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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-Q/A - AMENDMENT NO. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 0-27886
WORLDTALK COMMUNICATIONS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 77-0303581
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
5155 Old Ironsides Drive
Santa Clara, California 95054
(Address of principal executive offices)
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(408)567-1500
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
None
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 Par Value
(Title of Class)
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Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
The number of outstanding shares of the Registrant's Common Stock, par value
$0.01 per share, on August 10, 1998 was 10,593,055 shares.
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<PAGE>
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PART II: OTHER INFORMATION
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The Registrant hereby amends Part II, Item 6 of its quarterly report on Form
10-Q for the quarterly period ended June 30, 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are being filed as part of this report on Form 10-Q:
10.1 Employment Termination Agreement dated April 10, 1998 with Stephen R.
Bennion**
10.2 Employment Termination Agreement dated June 29, 1998 with Sathvik
Krisnamurthy**
11.1 Statement re: Computation of Net Income (Loss) per Share*
27.1 Financial Data Schedule *
* Previously filed.
** Confidential treatment has been requested with respect to certain portions of
this exhibit. Confidential portions have been omitted from the public filing and
have been filed separately with the Securities and Exchange Commission.
(b) Report on Form 8-K
None
2
<PAGE>
Exhibit Index:
Page
10.1 Employment Termination Agreement dated April 10, 1998 with
Stephen R. Bennion** 5
10.2 Employment Termination Agreement dated June 29, 1998 with
Sathvik Krisnamurthy** 8
11.1 Statement re: Computation of Net Income (Loss) per Share *
27.1 Financial Data Schedule*
* Previously filed.
** Confidential treatment has been requested with respect to certain portions of
this exhibit. Confidential portions have been omitted from the public filing and
have been filed separately with the Securities and Exchange Commission.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: September 4, 1998
WORLDTALK COMMUNICATIONS
CORPORATION
By: /s/ TODD HAGEN
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Todd Hagen
Vice President and Chief
Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
4
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WORLDTALK COMMUNICATIONS CORPORATION EXHIBIT 10.1
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** Confidential treatment has been requested with respect to certain portions of
this exhibit. Confidential portions have been omitted from the public filing and
have been filed separately with the Securities and Exchange Commission.
EMPLOYMENT TERMINATION AGREEMENT
This Employment Termination Agreement ("Agreement") is made and entered
into by and between Stephen R. Bennion (hereinafter referred to as "Mr.
Bennion") and Worldtalk Communications Corporation (including other subsidiaries
or affiliated entities, hereinafter referred to as "Worldtalk") as of April 10,
1998.
A. Mr. Bennion is employed at Worldtalk and has tendered, and Worldtalk
has accepted, his resignation as an officer and employee of Worldtalk effective
May 8, 1998 (the "Effective Date").
B. On the terms and subject to the conditions described in this
Agreement, Mr. Bennion and Worldtalk now desire to engage Mr. Bennion's services
as an advisor during the three-month period following the Effective Date and
[**].
Now, Therefore, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:
<TABLE>
1. Options. Mr. Bennion holds the following options
(collectively, the "Options"). Both parties acknowledge that
the Options are the only options or other rights to acquire
from Worldtalk any security of Worldtalk that are held by Mr.
Bennion.
<CAPTION>
Grant Date Number of Shares Exercise Price Shares Vested 5/8/98
- --------------------- ---------------------------- --------------------- --------------------------------
<S> <C> <C> <C>
2/7/96 12,500 $8.00 3,906
9/19/97 50,000 $6.63 none
</TABLE>
The Options will cease vesting on the Effective Date. Each Option shall be
exercised by Mr. Bennion, if at all, within the times and in the manner
specified in the Option grant forms evidencing such Option.
2. Stock. Mr. Bennion currently holds 191,000 shares of the Common
Stock of Worldtalk, 30,250 and 28,125 shares of which become subject to
repurchase by Worldtalk on the Effective Date pursuant to the terms of his Stock
Option Grant Agreements with Worldtalk for a repurchase price of $0.20 and $0.50
per share, respectively. Worldtalk hereby elects to repurchase [**] of the
shares having a repurchase price of $0.20 per share and [**] of the shares
having a repurchase price of $0.50 per share, [**]. The aggregate share
repurchase price of [**] will be paid to Mr. Bennion on or before June 7, 1998
by check deposited in the United States mail addressed to Mr. Bennion at his
current residence or by hand delivery to Mr. Bennion. Mr. Bennion agrees
immediately after payment of such amount to sign a stock power or assignment in
a form necessary to transfer the repurchased shares to Worldtalk and deliver
such stock power or assignment to Worldtalk.
5
<PAGE>
3. Employment Compensation.
3.1 Mr. Bennion confirms and acknowledges that he has received
payment for all salary, commissions, bonuses, accrued but unused vacation and
compensation in any other form that is currently due and payable to him by
Worldtalk in connection with his employment as of the date of this Agreement.
Mr. Bennion will take his vacation from April 10, 1998 through the Effective
Date and his signature authority with Worldtalk's bank and others with whom
Worldtalk does business will expire on April 10, 1998. Although he will not come
into the office during his vacation, Mr. Bennion agrees to provide up to eight
hours per week of services to Worldtalk and its personnel as to matters relating
to his duties as an employee. Mr. Bennion's salary and other compensation as an
officer and employee will terminate when his employment terminates on the
Effective Date.
3.2 Worldtalk has an obligation to make available to Mr.
Bennion any medical or disability insurance coverage under policies Worldtalk
carries for its employees generally, as required by the Consolidated Omnibus
Budget Reconciliation Act (commonly known as "COBRA"). Mr. Bennion has informed
Worldtalk that he does not require any such insurance coverage after the
Effective Date.
3.3 Except for salary and vacation pay in normal amounts that
may accrue, if any, between the Worldtalk payroll date immediately prior to the
date hereof and the Effective Date (which will be paid by Worldtalk no later
than three days after the Effective Date), Mr. Bennion agrees that he has no
claim for any salary, vacation, bonus or similar payment relating to his
employment with Worldtalk.
4. Services as an Advisor. Commencing on the Effective Date, Mr.
Bennion will hold himself available to provide advisory services to Worldtalk
until the close of business on August 8, 1998 (the "Advisory Period"). Services
will be provided during the Advisory Period, upon the request of Worldtalk's
President, for no more than eight hours per week (any period shorter than one
week to include a proportionate number of hours) at such times and places as are
mutually convenient to Mr. Bennion and Worldtalk. However, Mr. Bennion's
services will be performed at times and places that do not reasonably conflict
with Mr. Bennion's responsibilities to his then current employer. Mr. Bennion's
duties as an advisor will be to perform financial services and to help
transition knowledge concerning Worldtalk's financial status and systems
directly to management and to other members of Worldtalk's accounting and
finance department.
4.1 Mr. Bennion acknowledges that his services as an advisor
are being provided as an independent contractor and that he will not be deemed
an employee or agent of Worldtalk or have the power to bind Worldtalk to any
contract or agreement. Mr. Bennion will be accorded the customary and usual
independence associated with such status and will be responsible for payment of
all income, social security or other payroll taxes incurred in connection with
payments to Mr. Bennion as a result of this services arrangement.
4.2 In return for Mr. Bennion's availability and requested
services during the Advisory Period, Worldtalk will pay to Mr. Bennion [**] for
each hour per week actually worked by Mr. Bennion (any such hours to be
expressly preapproved by Worldtalk's President prior to being worked). All
amounts are to be paid, as earned during the Advisory Period, on the 15th day of
each month for hours worked during the previous month.
6
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5. Return of Worldtalk Property. Mr. Bennion agrees that on April 10,
1998 he will return to Worldtalk all files, memoranda, records (and copies
thereof), credit cards and other physical or personal property which Mr. Bennion
has received or will receive from Worldtalk and which are the property of
Worldtalk. Any such property received by Mr. Bennion during the Advisory Period
will be returned to Worldtalk upon expiration or termination of such period.
6. [**]
7. Confidentiality. The Proprietary Rights and Confidentiality
Agreement entered into by Mr. Bennion in favor of Worldtalk will remain in full
force and effect after the Effective Date and will not be modified or terminated
by this Agreement.
8. General Provisions. The parties represent and acknowledge that they
have carefully read and fully understand all of the provisions of this
Agreement, which sets forth the entire agreement between the parties. Except as
set forth above, this Agreement supersedes any and all prior agreements or
understandings between the parties and all corporate policies, practices or
procedures pertaining to the subject matter of this Agreement. If any provision
of this Agreement is unenforceable for any reason, it shall be interpreted, to
the extent possible to enhance its enforceability in order to achieve the intent
of the parties and, if not possible, the provision shall be stricken from this
Agreement. The invalidity or unenforceability of any provision of this Agreement
as applied to certain circumstances, shall not effect the validity or
enforceability of such provision as applied to other circumstances or any other
provision of this Agreement. In any action arising out of, or relating to this
Agreement, the prevailing party shall be entitled to recover all costs and
attorneys' fees incurred therein.
WORLDTALK COMMUNICATIONS
CORPORATION
/s/ Stephen R. Bennion By: /s/ Bernard Harguindeguy
- --------------------------- -------------------------------
STEPHEN R. BENNION Bernard Harguindeguy, President
7
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WORLDTALK COMMUNICATIONS CORPORATION EXHIBIT 10.2
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** Confidential treatment has been requested with respect to certain portions of
this exhibit. Confidential portions have been omitted from the public filing and
have been filed separately with the Securities and Exchange Commission.
EMPLOYMENT TERMINATION AGREEMENT
This Employment Termination Agreement ("Agreement") is made and entered
into by and between Sathvik Krisnamurthy (hereinafter referred to as "Mr.
Krishnamurthy") and Worldtalk Communications Corporation (including other
subsidiaries or affiliated entities, hereinafter referred to as "Worldtalk") as
of June 29, 1998.
A. Mr. Krishnamurthy is employed at Worldtalk and has tendered, and
Worldtalk has accepted, his resignation as an officer and employee of Worldtalk
effective April 30, 1998 (the "Effective Date").
B. On the terms and subject to the conditions described in this
Agreement, Mr. Krishnamurthy and Worldtalk now desire to engage Mr.
Krishnamurthy's services as an advisor during the six-month period following the
Effective Date and [**].
Now, Therefore, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:
1. Options.
<TABLE>
1.1 Mr. Krishnamurthy holds the following options
(collectively, the "Options"). Both parties acknowledge that the Options are the
only options or other rights to acquire from Worldtalk any security of Worldtalk
that are held by Mr. Krishnamurthy.
<CAPTION>
Shares Shares [**]
Number of Exercise Purchased as Exerciable
Grant Date Shares Price of 4/20/98 4/30/98
- ----------------- -------------- ------------ --------------- ----------------- -------------------
<S> <C> <C> <C> <C>
10/25/94 5,900 $0.20 4,275 1,625
3/28/95 8,171 0.20 3,000 3,128
12/6/95 12,500 1.00 0 7,031
1/24/96 1,562 6.00 0 1,562
3,438 3.75 0 938
2/7/96 625 8.00 0 625
1,875 3.75 0 468
4/28/97 60,000 3.75 0 26,250
4/28/97 25,000 3.75 0 9,375
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</TABLE>
1.2 In consideration for the agreements of Mr. Krishnamurthy
that are set forth herein and, [**], the [**] Options in the table above (the
"[**] Options") [**]. The total number of shares purchasable by Mr.
Krishnamurthy [**] is set forth in the right-hand column of the table above.
8
<PAGE>
1.3 Mr. Krishnamurthy hereby exercises the [**] Options and
[**], the proceeds of which will be used to pay the exercise price and any tax
withholding obligation of Mr. Krishnamurthy, with the remainder delivered to Mr.
Krishnamurthy. [**] Mr. Krishnamurthy hereby appoints Todd Hagen and Bernard
Harguindeguy, and each of them with full authority to act without the other, as
Mr. Krishnamurthy's attorneys-in-fact to execute and deliver any documents or
instruments necessary to complete such sale.
1.4 Each Option (other than the [**] Options) shall be
exercised by Mr. Krishnamurthy, if at all, within the times and in the manner
specified in the Option grant forms evidencing such Option as modified herein.
2. Employment Compensation.
2.1 Mr. Krishnamurthy confirms and acknowledges that he has
received payment for all salary, commissions, bonuses, accrued but unused
vacation and compensation in any other form that is currently due and payable to
him by Worldtalk in connection with his employment as of the date of this
Agreement. Mr. Krishnamurthy's salary and other compensation as an officer and
employee terminated when his employment terminated on the Effective Date.
2.2 Worldtalk has an obligation to make available to Mr.
Krishnamurthy any medical or disability insurance coverage under policies
Worldtalk carries for its employees generally, as required by the Consolidated
Omnibus Budget Reconciliation Act (commonly known as "COBRA"). Mr. Krishnamurthy
has informed Worldtalk that he does not require any such insurance coverage
after the Effective Date.
2.3 Except for the payment described in Section 5 below, Mr.
Krishnamurthy agrees that he has no claim for any salary, vacation, bonus or
similar payment relating to his employment with Worldtalk.
3. Services as an Advisor. Commencing on the Effective Date, Mr.
Krishnamurthy has held himself, and will hold himself, available to provide
advisory services to Worldtalk until the close of business on October 30, 1998
(the "Advisory Period"). Services are to be provided during the Advisory Period,
upon the request of Worldtalk's President, for no more than eight hours per week
(any period shorter than one week to include a proportionate number of hours) at
such times and places as are mutually convenient to Mr. Krishnamurthy and
Worldtalk. However, Mr. Krishnamurthy's services will be performed at times and
places that do not reasonably conflict with Mr. Krishnamurthy's responsibilities
to his then current employer. Mr. Krishnamurthy's duties as an advisor will be
to perform financial services and to help transition knowledge concerning
Worldtalk's sales and marketing status and systems directly to management and to
other members of Worldtalk's sales and marketing departments.
3.1 Mr. Krishnamurthy acknowledges that his services as an
advisor are being provided as an independent contractor and that he will not be
deemed an employee or agent of Worldtalk or have the power to bind Worldtalk to
any contract or agreement. Mr. Krishnamurthy will be accorded the customary and
usual
9
<PAGE>
independence associated with such status and will be responsible for payment of
all income, social security or other payroll taxes incurred in connection with
payments to Mr. Krishnamurthy as a result of this services arrangement.
3.2 In return for Mr. Krishnamurthy's availability and
requested services during the Advisory Period, Worldtalk will pay to Mr.
Krishnamurthy [**] for each hour per week actually worked by Mr. Krishnamurthy
(any such hours to be expressly preapproved by Worldtalk's President prior to
being worked). All amounts are to be paid, as earned during the Advisory Period,
on the 15th day of each month for hours worked during the previous month.
4. Return of Worldtalk Property. Mr. Krishnamurthy has returned to
Worldtalk all files, memoranda, records (and copies thereof), credit cards and
other physical or personal property that Mr. Krishnamurthy has received from
Worldtalk and that are the property of Worldtalk. Any such property received by
Mr. Krishnamurthy during the Advisory Period will be returned to Worldtalk upon
expiration or termination of such period.
5. [**]
6. Confidentiality. The Proprietary Rights and Confidentiality
Agreement entered into by Mr. Krishnamurthy in favor of Worldtalk will remain in
full force and effect after the Effective Date and will not be modified or
terminated by this Agreement.
7. General Provisions. The parties represent and acknowledge that they
have carefully read and fully understand all of the provisions of this
Agreement, which sets forth the entire agreement between the parties. Except as
set forth above, this Agreement supersedes any and all prior agreements or
understandings between the parties and all corporate policies, practices or
procedures pertaining to the subject matter of this Agreement. If any provision
of this Agreement is unenforceable for any reason, it shall be interpreted, to
the extent possible to enhance its enforceability in order to achieve the intent
of the parties and, if not possible, the provision shall be stricken from this
Agreement. The invalidity or unenforceability of any provision of this Agreement
as applied to certain circumstances, shall not effect the validity or
enforceability of such provision as applied to other circumstances or any other
provision of this Agreement. In any action arising out of, or relating to this
Agreement, the prevailing party shall be entitled to recover all costs and
attorneys' fees incurred therein.
WORLDTALK COMMUNICATIONS
CORPORATION
/s/ SATHVIK KRISHNAMURTHY By: /S/ Todd Hagen
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SATHVIK KRISHNAMURTHY Todd Hagen, Chief Financial Officer
10
