its Subsidiaries or its successor.
-1-
(i) "Disability" shall have the meaning set forth in Section 22(e)(3)
of the Code.
(j) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The
payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the
Nasdaq National Market of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, its Fair Market
Value shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system
for the last market trading day prior to the time of determination, as
reported in The Wall Street Journal or such other source as the
Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the Nasdaq National Market) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean between the high bid and low asked prices for
the Common Stock; or
(iii)In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith
by the Administrator.
(m) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the
Code.
(n) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(o) "Option" means a stock option granted pursuant to the Plan.
(p) "Optioned Stock" means the Common Stock subject to an Option
or a Stock Purchase Right.
(q) "Optionee" means an Employee or Consultant who receives an
Option or Stock Purchase Right.
(r) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(s) "Plan" means this 1992 Stock Plan.
-2-
(t) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11 below.
(u) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(v) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 below.
(w) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 2,288,000 shares of Common Stock. The shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires, becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an option exchange
program approved by the Administrator, the unpurchased Shares that were subject
thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated). Shares that have actually been issued under the Plan,
whether upon exercise of an Option or Right, shall not be returned to the Plan
and shall not become available for future distribution under the Plan, except
that if Shares of Restricted Stock are repurchased by the Company at their
original purchase price, and the original purchaser of such Shares did not
receive any benefits of ownership of such Shares, such Shares shall become
available for future grant under the Plan. For purposes of the preceding
sentence, voting rights shall not be considered a benefit of Share ownership.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are
neither Directors nor Officers.
(ii) Administration With Respect to Directors and Officers
Subject to Section 16(b). With respect to Option or Stock Purchase
Right grants made to Employees who are also Officers or Directors
subject to Section 16(b) of the Exchange Act, the Plan shall be
administered by (A) the Board, if the Board may administer the Plan in
a manner complying with the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which
Section 16(b) exempt discretionary grants and awards of equity
securities are to be made, or (B) a committee designated by the Board
to administer the Plan, which committee shall be constituted to
-3-
comply with the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be
made. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time
to time the Board may increase the size of the Committee and appoint
additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove
all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by the rules under Rule 16b-3
relating to the disinterested administration of employee benefit plans
under which Section 16(b) exempt discretionary grants and awards of
equity securities are to be made.
(iii)Administration With Respect to Other Persons. With respect
to Option or Stock Purchase Right grants made to Employees or
Consultants who are neither Directors nor Officers of the Company, the
Plan shall be administered by (A) the Board or (B) a committee
designated by the Board, which committee shall be constituted to
satisfy Applicable Laws. Once appointed, such Committee shall serve in
its designated capacity until otherwise directed by the Board. The
Board may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and substitute new
members, fill vacancies (however caused), and remove all members of
the Committee and thereafter directly administer the Plan, all to the
extent permitted by Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(l) of the Plan;
(ii) to select the Consultants and Employees to whom Options and
Stock Purchase Rights may be granted hereunder;
(iii)to determine whether and to what extent Options and Stock
Purchase Rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Purchase Rights may be exercised
(which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the
-4-
shares of Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;
(vii)to reduce the exercise price of any Option or Stock Purchase
Right to the then current Fair Market Value if the Fair Market Value
of the Common Stock covered by such Option or Stock Purchase Right
shall have declined since the date the Option or Stock Purchase Right
was granted;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;
(x) to modify or amend each Option or Stock Purchase Right
(subject to Section 14(b) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan;
(xi) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xii)to determine the terms and restrictions applicable to
Options and Stock Purchase Rights and any Restricted Stock; and
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options or Stock Purchase Rights.
5. Eligibility.
(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees and Consultants. Incentive Stock Options may be
granted only to Employees. An Employee or Consultant who has been granted
an Option or Stock Purchase Right may, if he or she is otherwise eligible,
be granted additional Options or Stock Purchase Rights.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Options
-5-
designated as Incentive Stock Options are exercisable for the first time by
any Optionee during any calendar year (under all plans of the Company or
any Parent or Subsidiary) exceeds $100,000, such excess Options shall be
treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with respect
to continuation of employment or consulting relationship with the Company,
nor shall it interfere in any way with his or her right or the Company's
right to terminate his or her employment or consulting relationship at any
time, with or without cause.
(e) The following limitations shall apply to grants of Options and
Stock Purchase Rights to Employees:
(i) No Employee shall be granted, in any fiscal year of the
Company, Options and Stock Purchase Rights to purchase more than
150,000 Shares.
(ii) In connection with his or her initial employment, an
Employee may be granted Options and Stock Purchase Rights to purchase
up to an additional 150,000 Shares which shall not count against the
limit set forth in subsection (i) above.
(iii)The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as
described in Section 12.
(iv) If an Option or Stock Purchase Right is cancelled in the
same fiscal year of the Company in which it was granted (other than in
connection with a transaction described in Section 12), the cancelled
Option or Stock Purchase Right will be counted against the limits set
forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option or Stock Purchase Right is reduced, the
transaction will be treated as a cancellation of the Option or Stock
Purchase Right and the grant of a new Option or Stock Purchase Right.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the stockholders of
the Company as described in Section 18 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 14 of the
Plan.
7. Term of Option. The term of each Option shall be the term stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of such
Option shall be
-6-
five (5) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued pursuant
to the exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.
(B) granted to any other Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator.
(b) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at the
time of grant. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than
six months on the date of surrender, and (B) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;
(v) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay
the exercise price;
-7-
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program
or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator, including performance
criteria with respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received
by the Company. Full payment may, as authorized by the Administrator,
consist of any consideration and method of payment allowable under Section
8(b) of the Plan. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate
promptly upon exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
(b) Termination of Employment or Consulting Relationship. Upon
termination of an Optionee's Continuous Status as an Employee or
Consultant, other than upon the Optionee's death or Disability, the
Optionee may exercise his or her Option, but only within such period of
time as is specified in the Notice of Grant, and only to the extent that
the Optionee was entitled to exercise it at the date of termination (but in
no event later than the expiration of the term of such Option as set forth
in the Notice of Grant). In the absence of a specified time in the Notice
of Grant, the Option shall remain exercisable for three (3) months
following the Optionee's termination. In the case of an Incentive Stock
Option, such period of time for exercise shall not exceed three (3) months
from the
-8-
date of termination. If, on the date of termination, the Optionee is not
entitled to exercise the Optionee's entire Option, the Shares covered by
the unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the
time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
Notwithstanding the above, in the event of an Optionee's change in status
from Consultant to Employee or Employee to Consultant, the Optionee's
Continuous Status as an Employee or Consultant shall not automatically
terminate solely as a result of such change in status. However, in such
event, an Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes
as a Nonstatutory Stock Option three months and one day following such
change of status.
(c) Disability of Optionee. In the event that an Optionee's Continuous
Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any
time within twelve (12) months from the date of such termination, but only
to the extent that the Optionee was entitled to exercise it at the date of
such termination (but in no event later than the expiration of the term of
such Option as set forth in the Notice of Grant). If, at the date of
termination, the Optionee is not entitled to exercise his or her entire
Option, the Shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the expiration of the term of
such Option as set forth in the Notice of Grant), by the Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent that the Optionee was entitled to
exercise the Option at the date of death. If, at the time of death, the
Optionee was not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall immediately revert
to the Plan. If, after death, the Optionee's estate or a person who
acquired the right to exercise the Option by bequest or inheritance does
not exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
(f) Rule 16b-3. Options granted to individuals subject to Section 16
of the Exchange Act ("Insiders") must comply with the applicable provisions
of Rule 16b-3 and shall contain such additional conditions or restrictions
as may be required thereunder to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions.
-9-
10. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid and the time
within which such person must accept such offer, which shall in no event
exceed ninety (90) days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be
accepted by execution of a purchase agreement (the "Restricted Stock
Purchase Agreement") in the form determined by the Administrator. Shares
purchased pursuant to the grant of a Stock Purchase Right shall be referred
to herein as "Restricted Stock".
(b) Repurchase Option. Unless the Administrator determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination
of the purchaser's employment with the Company for any reason (including
death or Disability). The purchase price for Shares repurchased pursuant to
the Restricted Stock Purchase Agreement shall be the original price paid by
the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as
the Administrator may determine.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
In addition, the provisions of Restricted Stock purchase agreements need
not be the same with respect to each purchaser.
(d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered
upon the records of the duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as
provided in Section 12 of the Plan.
(e) Rule 16b-3. Stock Purchase Rights granted to Insiders, and Shares
purchased by Insiders in connection with Stock Purchase Rights, shall be
subject to any restrictions applicable thereto in compliance with Rule
16b-3. An Insider may only purchase Shares pursuant to the grant of a Stock
Purchase Right, and may only sell Shares purchased pursuant to the grant of
a Stock Purchase Right, during such time or times as are permitted by Rule
16b-3.
12. Adjustments Upon Changes in Capitalization, Dissolution or Merger.
-10-
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the
Plan but as to which no Options or Stock Purchase Rights have yet been
granted or which have been returned to the Plan upon cancellation or
expiration of an Option or Stock Purchase Right, as well as the price per
share of Common Stock covered by each such outstanding Option or Stock
Purchase Right, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration". Such adjustment shall be made
by the Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of
Common Stock subject to an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or
Stock Purchase Right has not been previously exercised, it will terminate
immediately prior to the consummation of such proposed action. The Board
may, in the exercise of its sole discretion in such instances, declare that
any Option or Stock Purchase Right shall terminate as of a date fixed by
the Board and give each Optionee the right to exercise his or her Option or
Stock Purchase Right as to all or any part of the Optioned Stock, including
Shares as to which the Option or Stock Purchase Right would not otherwise
be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for
the Option or Stock Purchase Right, Administrator shall have the discretion
to allow the Optionee to exercise the Option or Stock Purchase Right as to
all of the Optioned Stock, including Shares as to which it would not
otherwise be exercisable. If an Option or Stock Purchase Right is
exercisable in lieu of assumption or substitution in the event of a merger
or sale of assets, the Administrator shall notify the Optionee that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock
Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option
or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately
prior to the merger or sale of assets, the consideration (whether stock,
cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each
-11-
Share held on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the merger or sale of assets was not
solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or
Stock Purchase Right, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
13. Date of Grant. The date of grant of an Option or Stock Purchase Right
shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other date
as is determined by the Administrator. Notice of the determination shall be
given to each Employee or Consultant to whom an Option or Stock Purchase Right
is so granted within a reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any
Optionee under any grant theretofore made without his or her consent. In
addition, to the extent necessary and desirable to comply with Section 422
of the Code (or any other applicable law or regulation), the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to
such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and
signed by the Optionee and properly on behalf of the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such
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Shares if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
17. Agreements. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Administrator shall approve from time to
time. Such agreements may contain such other terms and conditions, including
rights of repurchase and rights of first refusal, as the Administrator may in
its sole discretion deem appropriate.
18. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under applicable state and federal law.
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ADVENT SOFTWARE, INC.
1992 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
[Optionee's Name and Address]
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Grant Number _________________________
Date of Grant _________________________
Vesting Commencement Date _________________________
Exercise Price per Share $ _________________________
Total Number of Shares Granted _________________________
Total Exercise Price $ _________________________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: _________________________
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
20% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 1/60th of the Shares subject to the
Option shall vest each month thereafter.
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Termination Period:
This Option may be exercised for _____ [days/months] after
termination of the Optionee's employment or consulting relationship
with the Company. Upon the death or Disability of the Optionee, this
Option may be exercised for such longer period as provided in the
Plan. In the event of the Optionee's change in status from Employee to
Consultant or Consultant to Employee, this Option Agreement shall
remain in effect. In no event shall this Option be exercised later
than the Term/Expiration Date as provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants to
the Optionee named in the Notice of Grant attached as Part I of this Agreement
(the "Optionee") an option (the "Option") to purchase the number of Shares, as
set forth in the Notice of Grant, at the exercise price per share set forth in
the Notice of Grant (the "Exercise Price"), subject to the terms and conditions
of the Plan, which is incorporated herein by reference. Subject to Section 14(b)
of the Plan, in the event of a conflict between the terms and conditions of the
Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option ("ISO"),
this Option is intended to qualify as an Incentive Stock Option under Section
422 of the Code. However, if this Option is intended to be an Incentive Stock
Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d)
it shall be treated as a Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
(1) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event
of Optionee's death, Disability or other termination of Optionee's
employment or consulting relationship, the exercisability of the Option is
governed by the applicable provisions of the Plan and this Option
Agreement.
(2) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares
in respect of which the Option is being exercised (the "Exercised Shares"),
and such other representations and agreements as may be required by the
Company pursuant to the provisions of the Plan. The Exercise Notice shall
be signed by the Optionee and shall be delivered in person or by certified
mail to the Secretary of the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the
Company of such fully executed Exercise Notice accompanied by such
aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with all relevant provisions of law and
the requirements of any stock exchange
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or quotation service upon which the Shares are then listed. Assuming such
compliance, for income tax purposes the Exercised Shares shall be
considered transferred to the Optionee on the date the Option is exercised
with respect to such Exercised Shares.
3. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:
(1) cash;
(2) check;
(3) delivery of a properly executed exercise notice together with such
other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the
Company of the sale or loan proceeds required to pay the exercise price; or
(4) surrender of other Shares which (i) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than
six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares.
4. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by the Optionee. The terms of
the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
6. Tax Consequences. Some of the federal and state tax consequences
relating to this Option, as of the date of this Option, are set forth below.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.
(1) Exercising the Option.
(1) Nonstatutory Stock Option. The Optionee may incur regular
federal income tax and state income tax liability upon exercise of a
NSO. The Optionee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if
any, of the Fair Market Value of the Exercised Shares on the date of
exercise over their aggregate Exercise Price. If the Optionee is an
Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect from Optionee and pay
to the applicable taxing
-3-
authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor
the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.
(2) Incentive Stock Option. If this Option qualifies as an ISO,
the Optionee will have no regular federal income tax or state income
tax liability upon its exercise, although the excess, if any, of the
Fair Market Value of the Exercised Shares on the date of exercise over
their aggregate Exercise Price will be treated as an adjustment to
alternative minimum taxable income for federal tax purposes and may
subject the Optionee to alternative minimum tax in the year of
exercise. In the event that the Optionee undergoes a change of status
from Employee to Consultant, any Incentive Stock Option of the
Optionee that remains unexercised shall cease to qualify as an
Incentive Stock Option and will be treated for tax purposes as a
Nonstatutory Stock Option on the ninety-first (91st) day following
such change of status.
(2) Disposition of Shares.
(1) NSO. If the Optionee holds NSO Shares for at least one year,
any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(2) ISO. If the Optionee holds ISO Shares for at least one year
after exercise and two years after the grant date, any gain realized
on disposition of the Shares will be treated as long-term capital gain
for federal income tax purposes. If the Optionee disposes of ISO
Shares within one year after exercise or two years after the grant
date, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent
of the excess, if any, of the lesser of (A) the difference between the
Fair Market Value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale
price of such Shares and the aggregate Exercise Price.
(3) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired
pursuant to an ISO on or before the later of (i) two years after the
grant date, or (ii) one year after the exercise date, the Optionee
shall immediately notify the Company in writing of such disposition.
The Optionee agrees that he or she may be subject to income tax
withholding by the Company on the compensation income recognized from
such early disposition of ISO Shares by payment in cash or out of the
current earnings paid to the Optionee.
7. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by California law except for that body of
law pertaining to conflict of laws.
-4-
By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: ADVENT SOFTWARE, INC.
____________________________________ By:____________________________________
Signature
____________________________________ Title:_________________________________
Print Name
- - ------------------------------------
Residence Address
- - ------------------------------------
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CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
---------------------------------------
Spouse of Optionee
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EXHIBIT A
1992 STOCK PLAN
EXERCISE NOTICE
Advent Software, Inc.
301 Brannan Street
San Francisco, CA 94107
Attention: Secretary
1. Exercise of Option. Effective as of today, ________________, 199__, the
undersigned ("Purchaser") hereby elects to purchase ______________ shares (the
"Shares") of the Common Stock of Advent Software, Inc. (the "Company") under and
pursuant to the 1992 Stock Plan (the "Plan") and the Stock Option Agreement
dated , 19___ (the "Option Agreement"). The purchase price for the Shares shall
be $ , as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the full
purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 12 of the
Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing
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signed by the Company and Optionee. This agreement is governed by California law
except for that body of law pertaining to conflict of laws.
Submitted by: Accepted by:
OPTIONEE:: ADVENT SOFTWARE, INC.
__________________________________ By: _________________________________
Signature
__________________________________ Its: ________________________________
Print Name
Address: Address:
___________________________ 301 Brannan Street
___________________________ San Francisco, CA 94107
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ADVENT SOFTWARE, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1995 Employee Stock Purchase
Plan of Advent Software, Inc.
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of
the Plan, accordingly, shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Advent Software, Inc., a Delaware corporation
and any Designated Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time gross earnings,
including commissions, but exclusive of payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses, and other
compensation.
(f) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(g) "Employee" shall mean any individual who is an Employee of the
Company for tax purposes whose customary employment with the Company is at
least twenty (20) hours per week and more than five (5) months in any
calendar year. For purposes of the Plan, the employment relationship shall
be treated as continuing intact while the individual is on sick leave or
other leave of absence approved by the Company. Where the period of leave
exceeds 90 days and the individual's right to reemployment is not
guaranteed either by statute or by contract, the employment relationship
will be deemed to have terminated on the 91st day of such leave.
(h) "Enrollment Date" shall mean the first day of each Offering
Period.
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(i) "Exercise Date" shall mean the last day of each Purchase Period.
(j) "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the
Nasdaq National Market of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, its Fair Market
Value shall be the closing sale price for the Common Stock (or the
mean of the closing bid and asked prices, if no sales were reported),
as quoted on such exchange (or the exchange with the greatest volume
of trading in Common Stock) or system on the date of such
determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable, or;
(2) If the Common Stock is quoted on the NASDAQ System (but not
on the Nasdaq National Market thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean of the closing bid and asked
prices for the Common Stock on the date of such determination, as
reported in The Wall Street Journal or such other source as the Board
deems reliable, or;
(3) In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the
Board.
(k) "Offering Period" shall mean the period of approximately
twenty-four (24) months during which an option granted pursuant to the Plan
may be exercised, commencing on the first Trading Day on or after September
1 and March 1 of each year and terminating on the last Trading Day in the
periods ending twenty-four months later. The duration and timing of
Offering Periods may be changed pursuant to Section 4 of this Plan.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
(n) "Purchase Period" shall mean the approximately six month period
commencing after one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence
on the Enrollment Date and end with the next Exercise Date.
(o) "Reserves" shall mean the number of shares of Common Stock covered
by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance
under the Plan but not yet placed under option.
-2-
(p) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
(q) "Trading Day" shall mean a day on which national stock exchanges
and the Nasdaq System are open for trading.
3. Eligibility.
(a) Any Employee (as defined in Section 2(g)), who shall be employed
by the Company on a given Enrollment Date shall be eligible to participate
in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately
after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would
own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of the capital stock of the
Company or of any Subsidiary, or (ii) which permits his or her rights to
purchase stock under all employee stock purchase plans of the Company and
its subsidiaries to accrue at a rate which exceeds twenty-five thousand
dollars ($25,000) worth of stock (determined at the fair market value of
the shares at the time such option is granted) for each calendar year in
which such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after September 1 and March 1 each year, or on such other date
as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 19 hereof. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the
form of Exhibit A to this Plan and filing it with the Company's payroll
office prior to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless
sooner terminated by the participant as provided in Section 10 hereof.
-3-
6. Payroll Deductions.
(a) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding ten percent (10%) of
the Compensation which he or she receives on each pay day during the
Offering Period, and the aggregate of such payroll deductions during the
Offering Period shall not exceed ten percent (10%) of the participant's
Compensation during said Offering Period.
(b) All payroll deductions made for a participant shall be credited to
his or her account under the Plan and will be withheld in whole percentages
only. A participant may not make any additional payments into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or
filing with the Company a new subscription agreement authorizing a change
in payroll deduction rate. The Board may, in its discretion, limit the
number of participation rate changes during any Offering Period. The change
in rate shall be effective with the first full payroll period following
five (5) business days after the Company's receipt of the new subscription
agreement unless the Company elects to process a given change in
participation more quickly. A participant's subscription agreement shall
remain in effect for successive Offering Periods unless terminated as
provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to 0% at such time during any Purchase
Period which is scheduled to end during the current calendar year (the
"Current Purchase Period") that the aggregate of all payroll deductions
which were previously used to purchase stock under the Plan in a prior
Purchase Period which ended during that calendar year plus all payroll
deductions accumulated with respect to the Current Purchase Period equal
$21,250. Payroll deductions shall recommence at the rate provided in such
participant's subscription agreement at the beginning of the first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise
upon the exercise of the option or the disposition of the Common Stock. At
any time, the Company may, but will not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to
make available to the Company any tax deductions or benefits attributable
to sale or early disposition of Common Stock by the Employee.
-4-
7. Grant of Option. On the Enrollment Date of each Offering Period,
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than a
number of Shares determined by dividing $12,500 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date, and provided further
that such purchase shall be subject to the limitations set forth in Sec tions
3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The
Option shall expire on the last day of the Offering Period.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares will
be exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier with drawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his
or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's
payroll deductions credited to his or her account will be paid to such
participant promptly after receipt of notice of withdrawal and such
participant's option for the Offering Period will be automatically
terminated, and no further payroll deductions for the purchase of shares
will be made for such Offering Period. If a participant withdraws from an
Offering Period, payroll deductions will not resume at the beginning of the
succeeding Offering Period unless the participant delivers to the Company a
new subscription agreement.
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(b) Upon a participant's ceasing to be an Employee (as defined in
Section 2(g) hereof), for any reason, he or she will be deemed to have
elected to withdraw from the Plan and the payroll deductions credited to
such participant's account during the Offering Period but not yet used to
exercise the option will be returned to such participant or, in the case of
his or her death, to the person or persons entitled thereto under Section
14 hereof, and such participant's option will be automatically terminated.
The preceding sentence notwithstanding, a participant who receives payment
in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant's customary number of
hours per week of employment during the period in which the participant is
subject to such payment in lieu of notice.
11. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 300,000 shares,
subject to adjustment upon changes in capitalization of the Company as
provided in Section 18 hereof. If, on a given Exercise Date, the number of
shares with respect to which options are to be exercised exceeds the number
of shares then available under the Plan, the Company shall make a pro rata
allocation of the shares remaining available for purchase in as uniform a
manner as shall be practicable and as it shall deter mine to be equitable.
(b) The participant will have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant
and his or her spouse.
13. Administration.
(a) Administrative Body. The Plan shall be administered by the Board
or a committee of members of the Board appointed by the Board. The Board or
its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine
eligibility and to adjudicate all disputed claims filed under the Plan.
Every finding, decision and determination made by the Board or its
committee shall, to the full extent permitted by law, be final and binding
upon all parties.
(b) Rule 16b-3 Limitations. Notwithstanding the provisions of
Subsection (a) of this Section 13, in the event that Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or any successor provision ("Rule 16b-3") provides specific requirements
for the administrators of plans of this type, the Plan shall be only
administered by such
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a body and in such a manner as shall comply with the applicable
requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no discretion
concerning decisions regarding the Plan shall be afforded to any committee
or person that is not "disinterested" as that term is used in Rule 16b-3.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such partici pant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to
such participant of such shares and cash. In addition, a participant may
file a written designation of a beneficiary who is to receive any cash from
the participant's account under the Plan in the event of such participant's
death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required
for such designation to be effective.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant
and in the absence of a beneficiary validly designated under the Plan who
is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one
or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as
the Company may designate.
15. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.
16. Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees at least annually, which statements will set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
Merger or Asset Sale.
-7-
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the Reserves as well as the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration". Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to
an option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Periods will
terminate immediately prior to the consummation of such proposed action,
unless otherwise provided by the Board.
(c) Merger or Asset Sale. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each option under the Plan shall
be assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless
the Board determines, in the exercise of its sole discretion and in lieu of
such assumption or substitution, to shorten the Offering Periods then in
progress by setting a new Exercise Date (the "New Exercise Date"). If the
Board shortens the Offering Periods then in progress in lieu of assumption
or substitution in the event of a merger or sale of assets, the Board shall
notify each participant in writing, at least ten (10) business days prior
to the New Exercise Date, that the Exercise Date for his option has been
changed to the New Exercise Date and that his option will be exercised
automatically on the New Exercise Date, unless prior to such date he has
withdrawn from the Offering Period as provided in Section 10 hereof. For
purposes of this paragraph, an option granted under the Plan shall be
deemed to be assumed if, following the sale of assets or merger, the option
confers the right to purchase, for each share of option stock subject to
the option immediately prior to the sale of assets or merger, the
consideration (whether stock, cash or other securities or property)
received in the sale of assets or merger by holders of Common Stock for
each share of Common Stock held on the effective date of the transaction
(and if such holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares
of Common Stock); provided, however, that if such consideration received in
the sale of assets or merger was not solely common stock of the successor
corporation or its parent (as defined in Section 424(e) of the Code), the
Board may, with the consent of the successor corporation, provide for the
consideration to be received upon exercise of the option to be solely
common stock of the successor corporation or its parent equal in fair
market value to the per share consideration received by holders of Common
Stock and the sale of assets or merger.
-8-
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 18
hereof, no such termination can affect options previously granted, provided
that an Offering Period may be terminated by the Board of Directors on any
Exercise Date if the Board determines that the termination of the Plan is
in the best interests of the Company and its shareholders. Except as
provided in Section 18 hereof, no amendment may make any change in any
option theretofore granted which adversely affects the rights of any
participant. To the extent necessary to comply with Rule 16b-3 or under
Section 423 of the Code (or any successor rule or provision or any other
applicable law or regulation), the Company shall obtain shareholder
approval in such a manner and to such a degree as required.
(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods,
limit the frequency and/or number of changes in the amount withheld during
an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding
in excess of the amount designated by a participant in order to adjust for
delays or mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied
toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant's Compensation, and
establish such other limitations or procedures as the Board (or its
committee) determines in its sole discretion advisable which are consistent
with the Plan.
20. Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
-9-
22. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof.
23. Automatic Transfer to Low Price Offering Period. To the extent
permitted by Rule 16b-3 of the Exchange Act, if the Fair Market Value of the
Common Stock on any Exercise Date in an Offering Period is lower than the Fair
Market Value of the Common Stock on the Enrollment Date of such Offering Period,
then all participants in such Offering Period shall be automatically withdrawn
from such Offering Period immediately after the exercise of their option on such
Exercise Date and automatically re-enrolled in the immediately following
Offering Period as of the first day thereof.
-10-
EXHIBIT A
ADVENT SOFTWARE, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. hereby elects to participate in the Advent Software, Inc. 1995 Employee
Stock Purchase Plan (the "Employee Stock Purchase Plan") and subscribes
to pur chase shares of the Company's Common Stock in accordance with
this Subscription Agreement and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (1-10%) during the Offering
Period in accordance with the Employee Stock Purchase Plan. (Please
note that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise
my option.
4. I have received a copy of the complete " Advent Software, Inc. 1995
Employee Stock Purchase Plan." I understand that my participation in
the Employee Stock Purchase Plan is in all respects subject to the
terms of the Plan. I understand that my ability to exercise the option
under this Subscription Agreement is subject to obtaining shareholder
approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should
be issued in the name(s) of (Employee or Employee and spouse only):
----------------------------------------------------------
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares) or one year after
the Exercise Date, I will be treated for federal income tax purposes as
having received ordinary income at the time of such disposition in an
amount equal to the excess of the fair market value of the shares at
the time such shares were purchased over the
-1-
price which I paid for the shares. I HEREBY AGREE TO NOTIFY THE COMPANY
IN WRITING WITHIN 30 DAYS AFTER THE DATE OF ANY DISPOSITION OF MY
SHARES AND I WILL MAKE ADEQUATE PROVISION FOR FEDERAL, STATE OR OTHER
TAX WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON THE DISPOSITION
OF THE COMMON STOCK. The Company may, but will not be obligated to,
withhold from my compensation the amount necessary to meet any
applicable withholding obligation including any withholding necessary
to make available to the Company any tax deductions or benefits
attributable to sale or early disposition of Common Stock by me. If I
dispose of such shares at any time after the expiration of the 2-year
and 1- year holding periods, I understand that I will be treated for
federal income tax purposes as having received income only at the time
of such disposition, and that such income will be taxed as ordinary
income only to the extent of an amount equal to the lesser of (1) the
excess of the fair market value of the shares at the time of such
disposition over the purchase price which I paid for the shares, or (2)
15% of the fair market value of the shares on the first day of the
Offering Period. The remainder of the gain, if any, recognized on such
disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent
upon my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
NAME: (Please print)______________________________________________
(First) (Middle) (Last)
- - ----------------------------------------------------------------------------
Relationship
- - ---------------------------------------------
(Address)
-2-
Employee's Social
Security Number: ____________________________________
Employee's Address: ____________________________________
____________________________________
____________________________________
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:_________________________ ________________________________________
Signature of Employee
---------------------------------------
Spouse's Signature
(If beneficiary other than spouse)
-3-
EXHIBIT B
ADVENT SOFTWARE, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Advent
Software, Inc. 1995 Employee Stock Purchase Plan which began on ____________,
19____ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The
undersigned understands and agrees that his or her option for such Offering
Period will be automatically termi nated. The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.
Name and Address of Participant:
--------------------------------
--------------------------------
--------------------------------
Signature:
--------------------------------
Date:__________________________
-4-
ADVENT SOFTWARE, INC.
PROXY FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of ADVENT SOFTWARE, INC., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated March 30, 1998, and hereby appoints
Stephanie G. DiMarco and Irv H. Lichtenwald, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 1998 Annual Meeting
of Stockholders of ADVENT SOFTWARE, INC. to be held on Thursday, April 30, 1998,
at 9:00 a.m., local time, at the Sheraton Palace Hotel located at Two New
Montgomery Street, San Francisco, California and at any adjournment or
adjournments thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote, if then and there personally present, on
the matters set forth on the reverse side.
A majority of such attorneys or substitutes as shall be present and shall
act at said meeting or any adjournment or adjournments thereof (or if only one
shall represent and act, then that one) shall have and may exercise all of the
powers of said attorneys-in-fact hereunder.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
-----------
SEE REVERSE
SIDE
-----------
[X] Please mark
votes as in
this example
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE AMENDMENT TO THE 1992 STOCK
OPTION PLAN, FOR THE AMENDMENT TO THE 1995 EMPLOYEE STOCK PURCHASE PLAN,FOR THE
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND, L.L.P. AS INDEPENDENT
ACCOUNTANTS OF THE COMPANY, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
1. Election of Directors
NOMINEES: Stephanie G. DiMarco; Frank H. Robinson;
Wendell G. Van Auken; William F. Zuendt; Monte Zweben
FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[_] [_]
[_] _____________________________________________________________________
For all nominees except as noted above.
[_] MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
FOR AGAINST ABSTAIN
2. Proposal to approve an amendment to the [_] [_] [_]
Company's 1992 Stock Option Plan to increase
the number of shares reserved for issuance
thereunder by 500,000 shares.
FOR AGAINST ABSTAIN
3. Proposal to approve an amendment to the [_] [_] [_]
Company's 1995 Employee Stock Purchase Plan
to increase the number of shares reserved
for issuance thereunder by 200,000 shares.
FOR AGAINST ABSTAIN
4. Proposal to ratify the appointment of [_] [_] [_]
Coopers & Lybrand L.L.P., as the independent
accountants of the Company for fiscal 1998.
In their discretion the proxies are authorized to vote upon such other
matter or matters which may properly come before the meeting or any
adjournment or adjournments thereof.
(This Proxy should be marked, dated and signed by the stockholder(s) exactly as
his or her name appears hereon, and returned promptly in this enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.)
Signature:_________________ Date:______ Signature:_________________ Date:______