================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Point West Capital Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
POINT WEST CAPITAL CORPORATION
1700 Montgomery Street, Suite 250
San Francisco, California 94111
Notice of Annual Meeting of Stockholders
and Proxy Statement
May 16, 2000
To the Stockholders of Point West Capital Corporation (the "Company" or "Point
West"):
You are cordially invited to attend the annual meeting of stockholders
of the Company (the "Meeting") to be held at 1:30 p.m. on May 16, 2000 at Ernst
& Young LLP, 555 California Street, 16th Floor, San Francisco, California 94104
to:
1. elect two directors to serve until 2003 and until their successors are
elected;
2. to act on a proposal to amend the Company's Amended and Restated 1995 Stock
Option Plan (the "1995 Option Plan");
3. to act on a proposal to amend the Company's Stock Option Plan For Non-
Employee Directors (the "Director Plan"); and
4. to transact such other business as may properly come before the Meeting.
All stockholders are urged to attend the Meeting or to vote by proxy.
If you do not expect to attend the Meeting in person, please sign and return the
accompanying proxy in the enclosed postage prepaid envelope. If you later find
that you can be present or for any other reason desire to revoke your proxy, you
can do so at any time before the voting. See "General."
This Notice of Annual Meeting and Proxy Statement (this "Notice") is
furnished in connection with the solicitation of proxies by the Board of
Directors of the Company from the holders of the Company's common stock, $0.01
par value (the "Common Stock"), in connection with the Meeting and all
postponements or adjournments thereof. This Notice, the accompanying proxy card
and the Company's Annual Report on Form 10-K for the year ended December 31,
1999 (the "Form 10-K") are first being mailed to stockholders on or about April
14, 2000, for the purposes set forth above.
GENERAL
-------
Only stockholders of record at the close of business on April 4, 2000
(the "Record Date") are entitled to notice of the Meeting and to vote the shares
of Common Stock held by them on the Record Date at the Meeting or any
postponements or adjournments thereof.
1
<PAGE>
If the accompanying proxy card is properly signed and returned to the
Company and is not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the proxy card will vote the shares of Common
Stock represented thereby (i) for the election as director of the Company of
each of the nominees proposed by the Board of Directors, (ii) for the proposal
to amend the 1995 Option Plan and (iii) for the proposal to amend the Director
Plan. Because the Company did not receive by March 17, 2000 (the deadline
determined under the Company's advance notice by-law provision) notice of any
matter intended to be raised by a stockholder at the Annual Meeting, the persons
designated as proxy holders in the proxy card will vote the shares represented
thereby, with regard to all other matters as may properly come before the
Meeting, as recommended by the Board of Directors or, if no such recommendation
is given, in their own discretion. Each stockholder may revoke a previously
granted proxy at any time before it is voted by filing with the Secretary of the
Company a revoking instruction or a duly executed proxy bearing a later date.
The powers of the proxy holders will also be revoked if the person executing the
proxy attends the Meeting and requests to vote in person. Attendance at the
Meeting will not, in itself, constitute revocation of a previously granted
proxy.
The cost of soliciting proxies in the enclosed form will be borne by
the Company. The Company will also request brokerage firms, banks, nominees,
custodians and fiduciaries to forward proxy materials to the beneficial owners
of shares of Common Stock as of the Record Date and will reimburse the cost of
forwarding the proxy materials in accordance with customary practice.
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding at the close of business on
the Record Date will constitute a quorum. As of the Record Date, 3,352,624
shares of Common Stock were outstanding. Each outstanding share entitles its
holder to cast one vote on each matter to be voted upon at the Meeting. Under
Delaware law, properly executed proxies that are marked "abstain" or are held in
"street name" by brokers that are not voted on one or more particular proposals
(if otherwise voted on at least one proposal) will be counted for purposes of
determining whether a quorum has been achieved at the Meeting. Abstentions will
have the same effect as a vote against the proposal to which such abstention
applies. Broker non-votes will be treated neither as a vote for nor as a vote
against any of the proposals to which such broker non-votes apply. Proxy cards
that are timely signed and returned with no other marking will be voted in
accordance with the recommendation of the Board of Directors. Proxies and
ballots will be received and tabulated by the transfer agent for the Common
Stock.
A list of stockholders of record as of the Record Date will be
available at the Company's executive offices for 10 days prior to the Meeting
and will also be available at the Meeting. Such list may be examined during
ordinary business hours by any stockholder of record for any purpose germane to
the Meeting.
ELECTION OF DIRECTORS
---------------------
The Board of Directors presently consists of five members, divided into
three classes, with one class of directors elected each year for a three-year
term. The terms of the directors in Class 2 expire in 2000. Alan B. Perper and
Paul A. Volberding, each of whom is currently serving as a director of the
Company in Class 2, have been nominated by the Board of Directors for
re-election to a term expiring in 2003.
At the Meeting, stockholders will elect two directors to Class 2.
Proxies cannot be voted for more than two persons. Under Delaware law, the two
nominees who receive the most votes at the
2
<PAGE>
meeting will be elected as directors. Unless authority to do so is specifically
withheld, the persons named in the accompanying proxy will vote for the election
of both Alan B. Perper and Paul A. Volberding. See "Directors and Executive
Officers" for information regarding Alan B. Perper, Paul A. Volberding and the
other three directors whose terms of office extend beyond the Meeting.
The Board of Directors recommends that stockholders vote "FOR" the
----------------------------------------------------------------------
election as a director of each of Alan B. Perper and Paul A. Volberding.
- -----------------------------------------------------------------------
DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------
Directors and Executive Officers
- --------------------------------
The name, age and current position(s) of each director and executive
officer of Point West are as follows:
Name Age Positions and Offices with the Company
==== === ======================================
Bradley N. Rotter (1) 44 Director and Chairman of the Board of
Directors
Alan B. Perper 41 Director and President
John Ward Rotter (1) 42 Director, Executive Vice President and
Chief Financial Officer
Stephen T. Bow 68 Director
Paul A. Volberding, M.D. 50 Director
- ---------------
(1) Bradley Rotter and John Ward Rotter are brothers.
Bradley N. Rotter has served as a director and as Chairman of the Board
of Directors since the Company's formation in September 1992. Mr. Rotter is also
the managing member of The Echelon Group of Companies, LLC ("Echelon"), a
Delaware limited liability company which provides investment and financial
services. See "Security Ownership of Certain Beneficial Owners and Management --
Echelon." He was the majority stockholder of The Echelon Group Inc. ("Old
Echelon"), a financial services company which was merged into Point West in
1995, and served as a director and Chairman of the Board of Old Echelon from
1988 until the merger. In addition, Mr. Rotter is a member of the Board of
Directors of Homeseekers.com, Inc.
Alan B. Perper has served as a director and as President since the
Company's formation. Mr. Perper is a member of Echelon and was a stockholder and
director of Old Echelon and its Senior Vice President from 1991 until the
merger.
John Ward Rotter has served as a director and as an executive officer
since the Company's formation. He has served as Executive Vice President (since
1994) and Chief Financial Officer (since September 1995). Mr. Rotter is a member
of Echelon, was a stockholder and director of Old Echelon and served as Old
Echelon's President from 1988 until the merger.
Stephen T. Bow has served as a director of the Company since March
1996. He has been the owner and president of Steve Bow & Associates, Inc., a
business consulting firm, since January 1, 1997. He served as Chairman and Chief
Executive Officer of Anthem Life Insurance Companies from October 1994 to
December 1996 (served as President and Chief Executive Officer of Anthem Life
Insurance Co. from June 1993 to October 1994) and Community National Assurance
Company from October 1994 to
3
<PAGE>
December 1996. He also served as Executive Vice President and a director of
Associated Insurance Companies, Inc. (re-named Anthem, Inc.) (from June 1993 to
December 1996) and Chairman of Acordia of San Francisco, a subsidiary of
Acordia, Inc., an insurance broker (from October 1993 to August 1996). From 1993
to June 1994, Mr. Bow served as Chairman of the Board and Chief Executive
Officer of Southeastern Mutual, Inc. and Southeastern United Corporation, each
of which is a health insurance company.
Paul A. Volberding, M.D. has served as a director of the Company since
March 1996. Dr. Volberding has been a professor or associate professor of
medicine at the University of California, San Francisco since 1987 and the
director of the Center for AIDS Research at that institution since 1988. He has
also served as the chief of the Medical Oncology Division and the AIDS Program
at San Francisco General Hospital for over ten years.
The Board of Directors elects executive officers annually and such
officers serve at the discretion of the Board of Directors.
Board of Directors
- ------------------
Classification of Board
-----------------------
The Board of Directors, which presently consists of five members, is
divided into three classes (designated Class 1, Class 2 and Class 3) as nearly
equal in number as possible. Currently, Class 1 consists of Bradley N. Rotter
and Stephen T. Bow, Class 2 consists of Alan B. Perper and Paul A. Volberding
and Class 3 consists of John Ward Rotter, who serve until the Company's annual
stockholders' meetings to be held in 2002, 2000 and 2001, respectively. At each
annual stockholders' meeting, directors nominated to the class of directors
whose term is expiring at that annual meeting will be elected for a term of
three years, and the remaining directors will continue in office until their
respective terms expire. Accordingly, approximately one-third of the Company's
directors is elected at each annual stockholders' meeting and generally a
director will stand for election only once every three years.
Committees
----------
The Board of Directors has an Audit Committee, currently comprised of
Stephen T. Bow, John Ward Rotter and Paul A. Volberding, and a Compensation
Committee, currently comprised of Stephen T. Bow and Paul A. Volberding. The
functions of the Audit Committee are to recommend annually to the Board of
Directors the appointment of the independent public accountants of the Company,
discuss and review the scope and the fees of the prospective annual audit,
review the results thereof with the Company's independent public accountants,
review compliance with existing major accounting and financial policies of the
Company, review the adequacy of the financial organization of the Company,
review management's procedures and policies relative to the adequacy of the
Company's internal accounting controls and compliance with federal and state
laws relating to accounting practices, and review and approve (with the
concurrence of a majority of the disinterested directors, if any, of the
Company) transactions, if any, with affiliated parties. The functions of the
Compensation Committee are to review and approve annual salaries and bonuses for
all officers, review, approve and recommend to the Board of Directors the terms
and conditions of all employee benefit plans or changes thereto, and administer
the 1995 Option Plan. The Board of Directors does not have a nominating
committee.
4
<PAGE>
Meetings
--------
During 1999, six meetings of the Board of Directors were held, two
meetings of the Audit Committee were held and five meetings of the Compensation
Committee were held. During 1999, all directors attended 100% of the number of
meetings of the Board of Directors and the committees of which they were
members.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
-------------------------------------------------------
Based upon a review of Forms 4 and 5 furnished to the Company by its
directors and executive officers and by persons known to the Company to
beneficially own 10% or more of the outstanding Common Stock and written
representations from certain executive officers and directors that no Form 5 is
required, the Company notes that all such persons timely filed reports required
to be filed under Section 16 with respect to 1999 except that Stephen T. Bow
disclosed on a Form 5 one transaction that should have been reported earlier on
a Form 4.
EXECUTIVE COMPENSATION
----------------------
Compensation of Directors
- -------------------------
The Company pays each non-employee director an annual retainer of
$15,000 and a fee of $750 for each board or committee meeting attended. All
directors are reimbursed for expenses incurred to attend meetings of the Board
of Directors or committees thereof.
In addition, the Director Plan provides for the automatic grant of
certain options to non-employee directors. Any person who becomes a non-employee
director automatically receives at such time a non-qualified option to purchase
10,000 shares of Common Stock at an exercise price equal to the fair market
value on the date of grant (i.e. the date of becoming a director). Such options
vest 34%, 33% and 33% at the first, second and third annual stockholders'
meeting, respectively, following the date of grant if the non-employee director
serves as such through such meeting. The Director Plan also provides that at
each annual stockholders' meeting, each non-employee director elected at or
continuing his term after such meeting receives automatically a non-qualified
option to purchase 5,000 shares of Common Stock at an exercise price equal to
the fair market value on the date of grant (i.e. the date of the stockholders'
meeting). Such options vest 100% after the non-employee director has served as
such until the next annual stockholders' meeting. All options vest immediately
(to the extent they would have vested at the next annual stockholders' meeting)
upon a Change of Control (as defined in the Director Plan). Each option expires
after ten years or earlier upon certain events. During 1999, each of Mr. Bow and
Dr. Volberding received on the date of the 1999 annual stockholders' meeting an
option under the Director Plan to purchase 5,000 shares of Common Stock with a
per share exercise price of $10.8125.
In addition, the 1995 Option Plan permits discretionary grants of stock
options to non-employee directors. No options under the 1995 Option Plan have
been granted to the Company's non-employee directors.
5
<PAGE>
Summary Compensation Table
- --------------------------
The table below provides information relating to compensation for the
years ended December 31, 1999, 1998 and 1997, for each of the Company's
executive officers. The amounts shown below reflect all compensation which was
earned in the respective year by the executive officers.
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
------
Securities All Other
Name and Underlying Compensation
Principal Position Year Salary ($) Bonus ($) Options/SARs (#) ($)(1)
- ------------------ ---- ---------- --------- ---------------- ------
<S> <C> <C> <C> <C> <C>
Bradley N. Rotter 1999 175,000 87,500 50,000 26,165
Chairman of the Board 1998 175,000 17,500 10,000 18,168
1997 165,000 17,500 10,000 18,228
Alan B. Perper 1999 175,000 87,500 50,000 26,165
President 1998 175,000 17,500 10,000 18,168
1997 165,000 17,500 10,000 18,228
John W. Rotter 1999 175,000 87,500 50,000 26,165
Executive Vice President 1998 175,000 17,500 10,000 18,168
1997 165,000 17,500 10,000 18,228
- ---------------
<FN>
(1) Represents contributions to the Company's profit sharing plan related to
compensation earned during the indicated year.
</FN>
</TABLE>
Options
- -------
The 1995 Option Plan authorizes the granting of options to purchase
shares of Common Stock to employees (including officers), consultants and
non-employee directors of the Company and its subsidiaries. The Compensation
Committee is authorized to grant options with such terms, including price,
vesting, termination and other, as they deem appropriate.
6
<PAGE>
The following tables provide information relating to stock options
granted to the executive officers during 1999 under the 1995 Option Plan and
options held by the executive officers at the end of 1999. No executive officer
exercised a stock option during 1999. No SARs have been granted to the executive
officers.
Option/SAR Grants in Last Fiscal Year
-------------------------------------
<TABLE>
<CAPTION>
Individual Grants (1)
- ---------------------------------------------------------------------
Potential
Number of Percent of Realizable
Securities Total Value at Assumed
Underlying Options/SARs Rates of Stock Price
Options/ Granted to Exercise Appreciation For
SARs Employees in Or Base Expiration Option Terms (3)
----------------
Name Granted Fiscal Year Price (2) Date 5% 10%
---- ------- ----------- --------- ---- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Bradley N. Rotter 50,000 15.4% $5.98125 11/11/04 $82,625 $182,581
Alan B. Perper 50,000 15.4% $5.98125 11/11/04 $82,625 $182,581
John Ward Rotter 50,000 15.4% $5.98125 11/11/04 $82,625 $182,581
- ---------------
<FN>
(1) Options are incentive stock options. Options vest with respect to 25%
of the shares covered thereby on each of the first through fourth
anniversaries of the date of grant. Options will vest in full upon a
Change of Control (as defined in the agreements evidencing the
options).
(2) Represents 110% of the fair market value on the date of grant.
(3) Based on a five-year option term and annual compounding, the 5% and 10%
calculations are set forth in compliance with Securities and Exchange
Commission rules. The appreciation calculations are not necessarily
indicative of future values of stock options or of the Common Stock.
</FN>
</TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
---------------------------------------------------
and Fiscal-Year End Option/SAR Values
-------------------------------------
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs at Fiscal Options/SARs at Fiscal
Year-End (#) Year-End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable (1)
---- ------------------------- -----------------------------
<S> <C> <C>
Bradley N. Rotter 6,500 / 63,500 $44,248 / $288,810
Alan B. Perper 6,500 / 63,500 $44,248 / $288,810
John Ward Rotter 6,500 / 63,500 $44,248 / $288,810
- ---------------
<FN>
(1) Value is calculated by multiplying the number of shares of Common Stock
underlying the stock option by the difference between the closing price
of a share of Common Stock on December 31, 1999 as reported by The
Nasdaq Stock Market(R) ($9.875) and the exercise price of the stock
option.
</FN>
</TABLE>
7
<PAGE>
Profit-Sharing Plan
- -------------------
The Company maintains a profit sharing plan (the "Plan") for its
employees. Each employee who has been employed for at least one year becomes a
participant in the Plan. The Plan provides for discretionary annual
contributions by the Company for the account of each participant. In any year in
which the Plan is "top-heavy" within the meaning of the Internal Revenue Code
(the "Code"), the Plan requires, consistent with the Code, that a minimum
contribution be made for non-key employees. The contribution is allocated among
participants based on their compensation under an allocation formula integrated
with Social Security. Participants vest 20% in their Plan accounts after two
years of service and an additional 20% after each of the next four years of
service. Upon termination following permanent disability or on retirement at age
65, all amounts credited to a participant's account are distributed, in a lump
sum payment or in installments, as directed by the participant. Upon death, all
amounts credited to a participant's account become fully vested and are
distributed to the participant's surviving spouse or designated beneficiary.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
During 1999, the Compensation Committee was comprised of Mr. Bow and Dr.
Volberding.
Report of the Compensation Committee on Executive Compensation
- --------------------------------------------------------------
The Compensation Committee of the Board of Directors is comprised of
two non-employee directors. This Committee's responsibilities include approving
compensation for all officers, reviewing and recommending to the Board of
Directors the terms and conditions of all employee benefit plans and changes
thereto and administering the 1995 Option Plan.
The Compensation Committee's goals are to assure that executive
compensation is linked to the Company's business strategies, goals and
performance, and that the Company's programs attract, retain and motivate the
high quality executives required for the success of the business. These
objectives are achieved through the programs summarized below.
All three of the Company's executive officers received essentially the
same compensation during 1999 because the Compensation Committee determined that
the officers contributed different, but equally valuable, services to the
Company.
Base Salary
-----------
The Compensation Committee did not change the executive officer's base
salaries for 1999. However, in recognition of the Company's profitability for
1999 and the Compensation Committee's determination that executive officer
salaries for 1999 were considerably below market, in late 1999 the Compensation
Committee raised the salary of each executive officer to $250,000, effective
January 1, 2000. The Compensation Committee intends to continue to gradually
raise salaries for the executive officers in future years, to bring such
salaries more in line with market salaries. Base salaries for the executive
officers will continue to be determined by evaluating the responsibilities of
the respective position and comparing (informally) such salaries to those of
other executive positions in the marketplace. From time to time, the
Compensation Committee may survey executive salaries of companies in the
financial services industries for purposes of such comparison.
8
<PAGE>
Annual Bonuses
--------------
The executive officers have an opportunity to earn annual bonuses based
on financial and non-financial goals. There are no set preferences for any
financial or non-financial performance measure, and the Compensation Committee's
decision regarding the bonus is ultimately subjective. There is no requirement
for an annual bonus. The Compensation Committee awarded each of the executive
officers an annual bonus payout with respect to 1999 equal to 50% of annual
salary in 1999. The significant factors in the decision for the 1999 bonus were
the Company's record profitability during 1999 and the Compensation Committee's
determination that the salaries of the executive officers are considerably below
market.
Stock Options
-------------
The Compensation Committee has the authority to grant stock options to
the executive officers under the 1995 Option Plan and to determine the terms of
such options. The Compensation Committee believes that stock options can serve
to focus the executive officers on long-term objectives, including maximization
of stockholder value. The Compensation Committee's decision regarding stock
option grants is ultimately subjective. There is no requirement for stock option
grants. During 1999, the Compensation Committee granted each of the executive
officers a stock option for 50,000 shares of Common Stock which will vest over a
four-year period and terminate after five years. The exercise price of the
options is equal to 110% of the fair market value on the date of grant. The
options were granted with an exercise price above fair market value because
Bradley N. Rotter owns over 10% of the outstanding Common Stock. See "Security
Ownership of Certain Beneficial Owners and Management -- Echelon." The Code
requires incentive stock options granted to 10% owners to have an exercise price
equal to at least 110% of fair market value on the date of grant and a
termination date no later that five years after the date of grant. Although the
other executive officers could have received options with lower exercise prices
and longer terms, the Committee determined that it was more appropriate to
retain the equality of compensation among the executive officers. Therefore, the
other two executive officers received incentive stock options with terms
identical to the stock options granted to Bradley N. Rotter. The significant
factors in the decision for the number of shares covered by the stock option
grants were the Company's record profitability during 1999 and the recognition
that the salaries of the executive officers are considerably below market.
Profit Sharing Plan
-------------------
The Company's profit sharing plan also provides long term incentive for
the executive officers and other employees. The Compensation Committee decides
the Company's overall annual contribution percentage for all plan participants.
In 1999, the Company made a contribution of 15% of the eligible compensation
base. The contribution is allocated among participants based on their
compensation under an allocation formula integrated with Social Security. See
"--Profit-Sharing Plan."
Limitations on Deductibility
----------------------------
Section 162(m) of the Code places a $1 million limit on the
deductibility of compensation paid to certain executive officers in any taxable
year. Given current compensation levels, the Compensation Committee believes
that the limits imposed by Section 162(m) pose minimal risk to the Company. The
Compensation Committee will continue to evaluate the risk posed by Section
162(m).
9
<PAGE>
The Compensation Committee
- -------------------------
Stephen T. Bow
Paul A. Volberding, M.D.
Performance Graph
- -----------------
The following graph compares the yearly change in the Company's
cumulative return on its Common Stock for the period commencing on February 14,
1996 (the date of the Company's initial public offering) and ending on December
31, 1999 with that of the Nasdaq Financial Stock Index and the Nasdaq Stock
Market Index. The comparison assumes $100 was invested on February 14, 1996 in
Common Stock and in each of the foregoing indices and that dividends were
reinvested.
Point West Capital Corporation
2000 Proxy
Performance Graph Data
<TABLE>
<CAPTION>
Measurement Period Point West Nasdaq Financial Nasdaq Stock
(Fiscal Year Covered) Capital Corporation Stock Index Market Index
<S> <C> <C> <C>
<CAPTION>
For period ending 2/14/96 $100 $100 $100
For period ending 12/31/96 $20 $126 $119
For period ending 12/31/97 $29 $193 $146
For period ending 12/31/98 $42 $187 $206
For period ending 12/31/99 $76 $185 $372
</TABLE>
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The following table sets forth, as of March 31, 2000, certain
information with respect to the beneficial ownership of the Company's Common
Stock by: (a) each person owning of record or known by the Company to own
beneficially more than five percent of the outstanding shares of Common Stock;
(b) each director; (c) each executive officer and (d) all of the executive
officers and directors of the Company as a group. All information with respect
to beneficial ownership has been furnished by the respective director, executive
officer or stockholder, as the case may be, or has been derived from documents
filed with the Securities and Exchange Commission. See "--Echelon;" "Directors
and Executive Officers" and "Certain Relationships and Related Transactions."
<TABLE>
<CAPTION>
Number of Percent of
Name Shares (1) Shares
---- ---------- -----------
<S> <C> <C>
Bradley N. Rotter (2)..................................... 762,278 22.69
John Ward Rotter (2) (3) .................................. 337,831 10.00
Alan B. Perper (2) (4) .................................... 334,165 9.95
Perper/Raiche Revocable Trust ............................. 244,665 7.30
Janet G. Raiche (4)........................................ 244,665 7.30
Stephen T. Bow (5) ........................................ 30,500 *
Paul A. Volberding, M.D. (5)............................... 30,500 *
All directors and executive officers as a group (6) ....... 1,328,774 38.49
- -------------------
* Less than 1%
<FN>
(1) Beneficial ownership was determined in accordance with Rule 13d-3 under
the Exchange Act.
(2) Includes 83,000 shares held by Lodestone Capital Fund, LLC ("Lodestone
Capital") and 6,500 shares subject to stock options granted to each of
Bradley N. Rotter, Alan B. Perper and John Ward Rotter and exercisable
within 60 days of March 31, 2000. See "-- Echelon." Each of Bradley N.
Rotter, Alan B. Perper and John Ward Rotter disclaim beneficial
ownership of shares held by Lodestone Capital except to the extent of
their direct and indirect interests in Lodestone Capital.
(3) Includes 20,250 shares of Common Stock subject to stock options granted
to Mr. Rotter's wife and exercisable within 60 days of March 31, 2000.
Mr. Rotter disclaims beneficial ownership of these shares.
(4) Includes 244,665 shares held by the Perper/Raiche Revocable Trust (the
"Perper/Raiche Trust"). See "-- Echelon."
(5) Includes 30,000 shares issuable within 60 days of March 31, 2000
pursuant to the exercise of stock options granted under the Director
Plan.
(6) See footnotes (2), (3), (4) and (5) above.
</FN>
</TABLE>
Echelon
- -------
The following information is given as of March 31, 2000. Lodestone
Capital, Lodestone Partners, LLC ("Lodestone Partners"), Echelon, Bradley N.
Rotter, John Ward Rotter, Alan B. Perper, the Perper/Raiche Trust and Janet G.
Raiche jointly file a Schedule 13D. Echelon is a member of Lodestone Capital,
which is the record holder of 83,000 shares of Common Stock (approximately 2.5%
of the outstanding Common Stock). Echelon is also a member of Lodestone
Partners, which is in turn the manager of Lodestone Capital. Lodestone Partners
is managed by a board of managers composed of John Ward Rotter and another
individual (the "Lodestone Member"), who is the other member of Lodestone
Partners.
Pursuant to the Lodestone Partners Operating Agreement, the Lodestone
Member has sole investment power with respect to the investments of Lodestone
Capital. The Operating Agreement is, however, silent on the subject of voting
power with respect to securities held by Lodestone Capital.
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Therefore, through John Ward Rotter, Echelon may be deemed to share voting power
with respect to securities held by Lodestone Capital and, thus, to be the
beneficial owner of the shares of Common Stock held of record by Lodestone
Capital. Echelon disclaims beneficial ownership of the shares of Common Stock
held of record by Lodestone Capital, except to the extent of its equity interest
in Lodestone Capital.
Bradley N. Rotter, John Ward Rotter and Alan B. Perper constitute all
of the members of Echelon and, as such, may be deemed to be the beneficial
owners of the shares of Common Stock held of record by Lodestone Capital. Alan
B. Perper and John Ward Rotter disclaim beneficial ownership of the shares of
Common Stock held of record by Lodestone Capital, except to the extent of their
respective equity interests in Echelon and Echelon's respective equity interest
in Lodestone Capital. Bradley N. Rotter acknowledges beneficial ownership of
approximately 46,176 shares (at December 31, 1999) of Common Stock held of
record by Lodestone Capital, which are attributable to the equity interest in
Lodestone Capital of the Bradley N. Rotter Self-Employed Pension Plan and Trust,
but otherwise disclaims beneficial ownership of the shares of Common Stock held
of record by Lodestone Capital, except to the extent of his respective equity
interest in Echelon and Echelon's respective equity interest in Lodestone
Capital. Bradley N. Rotter is the record holder of 672,778 shares of Common
Stock (approximately 20.1% of the outstanding Common Stock) and holds stock
options. John Ward Rotter is the record holder of 228,081 shares of Common Stock
(approximately 6.8% of the outstanding Common Stock) and holds stock options.
Lodestone Partners is the manager of Lodestone Capital and, as such,
may be deemed to be the beneficial owner of the shares of Common Stock held of
record by Lodestone Capital. Lodestone Partners, however, currently has only a
nonparticipating (or "carried") interest in Lodestone Capital and, therefore,
disclaims beneficial ownership of the shares of Common Stock held of record by
Lodestone Capital, except to the extent of its equity interest in Lodestone
Capital.
The Perper/Raiche Trust is the record holder of 244,665 shares of
Common Stock (approximately 7.3% of the outstanding Common Stock). Alan B.
Perper and Janet G. Raiche, as trustees of the Perper/Raiche Trust, may be
deemed to be the beneficial owners of the shares of Common Stock held of record
by the Perper/Raiche Trust, but each of them disclaims beneficial ownership of
such shares, except to the extent of their respective beneficial interests under
the Perper/Raiche Trust. Mr. Perper also holds stock options.
The address for Echelon, Bradley N. Rotter, John Ward Rotter and Alan
B. Perper is 1700 Montgomery Street, Suite 250, San Francisco, California 94111.
The address for the Perper/Raiche Trust and Janet G. Raiche is 17 Reed Ranch
Road, Tiburon, California 94920.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
Allocation and Accrual of Expenses
- ----------------------------------
Echelon, which is controlled by Bradley N. Rotter, Alan B. Perper and
John Ward Rotter, shares office space and other expenses with the Company. In
February 1996, the Company executed an agreement with Echelon which governs the
allocation of certain shared expenses. The agreement was amended effective
January 1, 1999. The agreement provides that, so long as Echelon uses a portion
of the space leased by the Company in San Francisco, Echelon will pay an amount
equal to 20% of the amount of rent and required liability insurance premiums
paid by the Company in connection with such space. Echelon's right to use the
space will terminate on the earlier of (i) the date the agreement
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terminates, (ii) three days after Echelon notifies the Company that Echelon no
longer desires to use any portion of the space, or (iii) three days after the
Company notifies Echelon that Echelon may no longer use any portion of the
space. The agreement also acknowledges that the Company currently employs, and
may hereafter hire, individuals who regularly perform functions on behalf of
both the Company and Echelon ("shared employees"). Pursuant to the agreement,
Echelon (i) pays directly to (or on behalf of) each shared employee a designated
percentage of such shared employee's salary and any contributions to defined
benefit plans, and (ii) reimburses the Company a specified percentage of the
Company's costs of all other benefits paid to (or on behalf of) such shared
employee. Such percentage is determined by reference to the percentage of time
such shared employee devotes to each entity. Once a month, the Company and
Echelon reassess the identity of shared employees. The provisions regarding
shared employees will terminate on the date the agreement terminates, which will
be the earlier of (i) April 2001, subject to one-year automatic extensions in
the absence of 30 days' written notice of termination by the Company, or (ii)
the date the lease for the shared office space terminates or expires. Under the
agreement, each party is responsible for providing, at its sole cost and
expense, all supplies it will need. During 1999, pursuant to this agreement,
Echelon paid directly or reimbursed the Company for rent and insurance in the
amount of $33,894 and $84,064 of compensation for shared employees.
Indemnification
- ---------------
On December 19, 1996, a complaint was filed in the United States
District Court, Northern District of California (the "Court") (Docket No.
C96-4558) against Dignity Partners, Inc. (now Point West Capital Corporation)
and each of its directors and on February 13, 1997, a complaint was filed in the
Superior Court of California, City and County of San Francisco (Docket No.
984643) against Dignity Partners, Inc., and each of its executive officers and
Echelon. In 1999, a settlement was reached pursuant to which all claims against
all defendants were dismissed and $3.15 million was paid to the plaintiffs.
Under the terms of the Company's D&O insurance policy, the Company's insurer
paid 70% of the settlement amount.
In accordance with the Company's certificate of incorporation and
Delaware law, the Company has paid expenses (including attorneys' fees) incurred
by each executive officer and director in defending such cases in advance of the
final disposition of such cases on the condition that each such individual shall
repay the amounts advanced if it is ultimately determined that such individual
is not entitled to be indemnified by the Company.
1995 OPTION PLAN AMENDMENT
--------------------------
In November 1999 and April 2000 the Compensation Committee unanimously
recommended to the Board of Directors, and the Board of Directors unanimously
approved and adopted, subject to stockholder approval, an amendment to the 1995
Option Plan to increase by 620,000 the maximum number of shares of Common Stock
available for issuance thereunder and to impose a 100,000 share limit on the
number of shares of Common Stock that may be subject to stock options granted
under the 1995 Option Plan to any individual in a calendar year (the
"Amendment"). The affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy at the Meeting and entitled to vote on the
Amendment is required for approval of the Amendment. The following summary
describes the 1995 Option Plan (as currently in effect and as impacted by the
Amendment).
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1995 Option Plan
- ----------------
Description of Plan
-------------------
The purpose of the 1995 Option Plan is to enable the Company and its
subsidiaries to attract and retain directors, officers, other employees and
consultants and to provide them with appropriate incentives and rewards for
superior performance. The 1995 Option Plan provides for the plan to be
administered by a committee (the "Committee") comprised solely of non-employee
directors (within the meaning of Rule 16b-3 under the Exchange Act ("Rule
16b-3")) or, at any time that such a committee cannot be created, by the entire
Board. The Compensation Committee, which is currently comprised of two directors
who are non-employee directors, currently acts as the Committee. The 1995 Option
Plan affords the Committee the flexibility to respond to changes in competitive
and legal environments, thereby protecting and enhancing the Company's current
and future ability to attract and retain directors, officers, other employees
and consultants.
The 1995 Option Plan authorizes the granting of options to purchase
shares of Common Stock. All directors, officers, other employees and consultants
to the Company or any of its subsidiaries (or any person who has agreed to
commence serving in such capacity) may be selected by the Committee to receive
options under the 1995 Option Plan. At March 31, 2000, 27 individuals were
eligible to receive options under the 1995 Option Plan. Subject to adjustment as
provided in the 1995 Option Plan, the number of shares of Common Stock that may
be issued or transferred upon exercise of options granted under the 1995 Option
Plan plus the number of shares of Common Stock covered by outstanding options
granted under the 1995 Option Plan (the "Maximum Share Number") may not in the
aggregate exceed 450,000. Shares of Common Stock covered by an option which is
canceled or terminated will again be available to be issued or to be the subject
of a stock option granted under the 1995 Option Plan. The Maximum Share Number,
the number and kind of shares covered by outstanding options and the option
prices per share applicable thereto, are subject to adjustment by the Committee
in the event of stock dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, spin-offs, split-offs, spin-outs,
split-ups, reorganizations, partial or complete liquidations, issuances of
rights or warrants, and similar transactions or events. In the event of any such
transaction or event, the Committee may in its discretion provide in
substitution for any or all outstanding options under the 1995 Option Plan such
alternative consideration (including options of the surviving entity) as it may
in good faith determine to be equitable in the circumstances and may require the
surrender of all options so replaced. Shares of Common Stock issued upon
exercise of options granted under the 1995 Option Plan may be authorized but
unissued shares or shares held in treasury. The Company may repurchase shares of
Common Stock in the open market or otherwise in connection with the issuance or
transfer of shares pursuant to the 1995 Option Plan.
As of November 1, 1999, 65,500 shares of Common Stock were eligible for
option grants under the 1995 Option Plan. In November 1999, the Committee and
the Board determined that additional options should be granted to employees in
excess of the Maximum Share Number. Therefore, the Committee and the Board
approved, subject to stockholder approval, the Amendment. The Amendment
increases the Maximum Share Number from 450,000 shares to 1,070,000 shares.
Through March 31, 2000, the Committee also granted additional options for
248,500 shares of Common Stock to employees. These options will be null and void
if the Amendment is not approved by the stockholders.
The Amendment also adds to the 1995 Option Plan a limitation
prohibiting the grant to any person during any calendar year of options for more
than 100,000 shares of Common Stock. This amount is also subject to adjustment
by the Committee in the event of stock dividends, stock splits, combinations of
shares, recapitalizations, partial or complete liquidations, issuances of rights
or warrants, and similar transactions or
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events. We are adding this per person, per calendar year limit to permit options
granted under the 1995 Option Plan to qualify as performance-based compensation
that is not subject to the tax laws' $1,000,000 limit on deduction of certain
executive compensation.
Options granted under the 1995 Option Plan may be options that are
intended to qualify as "incentive stock options" within the meaning of Section
422 of the Code or options that are not intended to so qualify. No "incentive
stock option" can be granted under the 1995 Option Plan after November 2007 or,
if the Amendment is approved by stockholders, November 2009. The Committee may
grant options that entitle the optionee to purchase shares of Common Stock at a
price less than, equal to or greater than market value on the date of grant, as
determined by the Committee; provided that the exercise price of any incentive
stock option is at least equal to market value of the Common Stock on the date
of grant. The closing price of the Common Stock on March 31, 2000, as reported
by The Nasdaq Stock Market(R) was $7.15625. The Committee may also grant
"re-load" options which provide that additional stock options will automatically
be granted to an optionee upon the exercise of previously granted stock options.
The option price is payable at the time of exercise (i) in cash or cash
equivalent, (ii) by the transfer to the Company of shares of Common Stock that
are already owned by the optionee and have a value at the time of exercise equal
to the option price, (iii) with any other legal consideration the Committee may
deem appropriate or (iv) by any combination of the foregoing methods of payment.
Any grant may provide for deferred payment of the option price from the proceeds
of sale through a broker on the date of exercise of some or all of the shares of
Common Stock to which the exercise relates. Fractional shares will not be issued
in connection with the exercise of a stock option.
No option may be exercised more than ten years from the date of grant.
Each grant must specify the number of shares of Common Stock subject to the
option and the conditions, including as and to the extent determined by the
Committee, the period of continuous service to or employment by the Company or
any subsidiary, or the achievement of Management Objectives (as described below)
that are necessary before the options will become exercisable, and may provide
for the earlier exercise of the options, including, without limitation, in the
event of a change in control of the Company or other similar transaction or
event. Successive grants may be made to the same optionee regardless of whether
options previously granted to him or her remain unexercised. The Committee
determines whether and how options may be transferred and may provide for
further transfer restrictions on shares of Common Stock issued or transferred
upon exercise of stock options.
Management Objectives means the achievement of performance objectives
established pursuant to the 1995 Option Plan, which may be described in terms of
either Company-wide objectives or objectives that are related to the performance
of the individual optionee or the subsidiary, division, department or function
within the Company or a subsidiary in which the optionee is employed. The
Committee may adjust Management Objectives and related minimum acceptable levels
of achievement if events or transactions have occurred after the date an option
was granted that are unrelated to the performance of the optionee and result in
distortion of the Management Objectives or the related minimum levels.
In connection with its administration of the 1995 Option Plan, the
Committee is authorized to interpret the 1995 Option Plan and related agreements
and other documents. The Committee may provide for special terms for options to
participants who either are foreign nationals or are employed by or provide
services to the Company or any of its subsidiaries outside of the U.S., as the
Committee may consider necessary or appropriate to accommodate differences in
local law, tax policy or custom. The Committee may with the concurrence of the
affected optionee cancel any agreement evidencing an option granted under the
1995 Option Plan. In the event of any such cancellation, the Committee may
authorize the granting of a new option under the 1995 Option Plan (which may or
may not cover the same number of
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<PAGE>
shares that had been the subject of the prior option) in such manner, at such
price and subject to such other terms and conditions as would have been
applicable under the 1995 Option Plan had the canceled award not been granted.
The 1995 Option Plan may be amended from time to time by the Board of
Directors, but without further approval by the stockholders of the Company no
such amendment (unless expressly allowed pursuant to the adjustment provisions
described above) may increase the Maximum Share Number.
Benefits
--------
The types of options which may be granted in the future under the 1995
Option Plan are subject to the discretion of the Committee and, therefore,
cannot be determined. As of March 31, 2000, each executive officer had received
options for 70,000 shares under the 1995 Option Plan (see "Executive
Compensation -- Options") with an exercise price equal to 100% or 110% of the
fair market value at the date of grant. As of March 31, 2000, other current
employees and non-employee directors of the Company's subsidiaries had received
under the 1995 Option Plan stock options for 423,000 shares of Common Stock,
each of which had an exercise price equal to the fair market value at the date
of grant thereof, and 99,300 of which have been exercised. Of these options,
options covering 248,500 shares of Common Stock (including options covering
50,000 shares granted to each of the executive officers) were granted subject to
stockholder approval of the Amendment and will be null and void if such approval
is not obtained.
Federal Income Tax Consequences
-------------------------------
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the 1995 Option Plan based on federal
income tax laws in effect on January 1, 2000. This summary is not intended to be
exhaustive and does not describe state or local tax consequences.
Tax Consequences to Optionees
Non-qualified Options. In general: (i) no income will be recognized by
an optionee at the time a non-qualified option is granted; (ii) at the time of
exercise of a non-qualified option, ordinary income will be recognized by the
optionee in an amount equal to the difference between the option price paid for
the shares and the fair market value of the shares if they are nonrestricted on
the date of exercise; and (iii) at the time of sale of shares acquired pursuant
to the exercise of a non-qualified option, any appreciation (or depreciation) in
the value of the shares after the date of exercise will be treated as a capital
gain (or loss).
Incentive Stock Options. No income generally will be recognized by an
optionee upon the grant or exercise of an incentive stock option. If shares of
Common Stock are issued to an optionee pursuant to the exercise of an incentive
stock option and no disqualifying disposition of the shares is made by the
optionee within two years after the date of grant or within one year after the
exercise of the option, then upon the sale of the shares any amount realized in
excess of the option price will be taxed to the optionee as a capital gain and
any loss sustained will be a capital loss.
If shares of Common Stock acquired upon the exercise of an incentive
stock option are disposed of prior to the expiration of either holding period
described above, the optionee generally will recognize ordinary income in the
year of disposition in an amount equal to any excess of the fair market value of
the shares at the time of exercise (or, if less, the amount realized on the
disposition of the shares in the sale or
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exchange) over the option price paid for the shares. Any further gain (or loss)
realized by the optionee generally will be taxed as a capital gain (or loss).
Tax Consequences to the Company
To the extent that a participant recognizes ordinary income in the
circumstance described above, the Company or subsidiary for which the
participant performs services will be entitled to a corresponding deduction
provided that, among other things, the income meets the test of reasonableness,
is an ordinary and necessary business expense, is not an "excess parachute
payment" within the meaning of Section 280G of the Code, and is not disallowed
by the $1 million limitation on certain executive compensation.
The Board of Directors recommends that stockholders vote "FOR" the
-----------------------------------------------------------------------
proposal to amend the 1995 Option Plan.
- ---------------------------------------
DIRECTOR OPTION PLAN AMENDMENT
------------------------------
In February 2000 the Board of Directors unanimously approved and
adopted, subject to stockholder approval, amendments to the Director Plan to
increase by 75,000 the maximum number of shares of Common Stock available for
issuance thereunder and to update provisions of the Director Plan governing
amendments thereto (the "Director Plan Amendments"). The affirmative vote of a
majority of the shares of Common Stock represented in person or by proxy at the
Meeting and entitled to vote on the Director Plan Amendments is required for
approval of the Director Plan Amendments. The Director Plan Amendments are
intended primarily to permit the continuation of automatic grants of stock
options to non-employee directors. The following summary describes the Director
Plan (as currently in effect and as impacted by the Director Plan Amendments).
Director Plan
- -------------
Description of Plan
-------------------
The Director Plan is intended to encourage outside directors of the
Company to own shares of Common Stock and thereby to align their interests more
closely with the interests of the other stockholders of the Company, to
encourage the highest level of outside director performance by providing such
directors with a direct interest in the Company's attainment of its financial
goals, and to provide financial incentives that will help attract and retain the
most qualified outside directors. Only members of the Board of Directors who are
not employees of the Company and who do not beneficially own 10% or more of the
outstanding Common Stock (each an "Eligible Director") are eligible to
participate in the Director Plan. For purposes of the Director Plan, an
"employee" is a person whose compensation from the Company is subject to
withholding under the Code. Mr. Bow and Dr. Volberding each qualify as an
Eligible Director under the Director Plan.
The Director Plan is administered by the Board. The Board has the power
to interpret the Director Plan and to determine all questions thereunder.
Notwithstanding the foregoing, the Board has no authority, discretion or power
to determine the terms or timing of options granted under the Director Plan.
Subject to adjustment as provided in the Director Plan, the number of
shares of Common Stock that may be issued or transferred upon exercise of
options granted under the Director Plan plus the number of shares of Common
Stock covered by outstanding options granted under the Director Plan (the
"Maximum
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Share Number") may not in the aggregate exceed 75,000. If the number of
authorized shares is insufficient to cover all options to be granted on a
specific date, options shall be granted pro rata to all Eligible Directors
entitled to receive an option on such date. Shares of Common Stock covered by an
option which is canceled or terminated will again be available to be issued or
to be the subject of a stock option granted under the Director Plan. The Board
will make or provide for adjustments to the Maximum Share Number, the number of
shares covered by Initial Options and Annual Options (as described below) to be
granted in the future, the number and kind of shares of Common Stock or other
securities that are covered by outstanding options, and the exercise price
applicable to outstanding options as the Board in good faith determines to be
equitably required to prevent dilution or expansion of the rights of optionees
which would otherwise result from any stock dividend, stock split, combination
of shares, recapitalization or other change in the capital structure of the
Company, any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of warrants or other rights to purchase securities or any other
corporate transaction or event having an effect similar to any of the foregoing.
Shares of Common Stock issued upon exercise of options granted under the
Director Plan may be authorized but unissued shares or shares held in treasury.
The Company may repurchase shares of Common Stock in the open market or
otherwise in connection with the issuance or transfer of shares pursuant to the
Director Plan.
As of March 31, 2000, options covering 60,000 shares of Common Stock,
all of which were outstanding, had been granted under the Director Plan. The
shares of Common Stock available under the Director Plan will be sufficient to
grant Annual Options on the date of the Meeting, for 10,000 shares in the
aggregate that are expected to be granted to Mr. Bow and Dr. Volberding.
However, if the Maximum Share Number is not increased, the shares of Common
Stock available under the Director Plan will not be sufficient to grant Annual
Options in full on the date of subsequent annual stockholders' meetings or to
grant Initial Options (as described below) to any additional non-employee
directors who may be elected to the Board. The Company anticipates adding to the
Board over the next 14 months at least one additional non-employee director to
satisfy recently adopted changes to rules applicable to companies listed on The
Nasdaq Stock Market(R). In order to accommodate the grant of Initial Options to
any new non-employee director and Annual Options expected to be granted in 2001
and beyond, the Director Plan Amendments increase the Maximum Shares Number from
75,000 shares to 150,000 shares.
Any person who becomes an Eligible Director automatically receives at
such time a non-qualified option to purchase 10,000 shares of Common Stock at an
exercise price per share equal to the fair market value of a share of Common
Stock on the date the individual becomes an Eligible Director ("Initial
Options"). For purposes of the Director Plan, "fair market value" is the closing
sale price of the Common Stock as reported by The Nasdaq Stock Market(R) on the
date an Initial Option is granted or, if there were no sales on such date, on
the most recent preceding date on which sales occurred. The closing price of the
Common Stock on March 31, 2000, as reported by The Nasdaq Stock Market(R), was
$7.15625. Initial Options become exercisable to the extent of 34% of the shares
covered thereby after the optionee has continuously served as a director through
the next annual stockholders' meeting immediately following such grant date, and
to the extent of an additional 33% of the shares covered thereby in each of the
next two successive years if the optionee has continuously served as a director
until the date of the stockholders' meeting held in such years. Notwithstanding
the foregoing, if an optionee dies or becomes disabled, all Initial Options held
by such optionee become immediately exercisable to the extent the Initial
Options would have been exercisable had the optionee remained a director through
the date of the Company's next annual stockholders' meeting. To the extent
exercisable, each Initial Option is exercisable in whole or in part.
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On the date of the annual meeting of the Company's stockholders in each
year each Eligible Director elected at or continuing his or her term after such
meeting is automatically granted a non-qualified option to purchase 5,000 shares
of Common Stock at an exercise price per share equal to the fair market value of
a share of Common Stock on such date ("Annual Option"). Annual Options become
exercisable to the extent of 100% of the shares covered thereby after the
optionee has served as a director until the date of the next annual
stockholders' meeting. Notwithstanding the foregoing, if an optionee dies or
becomes disabled, all Annual Options held by such optionee become exercisable in
full. To the extent exercisable, each Annual Option is exercisable in whole or
in part from time to time.
The exercise price of stock options granted under the Director Plan may
be paid in cash or cash equivalents, shares of Common Stock held by the optionee
for at least six months, or a combination thereof. The requirement of payment in
cash is deemed to be satisfied if the optionee provides for a broker who is a
member of the National Association of Securities Dealers, Inc. to sell a
sufficient number of shares of Common Stock being purchased so that the net
sales proceeds equal, at least, the exercise price, and such broker agrees to
deliver the exercise price to the Company not later than the settlement date of
the sale. Fractional shares will not be issued in connection with the exercise
of a stock option, and cash in lieu thereof will be paid by the Company. Each
Initial Option and Annual Option (each an "Option Right") will terminate on the
earliest to occur of (i) three months after the optionee ceases to serve as a
director of the Company for a reason other than the optionee's death or
disability, (ii) one year after the optionee ceases to serve as a director
because of death or disability, or (iii) ten years from the date of grant of the
Option Right.
In general, Option Rights may not be transferred except by will or the
laws of descent or distribution, and may be exercised during an optionee's
lifetime only by the optionee or, in the event of the optionee's incapacity, by
the optionee's guardian or legal representative. However, under certain
circumstances, Option Rights may be transferred by an optionee without value
through gifts or domestic relations order to one or more "family members" of the
optionee (within the meaning of the Director Plan). In such event, the
transferee may exercise the Option Right but may not subsequently transfer the
Option Right.
Upon a Change in Control, all Option Rights will become immediately
exercisable in full to the extent the Option Rights would have become
exercisable with respect to the optionee's service as a director through the
date of the annual stockholders' meeting immediately following such Change of
Control. If any event or series of events constituting a Change in Control is
abandoned, the effect thereof will be null and the exercisability of Option
Rights will be governed by the provisions of the Director Plan described above
except to the extent of exercise prior to nullification. The Director Plan
defines a Change in Control as the occurrence of any of the following events:
(i) execution by the Company of an agreement for the merger, consolidation or
reorganization into or with another corporation or other legal person, unless as
a result of such transaction not less than a majority of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
securities of the Company entitled to vote generally in the election of
directors ("Voting Securities") immediately prior to such transaction; (ii)
execution by the Company of an agreement for the sale or other transfer of all
or substantially all of its assets to another corporation or legal person,
unless as a result of such transaction not less than a majority of the combined
voting power of the then-outstanding securities of such corporation or legal
person immediately after such transaction is held in the aggregate by the
holders of Voting Securities immediately prior to such transaction; (iii) a
report is filed on Schedule 13D or Schedule TO disclosing that any person other
than any of Bradley N. Rotter, Alan B. Perper or John Ward Rotter or any of
their respective family members or affiliates, has or intends to become the
beneficial owner of 20% or more of the combined voting power of the then
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outstanding Voting Securities; (iv) during any period of two consecutive years,
individuals who at the beginning of any such period constitute the directors of
the Company cease for any reason to constitute at least a majority thereof (each
director first elected or first nominated for election by a vote of at least
two-thirds of the directors then in office who were directors of the Company at
the beginning of any such period being deemed to have been a director of the
Company at the beginning of such period); or (v) the Company adopts a plan for
the liquidation or dissolution of the Company other than pursuant to a merger,
consolidation or reorganization which would not constitute a Change in Control,
as described in clause (i) above.
The Board may at any time amend or terminate the Director Plan.
Notwithstanding the foregoing, (i) except for the adjustments described above,
without the approval of the stockholders of the Company, no such amendment will
increase the maximum number of shares covered by the Director Plan, materially
modify the requirements as to eligibility for participation in the Director
Plan, or otherwise cause the Director Plan or any grant made pursuant thereto to
cease to satisfy any applicable condition of Rule 16b-3 or will cause any
Director to fail to qualify as a "disinterested person" within the meaning of
Rule 16b-3, and (ii) provisions relating to the amount and price of securities
to be awarded and the timing of awards under the Director Plan will not be
amended more than once every six months, other than to comport with changes in
the Code, the Employment Retirement Income Security Act, or the rules
promulgated thereunder. In addition, no amendment or termination will adversely
affect any outstanding award without the consent of the Director holding such
award.
Given fairly recent amendments to Rule 16b-3, the foregoing provisions
for amendments to the Director Plan are outdated. For example, Rule 16b-3 no
longer contains a definition of "disinterested person" or limits amendments for
certain director plans to once every six months. Therefore, the Director Plan
Amendments replace this provision to require stockholder approval for amendments
to the Director Plan only if the Maximum Share Number is being increased, unless
the increase results from adjustments described above.
Director Plan Benefits
----------------------
Option Rights under the Director Plan are granted automatically. The
number of Initial Options and Annual Options to be granted in the future will
depend on the number of Eligible Directors elected to the Board, the timing of
any such election and any term of service on the Board. Through March 31, 2000,
each of Mr. Bow and Dr. Volberding had received an Initial Option for 10,000
shares at an exercise price of $13.50, and Annual Options for 20,000 aggregate
shares at an exercise price ranging from $3.4375 to $12.375. The Company
anticipates that Mr. Bow and Dr. Volberding will each receive, on the date of
the Meeting, an Additional Annual Option for 5,000 shares at an exercise price
equal to fair market value on the date of grant.
Federal Income Tar Consequences
-------------------------------
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the Director Plan based on federal
income tax laws in effect on January 1, 2000. This summary is not intended to be
exhaustive and does not describe state or local tax consequences.
In general: (i) no income will be recognized by an optionee at the time
a non-qualified option is granted; (ii) at the time of exercise of a
non-qualified option, ordinary income will be recognized by the optionee in an
amount equal to the difference between the option price paid for the shares and
the fair market value of the shares if they are nonrestricted on the date of
exercise; and (iii) at the time of sale of
20
<PAGE>
shares acquired pursuant to the exercise of a non-qualified option, any
appreciation (or depreciation) in the value of the shares after the date of
exercise will be treated as a capital gain (or loss). To the extent that a
participant recognizes ordinary income in the circumstance described above, the
Company will be entitled to a corresponding deduction provided that, among other
things, the income meets the test of reasonableness and is an ordinary and
necessary business expense.
The Board of Directors recommends that stockholders vote "FOR" the
-----------------------------------------------------------------------
proposal to amend the Director Plan.
- -----------------------------------
INDEPENDENT ACCOUNTANTS
-----------------------
The Company has appointed Ernst & Young LLP ("E&Y") as the Company's
independent accountants for the fiscal year ending December 31, 2000. E&Y has
served as the Company's independent accountants since September 1999.
Representatives of E&Y are expected to be present at the Meeting to respond to
appropriate questions and to make such statements as they desire.
On September 20, 1999, the Company dismissed KPMG LLP ("KPMG") as the
Company's independent accountants. The decision to change independent
accountants was made by the Board of Directors, upon the recommendation thereof
by the Audit Committee. The reports of KPMG on the financial statements of the
Company for the fiscal years ended December 31, 1998 and 1997 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During the Company's
fiscal years ended December 31, 1998 and 1997 and any subsequent interim period,
there were no disagreements with KPMG on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of KPMG, would have caused
them to make reference thereto in their report on the financial statements for
such years.
On September 24, 1999 the Company engaged E&Y as the Company's
independent public accountants. During the Company's fiscal years ended December
31, 1998 and 1997 and any subsequent interim period prior to E&Y's engagement,
the Company did not consult Ernst & Young LLP regarding either (1) the
application of accounting principles to a specified transaction, either
completed or proposed, (2) the type of audit opinion that might be rendered on
the Company's financial statements, and neither a written report was provided to
the Registrant nor oral advice was provided that E&Y concluded was an important
factor considered by the Company in reaching a decision as to the accounting,
auditing or financial reporting issue or (3) any matter that was either the
subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of
Regulation S-K and the related instructions to that Item) or a reportable event
(as described in paragraph (a)(1)(v) of Item 304 of Regulation S-K).
OTHER MATTERS
-------------
As of the date of this Notice, the Company knows of no business that
will be presented for consideration at the Meeting other than the election of
two directors, the proposed Amendment to the 1995 Option Plan referred to above
and the proposed Director Plan Amendments to the Director Plan referred to
above. Because the Company did not receive by March 17, 2000 notice of any
matter intended to be raised by a stockholder at the Meeting, proxies will be
voted in respect of any other matters as may properly come before the Meeting in
accordance with the recommendation of the Board of Directors or, if no such
recommendation is given, in the discretion of the person or persons voting the
proxies.
21
<PAGE>
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
-------------------------------------------------
Any proposal of a stockholder intended to be presented at the Company's
2001 annual meeting of stockholders (the "2001 Meeting") and to be considered
for inclusion in the Company's proxy and proxy statement related to the 2001
Meeting must be received by the Secretary of the Company by December 15, 2000.
Any stockholder intending to propose any matter at the 2001 Meeting but
not intending for the Company to include the matter in its proxy statement and
proxy for the 2001 Meeting must notify the Company 60 days before the meeting
or, if the Company does not announce the date of the meeting at least 75 days
before the date of the meeting, by the tenth business day following announcement
of the meeting date. If the Company does not receive such notice by the
applicable deadline, the notice will be considered untimely. The Company's proxy
for the 2001 Meeting will grant discretionary authority to the persons named
therein to exercise their voting discretion with respect to any such untimely
matter. Assuming that the Company held the 2001 Meeting on May 16, 2001 and the
date was announced at least 75 days before May 16, 2001, the applicable deadline
would be March 19, 2001.
Any stockholder wishing to submit a proposal at the 2001 Meeting must
also comply with certain provisions of the Certificate of Incorporation and the
Company's Amended and Restated By-Laws (collectively, the "Charter Documents").
The Company will provide (without charge) a copy of the Charter Documents to any
holder of record of Common Stock. Notices regarding stockholder proposals and
requests for copies of the Charter Documents should be directed to: Secretary,
Point West Capital Corporation, 1700 Montgomery Street, Suite 250, San
Francisco, California 94111.
By order of the Board of Directors,
/s/John Ward Rotter
---------------------------------
John Ward Rotter
Secretary
April 14, 2000
22
<PAGE>
POINT WEST CAPITAL CORPORATION
------------------------------
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
-------------------------------------------
<PAGE>
POINT WEST CAPITAL CORPORATION
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
Table of Contents
-----------------
PAGE
----
1. Purpose ........................................... 1
2. Definitions ....................................... 1
3. Shares Available under the Plan ................... 3
4. Options ........................................... 3
5. Transferability Restrictions ...................... 4
6. Adjustments ....................................... 4
7. Fractional Shares ................................. 5
8. Withholding Taxes ................................. 5
9. Certain Terminations of Employment, Hardship
and Approved Leaves of Absence .................... 6
10. Foreign Optionees ................................. 6
11. Administration of the Plan ........................ 6
12. Amendments and Other Matters ...................... 7
13. Limitation on Grants of Tax-Qualified Options ..... 8
<PAGE>
POINT WEST CAPITAL CORPORATION
------------------------------
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
-------------------------------------------
1. Purpose. The purpose of this Plan is to attract and retain
-------
directors and officers and other employees of and consultants to Point West
Capital Corporation (the "Corporation") and its Subsidiaries and to provide such
persons with incentives and rewards for superior performance.
2. Definitions. (a) As used in this Plan,
-----------
"Board" means the Board of Directors of the Corporation.
-----
"Code" means the Internal Revenue Code of 1986, as amended
----
from time to time.
"Committee" means the committee or the Board, as the case may
---------
be, administering the Plan pursuant to the provisions of Section 11(a).
"Common Shares" means (i) shares of Common Stock, $.01 par
--------------
value, of the Corporation and (ii) any security into which Common Shares may be
converted by reason of any transaction or event of the type referred to in
Section 6.
"Date of Grant" means the date specified by the Committee on
-------------
which a grant of an Option shall become effective, which shall not be earlier
than the date on which the Committee takes action with respect thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended from time to time.
"Incentive Stock Option" means an Option that is intended to
-----------------------
qualify as an "incentive stock option" under Section 422 of the Code or any
successor provision thereto.
"Management Objectives" means the achievement of a performance
---------------------
objective or objectives established pursuant to this Plan, which may be
described in terms of Corporation-wide objectives or objectives that are related
to the performance of the individual Optionee or the Subsidiary, division,
department or function within the Corporation or Subsidiary in which the
Optionee is employed. The Committee may adjust Management Objectives and the
related minimum acceptable level of achievement if, in the sole judgment of the
Committee, events or transactions have occurred after the Date of Grant that are
unrelated to the performance of the Optionee and result in distortion of the
Management Objectives or the related minimum acceptable level of achievement.
<PAGE>
"Market Value per Share" means the fair market value of the
-----------------------
Common Shares as determined by the Committee from time to time.
"Nonqualified Option" means an Option that is not intended to
--------------------
qualify as a Tax-qualified Option.
"Option" means the right to purchase Common Shares from the
------
Corporation upon the exercise of a Nonqualified Option or a Tax-qualified Option
granted pursuant to Section 4.
"Optionee" means a person who is selected by the Committee to
--------
receive an Option under this Plan and who (i) is at that time a director
(including but not limited to a director who is not also an officer or employee
of, or a consultant to, the Corporation or any Subsidiary) of the Corporation or
any Subsidiary or an officer (including but not limited to an officer who is
also a member of the Board) or other employee of, or a consultant to, the
Corporation or any Subsidiary or (ii) has agreed to commence serving in any such
capacity.
"Plan" means the Point West Capital Corporation Amended and
----
Restated 1995 Stock Option Plan, as the same may be amended from time to time.
"Option Price" means the purchase price payable upon the
-------------
exercise of an Option.
"Reload Option" means an additional Option automatically
--------------
granted to an Optionee upon the exercise of Options pursuant to Section 4(e).
"Rule 16b-3" means Rule 16b-3, as promulgated and amended from
----------
time to time by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, or any successor rule to the same effect.
"Subsidiary" means a corporation, partnership, joint venture,
----------
unincorporated association or other entity in which the Corporation has a direct
or indirect ownership or other equity interest; provided, however, for purposes
-------- -------
of determining whether any person may be an Optionee for purposes of any grant
of Incentive Stock Options, "Subsidiary" means any corporation in which the
Corporation directly or indirectly owns or controls more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation at the time of the grant.
"Tax-qualified Option" means an Option that is intended to
---------------------
qualify under particular provisions of the Code, including without limitation an
Incentive Stock Option.
2
<PAGE>
(b) As used in this Plan, the terms "employed" and
"employment" shall be deemed to refer to service as a nonemployee director or as
a consultant, as well as to a traditional employment relationship, as the case
may be.
3. Shares Available under the Plan. (a) Subject to Section 6,
--------------------------------
the number of Common Shares issued or transferred upon exercise of Options, plus
the number of Common Shares covered by outstanding Options, shall not in the
aggregate exceed 450,000 Common Shares, which may be Common Shares of original
issuance or Common Shares held in treasury or a combination thereof. In
connection with the issuance or transfer of Common Shares pursuant to the Plan,
the Corporation may repurchase Common Shares in the open market or otherwise.
(b) For purposes of this Section 3, any Common Shares subject to an
Option that has been cancelled or terminated prior to exercise shall again be
available for the grant of Options to the extent of such cancellation or
termination.
4. Options. The Committee may from time to time authorize
-------
grants of Options to Optionees upon such terms and conditions as the Committee
may determine in accordance with the following provisions:
(a) Each grant shall specify the number of Common Shares to
which the Option pertains.
(b) Each grant shall specify an Option Price per Common Share,
which may be less than, equal to or greater than the Market Value per
Share on the Date of Grant; provided, however, that (i) the Option
-------- -------
Price per share of an Incentive Stock Option shall be equal to or
greater than the Market Value per Share on the Date of Grant and (ii)
the Option Price per Common Share shall be at least equal to the per
share stated par value of the Common Shares.
(c) Each grant shall specify the form of consideration to be
paid in satisfaction of the Option Price and the manner of payment of
such consideration, which may include (i) cash in the form of currency
or check or other cash equivalents acceptable to the Corporation, (ii)
Common Shares which are already owned by the Optionee and have a value
at the time of exercise that is equal to the Option Price, (iii) any
other legal consideration that the Committee may deem appropriate, on
such basis as the Committee may determine in accordance with this Plan
and (iv) any combination of the foregoing.
(d) Any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a broker on the
3
<PAGE>
date of exercise of the Option of some or all of the Common Shares to
which the exercise relates.
(e) On or after the Date of Grant of any Option, the Committee
may provide for the automatic grant to the Optionee of Reload Options
upon the exercise of Options including Reload Options for Common Shares
or any other noncash consideration authorized under Section 4(c).
(f) Successive grants may be made to the same Optionee
regardless of whether any Options previously granted to the Optionee
remain unexercised.
(g) Each grant shall specify the conditions, including as and
to the extent determined by the Committee the period or periods of
continuous employment of the Optionee by the Corporation or any
Subsidiary, or the achievement of Management Objectives, that are
necessary before the Option or installments thereof shall become
exercisable, and any grant may provide for the earlier exercise of the
Option, including, without limitation, in the event of a change in
control of the Corporation or other similar transaction or event.
(h) Options granted pursuant to this Plan may be Nonqualified
Options or Tax-qualified Options or combinations thereof.
(i) No Option granted pursuant to this Plan may be exercised
more than 10 years from its Date of Grant.
(j) Each grant shall be evidenced by an agreement, which shall
(i) be executed on behalf of the Corporation by any officer thereof and
delivered to and accepted by the Optionee, (ii) contain such terms and
provisions as the Committee may determine consistent with this Plan,
and (iii) specify the manner in which the Options granted thereunder
may be transferred and the persons entitled to exercise such Options.
Any such agreement may provide that the Option evidenced thereby shall
not be transferable except by will or the laws of descent and
distribution.
5. Transferability Restrictions. Any grant of Options under
-----------------------------
this Plan may provide that all or any part of the Common Shares that are to be
issued by the Corporation upon the exercise thereof shall be subject to further
restrictions upon transfer.
6. Adjustments. The Committee may make or provide for such
-----------
adjustments in the number of Common Shares covered by outstanding Options, the
Option Prices per Common Share applicable
4
<PAGE>
to any such Options, and the kind of shares (including shares of another issuer)
covered thereby, as the Committee may in good faith determine to be equitably
required in order to prevent dilution or expansion of the rights of Optionees
that otherwise would result from (a) any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Corporation or (b) any merger, consolidation, spin-off, spin-out,
split-off, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of warrants or other rights to purchase
securities or any other corporate transaction or event having an effect similar
to any of the foregoing. In the event of any such transaction or event, the
Committee may provide in substitution for any or all outstanding Options such
alternative consideration as it may in good faith determine to be equitable
under the circumstances and may require in connection therewith the surrender of
all Options so replaced. Moreover, the Committee may on or after the Date of
Grant provide in the agreement evidencing any Option that the holder of the
Option may elect to receive an equivalent Option in respect of securities of the
surviving entity of any merger, consolidation or other transaction or event
having a similar effect, or the Committee may provide that the holder will
automatically be entitled to receive such an equivalent Option. The Committee
may also make or provide for such adjustments in the maximum number of Common
Shares specified in Section 3(a) as the Committee may in good faith determine to
be appropriate in order to reflect any transaction or event described in this
Section 6.
7. Fractional Shares. The Corporation shall not be required to
-----------------
issue any fractional Common Shares pursuant to this Plan. The Committee may
provide for the elimination of fractions or for the settlement thereof in cash.
8. Withholding Taxes. To the extent that the Corporation is
required to withhold federal, state, local or foreign taxes in connection with
any payment made by an Optionee or other person under this Plan, and the amounts
available to the Corporation for the withholding are insufficient, it shall be a
condition to the receipt of any such payment that the Optionee or such other
person make arrangements satisfactory to the Corporation for payment of the
balance of any taxes required to be withheld. The Corporation and any Optionee
or such other person may also make similar arrangements with respect to the
payment of any taxes with respect to which withholding is not required.
5
<PAGE>
9. Certain Terminations of Employment, Hardship and Approved
-----------------------------------------------------------
Leaves of Absence. Notwithstanding any other provision of this Plan to the
- -------------------
contrary, in the event of termination of employment by reason of death,
disability, normal retirement, early retirement with the consent of the
Corporation, termination of employment to enter public service with the consent
of the Corporation or leave of absence approved by the Corporation, or in the
event of hardship or other special circumstances, of an Optionee who holds an
Option that is not immediately and fully exercisable, the Committee may take any
action that it deems to be equitable under the circumstances or in the best
interests of the Corporation, including but not limited to waiving or modifying
any limitation or requirement with respect to any Option under this Plan.
10. Foreign Optionees. In order to facilitate the granting of
-----------------
any Option, the Committee may provide for such special terms for Options granted
to Optionees who are foreign nationals, or who are employed by the Corporation
or any Subsidiary outside of the United States of America, as the Committee may
consider necessary or appropriate to accommodate differences in local law, tax
policy or custom. Moreover, the Committee may approve such supplements to, or
amendments, restatements or alternative versions of, this Plan as it may
consider necessary or appropriate for such purposes without thereby affecting
the terms of this Plan as in effect for any other purpose and the Secretary or
other appropriate officer of the Corporation may certify any such document as
having been approved and adopted in the same manner as this Plan; no such
supplements, amendments, restatements or alternative versions shall include
provisions that are inconsistent with the terms of this Plan as then in effect,
unless this Plan could have been amended to eliminate such inconsistency without
further approval by the stockholders of the Corporation.
11. Administration of the Plan. (a) This Plan shall be
----------------------------
administered (i) by a committee of the Board that is comprised solely of two or
more Non-Employee Directors (as that term is defined in Rule 16b-3) or (ii) at
any time that such a committee does not exist and cannot be created, by the
entire Board (in which case, all references in this Plan to the Committee shall
refer to the Board).
(b) The interpretation and construction by the Committee of
any provision of this Plan or any agreement, notification or document evidencing
the grant of Options, and any determination by the Committee pursuant to any
provision of this Plan or any such agreement, notification or document, shall be
final and conclusive. No member of the Committee shall be liable for any such
action taken or determination made in good faith.
6
<PAGE>
12. Amendments and Other Matters. (a) This Plan may be amended
----------------------------
from time to time by the Committee; provided, however, that except as provided
-------- -------
in Section 6, no such amendment shall increase the number of Common Shares
specified in Section 3(a).
(b) With the concurrence of the affected Optionee, the
Committee may cancel any agreement evidencing Options granted under this Plan.
In the event of any such cancellation, the Committee may authorize the granting
of new Options hereunder, which may or may not cover the same number of Common
Shares as had been covered by the cancelled Option, at such Option Price, in
such manner and subject to such other terms, conditions and discretion as would
have been permitted under this Plan had the cancelled Option not been granted.
(c) The Committee may require any Optionee, as a condition to
receiving an Option, to give written assurances in form and substance
satisfactory to the Corporation and its counsel to the effect that such person
is acquiring the Common Shares subject to the Option for his own account for
investment and not with any present intention of selling or otherwise
distributing the same and to such other effects as the Corporation and its
counsel deem necessary or appropriate in order to comply with federal and
applicable state securities laws.
(d) Each grant of Options shall be subject to the requirement
that, if at any time counsel to the Corporation shall determine that the
listing, registration or qualification of the Common Shares subject to such
Option upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, is necessary as a
condition of, or in connection with, the issuance of shares thereunder, such
grant of Options may not be accepted or exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to such counsel. Nothing herein
shall be deemed to require the Corporation to apply for or to obtain such
listing, registration or qualification.
(e) This Plan shall not confer upon any Optionee any right
with respect to continuance of employment or other service with the Corporation
or any Subsidiary and shall not interfere in any way with any right that the
Corporation or any Subsidiary would otherwise have to terminate any Optionee's
employment or other service at any time.
(f) To the extent that any provision of this Plan would
prevent any Option that was intended to qualify as a Tax-qualified Option from
so qualifying, any such provision shall be null and void with respect to any
such Option; provided, however, that any
-------- -------
7
<PAGE>
such provision shall remain in effect with respect to other Options, and there
shall be no further effect on any provision of this Plan.
(g) No Optionee shall have any rights as a stockholder with
respect to Common Shares subject to an Option until a certificate or
certificates representing such Common Shares has been issued.
13. Limitation on Grants of Tax-Qualified Options. No further
----------------------------------------------
Tax-qualified Options shall be granted under this Plan after the later of (a) 10
years from the date on which this Plan is first approved by the Board or (b) 10
years from the date on which an amendment to this Plan that increases the
maximum number of Common Shares specified in Section 3(a) is approved by the
Board.
8
<PAGE>
AMENDMENT NO. 1
TO POINT WEST CAPITAL CORPORATION
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
A. The first sentence of Section 3(a)of the Plan is amended to read in its
entirety as follows:
Subject to Section 6, the number of Common Shares issued or
transferred upon exercise of Options, plus the number of
Common Shares covered by outstanding Options, shall not in the
aggregate exceed 1,070,000 Common Shares, which may be Common
Shares of original issuance or Common Shares held in treasury
or a combination thereof.
B. A new subsection (c) shall be added to Section 3 of the Plan, which
subsection shall read in its entirety as follows:
(c) Notwithstanding anything in this Section 3 or, elsewhere
in this Plan to the contrary and subject to adjustment as
provided in Section 6, no Optionee shall be granted Options
for more than 100,000 Common Shares during any calendar year.
<PAGE>
DIGNITY PARTNERS, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
<PAGE>
DIGNITY PARTNERS, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Table of Contents
-----------------
PAGE
----
1. Purposes...........................................................1
2. Definitions........................................................1
3. Shares Available under the Plan....................................3
4. Initial Options....................................................3
5. Annual Options.....................................................4
6. Terms of Option Rights.............................................4
7. Adjustments........................................................5
8. Fractional Shares..................................................6
9. Administration of the Plan.........................................6
10. Amendments and Other Matters.......................................6
11. No Additional Rights...............................................7
12. Securities Law Matters.............................................7
13. Change in Control..................................................7
<PAGE>
DIGNITY PARTNERS, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. Purposes. The purposes of this Plan are to encourage
--------
outside directors of Dignity Partners, Inc. (the "Corporation") to own shares of
the Corporation's stock and thereby to align their interests more closely with
the interests of the other stockholders of the Corporation, to encourage the
highest level of director performance by providing such directors with a direct
interest in the Corporation's attainment of its financial goals, and to provide
financial incentives that will help attract and retain the most qualified
outside directors.
2. Definitions. As used in this Plan:
-----------
"Annual Option" means an Option Right granted to an Eligible
---------------
Director pursuant to Section 5.
"Board" means the Board of Directors of the Corporation.
-----
"Change in Control" has the meaning set forth in Section 13.
-----------------
"Code" means the Internal Revenue Code of 1986, as amended
----
from time to time.
"Committee" means the Committee described in Section 9.
---------
"Common Shares" means (i) shares of the Common Stock, $.01 par
-------------
value, of the Corporation and (ii) any security into which Common Shares may be
converted by reason of any transaction or event of the type referred to in
Section 7.
"Date of Grant" means the date as of which an Initial Option
-------------
or an Annual Option is granted as provided in Sections 4(a) and 5(a),
respectively.
"Director" means a member of the Board.
--------
"Disability" means the inability to engage in any substantial
----------
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months. An
Optionee shall not be considered to be subject to a Disability until such
Optionee furnishes a certification from a practicing physician in good standing
to the effect that such Optionee meets the criteria described in this
definition.
"Effective Date" means February 3, 1996.
--------------
<PAGE>
"Eligible Director" means a Director who is not an employee of
-----------------
the Corporation and who does not beneficially own (within the meaning of Rule
13d-3 or any successor rule or regulation promulgated under the Exchange Act)
10% or more of the outstanding Common Shares. For purposes of this Plan, an
employee is an individual whose wages are subject to the withholding of federal
income tax under Sections 3401 and 3402 of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended from time to time.
"First Annual Meeting" means the first annual meeting of
----------------------
stockholders of the Corporation following the Date of Grant of an Option Right.
"Initial Option" means an Option Right granted to an Eligible
---------------
Director pursuant to Section 4.
"Market Value" as of a given date means the greater of (i) the
------------
stated par value of the Common Shares or (ii) (a) the closing sale price of the
Common Shares as reported on The Nasdaq Stock Market's National Market System
("Nasdaq") on such date, or (b) if the price of the Common Shares is not
reported on Nasdaq, the closing sale price of the Common Shares on the principal
securities exchange on which Common Shares are then trading on such date. If
there are no Common Share transactions on such date, the Market Value per Share
shall be determined as of the immediately preceding date on which there were
Common Share transactions.
"Optionee" means a Director who has been granted an Option
--------
Right under the Plan.
"Option Price" means the purchase price payable upon the
-------------
exercise of an Option Right.
"Option Right" means the right to purchase Common Shares from
------------
the Corporation upon the exercise of an Initial Option or an Annual Option
granted pursuant to this Plan. Option Rights may be evidenced by written
agreements, notifications or other documents containing terms and conditions not
inconsistent with this Plan.
"Plan" means the Dignity Partners, Inc. Stock Option Plan for
----
Non-Employee Directors, as the same may be amended from time to time.
"Rule 16b-3" means Rule 16b-3 or any successor rule to the
-----------
same effect, as promulgated and amended from time to time by the Securities and
Exchange Commission under the Exchange Act.
2
<PAGE>
"Termination of Service" means the time at which the Optionee
-----------------------
ceases to serve as a Director for any reason, with or without cause, which
includes termination by resignation, removal, death or retirement.
"Voting Stock" has the meaning set forth in Section 13(a).
------------
3. Shares Available under the Plan. (a) Subject to Sections 3(b) and 7,
-------------------------------
the number of Common Shares issued or transferred upon exercise of Option
Rights, plus the number of Common Shares covered by outstanding Option Rights,
shall not in the aggregate exceed 75,000 Common Shares, which may be Common
Shares of original issuance or Common Shares held in treasury or a combination
thereof. Notwithstanding any other provision of this Plan to the contrary, if
the number of Common Shares authorized under this Plan is insufficient for all
Option Rights to be granted on a specific date, Option Rights shall be granted
pro rata among all Eligible Directors entitled to be granted an Option Right on
such date. In connection with the issuance or transfer of Common Shares pursuant
to the Plan, the Corporation may repurchase Common Shares in the open market or
otherwise.
(b) For the purposes of this Section 3, Common Shares subject
to an Option Right that has been cancelled or terminated prior to exercise shall
again be available for the grant of Option Rights to the extent of such
cancellation or termination.
4. Initial Options. (a) With respect to each person who first becomes
----------------
an Eligible Director after the Effective Date of this Plan, an option to
purchase 10,000 Common Shares shall be automatically granted to such Eligible
Director as of the date such person first becomes an Eligible Director.
(b) (i) Subject to Sections 4(b)(ii) and 13, each Initial
Option, until terminated as provided in Section 6(c), shall become
exercisable to the extent of 34% of the Common Shares subject thereto
after the Optionee has continuously served as a Director through the
date of the First Annual Meeting, and to the extent of an additional
33% of the Common Shares subject to the Initial Option after the
Optionee has continuously served as a Director through the date of the
annual stockholders' meeting immediately succeeding the First Annual
Meeting and to the extent of an additional 33% of the Common Shares
subject to the Initial Option after the Optionee has continuously
served as a Director through the date of the second annual
stockholders' meeting succeeding the First Annual meeting.
(ii) If an Optionee ceases to be a Director by reason of death
or Disability, all Initial Options held by such Optionee that would
have otherwise become exercisable had such Director continuously served
as a Director through the date of the Corporation's annual meeting of
stockholders
3
<PAGE>
immediately following such death or Disability shall, notwithstanding
Section 4(b)(i), become immediately exercisable in full.
5. Annual Options. (a) On the date of each annual meeting of the
---------------
Corporation's stockholders (beginning with the annual meeting of stockholders in
1996), an option to purchase 5,000 Common Shares shall be automatically granted
as of such date to each Eligible Director who is elected a Director at such
meeting or whose term of office as a Director continues after such meeting.
(b) (i) Subject to Sections 5(b)(ii) and 13, each Annual
Option, until terminated as provided in Section 6(c), shall become
exercisable to the extent of 100% of the Common Shares subject thereto
after the Optionee has continuously served as a Director until the date
of the First Annual Meeting.
(ii) If an Optionee ceases to be a Director by reason of death
or Disability, all Annual Options held by such Optionee shall,
notwithstanding Section 5(b)(i), become immediately exercisable in
full.
6. Terms of Option Rights.
-----------------------
(a) The Option Price per share of each Option Right shall be
equal to the Market Value per Common Share on the Date of Grant.
(b) To the extent exercisable, each Option Right shall be
exercisable in whole or in part from time to time by written notice to the
Corporation at its principal executive office specifying the number of Common
Shares with respect to which the Option Right is being exercised and payment of
the Option Price for such Common Shares in accordance with Section 6(d).
(c) Each Option Right shall terminate on the earliest to occur
of the following dates:
(i) Three (3) months following the effective date of the
Optionee's Termination of Service, if such Termination of Service
results other than from the Optionee's death or Disability;
(ii) One (1) year following the effective date of the
Optionee's Termination of Service, if such Termination of Service
results from the Optionee's death or Disability; or
(iii) Ten (10) years from the Date of Grant.
(d) The Option Price shall be payable (a) in cash or by check
acceptable to the Corporation, (b) by transfer to the Corporation of Common
Shares which have been owned by the
4
<PAGE>
Optionee for more than six months prior to the date of exercise and
which have a Market Value on the date of exercise equal to the Option
Price, or (c) by a combination of such methods of payment. The
requirement of payment in cash shall be deemed satisfied if the
Optionee shall have made arrangements satisfactory to the Corporation
with a broker who is a member of the National Association of Securities
Dealers, Inc. to sell on the exercise date a sufficient number of
Common Shares being purchased so that the net proceeds of the sale
transaction will at least equal the Option Price of the Common Shares
being purchased, and pursuant to which the broker undertakes to deliver
the full Option Price of the Common Shares being purchased to the
Corporation not later than the date on which the sale transaction will
settle in the ordinary course of business.
(e) No Optionee shall have any rights as a stockholder with
respect to Common Shares subject to an Option Right until a certificate or
certificates representing such Common Shares has been issued.
(f) To the extent necessary for the grant of an Option Right,
its exercise or the sale of Common Shares acquired thereunder to be exempt from
Section 16(b) of the Exchange Act, no Option Right shall be transferable other
than by will or the laws of descent and distribution and each Option Right may
be exercised, during an Optionee's lifetime, only by the Optionee or, in the
event of the Optionee's incapacity, including incapacity arising from a
Disability, by the Optionee's guardian or legal representative acting in a
fiduciary capacity.
(g) Option Rights granted pursuant to this Plan shall be
options that are not intended to qualify under any particular provision of the
Code.
7. Adjustments. The Committee shall make or provide for such
-----------
adjustments in the number of Common Shares covered by outstanding Option Rights,
the Option Prices per Common Share applicable to any such Option Rights, and the
kind of shares (including shares of another issuer) covered thereby, as the
Committee shall in good faith determine to be equitably required in order to
prevent dilution or expansion of the rights of Optionees that otherwise would
result from (a) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Corporation, or
(b) any merger, consolidation, spin-off, spin-out, split-off, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of warrants or other rights to purchase securities or any other
corporate transaction or event having an effect similar to any of the foregoing.
The Committee shall also make or provide for such adjustments in the maximum
number of Common Shares specified in Section 3(a) and the number of Common
Shares specified in Sections 4(a) and 5(a) as the Committee may in good faith
determine to be appropriate in
5
<PAGE>
order to reflect any transaction or event described in this Section 7.
8. Fractional Shares. The Corporation shall not be required to
-----------------
issue any fractional Common Shares pursuant to this Plan. Whenever under the
terms of this Plan a fractional Common Share would otherwise be required to be
issued, an amount in lieu thereof shall be paid in cash based upon the Market
Value of such fractional Common Share.
9. Administration of the Plan. (a) This Plan shall be
-----------------------------
administered by a committee of the Board, which shall be composed of not less
than two Directors ("Committee"). Notwithstanding the foregoing, grants of
Option Rights under this Plan shall be automatic as described in Sections 4 and
5, and the Committee shall have no authority, discretion or power to determine
the terms of Option Rights to be granted pursuant to the Plan, the number of
Common Shares to be issued thereunder or the time at which such Option Rights
are to be granted, or the duration and nature of Option Rights, except in the
sense of administering the Plan in accordance with the provisions of the Plan.
(b) Subject to Section 9(a), the interpretation and
construction by the Committee of any provision of this Plan or any agreement,
notification or document evidencing the grant of Option Rights, and any
determination by the Committee pursuant to any provision of this Plan or any
such agreement, notification or document, shall be final and conclusive. No
member of the Committee shall be liable for any such action taken or
determination made in good faith.
10. Amendments and Other Matters. (a) This Plan may be
-------------------------------
terminated, and from time to time amended, by the Board; provided, however, that
-------- -------
except as provided in Section 7, no such amendment shall (i) increase the number
of Common Shares specified in Section 3(a), materially modify the definition of
"Eligible Director" or otherwise cause this Plan or any grant of Option Rights
to cease to satisfy any applicable condition of Rule 16b-3, without further
approval of the stockholders of the Corporation, or (ii) cause any Optionee to
fail to qualify as a "disinterested person" within the meaning of Rule 16b-3;
provided further that Plan provisions relating to the terms of Option Rights and
- -------- -------
the timing of grants of Option Rights shall not be amended more than once every
six months, other than to comport with changes in the Code, the Employment
Retirement Income Security Act, or the rules promulgated thereunder. No
amendment or termination of the Plan shall adversely affect any outstanding
Option Right without the consent of the Optionee.
(b) Any grant of Option Rights pursuant to an amendment to
this Plan shall be null and void if it is subsequently determined that (i)
stockholder approval of such amendment was required in order for this Plan to
continue to
6
<PAGE>
satisfy the applicable conditions of Rule 16b-3, or (ii) such grant or amendment
disqualified any Optionee as a "disinterested person" within the meaning of Rule
16b-3.
11. No Additional Rights. Nothing contained in this Plan or in
--------------------
any award granted under this Plan shall interfere with or limit in any way the
right of the Board or the stockholders of the Corporation to remove any Director
from the Board pursuant to state law or the Certificate of Incorporation or
Bylaws of the Corporation, nor confer upon any Director any right to continue in
the service of the Corporation.
12. Securities Law Matters. (a) The Corporation may require
----------------------
any Optionee, as a condition of receiving Option Rights, to give written
assurances in substance and form satisfactory to the Corporation and its counsel
to the effect that such person is acquiring the Common Shares subject to the
Option Rights for his own account for investment and not with any present
intention of selling or otherwise distributing the same, and to such other
effects as the Corporation deems necessary or appropriate in order to comply
with federal and applicable state securities laws.
(b) Each award of Option Rights shall be subject to the
requirement that, if at any time counsel to the Corporation shall determine that
the listing, registration or qualification of the Common Shares subject to such
Option Rights upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental or regulatory body, is necessary as
a condition of, or in connection with, the issuance of shares thereunder, such
grant of Option Rights may not be accepted or exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained on conditions acceptable to such counsel. Nothing
herein shall be deemed to require the Corporation to apply for or to obtain such
listing, registration or qualification.
(c) Notwithstanding any other provision of this Plan
(including without limitation, Section 13), to the extent necessary for the
grant of an Option Right, its exercise or the sale of Common Shares acquired
thereunder to be exempt from Section 16(b) of the Exchange Act, such Option
Right shall be held six months from the Date of Grant, or at least six months
shall elapse from the Date of Grant to the date of disposition of the Common
Shares acquired upon exercise of such Option Right.
13. Change in Control. Upon a Change in Control (as
-------------------
hereinafter defined), all Option Rights held by an Optionee shall,
notwithstanding Sections 4(b) and 5(b), become immediately exercisable in full
to the extent that such Option Rights would have become exercisable with respect
to such Optionee's service as a Director through the date of the Corporation's
annual meeting of stockholders immediately following such Change in
7
<PAGE>
Control. If any event or series of events constituting a Change in Control shall
be abandoned, the effect thereof shall be null and of no further force and
effect and the provisions of Sections 4(b) and 5(b) shall be reinstated but
without prejudice to any exercise of any Option Right that occurred prior to
such nullification. For purposes of this Plan, "Change in Control" means the
occurrence of any of the following events:
(a) The execution by the Corporation of an agreement for the
merger, consolidation or reorganization into or with another
corporation or other legal person; provided, however, that no such
--------- -------
merger, consolidation or reorganization shall constitute a Change in
Control if as a result of such merger, consolidation or reorganization
not less than a majority of the combined voting power of the
then-outstanding securities of such corporation or person immediately
after such transaction are held in the aggregate by the holders of
securities of the Corporation entitled to vote generally in the
election of Directors ("Voting Stock") immediately prior to such
transaction;
(b) The execution by the Corporation of an agreement for the
sale or other transfer of all or substantially all of its assets to
another corporation or other legal person; provided, however, that no
-------- -------
such sale or other transfer shall constitute a Change in Control if as
a result of such sale or transfer not less than a majority of the
combined voting power of the then-outstanding securities of such
corporation or person immediately after such sale or transfer is held
in the aggregate by the holders of Voting Stock immediately prior to
such sale or transfer.
(c) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated
pursuant to the Exchange Act disclosing that any person (as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) (other than The Echelon Group of Companies, LLC, Bradley
N. Rotter, Alan B. Perper or John Ward Rotter) has or intends to become
the beneficial owner (as the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act) of securities representing 20% or more of the combined
voting power of the then-outstanding Voting Stock, including, without
limitation, pursuant to a tender offer or exchange offer;
(d) If, during any period of two consecutive years,
individuals who at the beginning of any such period constitute the
directors of the Corporation cease for any reason to constitute at
least a majority thereof; provided, however, that for purposes of this
-------- -------
subsection (d) each director who is first elected, or first nominated
for election by the Corporation's stockholders, by a vote of at least
two-thirds of the directors of the Corporation (or a
8
<PAGE>
committee thereof) then still in office who were directors of the Corporation at
the beginning of any such period shall be deemed to have been a director of the
Corporation at the beginning of such period; or
(e) except pursuant to a transaction described in the proviso
to subsection (a) of this Section 13, the Corporation adopts a plan for
the liquidation or dissolution of the Corporation.
9
<PAGE>
AMENDMENT NO. 1
TO DIGNITY PARTNERS, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
A. All references to "Dignity Partners, Inc." contained in the Dignity
Partners, Inc. Stock Option Plan for Non-Employee Directors (the
"Plan"), including references on the cover page, table of contents,
page one and Section 1 of the Plan, are hereby amended to refer to
"Point West Capital Corporation,"
B. Section 2 of the Plan is amended to delete therefrom the definition of
"Committee" and the definition of "Rule l6b-3."
C. The first sentence of Section 3(a) of the Plan is amended and restated
to read in its entirety as follows:
Subject to Sections 3(b) and 7, the number of Common Shares
issued or transferred upon exercise of Option Rights, plus the
number of Common Shares covered by outstanding Option Rights
shall not in the aggregate exceed 150,000 Common Shares, which
may be Common Shares of original issuance or Common Shares
held in treasury or a combination thereof.
D. Section 6(f) of the Plan is amended and restated to read in its entirety as
follows:
Except as set forth below, no Option Right shall be
transferable other than by will or the laws of descent and
distribution and each Option Right may be exercised, during an
Optionee's lifetime, only by the Optionee or, in the event of
the Optionee's incapacity, including incapacity arising from a
Disability, by the Optionee's guardian or legal representative
acting in a fiduciary capacity. Notwithstanding the foregoing,
(i) an Optionee may transfer part or all of an Option Right to
one or more persons, each of whom is a "family member" of the
Optionee (within the meaning of General Instruction A(5) of
Form S-8) provided that (A) the Optionee, at the time or
within 12 months prior to the time of the notice referred to
in clause (C) below, is or was serving as a Director of the
Corporation, (B) each such transfer is without value through a
gift or a domestic relations order, (C) the Optionee provides
to the Corporation at least 15 days prior written notice of
each such transfer, and (D) the Optionee and each such family
member provides to the Corporation prior to each such transfer
any additional information and documentation as the
Corporation may request to confirm that the provisions of this
clause (i) are
<PAGE>
satisfied and that Form S-8 will be available to the
Corporation with respect to any exercise(s) of the Option
Right by each such family member transferee, and (ii)
thereafter, such family member transferee may exercise such
Option Right. No transferee of an Option Right may transfer
such Option Right to any other person.
E. All references to "the Committee" contained in Section 7 of' the Plan
are hereafter amended to read "the Board."
F. The first sentence of Section 9 of the Plan is amended and restated to
read in its entirety as follows:
This Plan shall be administered by the Board.
G. All references to "the Committee" contained in Section 9 of the Plan
are hereafter amended to read "the Board."
H. Section 10 of the Plan is hereby amended and restated to read in its
entirety as follows:
10. Amendments. This Plan may be terminated, and from time to time
--- ----------
amended by the Board; provided, however, that except as
-------- -------
provided in Section 7, no such amendment shall increase the
number of Common Shares specified in Section 3(a) without
further approval of the stockholders of the Corporation. No
amendment or termination of the Plan shall adversely affect
any outstanding Option Right without the consent of the
Optionee.
I. Section 12 of the Plan is hereby amended to delete therefrom subsection
4(c).
J. Section 13(c) of the Plan is hereby amended and restated to read in its
entirety as follows:
(c) There is a report filed on Schedule 13D or Schedule TO (or any
successor schedule, form or report), each as promulgated
pursuant to the Exchange Act disclosing that any person (as
the term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) (other than any of Bradley N.
Rotter, Alan B. Perper or John Ward Rotter or any of their
respective family members or affiliates) has or intends to
become the beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing
20% or more of the combined voting power of the
then-outstanding Voting Stock, including, without limitation,
pursuant to a tender offer or exchange offer;
<PAGE>
PROXY
- -----
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
-----------------------------------------------------------
POINT WEST CAPITAL CORPORATION
------------------------------
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 16, 2000
-----------------------------------------------------
The undersigned acknowledges receipt of the accompanying Notice of Annual
Meeting of Stockholders and Proxy Statement and the Annual Report on Form 10-K
for the year ended December 31, 1999 of POINT WEST CAPITAL CORPORATION (the
"Company") and hereby appoints Bradley N. Rotter, Alan B. Perper and John Ward
Rotter, and each of them, attorneys and proxies, with full power of substitution
and resubstitution, to vote all shares of common stock of the Company held of
record by the undersigned at the close of business on April 4, 2000, at the
annual meeting of stockholders of the Company to be held at 1:30 p.m. on May 16,
2000, and at any postponement or adjournment thereof, as follows:
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- -------------------------------------------------------------------------------
If this proxy is properly executed, the shares represented hereby will be voted
in the manner directed and, in the absence of direction as to the manner of
voting, will be voted FOR the election as director of each of the nominees
listed, FOR the proposal to amend the Company's Amended and Restated 1995 Stock
Option Plan and FOR the proposal to amend the Company's Stock Option Plan for
Non-Employee Directors as set forth in the Notice of Annual Meeting of
Stockholders and Proxy Statement.
Please mark
your votes [X]
as indicated
1. ELECTION OF DIRECTORS:
AUTHORITY TO WITHHOLD
VOTE FOR authority to
both nominees vote for both
listed (except nominees
as indicated listed.
below)
[_] [_]
(INSTRUCTION: To withhold authority to vote for either nominee, write that
nominee's name in the space provided below.)
Nominees: Alan B. Perper and Paul A. Volberding
- -----------------------------------------------------
2. Proposal to amend the Company's FOR AGAINST ABSTAIN
Amended and Restated 1995 Stock
Option Plan. [_] [_] [_]
3. Proposal to amend the Company's
Stock Option Plan for Non-Employee
Directors. [_] [_] [_]
4. As recommended by the Board of Directors, or if no
such recommendation is given in their discretion, to
vote upon such other business as may properly come
before said meeting or any adjournment thereof.
I plan to attend
the meeting
[_]
STOCKHOLDERS ARE URGED TO
MARK, DATE, SIGN AND
RETURN THIS PROXY PROMPTLY
IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES.
SIGNATURE(s) DATE:
--------------------------------------- ---------------------
Please date this proxy and sign exactly as name(s) appears above and return
signed proxy in enclosed envelope. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
