<PAGE>
As filed with the Securities and Exchange Commission on November 7, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
WALKER INTERACTIVE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
-----------------------------
DELAWARE 95-2862954
(State of Incorporation) (I.R.S. Employer Identification No.)
-----------------------------
Marathon Plaza Three North
303 Second Street
San Francisco, CA 94107
(415) 495-8811
(Address and telephone number of principal executive offices)
-----------------------------
1995 Nonstatutory Stock Option Plan for Non-Officer Employees, as Amended
(Full title of the plans)
Leonard Y. Liu
Chairman of the Board, President, and Chief Executive Officer
Walker Interactive Systems, Inc.
Marathon Plaza Three North
303 Second Street
San Francisco, CA 94107
(415) 957-1711
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------------
Copies to:
Gregory C. Smith, Esq.
Cooley Godward LLP
One Maritime Plaza, 20th Floor
San Francisco, CA 94111-3580
(415) 693-2000
----------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED (1) SHARE (2) PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and 500,000 $14.19 $7,095,000 $2,150.00
Common Stock (par
value $.001)
============================================================================================================
</TABLE>
(1) This registration statement is intended to cover the offering of up to
500,000 shares of the Company's Common Stock pursuant to its 1995 Nonstatutory
Stock Option Plan for Non-Officer Employees, as amended.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee. The offering price per share and the aggregate offering price
are based upon the average of the high and low prices of the Registrant's Common
Stock as reported on the Nasdaq National Market on November 3, 1997, in
accordance with Rule 457(c) under the Securities Act of 1933, as amended.
================================================================================
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
Page 1 of _______
Exhibit Index at Page 5
<PAGE>
INCORPORATION OF THE CONTENTS OF REGISTRATION STATEMENTS ON FORM S-8
The contents of Registration Statements on Form S-8 No. 333-08629, filed
with the Securities and Exchange Commission on July 23, 1996, are incorporated
by reference into this Registration Statement.
EXHIBITS
EXHIBIT
NUMBER
5.1 Opinion of Cooley Godward LLP
23.1 Independent auditors' consent
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement
24 Power of Attorney is contained on the signature pages.
99.1 1995 Nonstatutory Stock Option Plan for Non-Officer Employees, as
amended
2.
<PAGE>
SIGNATURES
THE REGISTRANT. 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 San Francisco, State of
California, on November 7, 1997.
WALKER INTERACTIVE SYSTEMS, INC.
By: /s/ Leonard Y. Liu
--------------------
Leonard Y. Liu
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Leonard Y. Liu and Bruce C. Pollock, and
each or any one of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
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, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
3.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Leonard Y. Liu Chairman of the Board, President November 7, 1997
- --------------------- and Chief Executive Officer
Leonard Y. Liu (Principal Executive Officer)
/s/ Bruce C. Pollock Chief Financial Officer November 7, 1997
- --------------------- (Principal Financial Officer)
Bruce C. Pollock
/s/ Barbara M. Hubbard Corporate Controller November 7, 1997
- ------------------------ (Principal Accounting Officer)
Barbara M. Hubbard
/s/ Richard C. Alberding Director November 7, 1997
- ------------------------
Richard C. Alberding
/s/ Tania Amochaev Director November 7, 1997
- ---------------------
Tania Amochaev
/s/ William A. Hasler Director November 7, 1997
- ------------------------
William A. Hasler
/s/ John M. Lillie Director November 7, 1997
- ---------------------
John M. Lillie
/s/ David C. Wetmore Director November 7, 1997
- -----------------------
David C. Wetmore
</TABLE>
4.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBER
<S> <C> <C>
5.1 Opinion of Cooley Godward LLP
23.1 Independent auditors' consent
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5
to this Registration Statement
24 Power of Attorney is contained on the signature pages.
99.1 1995 Nonstatutory Stock Option Plan for Non-Officer
Employees, as amended
</TABLE>
5.
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF COOLEY GODWARD LLP]
GREGORY C. SMITH
415 693-2124
[email protected]
November 7, 1997
Walker Interactive Systems, Inc.
Marathon Plaza Three North
303 Second Street
San Francisco, CA 94107
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Walker Interactive Systems, Inc. (the "Company") of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission covering the offering of up to 500,000
additional shares of the Company's Common Stock, $.001 par value, (the
"Additional Shares") pursuant to its 1995 Nonstatutory Stock Option Plan for
Non-Officer Employees, as amended (the "Plan").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, the Plan, your Certificate of Incorporation and By-laws, as
amended, and such other documents, records, certificates, memoranda and other
instruments as we deem necessary as a basis for this opinion. We have assumed
the genuineness and authenticity of all documents submitted to us as originals,
the conformity to originals of all documents submitted to us as copies thereof,
and the due execution and delivery of all documents where due execution and
delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Additional Shares, when sold and issued in accordance with the Plan,
the Registration Statement and Related Prospectus will be validly issued, fully
paid, and nonassessable (except as to shares issued pursuant to certain deferred
payment arrangements, which will be fully paid and nonassessable when such
deferred payments are made in full).
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Cooley Godward LLP
/s/ Gregory C. Smith
Gregory C. Smith
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Walker Interactive Systems, Inc. on Form S-8 of our report dated February 4,
1997, appearing in the Annual Report on Form 10-K of Walker Interactive Systems,
Inc. for the year ended December 31, 1996.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
San Francisco, California
November 6, 1997
<PAGE>
EXHIBIT 99.1
WALKER INTERACTIVE SYSTEMS, INC.
1995 NONSTATUTORY STOCK OPTION PLAN
FOR NON-OFFICER EMPLOYEES
ADOPTED AUGUST 28, 1995
RATIFIED AND AMENDED SEPTEMBER 20, 1995
AMENDED MAY 9, 1996 AND OCTOBER 20, 1997
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees of the Company, and its Affiliates, may be given an opportunity to
purchase stock of the Company.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now non-officer Employees of the Company or its Affiliates, to
secure and retain the services of new Employees in such positions, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company and its Affiliates.
(c) The Company intends that the Options issued under the Plan shall be
only Nonstatutory Stock Options.
2. DEFINITIONS.
(a) "AFFILIATE" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" means a Committee appointed by the Board in accordance with
subsection 3(c) of the Plan.
(e) "COMPANY" means Walker Interactive Systems, Inc., a Delaware
corporation.
1.
<PAGE>
(f) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means the
employment relationship, or service as a member of the Board or Consultant, is
not interrupted or terminated. The Board, in its sole discretion, may determine
whether Continuous Status as an Employee, Director or Consultant shall be
considered interrupted in the case of: (i) any leave of absence approved by the
Board, including sick leave, military leave, or any other personal leave; or
(ii) transfers between locations of the Company or between the Company,
Affiliates or their successors.
(g) "DIRECTOR" means a member of the Board.
(h) "DISINTERESTED PERSON" means a Director who either (i) was not during
the one year prior to service as an administrator of the Plan granted or awarded
equity securities pursuant to the Plan or any other plan of the Company or any
Affiliate entitling the participants therein to acquire equity securities of the
Company or any Affiliate except as permitted by Rule 16b-3(c)(2)(i); or (ii) is
otherwise considered to be a "disinterested person" in accordance with Rule 16b-
3(c)(2)(i), or any other applicable rules, regulations or interpretations of the
Securities and Exchange Commission.
(i) "EMPLOYEE" means any person employed by the Company or any Affiliate of
the Company.
(j) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(k) "FAIR MARKET VALUE" means, as of any date, the value of the common
stock of the Company determined as follows:
(1) If the common stock is listed on any established stock exchange or
a national market system, including without limitation the Nasdaq National
Market, the Fair Market Value of a share of common stock shall be the closing
sales price for such stock (or the
2.
<PAGE>
closing bid, if no sales were reported) as quoted on such system or exchange (or
the exchange with the greatest volume of trading in common stock) on the last
market trading day prior to the day of determination, as reported in the Wall
Street Journal or such other source as the Board deems reliable;
(2) If the common stock is quoted on the Nasdaq System (but not on the
Nasdaq National Market) or is regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a share of common
stock shall be the mean between the bid and asked prices for the common stock on
the last market trading day prior to the day of determination, as reported in
the Wall Street Journal or such other source as the Board deems reliable;
(3) In the absence of an established market for the common stock, the
Fair Market Value shall be determined in good faith by the Board.
(l) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as
an Incentive Stock Option.
(m) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(n) "OPTION" means a stock option granted pursuant to the Plan.
(o) "OPTION AGREEMENT" means a written agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(p) "OPTIONEE" means an Employee who holds an outstanding Option.
(q) "PLAN" means this Walker Interactive Systems, Inc. 1995 Nonstatutory
Stock Option Plan for Non-Officer Employees.
3.
<PAGE>
(r) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.
3. ADMINISTRATION.
(a) The Plan shall be administered by Compensation Committee of the Board
unless and until the Compensation Committee or the Board delegates
administration to a Committee, as provided in subsection 3(c).
(b) The Compensation Committee shall have the power, subject to, and within
the limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible under
the Plan shall be granted Options; when and how each Option shall be granted;
the provisions of each Option granted (which need not be identical), including
the time or times such Option may be exercised in whole or in part; and the
number of shares for which an Option shall be granted to each such person.
(2) To construe and interpret the Plan and Options granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Compensation Committee, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Option Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan or an Option as provided
in Section 11 of the Plan.
(4) Generally, to exercise such powers and to perform such acts as the
Compensation Committee deems necessary or expedient to promote the best
interests of the Company.
4.
<PAGE>
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of which Committee shall be Disinterested Persons. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Compensation
Committee (and references in this Plan to the Compensation Committee shall
thereafter be to the Committee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Compensation Committee. The Compensation Committee may abolish the
Committee at any time and revest in the Compensation Committee the
administration of the Plan. Notwithstanding anything in this Section 3 to the
contrary, the Board or the Compensation Committee may delegate to a committee of
one or more members of the Board the authority to grant Options to persons
eligible to receive Options as provided in Section 5 of the Plan.
(d) Any requirement that an administrator of the Plan be a Disinterested
Person shall not apply if the Board or the Compensation Committee expressly
declares that such requirement shall not apply. Any Disinterested Person shall
otherwise comply with the requirements of Rule 16b-3.
(e) The Board shall at all times have the authority to arrogate to itself
any or all of the powers and responsibilities allocated to the Compensation
Committee or to the Committee under the Plan.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 10 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to Options shall not
exceed in the aggregate one million six hundred thousand (1,600,000) shares of
the Company's common stock. If any
5.
<PAGE>
Option shall for any reason expire or otherwise terminate, in whole or in part,
without having been exercised in full, the stock not purchased under such Option
shall revert to and again become available for issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. ELIGIBILITY.
Nonstatutory Stock Options may be granted under the Plan only to Employees
who (i) hold positions below the level of Officer, and (ii) are not then subject
to Section 16 of the Exchange Act.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Compensation Committee shall deem appropriate. The provisions
of separate Options need not be identical, but each Option shall include
(through incorporation of provisions hereof by reference in the Option or
otherwise) the substance of each of the following provisions:
(a) TERM. No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) PRICE. The exercise price of each Nonstatutory Stock Option shall be
not less than eighty-five percent (85%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted.
(c) CONSIDERATION. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, in one or more of the following forms: (i) in cash at the time the
Option is exercised, (ii) at the discretion of the Compensation Committee or the
Committee, by delivery to the Company of other common stock
6.
<PAGE>
of the Company, or (iii) pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which results in the receipt of cash
(or check) by the Company prior to the issuance of the stock.
(d) TRANSFERABILITY. A Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order satisfying the requirements of Rule 16b-3 and
the rules thereunder (a "QDRO"), and shall be exercisable during the lifetime of
the person to whom the Option is granted only by such person or any transferee
pursuant to a QDRO. The person to whom the Option is granted may, by delivering
written notice to the Company, in a form satisfactory to the Company, designate
a third party who, in the event of the death of the Optionee, shall thereafter
be entitled to exercise the Option.
(e) VESTING. The total number of shares of stock subject to an Option may,
but need not, be allotted in periodic installments (which may, but need not, be
equal). The Option Agreement may provide that from time to time during each of
such installment periods, the Option may become exercisable ("vest") with
respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. The provisions of this
subsection 6(e) are subject to any Option provisions governing the minimum
number of shares as to which an Option may be exercised.
(f) SECURITIES LAW COMPLIANCE. The Company may require any Optionee, or
any person to whom an Option is transferred under subsection 6(d), as a
condition of exercising any
7.
<PAGE>
such Option, (1) to give written assurances satisfactory to the Company as to
the Optionee's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters, and that he
or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (2) to give
written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Option for such person's own account and not
with any present intention of selling or otherwise distributing the stock. The
foregoing requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
Option has been registered under a then currently effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.
(g) TERMINATION OF SERVICE. In the event an Optionee's Continuous Status
as an Employee, Director or Consultant terminates (other than upon the
Optionee's death or disability), the Optionee may exercise his or her Option (to
the extent that the Optionee was entitled to exercise it at the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months after the termination of the Optionee's Continuous
Status as an Employee, Director or Consultant or such longer or shorter period
specified in the Option Agreement, or (ii) the expiration of the term of the
Option as set forth in the Option
8.
<PAGE>
Agreement. If, after termination, the Optionee does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.
(h) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous Status
as an Employee, Director or Consultant terminates as a result of the Optionee's
disability, the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement), or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.
(i) DEATH OF OPTIONEE. In the event of the death of an Optionee during,
or within a period specified in the Option after the termination of, the
Optionee's Continuous Status as an Employee, Director or Consultant, the Option
may be exercised (to the extent the Optionee was entitled to exercise the Option
at the date of death) by the Optionee's estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionee's death pursuant to subsection 6(d),
but only within the period ending on the earlier of (i) the date eighteen (18)
months following the date of death (or such longer or shorter period specified
in the Option Agreement), or (ii) the expiration of the
9.
<PAGE>
term of such Option as set forth in the Option Agreement. If, at the time of
death, the Optionee was not entitled to exercise his or her entire Option, the
shares covered by the unexercisable portion of the Option shall revert to and
again become available for issuance under the Plan. If, after death, the Option
is not exercised within the time specified herein, the Option shall terminate,
and the shares covered by such Option shall revert to and again become available
for issuance under the Plan.
(j) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject to
the Option prior to the full vesting of the Option. Any unvested shares so
purchased may be subject to a repurchase right in favor of the Company or to any
other restriction the Board determines to be appropriate.
(k) WITHHOLDING. To the extent provided by the terms of an Option
Agreement, the Optionee may satisfy any federal, state, local or foreign tax
withholding obligation relating to the exercise of such Option by any of the
following means or by a combination of such means: (1) tendering a cash
payment; (2) authorizing the Company to withhold shares from the shares of the
common stock otherwise issuable to the participant as a result of the exercise
of the Option; or (3) delivering to the Company owned and unencumbered shares of
the common stock of the Company.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the Options, the Company shall keep available at
all times the number of shares of stock required to satisfy such Options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of
10.
<PAGE>
stock upon exercise of the Options; provided, however, that this undertaking
shall not require the Company to register under the Securities Act either the
Plan, any Option or any stock issued or issuable pursuant to any such Option.
If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such Options unless and until such authority is obtained.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Options shall constitute
general funds of the Company.
9. MISCELLANEOUS.
(a) The Compensation Committee shall have the power to accelerate the time
at which an Option may first be exercised or the time during which an Option or
any part thereof will vest pursuant to subsection 6(e), notwithstanding the
provisions in the Option stating the time at which it may first be exercised or
the time during which it will vest.
(b) Neither an Optionee nor any person to whom an Option is transferred
under subsection 6(d) shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to such Option unless and
until such person has satisfied all requirements for exercise of the Option
pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Option granted
pursuant thereto shall confer upon any Employee any right to continue in the
employ of the Company or any Affiliate, or to continue to serve as a member of
the Board or as a consultant, or shall affect the right of the Company or any
Affiliate to terminate the employment relationship of any Employee
11.
<PAGE>
with or without cause, to remove a member of the Board pursuant to the terms of
the Company's Bylaws, or to terminate a consultant in accordance with the terms
of this agreement with the Company or Affiliate.
(d) The Compensation Committee shall have the authority to effect, at any
time and from time to time (i) the repricing of any outstanding Options under
the Plan and/or (ii) with the consent of the affected holders of Options, the
cancellation of any outstanding Options and the grant in substitution therefor
of new Options under the Plan covering the same or different numbers of shares
of Common Stock, but having an exercise price per share not less than eighty-
five percent (85%) of the Fair Market Value per share of Common Stock on the new
grant date.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject to
any Option (through merger, consolidation, reorganization, recapitalization,
stock dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), the Plan will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan pursuant to
subsection 4(a) and the outstanding Options will be appropriately adjusted in
the class(es) and number of shares and price per share of stock subject to such
outstanding Options.
(b) In the event of: (1) a dissolution, liquidation or sale of
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving corporation; or (3) a reverse merger in
which the Company is the surviving corporation but the shares of the Company's
common stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, then, at the sole discretion of the Compensation Committee or
the Board and to
12.
<PAGE>
the extent permitted by applicable law: (i) any surviving corporation shall
assume any Options outstanding under the Plan or shall substitute similar
Options for those outstanding under the Plan, (ii) such Options shall continue
in full force and effect, or (iii) the time during which such Options may be
exercised shall be accelerated and any outstanding unexercised rights under any
Options terminated if not exercised prior to such event.
11. AMENDMENT OF THE PLAN AND OPTIONS.
(a) The Board or the Compensation Committee at any time, and from time to
time, may amend the Plan.
(b) The Compensation Committee may, in its sole discretion, submit the Plan
or any amendment to the Plan for stockholder approval.
(c) It is expressly contemplated that the Board or the Compensation
Committee may amend the Plan in any respect the Board or the Compensation
Committee deems necessary or advisable to provide Optionees with the maximum
benefits provided or to be provided under the provisions of the Code and the
regulations promulgated thereunder.
(d) Rights and obligations under any Option granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company
requests the consent of the person to whom the Option was granted and (ii) such
person consents in writing.
(e) The Board or the Compensation Committee at any time, and from time to
time, may amend the terms of any one or more Options; provided, however, that
the rights and obligations under any Option shall not be impaired by any such
amendment unless (i) the Company requests the consent of the person to whom the
Option was granted and (ii) such person consents in writing.
13.
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12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board or the Compensation Committee may suspend or terminate the
Plan at any time. Unless sooner terminated, the Plan shall terminate on the
date when all the shares of the Company's common stock reserved for issuance
under the Plan have been issued. No Options may be granted under the Plan while
the Plan is suspended or after it is terminated.
(b) Rights and obligations under any Option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the Option was granted.
13. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on August 28, 1995.
Adopted by the Compensation Committee on August 28, 1995 with an aggregate share
reserve of 140,000 shares.
Ratified and amended by the Board of Directors on September 20, 1995 to increase
the aggregate share reserve to 600,000 shares.
Amended by the Board of Directors on May 6, 1996 to increase the aggregate share
reserve to 1,100,000 shares.
Amended by the Board of Directors on October 20, 1997 to increase the aggregate
share reserve to 1,600,000 shares.
14.
