<PAGE>
As filed with the Securities and Exchange Commission on January 31, 2000
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.)
_____________________________
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)
Frank M. Richardson
Chief Executive Officer
Walker Interactive Systems, Inc.
303 Second Street
San Francisco, CA 94107
(415) 495-8811
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
_____________________________
Copies to:
Jamie E. Chung, Esq.
Cooley Godward llp
One Maritime Plaza, 20/th/ Floor
San Francisco, CA 94111-3580
(415) 693-2000
_____________________________
Page 1 of 26
Exhibit Index on Page 6
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities to Offering Price Per Aggregate Offering
be Registered Amount to be Share (2) Price (2) Amount of
Registered(1) Registration Fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and Common
Stock (par value $.001) 600,000 $10.4375 $6,262,500 $1,653.30
===================================================================================================================================
</TABLE>
(1) This registration statement shall cover any additional shares of Common
Stock which become issuable under the 1995 Nonstatutory Stock Option Plan for
Non-Officer Employees, as amended, by reason of any stock dividend, stock
split, recapitalization or any other similar transaction without receipt of
consideration which results in an increase in the number of shares of the
Registrant's Common Stock.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h)(1) under the Securities Act of 1933,
as amended (the "Act"). The offering price per share and aggregate offering
price are based upon the average of the high and low prices of Walker
Interactive Systems, Inc.'s ("Registrant" or "Company") Common Stock as
reported on the Nasdaq National Market on January 26, 2000.
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
2.
<PAGE>
INCORPORATION BY REFERENCE OF CONTENTS OF
REGISTRATION STATEMENT ON FORM S-8
The contents of Registration Statements on Form S-8, Nos. 33-64426, 33-
87022, 333-02942, 333-08629, 333-39913, 333-57199 and 333-85677 filed with the
Securities and Exchange Commission on June 14, 1993, December 5, 1994, April 2,
1996, July 23, 1996, November 10, 1997, June 19, 1998 and August 20, 1999,
respectively, are incorporated by reference herein.
In November 1999 the Board amended the 1995 Nonstatutory Stock Option Plan
for Non-Officer Employees to increase the number of shares reserve from
3,000,000 to 3,600,000 and to permit the grant of options to persons who will
become officers of the Company or an affiliate if such grants are made in order
to induce such persons to enter into employment contracts with the Company or an
affiliate.
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
3.
<PAGE>
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 San Francisco, State of California, on January 31,
2000.
WALKER INTERACTIVE SYSTEMS, INC.
By: /s/ Frank M. Richardson
-----------------------------------
Name: Frank M. Richardson
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Frank M. Richardson and Michael B.
Shahbazian, 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.
4.
<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/ Frank M. Richardson Chief Executive Officer (Principal January 26, 2000
- -------------------------------------- Executive Officer)
Frank M. Richardson
/s/ Michael B. Shahbazian Senior Vice President and Chief Financial January 26, 2000
- -------------------------------------- Officer (Principal Accounting Officer)
Michael B. Shahbazian
/s/ Leonard Y. Liu Chairman of the Board and Director January 26, 2000
- --------------------------------------
Leonard Y. Liu
/s/ Richard C. Alberding Director January 26, 2000
- --------------------------------------
Richard C. Alberding
/s/ Tania Amochaev Director January 26, 2000
- --------------------------------------
Tania Amochaev
/s/ William A. Hasler Director January 26, 2000
- --------------------------------------
William A. Hasler
/s/ John M. Lillie Director January 26, 2000
- --------------------------------------
John M. Lillie
/s/ David C. Wetmore Director January 26, 2000
- --------------------------------------
David C. Wetmore
</TABLE>
5.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
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
6.
<PAGE>
EXHIBIT 5.1
[Cooley Godward LLP letterhead]
January 31, 2000
Walker Interactive Systems, Inc.
303 Second Street
Three North
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 600,000
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 Prospectuses, 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.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Cooley Godward llp
/s/ Jamie E. Chung
Jamie E. Chung
JEC:ckm
<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 10,
1999, appearing in the Annual Report on Form 10-K of Walker Interactive Systems,
Inc. for the year ended December 31, 1998.
/s/ Deloitte & Touche LLP
San Jose, CA
January 28, 2000
<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, OCTOBER 20, 1997, AUGUST 5, 1998,
NOVEMBER 9, 1998, APRIL 12, 1999, JUNE 25, 1999 AND NOVEMBER 12, 1999
1. Purposes.
(a) The purpose of the Plan is to provide a means by which selected
Employees of and Consultants to the Company and its Affiliates who are not
Officers or Directors may be given an opportunity to purchase stock of the
Company. The Plan is also intended to provide a means by which the Company may
grant options to persons not previously employed by the Company as an inducement
essential to those persons entering employment contracts with the Company. Such
"inducement grants" may be made to any Employee, including persons who
ultimately are employed by the Company as Officers.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Consultants, to secure and retain the services
of new Employees and Consultants, 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.
<PAGE>
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) "Cause" means termination of an Employee's employment with the Company
for any of the following reasons as determined in good faith by the Company:
(i) an intentional act which materially injures the Company;
(ii) an intentional refusal or failure to follow lawful and reasonable
directions of the Board or the individual to whom the Employee reports;
(iii) a willful and habitual neglect of duties; or
(iv) a conviction of a felony involving moral turpitude which is
reasonably likely to inflict or has inflicted material injury on the Company.
(d) "Change in Control" means:
(i) a dissolution, liquidation or sale of substantially all of the
assets of the Company;
(ii) a merger or consolidation in which the Company is not the
surviving corporation; or
(iii) 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.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE>
(f) "Committee" means a Committee appointed by the Board in accordance with
subsection 3(c) of the Plan.
(g) "Company" means Walker Interactive Systems, Inc., a Delaware
corporation.
(h) "Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services, provided that the term "Consultant" shall not include Directors.
(i) "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. Continuous Status as an Employee, Director or
Consultant shall not be deemed to have terminated merely because of a change in
the capacity in which a person renders service to the Company or an Affiliate,
whether such service is as an Employee, Officer, Director or Consultant, or a
change in the entity for which the person renders such service, provided that
there is no interruption in the person's service relationship with the Company
or an Affiliate.
(j) "Director" means a member of the Board.
(k) "Employee" means any person employed by the Company or any Affiliate of
the Company; provided that except as provided below, Officers and Directors of
the Company shall not be considered Employees for purposes of the Plan. An
Officer shall be considered an Employee for purposes of the grant under this
Plan of an Option to that Officer as an inducement essential to such Officer's
entering into an employment contract with the Company if such
<PAGE>
Officer was not an Employee of the Company immediately prior to the date on
which such Option is granted.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(m) "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 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.
(n) "Involuntary Termination Without Cause" means an Employee's dismissal
or discharge other than for Cause. The termination of an Employee's employment
as a result of the
<PAGE>
Employee's death or disability will not be deemed to be an Involuntary
Termination Without Cause.
(o) "Non-Employee Director" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or subsidiary, does not
receive compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
("Regulation S-K")), does not possess an interest in any other transaction as to
which disclosure would be required under Item 404(a) of Regulation S-K, and is
not engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a "non-
employee director" for purposes of Rule 16b-3.
(p) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(q) "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, or any other employee of the Company or an Affiliate
whom the Board or the Committee classifies as an "Officer."
(r) "Option" means a stock option granted pursuant to the Plan.
(s) "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.
<PAGE>
(t) "Optionee" means a person to whom an Option is granted pursuant to the
Plan or, if applicable, such other person who holds an outstanding Option.
(u) "Plan" means this Walker Interactive Systems, Inc. 1995 Nonstatutory
Stock Option Plan for Non-Officer Employees.
(v) "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.
(w) "Securities Act" means the Securities Act of 1933, as amended.
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.
<PAGE>
(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.
(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 may be, in the discretion of the Board, Non-Employee
Directors. 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 who are not then subject to Section 16 of the Exchange Act.
(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 three million six hundred thousand (3,600,000) shares of
the Company's common stock. If any
<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.
(a) Nonstatutory Stock Options may be granted under the Plan only to
Employees and Consultants.
(b) A Consultant shall not be eligible for the grant of a Nonstatutory
Stock Option if, at the time of grant, a Form S-8 Registration Statement under
the Securities Act ("Form S-8") is not available to register either the offer or
the sale of the Company's securities to such Consultant because of the nature of
the services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions.
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:
<PAGE>
(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 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
<PAGE>
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 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, 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
<PAGE>
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 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.
An Optionee's Option Agreement may also provide that if the exercise of the
Option following the termination of the Optionee's Continuous Status as an
Employee, Director or Consultant (other than upon the Optionee's death or
disability) would result in liability under Section 16(b) of the Exchange Act,
then the Option shall terminate on the earlier of (i) the expiration of the term
of the Option set forth in the Option Agreement, or (ii) the tenth (10th) day
after the last date on which such exercise would result in such liability under
Section 16(b) of the Exchange Act. Finally, an Optionee's Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionee's Continuous Status as an Employee, Director or Consultant (other than
upon the Optionee's death or disability) would be prohibited at any time solely
because the issuance of shares would violate the registration requirements under
the Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the
<PAGE>
term of the Option set forth in the first paragraph of this subsection 6(g), or
(ii) the expiration of a period of three (3) months after the termination of the
Optionee's Continuous Status as an Employee, Director or Consultant during which
the exercise of the Option would not be in violation of such registration
requirements.
(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
<PAGE>
such longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the 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. Notwithstanding the foregoing, the Company shall
not be authorized to withhold shares of common stock at rates in excess of the
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, if such excess withholding would result in a charge to
the Company's earnings for accounting purposes.
<PAGE>
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 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
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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 or Consultant 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 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.
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(b) In the event of a Change in Control, then, to 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; or (ii) such Options shall continue in full force
and effect. In the event any surviving corporation refuses to assume or continue
such options, or to substitute similar options for those outstanding under the
Plan, then, with respect to options held by persons then performing services as
employees, consultants or directors for the Company, the time during which such
Options become vested or may be exercised shall be accelerated and any
outstanding unexercised rights under any Options terminated if not exercised
prior to such event.
(c) In the event an Employee's employment is terminated due to an
Involuntary Termination Without Cause within twenty-four (24) months after the
effective date of a Change in Control, then all Options issued and outstanding
under the Plan and held by the Employee shall accelerate and become immediately
vested and exercisable. Notwithstanding the foregoing, if the Change in Control
was a transaction that was accounted for as a pooling of interests for financial
reporting purposes, then the unvested portion of such stock options shall not
accelerate unless the Company receives reasonable assurances from the Company's
independent public accountants (and from the acquiring party's independent
public accountants) that in their good faith judgment such acceleration will not
adversely affect the pooling of interests accounting treatment of such Change in
Control transaction.
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. However, except as provided in Section 10 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the
<PAGE>
Company to the extent stockholder approval is necessary for the Plan to satisfy
the requirements of Rule 16b-3 under the Exchange Act or any Nasdaq or
securities exchange listing requirements. The Board may in its sole discretion
submit any other amendment to the Plan for stockholder approval.
(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.
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.
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(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 9, 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.
Amended by the Board of Directors on August 5, 1998 to remove the discretion of
the Board to determine whether acceleration of vesting shall occur in the event
of a Change in Control if the successor entity does not assume or continue
outstanding options or substitute similar options and to provide for
acceleration of vesting upon an employee's Involuntary Termination Without Cause
within twenty-four months after a Change in Control.
Amended by the Board of Directors on November 9, 1998 to increase the aggregate
share reserve to 2,000,000 shares.
Amended by the Board of Directors on April 12, 1999 to increase the aggregate
share reserve to 2,500,000 shares.
Amended by the Board of Directors on June 25, 1999 to increase the aggregate
share reserve to 3,000,000 shares.
Amended by the Board of Directors on November 12, 1999 to increase the aggregate
share reserve to 3,600,000 shares and to permit the grant of options to persons
who will become officers of the Company or an affiliate if such grants are made
in order to induce such persons to enter into employment contracts with the
Company or an affiliate.
