<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 4, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
INTERLINQ SOFTWARE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
WASHINGTON 91-1187540
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
11255 KIRKLAND WAY
KIRKLAND, WASHINGTON 98033
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
INTERLINQ SOFTWARE CORPORATION
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(FULL TITLE OF THE PLANS)
STEPHEN A. YOUNT
VICE PRESIDENT-FINANCE AND CHIEF FINANCIAL OFFICER
11255 KIRKLAND WAY
KIRKLAND, WASHINGTON 98033
(206) 827-1112
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPY TO:
CHARLES J. KATZ, JR.
PERKINS COIE
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF SECURITIES NUMBER TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
SHARE(1) PRICE(1)
- ------------------------ ------------------ -------------------------- --------------------------- -----------------
<S> <C> <C> <C> <C>
COMMON STOCK,
$.01 PAR VALUE 140,000 $5.3125 $743,750 $226.00
- ------------------------ ------------------ -------------------------- --------------------------- -----------------
</TABLE>
(1) Estimated pursuant to Rule 457 of the Securities Act of 1933, as
amended (the "Securities Act"), solely for the purpose of calculating
the amount of the registration fee. The price per share is estimated to
be $5.3125 based on the average of the high ($5.375) and low ($5.250)
sales prices for the Common Stock in the over-the-counter market on
January 31, 1997, as reported on the Nasdaq National Market.
(2) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant
to the Stock Option Plan for Non-Employee Directors as the result of
any future stock split, stock dividend or similar adjustment of the
outstanding Common Stock of the Registrant.
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996, filed with the Securities and Exchange Commission (the
"Commission") on September 30, 1996;
(b) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), since the end of the fiscal year covered by the Annual Report
referred to in (a) above; and
(c) The description of the Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission on March 15, 1993
under Section 12(g) of the 1934 Act, as amended by the Form 8 filed with the
Commission on April 19, 1993, including any amendments or reports filed for the
purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the 1934 Act after the date hereof and prior to the
filing of a post-effective amendment which indicate that all securities offered
hereby have been sold or which deregister all securities then remaining unsold
shall be deemed to be incorporated by reference herein and to be a part hereof
as of the respective dates of filing such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 23B.08.320 of the Washington Business
Corporation Act, Article 12 of the Registrant's Articles of Incorporation limits
a director's liability to the Registrant or its shareholders for monetary
damages arising from his or her conduct as a director, except for acts or
omissions that involve intentional misconduct or a knowing violation of law,
approval of distributions or loans in violation of Section 23B.06.400 of the
Washington Business Corporation Act or any transaction from which the director
will personally receive a benefit in money, property or services to which the
director is not legally entitled.
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act. As permitted by Section 23B.08.560
of the Washington Business Corporation Act, Section 10 of the Registrant's
Bylaws provides that the Registrant shall indemnify its officers and directors
and may indemnify its employees and other agents against any and all loss,
liability, expenses (including attorneys' fees), judgments, fines, ERISA excise
taxes or penalties and amounts to be paid in settlement (each, a "Loss")
actually and reasonably incurred or suffered in connection with any actual or
threatened claim, suit or proceeding, whether civil, criminal, administrative or
investigative, except for a Loss arising out of acts or omissions finally
adjudged to be intentional misconduct or a known violation of law, approval of
distributions or loans that are finally adjudged to be in violation of RCW
23B.06.400 or any transaction in which it is finally adjudged that the
indemnitee personally received a benefit in money, property or services to which
the indemnitee was not legally entitled. The Registrant's Bylaws also permit it
to secure insurance on behalf of any officer, director, employee or other agent
for any liability arising out of his or her actions in such capacity, regardless
of whether the Bylaws would permit indemnification, and to enter into agreements
to indemnify its officers and directors in furtherance of Section 10 of the
Registrant's Bylaws. The Registrant has entered into such agreements with
certain of its officers and directors.
<PAGE> 3
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------------- --------------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie regarding legality of the Common Stock being
registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Perkins Coie (included in opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 INTERLINQ Software Corporation Stock Option Plan for Non-Employee
Directors (as amended and restated through January 19, 1996)
</TABLE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the 1934
Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the 1934 Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the 1934 Act) that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that, in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in
II-2
<PAGE> 4
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Kirkland, State of Washington, on January 29,
1997.
INTERLINQ SOFTWARE CORPORATION
By /s/ JIRI NECHLEBA
__________________________________________
Jiri Nechleba
President and Chief Executive Officer
POWER OF ATTORNEY
EACH PERSON WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS JIRI
NECHLEBA AND STEPHEN A. YOUNT, AND EACH OF THEM, AS HIS TRUE AND LAWFUL
ATTORNEY-IN-FACT AND AGENT WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION,
TO SIGN IN THE NAME AND ON BEHALF OF SUCH PERSON, INDIVIDUALLY AND IN EACH
CAPACITY STATED BELOW, ANY OR ALL AMENDMENTS (INCLUDING PRE-EFFECTIVE AND
POST-EFFECTIVE AMENDMENTS) TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME
WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities indicated on January 29, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JIRI NECHLEBA President, Chief Executive Officer and Director
________________________________________________________ (Principal Executive Officer)
Jiri Nechleba
/s/ STEPHEN A. YOUNT Vice President-Finance, Chief Financial Officer and
________________________________________________________ Secretary
Stephen A. Yount (Principal Financial Officer and Principal Accounting
Officer)
/s/ THEODORE M. WIGHT Director
________________________________________________________
Theodore M. Wight
/s/ ROBERT J. GALLAGHER Director
________________________________________________________
Robert J. Gallagher
/s/ ROBERT W. O'REAR Director
________________________________________________________
Robert W. O'Rear
</TABLE>
II-4
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
5.1 Opinion of Perkins Coie regarding legality of the Common Stock being
registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Perkins Coie (included in opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 INTERLINQ Software Corporation Stock Option Plan for Non-Employee Directors
(as amended and restated through January 19, 1996)
</TABLE>
<PAGE> 1
EXHIBIT 5.1
February 3, 1997
INTERLINQ Software Corporation
11255 Kirkland Way
Kirkland, WA 98033
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") pursuant to
the Securities Act of 1933, as amended (the "Act"), which you are filing with
the Securities and Exchange Commission with respect to 140,000 shares of Common
Stock, $.01 par value per share (the "Shares"), which are to be issued pursuant
to the INTERLINQ Software Corporation Stock Option Plan for Non-Employee
Directors (as amended through January 19, 1996) (the "Plan").
We have examined the Registration Statement and such other documents
and records of INTERLINQ Software Corporation as we have deemed relevant and
necessary for the purposes of this opinion. In giving this opinion we are
assuming the authenticity of all instruments presented to us as originals, the
conformity with originals of all instruments presented to us as copies and the
genuineness of all signatures.
Based upon and subject to the foregoing, we are of the opinion that the
Shares that will be issued pursuant to the Plan, upon the due execution by
INTERLINQ Software Corporation and the registration by its registrar of the
Shares and the issuance thereof by INTERLINQ Software Corporation in accordance
with the terms of the Plan, and the receipt of consideration therefor in
accordance with the terms of the Plan, will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
PERKINS COIE
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders
INTERLINQ Software Corporation:
We consent to the use of our report dated August 6, 1996 incorporated
herein by reference. Our report refers to a change in the method of
accounting for income taxes effective July 1, 1993.
KPMG PEAT MARWICK LLP
Seattle, Washington
February 3, 1997
<PAGE> 1
EXHIBIT 99.1
INTERLINQ SOFTWARE CORPORATION
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(AS AMENDED AND RESTATED ON JANUARY 19, 1996)
SECTION 1. PURPOSES
The purposes of the Amended and Restated INTERLINQ Software Corporation
Stock Option Plan for Non-Employee Directors (the "Plan") are to attract and
retain the services of experienced and knowledgeable non-employee directors of
Interlinq Software Corporation (the "Corporation") and to provide an incentive
for such directors to increase their proprietary interests in the Corporation's
long-term success and progress.
SECTION 2. SHARES SUBJECT TO THE PLAN
Subject to adjustment in accordance with Section 6 hereof, the total
number of shares of the Corporation's common stock (the "Common stock") for
which options may be granted under the Plan is 215,000 (the "Shares"). The
Shares shall be shares presently authorized but unissued or subsequently
acquired by the Corporation and shall include shares representing the
unexercised portion of any option granted under the Plan which expires or
terminates without being exercised in full.
SECTION 3. ADMINISTRATION OF THE PLAN
The administrator of the Plan (the "Plan Administrator") shall be the
Board of Directors of the Corporation (the "Board"). Subject to the terms of
the Plan, the Plan Administrator shall have the power to construe the
provisions of the Plan, to determine all questions arising thereunder and to
adopt and amend such rules and regulations for the administration of the Plan as
it may deem desirable. No member of the Plan Administrator shall participate
in any vote by the Plan Administrator on any matter materially affecting the
rights of any such member under the Plan.
SECTION 4. PARTICIPATION IN THE PLAN
Each member of the Board elected or appointed who is not otherwise an
employee of the Corporation or any parent or subsidiary corporation (an
"Eligible Director") shall be eligible to participate in the Plan.
4.1 INITIAL GRANTS
Commencing on February 17, 1993 and ending on January 19, 1996, each
Eligible Director who is initially appointed or elected (other than at an
Annual Meeting of Shareholders as described in the Corporation's Restated
Bylaws (an "Annual Meeting")) to fill a vacancy on the Board shall
automatically receive the grant of an option (an "Initial Grant") to purchase
3,000 Shares upon such election. On January 19, 1996, each Eligible Director
shall automatically receive an Initial Grant to purchase 10,000 Shares, and
each Eligible Director who is initially appointed or elected to fill a vacancy
on the Board after that date shall automatically receive an Initial Grant to
purchase 10,000 Shares on the date of such appointment or election, subject in
both cases to shareholder approval at the 1996 Annual Meeting of the amendments
to the Plan adopted by the Board on January 19, 1996.
4.2 ANNUAL GRANTS
Commencing with the 1993 Annual Meeting and ending with the 1996 Annual
Meeting, each Eligible Director shall automatically receive the grant of an
option (an "Annual Grant") to purchase 3,000 Shares immediately following each
Annual Meeting, except that the Annual Grants for 1993 shall be granted
<PAGE> 2
on the first day on which the Corporation's Common Stock is publicly traded.
Commencing with the 1997 Annual Meeting, each Eligible Director shall
automatically receive an Annual Grant to purchase 7,500 Shares immediately
following each Annual Meeting, subject to shareholder approval at the 1996
Annual Meeting of the amendments to the Plan adopted by the Board on January
19, 1996. Each Eligible Director shall be entitled to receive an Annual Grant
notwithstanding the receipt of an Initial Grant in the same calendar year.
SECTION 5. OPTION TERMS
Each option granted to an Eligible Director under the Plan and the
issuance of Shares thereunder shall be subject to the following terms:
5.1 OPTION AGREEMENT
Each option granted under the Plan shall be evidenced by an option
agreement (an "Agreement") duly executed on behalf of the Corporation. Each
Agreement shall comply with and be subject to the terms and conditions of the
Plan. Any Agreement may contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Plan Administrator.
5.2 OPTION EXERCISE PRICE
The option exercise price for each option granted under the Plan shall
be the fair market value of the Shares covered by the option at the time the
option is granted. For purposes of the Plan, "fair market value" shall be the
average of the high and low sales prices at which the Common Stock was sold on
such date as reported by the Nasdaq National Market on such date; provided,
however, that (i) if no Common Stock was traded on such date, fair market value
shall be based on the high and low sales prices on the next preceding date on
which Common Stock was so traded and (ii) with respect to the initial grants
hereunder, on the effective date of the Corporation's initial public offering of
Common Stock, fair market value shall be the price at which Common Stock was
sold to the public in such initial public offering.
5.3 VESTING AND EXERCISABILITY
Annual Grants and Initial Grants to an Eligible Director shall vest and
be fully exercisable six months after the date of grant.
5.4 TIME AND MANNER OF EXERCISE OF OPTION
Each option may be exercised in whole or in part at any time and from
time to time; provided, however, that no fewer than 100 Shares (or the
remaining Shares then purchasable under the option, if less than 100 Shares)
may be purchased upon any exercise of option rights hereunder and that only
whole Shares will be issued pursuant to the exercise of any option.
Any option may be exercised by giving written notice, signed by the
person exercising the option, to the Corporation stating the number of Shares
with respect to which the option is being exercised, accompanied by payment in
full for such Shares, which payment may be in whole or in part (i) in cash or
by check, (ii) in shares of Common Stock already owned for at least six months
by the person exercising the option, valued at fair market value at the time of
such exercise, or (iii) by delivery of a properly executed exercise notice,
together with irrevocable instructions to a broker, to properly deliver to the
Corporation the amount of sale or loan proceeds to pay the exercise price, all
in accordance with the regulations of the Federal Reserve Board.
- --------------------------------------------------------------------------------
INTERLINQ Software Corporation Page 2
Amended and Restated Stock Option Plan For Non-Employee Directors
<PAGE> 3
5.5 TERM OF OPTIONS
Each option shall expire five years from the date of the granting
thereof, but shall be subject to earlier termination as follows:
(a) In the event that an optionee ceases to be a director of
the Corporation for any reason other than the death or total disability
of the optionee, the unvested portion of the options granted to such
optionee shall terminate immediately and the vested portion of the
options granted to such optionee may be exercised by him or her only
within three months after the date such optionee ceases to be a director
of the Corporation.
(b) In the event of the death of an optionee, whether during
the optionee's service as a director or during the three-month period
referred to in Section 5.5(a), the unvested portion of the options
granted to such optionee shall terminate immediately and the vested
portion of the options granted to such optionee shall be exercisable,
and such options shall expire (unless by their terms they sooner
terminate and expire) unless exercised within one year after the date of
the optionee's death, by the legal representatives or the estate of such
optionee, by any person or persons whom the optionee shall have
designated in writing on forms prescribed by and filed with the
Corporation or, if no such designation has been made, by the person or
persons to whom the optionee's rights have passed by will or the laws of
descent and distribution.
(c) In the event that an optionee suffers a total disability
during the optionee's service as a director, the unvested portion of the
options granted to such optionee shall terminate immediately and the
vested portion of the options granted to such optionee shall be
exercisable, and such options shall expire unless exercised within one
year of the optionee's cessation of service as a director (unless by its
terms it sooner terminates and expires). As used in the Plan, the term
"total disability" refers to a mental or physical impairment of the
optionee which is expected to result in death or which has lasted or is
expected to last for a continuous period of 12 months or more and which
causes the optionee to be unable, in the opinion of the Corporation and
two independent physicians, to perform his or her duties for the
Corporation. Total disability shall be deemed to have occurred on the
first day after the Corporation and the independent physicians have
furnished their opinion of total disability to the Plan Administrator.
5.6 TRANSFERABILITY
During an optionee's lifetime, an option may be exercised only by the
optionee or a permitted assignee or transferee (as provided below). Options
granted under the Plan and the rights and privileges conferred thereby shall
not be subject to execution, attachment or similar process and may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than (a) by will or by the applicable laws
of descent and distribution or (b) by gift or other transfer to either (i) a
spouse or other immediate family member or (ii) any trust or estate in which
the original optionee or such person's spouse or other immediate family member
has a substantial beneficial interest; provided, however, that any option so
assigned or transferred shall be subject to all the same terms and conditions
contained in the instrument evidencing the award. An optionee may also
designate in writing during the optionee's lifetime a beneficiary to receive
and exercise options in the event of the optionee's death (as provided in
Section 5.5(b)). Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of any option under the Plan or of any right or privilege
conferred thereby, contrary to the provisions of the Plan, or the sale or levy
or any attachment or similar process upon the rights and privileges conferred
hereby, shall be null and void.
- --------------------------------------------------------------------------------
INTERLINQ Software Corporation Page 3
Amended and Restated Stock Option Plan For Non-Employee Directors
<PAGE> 4
5.7 HOLDING PERIOD
If a person subject to Section 16 of the Exchange Act sells Shares
obtained upon the exercise of any option granted under the Plan within six
months after the date the option was granted, such sale may result in
short-swing profit liability under Section 16 of the Securities Exchange Act of
1934, as amended.
5.8 PARTICIPANT'S OR SUCCESSOR'S RIGHTS AS SHAREHOLDER
Neither the recipient of an option under the Plan nor the optionee's
successor(s) in interest shall have any rights as a shareholder of the
Corporation with respect to any Shares subject to an option granted to such
person until such person becomes a holder of record of such Shares.
5.9 LIMITATION AS TO DIRECTORSHIP
Neither the Plan, nor the granting of an option, nor any other action
taken pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an optionee has a right to continue as
a director for any period of time or at any particular rate of compensation.
5.10 REGULATORY APPROVAL AND COMPLIANCE
The Corporation shall not be required to issue any certificate or
certificates for Shares upon the exercise of an option granted under the Plan,
or record as a holder of record of Shares the name of the individual exercising
an option under the Plan, without obtaining to the complete satisfaction of the
Plan Administrator the approval of all regulatory bodies deemed necessary by
the Plan Administrator, and without complying, to the Plan Administrator's
complete satisfaction, with all rules and regulations under federal, state or
local law deemed applicable by the Plan Administrator.
SECTION 6. CAPITAL ADJUSTMENTS
The aggregate number of Shares with respect to which options may be
granted under the Plan, as provided in Section 2 hereof, the number and class
of Shares to be granted pursuant to each Initial Grant and each Annual Grant,
the number of Shares subject to each outstanding option and the price per share
specified in such options, shall all be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision or consolidation of shares or any other similar capital
adjustment, the payment of a stock dividend or a merger or consolidation of the
Corporation, or the sale of all or substantially all of the assets of, or the
liquidation of, the Corporation.
Upon the effective date of a dissolution or liquidation of the Company,
or of a reorganization, merger or consolidation of the Company with one or more
corporations which results in more than eighty percent of the outstanding
voting shares of the Company being owned by one or more affiliated corporations
or other affiliated entities, or of a transfer of all or substantially all the
assets or more than eighty percent of the then outstanding shares of the Company
to another corporation or other entity (each, a "corporate transaction"), other
than a merger of the Company in which the holders of Common Stock immediately
prior to the merger have the same proportionate ownership of Common Stock in
the surviving corporation immediately after the merger, a mere reincorporation
or the creation of a holding company, then the exercisability of each option
outstanding under the Plan shall be automatically accelerated so that each such
option shall, immediately prior to the specified effective date for any such
corporate transaction, become fully exercisable with respect to the total
number of Shares purchasable under such option and may be exercised for all or
any portion of such Shares. To the extent such option is not exercised, it
shall terminate, except that, in the event of such a corporate transaction in
which shareholders of the Company receive capital stock of another corporation
in exchange for their shares of Common Stock, such unexercised option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation. Any
- -------------------------------------------------------------------------------
INTERLINQ Software Corporation Page 4
Amended and Restated Stock Option Plan
For Non-Employee Directors
<PAGE> 5
such assumed or equivalent option shall be fully exercisable with respect to
the total number of Shares purchasable under such option. Upon a merger of the
Company in which the holders of Common Stock immediately prior to the merger
have the same proportionate ownership of Common Stock in the surviving
corporation immediately after the merger or the creation of a holding company,
each option outstanding under the Plan shall be assumed or an equivalent option
shall be substituted by the successor corporation or a parent or subsidiary of
such corporation and the vesting schedule set forth in the instrument
evidencing the option shall continue to apply to such assumed or equivalent
option.
Adjustments under this Section 6 shall be made by the Plan
Administrator, whose determination shall be final. No fractional Shares shall be
issued under the Plan or pursuant to any adjustment hereunder.
SECTION 7. EXPENSES OF THE PLAN
All costs and expenses of the adoption and administration of the Plan
shall be borne by the Corporation; none of such expenses shall be charged to
any optionee.
SECTION 8. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective upon adoption by the Corporation's
shareholders. The Plan shall continue in effect until it is terminated by action
of the Board or the Corporation's shareholders, but such termination shall not
affect the then-outstanding terms of any options.
SECTION 9. COMPLIANCE WITH RULE 16b-3
It is the intention of the Corporation that the Plan comply in all
respects with the requirements for a formula plan within the meaning attributed
to that term for purposes of Rule 16b-3 promulgated under Section 16(b) of the
Exchange Act. Therefore, if any Plan provision is later found not to be in
compliance with such requirements, that provision shall be deemed null and
void, and in all events the Plan shall be construed in favor of its meeting
such requirements.
SECTION 10. TERMINATION AND AMENDMENT OF THE PLAN
The Board may amend, terminate or suspend the Plan at any time, in its
sole and absolute discretion; provided, however, that if required to qualify the
Plan as a formula plan for purposes of Rule 16b-3 promulgated under Section
16(b) of the Exchange Act, no amendment may be made more than once every six
months that would change the amount, price, timing or vesting of the options,
other than to comport with changes in the Internal Revenue Code of 1986, as
amended, or the rules and regulations promulgated thereunder; and provided,
further, that if required to qualify the Plan under Rule 16b-3, no amendment
that would
(a) materially increase the number of Shares that may be issued under
the Plan,
(b) materially modify the requirements as to eligibility for
participation in the Plan, or
(c) otherwise materially increase the benefits accruing to participants
under the Plan
shall be made without the approval of the Corporation's shareholders.
Adopted by the Corporation's Board of Directors on February 17, 1993,
and approved by the Corporation's shareholders on March 12, 1993. Amended and
restated by the Corporation's Board of Directors on January 19, 1996 and
approved by the Corporation's shareholders on November 6, 1996.
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INTERLINQ Software Corporation Page 5
Amended and Restated Stock Option Plan for Non-Employee Directors
