UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 20, 2005
TECHEDGE, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 000-50005 04-3703334
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
33 Wood Avenue South, 7F
Iselin, New Jersey 07310
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (732) 632-9896
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
The stockholders of Techedge, Inc. ("Techedge" or the "Company") ratified
its board of directors' adoption of Techedge's 2005 Equity Compensation Plan at
the annual stockholders' meeting on May 20, 2005.
Description of the 2005 Equity Compensation Plan
The following description of the principal terms of the 2005 Plan is a summary
and is qualified in its entirety by the full text of the 2005 Plan.
Administration. The 2005 Plan will be administered by a duly authorized
committee appointed by the Board of Directors and charged with administration of
the 2005 Plan. The Committee may grant options to purchase shares of the
Company's common stock, stock purchase rights and restricted or unrestricted
stock awards ("awards") of shares of common stock to eligible employees,
directors and consultants, determine the terms and conditions of each option,
stock purchase right or award and adopt, amend and rescind rules and regulations
for the administration of the 2005 Plan. No options, stock purchase rights or
awards may be made under the 2005 Plan after April 14, 2015, but the 2005 Plan
shall continue thereafter while previously granted options, stock purchase
rights or awards remain subject to the 2005 Plan.
Employees, Directors and Consultants Eligible to Receive Options or Awards
Under the 2005 Plan. Persons eligible to receive options, stock purchase rights
or awards under the 2005 Plan are those employees, directors and consultants of
Techedge and its subsidiaries who, in the opinion of the Committee, are in a
position to make a significant contribution to our success.
Shares Subject to the 2005 Plan. Subject to adjustments set forth in the
2005 Plan, the aggregate number of shares of common stock available for issuance
under the 2005 Plan will be 8,500,000, subject to customary adjustments for
stock splits, stock dividends or similar transactions. If any option or stock
purchase right granted under the 2005 Plan terminates without having been
exercised in full or if any award is forfeited, the number of shares of common
stock as to which such option, stock purchase right or award was forfeited shall
be available for future grants within certain limits under the 2005 Plan. No
director, employee or consultant may receive awards of or relating to more than
4,000,000 shares of Techedge's common stock in the aggregate in any year.
Terms and Conditions of Options. The Committee determines the exercise
price of options granted under the 2005 Plan. The exercise price of incentive
stock options, however, must be at least equal to the fair market value per
share of common stock (or 110% of fair market value in the case of incentive
options granted to a ten-percent stockholder) issuable upon exercise of the
option at the time the incentive option was granted. No option may be
exercisable for more than ten years (five years in the case of an incentive
option granted to a ten-percent stockholder) from the date of grant. Options
issued under the 2005 Plan will be exercisable at such time or times as the
Committee prescribes at the time of grant. Unless otherwise determined by the
Committee, options will generally be exercisable as to 12.5% of the shares of
common stock underlying such option 6th months after the date of grant and as to
1/42 of the remaining shares subject to the option each month thereafter.
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Generally, the option price may be paid (a) in cash or by certified check,
bank draft or money order, (b) through delivery of shares of common stock having
a fair market value equal to the purchase price, or (c) a combination of these
methods. The Committee is also authorized to establish a cashless exercise
program.
No option may be transferred other than by will or by the laws of descent
and distribution, and during a recipient's lifetime an option may be exercised
only by the recipient. Unless otherwise determined by the Committee, options
that are exercisable at the time of a recipient's termination of service with
Techedge will continue to be exercisable for three months (twelve months if the
optionee terminates service due to death or disability).
Terms and Conditions of Stock Purchase Rights. Stock purchase rights may
be issued either alone, or in tandem with, options or other awards under the
2005 Plan. A stock purchase right allows a recipient to purchase a share of
common stock at a price determined by the Committee. The Company will have the
right to repurchase the shares of common stock that are subject to the award
upon the recipient's termination of service. Unless otherwise determined by the
Committee, the Company's right of repurchase will lapse as to 12.5% of the
purchased shares 6 months after the date of grant and will lapse as to 1/42 of
the remaining purchased shares each month thereafter.
Terms and Conditions of Restricted Stock Awards. The Committee may also
grant a restricted stock award to any eligible employee, director or consultant.
Under a restricted stock award, shares of common stock that are the subject of
the award are generally subject to forfeiture to the extent that the recipient
terminates service with the Company prior to the award having vested. Unless
otherwise determined by the Committee, 12.5% of the shares subject to a
restricted stock award will vest 6 months after the date of grant and as to 1/42
of the remaining shares each month thereafter. Unless otherwise determined by
the Committee, holders of restricted shares will have the right to vote such
shares and to receive any cash dividends with respect thereto during the
restriction period. Any stock dividends will be subject to the same restrictions
as the underlying shares of restricted stock.
Terms and Conditions of Unrestricted Stock Awards. The Committee may grant
unrestricted stock awards to any eligible employee, director or consultant.
Unrestricted shares do not require any payment by the recipient and are not
subject to forfeiture.
In the event of a consolidation or merger in which Techedge is not the
surviving corporation or which results in the acquisition of substantially all
Techedge's outstanding stock by a single person or entity or by a group of
persons and/or entities acting in concert, or in the event of the sale or
transfer of substantially all Techedge's assets, the 2005 Plan provides that all
outstanding options and stock purchase rights will become exercisable, unless
the successor entity assumes such options and stock purchase rights, and that
the Company's right of repurchase with respect to shares covered by all
outstanding stock purchase rights and all restrictions with respect to
restricted stock awards will lapse.
The Board may at any time amend the 2005 Plan for the purpose of
satisfying the requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), or other applicable law or regulation or for any other legal
purpose, provided that, without the consent of our stockholders, the Board may
not (a) increase the number of shares of common stock available under the 2005
Plan, (b) change the group of individuals eligible to receive options and/or
purchase grants, or (c) extend the term of the 2005 Plan.
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Item 1.02 Termination of a Material Definitive Agreement.
As a result of Techedge's stockholders ratification of the 2005 Equity
Compensation Plan at the annual stockholders' meeting on May 20, 2005, Techedge
has terminated the China Quantum Communications, Ltd. ("CQCL") 2001 Stock Plan
with respect to future option grants.
Description of the CQCL 2001 Stock Plan
Adoption and Shares Reserved. Our board of directors approved the
assumption of the CQCL 2001 Stock Plan in August 2004 in connection with our
acquisition of CQCL. The 2001 Stock Plan provided for the grant of incentive
stock options to our employees, and for the grant of nonstatutory stock options
to our employees, directors and consultants.
The 2001 Stock Plan provided that the maximum aggregate number of shares
that may be subject to option and sold pursuant to the plan is 11,557,488
shares. As a result of the stockholders ratification of the adoption of the 2005
Equity Compensation Plan, the 2001 Stock Plan has been terminated with respect
to future option grants. We are required to reserve and keep available such
number of shares to satisfy the outstanding but unexercised options that have
been granted under the 2001 Stock Plan.
Administration. Our board of directors or a committee of our board
administers the 2001 plan. The administrator has the power to determine the fair
market value of the shares, select the employees, directors or consultants to
whom options are to be granted, the terms of the options granted, including the
exercise price, the number of shares covered by each option, form of
consideration, terms of exercisability of the options and vesting acceleration
or waiver of forfeiture restrictions; however, no additional options will be
granted under the 2001 plan.
Exercise Price. The administrator determines the exercise price of options
granted under the 2001 plan, subject to the following requirements: (i) the
exercise price of incentive stock options shall be no less than 100% of the fair
market value per share, and for incentive stock options granted to employees who
own greater than 10% of the voting power of all classes of our stock, the
exercise price shall be no less than 110% of the fair market value per share;
and (ii) the exercise price of nonstatutory stock options shall be no less than
85% of the fair market value per share, and for nonstatutory stock options
granted to employees, directors or consultants who own greater than 10% of the
voting power of all classes of stock, the exercise price shall be no less than
110% of the fair market value per share. The term of an option may not exceed 10
years from the date of grant, except in the case of incentive stock options
granted to employees owning more than 10% of the voting power of all of our
classes of stock, in which case the term shall be no more than 5 years.
Termination of Employment. After termination of one of our employees,
directors or consultants, that person may exercise an option for the period of
time stated in the option agreement. In the case of termination of one of our
employees, directors or consultants due to death or disability, the option will
remain exercisable for 6 months following the date of termination. In all other
cases, in the absence of a period of time in the option agreement, to the extent
the option is vested the option will remain exercisable for 30 days following
the date of termination. To the extent that an option is not exercised within
the applicable time period, the unexercised option is reverted to the plan. If
on the date of termination, the option is not fully vested, the unvested portion
of the option is reverted to the plan.
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Non-Transferability of Options. Our 2001 plan generally does not allow for
the transfer of options, except by will or the laws of descent, and only the
holder of an option may exercise the option during the holder's lifetime.
Adjustments upon Merger or Asset Sale. Our 2001 plan provides that the
Administrator may allow holders to exercise options in the event of a proposed
dissolution or liquidation of the company. The plan also provides that if we
merge with another corporation, sell all or substantially all of our assets, the
successor corporation will assume or provide a substitute for each option. If
the outstanding options are not assumed or substituted, the options shall
terminate as of the date of the merger or asset sale.
Amendment and Termination. Our 2001 plan has been terminated with respect
to future option grants. Our board of directors has the authority to amend,
suspend or terminate the plan provided it does not adversely affect any option
previously granted under it.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TECHEDGE, INC.
By: /s/ Peter Wang
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Name: Peter Wang
Title: Chief Executive Officer and
Chairman of the Board
Dated: May 26, 2005
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