-----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, VqHOmUDhYB+KnXtOrl+efSklX9w1ygqCJqxlqjyR4wPtGgFs5ui6vrbzBXk3UCMb En+Dqhd6K+vkFJ8CQi6mxg== 0000950144-97-013145.txt : 19971209 0000950144-97-013145.hdr.sgml : 19971209 ACCESSION NUMBER: 0000950144-97-013145 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971124 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971208 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARBINGER CORP CENTRAL INDEX KEY: 0000947116 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 581817306 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-26298 FILM NUMBER: 97734120 BUSINESS ADDRESS: STREET 1: 1055 LENOX PK BLVD CITY: ATLANTA STATE: GA ZIP: 30319 BUSINESS PHONE: 4048414334 8-K 1 HARBINGER CORPORATION 1 - -------------------------------------------------------------------------------- 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): November 24, 1997 HARBINGER CORPORATION (Exact name of registrant as specified in its charter) GEORGIA 0-26298 58-1817306 (State or other jurisdiction (Commission File Number) (IRS Employer Identification of incorporation) Number)
1055 LENOX PARK BOULEVARD ATLANTA, GEORGIA 30319 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (404) 467-3000 NOT APPLICABLE (Former Name or Former Address, if Changed Since Last Report) - -------------------------------------------------------------------------------- 2 Item 5. Other Events Harbinger Corporation, a Georgia corporation ("Harbinger") and Premenos Technology Corp., a Delaware corporation ("Premenos"), entered into a merger agreement, dated October 23, 1997 (the "Merger Agreement"), pursuant to which Olympic Subsidiary Corporation, a Delaware corporation and a wholly-owned subsidiary of Harbinger, will merge with and into Premenos (the "Merger"). Premenos has agreed under the Merger Agreement to cause holders of options to acquire Premenos common stock (the "Old Options") representing at least 95% of the shares of Premenos common stock issuable pursuant to Old Options to execute and deliver to Harbinger prior to the closing of the Merger an option notice, assumption and substitution agreement. Attached hereto as Exhibits 99.1, 99.2 and 99.3 are the Option Notice, Assumption and Substitution Agreement, the Cover Memorandum to Premenos Option Holders and the Question and Answer Document that have been delivered to each current holder of Old Options to effectuate the assumption and substitution contemplated by the Merger Agreement. Item 7. Financial Statements and exhibits. (c) Exhibits: Exhibit No. 99.1 Option Notice, Assumption and Substitution Agreement 99.2 Cover Memorandum to Premenos Option Holders 99.3 Question and Answer Document -2- 3 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 thereunto duly authorized. Date: December 8, 1997 HARBINGER CORPORATION By:/s/Joel G. Katz ------------------------------------- Joel G. Katz Chief Financial Officer and Secretary -3- 4 EXHIBIT INDEX 99.1 Option Notice, Assumption and Substitution Agreement 99.2 Cover Memorandum to Premenos Option Holders 99.3 Question and Answer Document -4- EX-99.1 2 OPTION NOTICE ASSUMPTION & SUBSTITUTION AGREEMENT 1 EXHIBIT 99.1 OPTION NOTICE, ASSUMPTION AND SUBSTITUTION AGREEMENT THIS OPTION NOTICE, ASSUMPTION AND SUBSTITUTION AGREEMENT (the "Agreement") is made and entered into as of this __ day of December, 1997, by and among HARBINGER CORPORATION, a Georgia corporation ("Harbinger"), PREMENOS TECHNOLOGY CORP., a Delaware corporation ("Premenos"), and the individual listed on Exhibit A to this Agreement ("Optionee"). W I T N E S S E T H WHEREAS, Harbinger, Olympic Subsidiary Corporation, a Delaware corporation and a wholly-owned subsidiary of Harbinger ("HarbingerSub"), and Premenos have entered into that certain Merger Agreement, dated as of October 23, 1997 (the "Merger Agreement"); WHEREAS, pursuant to the Merger Agreement, Harbinger will acquire Premenos through the merger of HarbingerSub with and into Premenos (the "Merger"); WHEREAS, as a result of the Merger, Premenos will become a wholly-owned subsidiary of Harbinger; WHEREAS, Premenos previously granted to Optionee stock options (the "Old Options") to purchase such shares of common stock, $.01 par value per share, of Premenos as are listed on Exhibit A to this Agreement ("Premenos Common Stock"), which Old Options were granted under and pursuant to the Premenos Program (the "Premenos Program") attached as Exhibit B; WHEREAS, pursuant to the Merger Agreement, Harbinger will assume at the Effective Time all of Premenos' rights and obligations with respect to the Old Options and shall substitute therefor non-qualified stock options (the "New Non-Qualified Options") under the Harbinger 1996 Stock Option Plan (the "Plan") to purchase shares of common stock, par value $.0001 per share of Harbinger (the "Harbinger Common Stock") for each Old Option that constituted a non-qualified stock option prior to the Effective Time, and shall substitute therefor incentive stock options (the "New Incentive Options" and together with "New Non-Qualified Options" hereinafter collectively referred to as the "New Options") under the Plan for each Old Option that qualified as an incentive stock option prior to the Effective Time; WHEREAS, the New Options shall be evidenced by, and shall be subject to the terms and conditions of, the stock option grant certificate in the form of Exhibit C to this Agreement (the "New Stock Option Grant Certificate(s)") which will be issued under the Plan attached as Exhibit D to this Agreement; and 1 2 WHEREAS, in connection with the Merger and to induce Harbinger to consummate the transactions contemplated by the Merger Agreement and to grant to Optionee the New Options, Optionee wishes to enter into this Agreement to facilitate the matters contemplated hereby. NOW, THEREFORE, the parties, intending to be legally bound, agree as follows: SECTION 1. DEFINITIONS. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Merger Agreement. SECTION 2. ASSUMPTION AND SUBSTITUTION OF OPTIONS. A. OPTION ASSUMPTION AND SUBSTITUTION. Promptly following the Effective Time and upon receipt of this Agreement duly executed by Optionee and Premenos, Harbinger shall execute and deliver to Optionee a New Stock Option Grant Certificate evidencing the New Options being granted to Optionee in connection with the assumption of the Old Options and the substitution of the New Options therefor pursuant to the terms and conditions of the Merger Agreement and this Agreement. The New Stock Option Grant Certificate shall evidence the right to purchase the number of shares of Harbinger Common Stock as is equal to the product (rounded up or down as appropriate to a whole share) of (i) the number of shares of Premenos Common Stock subject to the Old Options immediately prior to the Effective Time, multiplied by (ii) the Conversion Ratio and the exercise price per share of Harbinger Common Stock set forth in such New Stock Option Grant Certificate shall be equal to the quotient (rounded up or down as appropriate to a whole cent) obtained by dividing (i) the per share exercise price for a share of Premenos Common Stock subject to the Old Options immediately prior to the Effective Time, by (ii) the Conversion Ratio. In connection with such assumption and substitution, Harbinger shall substitute a non-qualified stock option under the Plan for each Old Option held by Optionee that constituted a non-qualified stock option prior to the Effective Time, and shall substitute an incentive stock option under the Plan for each Old Option held by Optionee that constituted an incentive stock option prior to the Effective Time. B. TERMINATION. Optionee hereby acknowledges and agrees that the receipt of the New Options and the New Stock Option Grant Certificate in accordance with the provisions hereof shall constitute full satisfaction and discharge of all rights of Optionee in respect of the Old Options. 2 3 SECTION 3. REPRESENTATIONS AND WARRANTIES OF HARBINGER. Harbinger represents and warrants to Optionee as follows: A. CORPORATE EXISTENCE AND POWER. Harbinger is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Georgia and has full power and authority to execute, deliver and perform this Agreement. B. AUTHORITY. The execution, delivery and performance of this Agreement and the issuance and delivery of the New Options have been duly and validly authorized by all necessary corporate action on the part of Harbinger. C. BINDING EFFECT. This Agreement has been duly executed and delivered by Harbinger and constitutes the valid and binding agreement of Harbinger, enforceable against Harbinger in accordance with its terms, subject to applicable bankruptcy, insolvency and other similar laws affecting the enforceability of creditors' rights generally, general equitable principles and the discretion of courts in granting equitable remedies. D. REGISTRATION. Harbinger shall, promptly following the Effective Time, cause the shares of Harbinger Common Stock issuable upon exercise of the New Options to be registered with the Securities and Exchange Commission on a Form S-8 Registration Statement. SECTION 4. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee represents and warrants to Harbinger as follows: A. AUTHORITY. Optionee has full right, power, authority and capacity to enter into this Agreement and to relinquish all of his/her rights in respect of the Old Options in accordance with the terms and provisions hereof. B. BINDING EFFECT. This Agreement has been duly executed and delivered by Optionee, and, upon consummation of the transactions contemplated hereby, Optionee shall have relinquished all of his/her rights in respect of the Old Options, and this Agreement constitutes the valid and binding agreement of Optionee, enforceable against Optionee in accordance with its terms, subject to applicable bankruptcy, insolvency and other similar laws affecting the enforceability of creditors' rights generally, general equitable principles and the discretion of courts in granting equitable remedies. Optionee acknowledges that (a) he/she has read this Agreement and all Exhibits hereto, understands the contents hereof and thereof and has signed this Agreement of his/her own 3 4 free will, and (b) he/she understands that Harbinger and Premenos will rely on this Agreement in connection with the consummation of the transactions contemplated by the Merger Agreement. Optionee further acknowledges that he/she has received a copy of the Joint Proxy Statement/Prospectus and the Merger Agreement delivered therewith and has had sufficient time to review each such document in full, including, but not limited to, the provisions therein relating to the assumption of the Old Options and substitution of the New Options. C. STOCK OPTION AGREEMENTS. Optionee hereby agrees that upon execution of this Agreement he/she will deliver this Agreement along with his/her original Premenos stock option agreement(s) to Harbinger. If Optionee cannot locate his/her original Premenos stock option agreement(s), he/she will complete and execute the affidavit of loss enclosed herewith for each missing Premenos stock option agreement and return it to Harbinger. SECTION 5. MISCELLANEOUS. A. GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to Delaware's conflict of law rules. B. BINDING EFFECT. This Agreement shall be binding on and inure to the benefit of Harbinger, Premenos and Optionee and their respective successors, assigns, heirs, executors and legal representatives; provided, however, that none of the rights or obligations of Optionee hereunder may be assigned or otherwise transferred by Optionee. C. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. D. ENTIRE AGREEMENT. This Agreement is intended by the parties hereto to be their complete agreement with respect to the subject matter hereof, and this Agreement supersedes any prior agreements or understandings (oral or written) with respect to the subject matter hereof between the parties hereto. E. SPECIFIC PERFORMANCE. The parties hereto each acknowledge that the rights of each party to performance of the covenants and agreements herein are special, unique and of extraordinary character, and that, in the event that any party violates or fails or refuses to perform any covenant or agreement made by it herein, the non-breaching party may be without an adequate remedy at law. The parties each agree, therefore, that in the event that either party 4 5 violates or fails or refuses to perform any covenant or agreement made by such party herein, the non-breaching party or parties may, subject to the terms of this Agreement and in addition to any remedies at law for damages or other relief, institute and prosecute an action in any court of competent jurisdiction to enforce specific performance of such covenant or agreement or seek any other equitable relief. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. HARBINGER CORPORATION By: ________________________________________ Name: _____________________________ Title: ____________________________ PREMENOS CORPORATION By:________________________________________ Name: ___________________________ Title: _________________________ OPTIONEE Signature: Name (print name):__________________________ 5 EX-99.2 3 COVER MEMORANDUM TO PREMENOS OPTION HOLDERS 1 EXHIBIT 99.2 MEMORANDUM TO: All Premenos Optionholders FROM: Tim Dreisbach DATE: November 25, 1997 SUBJECT: Option Exchange Agreement We are pleased to forward to you the enclosed materials relating to the substitution of options to purchase Harbinger Corporation common stock (the "Harbinger Options") for your Premenos Options upon the effective date of the merger between Premenos and Harbinger. Your package includes the following items in addition to this letter: Option Notice, Assumption and Substitution Agreement (with all exhibits) Option Notice, Assumption and Substitution Agreement (without exhibits) Question and Answer Document Affidavit and Loss of Indemnity Agreement Joint Proxy Statement/Prospectus We urge you to read these documents carefully. The Question and Answer Document explains the procedures for substituting Harbinger Options for your Premenos Options. As part of the procedure, you must execute and return to Ardene Fullerton at Premenos the Option Notice, Assumption and Substitution Agreement. For convenience we enclosed an extra copy of the Assumption and Substitution Agreement (without exhibits and with the bright pink cover sheet) for you to execute and return; you should retain the copy with exhibits for your records. We believe that acquiring Harbinger Options in substitution for Premenos Options is in your the best interests, and we recommend that you execute and return the Option Notice, Assumption and Substitution Agreement. If you do not execute and return the documents, you will continue to hold Premenos Options representing the right to purchase Premenos Common Stock and not Harbinger Common Stock. After the effective date of the merger, the ability to sell Premenos Common Stock will be extremely limited and the value will be greatly reduced as Premenos stock will not be registered under applicable securities laws and will contain a legend restricting sale, transfer or other disposition of such stock. Premenos and Harbinger have set the close of business on Friday, December 12, 1997, as the deadline for submitting your Option Notice, Assumption and Substitution Agreement. Premenos and Harbinger may accept Agreements after the 12th, but we urge you to comply with this deadline to insure that you will receive your Harbinger Options as soon as practicable after the effective date of the merger. EX-99.3 4 QUESTION AND ANSWER DOCUMENT 1 EXHIBIT 99.3 PREMENOS STOCK OPTION PROGRAMS - EFFECT OF MERGER WITH HARBINGER COMMONLY ASKED QUESTIONS & ANSWERS On October 23, 1997, Premenos and Harbinger entered into an agreement (the "Merger Agreement") under which Premenos will merge with a subsidiary of Harbinger and become a subsidiary of Harbinger. At the time when the Merger becomes effective (the "Effective Time"), each share of Premenos Common Stock will be automatically converted into the right to receive .45 (the "Conversion Ratio") of a share of Harbinger Common Stock. EFFECT OF THE MERGER ON PREMENOS STOCK OPTIONS In the Merger Agreement, Harbinger has agreed to assume all of Premenos' rights and obligations under outstanding and unexercised stock options (the "Old Options"), including both employee and non-employee director stock options, under each applicable Premenos Program (the "Premenos Programs"). The Merger Agreement further provides that each outstanding Old Option will evidence the right to purchase the number of shares of Harbinger Common Stock (the "New Options") as is equal to (i) the number of shares of Premenos Common Stock covered by the Old Option immediately prior to the Effective Time, multiplied by (ii) the Conversion Ratio (.45). Fractions of a share resulting from this calculation will be rounded up or down as appropriate to a whole share. The exercise price of the New Options will be equal to (i) the per share exercise price for a share of Premenos Common Stock subject to the Old Options immediately prior to the Effective Time, divided by (ii) the Conversion Ratio (the "New Exercise Price"). Fractions of a cent resulting from this calculation will be rounded up or down as appropriate to a whole cent. Each holder of Old Options (the "Holders") will be provided an Option Notice, Assumption and Substitution Agreement (the "Assumption and Substitution Agreement") prior to the Effective Time. As soon as reasonably practicable after the Effective Time (assuming Harbinger has received a duly executed Assumption and Substitution Agreement and the stock option agreement representing the Old Option), Harbinger will issue New Options under the Harbinger 1996 Stock Option Plan (the "Harbinger Plan") in substitution for each Old Option. The New Options will contain vesting terms and conditions matching those contained in the Old Options. Harbinger has agreed to issue incentive stock options under the Harbinger Plan in substitution for each Old Option that qualified as an incentive stock option under the Premenos Programs and to issue non-qualified stock options under the Harbinger Plan in substitution for each Old Option that constituted a non-qualified stock option under the Premenos Programs. HOLDERS MUST EXECUTE AND RETURN THE ASSUMPTION AND SUBSTITUTION AGREEMENT AND RETURN THEIR STOCK OPTION AGREEMENTS (OR AFFIDAVIT OF LOSS IN LIEU THEREOF) IN ORDER TO CONVERT THEIR OLD OPTIONS INTO NEW OPTIONS. 1 2 Any Old Options with respect to which the Holder does not properly complete and execute the Assumption and Substitution Agreement and return the applicable stock option agreement (or affidavit of loss in lieu thereof) will continue to evidence the right to purchase the number of shares of Premenos Common Stock at the exercise price set forth in the Holder's old stock option agreement with Premenos, and such Old Options will remain subject to the terms of the applicable Premenos Program. After the Effective Time, there will no longer be a public trading market in which you can readily sell your Premenos Common Stock. In the Merger Agreement, Premenos has agreed to cause holders of Old Options representing at least 95% of the shares of Premenos Common Stock issuable pursuant to Old Options to execute and deliver to Harbinger prior to the closing of the Merger an Assumption and Substitution Agreement, and satisfaction of such covenant is a condition of Harbinger to close the Merger. Harbinger anticipates that after the consummation of the Merger, the Premenos Programs may be amended, to the extent permitted by each such plan and applicable accounting pronouncements, as required to conform the administrative and other provisions of each Premenos Program to the Harbinger Plan. 2 3 CALCULATING THE EFFECT OF THE MERGER HOW DO I CALCULATE THE NUMBER OF HARBINGER STOCK OPTIONS AND RELATED EXERCISE PRICE RESULTING FROM THE MERGER? The number of New Options can be computed as: NUMBER OF OLD OPTIONS OUTSTANDING X CONVERSION RATIO=NUMBER OF NEW OPTIONS The exercise price of the New Options can be calculated as: PREMENOS EXERCISE PRICE/CONVERSION RATIO=NEW EXERCISE PRICE EXAMPLE: If you were granted 1,000 options under the Premenos Programs, at an exercise price of $9.375 per share, you would calculate the number of Harbinger Common Stock you now have the right to purchase and the applicable exercise price as follows:
Premenos Options 1,000 Conversion Ratio multiplied by 0.45 ------ CONVERTED OPTIONS 450 Premenos Exercise Price $9.375 Conversion Ratio divided by 0.45 ------ NEW EXERCISE PRICE $20.83
WHAT IS THE CONVERSION RATIO? The Conversion Ratio is .45. It represents the ratio in which Premenos Common Stock will be converted into Harbinger Common Stock under the Merger Agreement. 3 4 HOW DOES THE MERGER AFFECT MY VESTING? There is no impact on your vesting. Your options will continue to vest according to the option vesting schedule under the stock option agreement between you and Premenos. WHAT IF I CHOOSE NOT TO HAVE MY OLD OPTIONS SUBSTITUTED WITH NEW OPTIONS? If you choose not to execute an Assumption and Substitution Agreement and return your old stock option agreement, your Old Options will continue to represent the right to purchase Premenos Common Stock and not the right to purchase Harbinger Common Stock. After the Effective Time, Premenos Common Stock will be delisted from the Nasdaq National Market and will no longer be registered under the federal securities laws. Thus, there will no longer be a public trading market in which you can readily sell your Premenos Stock. I UNDERSTAND MY OLD OPTIONS WILL BE SUBSTITUTED WITH NEW OPTIONS TO BE GRANTED UNDER THE HARBINGER PLAN. CAN YOU EXPLAIN THIS PROCESS? If you execute an Assumption and Substitution Agreement and return your stock option agreement (or affidavit of loss in lieu thereof), Harbinger will issue incentive stock options under the Harbinger Plan in substitution for each of your Old Options that qualified as an incentive stock option prior to the Effective Time, and will issue a non-qualified stock option under the Harbinger Plan in substitution for each of your Old Options that constituted a non-qualified stock option prior to the Effective Time. If you return your original stock option agreement but do not execute the Assumption and Substitution Agreement, you will continue to hold options governed by the existing Premenos Programs. WHAT IF I CANNOT LOCATE MY ORIGINAL STOCK OPTION AGREEMENTS? An affidavit of loss is included in this package. If you cannot locate your original Premenos stock option agreements, you should complete and execute the affidavit of loss and return it to Premenos. IF YOU HAVE MISPLACED MORE THAN ONE OF YOUR PREMENOS STOCK OPTION AGREEMENTS, PLEASE MAKE COPIES OF THE AFFIDAVIT OF LOSS FOR EACH MISPLACED OPTION AGREEMENT AND EXECUTE EACH AFFIDAVIT OF LOSS INDIVIDUALLY. WHAT IF THE MERGER DOES NOT OCCUR? If the Merger does not for any reason go forward, your executed Assumption and Substitution Agreement and your old stock option agreement will be returned to you and no substitution will take place. 4 5 WHO CAN I CALL IF I HAVE QUESTIONS ABOUT SUBSTITUTING OLD OPTIONS WITH NEW OPTIONS? If you have questions, please do not hesitate to contact Ardene Fullerton (Ext. 2833), Dale Marquart (Ext. 2987) or Ward Wolff (Ext. 2718) at Premenos or Mike Lieb (404/467-3013) or Laura Nuzzo (404/467-3170) at Harbinger. EXERCISING OPTIONS WHEN CAN I EXERCISE MY STOCK OPTIONS? Upon receipt by Harbinger of a duly executed Assumption and Substitution Agreement and as soon as reasonably practicable following the Effective Time, Harbinger shall execute and deliver a New Stock Option Grant Certificate evidencing the New Options being granted in connection with the assumption of the Old Options and the substitution of the New Options therefor. Following receipt of such New Stock Option Grant Certificate, you may exercise vested stock options to acquire Harbinger Common Stock by following the procedures set forth on Exhibit I attached hereto. HOW DO I EXERCISE MY STOCK OPTIONS? To initiate an option exercise, you should contact Laura Nuzzo (404/467-3170) in the Harbinger Accounting/Finance Department to verify the number of vested shares available for exercise. Harbinger offers two methods of exercising (1) the traditional approach where you pay the total number of the options to be exercised times the exercise price per option; and (2) the "cashless stock option exercise" whereby you can pay for the "purchase price" of your stock through the proceeds from the sale of stock. Exhibit I is a copy of a document summarizing the process by which you may exercise your vested stock options. WHAT IS MATERIAL NON-PUBLIC INFORMATION? You are prohibited from trading in Harbinger Common Stock if you are in possession of material non-public information. Harbinger has issued a Revised Policy Statement Regarding Insider Trading and Related Securities Law Matters dated August 5, 1996; a copy of this will be distributed to all Premenos employees under separate cover. 5 6 HOW CAN I DETERMINE THE POTENTIAL SALE PRICE? As Harbinger is a public company, you can determine the potential sale price based on the market price of Harbinger Common Stock. Harbinger is traded on the Nasdaq National Market exchange under "HRBC". You can determine the market price of Harbinger through periodicals (i.e., the Wall Street Journal or local newspaper), contacting a stock broker or via certain resources available on the Internet. WHO CAN I CALL IF I HAVE QUESTIONS ABOUT EXERCISING MY NEW OPTIONS? If you have questions, please do not hesitate to contact Mike Lieb (404/467-3013) or Laura Nuzzo (404/467-3170) at Harbinger. 6 7 EXHIBIT I EXERCISING STOCK OPTIONS There are two ways to exercise your vested Harbinger stock options: 1. Same Day Sale/Cashless - A broker buys and sells the stock immediately and you receive the difference between the sale price and the exercise price less taxes. In this type of exercise you do not have to put cash up front. 2. Buy and Hold - You buy the stock at the exercise price plus taxes to be withheld (if any) and hold the certificate until a future date at which you want to sell. SAME DAY SALE / CASHLESS PROCEDURE 1. Call Laura Nuzzo (404/467-3170) in Harbinger's Accounting/Finance Department to verify the number of shares you have available to exercise and the exercise price. 2. Harbinger will send to you a Cashless Stock Option Exercise Form and Notice of Intent to Exercise (the "Form"). You must complete and sign the Form and return it to Harbinger's Accounting/Finance Department (facsimile is acceptable), together with a copy of your New Stock Option Grant Certificate. You may use your own broker if you indicate your desire to do so to Harbinger at this time by providing Harbinger with your broker's name, address, phone number, and fax number. Otherwise BT Alex. Brown & Sons Incorporated will be used as the broker for the transaction. 3. Once the Form is processed by Harbinger, Harbinger will instruct the transfer agent to electronically transfer the Harbinger shares to your account with your broker. Harbinger will also inform the broker that the shares are being transferred and inform your broker that the shares may be traded. 4. Once your broker completes the sale of the shares, your broker will issue a check to Harbinger for the option exercise price and any applicable taxes. The broker will then issue a check to you for the net proceeds of the sale. PLEASE NOTE THAT THE ABOVE PROCESS CAN TAKE A WEEK OR LONGER, SO PLAN ACCORDINGLY. Page 1 8 BUY AND HOLD PROCEDURE 1. Call Harbinger's Accounting/Finance Department to verify the number of shares you have available to exercise and the exercise price. 2. Send a check made payable to Harbinger for the total option exercise price to Harbinger headquarters, Attn: Accounting/Finance Department, Laura Nuzzo (404/467-3170), together with a copy of your New Stock Option Grant Certificate. 3. Upon receipt of the check, Harbinger will instruct the transfer agent to issue to you the certificate for your shares of Harbinger stock. Page 2 -----END PRIVACY-ENHANCED MESSAGE-----