-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UM/YspTrEAqPN0VmQVyFKw5y77dARxREFUdcYH514w20RTfWQIUZIz0Y9ip5Kby5 /1U2A2qVPiJW1j8fk0Merg== 0000950135-96-004006.txt : 19960918 0000950135-96-004006.hdr.sgml : 19960918 ACCESSION NUMBER: 0000950135-96-004006 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960917 EFFECTIVENESS DATE: 19960917 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BACHMAN INFORMATION SYSTEMS INC /MA/ CENTRAL INDEX KEY: 0000880229 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 042784044 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-12139 FILM NUMBER: 96631114 BUSINESS ADDRESS: STREET 1: 8 NEW ENGLAND EXECUTIVE PARK CITY: BURLINGTON STATE: MA ZIP: 01803 BUSINESS PHONE: 6172739003 S-8 1 CAYENNE SOFTWARE, INC. 1 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Cayenne Software, Inc. (Exact name of issuer as specified in its charter) Massachusetts 04-2784044 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8 New England Executive Park, Burlington, MA 01803 (Address of principal executive offices) (Zip Code) Cadre Technologies, Inc. 1988 Incentive and Non-Statutory Stock Option Plan 1989 Non-Statutory Stock Option Plan (Full title of the Plan) Peter J. Boni, President Cayenne Software, Inc. 8 New England Executive Park Burlington, MA 01803 (617) 273-9003 (Name and address, including zip code, and telephone number, including area code, of agent for service) WITH A COPY TO: John D. Patterson, Jr., Esquire Foley, Hoag & Eliot One Post Office Square Boston, Massachusetts 02109 (617) 832-1000 CALCULATION OF REGISTRATION FEE
Proposed Title of Proposed maximum securities Amount maximum aggregate Amount of to be to be offering price offering registration registered registered per share price fee Common Stock 1,508,488 $4.25 $6,411,074 $2,210.72 (par value $.01) shares Common Stock 194,853 $4.25 $ 828,125 $ 285.56 (par value $.01) shares
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(h), based on the reported high and low prices on the NASDAQ National Market System on September 11, 1996. 2 PROSPECTUS CAYENNE SOFTWARE, INC. 8 New England Executive Park Burlington, MA 01803 (617) 273-9003 THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 SEPTEMBER 16, 1996 INTRODUCTION ------------ This Prospectus relates to 1,703,341 shares of Common Stock, par value $0.01 per share (the "Common Stock"), offered to key employees, officers and directors of, and individuals providing services to, Cayenne Software, Inc. (the "Company") under two employee benefit plans of the Company's wholly-owned subsidiary Cadre Technologies Inc. ("Cadre") providing for the grant of stock options, designated the 1988 Incentive and Non-Statutory Stock Option Plan (the "1988 Plan") and the 1989 Non-Statutory Stock Option Plan (the "1989 Plan"). THE PLAN -------- Purpose - ------- The purpose of both the 1988 Plan and the 1989 Plan is to provide additional incentive to executives and other key employees of the Company and its subsidiaries. Creation, Duration, Modification and Termination - ------------------------------------------------ The 1988 Plan was adopted by the Board of Directors of Cadre (the "Cadre Board") and approved by Cadre's stockholders in 1988. The 1989 Plan was adopted by the Cadre Board and approved by Cadre's stockholders in 1989. Both Plans initially provided for issuance of options to purchase shares of Cadre's Common Stock. In connection with the merger of Cadre with a wholly-owned subsidiary of the Company effective July 18, 1996, the options then outstanding under both Plans were modified to be exercisable to purchase shares of the Company's Common Stock. The Company does not intend to grant further options under either Plan; this Prospectus relates to shares of the Company's Common Stock that may be issued upon exercise of options outstanding at the date of this Prospectus. A total of 593,483 shares of the Company's Common Stock are issuable on exercise of option outstanding under the 1988 Plan and 113,330 shares under the 1989 Plan. The 1988 Plan authorizes (i) the grant of options to purchase Common Stock intended to qualify as incentive stock options ("Incentive Options"), as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) the grant of options that do not so qualify ("Nonqualified Options"). The 1989 Plan authorizes the grant of Nonqualified options. Each Plan provides that the Board may amend the Plan, except that the class of employees eligible to receive options, the maximum term of options and the aggregate number of shares issuable under the 1988 Plan may not be changed or 3 increased (except in the event of certain changes in the Company's capital structure) without the consent of the stockholders. Options may not be granted under either Plan more than ten years after the effective date of the Plan. Each Plan will terminate when the total amount of the Common Stock with respect to which options may be granted under the Plan will have been issued upon the exercise of options, unless sooner terminated by the Board. Administration - -------------- Each Plan is administered by the Cadre Board. Currently, the sole Director of Cadre is Peter J. Boni, who is President and Chief Executive Officer of the Company and a member of the Company's Board of Directors. Each Plan authorizes the Cadre Board to interpret the Plan and the options granted thereunder, to establish, amend and revoke rules and regulations for the administration of the Plan, to make changes to any outstanding option granted thereunder, and generally, to exercise such powers and to perform such acts as are deemed necessary or expedient to promote the best interests of the Company with respect to the Plan. Under each Plan, the Cadre Board selects the individual to whom options are granted and determines the option exercise price and other terms of each award (including whether repurchase rights of the Company or certain resale restrictions are to be imposed on shares subject to the option), subject to the provisions of the Plan. Information about each Plan and its administration may be obtained by calling or writing to the Company's Chief Financial Officer, Cayenne Software, Inc., 8 New England Executive Park, Burlington, MA 01803, (617) 273-9003. Participation - ------------- Incentive Options under the 1988 Plan may be granted only to officers and other employees of the Company and its subsidiaries. Nonqualified Options under either Plan may be granted to officers or other employees of the Company and its subsidiaries and to members of the Board and consultants or other persons who render services to the Company (regardless of whether they are also employees). No Incentive Option may extend for more than ten years from the date of grant (five years in the case of persons holding 10% or more of the total combined voting power of all classes of stock of the Company or any subsidiary). The shares of stock issuable upon exercise of an option by any officer, director or beneficial owner of more than 10% of the Common Stock of the Company may not be sold or transferred for a period of six months following the grant of such option. The Committee may accelerate the time for exercise of all unexercised and unexpired options in connection with a merger, consolidation, liquidation or sale of substantially all of the assets of the Company. The exercise price of Incentive Options granted under the 1988 Plan may not be less than 100% of the fair market value of the Common Stock on the date of grant (or 110% of the fair market value in the case of persons holding 10% or more of the total combined voting power of all classes of stock of the Company or any subsidiary). The aggregate fair market value (determined at the time of grant) of shares of Common Stock issuable pursuant to Incentive Options which first become exercisable by an employee in any calendar year may not exceed $100,000 (or such greater amount as may from time to time be permitted with respect to Incentive Options by the Code or any other applicable law or regulation). The exercise price of Nonqualified Options granted under the 1988 Plan may not be less than 85% of the Fair Market Value of the Common Stock at the date of grant. The exercise price of options granted under the 1989 Plan is not subject to any general limitation. Shares of Common Stock issued under either Plan may be either treasury shares or authorized but unissued shares. 4 Exercise of Options; Payment of Exercise Price - ---------------------------------------------- Each option granted under either Plan may be exercised, so long as it is valid and outstanding, from time to time in part or as a whole, subject to any limitations with respect to the number of shares for which the option may be exercised at a particular time and to such other conditions as the Committee in its discretion may specify upon granting the option. Options may be exercised by the delivery of written notice to the Company setting forth the number of shares of Common Stock the option holder then desires to purchase and specifying the address to which the certificates for such shares are to be mailed, together with (i) cash, certified check, bank draft or postal or express money order equal to the option price of such shares; (ii) with the consent of the Committee, other shares of Common Stock of the Company having a fair market value equal to the option price of such shares; (iii) with the consent of the Committee, such other consideration which is acceptable to the Committee and which has a fair market value equal to the option price of such shares; or (iv) with the consent of the Committee, a combination of (i), (ii) and/or (iii). Resale Restrictions - ------------------- This Prospectus does not cover resales by affiliates of the Company, as defined in the Act, of shares of the Common Stock purchased under either Plan. Resales by affiliates of Common Stock purchased under either Plan will be subject to the restrictions thereon imposed by the Act, and offers and sales by affiliates may be made only pursuant to an effective registration statement under the Act or an exemption from the registration requirements of the Act. Officers, directors and beneficial owners of greater than 10% of the outstanding shares of Common Stock who have been granted options under either Plan may be subject to Section 16 of the Securities Exchange Act of 1934 and to the rules promulgated thereunder. Such persons should consult their tax, accounting and legal advisors with respect to options granted to them under either Plan and the acquisition and disposition of shares of Common Stock obtained upon exercise of such options. United States Income Tax Information - ------------------------------------ The following discussion is intended only as a brief overview of certain of the current federal income tax laws applicable to the Plans. Option holders should consult their tax advisors concerning their own federal income tax situations, as well as concerning state tax aspects of the acquisition and exercise of options granted to them under either Plan. No state tax matters are addressed in the following discussion. The grantee of a Nonqualified Option recognizes no income for federal income tax purposes on the grant thereof. On the exercise of a Nonqualified Option, the difference between the fair market value of the underlying shares of Common Stock and the option exercise price is treated as compensation to the holder of the option taxable as ordinary income in the year of exercise, and such fair market value becomes the basis for the underlying shares which will be used in computing any capital gain or loss upon disposition of such shares. The Company may deduct for the year of exercise an amount equal to the amount recognized by the option holder as ordinary income upon exercise of a Nonqualified Option. The grantee of an Incentive Option normally will recognize no income for federal income tax purposes on the grant thereof. Except as provided below with respect to the alternative minimum tax, there is no tax upon exercise of an Incentive Option. If no disposition of shares acquired upon exercise of the Incentive Option is made by the option holder within two years from the date of the grant of the Incentive Option or within one year after exercise of the option, any gain realized by the option holder on the subsequent sale of such shares is treated as a long-term capital gain for federal income tax purposes. If the shares are sold prior to the expiration of such periods, the difference between the lesser of the value of the shares at the date of 5 exercise or at the date of sale and the exercise price of the option is treated as compensation to the employee taxable as ordinary income and the excess gain, if any, is treated as capital gain (which will be long-term capital gain if the shares are held for more than one year). The excess of the fair market value of the underlying shares over the option price at the time of exercise of an Incentive Option will constitute an item of tax preference for purposes of the alternative minimum tax. Taxpayers who incur the alternative minimum tax are allowed a credit which may be carried forward indefinitely to be used as a credit against the regular tax liability in a later year; however, the minimum tax credit can not reduce the regular tax below the alternative minimum tax for that carryover year. In connection with the sale of the shares covered by Incentive Options, under the 1988 Plan, the Company is allowed a deduction for tax purposes only to the extent, and at the time, the option holder receives ordinary income (for example, by reason of the sale of shares by the holder of an Incentive Option within two years of the date of the granting of the option or one year after the exercise of the option). Neither Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, nor is either plan qualified under Section 401(a) of the Code. Assignment of Interests Under The Plan; Withdrawal From the Plan - ---------------------------------------------------------------- Options under each Plan are nontransferable except by will or by the laws of descent and distribution, and are exercisable, during the lifetime of the option holder, only by the option holder. Options, other than Nonqualified Options granted to persons who are not employees of the Company, terminate on the earlier of: (i) the date of expiration thereof, (ii) the date of termination of the option holder's employment with or performance of services to the Company by the Company for cause (as determined by the Company), or voluntarily by the option holder, (iii) ninety days after termination of the option holder's employment with or services to the Company by the Company without cause, other than in the case of death or permanent and total disability, or (iv) one year after the date of death or permanent and total disability of the option holder while in the employ of the Company. Nonqualified Options granted to persons who are not employees of the Company need not, unless the Committee determines otherwise, be subject to the provisions set forth in clauses (ii) through (iv) above. Charges and Deductions, and Liens Therefor - ------------------------------------------ Neither Plan provides that a person has or may create a lien on any funds, securities, or other property held under the Plan. Availability of Documents Incorporated by Reference - --------------------------------------------------- A copy of any document incorporated by reference in Item 3 of Part II of the Registration Statement of which this Prospectus is a part (not including exhibits), such documents incorporated by reference constituting a prospectus under Section 10(a) of the Act, and any other documents required to be delivered to employees pursuant to Rule 428(b) promulgated under the Act will be provided to any option holder by the Company upon written or oral request to the Company's Chief Financial Officer, Cayenne Software, Inc., 8 New England Executive Park, Burlington, MA 01803, (617) 273-9003. 6 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed with the Securities and Exchange Commission (the "Commission") are incorporated in this Registration Statement by reference: (a) The Company's Annual Report (Form 10K) for the year ended June 30, 1995, File No. 0-19682. (b) The Company's Quarterly Reports on Form 10-Q for the quarters ended September 30, 1995, December 31, 1995, and March 31, 1996, File No. 0-19682. (c) The description of Common Stock included in the Company's Registration Statement on Form S-1, File No. 33-43401. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be part hereof from the date of filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. The validity of the securities registered hereby is being passed upon for the Company by Foley, Hoag & Eliot, Boston, Massachusetts. II-1 7 ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Paragraph D of Article 6 of the Company's Articles provides that, to the maximum extent permitted by Massachusetts law (as the same exists or is subsequently amended), no director shall be personally liable to the Company or any of its stockholders for monetary damages arising out of the director's breach of fiduciary duty as a director of the Company. Section 13(b)(l1/2) of the Massachusetts BCL provides that a Massachusetts corporation's articles of organization may state a provision eliminating or limiting the personal liability of a director to a corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision may not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under specified sections of the Massachusetts BCL establishing the liability of directors for certain unauthorized distributions and loans to insiders or (iv) for any transaction from which the director derived an improper personal benefit. Section 6 of Article VII of the the Company's By-Laws provides that the Company shall, to the extent legally permissible, indemnify each of its directors and officers (including persons who serve at its request as directors, officers or trustees of any organization in which the Company has an interest as a stockholder, creditor or otherwise), against all liabilities and expenses reasonably incurred by such persons in connection with the defense or disposition of any action, suit or proceeding in which they may be involved or with which they may be threatened by reason of being or having been such a director or officer, except with respect to any matter as to which they shall have been adjudicated not to have acted in good faith in the reasonable belief that their action was in the best interests of the Company. Section 67 of the Massachusetts BCL authorizes a Massachusetts corporation to indemnify its directors, officers, employees and other agents unless such person shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that such action was in the best interests of the corporation. The effect of these provisions would be to permit indemnification by the Company for, among other liabilities, (a) liabilities arising out of the Securities Act in connection with this Registration Statement (see Item 9 below). Section 67 of the Massachusetts BCL also affords a Massachusetts corporation the power to obtain insurance on behalf of its directors, officers, employees and agents against liabilities incurred by them in those capacities or out of their status as such, whether or not the corporation would have the power to indemnify them against those liabilities. the Company has procured a directors' and officers' liability and company reimbursement liability insurance policy that (a) insures directors and officers of the Company against losses (in excess of a deductible amount) arising from certain claims made against them by reason of certain acts done or attempted by such directors or officers and (b) insures the Company against losses (in excess of a deductible amount) arising from any such claims, but only if the Company is required or permitted to indemnify such directors or officers for such losses under statutory or common law or under provisions of the Company's articles of organization or by-laws. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. 4.1 Restated Articles of Organization of the Company, incorporated by reference to the Exhibits to the Company's Registration Statement on Form S-1, File No. 33-45841. II-2 8 4.2 Amended and Restated By-Laws of the Company, incorporated by reference to the Exhibits to the Company's Registration Statement on Form S-1, File No. 43401. 4.3 1988 Incentive and Non-Statutory Stock Option Plan. 4.4 1989 Non-Statutory Stock Option Plan. 5.1 Opinion of Counsel. 23.1 Consent of Independent Accountants. 23.2 Consent of Counsel (included in Exhibit 5.1). 24.1 Power of Attorney (contained on the signature page). ITEM 9. UNDERTAKINGS. 1. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 2. The undersigned Registrant hereby undertakes: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs 2 (a)(1)(i) and 2 (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference herein. (b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-3 9 3. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-4 10 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Burlington, Commonwealth of Massachusetts, on the 11th day of September 1996. CAYENNE SOFTWARE, INC. By: /S/ Peter J. Boni ----------------- Peter J. Boni President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Peter J. Boni and Eugene J. DiDonato, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing he may deem necessary or advisable to be done in connection with this Registration Statement, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, any lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE Title DATE --------- ----- ---- /S/ Peter J. Boni President, Chief September 11, 1996 - ----------------- Executive Officer and Peter J. Boni Director (Principal Executive Officer) /S/ Frederick H. Phillips Vice President--Finance September 11, 1996 - ------------------------- Adminstration, Treasurer Frederick H. Phillips and Chief Financial and Accounting Officer /S/ Charles W. Bachman Chairman of the Board of September 11, 1996 - ---------------------- Directors Charles W. Bachman
II-5 11 /S/ John J. Alexander Director September 11, 1996 - --------------------- John J. Alexander /S/ Director September __, 1996 - --------------------- R. John Fletcher /S/ William H.D. Goddard Director September 11, 1996 - ------------------------ William H.D. Goddard /S/ Allyn C. Woodward, JR. Director September 11, 1996 - -------------------------- Allyn C. Woodward, Jr.
II-6 12 EXHIBIT INDEX ------------- Exhibit No. Description Page - ------- ----------- ---- 4.1 Restated Articles of Organization of the Company (incorporated by reference) 4.2 Amended and Restated By-Laws of the Company (incorporated by reference) 4.3 1988 Incentive and Non-Statutory Stock Option Plan 4.4 1989 Non-Statutory Stock Option Plan 5.1 Opinion of Counsel 23.1 Consent of Independent Accountants 23.2 Consent of Counsel (included in Exhibit 5.1) 24.1 Power of Attorney (contained on the signature page) EX-4.3 2 1988 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN 1 EXHIBIT 4.3 EAST-WEST MERGERCO, INC. 1988 Incentive and Non-statutory Stock Option Plan -------------------------------------------------- BACKGROUND East-West Mergerco Inc., (the "Company") was incorporated in Delaware in 1988 in connection with the proposed merger of MicroCASE, Inc. and Cadre Technologies Inc. (collectively, the "Constituent Companies") and the Company pursuant to an Agreement and Plan of Merger by and among the Company and the Constituent Companies dated December 15, 1988. Options under this 1988 Incentive and Non-Statutory Stock Option Plan (the "Plan") will include options which are substituted for options granted under an cation plan of one of the Constituent Companies ("substituted options"), options granted under an option plan of one of Constituent Companies which are assumed by the Company ("assumed options") and options granted by the Company which are neither substituted or assumed options ("new options") . Substituted, assumed and new options will be referred to herein collectively as "options." SECTION 1. PURPOSE This Plan is intended as a performance incentive for officers and employees of the Company or its Subsidiaries (as hereinafter defined) and for certain other individuals providing services to or acting as directors of the Company or its Subsidiaries, to enable the persons to whom options are granted (an "Optionee" or "Optionees") to acquire or increase a proprietary interest in the success of the Company. The Company intends that this purpose will be effected by the granting of incentive stock options ("Incentive Options") as defined in Section 422A(b) of the internal Revenue Code of 1986 (the "Code") and other stock options ("Non-Statutory Options") under the Plan. The term "Subsidiaries" includes any corporations in which stock possessing 50% or more of the total combined voting power of all classes of stock is owned directly or indirectly by the Company. SECTION 2. OPTIONS TO BE GRANTED AND ADMINISTRATION 2.1 OPTIONS TO BE GRANTED. Options granted under the Plan (whether substituted, assumed or new options) may be either Incentive Options or Non-Statutory Options. 2.2. ADMINISTRATION BY THE BOARD. This Plan shall be administered by the Board of Directors of the Company (the "Board"). The Board shall have full and final authority to operate, manage and administer the Plan on behalf of the Company. This authority includes, but is not limited to: (i) the power to grant options 2 conditionally or unconditionally; (ii) the power to prescribe the form or forms of the instruments evidencing options granted under this Plan; (iii) the power to interpret the Plan; (iv) the power to provide regulations for the operation of the incentive features of the Plan, and otherwise to prescribe regulations for interpretation, management and administration of the Plan; (v) the power to delegate responsibility for Plan operation, management and administration on such terms, consistent with the Plan, as the Board may establish; (vi) the power to delegate to other persons the responsibility for performing ministerial acts in furtherance of the Plan's purpose; and (vii) the power to engage the services of persons or organizations in furtherance of the Plan's purpose, including but not limited to, banks, insurance companies, brokerage firms and consultants. In addition, as to each option, the Board shall have full and final authority in its discretion: (i) to determine the number of shares subject to each option; (ii) to determine the time or times at which options will be granted; (iii) to determine the option price for the shares subject to each option, which price shall be subject to the applicable requirements, if any, of Section 5.1(c) hereof; and (iv) to determine the time or times when each option shall become exercisable and the duration of the exercise period, which shall not exceed the limitations specified in Section 5.1(a). 2.3. APPOINTMENT AND PROCEEDINGS OF COMMITTEE. The Board may appoint a Stock Option Committee (the "Committee") which shall consist of at least three members of the Board, The Board may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed, and may fill vacancies, however caused, in the Committee. The Committee shall select one of its members as its chairman and shall hold its meetings at such times and places as it shall deem advisable. A majority of its members shall constitute a quorum, and all actions of the Committee shall be taken by a majority of its members. Any action may be taken by a written instrument signed by a majority of the members, and any action so taken shall be as fully effective as if it had been taken by a vote of a majority of the members at a meeting duly called and held. 2.4. POWERS OF COMMITTEE. Subject to the provisions of this Plan and the approval of the Board, the Committee shall have the power to make recommendations to the Board as to whom options should be granted, the number of shares to be covered by each option, the time or times of option grants, and the terms and conditions of each option; provided, however, that the terms and conditions of each substituted option shall not differ materially from the option previously granted by a Constituent Company to the holder thereof. In addition, the Committee shall have authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, and to exercise the administrative and ministerial powers of the Board with regard to aspects of the Plan other than the granting of options. The interpretation and construction by the Committee of any provisions of the Plan or of any option granted hereunder and the exercise of any power delegated to it hereunder shall be final, unless otherwise determined by the Board. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder. SECTION 3. STOCK 3.1 SHARES SUBJECT TO PLAN. The stock subject to the options granted under the plan shall be shares of the Company's authorized but unissued common stock, par value $.01 per share ("Common Stock"). The total number of shares that may be issued pursuant to options granted under the Plan shall not exceed an aggregate of 4,885,000 shares of Common Stock. Such number of shares shall be subject to adjustment as provided in Section 7 hereof. 3 3.2 LAPSED OR UNEXERCISED OPTIONS. Whenever any outstanding option under the Plan is cancelled or is otherwise terminated (other than by exercise), the shares of Common Stock allocable to the unexercised portion of such option shall be restored to the Plan and shall again become available for the grant of other options under the Plan. SECTION 4. ELIGIBILITY 4.1 ELIGIBLE OPTIONEES. Incentive options may be granted only to officers and other employees of the Company or its Subsidiaries, including members of the Board who are also employees of the Company or a Subsidiary. Non-Statutory Options may be granted to officers or other employees of the Company or its Subsidiaries, to members of the Board or the board of directors of any Subsidiary whether or not employees of the Company or such Subsidiary, and to certain other individuals providing services to, the Company or its Subsidiaries. 4.2 LIMITATIONS ON 10% STOCKHOLDERS. No Incentive Option shall be granted to an individual who, at the time the incentive Option is granted, owns (including ownership attributed pursuant to Section 425(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any parent or Subsidiary of the Company (a "greater-than-10% stockholder"), unless such Incentive Option provides that (i) the purchase price per share shall not be less than 110% of the fair market value of the Common Stock at the time such Incentive Option is granted, and (ii) that such Incentive Option shall not be exercisable to any extent after the expiration of five years from the date it is granted. 4.3 LIMITATION ON EXERCISABLE OPTIONS. The aggregate fair market value (determined at the time the Incentive Option is granted) of the Common Stock with respect to which Incentive Options are exercisable for the first time by any person during any calendar year under the Plan and under any other option plan of the Company (or a parent or subsidiary as defined in Section 425 of the Code) shall not exceed $100,000; provided, however, that such limitation shall not be applicable to assumed or substituted options if on the date of grant of an assumed option, or on the date of grant of the option which has been replaced by the substituted option, such option was an incentive option under the provisions of the Internal Revenue Code of 1954 in effect on such date of grant. Any option granted in excess of the foregoing limitation shall be specifically designated as being a Non-Statutory Option. SECTION 5. TERMS OF THE OPTION AGREEMENTS 5.1 MANDATORY TERMS. Each option agreement shall contain such provisions as the Board or the Committee shall from time to time deem appropriate. Option agreements applicable to substituted options shall contain provisions not materially different from the options which the substituted options replace. Option agreements need not be identical, but each option agreement by appropriate language shall include the substance of all of the following provisions: (a) EXPIRATION. Notwithstanding any other provision of the Plan or any option agreement, each option shall expire the option agreement, which date shall not be later than the tenth anniversary of the date on which the option was granted (fifth anniversary in the case of a greater-than-10% stockholder). (b) EXERCISE. Each option shall be exercisable in full or in installments (which need not be equal) and at such times as designated by the Board or the Committee. To the extent not exercised, installments shall accumulate and be exercisable, in whole or in part, at any time after becoming 4 exercisable, but not later than the date the option expires. (c) PURCHASE PRICE. The purchase price per share of the Common Stock under each Incentive Option shall be not less than the fair market value of the Common Stock on the date the option is granted (110% of the fair market value in the case of a greater-than-10% stockholder); provided, however, that with respect to substituted options, the purchase price per share shall be not less than the fair market value of the Common Stock of the Constituent Company on the date the option which the substituted option replaces was granted (110% of the fair market value in the case of a greater- than-10% stockholder). For the purpose of the Plan the fair market value of the Common Stock shall be determined by the Board. The price at which shares may be purchased pursuant to NonStatutory Options shall not be less than 85% of the fair market value of the shares of Common Stock on the date the option is granted. (d) TRANSFERABILITY OF OPTIONS. Options granted under this Plan and rights and privileges conferred hereby may not be transferred, assigned, pledged, or hypothecated in any manner (whether by operation of law or otherwise) other than by will or by applicable laws of descent and distribution, and shall not be subject to execution, attachment, or similar process upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any option under this Plan or any right or privilege conferred hereby contrary to the provisions of this Plan, or upon the sale of levy or any attachment or similar process upon the rights and privileges conferred hereby, such options shall thereupon terminate and become null and void. (e) TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP OR DEATH OF OPTIONEE. Except as may be otherwise expressly provided in the terms and conditions of the option granted to the Optionee, options granted hereunder shall terminate on the earlier to occur of: (i) the date of expiration thereof; or (ii) other than in the case of death of the Optionee or disability of the Optionee within the meaning of Section 22(e)(3) of the Code ("disability"), 90 days after termination of the employment between the Company and the Optionee in the case of an Incentive Option or 90 days after termination of the employment or other relationship between the Company and the Optionee, unless such termination provision is waived by resolution adopted by the Board within 30 days of the termination of such relationship, in the case of a Non-Statutory option. An employment relationship between the Company and the Optionee shall be deemed to exist during any period during which the Optionee is employed by the Company or by any Subsidiary. Whether authorized leave of absence or absence on military government service shall constitute termination of the employment relationship between the Company and the Optionee shall be determined by the Board or the Committee at the time thereof; provided, however, that with respect to incentive stock options, such determination shall be subject to any requirements contained in the Code including that employment shall not be deemed to continue beyond the first 90 days of such leave, unless the Optionee's reemployment rights are guaranteed by statute or by contract. In the event of the death of an Optionee while in an employment or other relationship with the Company and before the date of expiration of such option, such option shall terminate on the earlier of such date of expiration or 180 days following the date of such death. After the death of the Optionee, his executors, administrators or any person or persons to whom his option may be transferred by will or by laws of descent and distribution, shall have the right, at any time prior to 5 such time termination, to exercise the option to the extent the Optionee was entitled to exercise such option immediately prior to his death. If an optionee's employment or other relationship with the Company terminates because of a disability, the Optionee's option shall terminate on the earlier of the date of expiration thereof or 12-months following the termination of such relationship; and unless by its terms it sooner terminates and expires during such 12-month period, the Optionee may exercise that portion of his or her option which is exercisable at the time of termination of such relationship. (f) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose to be the owner of any shares of Common Stock subject to any option unless and until (i) the option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the shares of the Optionee, and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Common Stock. 5.2 CERTAIN OPTIONAL TERMS. The Board may in its discretion provide, upon the grant of any option hereunder, that the Company shall have an option to repurchase all or any number of shares purchased upon exercise of such option. The repurchase price per share payable by the Company shall be such amount or be determined by such formula as is fixed by the Board at the time the option for the shares subject to repurchase was granted. The Board may also provide that the Company shall have a right of first refusal with respect to the transfer or proposed transfer of any shares purchased upon exercise of an option granted hereunder. In the event the Board shall grant options subject to the Company's repurchase rights or rights of first refusal, the certificate or certificates representing the shares purchased pursuant to such option shall carry a legend satisfactory to counsel for the Company referring to the Company's repurchase option. SECTION 6. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE 6.1 NOTICE OF EXERCISE. Any option granted under the Plan may be exercised by the Optionee by delivering to the Company on any business day a written notice specifying the number of shares of Common Stock the Optionee then desires to purchase and specifying the address to which the certificates for such shares are to be mailed (the "Notice"), accompanied by payment for such shares. 6.2 MEANS OF PAYMENT AND DELIVERY. Payment for the shares of Common Stock purchased pursuant to the exercise of an option shall be made either (i) in cash equal to the option price for the number of shares specified in the Notice (the "Total Option Price"); or (ii) if authorized by, or with the consent of, the Committee of the Board, in shares of Common Stock of the Company having a fair market value equal to or less than the Total Option Price, or by a combination of stock and cash; PROVIDED, HOWEVER, that neither the Committee nor the Board may approve the use of shares of Common Stock to pay all or any portion of the Total Option Price unless such shares of Common Stock have been held by the Optionee for such period of time that such use will not result in "compensation expense" to the Company, as determined under generally accepted accounting principles; or (iii) with respect to substituted or assumed options, and then only if authorized by the applicable option agreement and only to the extent permitted by law, by issuance by the option holder of a full recourse promissory note having the repayment terms specified in the applicable option agreement or approved by the Board or by the Committee; or (iv) if authorized by an option agreement issued in replacement of option agreements issued prior to 1989, in shares of Common Stock of the Company having a fair market value equal to or less than the Total Option Price, if any, 6 of the Total Option Price over the fair market value of such shares of Common Stock. SECTION 7. ADJUSTMENT UPON CHANCES IN CAPITALIZATION 7.1 NO EFFECT OF OPTIONS UPON CERTAIN CORPORATE TRANSACTIONS. The existence of outstanding options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of Common Stock, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 7.2 STOCK DIVIDENDS, RECAPITALIZATION, ETC. If the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the Common Stock outstanding, without receiving compensation therefor in money, services or property, then (i) the number, class and per share price of shares of stock subject to outstanding options hereunder shall be appropriately adjusted in such a manner as to entitle an Optionee to receive upon exercise of an option, for the same aggregate cash consideration, the same total number and class of shares as he would have received as a result of the event requiring the adjustment had he exercised his option in full immediately prior to such event; and (ii) the number and class of shares with respect to which options may be granted under the Plan shall be adjusted by substituting for the total number of shares of Common Stock then reserved for issuance under the Plan that number and class of shares of stock that would have been owned by the owner of an equal number of outstanding shares of Common Stock as the result of the event requiring the adjustment. 7.3 DETERMINATION OF ADJUSTMENTS. Adjustments under this Section 7 shall be determined by the Board and such determinations shall be conclusive. The Board shall have the discretion and power in any such event to determine and to make effective provision for acceleration of the time or times at which any option or portion thereof shall become exercisable. No fractional shares of Common Stock shall be issued under the Plan on account of any adjustment specified above. 7.4 NO ADJUSTMENT IN CERTAIN CASES. Except as hereinbefore expressly provided, the issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants into shares to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock then subject to outstanding options. SECTION 8. EFFECT OF CERTAIN TRANSACTIONS 8.1 MERGERS WITH COMPANY AS SURVIVOR. After a merger of one or more corporations into the company or after a consolidation of the Company and one or more corporations in which the Company shall be the surviving corporation, each holder of an outstanding option shall, at no additional cost, be entitled upon exercise of such option to receive (subject to any required action by stockholders) in lieu of the number of shares as to which such option shall then be so exercisable, the number and class of shares of stock or other securities to which such holder would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such 7 merger or consolidation, such holder had been the holder of record of a number of shares of Common Stock equal to the number of shares as to which such option shall be so exercised. 8.2 LIQUIDATIONS AND MERGERS IN WHICH COMPANY NOT SURVIVOR. If the Company is merged into or consolidated with another corporation under circumstances where the Company is not the surviving corporation, or if the Company is liquidated, or sells or otherwise disposes of substantially all of its assets to another corporation while unexercised options remain outstanding under the Plan: (i) subject to the provisions of clause (iii) below, after the effective date of such merger, consolidation, liquidation, sale or disposition, as the case may be, each holder of an outstanding option (other than a substituted option which, by its terms, expires upon the effective date of such merger, consolidation or sale of assets) shall be entitled, upon exercise of such option, to receive, in lieu of shares of Common Stock, shares of such stock or other securities, cash or property as the holders of shares of Common Stock received pursuant to the terms of the merger, consolidation, liquidation, sale or disposition; (ii) the Board may accelerate the time for exercise of all unexercised and unexpired options to and after a date prior to or specified by the Board; sale or disposition, as the case may be, the effective date of such merger, consolidation, liquidation, sale or disposition, provided that (x) notice of such cancellation shall be given to each holder of an option and (y)each holder of an option shall have the right to exercise such option to the extent that the same is then exercisable or, if the Board shall have accelerated the time for exercise of all unexercised and unexpired options, in full during the 30-day period preceding the effective date of such merger, consolidation, liquidation, sale or disposition. SECTION 9. AMENDMENT OF THE PLAN The Board may amend the Plan at any time, and from time to time, subject to the limitation that, except as provided in Sections 7 and 8 hereof, no amendment shall be effective unless approved by the stockholders of the Company in accordance with applicable law and regulations at an annual or special meeting held within twelve months before or after the date of adoption of such amendment, in any instance in which such amendment would: (i) increase the number of shares of Common Stock as to which options may be granted under the Plan; (ii) change in substance the provisions of Section 4 hereof relating to eligibility to participate in the Plan; or (iii) increase the maximum term of Options provided herein. Except as provided in Sections 7 and 8 hereof, rights and obligations under any option granted before any amendment of the Plan shall not be altered or impaired by such amendment, except with the consent of the Optionee. SECTION 10. NON-EXCLUSIVITY OF THE PLAN Neither the adoption of the Plan by the Board nor the submission of the Plan to the stockholders of the Company or approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including without limitation to the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases. SECTION 11. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW The obligation of the Company to sell and deliver shares of Common Stock with respect to options granted under the Plan shall e subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by government 8 agencies as may be deemed necessary or appropriate by the Board or the Committee. The Plan shall be governed by and construed in accordance with the laws of the State of Delaware. SECTION 12. EFFECTIVE DATE OF PLAN; STOCKHOLDER APPROVAL The Plan shall become effective upon its approval by the Board; provided, however that the Plan shall be subject to the further approval of the Company's stockholders in accordance with applicable laws and regulations at an annual of special meeting held within one year of such effective date. No options granted under the Plan prior to such stockholder approval may be exercised until such approval has been obtained, and the right to exercise any such options shall by the terms thereof be specifically subject to such stockholder approval. No option may be granted under the Plan after the tenth anniversary of the effective date of the Plan. EX-4.4 3 NON-STATUTORY STOCK OPTION PLAN 1 EXHIBIT 4.4 EAST-WEST MERGERCO, INC. 1989 Non-statutory Stock Option Plan ------------------------------------ SECTION 1. PURPOSE This 1989 Non-Statutory Stock Option Plan (the "Plan") is intended as a performance incentive for officers and employees of East-West Mergerco, Inc. (the "Company") or its Subsidiaries (as hereinafter defined) and for certain other individuals providing services to or acting as directors of the Company or its Subsidiaries, to enable the persons to whom options are granted (an "Optionee" or "Optionees") to acquire or increase a proprietary interest in the success of the Company. The Company intends that this purpose will be effected by the granting of options ("options") that are not incentive stock options as defined in Section 422A(b) of the Internal Revenue Code of 1986 (the "Code"). The term "Subsidiaries" includes any corporations in which stock possessing 50% or more of the total combined voting power of all classes of stock is owned directly or indirectly by the Company. SECTION 2. OPTIONS TO BE GRANTED AND ADMINISTRATION 2.1 ADMINISTRATION BY THE BOARD. This Plan shall be administered by the Board of Directors of the Company (the "Board"). The Board shall have full and final authority to operate, manage and administer the Plan on behalf of the Company. This authority includes, but is not limited to: (i) the power to grant options conditionally or unconditionally; (ii) the power to prescribe the form or forms of the instruments evidencing options granted under this Plan; (iii) the power to interpret the Plan; (iv) the power to provide regulations for the operation of the incentive features of the Plan, and otherwise to prescribe regulations for interpretation, management and administration of the Plan; (v) the power to delegate responsibility for Plan operation, management and administration on such terms, consistent with the Plan, as the Board may establish; (vi) the power to delegate to other persons the responsibility for performing ministerial acts in furtherance of the Plan's purpose; and (vii) the power to engage the services of persons or organizations in furtherance of the Plan's purpose, including but not limited to, banks, insurance companies, brokerage firms and consultants. In addition, as to each option, the Board shall have full and final authority in its discretion: (i) to determine the number of shares subject to each option; (ii) to determine the time or times at which options will be granted; (iii) to determine the option price for the shares subject to each option, which price shall be subject to the applicable requirements, if any, of Section 5.1(c) hereof; and (iv) to determine the time or times when each option shall become exercisable and the duration of the exercise period, which shall not exceed the limitations specified in Section 5.1(a). 2.2 APPOINTMENT AND PROCEEDINGS OF COMMITTEE. The Board may appoint a Stock Option Committee (the "Committee") which shall consist of at least three members of the Board. The Board may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed, and may fill vacancies, however, caused, in the Committee. The Committee shall select one of its members as its chairman and shall hold its meetings at such times and places as it shall deem advisable. A majority of its members shall constitute a quorum, and all actions of the Committee shall be taken by a majority of its members. Any action may be taken by a 2 written instrument signed by a majority of the members, and any action so taken shall be as fully effective as if it had been taken by a vote of a majority of the members at a meeting duly called and held. 2.3 POWERS OF COMMITTEE. Subject to the provisions of this Plan and the approval of the Board, the Committee shall have the power to make recommendations to the Board as to whom options should be granted, the number of shares to be covered by each option, the time or times of option grants, and the terms and conditions of each option. In addition, the Committee shall have authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, and to exercise the administrative and ministerial powers of the Board with regard to aspects of the Plan other than the granting of options. The interpretation and construction by the Committee of any provisions of the Plan or of any option granted hereunder and the exercise of any power delegated to it hereunder shall be final, unless otherwise determined by the Board. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder. SECTION 3. STOCK 3.1 SHARES SUBJECT TO PLAN. The stock subject to the options granted under the Plan shall be shares of the Company's authorized but unissued common stock, par value $.01 per share ("Common Stock"). The total number of shares that may be issued pursuant to options granted under the Plan shall not exceed an aggregate of 631,000 shares of Common Stock. Such number of shares shall be subject to increases or decreases (but not to a number of shares less than the aggregate number covered by outstanding options) at any time or from time to time by the Board. The number of shares covered by the plan also is subject to adjustment as provided in Section 7 hereof. 3.2 LAPSED OR UNEXERCISED OPTIONS. Whenever any outstanding option under the Plan expires, is cancelled or is otherwise terminated (other than by exercise), the shares of Common Stock allocable to the unexercised portion of such option shall be restored to the Plan and shall again become available for the grant of other options under the Plan. SECTION 4. ELIGIBILITY Options may be granted to officers or other employees of the Company or its Subsidiaries, to members of the Board or the board of directors of any Subsidiary whether or not employees of the Company or such Subsidiary, and to certain other individuals providing services to the Company or its Subsidiaries. SECTION 5. TERMS OF THE OPTION AGREEMENTS 5.1 MANDATORY TERMS. Each option agreement shall contain such provisions as the Board or the Committee shall from time to time deem appropriate. Option agreements need not be identical, but each option agreement by appropriate language shall include the substance of all of the following provisions: (a) EXPIRATION. Notwithstanding any other provision of the Plan or of any option agreement, each option shall expire on the date specified in the option agreement, which date shall not be later than the tenth anniversary of the date on which the option was granted. (b) EXERCISE. Each option shall be exercisable in full or in installments (which 3 need not be equal) and at such times as designated by the Beard or the Committee. To the extent not exercised, installments shall accumulate and be exercisable, in whole or in part, at any time after becoming exercisable, but not later than the date the option expires. (c) PURCHASE PRICE. The price at which shares may be purchased pursuant to the options shall be specified by the Board at the time the option is granted, and may be less than, equal to or greater than the fair market value of the shares of Common Stock on the date such option is granted, but shall not be less than the par value of shares of Common Stock. (d) TRANSFERABILITY OF OPTIONS. Options granted under this Plan and rights and privileges conferred hereby may not be hypothecated in any manner otherwise) other than by will or distribution, and shall not be subject to execution, attachment, or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any option under this Plan or any right or privilege conferred hereby contrary to the provisions of this Plan, or upon the sale or levy or any attachment or similar process upon the rights and privileges conferred hereby, such options shall thereupon terminate and become null and void. (e) TERMINATION OF EMPLOYMENT OR DEATH OF EMPLOYEE OPTIONEE. Except as may be otherwise expressly provided in the terms and conditions of the option granted to the Optionee, options granted hereunder shall terminate on the earlier to occur of: (i) the date of expiration thereof; or (ii) other than in the case of death of the Optionee or disability of the Optionee within the meaning of Section 22(e)(3) of the Code ("disability"), 90 days after termination of the employment or other relationship between the Company and the Optionee, unless such termination provision is waived by resolution adopted by the Board within 30 days of the termination of such relationship. An employment relationship between the Company and the Optionee shall be deemed to exist during any period during which the Optionee is employed by the Company or by any Subsidiary. Whether authorized leave of absence or absence on military government service shall constitute termination of the employment relationship between the Company and the Optionee shall be determined by the Board at the time thereof. In the event of the death of an Optionee while in an employment or other relationship with the Company and before the date of expiration of such option, such option shall terminate on the earlier of such date of expiration or 180 days following the date of such death. After the death of the Optionee, his executors, administrators or any person or persons to whom his option may be transferred by will or by laws of descent and distribution, shall have the right, at any time prior to such time termination, to exercise the option to the extent the Optionee was entitled to exercise such option immediately prior to his death. If an Optionee's employment or other relationship with the Company terminates because of a disability, the Optionee's option shall terminate on the earlier of the date of expiration thereof or 12- months following the termination of relationship; and unless by its terms it sooner terminates and expires during such 12-month period, the Optionee may exercise that portion of his or her option which is exercisable at the time of termination of such relationship. (f) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose to be the owner 4 of any shares of Common Stock subject to any option unless and until (i) the option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the shares of the Optionee, and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Common Stock. 5.2 The Board may in its discretion provide, upon the grant of any option hereunder, that the Company shall have an option to repurchase all or any number of shares purchased upon exercise of such option. The repurchase price per share payable by the Company shall be such amount or be determined by such formula as is fixed by the Board at the time the option for the shares subject to repurchase was granted. The Board may also provide that the Company shall have a right of first refusal with respect to the transfer or proposed transfer of any shares purchased upon exercise of an option granted hereunder. In the event the Board shall grant options subject to the Company's repurchase rights or rights of first refusal, the certificate or certificates representing the shares purchased pursuant to such option shall carry a legend satisfactory to counsel for the Company referring to the Company's repurchase option. SECTION 6. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE 6.1 NOTICE OF EXERCISE. Any option granted under the Plan may be exercised by the Optionee by delivering to the Company on any business day a written notice specifying the number of shares of Common Stock the Optionee then desires to purchase and specifying the address to which the certificates for such shares are to be mailed (the "Notice"), accompanied by payment for such shares. 6.2 MEANS OF PAYMENT AND DELIVERY. Payment for the shares of Common Stock purchased pursuant to the exercise of an option shall be made either (i) in cash equal to the option price for the number of shares specified in the Notice (the "Total Option Price"), or (ii) if authorized by the applicable option agreement, in shares of Common Stock of the Company having a fair market value equal to or less than the Total Option Price, plus cash in an amount equal to the excess, if any, of the Total Option Price over the fair market value of such shares of Common Stock, or (iii) with the consent of the Committee or the Board, by a combination of (i) and (ii). For the purpose of the preceding sentence, the fair market value of the shares of Common Stock sc delivered to the Company shall be determined in accordance with procedures adopted by the Board. As promptly as practicable after receipt of such written notification and payment, the Company shall deliver to the Optionee certificates for the number of shares with respect to which such Option has been so exercised, issued in the Optionee's name; provided, however, that such delivery shall be deemed effected for all purposes when the Company or a stock transfer agent of the Company shall have deposited such certificates in the United States mail, addressed to the Optionee, at the address specified pursuant to Section 6.1. SECTION 7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION 7.1 NO EFFECT OF OPTIONS UPON CERTAIN CORPORATE TRANSACTIONS. The existence of outstanding options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalization, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of Common Stock, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate 5 act or proceeding, whether of a similar character or otherwise. 7.2 STOCK DIVIDENDS, RECAPITALIZATION, ETC. If the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the Common Stock outstanding, without receiving compensation therefor in money, services or property, then (i) the number, class and per share price of shares of stock subject to outstanding options hereunder shall be appropriately adjusted in such a manner as to entitle an Optionee to receive upon exercise of an option, for the same aggregate cash consideration, the same total number and class of shares as he would have received as a result of the event requiring the adjustment had he exercised his option in full immediately prior to such event; and (ii) the number and class of shares with respect to which options may be granted under the Plan shall be adjusted by substituting for the total number of shares of Common Stock then reserved for issuance under the Plan that number and class of shares of stock that would have been received by the owner of an equal number of outstanding shares of Common Stock as the result of the event requiring the adjustment. 7.3 DETERMINATION OF ADJUSTMENTS. Adjustments under this Section 7 shall be determined by the Board and such determinations shall be conclusive. The Board shall have the discretion and power in any such event to determine and to make effective for provision for acceleration of the time or times at which any option or portion thereof shall become exercisable. No fractional shares of Common Stock shall be issued under the Plan on account of any adjustment specified above. 7.4 NO ADJUSTMENT IN CERTAIN CASES. Except as hereinbefore expressly provided, the issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock then subject to outstanding options. SECTION 8. EFFECT OF CERTAIN TRANSACTIONS 8.1 MERGERS WITH COMPANY AS SURVIVOR. After a merger of one or more corporations into the Company, or after a consolidation of the Company and one or more corporations in which the Company shall be the surviving corporation, each holder of an outstanding option shall, at no additional cost, be entitled upon exercise of such option to receive (subject to any required action by stockholders) in lieu of the number of shares as to which such option shall then be so exercisable, the number and class of shares of stock or other securities to which such holder would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, such holder had been the holder of record of a number of shares of Common Stock equal to the number of shares as to which such option shall be so exercised. 8.2 LIQUIDATIONS AND MERGERS IN WHICH COMPANY NOT SURVIVOR. If the Company is merged into or consolidated with another corporation under circumstances where the Company is not the surviving corporation, or if the Company is liquidated, or sells or otherwise disposes of substantially all of its assets to another corporation while unexercised options remain outstanding under the Plan: (i) subject to the provisions of clause (iii) below, after the effective date of such merger, consolidation, liquidation, sale or disposition, as the case may bet each holder of an outstanding option shall be entitled, upon exercise of such option, to receive, in lieu of shares of Common Stock, shares of such stock or other securities, cash or property as the holders of shares of 6 Common Stock received pursuant to the terms of the merger, consolidation, liquidation, sale or disposition; (ii) the Board may accelerate the time for exercise of all unexercised and unexpired options to and after a date prior to the effective date of such merger, consolidation, liquidation, sale or disposition, as the case may be, specified by the Board; or (iii) all outstanding options may be cancelled by the Board as of the effective date of any such merger, consolidation, liquidation, sale or disposition, provided that (x) notice of such cancellation shall be given to each holder of an option and (y) each holder of an option shall have the right to exercise such option to the extent that the same is then exercisable or, if the Board shall have accelerated the time for exercise of all unexercised and unexpired options, in full during the 30-day period preceding the effective date of such merger, consolidation, liquidation, sale or disposition. SECTION 9. AMOUNT OF THE PLAN The Board may amend the Plan at any time, and from time to time. Except as provided in Sections 7 and 8 hereof, rights and obligations under any option granted before any amendment of the Plan shall not be altered or impaired by such amendment, except with the consent of the Optionee. SECTION 10. NON-EXCLUSIVITY OF THE PLAN The adoption of the Plan by the Board shall not be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including without limitation the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases. SECTION 11. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW The obligation of the Company to sell and deliver shares of Common Stock with respect to options granted under the Plan Shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by government agencies as may be deemed necessary or appropriate by the Board or the Committee. The Plan shall be governed by and construed in accordance with the laws of the State of Delaware. SECTION 12. EFFECTIVE DATE OF PLAN The effective date of the Plan shall be January 24, 1989, the date of its approval by the Board. No option may be granted under the Plan after the tenth anniversary of the effective date of the Plan. EX-5.1 4 OPINION OF FOLEY, HOAG & ELIOT LLP 1 EXHIBIT 5.1 FOLEY, HOAG & ELIOT LLP One Post Office Square Boston, Massachusetts 02109 September 16, 1996 Cayenne Software, Inc. 8 New England Executive Park Burlington, MA 01803 Ladies and Gentlemen: We are familiar with the Registration Statement on Form S-8 transmitted for filing by the Company today (the "S-8 Registration Statement") relating to 706,733 shares (the "Shares") of the Company's Common Stock issuable pursuant to two stock option plans of the Company's wholly-owned subsidiary Cadre Technologies Inc. (the "Plans"). We are familiar with the Company's Articles of Organization and all amendments thereto, its By-Laws and all amendments thereto, the records of all meetings and consents of its Board of Directors and of its stockholders, and its stock records. We have examined such other records and documents as we deemed necessary or appropriate for purposes of rendering this opinion. Based upon the foregoing, we are of the opinion that (a) the Company has corporate power adequate for the issuance of the Shares in the manner set forth in the S-8 Registration Statement, (b) the Company has taken all necessary corporate action required to authorize the issuance and sale of the Shares and (c) when certificates for the Shares have been duly executed and countersigned, and delivered against due receipt of the exercise price therefore in accordance with the Plan, the Shares will be legally issued, fully paid and non-assessable. We consent to the filing of this opinion as an exhibit to the S-8 Registration Statement. Very truly yours, FOLEY, HOAG & ELIOT By: /s/ David W. Walker a Partner EX-23.1 5 CONSENT OF COOPERS & LYBRAND 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Registration Statement of Cayenne Software, Inc. (formerly Bachman Information Systems, Inc.) on Form S-8 of our reports dated August 15, 1995, except as to the information presented in Note 17, for which the date is September 19, 1995, on our audits of the consolidated financial statements and financial statement schedule of Bachman Information Systems, Inc. as of June 30, 1995 and 1994, and for each of the three years in the period ended June 30, 1995, which reports are included in the Annual Report on Form 10-K of Bachman Information Systems, Inc. for the year ended June 30, 1995. COOPERS & LYBRAND L.L.P. Boston, Massachusetts September 16, 1996 -----END PRIVACY-ENHANCED MESSAGE-----