1999 Stock Option Plan, as amended through April 20, 2005



 Exhibit 4.2 
  
 NETMANAGE, INC. 
 1999 NONSTATUTORY STOCK OPTION PLAN 
  
 AMENDED
AND RESTATED AS OF APRIL 19, 2002 
 AMENDED AS OF APRIL 20, 2005 
  
 1. Purposes of the Plan. The purposes of this Nonstatutory Stock Option Plan are: 
  

	 	•	 	to attract and retain the best available personnel for positions of substantial responsibility, 

  

	 	•	 	to provide additional incentive to Employees and Consultants, and 

  

	 	•	 	to promote the success of the Company’s business. 

  
 Options granted under the Plan will be Nonstatutory Stock Options. 
  
 2. Definitions. As used herein, the following definitions shall apply: 
  
 (a) “Administrator” means the Board or any of its
Committees as shall be administering the Plan, in accordance with Section 4 of the Plan. 
  
 (b) “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange
or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Options are, or will be, granted under the Plan. 
  
 (c) “Board” means the Board of Directors of the Company. 
  
 (d) “Code” means the Internal Revenue Code of 1986, as
amended. 
  
 (e) “Committee” means a committee of
Directors appointed by the Board in accordance with Section 4 of the Plan. 
  
 (f) “Common Stock” means the Common Stock of the Company. 
  
 (g) “Company” means NetManage, Inc. 
  
 (h) “Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such
entity. 
  
 (i) “Director” means a member of the
Board. 
  
 (j) “Disability” means total and
permanent disability as defined in Section 22(e)(3) of the Code. 







 (k) “Employee” means any person, including Officers, employed by the Company or any
Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company. 
  
 (l) “Exchange Act” means the Securities Exchange Act of
1934, as amended. 
  
 (m) “Fair Market Value”
means, as of any date, the value of Common Stock determined as follows: 
  
 (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination, as reported in The Wall Street Journal or such other source
as the Administrator deems reliable; 
  
 (ii) If the Common Stock
is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the date of
determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (iii) In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator.

  
 (n) “Notice of Grant” means a written or
electronic notice evidencing certain terms and conditions of an individual Option grant. The Notice of Grant is part of the Option Agreement. 
  
 (o) “Officer” means a person who is an officer of the Company within the meaning of Nasdaq guidelines, including all employees with the
corporate rank of vice-president or higher, and employees with lesser rank but comparable authority. 
  
 (p) “Option” means a nonstatutory stock option granted pursuant to the Plan, that is not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
  
 (q) “Option Agreement” means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan. 
  
 (r)
“Optioned Stock” means the Common Stock subject to an Option. 
  
 (s) “Optionee” means the holder of an outstanding Option granted under the Plan. 
  

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 (t) “Parent” 1means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (u) “Plan” means this 1999 Nonstatutory Stock Option Plan,
as amended and restated as of April 19, 2002 and as amended April 20, 2005. 
  
 (v) “Service Provider” means an Employee, Consultant or Director. 
  
 (w) “Share” means a share of the Common Stock, as adjusted in accordance with Section 12 of the Plan. 
  
 (x) “Subsidiary” means a “subsidiary corporation,”
whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares which may be issued and sold under the Plan is eight hundred
seventy one thousand four hundred and twenty-nine (871,429) Shares. Such reserve shall consist of (i) the 571,429 shares initially authorized for issuance under the Plan upon its adoption on October 25, 1999, and (ii) the
aggregate 300,000 share increase subsequently approved by the Board and the stockholders. 
  
 If an Option expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan
has terminated). 
  
 4.
Administration of the Plan. 
  
 (a)
Administration. The Plan shall be administered by (i) the Board or (ii) a Committee, which Committee shall be constituted to satisfy Applicable Laws. 
  
 (b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a
Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: 
  
 (i) to determine the exercise price per share in effect for Options granted under the Plan; 
  
 (ii) to select the Service Providers to whom Options may be granted hereunder; 
  
 (iii) to determine whether and to what extent Options are granted hereunder;

  


	1	Reflects adjustment for one-for-seven reverse stock split effective September 3, 2002. 

  

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 (iv) to determine the number of shares of Common Stock to be covered by each Option granted hereunder;

  
 (v) to approve forms of agreement for use under the Plan,
including the ability to approve forms of agreement allowing for early exercise of stock options prior to vesting, subject to the Optionee entering into a form of restricted stock purchase agreement; 
  
 (vi) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options may be exercised (which may be based on performance criteria), any vesting acceleration or
waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 

 
 (vii) to construe and interpret the terms of the Plan and awards granted
pursuant to the Plan; 
  
 (viii) to prescribe, amend and rescind
rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws; 
  
 (ix) to modify or amend each Option (subject to Section 14(b) of the
Plan), including the discretionary authority to extend the post-termination exercisability period of Options longer than is otherwise provided for in the Plan; 
  

(x) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option previously granted by the
Administrator; 
  
 (xi) to determine the terms and restrictions
applicable to Options; 
  
 (xii) to effect, at any time and from
time to time, with the consent of the affected option holders, the cancellation of any or all outstanding Options and to grant in substitution new Options covering the same or different number of shares of Common Stock but with an exercise price per
share based on the Fair Market Value per share of Common Stock on the new grant date; and 
  
 (xiii) to make all other determinations deemed necessary or advisable for administering the Plan. 
  
 (c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations shall be final
and binding on all Optionees and any other holders of Options. 
  
 5. Eligibility. Options may be granted to Service Providers; provided, however, that not more than fifty percent (50%) of the Shares authorized for issuance under this Plan may be issued pursuant to option grants made to persons
who are at the time of such grant either Officers or Directors. 
  

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 6. Limitation. Neither the Plan nor any Option shall confer upon an Optionee any right with
respect to continuing the Optionee’s relationship as a Service Provider with the Company, nor shall they interfere in any way with the Optionee’s right or the Company’s right to terminate such relationship at any time, with or without
cause. 
  
 7. Term of Plan. The Plan shall become
effective upon its adoption by the Board. Unless sooner terminated under Section 14 of the Plan, the Plan shall terminate on October 25, 2015. No Options may be granted under the Plan while the Plan is suspended or after it is terminated.

  
 8. Term of Option. The term of each Option shall be
stated in the Option Agreement. 
  
 9. Option Exercise Price
and Consideration. 
  
 (a) Exercise Price. The per
share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator, provided, however, that such exercise price per share shall not be less than one hundred percent (100%) of the Fair
Market Value per share on the grant date of the Option. 
  
 (b)
Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions which must be satisfied before the Option may be
exercised. 
  
 (c) Form of Consideration. The Administrator
shall determine the acceptable form of consideration for exercising an Option, including the method of payment. Such consideration may consist entirely of: 
  
 (i) cash; 
  
 (ii) check; 
  
 (iii) other Shares which (A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six months on
the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; 
  
 (iv) consideration received by the Company under a cashless exercise program implemented by the Company in connection with
the Plan; or 
  
 (v) any combination of the foregoing methods of
payment. 
  

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 10. Exercise of Option. 
  
 (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable
according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. An Option may not be exercised for a fraction of a Share. 
  
 An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may
consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will
be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan. 
  

Exercising an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised. 
  
 (b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, other than upon the Optionee’s death or Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Option Agreement, and only to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the
absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately revert to the Plan, and the Option shall cease to be outstanding as to those unvested Shares. If, after termination, the Optionee does not, within the time specified by the
Administrator, exercise his or her Option for one more of the vested Shares subject to the Option, then the Option shall terminate with respect to those vested Shares, and those Shares shall revert to the Plan. 
  
 (c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement, to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s
termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan, and the Option shall cease to be outstanding as to
unvested Shares. If, after termination, the Optionee does not, within the time 
  

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 specified by the Administrator, exercise his or her Option for one more of the vested Shares subject to the Option, then
the Option shall terminate with respect to those vested Shares, and those Shares shall revert to the Plan. 
  
 (d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee’s estate or by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s
termination. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan, and the Option shall cease to be outstanding as to those
unvested Shares. The Option may be exercised by the executor or administrator of the Optionee’s estate or, if none, by the person(s) entitled to exercise the Option under the Optionee’s will or the laws of descent or distribution. If the
Option is not, within the time specified by the Administrator, exercised for one more of the vested Shares subject to the Option, then the Option shall terminate with respect to those vested Shares, and those Shares shall revert to the Plan.

  
 11. Non-Transferability of Options. Unless
determined otherwise by the Administrator, an Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime
of the Optionee, only by the Optionee. If the Administrator makes an Option transferable, such Option shall contain such additional terms and conditions as the Administrator deems appropriate. 
  
 12. Adjustments Upon Changes in Capitalization,
Dissolution, Merger, Asset Sale or Corporate Reorganization. 
  
 (a) Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have
been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.

  

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 (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the
Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option
until ten (10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase
option applicable to any Shares purchased upon exercise of an Option shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously
exercised, an Option will terminate immediately prior to the consummation of such proposed action. 
  
 (c) Merger, Asset Sale or Corporate Reorganization. In the event of: (1) a merger or consolidation in which the Company is not the surviving
corporation; (2) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (3) any other capital reorganization in which more than fifty percent (50%) of the shares of the Company entitled to vote are exchanged, then to the extent permitted by applicable
law the Options and any restricted stock subject thereto shall become 100% vested and exercisable for a period of at least 10 days prior to the closing of such transaction, and such Options shall be terminated if not exercised prior to the closing
of such transaction; provided, however, that in no event shall any such accelerated vesting or termination of the Options occur in connection with a transaction effected solely for the purpose of changing the situs of the Company’s
incorporation ( e.g. from California to Delaware). 
  
 13. Date
of Grant. The date of grant of an Option shall be, for all purposes, the date on which the Administrator makes the determination granting such Option, or such other later date as is determined by the Administrator. Notice of the determination
shall be provided to each Optionee within a reasonable time after the date of such grant. 
  
 14. Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan. 
  
 (b) Effect of Amendment or Termination. No
amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the
Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to options granted under the Plan prior to the date of such termination. 
  
 15. Conditions Upon Issuance of Shares.

  
 (a) Legal Compliance. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such
compliance. 
  

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 (b) Investment Representations. As a condition to the exercise of an Option the Company may
require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required. 
  
 16. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 
  
 17. Reservation of Shares. The Company, during the term of
this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan 
  

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