-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, nwsahaixXx6jBxwiDfvOZgh61l3t8179gR6BRAObhzGtm/F0kPE8YMrmxN0fX9eE SPqDlKhDf43S+l1bd7+cDw== 0000950135-94-000735.txt : 19950103 0000950135-94-000735.hdr.sgml : 19950103 ACCESSION NUMBER: 0000950135-94-000735 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19941230 EFFECTIVENESS DATE: 19950118 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMRS INC CENTRAL INDEX KEY: 0000878594 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 061326879 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-57143 FILM NUMBER: 94567289 BUSINESS ADDRESS: STREET 1: 777 LONG RIDGE RD CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 2033213500 MAIL ADDRESS: STREET 1: 777 LONG RIDGE ROAD CITY: STAMFORD STATE: CT ZIP: 06902 S-8 1 PILLAR CORP. STOCK OPTION & LONG TERM INCENTIVE 1 As filed with the Securities and Exchange Commission on December 30, 1994 Registration No. 33-______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT under THE SECURITIES ACT OF 1933 IMRS INC. (Exact name of registrant as specified in its charter) Delaware 06-1326879 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 777 Long Ridge Road, Stamford, CT 06902 (Address of Principal Executive Offices) (Zip Code) ________________________ PILLAR CORPORATION* 1988 STOCK OPTION PLAN PILLAR CORPORATION* 1992 LONG-TERM EQUITY INCENTIVE PLAN (Full title of the plans) James A. Perakis President and Chief Executive Officer IMRS INC. 777 Long Ridge Road, Stamford, CT 06902 (Name and address of agent for service) (203) 321-3500 (Telephone number, including area code of agent for service) ________________________ Approximate date of commencement of sales pursuant to plans: From time to time after the Registration Statement has become effective. *IMRS Pillar Corporation, a California corporation, is a wholly-owned subsidiary of the issuer and the successor in interest to Masterplan Software, Inc., a California corporation. ___________________ 2 CALCULATION OF REGISTRATION FEE ============================================================================================
Title of Securities to Amount to be Proposed Proposed Amount of be registered registered maximum maximum registration offering price aggregate fee per share(1) offering price(1) - -------------------------------------------------------------------------------------------- 1988 STOCK OPTION PLAN Common Stock (Par 21,684 $ N/A $ 50,261 $ 17.33 Value $.01) 1992 LONG-TERM EQUITY INCENTIVE PLAN Common Stock (Par 48,574 $ N/A $127,353 $ 43.91 Value $.01) Total Number of Shares Registered: 70,258 Aggregate fee: $ 61.24 Minimum Filing Fee $100.00 ============================================================================================ (1) All shares are issuable upon the exercise of outstanding options with fixed exercise prices. Pursuant to Rule 457(h)(1), the aggregate offering price and the fee have been computed upon the basis of the price at which the options may be exercised. The offering price per share set forth for such shares is the weighted average exercise price per share at which such options are exercisable. Options granted under the 1988 Stock Option Plan have a weighted average exercise price of $2.32 per share and options granted under the 1992 Long-Term Equity Incentive Plan have a weighted average exercise price of $2.62 per share. All of the options granted pursuant to these plans are being registered hereby. There will be no additional options grants under the plans in the future. ============================================================================================
3 PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Item 1. Plan Information. ----------------- Not required to be filed with the Securities and Exchange Commission (the "Commission"). Item 2. Registrant Information and Employee Plan Annual Information. ------------------------------------------------------------ Not required to be filed with the Commission. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. ---------------------------------------- The following documents filed with the Commission by IMRS Inc. (the "Company") are incorporated herein by reference as of their respective dates: (a) The Company's Annual Report on form 10-K for the fiscal year ended June 30, 1994 (the "Annual Report"), incorporating audited financial statements for the fiscal year ended June 30, 1994. The audited financial statements included in the Annual Report were examined and reported on by Ernst & Young LLP, independent certified public accountants. (b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1994. (c) The Company's Current Report on Form 8-K dated as of November 29, 1994. (d) The section entitled "Description of Registrant's Securities to be Registered" contained in the Company's Registration Statement on Form 8-A filed pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporating by reference the information contained in the Company's Registration Statement No. 33-42855 on Form S-1, as amended. All documents subsequently filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference and to be part hereof from the date of filing of such documents. Item 4. Description of Securities. -------------------------- Not applicable. Item 5. Interest of Named Experts and Counsel. -------------------------------------- Not applicable. 4 Item 6. Indemnification of Directors and Officers. ------------------------------------------ Article Seventh of the Registrant's Amended and Restated Certificate of Incorporation provides that no director of the Registrant shall be liable for any breach of fiduciary duty, except to the extent that the Delaware General Corporation Law prohibits the elimination of liability of directors for breach of fiduciary duty. Article Twelfth of the Registrant's Amended and Restated Certificate of Incorporation provides that a director or officer of the Registrant (a) shall be indemnified by the Registrant against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement incurred in connection with any litigation or other legal proceeding (other than an action by or in the right of the Registrant) brought against him by virtue of his position as a director or officer of the Registrant if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Registrant, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful and (b) shall be indemnified by the Registrant against all expenses (including attorneys' fees) and amounts paid in settlement incurred in connection with any action by or in the right of the Registrant brought against him by virtue of his position as a director or officer of the Registrant if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Registrant, except that no indemnification shall be made with respect to any matter as to which such person shall have been adjudged to be liable to the Registrant, unless a court determines that despite such adjudication but in view of all of the circumstances, he is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that a director or officer has been successful, on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, he is required to be indemnified by the Registrant against all expenses (including attorneys' fees) incurred in connection therewith. Expenses shall be advanced to a director or officer at his request, provided that he undertakes to repay the amount advanced if it is ultimately determined that he is not entitled to indemnification for such expenses. Indemnification is required to be made unless the Registrant or independent legal counsel determines that the applicable standard of conduct required for indemnification has not been met. In the event of a determination by the Registrant or independent legal counsel that the director or officer did not meet the applicable standard of conduct required for indemnification, or if the Registrant fails to make an indemnification payment within sixty (60) days after such payment is claimed by such person, such person is permitted to petition the court to make an independent determination as to whether such person is entitled to indemnification. As a condition precedent to the right of indemnification, the director or officer must give the Registrant notice of the action for which indemnity is sought and the Registrant has the right to participate in such action or assume the defense thereof. Article Twelfth of the Registrant's Amended and Restated Certificate of Incorporation further provides that the indemnification provided therein is not exclusive, and provides that in the event the Delaware General Corporation Law is amended to expand the indemnification permitted to directors or officers the Registrant must indemnify those persons to the fullest extent permitted by such law as so amended. The Registrant maintains directors and officers liability insurance for the benefit of its directors and officers. 5 Item 7. Exception from Registration Claimed. ------------------------------------ Not applicable. Item 8. Exhibits. ---------
Exhibit No. Description of Exhibit - ----------- ---------------------- 4.1 Restated Certificate of Incorporation of the Registrant (filed as Exhibit 3.1 to the Registrant's Registration Statement on Form S-1, file No. 33-42855, and incorporated herein by reference). 4.2 By-laws, as amended and restated, of the Registrant (filed as Exhibit 3.2 to the Registrant's Registration Statement on Form S-1, file No. 33-42855, and incorporated herein by reference). 4.3 Pillar Corporation 1988 Stock Option Plan (including a copy of the Forms of Pillar NonStatutory Stock Option Agreement and Amendment thereto). 4.4 Pillar Corporation 1992 Long-Term Equity Incentive Plan. 4.5 Form of Stock Option Grant under the Pillar Corporation 1992 Long-Term Equity Incentive Plan. 5.1 Opinion of Testa, Hurwitz & Thibeault. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Testa, Hurwitz & Thibeault (included in Exhibit 5.1). 24.1 Power of Attorney (contained in Page 7 of this Registration Statement).
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 of 1933 (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a 6 fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3 and 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 Securities Exchange Act that are incorporated by reference in the 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 which 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 Section 15(d) of the Securities Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act) that is incorporated by reference in the 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 Securities and Exchange 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 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 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. 7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, 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 Stamford, State of Connecticut, on December 30, 1994. IMRS INC. By: /s/ James A. Perakis ------------------------------------- James A. Perakis President and Chief Executive Officer POWER OF ATTORNEY EACH PERSON WHOSE SIGNATURE appears below this Registration Statement hereby constitutes and appoints James A. Perakis and Lucy Rae Ricciardi and each of them, with full power to act without the other, 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 effective amendment) to this Registration Statement on Form S-8 of IMRS Inc., 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 fully to all intents and purposes as he might or could do in person thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement or amendment thereto has been signed by the following persons in the capacities and on the date indicated.
SIGNATURE CAPACITY DATE --------- -------- ---- /s/ James A. Perakis President, Chief December 30, 1994 - ---------------------- Executive Officer James A. Perakis and Director (principal executive officer) /s/ Lucy Rae Ricciardi Chief Financial Officer December 30, 1994 - ---------------------- (principal financial Lucy Rae Ricciardi and accounting officer)
8
SIGNATURE CAPACITY DATE --------- -------- ---- /s/ Gary G. Greenfield Director December 30, 1994 - --------------------------- Gary G. Greenfield /s/ Harry S. Gruner Director December 30, 1994 - --------------------------- Harry S. Gruner /s/ William W. Helman IV Director December 30, 1994 - --------------------------- William W. Helman IV /s/ Marco Arese Lucini Director December 30, 1994 - --------------------------- Marco Arese Lucini /s/ Aldo Papone Director December 30, 1994 - --------------------------- Aldo Papone Director December __, 1994 - --------------------------- Robert W. Thomson
9 Exhibits
Exhibit No. Description of Exhibit - ----------- ---------------------- 4.1 Restated Certificate of Incorporation of the Registrant (filed as Exhibit 3.1 to the Registrant's Registration Statement on Form S-1, file No. 33-42855, and incorporated herein by reference). 4.2 By-laws, as amended and restated, of the Registrant (filed as Exhibit 3.2 to the Registrant's Registration Statement on Form S-1, file No. 33-42855, and incorporated herein by reference). 4.3 Pillar Corporation 1988 Stock Option Plan (including a copy of the Forms of Pillar NonStatutory Stock Option Agreement and Amendment thereto). 4.4 Pillar Corporation 1992 Long-Term Equity Incentive Plan. 4.5 Form of Stock Option Grant under the Pillar Corporation 1992 Long-Term Equity Incentive Plan. 5.1 Opinion of Testa, Hurwitz & Thibeault. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Testa, Hurwitz & Thibeault (included in Exhibit 5.1). 24.1 Power of Attorney (contained in Page 7 of this Registration Statement).
EX-4.3 2 1988 STOCK OPTION PLAN 1 EXHIBIT 4.3 MASTERPLAN SOFTWARE, INC. 1988 STOCK OPTION PLAN 1. PURPOSES OF THE PLAN. The purposes of this Stock Option Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to the Employees and Consultants of the Company and to promote the success of the Company's business. Options granted hereunder will be Nonstatutory Stock Options as reflected in the terms of the written option agreement. 2. DEFINITIONS. As used herein, the following definitions shall apply: (a) "BOARD" shall mean the Committee, if one has been appointed, or the Board of Directors of the Company, if no Committee is appointed. (b) "CODE" shall mean the Internal Revenue Code of 1986, as amended. (c) "COMMITTEE" shall mean the Committee appointed by the Board of Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is appointed. (d) "COMMON STOCK" shall mean the Common Stock of the Company. (e) "COMPANY" shall mean MasterPlan Software, Inc., a California corporation. (f) "CONSULTANT" shall mean any person who is engaged by the Company or any Parent or Subsidiary to render consulting services and is compensated for such consulting services, and any director of the Company whether compensated for such services or not. (g) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" shall mean the absence of any interruption or termination of service as an Employee or Consultant. Continuous Status as an Employee or Consultant shall not be considered interrupted in the case of sick leave, military leave, or any other leave of absence approved by the Board; provided that such leave is for a period of not more than 90 days or reemployment upon the expiration of such leave is guaranteed by contract or statute. (h) "EMPLOYEE" shall mean any person, including officers and directors, employed by the Company or any Parent or Subsidiary of the Company. The payment of a director's fee by the 2 Company shall not be sufficient to constitute "employment" by the Company. (i) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended. (j) "NONSTATUTORY STOCK OPTION" shall mean an Option not intended to qualify as an incentive stock option within the meaning of Section 422A of the Code. (k) "OPTION" shall mean a stock option granted pursuant to the Plan. (1) "OPTIONED STOCK" shall mean the Common Stock subject to an Option. (m) "OPTIONEE" shall mean an Employee or Consultant who receives an Option. (n) "PARENT" shall mean a "parent corporation", whether now or hereafter existing, as defined in Section 425(e) of the Code. (o) "PLAN" shall mean this 1987 Stock Option Plan. (p) "SHARE" shall mean a share of the Common Stock, as adjusted in accordance with Section 11 of the Plan. (q) "SUBSIDIARY" shall mean a "subsidiary corporation", whether now or hereafter existing, as defined in Section 425(f) of the Code. 3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 11 of the Plan, the maximum aggregate number of shares which may be sold under the Plan is 843,000 shares of Common Stock. The Shares may be authorized, but unissued, or reacquired Common Stock. If an Option should expire or become unexercisable for any reason without having been exercised in full, the unpurchased Shares which were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan. Notwithstanding any other provision of the Plan, shares issued under the Plan and later repurchased by the Company shall not become available for future grant or sale under the Plan. 4. ADMINISTRATION OF THE PLAN. (a) PROCEDURE. The Plan shall be administered by the Board of Directors of the Company. The Board of Directors may -2- 3 appoint a Committee consisting of not less than two members of the Board of Directors to administer the Plan on behalf of the Board of Directors, subject to such terms and conditions as the Board of Directors may prescribe. Once appointed, the Committee shall continue to serve until otherwise directed by the Board of Directors. Members of the Board who are either eligible for Options or have been granted Options may vote on any matters affecting the administration of the Plan or the grant of any Options pursuant to the Plan, except that no such member shall act upon the granting of an Option to himself, but any such member may be counted in determining the existence of a quorum at any meeting of the Board during which action is taken with respect to the granting of Options to him. From time to time the Board of Directors may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan. (b) POWERS OF THE BOARD. Subject to the provisions of the Plan, the Board shall have the authority, in its discretion: (i) to grant Options; (ii) to determine, upon review of relevant information and in accordance with Section 8(b) of the Plan, the fair market value of the Common Stock; (iii) to determine the exercise price per share of Options to be granted, which exercise price shall be determined in accordance with Section 8(a) of the Plan; (iv) to determine the Employees or Consultants to whom, and the time or times at which, Options shall be granted and the number of shares to be represented by each Option; (v) to interpret the Plan; (vi) to prescribe, amend and rescind rules and regulations relating to the Plan; (vii) to determine the terms and provisions of each Option granted (which need not be identical) and, with the consent of the holder thereof, modify or amend each Option including the exercise price thereof (but not to reduce the price below the fair market value of the Common Stock on the date of the Amendment); (viii) to accelerate or defer (with the consent of the Optionee) the exercise date of any Option (ix) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously granted by the Board; and (x) to make all other determinations deemed necessary or advisable for the administration of the Plan. (c) EFFECT OF BOARD'S DECISION. All decisions, determinations and interpretations of the Board shall be final and binding on all Optionees and any other holders of any Options granted under the Plan. -3- 4 5. ELIGIBILITY. (a) Options may be granted only to Employees and Consultants. An Employee or Consultant who has been granted an Option may, if he is otherwise eligible, be granted an additional Option or Options. No Employee whose annual rate of compensation is $30,000 or less shall be granted Options having an aggregate exercise price exceeding five percent (5%) of such compensation. (b) The Plan shall not confer upon any Optionee any right with respect to continuation of employment or consulting relationship with the Company, nor shall it interfere in any way with his right or the Company's right to terminate his employment or consulting relationship at any time. 6. TERM OF PLAN. The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Company as described in Section 17 of the Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 3 of the Plan. 7. TERM OF OPTION. The term of each Nonstatutory Stock Option shall be ten (10) years from the date of grant thereof or such shorter term as may be provided in the Nonstatutory Stock Option agreement. However, in the case of an Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Nonstatutory Stock Option agreement. 8. EXERCISE PRICE AND CONSIDERATION. (a) The per Share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Board, but shall be subject to the following: (i) For an Option granted to a person who, at the time of the grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the fair market value per Share on the date of the grant. (ii) For an Option granted to any other person, the per Share exercise price shall be no less than 85% of the fair market value per Share on the date of grant. -4- 5 (b) The fair market value shall be determined by the Board in its discretion provided, however, that where there is a public market for the Common Stock, the fair market value per Share shall be the mean of the bid and asked prices (or the closing price per share if the Common Stock is listed on the National Association of Securities Dealers Automated Quotation ("NASDAQ") National Market System) of the Common Stock for the date of grant, as reported in the Wall Street Journal (or, if not so reported, as otherwise reported by the NASDAQ System) or, in the event the Common Stock is listed on a stock exchange, the fair market value per Share shall be the closing price on such exchange on the date of grant of the Option, as reported in the Wall Street Journal. (c) The consideration to be paid for the Shares to be issued upon exercise of an option, including the method of payment, shall be determined by the Board and may consist entirely of cash, check, promissory note, other Shares of Common Stock having a fair market value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, or any combination of such methods of payment, or such other consideration and method of payment for the issuance of Shares to the extent permitted under Sections 408 and 409 of the California General Corporation Law. In making its determination as to the type of consideration to accept, the Board shall consider if acceptance of such consideration may be reasonably expected to benefit the Company (Section 315(b) of the California General Corporation Law). 9. EXERCISE OF OPTION. (a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Board, including performance criteria with respect to the Company and/or the Optionee, and as shall be permissible under the terms of the Plan. Notwithstanding the foregoing, every option must become exercisable at least at the rate of twenty percent (20%) of the total shares per year (or such more accelerated rate as provided in the Non-Statutory Option Agreement). An Option may not be exercised for a fraction of a Share. An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company. Full payment may, as authorized by the Board, consist of any consideration and method of payment allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of -5- 6 the Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 11 of the Plan. Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. (b) TERMINATION OF STATUS AS AN EMPLOYEE OR CONSULTANT. In the event of termination of an Optionee's Continuous Status as an Employee or Consultant (as the case may be), such Optionee may, at any time thereafter during the term of the Option, exercise his Option to the extent that he was entitled to exercise it at the date of such termination. To the extent that he was not entitled to exercise the Option at the date of such termination the Option shall terminate. (c) DEATH OF OPTIONEE. In the event of the death of an Optionee the Option may be exercised, at any time following the date of death (but only during the term of such Option) by the Optionee's estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise that had accrued at the date of termination of employment. 10. NON-TRANSFERABILITY OF OPTIONS. The Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. 11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease -6- 7 in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option. In the event of the proposed dissolution or liquidation of the Company, the Option will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. The Board may, in the exercise of its sole discretion in such instances, declare that any Option shall terminate as of a date fixed by the Board and give each Optionee the right to exercise his Option as to all or any part of the Optioned Stock, including Shares as to which the Option would not otherwise be exercisable. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, the Option shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Board determines, in the event that the successor corporation refuses to assume or substitute for the Option, that the Optionee shall have the right to exercise the Option as to all of the Optioned Stock, including Shares as to which the Option would not otherwise be exercisable. If the Board makes an Option fully exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Board shall notify the Optionee that the Option shall be fully exercisable for a period of not fewer than twenty days from the date of such notice, and the Option will terminate upon the expiration of such period. For purposes of this Section 11, an option shall be considered to have been assumed, or an equivalent option substituted therefor, if the Optionee thereafter has the right upon exercise to receive for each share of Optioned Stock which would otherwise have been received either (a) the consideration received by the holder of the share of Common Stock pursuant to the merger or other transaction, or (ii) other consideration of equal value as determined in good faith by the Board of Directors. 12. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for all purposes, be the date on which the Board makes the determination granting such Option. Notice of the determination shall be given to each Employee or Consultant to whom an Option is so granted within a reasonable time after the date of such grant. -7- 8 13. AMENDMENT AND TERMINATION OF THE PLAN. (a) AMENDMENT AND TERMINATION. The Board may amend or terminate the Plan from time to time in such respects as the Board may deem advisable; provided that, the following revisions or amendments shall require approval of the shareholders of the Company in the manner described in Section 17 of the Plan: (i) any increase in the number of Shares subject to the Plan, other than in connection with an adjustment under Section 11 of the Plan; (ii) any change in the designation of the class of persons eligible to be granted Options; or (iii) if the Company has a class of equity securities registered under Section 12 of the Exchange Act at the time of such revision or amendment, any material increase in the benefits accruing to participants under the Plan. (b) SHAREHOLDER APPROVAL. If any amendment requiring shareholder approval under Section 13(a) of the Plan is made subsequent to the first registration of any class of equity securities by the Company under Section 12 of the Exchange Act, such shareholder approval shall be solicited as described in Section 17 of the Plan. (c) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or termination of the Plan shall not affect Options already granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Optionee and the Board, which agreement must be in writing and signed by the Optionee and the Company. 14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for -8- 9 the Company, such a representation is required by any of the aforementioned relevant provisions of law. 15. RESERVATION OF SHARES. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such. requisite authority shall not have been obtained. 16. OPTION AGREEMENT. Options shall be evidenced by written option agreements in such form as the Board shall approve. 17. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to approval by the shareholders of the Company within twelve (12) months after the date the Plan is adopted by the Board of Directors. Shareholder approval must be obtained, either at a duly held shareholder's meeting or by written consent, by the affirmative vote of the holders of a majority of the outstanding shares of the Company. 18. INFORMATION TO OPTIONEES. The Company shall provide to each Optionee, during the period for which such Optionee has one or more Options outstanding, copies of all annual reports and other information which are provided to all shareholders of the Company. The Company shall not be required to provide such information if the issuance of Options under the Plan is limited to key employees whose duties in connection with the Company assure their access to equivalent information. -9- 10 MASTERPLAN SOFTWARE, INC. NONSTATUTORY STOCK OPTION AGREEMENT MasterPlan Software, Inc., a California corporation (the "Company"), has granted to ____________________________________ (the "Optionee"), an option (the "Option") to purchase a total of __________ shares of Common Stock (the "Shares"), at the price as provided herein, and in all respects subject to the terms, definitions and provisions of the 1988 Stock Option Plan (the "Plan") adopted by the Company, which provisions are incorporated herein by reference. Optionee acknowledges receipt of a copy of the Plan. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings herein. 1. NATURE OF THE OPTION. This Option is intended by the Company and the Optionee to be a Nonstatutory Stock Option, and does not qualify for any special tax benefits to the Optionee. 2. EXERCISE PRICE. The exercise price is $ ____________ for each share of Common Stock. 3. EXERCISE OF OPTION. This Option shall be exercisable during its term in accordance with the provisions of Section 9 of the Plan as follows: (I) RIGHT TO EXERCISE. (a) Subject to the other provisions of this Agreement, this Option shall be exercisable cumulatively to the extent of 1/60th of the Shares subject to the Option for each month which has expired after the Vesting Commencement Date of the Option; provided however that Optionee shall not be entitled to exercise any portion of this Option until twelve months after the Vesting Commencement Date. The Vesting Commencement Date shall be the date provided opposite the signature of the Company to this Agreement. (b) This Option may not be exercised for a fraction of a share. (c) In the event of Optionee's death, disability or other termination of employment or consulting relationship, the exercisability of the Option is governed by Sections 7, 8 and 9 below. (d) In no event may this Option be exercised after the date of expiration of the term of this Option as set forth in Section 10 below. 11 (ii) METHOD OF EXERCISE. This Option shall be exercisable by written notice which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the holder's investment intent with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the exercise price. This Option shall be deemed exercised upon receipt by the Company of such written notice accompanied by the exercise price. No Shares will be issued pursuant to the exercise of an Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares. 4. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable pursuant to the exercise of this Option have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, Optionee shall, concurrently with the exercise of all or any portion of this Option, deliver to the Company his Investment Representation Statement in the form attached hereto as Exhibit A, and shall read the applicable rules of the Commissioner of Corporations attached to such Investment Representation Statement. 5. METHOD OF PAYMENT. Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of the Board: (i) cash; (ii) check; or (iii) surrender of other shares of Common Stock of the Company of a value equal to the exercise price of the Shares as to which the Option is being exercised, provided that such surrendered shares have been held at least six months prior to their surrender. The value of the shares surrendered shall not take into account whether such shares are registered under applicable securities laws. -2- 12 6. RESTRICTIONS ON EXERCISE. This Option may not be exercised until such time as the Plan has been approved by the shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, including any rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation. 7. TERMINATION OF STATUS AS AN EMPLOYEE OR CONSULTANT. In the event of termination of Optionee's Continuous Status as an Employee or Consultant, he may, at any time during the term of this option as set forth in Section 10 below, exercise this Option but only to the extent that it is immediately exercisable on the date of such termination. To the extent that this Option is not immediately exercisable on the date of such termination of employment because of failure to complete the vesting schedule in Section 3 (including the initial twelve-month period), the Option shall terminate. 8. DEATH OF OPTIONEE. In the event of the death of Optionee, the Option may be exercised, at any time prior to the date of expiration of the term of this Option as set forth in Section 10 below, by Optionee's estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise accrued to the date of termination of employment. To the extent that this Option is not immediately exercisable on the date of such termination of employment because of failure to complete the vesting schedule in Section 3 (including the initial twelve-month period), the Option shall terminate. 9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by him. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 10. TERM OF OPTION. This Option may not be exercised more than ten years (five years if Optionee owns, immediately before the Option is granted, stock representing more than ten percent of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary) from the date of grant of this Option, and may be exercised during such term only in accordance with the Plan and the terms of this Option. -3- 13 11. TAXATION UPON EXERCISE OF OPTION. Optionee understands that, upon exercise of this Option, he will recognize income for tax purposes in an amount equal to the excess of the then fair market value of the shares over the exercise price. The Company will be required to withhold tax from Optionee's current compensation with respect to such income; to the extent that Optionee's current compensation is insufficient to satisfy the withholding tax liability, the Company may require the Optionee to make a cash payment to cover such liability as a condition of exercise of this Option. Upon a resale of such shares by the Optionee, any difference between the sale price and the fair market value of the shares on the date of exercise of the Option will be treated as capital gain or loss. 12. RESTRICTION ON SALE AFTER PUBLIC OFFERING. In the event that the Company registers shares of Common Stock for public sale in an underwritten offering pursuant to the Securities Act of 1933, Optionee agrees not to sell, contract to sell, sell short, acquire any option to sell or otherwise dispose of any of the Shares or make a short sale of any Common Stock for a period of up to 180 days commencing on the effective date of such registration as required by the managing underwriter of such public offering, provided that the officers of the Company similarly agree with respect to their Common Stock. DATE: __________________________ VESTING COMMENCEMENT MASTERPLAN SOFTWARE, INC. DATE: __________________________ By: OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL. Optionee acknowledges receipt of a copy of the Plan and certain information related thereto and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Plan. Dated: _________________________ ____________________________ Optionee -4- 14 MASTERPLAN SOFTWARE, INC. AMENDMENT TO NON-STATUTORY STOCK OPTION AGREEMENT This Amendment is made as of this ____ day of ___________ , 198_ between MasterPlan Software, Inc., a California corporation (the "Company"), and ("Optionee") to the Non-Statutory Stock Option Agreement (the "Option Agreement") dated ___________, 19__, between the Company and Optionee. The Company and Optionee desire to amend the Option Agreement to make Optionee's option immediately exercisable in full, subject to the Company's right to repurchase at cost any shares which may remain unvested at the time of termination of Optionee's services to the Company. In consideration of the mutual promises contained herein, the parties agree as follows: 1. TERMS OF EXERCISE: Section 3 of the Option Agreement is hereby amended to provide that the option shall be exercisable in full at any time during the term of the Option Agreement as to all installments, subject to the terms and conditions of this Amendment. 2. REPURCHASE AGREEMENT: As a condition to Optionee's ability to exercise such stock option as set forth in this Amendment, Employee shall at the time of exercise execute and deliver to the Company the Stock Purchase and Restriction Agreement attached hereto as Exhibit A. 3. NO OTHER CHANGES: Except as expressly set forth above, the Option Agreement shall continue in full force and effect. 4. TAX ELECTION: Optionee agrees to make the election prescribed by Section 83 (b) of the Internal Revenue Code, within thirty days of purchase of any stock under the Option. IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the day and year first set forth above. MASTERPLAN SOFTWARE, INC. OPTIONEE By: ______________________ ______________________ Title: ____________________ EX-4.4 3 1992 LONG-TERM EQUITY INCENTIVE PLAN 1 EXHIBIT 4.4 PILLAR CORPORATION 1992 LONG-TERM EOUITY INCENTIVE PLAN ------------------------------------ As Adopted April 20, 1992 1. PURPOSE. The purpose of the Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company, its subsidiaries and affiliates, by offering them an opportunity to participate in the Company's future. Options, Restricted Stock and Performance Bonuses may be awarded pursuant to the Plan. 2. SHARES SUBJECT TO THE PLAN. (a) NUMBER OF SHARES AVAILABLE. Subject to Sections 2(b) and 18, the total number of Shares reserved and available for distribution pursuant to the Plan shall be 3,306,500 shares less shares issuable upon exercise of any outstanding options granted pursuant to Applicant's 1988 Stock Option Plan. Any shares issuable upon exercise of options granted pursuant to Applicant's 1988 Stock Option Plan that expire or become unexercisable for any reason without having been exercised in full shall no longer be available for distribution under Applicant's 1988 Stock Option Plan, but shall be available for distribution under this Plan. Subject to Sections 2(b) and 18, Shares shall again be available for grant and distribution in connection with future Awards under the Plan if: (i) any Shares that are subject to issuance upon exercise of an Option cease to be subject to such Option for any reason other than exercise of such Option, (ii) any Shares that are subject to an Award granted hereunder are forfeited or repurchased, or (iii) an Award otherwise terminates without Shares being issued to the Participant. (b) ADJUSTMENT OF SHARES. In the event that the number of outstanding Shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, combination, reclassification or similar change in the capital structure of the Company without consideration, then (i) the number of Shares reserved for issuance under the Plan, (ii) the Exercise Prices of and number of Shares subject to outstanding Options, and (iii) the number of Shares subject to other outstanding Awards, shall be proportionately adjusted, subject to any required action by the Board or the shareholders of the Company and compliance with applicable securities laws; PROVIDED, HOWEVER, that fractions of a Share shall not be issued but shall either be paid in cash at Fair Market Value or shall be rounded up to the nearest whole number, as determined by the Committee. 2 3. ELIGIBILITY. Incentive Stock Options may be granted only to employees (including officers and directors who are also employees) of the Company or of a Parent or Subsidiary of the Company. All other Awards may be granted to employees, officers, directors, consultants, independent contractors and advisers of the Company or any Parent, Subsidiary or Affiliate of the Company, provided such consultants, contractors and advisers render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. A person may be granted more than one Award under the Plan. 4. ADMINISTRATION. (a) The Plan shall be administered by the Board or Committee. Subject to the general purposes, terms and conditions of the Plan, and to the direction of the Board, the Committee shall have full power to implement and carry out the Plan. The Committee shall have the authority to: (i) construe and interpret the Plan, any Award Agreement and any other agreement or documents executed pursuant to the Plan; (ii) prescribe, amend and rescind rules and regulations relating to the Plan; (iii) select persons to receive Awards; (iv) determine the form and terms of Awards; (v) determine the number of Shares or other consideration subject to Awards; (vi) determine whether Awards will be granted singly, in combination, in tandem, in replacement of, or as alternatives to, other Awards under the Plan or any other incentive or compensation plan of the Company, a Subsidiary or Affiliate; (vii) grant waivers of Plan or Award conditions; (viii) correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any Award Agreement; (ix) determine whether an Award has been earned; and (x) make all other determinations necessary or advisable for the administration of the Plan. - 2 - 3 (b) Any determination made by the Committee with respect to any Award shall be made in its sole discretion at the time of grant of the Award or, unless in contravention of any express term of the Plan or Award, at any later time, and such determination shall be final and binding on the Company and all persons having an interest in any Award under the Plan. (c) If the Company is subject to the Exchange Act, and if the Board is not comprised entirely of Disinterested Persons, the Company will take appropriate steps to comply with the disinterested director requirements of Section 16(b) of the Exchange Act, which may consist of the appointment by the Board of a Committee consisting of not less than two persons (who are members of the Board), each of whom is a Disinterested Person. The Committee may delegate to one or more officers of the Company the authority to grant an Award under the Plan to Participants who are not Insiders of the Company. 5. OPTIONS. The Committee, in its discretion, may grant Options to eligible persons and shall determine whether such Options shall be Incentive Stock Options within the meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the Option, subject to the following: (a) FORM OF OPTION GRANT. Each Option granted under the Plan shall be evidenced by an Award Agreement which shall expressly identify the Option as an ISO or NQSO ("STOCK OPTION AGREEMENT"), and be in such form and contain such provisions (which need not be the same for each Participant) as the Committee shall from time to time approve, and which shall comply with and be subject to the terms and conditions of the Plan. (b) DATE OF GRANT. The date of grant of an Option shall be the date on which the Committee makes the determination to grant such Option, unless otherwise specified by the Committee. The Stock Option Agreement will be delivered to the Participant with a copy of the Plan within a reasonable time after the granting of the Option. (c) EXERCISE PERIOD. Options shall be exercisable within the times or upon the events determined by the Committee as set forth in the Stock Option Agreement; PROVIDED, HOWEVER, that no Option shall be exercisable after the expiration of one hundred twenty (120) months from the date the Option is granted, and provided further that no Option granted to a person who directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company ("TEN PERCENT SHAREHOLDER") shall be exercisable after the expiration of five (5) years from the date the Option is granted. - 3 - 4 (d) EXERCISE PRICE. The Exercise Price shall be determined by the Committee when the Option is granted and may be not less than 85% of the Fair Market Value of the Shares on the date of grant; provided that (i) the Exercise Price of an ISO shall be not less than 100% of the Fair Market Value of the Shares on the date of grant and (ii) the Exercise Price of any Option granted to a Ten Percent Shareholder shall not be less than 110% of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with Section 10 of the Plan. (e) METHOD OF EXERCISE. Options may be exercised only by delivery to the Company of a written stock option exercise notice (the "EXERCISE NOTICE") in a form approved by the Committee (which need not be the same for each Participant), stating the number of Shares being purchased, the restrictions imposed on the Shares, if any, and such representations and agreements regarding Participant's investment intent and access to information, if any, as may be required by the Company to comply with applicable securities laws, together with payment in full of the Exercise Price for the number of Shares being purchased. (f) TERMINATION. Notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of an Option shall always be subject to the following: (i) If the Participant ceases to provide services to the Company or any Parent, Subsidiary or Affiliate of the Company for any reason except death or Disability, then Participant may exercise such Participant's Options only to the extent that such Options would have been exercisable upon the date Participant ceases to provide services. Any such exercise must take place within ninety (90) days after the date of termination of Participant's services (or such shorter time period as may be specified in the Stock Option Agreement), but no later than the expiration date of the Options. (ii) If the Participant ceases to provide services to the Company or any Parent, Subsidiary or Affiliate of the Company because of the death or Disability of Participant, Participant's Options may be exercised only to the extent that such Options would have been exercisable by Participant on the date Participant ceases to provide services, by Participant (or Participant's legal representative or authorized assignee). Any such exercise must take place within twelve (12) months after the date Participant ceases to provide services (or such shorter time period as may be specified in the Grant or Award Agreement), but in any event no later than the expiration date of the Options. (iii) The Committee shall determine whether Participant (including any Participant who is a director) has ceased to provide services to the Company or any Parent, Subsidiary or Affiliate of the Company and the effective date on which Participant ceased to provide services. - 4 - 5 (g) LIMITATIONS ON EXERCISE. The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent Participant from exercising the full number of Shares as to which the Option is then exercisable. (h) LIMITATIONS ON ISOS. The aggregate Fair Market Value (determined as of the date 0f grant) of Shares with respect to which ISOs are exercisable for the first time by a Participant during any calendar year (under the Plan or under any other incentive stock option plan of the Company or any Affiliate, Parent or Subsidiary of the Company) shall not exceed $100,000. If the Fair Market Value of Shares on the date of grant with respect to which ISOs are exercisable for the first time by a Participant during any calendar year exceeds $100,000, the Options for the first $100,000 worth of Shares to become exercisable in such calendar year shall be ISOs and the Options for the amount in excess of $100,000 that become exercisable in that calendar year shall be NQSOs. In the event that the Code or the regulations promulgated thereunder are amended after the Effective Date of the Plan to provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISOs, such different limit shall be incorporated herein and shall apply to any Options granted after the effective date of such amendment. (i) MODIFICATION, EXTENSION OR RENEWAL. The Committee shall have the power to modify, extend or renew outstanding Options and to authorize the grant of new Options in substitution therefor, provided that any such action may not, without the written consent of Participant, impair any rights under any Option previously granted. Any outstanding ISO that is modified, extended, renewed or otherwise altered shall be treated in accordance with Section 424(h) of the Code. The Committee shall have the power to reduce the Exercise Price of outstanding Options without the consent of Participants by a written notice to the Participants affected; PROVIDED, HOWEVER, that the Exercise Price may not be reduced below the minimum Exercise Price that would be permitted under Section 6(d) of the Plan for Options granted on the date the action is taken to reduce the Exercise Price. (j) NO DISQUALIFICATION. Notwithstanding any other provision in the Plan, no term of the Plan relating to ISOs shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code. 6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to sell to an eligible person Shares that are subject to restrictions. The Committee shall determine to whom an offer will be made, the number of Shares the person may purchase, the price to be paid (the "PURCHASE PRICE"), the restrictions to which the Shares shall be subject, and all other terms and conditions of the Restricted Stock Award, subject to the following: - 5 - 6 (a) FORM OF RESTRICTED STOCK AWARD. All purchases made pursuant to the Plan shall be evidenced by an Award Agreement ("RESTRICTED STOCK PURCHASE AGREEMENT") in such form (which need not be the same for each Participant) as the Committee shall from time to time approve, which Restricted Stock Purchase Agreement shall comply with and be subject to the terms and conditions of the Plan. The offer of Restricted Stock shall be accepted by the Participant's execution and delivery of the Restricted Stock Purchase Agreement and payment for the Shares to the Company within thirty (30) days from the date the offer is made to the person. (b) PURCHASE PRICE. The Purchase Price of Shares sold pursuant to a Restricted Stock Award shall be at least 85% of the Fair Market Value of the Shares when the Restricted Stock Award is granted or at the time of purchase, except in the case of a sale to a Ten Percent Shareholder, in which case the Purchase Price shall be 100% of the Fair Market Value. Payment of the Purchase Price may be made in accordance with Section 10 of the Plan. (c) RESTRICTIONS. Restricted Stock Awards shall be subject to such restrictions as the Committee may impose. The Committee may provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions, in whole or part, based on service, performance or such other factors or criteria as the Committee may determine. 7. PERFORMANCE BONUSES. (a) AWARDS OF PERFORMANCE BONUSES. A Performance Bonus is an award of Shares (which may consist of Restricted Stock) for services rendered to the Company or any Parent, Subsidiary or Affiliate of the Company. A Performance Bonus may be awarded for past services already rendered to the Company, or any Parent, Subsidiary or Affiliate of the Company may be awarded upon satisfaction of such performance factors as are set out in advance in an individual Award Agreement (the "PERFORMANCE BONUS AGREEMENT") in such form (which need not be the same for each Participant) as the Committee shall from time to time approve, which Performance Bonus Agreement shall comply with and be subject to the terms and conditions of the Plan. Performance Bonuses may vary from Participant to Participant and between groups of Participants and may be based upon the achievement of the Company, Parent, Subsidiary or Affiliate and/or individual performance factors or upon such other criteria as the Committee may determine. (b) TERMS OF PERFORMANCE BONUSES. The Committee shall determine the number of Shares to be awarded to the Participant and whether such Shares shall be Restricted Stock. If the Performance Bonus is being awarded based on future services pursuant to a Performance Bonus Agreement, then the Committee shall determine: (i) the nature, length and starting date of any performance period (the "PERFORMANCE PERIOD") for each Performance Bonus; (ii) the performance goals and criteria to be used to measure the performance; (iii) the number of Shares to be awarded to the Participant at the end of the Performance - 6 - 7 Period; and (iv) the extent to which such Performance Bonuses have been earned. Performance Periods may overlap and Participants may participate simultaneously with respect to Performance Bonuses that are subject to different Performance Periods and different performance factors and criteria. The number of Shares may be fixed or may vary in accordance with such performance or other criteria as may be determined by the Committee. The Committee may, in its discretion, adjust the performance factors applicable to the Performance Bonuses to take into account changes in law and accounting or tax rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the inclusion or exclusion of the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships. (c) FORM OF PAYMENT. The earned portion of a Performance Bonus may be paid currently or on a deferred basis with such interest or earnings equivalent as may be determined by the Committee. Payment shall be made in the form of cash, whole Shares, including Restricted Stock, or a combination thereof, either in a lump sum payment or in installments, all as the Committee shall determine. (d) TERMINATION DURING PERFORMANCE PERIOD. If a Participant ceases to provide services to the Company during a Performance Period for any reason, then such Participant shall not be entitled to any payment (whether in cash or Shares or otherwise) with respect to the Performance Bonus subject to such Performance Period, unless the Committee shall determine otherwise. 8. WITHHOLDING TAXES. (a) WITHHOLDING GENERALLY. Whenever Shares are to be issued in satisfaction of Awards granted under the Plan, the Company shall have the right to require the Participant to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements prior to the delivery of any certificate or certificates for such Shares. Whenever, under the Plan, payments are to be made in cash, such payment shall be net of an amount sufficient to satisfy federal, state, and local withholding tax requirements. (b) STOCK WITHHOLDING. When under applicable tax laws a Participant incurs tax liability in connection with the exercise or vesting of any Award that is subject to tax withholding, and the Participant is obligated to pay the Company the amount required to be withheld, the Participant may satisfy the withholding tax obligation by electing to have the Company withhold from the Shares to be issued that number of Shares having a Fair Market Value equal to the amount required to be withheld, determined on the date that the amount of tax to be withheld is to be determined (the "TAX DATE"). All elections by a Participant to have Shares withheld for this purpose shall be made in writing in a form acceptable to the Committee and shall be subject to the following restrictions: - 7 - 8 (i) the election must be made on or prior to the applicable Tax Date; (ii) once made, the election shall be irrevocable as to the particular Shares as to which the election is made; (iii) all elections shall be subject to the consent or disapproval of the Committee; (iv) if the Participant is an Insider and if the Company is subject to Section 16(b) of the Exchange Act: (A) the election may not be made within six (6) months of the date of grant of the Award; PROVIDED, HOWEVER, that this limitation shall not apply in the event that death or Disability of the Participant occurs prior to the expiration of the six-month period; and (B) the election must be made either six (6) months prior to the Tax Date or in the ten (10) day period beginning on the third day following the release of the Company's quarterly or annual summary statement of sales or earnings; PROVIDED, HOWEVER, that on and after such date as the Company elects to comply with the requirements of Rule 16b-3, as amended effective May 1, 1991, the provisions of Rule 16b-3(d)(1)(i) and Rule 16b-3(e) of the Exchange Act shall apply with respect to any such elections in accordance with rules established by the Committee; and (v) in the event that the Tax Date is deferred until six months after exercise of the Option under Section 83(b) of the Code, the Participant shall receive the full number of Shares with respect to which the exercise occurs, but such Participant shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date. 9. PAYMENT FOR SHARE PURCHASES. Payment for Shares purchased pursuant to the Plan may be made in cash (by check) or, where expressly approved for the Participant by the Committee in its sole discretion at the time of grant and where permitted by law: (a) by cancellation of indebtedness of the Company to the Participant; (b) by surrender of Shares having a Fair Market Value equal to the applicable Purchase Price of the Shares, which Shares either: (A) have been owned by Participant for more than six (6) months (and which have been paid for within the meaning of SEC Rule 144 and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such Shares); or (B) were obtained by Participant in the public market; (c) by tender of a full recourse promissory note having such terms as may be approved by the Committee and bearing interest at a rate sufficient to avoid imputation of income under Sections 483 and 1274 of the Code. Participants who are not-employees of the Company shall not be entitled to purchase Shares with a promissory note unless the note is adequately secured by collateral other than the Shares; - 8 - 9 (d) by waiver of compensation due or accrued to Participant for services rendered; (e) with respect only to purchases upon exercise of an Option, and provided that a public market for the Company's stock exists, (i) through a "same day sale" commitment from Participant and a broker-dealer that is a member of the National Association of Securities Dealers (an "NASD DEALER") whereby Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or (ii) through a "margin" commitment from Participant and an NASD Dealer whereby Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; or (f) by any combination of the foregoing. 10. PRIVILEGES OF STOCK OWNERSHIP. No Participant shall have any of the rights of a shareholder with respect to any Shares until the Shares are issued to the Participant. After Shares are issued to the Participant, the Participant shall be a shareholder and have all the rights of a shareholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided, that if such Shares are Restricted Stock, then any new, additional or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate or capital structure of the Company shall be subject to the same restrictions as the Restricted Stock. The Company shall provide to each Participant a copy of the financial statements of the Company at least annually. 11. TRANSFERABILITY. Awards granted under the Plan, and any interest therein, shall not be transferable or assignable by Participant, and may not be made subject to execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution or as consistent with the specific Plan and Award Agreement provisions relating thereto. During the lifetime of the Participant an Award shall be exercisable only by the Participant, and any elections with respect to an Award, may be made only by the Participant. 12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company may reserve to itself and/or its assignee(s) in the Award Agreement (a) a right of first refusal to purchase all Shares that a Participant (or a subsequent transferee) may propose to transfer to a third party, and/or (b) - 9 - 10 a right to repurchase a portion of or all Shares held by a Participant when such Participant ceases to provide services to the Company or a Parent, Subsidiary or Affiliate of the Company, for any reason within 90 days of the date the Participant ceases to provide services, for cash or cancellation of purchase money indebtedness, either: (1) at the higher of: (i) Participant's original Purchase Price, or (ii) the Fair Market Value of such Shares on the date the Participant ceased to provide services, PROVIDED, such right of repurchase terminates when the Company's securities become publicly traded; or (2) at the Participant's original Purchase Price, PROVIDED, that the right to repurchase at the original Purchase Price lapses at the rate of at least 20% per year over 5 years from the date the Shares were purchased, and if the right to repurchase is assignable, the assignee must pay the Company upon assignment of the right to repurchase, cash equal to the excess of the Fair Market Value of the Shares over the original Purchase Price. 13. CERTIFICATES. All certificates for Shares or other securities delivered under the Plan shall be subject to such stock transfer orders, legends and other restrictions as the Committee may deem advisable, including under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange upon which the Shares may be listed. 14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant's Shares, the Committee may require the Participant to deposit all certificates, together with stock powers or other instruments of transfer approved by the Committee, appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates. Any Participant who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under the Plan shall be required to pledge and deposit with the Company all or part of the Shares so purchased as collateral to secure the payment of Participant's obligation to the Company under the promissory note; provided, however, that the Committee may in its sole discretion require or accept other or additional forms of collateral to secure the payment of such obligation and, in any event, the Company shall have full recourse against the Participant under the promissory note notwithstanding any pledge of the Participant's Shares or other collateral. In connection with any pledge of the Shares, Participant shall be required to execute and deliver a written pledge agreement in such form as the Committee shall from time to time approve. The Shares purchased with the promissory note may be released from the pledge on a prorata basis as the promissory note is paid. 15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time to time, authorize the Company, with the consent of the respective Participants, to issue new Awards in exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may at any time buy from a Participant an Award previously granted with payment in cash or - 10 - 11 Shares (including Restricted Stock), based on such terms and conditions as the Committee and the Participant shall agree. 16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. (a) An Award shall not be effective unless such Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed, as they are in effect on the date of the Award and also on the date of exercise or other issuance. The Company shall be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company shall have no liability for any inability or failure to do so. (b) Notwithstanding any other provision in the Plan, the Company shall have no obligation to issue or deliver certificates of Common Stock under the Plan prior to (A) obtaining approval from any governmental agency that the Company determines is necessary or advisable, (B) admission of such shares to listing on the stock exchange on which the Common Stock may be listed and (C) completion of any registration or other qualification of such shares under any state or federal law or ruling of any governmental body that the Company determines to be necessary or advisable. 17. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award granted under the Plan shall confer on any Participant any right to continue in the employ of, or other relationship with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit in any way the right of the Company or any Parent, Subsidiary or Affiliate of the Company to terminate Participant's employment or other relationship at any time, with or without cause. 18. CORPORATE TRANSACTIONS. (a) In the event of (i) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the shareholders of the Company and the Awards granted under the Plan are assumed by the successor corporation, which assumption shall be binding on all Participants), (ii) a dissolution or liquidation of the Company, (iii) the sale of substantially all of the assets of the Company, or (iv) any other transaction which qualifies as a "corporate transaction" under Section 424(a) of the Code wherein the shareholders of the Company give up all of their equity interest in the Company (except for the acquisition of all or substantially all of the outstanding shares of the Company), any or all outstanding Awards may be assumed by the successor corporation, which assumption shall be binding on all Participants. In the alternative, the successor corporation may substitute equivalent Awards or provide substantially similar - 11 - 12 consideration to Participants as was provided to shareholders (after taking into account the existing provisions of the Awards). The successor corporation may also issue, in place of outstanding Shares of the Company Restricted Stock held by the Participant, substantially similar Shares or other property subject repurchase restrictions no less favorable to the Participant. (b) In the event such successor corporation, if any, refuses to assume or substitute the Awards as provided above, pursuant to a transaction described in Subsections 18(a)(ii), (iii) or (iv) above, or there is no successor corporation, and if the Company ceases to exist as a separate corporate entity, the Awards, notwithstanding any contrary terms in the Award Agreement, expire on a date at least twenty (20) days after the Board gives written notice to Participants specifying the terms and conditions of such termination. (c) In the event such successor corporation, if any, refuses to assume or substitute the Awards, as provided above, pursuant to a transaction described in Subsections 18(a)(i) above, such Awards shall expire on (and, if the Company has reserved to itself a right to repurchase Shares issued pursuant to an Award, such right shall terminate on the consummation of such transaction at such time and on such conditions as the Board shall determine. (d) Subject to any greater rights granted to Participants under the foregoing provisions of this Section 19, in the event of the occurrence of any transaction described in Section 18(a), any outstanding Awards shall be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, sale of assets or other "corporate transaction." (e) The Company, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either (i) granting an Award under the Plan in substitution of the stock option, or (ii) assuming the award as if it had been granted under the Plan if the terms of such assumed award could be applied to an Award granted under the Plan. Such substitution or assumption shall be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under the Plan if the other company had applied the rules of the Plan to such grant. In the event the Company assumes an award granted by another company, the terms and conditions of such award shall remain unchanged (except the exercise price and the number and nature of Shares issuable upon exercise, which will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects to grant a new Award rather than assuming an existing award (as specified in Section 5), such new Option may be granted with a similarly adjusted exercise price. 19. ADOPTION AND SHAREHOLDER APPROVAL. The Plan shall become effective on the date that it is adopted by the Board (the "EFFECTIVE DATE"). The Plan shall be approved by the - 12 - 13 shareholders of the Company, consistent with applicable laws, within twelve months before or after the Effective Date. Upon the Effective Date, the Board may grant Awards pursuant to the Plan; PROVIDED, HOWEVER, that (i) no Option may be exercised prior to initial shareholder approval of the Plan; (ii) no Option shall be exercised prior to the time an increase in the number of Shares has been approved by the shareholders of the Company; and (iii) in the event that shareholder approval is not obtained within the time period provided herein all Awards granted hereunder and any Shares issued pursuant to any Award shall be rescinded. After the Company becomes subject to Section 16(b) of the Exchange Act, the Company will comply with the requirements of Rule 16b-3 (or its successor), as amended with respect to shareholder approval. 20. TERM OF PLAN. The Plan will terminate ten (10) years from the Effective Date. 21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or amend the Plan in any respect including (but not limited to) amendment of any form of Award Agreement or instrument to be executed pursuant to the Plan; provided, however, that the Board shall not, without the approval of the shareholders of the Company, amend the Plan in any manner that requires such shareholder approval pursuant to the Code or the regulations promulgated thereunder as such provisions apply to ISO plans or pursuant to the Exchange Act or Rule 16b-3 (or its successor), as amended thereunder. 22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the Board, the submission of the Plan to the shareholders of the Company for approval, nor any provision of the Plan shall be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock options and bonuses otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases. 23. DEFINITIONS. As used in the Plan, the following terms shall have the following meanings: "AFFILIATE" means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another corporation, where "control" (including the terms "controlled by" and "under common control with") means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise. "AWARD" means any award under the Plan, including any Option, Restricted Stock or Performance Bonus. "AWARD AGREEMENT" means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award. - 13 - 14 "BOARD" means the Board of Directors of the Company. "CODE" means the Internal Revenue Code of 1986, as amended. "COMMITTEE" means the committee appointed by the Board to administer the Plan, or if no committee is appointed, the Board. "COMPANY" means Pillar Corporation, a corporation organized under the laws of the State of California, or any successor corporation. "DISABILITY" means a disability, whether temporary or permanent, partial or total, within the meaning of Section 22(e)(3) of the Code, as determined by the Committee. "DISINTERESTED PERSON" means a director who is not, during the period that person is a member of the Committee and for one year prior to service as a member of the Committee, granted or awarded equity securities pursuant to the Plan or any other plan of the Company, or any Parent, Subsidiary or Affiliate of the Company, except in accordance with the requirements set forth in Rule 16b-3(c)(2)(i) (and any successor thereto) as promulgated by the SEC under Section 16(b) of the Exchange Act, as such rule is amended from time to time and as interpreted by the SEC. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXERCISE PRICE" means the price at which a holder of an Option may purchase the Shares issuable upon exercise of the Option. "FAIR MARKET VALUE" means, as of any date, the value of a share of the Company's Common Stock determined as follows: (i) the last reported sale price of the Common Stock of the Company on the NASDAQ National Market System or, if no such reported sale takes place on any such day, the average of the closing bid and asked prices; (ii) if such Common Stock shall then be listed on a national securities exchange, the last reported sale price or, if no such reported sale takes place on any such day, the average of the closing bid and asked prices on the principal national securities exchange on which the Common Stock is listed or admitted to trading; (iii) if such Common Stock shall not be quoted on the NASDAQ National Market System nor listed or admitted to trading on a national securities exchange, then the average of the closing bid and asked prices, as reported by The Wall Street Journal for the over-the-counter market; or - 14 - 15 (iv) if none of the foregoing is applicable, by the Board of Directors of the Company in good faith. "INSIDER" means an officer or director of the Company or any other person whose transactions in Common Stock are subject to Section 16(b) of the Exchange Act. "OPTION" means an award of an option to purchase Shares pursuant to Section 5. "PARENT" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if at the time of the granting of an Award under the Plan, each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. "PARTICIPANT" means a person who receives an Award under the Plan. "PERFORMANCE BONUS" means an award of Shares pursuant to Section 7. "PLAN" means this Pillar Corporation 1992 Equity Incentive Plan, as amended from time to time. "RESTRICTED STOCK" means an award of Shares pursuant to Section 6. "SEC" means the Securities and Exchange Commission. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SHARES" means shares of the Company's Common Stock, reserved for issuance under the Plan, as adjusted pursuant to Section 4, and any successor security. "SUBSIDIARY" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting of the Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. - 15 - EX-4.5 4 STOCK OPTION GRANT 1 EXHIBIT 4.5 PILLAR CORPORATION 1992 LONG-TERM EQUITY INCENTIVE PLAN STOCK OPTION GRANT ------------------ Optionee: _______________________________________________________________ Address: ________________________________________________________________ Total Options Granted: __________________________________________________ Exercise Price Per Share: _______________________________________________ Date of Grant: __________________________________________________________ Vesting Start Date: _____________________________________________________ Expiration Date: ________________________________________________________ Type of Stock Option (check one): __ Incentive __ Nonqualified 1. GRANT OF OPTION. PILLAR CORPORATION, a California corporation (the "COMPANY"), hereby grants to the optionee named above ("OPTIONEE") an option (this "OPTION") to purchase the total number of shares of Common Stock of the Company set forth below (the "SHARES") at the exercise price per share set forth above (the "EXERCISE PRICE"), subject to all of the terms and conditions of this Grant and the PILLAR CORPORATION 1992 Long-Term Equity Incentive Plan as amended to date (the "PLAN"). If designated as an Incentive Stock Option above, this Option is intended to qualify as an "incentive stock option" ("IS0") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "CODE"). Unless otherwise defined herein, capitalized terms shall have the meanings ascribed to them in the Plan. 2. EXERCISE PERIOD OF OPTION. Subject to the terms and conditions of the Plan and this Grant, this Option shall become exercisable as to portions of the Shares as follows: (a) This Option shall not be exercisable with respect to any of the Shares until 10/1, 1993 (the "FIRST VESTING DATE"); (b) if Optionee has been continuously employed by the Company at all times during the time period beginning on the Date of Grant set forth above and ending on the First Vesting Date, then on the First Vesting Date this Option shall become exercisable as to 20% of the Shares; and (c) thereafter this Option shall become exercisable as to an additional 1.667 of the Shares each month thereafter if Optionee has remained continuously employed by the Company at all times; PROVIDED that Optionee shall in no event be entitled under this Option to purchase a number of shares of the Company's common stock greater than the "Total Options Granted" indicated above. Notwithstanding anything herein to the contrary, this Option shall expire on the Expiration Date set forth above and must be exercised, if at all, on or before the Expiration Date; and provided further that this Option must become exercisable as to at least 20% of the Shares for each full year since the Date of Grant. 2 3. RESTRICTIONS ON EXERCISE. Exercise of this Option is subject to the following limitations: (a) This Option may not be exercised unless such exercise is in compliance with the Securities Act of 1933, as amended, and all applicable state securities laws, as they are in effect on the date of exercise. (b) This Option may not be exercised as to fewer than 100 Shares unless it is exercised as to all Shares as to which this Option is then exercisable. 4. TERMINATION OF OPTION. Except as provided below in this Section, this Option shall terminate and may not be exercised if Optionee ceases to be employed by the Company or any Parent or Subsidiary of the Company (or in the case of a nonqualified stock option, an Affiliate of the Company). Optionee shall be considered to be employed by the Company if Optionee is an officer, director or full-time employee of the Company, or any Parent, Subsidiary or Affiliate of the Company. The Board of Directors of the Company shall have discretion to determine whether Optionee has ceased to be employed by the Company or any Parent, Subsidiary or Affiliate of the Company and the effective date on which such employment terminated (the "TERMINATION DATE"). (a) If Optionee ceases to be employed by the Company or any Parent, Subsidiary or Affiliate of the Company for any reason except death or disability within the meaning of Section 22(e)(3) of the Code, this Option, to the extent (and only to the extent) that it would have been exercisable by Optionee on the Termination Date, may be exercised by Optionee within ninety days after the Termination Date, but in any event no later than the Expiration Date. (b) If Optionee's employment with the Company or any Parent, Subsidiary or Affiliate of the Company is terminated because of the death of Optionee or disability of Optionee within the meaning of Section 22(e)(3) of the Code, this Option, to the extent that it is exercisable by Optionee on the Termination Date, may be exercised by Optionee (or Optionee's legal representative) within twelve months after the Termination Date, but in any event no later than the Expiration Date. 3 Nothing in the Plan or this Grant shall confer on Optionee any right to continue in the employ of the Company or any Parent, Subsidiary or Affiliate of the Company or limit in any way the right of the Company or any Parent, Subsidiary or Affiliate of the Company to terminate Optionee's employment at any time, with or without cause. 5. MANNER OF EXERCISE. (a) This Option shall be exercisable by delivery to the Company of an executed written Notice and Agreement in the form attached hereto as EXHIBIT A, or in such other form as may be approved by the Company (the "EXERCISE AGREEMENT"), which shall set forth Optionee's election to exercise this Option, the number of Shares being purchased, any restrictions imposed on the Shares and such other representations and agreements regarding Optionee's investment intent and access to information as may be required by the Company to comply with applicable securities laws. (B) SUCH EXERCISE AGREEMENT SHALL BE ACCOMPANIED BY FULL PAYMENT OF THE EXERCISE PRICE FOR THE SHARES BEING PURCHASED (I) IN CASH (BY CHECK); (II) BY CANCELLATION OF INDEBTEDNESS OF THE COMPANY TO THE PARTICIPANT; (III) BY SURRENDER OF SHARES OF COMMON STOCK HAVING A FAIR MARKET VALUE EQUAL TO THE APPLICABLE EXERCISE PRICE OF THE OPTIONS, WHICH SHARES OF COMMON STOCK EITHER: (X) HAVE BEEN OWNED BY PARTICIPANT FOR MORE THAN SIX (6) MONTHS (AND WHICH HAVE BEEN PAID FOR WITHIN THE MEANING OF THE SECURITIES AND EXCHANGE COMMISSION ("SEC") RULE 144 AND, IF SUCH SHARES WERE PURCHASED FROM THE COMPANY BY USE OF A PROMISSORY NOTE, SUCH NOTE HAS BEEN FULLY PAID WITH RESPECT TO SUCH SHARES), OR (Y) WERE OBTAINED BY PARTICIPANT IN THE OPEN PUBLIC MARKET; (IV) BY WAIVER OF COMPENSATION DUE OR ACCRUED TO PARTICIPANT FOR SERVICES RENDERED; (V) PROVIDED THAT A PUBLIC MARKET FOR THE COMPANY'S STOCK EXISTS, THROUGH A "SAME DAY SALE" COMMITMENT FROM PARTICIPANT AND A BROKER-DEALER THAT IS A MEMBER OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS (AN "NASD DEALER") WHEREBY PARTICIPANT IRREVOCABLY ELECTS TO EXERCISE THE OPTION AND TO SELL A PORTION OF THE SHARES SO PURCHASED TO PAY FOR THE EXERCISE PRICE AND WHEREBY THE NASD DEALER IRREVOCABLY COMMITS UPON RECEIPT OF SUCH SHARES TO FORWARD THE EXERCISE PRICE DIRECTLY TO THE COMPANY; (VI) PROVIDED THAT A PUBLIC MARKET FOR THE COMPANY'S STOCK EXISTS, THROUGH A "MARGIN" COMMITMENT FROM PARTICIPANT AND AN NASD DEALER WHEREBY PARTICIPANT IRREVOCABLY ELECTS TO EXERCISE THE OPTION AND TO PLEDGE THE SHARES SO PURCHASED TO THE NASD DEALER IN A MARGIN ACCOUNT AS SECURITY FOR A LOAN FROM THE NASD DEALER IN THE AMOUNT OF THE EXERCISE PRICE, AND WHEREBY THE NASD DEALER IRREVOCABLY COMMITS UPON RECEIPT OF SUCH SHARES TO FORWARD THE EXERCISE PRICE DIRECTLY TO THE COMPANY; OR (VII) BY ANY COMBINATION OF THE FOREGOING. 4 (c) Prior to the issuance of the Shares upon exercise of this Option, Optionee must pay or make adequate provision for any applicable federal or state withholding obligations of the Company. Optionee may provide for payment of withholding taxes upon exercise of the Option by requesting that the Company retain Shares with a Fair Market Value equal to the minimum amount of taxes required to be withheld. In such case, the Company shall issue the net number of Shares to the Optionee by deducting the Shares retained from the Shares issuable upon exercise. (d) Provided that such notice and payment are in form and substance satisfactory to counsel for the Company, the Company shall issue the Shares registered in the name of Optionee or Optionee's legal representative. 6. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the date of this grant, and (2) the date one year after transfer of such Shares to the Optionee upon exercise of the ISO, the Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Company on the compensation income recognized by the Optionee from the early disposition by payment in cash or out of the current earnings paid to the Optionee. 7. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of Shares shall be subject to compliance by the Company and the Optionee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company's common stock may be listed at the time of such issuance or transfer. Optionee understands that the Company is under no obligation to register or qualify the Shares with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance. 8. NONTRANSFERABILITY OF OPTION. If this Option is an ISO, or if Optionee is an Insider subject to Section 16(b) of the Exchange Act, then this Option may not be transferred in any manner other than by will or by the law of descent and distribution and may be exercised during the lifetime of Optionee only by Optionee. Otherwise, this Option may only be transferred to Optionee's immediate family, to a trust for the benefit of Optionee or Optionee's immediate family, or to a charitable entity qualified under IRC Section 501(c), where "immediate family" shall mean spouse, lineal descendant or antecedent, brother or sister. The terms of this Option shall be binding upon the executors, administrators, successors and assigns of Optionee. 5 9. TAX CONSEQUENCES. Set forth below is a brief summary as of the date of this Option of some of the federal and California tax consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. (a) EXERCISE OF ISO. If this Option qualifies as an ISO, there will be no regular federal income tax liability or California income tax liability upon the exercise of the Option, although the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price will be treated as a tax preference item for federal income tax purposes and may subject the Optionee to the alternative minimum tax in the year of exercise. (b) EXERCISE OF NONQUALIFIED STOCK OPTION. If this Option does not qualify as an ISO, there may be a regular federal income tax liability and a California income tax liability upon the exercise of the Option. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price. The Company will be required to withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) DISPOSITION OF SHARES. If the Shares are held for more than twelve months after the date of the transfer of the Shares pursuant to the exercise of this Option (and, in the case of an ISO, are disposed of more than two years after the Date of Grant), any gain realized on disposition of the Shares will be treated as long term capital gain for federal and California income tax purposes. If Shares purchased under an ISO are disposed of within such one year period or within two years after the Date of Grant, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price. 10. Interpretation. Any dispute regarding the interpretation of this agreement shall be submitted by Optionee or the Company forthwith to the Company's Board of Directors or the committee thereof that administers the Plan, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Board or committee shall be final and binding on the Company and on Optionee. 6 11. ENTIRE AGREEMENT. The Plan and the Exercise Agreement attached as Exhibit A are incorporated herein by reference. This Grant, the Plan and the Exercise Agreement constitute the entire agreement of the parties and supersede all prior undertakings and agreements with respect to the subject matter hereof. PILLAR CORPORATION By: ------------------------ Title: -------------------- Name: --------------------- (Please Print) 7 ACCEPTANCE Optionee hereby acknowledges receipt of a copy of the Plan, represents that Optionee has read and understands the terms and provisions thereof, and accepts this Option subject to all the terms and conditions of the Plan and this Grant. Optionee acknowledges that there may be adverse tax consequences upon exercise of this Option or disposition of the Shares and that Optionee should consult a tax adviser prior to such exercise or disposition. __________________________ Optionee Signature __________________________ Name (please print) EX-5.1 5 OPINION OF TESTA,HURWITZ & THIBEAULT 1 Exhibit 5.1 ----------- December 30, 1994 IMRS Inc. 777 Long Ridge Road Stamford, CT 06902 RE: Registration Statement on Form S-8 Relating to the Pillar Corporation 1988 Stock Option Plan and the Pillar Corporation 1992 Long-Term Equity Incentive Plan (collectively referred to herein as the "Plans") -------------------------------------------------------------- Dear Sir or Madam: Reference is made to the above-captioned Registration Statement on Form S-8 (the "Registration Statement") to be filed on behalf of IMRS Inc., a Delaware corporation ("IMRS"), with the Securities and Exchange Commission under the Securities Act of 1933, as amended, relating to an aggregate of 70,258 shares of Common Stock, $.01 par value, (the "Shares") of IMRS issuable pursuant to the Plans of Pillar Corporation, a California corporation ("Pillar") and a wholly-owned subsidiary of IMRS by virtue of a merger transaction completed in November 1994. We have examined, are familiar with, and have relied as to factual matters solely upon, copies of the Plans, the Amended and Restated Articles of Organization, By-Laws, minute books and stock records of Pillar, the Amended and Restated Articles of Organization, Amended and Restated By-Laws, minute books and stock records of IMRS, and originals of such other documents, certificates and proceedings as we have deemed necessary for the purpose of rendering this opinion. Based on the foregoing, we are of the opinion that the Shares have been duly authorized and, when issued and paid for in accordance with the terms of the related Plan, will be validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. Very truly yours, /S/ TESTA, HURWITZ & THIBEAULT ------------------------------ TESTA, HURWITZ & THIBEAULT EX-23.1 6 CONSENT OF INDEPENDENT AUDITORS 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in this Registration Statement on Form S-8 of IMRS Inc. dated December 30, 1994, pertaining to the Pillar Corporation 1988 Stock Option Plan, and the Pillar Corporation 1992 Long Term Equity Incentive Plan, of our report dated July 22, 1994, except for Note K, as to which the date is September 27, 1994, with respect to the consolidated financial statements and schedules of IMRS Inc. incorporated by reference in its Annual Report (Form 10-K) for the year ended June 30, 1994 filed with the Securities and Exchange Commission. ERNST & YOUNG LLP Stamford, Connecticut December 30, 1994 -----END PRIVACY-ENHANCED MESSAGE-----