-----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, HtGQSW3mORCK+SPGuoKSSu0IuDyF8jPBQdJ06ms1N/c5vhkXnDXQcALREarMpzaF 316mocxJ4Tk9QqH393K2HQ== 0000950116-05-001957.txt : 20050519 0000950116-05-001957.hdr.sgml : 20050519 20050519154021 ACCESSION NUMBER: 0000950116-05-001957 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050513 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050519 DATE AS OF CHANGE: 20050519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEOWARE SYSTEMS INC CENTRAL INDEX KEY: 0000894743 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 232705700 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21240 FILM NUMBER: 05844848 BUSINESS ADDRESS: STREET 1: 400 FEHELEY DR CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 BUSINESS PHONE: 6102778300 MAIL ADDRESS: STREET 1: 400 FEHELEY DR CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 FORMER COMPANY: FORMER CONFORMED NAME: HDS NETWORK SYSTEMS INC DATE OF NAME CHANGE: 19950313 FORMER COMPANY: FORMER CONFORMED NAME: INFORMATION SYSTEMS ACQUISITION CORP DATE OF NAME CHANGE: 19930108 8-K 1 eightk.txt 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 13, 2005 Neoware Systems, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 000-21240 23-2705700 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 400 Feheley Drive, King of Prussia, Pennsylvania 19406 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (610) 277-8300 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 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. On May 13, 2005, the Compensation and Stock Option Committee (the "Committee") of the Board of Directors of Neoware Systems, Inc. (the "Company"), and Board of Directors, upon recommendation of the Committee, approved the acceleration of the vesting of "underwater" unvested stock options held by certain current employees, including executive officers. No stock options held by non-employee directors were subject to the acceleration. A stock option was considered "underwater" if the option exercise price was greater than $14.00 per share. The decision to accelerate vesting of these underwater stock options was made primarily to avoid recognizing compensation cost in the Consolidated Statements of Income in future financial statements upon the Company's adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment" ("FAS 123R"), which when adopted by the Company will require all share-based payments to employees, including grants of employee stock options, to be recognized on the Company's financial statements based on their fair values. FAS 123R will become effective as to the Company beginning July 1, 2005. Additionally, the Company believes underwater stock options may not be offering the affected employees sufficient incentive when compared to the potential future compensation expense that would have been attributable to these stock options. The accelerated vesting was effective as of May 13, 2005, although holders of incentive stock options (within the meaning of Section 422 of the Internal Revenue Code of 1986) to purchase 58,899 shares of common stock have the opportunity to decline the accelerated vesting in order to prevent changing the status of the incentive stock options for federal income tax purposes to non-qualified stock options. Assuming that no holders of incentive stock options elect to decline the accelerated vesting, options to purchase 532,376 shares of the Company's common stock became immediately exercisable on May 13, 2005, of which 260,000 are held by executive officers. The exercise prices of the accelerated options range from $14.27 to $20.00 per share. All other terms and conditions of such options remain unchanged. The following table summarizes outstanding underwater options held by executive officers which were subject to the acceleration and became exercisable on May 13, 2005.
OPTIONS SUBJECT TO NAME POSITION ACCELERATION - ------------------------ ---------------------------------------------------- -------------------- Michael G. Kantrowitz President and Chief Executive Office 87,500 Peter Bolton Executive Vice President 32,500 Eric N. Rubino Chief Operating Officer 92,500 Matt D. Wrabley Executive Vice President Business Development 47,500
Item 9.01 Financial Statements and Exhibits. (c) Exhibits. The following document is filed as an exhibit to this report. 99.1 Press Release dated May 19, 2005. SIGNATURES 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. Dated: May 19, 2005 Neoware Systems, Inc. ----------------------------- (Registrant) /s/ Keith D. Schneck ----------------------------- Keith D. Schneck Executive Vice President and Chief Financial Officer EX-99 2 ex99-1.txt EXHIBIT 99.1 [GRAPHIC OMITTED] NEOWARE PRESS RELEASE NEOWARE ANNOUNCES ACCELERATED VESTING OF UNDERWATER OPTIONS KING OF PRUSSIA, PA., MAY 19, 2005 -- Neoware Systems, Inc. (Nasdaq: NWRE), the leading supplier of software, services, and appliances for thin client computing, today announced it has accelerated the vesting of all unvested options awarded to employees and officers under the Company's 1995 Stock Option Plan and the 2002 Non-Qualified Stock Option Plan which had exercise prices greater than $14.00 per share. Options to purchase approximately 530,000 shares became exercisable immediately, representing approximately 23% of the total options outstanding, as a result of the vesting acceleration. Of these 530,000 options, approximately 70% were scheduled to vest over the next 18 months. "We believe that the accelerated vesting will result in the Company not being required to recognize approximately $5 million (pre-tax) of compensation expense in the fiscal 2006 through fiscal 2008 periods. We believe that the incentive and retention value of these options is significantly lower than their valuation using the Black Scholes methodology, and as a result this decision is in the best interest of the Company and its shareholders," stated Michael Kantrowitz, Neoware's Chairman and CEO. The decision to accelerate the options was made to reduce compensation expense that might be recorded in future periods following the Company's adoption of Financial Accounting Standard Board (the "FASB") proposed statement "Share-Based Payment" ("FAS 123R") on July 1, 2005. The Company expects that the action announced today will reduce the share-based compensation expense (pre-tax) by approximately $2.8 million in fiscal year 2006, $2.1 million in fiscal year 2007, and $150,000 in fiscal year 2008, based on estimated valuation calculations using the Black Scholes methodology. ABOUT NEOWARE Neoware (Nasdaq:NWRE) is a leading provider of enterprise software, thin client appliances, and related services that make computing more open, secure, reliable, affordable and manageable. Neoware was recently ranked America's eighth fastest-growing company by Fortune magazine. By employing open technologies and eliminating the obsolescence built into standard PC architectures, Neoware helps enterprises leverage server-based computing architectures to increase security, flexibility and choice, as well as lower their total cost of ownership. Neoware's software products enable enterprises to gain control of their desktops, stream software on-demand, and to integrate mainframe, midrange, UNIX and Linux applications with Windows(R) environments and the Web. Its thin client appliances and software enable enterprises to run applications on servers and display them across wired or wireless networks on secure, managed, reliable appliances that cost as little as one-fourth the price of today's typical business PC. The company's global development, services, and support provide customers with customized solutions that facilitate their specialized computing needs. Neoware's products are available worldwide from IBM and Lenovo Group Limited, as well as from select, knowledgeable resellers. More information about Neoware can be found on the Web at http://www.neoware.com or via email at info@neoware.com. Neoware's global headquarters is in King of Prussia, PA. # # # This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding: the projected impact of FAS 123R and the effect of accelerating "underwater" options; the use of the Black Scholes methodology; and the incentive and retention value of the options. These forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those predicted in such forward-looking statements include our use of a different valuation methodology and the possibility that subsequent pronouncements or interpretations of the FASB or other regulatory bodies may alter the accounting treatment prescribed for stock options. These and other risks are detailed from time to time in Neoware's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its reports on Form 10-K for the year ended June 30, 2004 and Forms 10-Q for the quarters ended September 30, 2004, December 31, 2004 and March 31, 2005. Neoware is a trademark of Neoware Systems, Inc. All other names products and services are trademarks or registered trademarks of their respective holders. CONTACT: Neoware Systems, Inc. Keith Schneck, CFO (610) 277-8300 invest@neoware.com - ------------------ -----END PRIVACY-ENHANCED MESSAGE-----