As filed with the Securities and Exchange Commission on November 23, 1999
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
SMARTSERV ONLINE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3750708
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE STATION PLACE, STAMFORD, CT 06902
(Address of Principal Executive Offices)
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENTS BETWEEN THE REGISTRANT AND ITS EMPLOYEES
NON-QUALIFIED STOCK OPTION AGREEMENTS BETWEEN THE REGISTRANT
AND ITS NON-EMPLOYEE DIRECTORS
(Full title of the plans)
SEBASTIAN E. CASSETTA
SMARTSERV ONLINE, INC.
ONE STATION PLACE, STAMFORD, CT 06902
(203) 353-5950
(Name, address and telephone number, including area code, of agent for service)
with a copy to:
Michael J. Shef, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
(212) 704-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================================================
Proposed Proposed
Maximum Maximum Amount of
Title of each class of Securities Amount to Offering Price Aggregate Registration
to be Registered be Registered Per Share Offering Price Fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share 300,000 (1) $2.438 (2) $731,448 $203.34
==============================================================================================================
</TABLE>
(1) Pursuant to Rule 416(b), there shall also be deemed covered hereby all
additional securities resulting from antidilution adjustments under the
Amended and Restated 1996 Stock Option Plan of SmartServ Online, Inc., the
Non-Qualified Stock Option Agreements between the registrant and employees
of SmartServ Online, Inc. and the Non-Qualified Stock Option Agreements
between the registrant and non-employee directors of SmartServ Online,
Inc.
(2) Estimated solely for the purpose of calculating the registration fee on
the basis of: (a) pursuant to Rule 457(h), the exercise prices of 37,497
options granted under the Amended and Restated 1996 Stock Option Plan,
193,242 non-qualified stock options granted to employees of the registrant
under stock option contracts and 50,000 non-qualified stock options
granted to directors of the registrant under stock option contracts, and
(b) pursuant to Rule 457(c), the average of the bid ($15.250) and asked
($15.6255) price on the Over-the-Counter Bulletin Board on November 22
1999 with respect to 19,261 options issuable under the Amended and
Restated 1996 Stock Option Plan.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the registrant with the Securities and
Exchange Commission (Commission File No.0-28008) pursuant to Section 13(a) of
the Securities Exchange Act of 1934 (the "Exchange Act") are incorporated herein
by reference:
(a) The registrant's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1999;
(b) The registrant's Annual Report on Form 10-KSB for the year ended
June 30, 1999; and
(c) The description of the registrant's common stock contained in the
registrant's registration statement on Form 8-A filed on March
19, 1996, including any amendment or report filed for the purpose
of updating such description.
All documents filed subsequent to the date of this registration
statement pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act 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 in this
registration statement and to be a part hereof from the date of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this registration statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not required, since the registrant's common stock is registered under
Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware ("DGCL")
provides that directors, officers, employees or agents of Delaware corporations
are entitled, under certain circumstances, to be indemnified against expenses
(including attorneys' fees) and other liabilities actually and reasonably
incurred by them in connection with any suit brought against them in their
capacity as a director, officer, employee or agent, if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, if they had no reasonable cause to believe their conduct was
unlawful. Section 145 also provides that directors, officers, employees and
agents may also be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by them in connection with a derivative suit
bought against them in their capacity as a director, if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification may be made without
court approval if such person was adjudged liable to the corporation.
Article Tenth of the registrant's Certificate of Incorporation provides
that the registrant shall indemnify any and all persons whom it shall have power
to indemnify to the fullest extent permitted by the DGCL. Article VI of the
registrant's by-laws provide that the registrant shall indemnify authorized
representatives of the registrant to the fullest extent permitted by the DGCL.
The registrant's by-laws also permit the registrant to purchase insurance on
behalf of any such person against any liability asserted against such person and
incurred by such person in any capacity, or out of such person's status as such,
whether or not the registrant would have the power to indemnify such person
against such liability under the foregoing provision of the by-laws.
The registrant maintains a directors and officers liability insurance
policy with National Union Fire Insurance Company of Pittsburgh, PA. The policy
insures the directors and officers of the registrant against loss arising from
certain claims made against such directors or officers by reason of certain
wrongful acts.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit
Number Description
- ------- -----------
5.1 Opinion of Parker Chapin Flattau & Klimpl, LLP, as to the legality of
the common stock being offered.
23.1 Consent of Parker Chapin Flattau & Klimpl, LLP (included in their
opinion filed as Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of attorney of certain officers and directors of the registrant
(contained in the signature page).
<PAGE>
99.1 Amended and Restated 1996 Stock Option Plan of SmartServ Online, Inc.
99.2 Form of Incentive Stock Option Contract under the Amended and Restated
1996 Stock Option Plan.
99.3 Form of Non-Qualified Stock Option Contract under the Amended and
Restated 1996 Stock Option Plan.
99.4 Form of Non-Qualified Stock Option Contract between the registrant and
its employees.
99.5 Form of Non-Qualified Stock Option Contract between the registrant and
its non-employee directors.
ITEM 9. UNDERTAKINGS.
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, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the 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.
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
Exchange Act that is incorporated by reference in this registration statement
shall be
<PAGE>
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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 described in Item 6 above, 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant 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 the 23rd day of November, 1999.
SmartServ Online, Inc.
By: /s/ SEBASTIAN E. CASSETTA
-----------------------------------
Sebastian E. Cassetta
Chairman of the Board, Chief Executive
Officer and Secretary
POWER OF ATTORNEY
The undersigned directors and officers of SmartServ Online, Inc. hereby
constitute and appoint Sebastian E. Cassetta, Mario F. Rossi and Thomas W.
Haller and each of them, with full power to act without the other and with full
power of substitution and resubstitution, our true and lawful attorneys-in-fact
with full power to execute in our name and behalf in the capacities indicated
below any and all amendments (including post-effective amendments and amendments
thereto) to this registration statement under the Securities Act of 1933 and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission and hereby ratify and
confirm each and every act and thing that such attorneys-in-fact, or any of
them, or their substitutes, shall lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ SEBASTIAN E. CASSETTA Chairman of the Board, November 23, 1999
- --------------------------------------- Chief Executive Officer,
Sebastian E. Cassetta Secretary and Director
/s/ MARIO F. ROSSI Vice President and November 23, 1999
- --------------------------------------- Director
Mario F. Rossi
/s/ THOMAS W. HALLER Vice President and Treasurer November 23, 1999
- --------------------------------------- (Chief Financial Officer and
Thomas W. Haller Chief Accounting Officer)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- --------------------------------------- Director November __, 1999
Claudio Guazzoni
/S/ ROBERT H. STEELE Director November 23, 1999
- ---------------------------------------
Robert H. Steele
/S/ L. SCOTT PERRY Director November 23, 1999
- ---------------------------------------
L. Scott Perry
/S/ CATHERINE CASSEL TALMADGE Director November 23, 1999
- ---------------------------------------
Catherine Cassel Talmadge
/S/ CHARLES R. WOOD Director November 23, 1999
- ---------------------------------------
Charles R. Wood
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
5.1 Opinion of Parker Chapin Flattau & Klimpl, LLP, as to the legality of
the common stock being offered.
23.1 Consent of Parker Chapin Flattau & Klimpl, LLP (included in their
opinion filed as Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of attorney of certain officers and directors of the registrant
(contained in the signature page).
99.1 Amended and Restated 1996 Stock Option Plan of SmartServ Online, Inc.
99.2 Form of Incentive Stock Option Contract under the Amended and Restated
1996 Stock Option Plan.
99.3 Form of Non-Qualified Stock Option Contract under the Amended and
Restated 1996 Stock Option Plan.
99.4 Form of Non-Qualified Stock Option Contract between registrant and its
employees.
99.5 Form of Non-Qualified Stock Option Contract between registrant and its
non-employee directors.
EXHIBIT 5.1
November 23, 1999
SmartServ Online, Inc.
One Station Place
Stamford, CT 06902
Gentlemen:
We have acted as counsel for SmartServ Online, Inc., a Delaware
corporation (the "Company") in connection with its Registration Statement on
Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission relating to the registration of 300,000 shares of Common
Stock, par value $ .01 per share (the "Shares") issuable upon exercise of
options granted or to be granted pursuant to (a) the Company's Amended and
Restated 1996 Stock Option Plan (the "Plan"), (b) non-qualified stock option
contacts between the Company and its non-employee directors (the "Director Stock
Option Contracts"), and (c) non-qualified stock option contracts between the
Company and its employees (the "Employee Stock Option Contracts" and, together
with the Plan and the Director Stock Option Contracts, the "Stock Option
Documents").
In connection with the foregoing, we have examined, among other things,
the Stock Option Documents, the Registration Statement and originals or copies,
satisfactory to us, of all such corporate records and of all such agreements,
certificates and other documents as we have deemed relevant and necessary as a
basis for the opinion hereinafter expressed. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity with the original documents of
documents submitted to us as copies. As to any facts material to such opinion,
we have, to the extent that relevant facts were not independently established by
us, relied on certificates of public officials and certificates, oaths and
declarations of officers or other representatives of the Company.
Based upon and subject to the foregoing, we are of the opinion that the
Shares to be issued pursuant to the exercise of options granted or to be granted
under the Stock Option Documents will be, when issued pursuant to the Stock
Option Documents, validly issued, fully paid and non-assessable.
We hereby consent to the filing of a copy of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
/s/ Parker Chapin Flattau & Klimpl, LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Amended and Restated 1996 Stock Option Plan of SmartServ
Online, Inc. and Non-Qualified Stock Option Agreements between SmartServ Online,
Inc. and its employees and non-employee directors of our report dated October
13, 1999, with respect to the financial statements of SmartServ Online, Inc.
included in its Annual Report (Form 10-K) for the year ended June 30, 1999 filed
with the Securities and Exchange Commission.
Stamford, Connecticut
November 18, 1999 /s/ Ernst & Young LLP
EXHIBIT 99.1
AMENDED AND RESTATED
1996 STOCK OPTION PLAN
OF
SMARTSERV ONLINE, INC.
1. PURPOSES OF THE PLAN. This amended and restated stock option plan (as amended
and restated, the "Plan") is designed to provide an incentive to key employees
(including directors and officers who are key employees), to consultants and to
Non-Employee Directors (as defined in Paragraph 19) of SmartServ Online, Inc., a
Delaware corporation (the "Company"), or any of its Subsidiaries (as defined in
Paragraph 19), and to offer an additional inducement in obtaining the services
of such persons. The Plan provides for the grant of "incentive stock options"
("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), and nonqualified stock options which do not qualify as
ISOs ("NQSOs"), but the Company makes no representation or warranty, express or
implied, as to the qualification of any option as an "incentive stock option"
under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph 12, the
aggregate number of shares of common stock, $.01 par value per share, of the
Company ("Common Stock") for which options may be granted under the Plan shall
not exceed 1,500,000. Such shares of Common Stock may, in the discretion of the
Board of Directors of the Company (the "Board of Directors"), consist either in
whole or in part of authorized but unissued shares of Common Stock or shares of
Common Stock held in the treasury of the Company. Subject to the provisions of
Paragraph 13, any shares of Common Stock subject to an option which for any
reason expires, is canceled or is terminated unexercised or which ceases for any
reason to be exercisable shall again become available for the granting of
options under the Plan. The Company shall at all times during the term of the
Plan reserve and keep available such number of shares of Common Stock as will be
sufficient to satisfy the requirements of the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a committee of
the Board of Directors (the "Compensation Committee") consisting of not less
than two directors. During such time as the Company has a class of equity
securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the "Act"), each member of the Compensation Committee shall be (a) a
"disinterested person" within the meaning of Rule 16b-3 promulgated under such
act until September 30, 1996 and (b) from and after September 30, 1996 a
"non-employee director" within the meaning of Rule 16b-3 (as the same may be in
effect and interpreted from time to time, "Rule 16b-3"). A majority of the
members of the Compensation Committee shall constitute a quorum, and the acts of
a majority of the members present at any meeting at which a quorum is present,
and any acts approved in writing by all members without a meeting, shall be the
acts of the Compensation Committee. With respect to Non-Employee Director
Options, the Plan shall also be administered by the Compensation Committee. For
the purpose of administering the grant of Non-Employee Director Options, the
Compensation Committee shall have all the duties and powers specifically
provided herein with respect to the grant of Employee Options, and the Plan
shall be construed accordingly.
Subject to the express provisions of the Plan, the
Compensation Committee shall have the authority, in its sole discretion, with
respect to Employee Options and Consultant Options (as defined in
<PAGE>
Paragraph 19): to determine the key employees who shall be granted Employee
Options and the consultants who shall be granted Consultant Options; the times
when options shall be granted; whether an Employee Option shall be an ISO or a
NQSO; the number of shares of Common Stock to be subject to each option; the
term of each option; the date each option shall become exercisable; whether an
option shall be exercisable in whole, in part or in installments and, if in
installments, the number of shares of Common Stock to be subject to each
installment, whether the installments shall be cumulative, the date each
installment shall become exercisable and the term of each installment; whether
to accelerate the date of exercise of any option or installment; whether shares
of Common Stock may be issued upon the exercise of an option as partly paid and,
if so, the dates when future installments of the exercise price shall become due
and the amounts of such installments; the exercise price of each option; the
form of payment of the exercise price; whether to restrict the sale or other
disposition of the shares of Common Stock acquired upon the exercise of an
option and, if so, whether to waive any such restriction; whether to subject the
exercise of all or any portion of an option to the fulfillment of contingencies
as specified in the contract referred to in Paragraph 11 (the "Contract"),
including without limitation, contingencies relating to entering into a covenant
not to compete with the Company, any of its Subsidiaries or a Parent (as defined
in Paragraph 19), to financial objectives for the Company, any of its
Subsidiaries or a Parent, a division of any of the foregoing, a product line or
other category, and/or the period of continued employment of the optionee with
the Company, any of its Subsidiaries or a Parent, and to determine whether such
contingencies have been met; whether an optionee is Disabled (as defined in
Paragraph 19); and with respect to Employee Options, Consultant Options and Non-
Employee Director Options (as defined in Paragraph 19): the amount, if any,
necessary to satisfy the Company's obligation to withhold taxes or other
amounts; the fair market value of a share of Common Stock; to construe the
respective Contracts and the Plan; with the consent of the optionee, to cancel
or modify an option, provided, that the modified provision is permitted to be
included in an option granted under the Plan on the date of the modification,
and further, provided, that in the case of a modification (within the meaning of
Section 424(h) of the Code) of an ISO, such option as modified would be
permitted to be granted on the date of such modification under the terms of the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; from and after September 30, 1996 to approve any provision which under
Rule 16b-3 requires approval by the Board of Directors, a committee of
non-employee directors or the stockholders of the Company in order to be exempt
under Rule 16b-3 (unless otherwise specifically provided herein); and to make
all other determinations necessary or advisable for administering the Plan. Any
controversy or claim arising out of or relating to the Plan, any option granted
under the Plan or any Contract shall be determined unilaterally by the
Compensation Committee in its sole discretion. The determinations of the
Compensation Committee on the matters referred to in this Paragraph 3 shall be
conclusive and binding on the parties. No member or former member of the
Compensation Committee shall be liable for any action, failure to act or
determination made in good faith with respect to the Plan or any option
hereunder.
4. ELIGIBILITY; GRANTS. The Compensation Committee may from time to time, in its
sole discretion, consistent with the purposes of the Plan, grant Employee
Options to key employees (including officers and directors who are key
employees) of, and Consultant Options to consultants to, the Company or any of
its Subsidiaries. Such options granted shall cover such number of shares of
Common Stock as the Compensation Committee may determine, in its sole
discretion; provided, however, that the maximum number of shares subject to
Employee Options that may be granted to any individual during any calendar year
under the Plan (the "162(m) Maximum") shall not exceed 125,000 shares; and
further, provided, that the aggregate market value (determined at the time the
option is granted in accordance with Paragraph 5) of the shares of Common Stock
for which any eligible employee may be granted ISOs under the Plan or any other
plan of the Company, or of a Parent or a Subsidiary of the Company, which are
exercisable for the first time by such optionee during any calendar year shall
not exceed $100,000. Such ISO limitation shall be applied
-2-
<PAGE>
by taking ISOs into account in the order in which they were granted. Any option
(or the portion thereof) granted in excess of such ISO limitation amount shall
be treated as a NQSO. The Compensation Committee may, from time to time, grant
Non-Employee Director Options to Non-Employee Directors.
5. EXERCISE PRICE. The exercise price of the shares of Common Stock under each
Employee Option and Consultant Option shall be determined by the Compensation
Committee in its sole discretion; provided, however, that the exercise price of
an ISO shall not be less than the fair market value of the Common Stock subject
to such option on the date of grant; and further, provided, that if, at the time
an ISO is granted, the optionee owns (or is deemed to own under Section 424(d)
of the Code) stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company, of any of its Subsidiaries or of a
Parent, the exercise price of such ISO shall not be less than 110% of the fair
market value of the Common Stock subject to such ISO on the date of grant. The
exercise price of the shares of Common Stock under each Non-Employee Director
Option shall be equal to the fair market value of the Common Stock subject to
such option on the date of grant.
The fair market value of a share of Common Stock on any day shall be
(a) if the principal market for the Common Stock is a national securities
exchange, the average of the highest and lowest sales prices per share of Common
Stock on such day as reported by such exchange or on a composite tape reflecting
transactions on such exchange, (b) if the principal market for the Common Stock
is not a national securities exchange and the Common Stock is quoted on The
NASDAQ Stock Market ("NASDAQ"), and (i) if actual sales price information is
available with respect to the Common Stock, the average of the highest and
lowest sales prices per share of Common Stock on such day on NASDAQ, or (ii) if
such information is not available, the average of the highest bid and lowest
asked prices per share of Common Stock on such day on NASDAQ, or (c) if the
principal market for the Common Stock is not a national securities exchange and
the Common Stock is not quoted on NASDAQ, the average of the highest bid and
lowest asked prices per share of Common Stock on such day as reported on the OTC
Bulletin Board Service or by National Quotation Bureau, Incorporated or a
comparable service; provided, however, that if clauses (a), (b) and (c) of this
Paragraph are all inapplicable, or if no trades have been made or no quotes are
available for such day, the fair market value of the Common Stock shall be
determined by the Board by any method consistent with applicable regulations
adopted by the Treasury Department relating to stock options.
6. TERM. The term of each Employee Option and Consultant Option granted pursuant
to the Plan shall be such term as is established by the Compensation Committee,
in its sole discretion; provided, however, that the term of each ISO granted
pursuant to the Plan shall be for a period not exceeding 10 years from the date
of grant thereof; and further, provided, that if, at the time an ISO is granted,
the optionee owns (or is deemed to own under Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, of any of its Subsidiaries or of a Parent, the term of the
ISO shall be for a period not exceeding five years from the date of grant.
Employee Options and Consultant Options shall be subject to earlier termination
as hereinafter provided. Subject to earlier termination as hereinafter provided,
each Non-Employee Director Option shall be exercisable for a term of five years
commencing on the date of grant.
7. EXERCISE. An option (or any part or installment thereof), to the extent then
exercisable, shall be exercised by giving written notice to the Company at its
principal office stating which option is being exercised, specifying the number
of shares of Common Stock as to which such option is being exercised and
accompanied by payment in full of the aggregate exercise price therefor (or the
amount due on exercise if the Contract with respect to an Employee Option
permits installment payments) (a) in cash or by certified check
-3-
<PAGE>
or (b) if the applicable Contract permits, with previously acquired shares of
Common Stock having an aggregate fair market value on the date of exercise
(determined in accordance with Paragraph 5) equal to the aggregate exercise
price of all options being exercised, or with any combination of cash, certified
check or shares of Common Stock. The Company shall not be required to issue any
shares of Common Stock pursuant to any such option until all required payments,
including any required withholding, have been made.
The Compensation Committee may, in its sole discretion, permit payment
of the exercise price of an option by delivery by the optionee of a properly
executed notice, together with a copy of his irrevocable instructions to a
broker acceptable to the Compensation Committee to deliver promptly to the
Company the amount of sale or loan proceeds sufficient to pay such exercise
price. In connection therewith, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a stockholder with respect to such shares of
Common Stock until the date of issuance of a stock certificate to him for such
shares; provided, however, that until such stock certificate is issued, any
optionee using previously acquired shares of Common Stock in payment of an
option exercise price shall continue to have the rights of a stockholder with
respect to such previously acquired shares.
In no case may a fraction of a share of Common Stock be purchased or
issued under the Plan.
8. TERMINATION OF RELATIONSHIP. Except as may otherwise be expressly
provided in the applicable Contract, any holder of an Employee Option or
Consultant Option whose relationship with the Company, its Parent and
Subsidiaries as an employee or a consultant has terminated for any reason (other
than as a result of the death or Disability of the optionee) may exercise such
option, to the extent exercisable on the date of such termination, at any time
within three months after the date of termination, but not thereafter and in no
event after the date the option would otherwise have expired; provided, however,
that if such relationship is terminated either (a) for cause, or (b) without the
consent of the Company, such option shall terminate immediately.
For the purposes of the Plan, an employment relationship shall be
deemed to exist between an individual and a corporation if, at the time of the
determination, the individual was an employee of such corporation for purposes
of Section 422(a) of the Code. As a result, an individual on military, sick
leave or other bona fide leave of absence shall continue to be considered an
employee for purposes of the Plan during such leave if the period of the leave
does not exceed 90 days, or, if longer, so long as the individual's right to
reemployment with the Company (or a related corporation) is guaranteed either by
statute or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute or by contract,
the employment relationship shall be deemed to have terminated on the 91st day
of such leave.
Except as may otherwise be expressly provided in the applicable
Contract, Employee Options and Consultant Options granted under the Plan shall
not be affected by any change in the status of the optionee so long as the
optionee continues to be an employee of, or a consultant to, the Company, or any
of the Subsidiaries or a Parent (regardless of having changed from one to the
other or having been transferred from one corporation to another).
Except as provided below, a Non-Employee Director Option may be
exercised at any time during its five year term. The Non-Employee Director
Option shall not be affected by the optionee ceasing to
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<PAGE>
be a director of the Company or becoming an employee of, or consultant to, the
Company, any of its Subsidiaries or a Parent; provided, however, that if (a) he
is terminated as a director of the Company for cause, such option shall
terminate immediately, or (b) he ceases to be a director of the Company because
he is not nominated by the Board of Directors for reelection as a director, such
option may be exercised at any time within one year after he ceases to be a
director of the Company, but not thereafter and in no event after the date the
option otherwise would have expired.
Nothing in the Plan or in any option granted under the Plan shall
confer on any optionee any right to continue in the employ of, or as a
consultant to, the Company, any of its Subsidiaries or a Parent, or as a
director of the Company, or interfere in any way with any right of the Company,
any of its Subsidiaries or a Parent or the stockholders of the Company to
terminate the optionee's relationship at any time for any reason whatsoever
without liability to the Company, any of its Subsidiaries or a Parent.
9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may otherwise be expressly
provided in the applicable Contract, if an optionee dies (a) while he is an
employee of, or consultant to, the Company, any of its Subsidiaries or a Parent,
(b) within three months after the termination of such relationship (unless such
termination was for cause or without the consent of the Company) or (c) within
one year following the termination of such relationship by reason of his
Disability, his Employee Option or Consultant Option may be exercised, to the
extent exercisable on the date of his death, by his Legal Representative (as
defined in Paragraph 19) at any time within one year after death, but not
thereafter and in no event after the date the option would otherwise have
expired.
Except as may otherwise be expressly provided in the applicable
Contract, any optionee whose relationship as an employee of, or consultant to,
the Company, its Parent and Subsidiaries has termi nated by reason of such
optionee's Disability may exercise his Employee Option or Consultant Option, to
the extent exercisable upon the effective date of such termination, at any time
within one year after such date, but not thereafter and in no event after the
date the option would otherwise have expired.
The term of a Non-Employee Director Option shall not be affected by the
death or Disability of the optionee. If an optionee holding a Non-Employee
Director Option dies during the term of such option, the option may be exercised
at any time during its term by his Legal Representative.
10. COMPLIANCE WITH SECURITIES LAWS. The Compensation Committee may require, in
its sole discretion, as a condition to the exercise of any option that either
(a) a Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the shares of Common Stock to be issued upon
such exercise shall be effective and current at the time of exercise, or (b)
there is an exemption from registration under the Securities Act for the
issuance of the shares of Common Stock upon such exercise. Nothing herein shall
be construed as requiring the Company to register shares subject to any option
under the Securities Act or to keep any Registration Statement effective or
current.
The Compensation Committee may require, in its sole discretion, as a
condition to the exercise of any option that the optionee execute and deliver to
the Company his representations and warranties, in form, substance and scope
satisfactory to the Compensation Committee, which the Compensation Committee
determines are necessary or convenient to facilitate the perfection of an
exemption from the registration requirements of the Securities Act, applicable
state securities laws or other legal requirement, including without limitation
that (a) the shares of Common Stock to be issued upon the exercise of the option
are being acquired by the optionee for his own account, for investment only and
not with a view
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<PAGE>
to the resale or distribution thereof, and (b) any subsequent resale or
distribution of shares of Common Stock by such optionee will be made only
pursuant to (i) a Registration Statement under the Securities Act which is
effective and current with respect to the shares of Common Stock being sold, or
(ii) a specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption, the optionee shall prior to any offer of
sale or sale of such shares of Common Stock provide the Company with a favorable
written opinion of counsel satisfactory to the Company, in form, substance and
scope satisfactory to the Company, as to the applicability of such exemption to
the proposed sale or distribution.
In addition, if at any time the Compensation Committee shall determine,
in its sole discretion, that the listing or qualification of the shares of
Common Stock subject to such option on any securities exchange, NASDAQ or under
any applicable law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition to, or in connection with, the
granting of an option or the issue of shares of Common Stock thereunder, such
option may not be exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Compensation Committee.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced by an appropriate
Contract which shall be duly executed by the Company and the optionee, and shall
contain such terms, provisions and conditions not inconsistent herewith as may
be determined by the Compensation Committee.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other
provision of the Plan, in the event of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spin-off, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately prior
to such event, the aggregate number and kind of shares subject to the Plan, the
aggregate number and kind of shares subject to each outstanding option and the
exercise price thereof, and the number and kind of shares subject to future
Non-Employee Director Options and the 162(m) Maximum shall be appropriately
adjusted by the Board of Directors, whose determination shall be conclusive and
binding on all parties. Such adjustment may provide for the elimination of
fractional shares which might otherwise be subject to options without payment
therefor.
All outstanding options shall become immediately exercisable in full
upon the occurrence of a "Change in Control". For this purpose, a Change in
Control shall be deemed to have occurred if (a) there has occurred a change in
control as the term "control" is defined in Rule 12b-2 promulgated under the
Act; (b) when any "person" (as such term is defined in Sections 3(a)(9) and
13(d)(3) of the Act), except for an employee stock ownership trust (or any of
the trustees thereof), becomes a beneficial owner, directly or indirectly, of
securities of the Company representing 15% or more of the Company's then
outstanding securities having the right to vote on the election of directors,
unless the transaction in which such person becomes such a beneficial owner was
approved by a vote of at least two-thirds of the directors then still in office
who were directors before such transaction was consummated; (c) during any
period of not more than two consecutive years, individuals who at the beginning
of such period constitute the Board of Directors, and any new director whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of the period or whose
election or nomination for election was previously approved, cease for any
reason to constitute at least 51% of the entire Board of Directors; (d) when a
majority of the directors elected at any annual or special meeting of
stockholders (or by written consent in lieu of a meeting) are not individuals
nominated by the Company's incumbent Board of Directors; (e) if the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger
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<PAGE>
or consolidation which would result in the holders of voting securities of the
Company outstanding immediately prior thereto being the holders of at least 80%
of the voting securities of the surviving entity outstanding immediately after
such merger or consolidation; (f) if the stockholders of the Company approve a
plan of complete liquidation of the Company; or (g) if the stockholders of the
Company approve an agreement for the sale or disposition of all or substantially
all of the Company's assets.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by the Board of
Directors on April 16, 1996 and amended on September 30, 1996, December 6, 1996
and February 23, 1998. No option may be granted under the Plan after April 15,
2006. The Board of Directors, without further approval of the Company's
stockholders, may at any time suspend or terminate the Plan, in whole or in
part, or amend it from time to time in such respects as it may deem advisable,
including, without limitation, in order that ISOs granted hereunder meet the
requirements for "incentive stock options" under the Code, to comply with the
provisions of Rule 16b-3, Section 162(m) of the Code, or any change in
applicable law, regulations, rulings or interpretations of administrative
agencies; provided, however, that no amendment shall be effective without the
requisite prior or subsequent stockholder approval which would (a) except as
contemplated in Paragraph 12, increase the maximum number of shares of Common
Stock for which options may be granted under the Plan or the 162(m) Maximum, (b)
change the eligibility requirements to receive options hereunder or (c) make any
change for which applicable law or regulatory authority requires stockholder
approval. Notwithstanding the foregoing, prior to September 30, 1996 the
provisions regarding the selection of directors for participation in, and the
amount, the price or the timing of, Non-Employee Director Options shall not be
amended more than once every six months, other than to comport with changes in
the Code, the Employee Retirement Income Security Act or the rules thereunder.
No termination, suspension or amendment of the Plan shall, without the consent
of the holder of an existing and outstanding option affected thereby, adversely
affect his rights under such option. The power of the Compensation Committee to
construe and administer any options granted under the Plan prior to the
termination or suspension of the Plan nevertheless shall continue after such
termination or during such suspension.
14. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan shall be
transferable otherwise than by will or the laws of descent and distribution, and
options may be exercised, during the lifetime of the optionee, only by the
optionee or his Legal Representatives. Except to the extent provided above,
options may not be assigned, transferred, pledged, hypothecated or disposed of
in any way (whether by operation of law or otherwise) and shall not be subject
to execution, attachment or similar process, and any such attempted assignment,
transfer, pledge, hypothecation or disposition shall be null and void ab initio
and of no force or effect.
15. WITHHOLDING TAXES. The Company may withhold (a) cash, (b) subject to any
limitations under Rule 16b-3, shares of Common Stock to be issued with respect
thereto having an aggregate fair market value on the exercise date (determined
in accordance with Paragraph 5), or (c) any combination thereof, in an amount
equal to the amount which the Compensation Committee determines is necessary to
satisfy the Company's obligation to withhold Federal, state and local income
taxes or other amounts incurred by reason of the grant or exercise of an option,
its disposition, or the disposition of the underlying shares of Common Stock.
Alternatively, the Company may require the holder to pay to the Company such
amount, in cash, promptly upon demand.
16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such legend or legends
upon the certificates for shares of Common Stock issued upon exercise of an
option under the Plan and may issue such "stop transfer" instructions to its
transfer agent in respect of such shares as it determines, in its discre-
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<PAGE>
tion, to be necessary or appropriate to (a) prevent a violation of, or to
perfect an exemption from, the registration requirements of the Securities Act
and any applicable state securities laws, (b) implement the provisions of the
Plan or any agreement between the Company and the optionee with respect to such
shares of Common Stock, or (c) permit the Company to determine the occurrence of
a "disqualifying disposition," as described in Section 421(b) of the Code, of
the shares of Common Stock issued or transferred upon the exercise of an ISO
granted under the Plan.
The Company shall pay all issuance taxes with respect to the issuance
of shares of Common Stock upon the exercise of an option granted under the Plan,
as well as all fees and expenses incurred by the Company in connection with such
issuance.
17. USE OF PROCEEDS. The cash proceeds from the sale of shares of Common Stock
pursuant to the exercise of options under the Plan shall be added to the general
funds of the Company and used for such corporate purposes as the Board of
Directors may determine.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the Board
of Directors may, without further approval by the stockholders, substitute new
options for prior options of a Constituent Corporation (as defined in Paragraph
19) or assume the prior options of such Constituent Corporation.
19. DEFINITIONS. For purposes of the Plan, the following terms shall be defined
as set forth below:
(a) Constituent Corporation. The term "Constituent Corporation"
shall mean any corporation which engages with the Company, any of its
Subsidiaries or a Parent in a transaction to which Section 424(a) of the Code
applies (or would apply if the option assumed or substituted were an ISO), or
any Parent or any Subsidiary of such corporation.
(b) Consultant Option. The term "Consultant Option" shall mean a
NQSO granted pursuant to the Plan to a person who, at the time of grant, is a
consultant to the Company or a Subsidiary of the Company, and at such time is
not a salaried employee of the Company or any of its Subsid iaries.
(c) Disability. The term "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
(d) Employee Option. The term "Employee Option" shall mean an
option granted pursuant to the Plan to an individual who, at the time of grant,
is a key employee of the Company or any of its Subsidiaries.
(e) Legal Representative. The term "Legal Representative" shall
mean the executor, administrator or other person who at the time is entitled by
law to exercise the rights of a deceased or incapacitated optionee with respect
to an option granted under the Plan.
(f) Non-Employee Director. The term "Non-Employee Director" shall
mean a person who is a director of the Company but who is not a salaried
employee of the Company or any of its Subsidiaries.
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<PAGE>
(g) Non-Employee Director Option. The term "Non-Employee Director
Option" shall mean a NQSO granted pursuant to the Plan to a person who, at the
time of the grant, is a Non- Employee Director.
(h) Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
(i) Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.
20. GOVERNING LAW; CONSTRUCTION. The Plan, such options as may be granted
hereunder and all related matters shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to conflict
of law provisions.
Neither the Plan nor any Contract shall be construed or interpreted with any
presumption against the Company by reason of the Company causing the Plan or
Contract to be drafted. Whenever from the context it appears appropriate, any
term stated in either the singular or plural shall include the singular and
plural, and any term stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter.
21. PARTIAL INVALIDITY. The invalidity, illegality or unenforceability of any
provision in the Plan or any Contract shall not affect the validity, legality or
enforceability of any other provision, all of which shall be valid, legal and
enforceable to the fullest extent permitted by applicable law.
22. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by a majority of
the votes present in person or by proxy at the next duly held meeting of the
Company's stockholders at which a quorum is present. No options granted
hereunder may be exercised prior to such approval; provided, however, that the
date of grant of any option shall be determined as if the Plan had not been
subject to such approval.
EXHIBIT 99.2
1996 STOCK OPTION PLAN
INCENTIVE STOCK OPTION CONTRACT
THIS INCENTIVE STOCK OPTION CONTRACT entered into as of , 1998 between
SMARTSERV ONLINE, INC., a Delaware corporation (the "Company"), and _________
(the "Optionee").
W I T N E S S E T H:
- - - - - - - - - -
1. The Company, in accordance with the allotment made by the committee
of the Company's Board of Directors (the "Committee") and subject to the terms
and conditions of the 1996 Stock Option Plan of the Company (the "Plan"), grants
to the Optionee an option to purchase an aggregate of _____ shares of the Common
Stock, $.01 par value per share, of the Company ("Common Stock") at an exercise
price of $_____ per share, being at least equal to the fair market value of such
shares of Common Stock on the date hereof. This option is intended to constitute
an incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), although the Company makes no
representation or warranty as to such qualification.
2. The term of this option shall be 10 years from the date hereof,
subject to earlier termination as provided in the Plan. However, this option
shall not be exercisable until the first anniversary of the date hereof, at
which time it shall become exercisable in full. The right to purchase shares of
Common Stock under this option shall be cumulative, so that if the full number
of shares purchasable in a period shall not be purchased, the balance may be
purchased at any time or from time to time thereafter, but not after the
expiration of the option. Notwithstanding any of the foregoing, in no event may
a fraction of a share of Common Stock be purchased under this option.
3. This option shall be exercised by giving written notice to the
Company at its then principal office, presently Metro Center, One Station Place,
Stamford, Connecticut 06902, Attn: Chief Financial Officer, stating that the
Optionee is exercising the option hereunder, specifying the number of shares
being purchased and accompanied by payment in full of the aggregate purchase
price therefor (a) in cash or by certified check, (b) with previously acquired
shares of Common Stock which have been held by the Optionee for at least six
months, or (c) a combination of the foregoing.
<PAGE>
4. The Company may withhold cash and/or shares of Common Stock to be
issued to the Optionee in the amount which the Company determines is necessary
to satisfy its obligation to withhold taxes or other amounts incurred by reason
of the grant or exercise of this option or the disposition of the underlying
shares of Common Stock. Alternatively, the Company may require the Optionee to
pay the Company such amount in cash promptly upon demand.
5. In the event of any disposition of the shares of Common Stock
acquired pursuant to the exercise of this option within two years from the date
hereof or one year from the date of transfer of such shares to him, the Optionee
shall notify the Company thereof in writing within 30 days after such
disposition. In addition, the Optionee shall provide the Company on demand with
such information as the Company shall reasonably request in connection with
determining the amount and character of the Optionee's income, the Company's
deduction and its obligation to withhold taxes or other amounts incurred by
reason of such disqualifying disposition, including the amount thereof. The
Optionee shall pay the Company in cash on demand the amount, if any, which the
Company determines is necessary to satisfy such withholding obligation.
6. Notwithstanding the foregoing, this option shall not be exercisable
by the Optionee unless (a) a Registration Statement under the Securities Act of
1933, as amended (the "Securities Act") with respect to the shares of Common
Stock to be received upon the exercise of this option shall be effective and
current at the time of exercise or (b) there is an exemption from registration
under the Securities Act for the issuance of the shares of Common Stock upon
such exercise. The Optionee hereby represents and warrants to the Company that,
unless such a Registration Statement is effective and current at the time of
exercise of this option, the shares of Common Stock to be issued upon the
exercise of this option will be acquired by the Optionee for his own account,
for investment only and not with a view to the resale or distribution thereof.
In any event, the Optionee shall notify the Company of any proposed resale of
the shares of Common Stock issued to him upon exercise of this option. Any
subsequent resale or distribution of shares of Common Stock by the Optionee
shall be made only pursuant to (x) a Registration Statement under the Securities
Act which is effective and current with respect to the sale of shares of Common
Stock being sold, or (y) a specific exemption from the registration requirements
of the Securities Act, but in claiming such exemption, the Optionee shall, prior
to any offer of sale or sale of such shares of Common Stock, provide the Company
(unless waived by the Company) with a favorable written opinion of counsel, in
form and substance satisfactory to the Company, as to the applicability of such
exemption to the proposed sale or distribution. Such representations and
warranties shall also be deemed to be made by the Optionee upon each exercise of
this option. Nothing herein shall be construed as requiring the Company to
register the shares subject to this option under the Securities Act.
7. Notwithstanding anything herein to the contrary, if at any time the
Committee shall determine, in its discretion, that the listing or qualification
of the shares of
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<PAGE>
Common Stock subject to this option on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition to, or in connection with, the granting
of an option or the issue of shares of Common Stock hereunder, this option may
not be exercised in whole or in part unless such listing, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
8. The Company may affix appropriate legends upon the certificates for
shares of Common Stock issued upon exercise of this option and may issue such
"stop transfer" instructions to its transfer agent in respect of such shares as
it determines, in its discretion, to be necessary or appropriate to (a) prevent
a violation of, or to perfect an exemption from, the registration requirements
of the Securities Act, (b) implement the provisions of the Plan or this Contract
or any other agreement between the Company and the Optionee with respect to such
shares of Common Stock, or (c) permit the Company to determine the occurrence of
a "disqualifying disposition," as described in Section 421(b) of the Code, of
the shares of Common Stock transferred upon the exercise of this option.
9. Nothing in the Plan or herein shall confer upon the Optionee any
right to continue in the employ of the Company, any Parent or any of its
Subsidiaries, or interfere in any way with any right of the Company, any Parent
or its Subsidiaries to terminate such employment at any time for any reason
whatsoever without liability to the Company, any Parent or any of its
Subsidiaries.
10. The Company and the Optionee agree that they will both be subject
to and bound by all of the terms and conditions of the Plan, a copy of which is
attached hereto and made a part hereof. Any capitalized term not defined herein
shall have the meaning ascribed to it in the Plan. In the event of a conflict
between the terms of this Contract and the terms of the Plan, the terms of the
Plan shall govern.
11. The Optionee represents and agrees that he will comply with all
applicable laws relating to the Plan and the grant and exercise of this option
and the disposition of the shares of Common Stock acquired upon exercise of the
option, including without limitation, federal and state securities and "blue
sky" laws.
12. This option is not transferable by the Optionee otherwise than by
will or the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee or the Optionee's legal
representatives.
13. This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to any heir, distributee, executor,
administrator or legal representative entitled to the Optionee's rights
hereunder.
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<PAGE>
14. This Contract shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to the
conflicts of law rules thereof.
15. The invalidity, illegality or unenforceability of any provision
herein shall not affect the validity, legality or enforceability of any other
provision.
16. The Optionee agrees that the Company may amend the Plan and the
options granted to the Optionee under the Plan, subject to the limitations
contained in the Plan.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the day and year first above written.
SMARTSERV ONLINE, INC.
By: ________________________________________
_____________________________________________
, Optionee
_____________________________________________
_____________________________________________
Address
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EXHIBIT 99.3
1996 STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION CONTRACT
----------------------------------
THIS NONQUALIFIED STOCK OPTION CONTRACT entered into as of
_________, 1998 between SMARTSERV ONLINE, INC., a Delaware corporation (the
"Company"), and ____________________ (the "Optionee").
W I T N E S S E T H:
- - - - - - - - - -
1. The Company, in accordance with the allotment made by the committee
of the Company's Board of Directors (the "Committee") and subject to the terms
and conditions set forth herein, grants to the Optionee an option to purchase an
aggregate of ______ shares of the Common Stock, $.01 par value per share, of the
Company ("Common Stock") at an exercise price of $_____ per share, being at
least equal to the fair market value of such shares of Common Stock on the date
hereof. This option is not an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. The term of this option shall be ____ years from the date hereof,
subject to earlier termination as provided in section ____ below. However, this
option shall not be exercisable until the first anniversary of the date hereof,
at which time it shall become exercisable in full. The right to purchase shares
of Common Stock under this option shall be cumulative, so that if the full
number of shares purchasable in a period shall not be purchased, the balance may
be purchased at any time or from time to time thereafter, but not after the
expiration of the option. Notwithstanding any of the foregoing, in no event may
a fraction of a share of Common Stock be purchased under this option. The
Company shall at all times during the term of this Contract reserve and keep
available such number of shares of Common Stock as will be sufficient to satisfy
the requirements of this Contract.
3. This option shall be exercised by giving written notice to the
Company at its then principal office, presently Metro Center, One Station Place,
Stamford, Connecticut 06902 Attn: Chief Financial Officer, stating that the
Optionee is exercising the option hereunder, specifying the number of shares
being purchased and accompanied by payment in full of the aggregate purchase
price therefor (a) in cash or by certified check, (b) with previously acquired
shares of Common Stock which have been held by the Optionee for at least six
months, or (c) a combination of the foregoing. The Company shall not be required
to issue any shares of Common Stock pursuant to any such option until all
required payments, including any required withholding, have been made.
4. The Company may withhold (a) cash, (b) subject to any limitations
under Rule 16b-3, shares of Common Stock to be issued with respect thereto
having an aggregate fair
<PAGE>
market value on the exercise date, or (c) any combination thereof, in an amount
equal to the amount which the Committee determines is necessary to satisfy the
Company's obligation to withhold Federal, state and local income taxes or other
amounts incurred by reason of the grant or exercise of an option, its
disposition, or the disposition of the underlying shares of Common Stock.
Alternatively, the Company may require the Optionee to pay the Company such
amount in cash promptly upon demand.
A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a stockholder with respect to such shares of
Common Stock until the date of issuance of a stock certificate to him for such
shares; provided, however, that until such stock certificate is issued, any
optionee using previously acquired shares of Common Stock in payment of an
option exercise price shall continue to have the rights of a stockholder with
respect to such previously acquired shares.
Any holder of an Employee Option or Consultant Option whose
relationship with the Company, its Parent and Subsidiaries as an employee or a
consultant has terminated for any reason (other than as a result of the death or
Disability of the optionee) may exercise such option, to the extent exercisable
on the date of such termination, at any time within three months after the date
of termination, but not thereafter and in no event after the date the option
would otherwise have expired; provided, however, that if such relationship is
terminated either (a) for cause, or (b) without the consent of the Company, such
option shall terminate immediately.
For the purposes of this Contract, an employment relationship shall be
deemed to exist between an individual and a corporation if, at the time of the
determination, the individual was an employee of such corporation for purposes
of Section 422(a) of the Code. As a result, an individual on military, sick
leave or other bona fide leave of absence shall continue to be considered an
employee for purposes of this Contract during such leave if the period of the
leave does not exceed 90 days, or, if longer, so long as the individual's right
to reemployment with the Company (or a related corporation) is guaranteed either
by statute or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute or by contract,
the employment relationship shall be deemed to have terminated on the 91st day
of such leave.
Except as may otherwise be expressly provided herein, Employee Options
and Consultant Options granted under this Contract shall not be affected by any
change in the status of the optionee so long as the optionee continues to be an
employee of, or
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<PAGE>
a consultant to, the Company, or any of the Subsidiaries or a Parent (regardless
of having changed from one to the other or having been transferred from one
corporation to another).
Except as provided below, a Non-Employee Director Option may be
exercised at any time during its five year term. The Non-Employee Director
Option shall not be affected by the optionee ceasing to be a director of the
Company or becoming an employee of, or consultant to, the Company, any of its
Subsidiaries or a Parent; provided, however, that if (a) he is terminated as a
director of the Company for cause, such option shall terminate immediately, or
(b) he ceases to be a director of the Company because he is not nominated by the
Board of Directors for reelection as a director, such option may be exercised at
any time within one year after he ceases to be a director of the Company, but
not thereafter and in no event after the date the option otherwise would have
expired.
5. Notwithstanding the foregoing, this option shall not be exercisable
by the Optionee unless (a) a Registration Statement under the Securities Act of
1933, as amended (the "Securities Act") with respect to the shares of Common
Stock to be received upon the exercise of this option shall be effective and
current at the time of exercise or (b) there is an exemption from registration
under the Securities Act for the issuance of the shares of Common Stock upon
such exercise. The Optionee hereby represents and warrants to the Company that,
unless such a Registration Statement is effective and current at the time of
exercise of this option, the shares of Common Stock to be issued upon the
exercise of this option will be acquired by the Optionee for his own account,
for investment only and not with a view to the resale or distribution thereof.
In any event, the Optionee shall notify the Company of any proposed resale of
the shares of Common Stock issued to him upon exercise of this option. Any
subsequent resale or distribution of shares of Common Stock by the Optionee
shall be made only pursuant to (x) a Registration Statement under the Securities
Act which is effective and current with respect to the sale of shares of Common
Stock being sold, or (y) a specific exemption from the registration requirements
of the Securities Act, but in claiming such exemption, the Optionee shall, prior
to any offer of sale or sale of such shares of Common Stock, provide the Company
(unless waived by the Company) with a favorable written opinion of counsel, in
form and substance satisfactory to the Company, as to the applicability of such
exemption to the proposed sale or distribution. Such representations and
warranties shall also be deemed to be made by the Optionee upon each exercise of
this option. Nothing herein shall be construed as requiring the Company to
register the shares subject to this option under the Securities Act.
6. Notwithstanding anything herein to the contrary, if at any time the
Committee shall determine, in its discretion, that the listing or qualification
of the shares of Common Stock subject to this option on any securities exchange
or under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to, or in connection
with, the granting of an option or the issue of shares of Common Stock
hereunder, this option may not be exercised in whole or in part unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
7. The Company may affix appropriate legends upon the certificates for
shares of Common Stock issued upon exercise of this option and may issue such
"stop transfer" instructions to its transfer agent in respect of such shares as
it determines, in its discretion, to be necessary or appropriate to (a) prevent
a violation of, or to perfect an exemption from, the registration
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<PAGE>
requirements of the Securities Act and any applicable state securities laws or
(b) implement the provisions of this Contract or any other agreement between the
Company and the Optionee with respect to such shares of Common Stock.
The Company shall pay all issuance taxes with respect to the issuance
of shares of Common Stock upon the exercise of an option granted under the Plan,
as well as all fees and expenses incurred by the Company in connection with such
issuance.
8. Nothing herein shall confer upon the Optionee any right to continue
in the employ of the Company, any Parent or any of its Subsidiaries, or
interfere in any way with any right of the Company, any Parent or its
Subsidiaries to terminate such employment at any time for any reason whatsoever
without liability to the Company, any Parent or any of its Subsidiaries.
9. If an optionee dies (a) while he is an employee of, or consultant
to, the Company, any of its Subsidiaries or a Parent, (b) within three months
after the termination of such relationship (unless such termination was for
cause or without the consent of the Company) or (c) within one year following
the termination of such relationship by reason of his Disability, his Employee
Option or Consultant Option may be exercised, to the extent exercisable on the
date of his death, by his Legal Representative (as defined in Paragraph 15 at
any time within one year after death, but not thereafter and in no event after
the date the option would otherwise have expired.
Any optionee whose relationship as an employee of, or consultant to,
the Company, its Parent and Subsidiaries has terminated by reason of such
optionee's Disability may exercise his Employee Option or Consultant Option, to
the extent exercisable upon the effective date of such termination, at any time
within one year after such date, but not thereafter and in no event after the
date the option would otherwise have expired.
The term of a Non-Employee Director Option shall not be affected by the
death or Disability of the optionee. If an optionee holding a Non-Employee
Director Option dies during the term of such option, the option may be exercised
at any time during its term by his Legal Representative.
10. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other
provision of the Contract, in the event of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spin-off, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately prior
to such event, the aggregate number and kind of shares subject to the Contract,
the aggregate number and kind of shares subject to each outstanding option and
the exercise price thereof, and the number and kind of shares subject to future
Non-Employee Director Options and the 162(m) Maximum shall be appropriately
adjusted by the Board of Directors, whose determination shall be
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<PAGE>
conclusive and binding on all parties. Such adjustment may provide for the
elimination of fractional shares which might otherwise be subject to options
without payment therefor.
All outstanding options shall become immediately exercisable in full
upon the occurrence of a "Change in Control". For this purpose, a Change in
Control shall be deemed to have occurred if (a) there has occurred a change in
control as the term "control" is defined in Rule 12b-2 promulgated under the
Act; (b) when any "person" (as such term is defined in Sections 3(a)(9) and
13(d)(3) of the Act), except for an employee stock ownership trust (or any of
the trustees thereof), becomes a beneficial owner, directly or indirectly, of
securities of the Company representing 15% or more of the Company's then
outstanding securities having the right to vote on the election of directors,
unless the transaction in which such person becomes such a beneficial owner was
approved by a vote of at least two-thirds of the directors then still in office
who were directors before such transaction was consummated; (c) during any
period of not more than two consecutive years, individuals who at the beginning
of such period constitute the Board of Directors, and any new director whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of the period or whose
election or nomination for election was previously approved, cease for any
reason to constitute at least 51% of the entire Board of Directors; (d) when a
majority of the directors elected at any annual or special meeting of
stockholders (or by written consent in lieu of a meeting) are not individuals
nominated by the Company's incumbent Board of Directors; (e) if the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
holders of voting securities of the Company outstanding immediately prior
thereto being the holders of at least 80% of the voting securities of the
surviving entity outstanding immediately after such merger or consolidation; (f)
if the stockholders of the Company approve a plan of complete liquidation of the
Company; or (g) if the stockholders of the Company approve an agreement for the
sale or disposition of all or substantially all of the Company's assets.
11. The Company and the Optionee agree that they will both be subject
to and bound by all of the terms and conditions set forth herein.
12. The Optionee represents and agrees that he will comply with all
applicable laws relating to this Contract and the grant and exercise of this
option and the disposition of the shares of Common Stock acquired upon exercise
of the option, including without limitation, federal and state securities and
"blue sky" laws.
13. This option is not transferable by the Optionee otherwise than by
will or the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee or the Optionee's legal
representatives. Except to the extent provided above, options may not be
assigned, transferred, pledged, hypothecated or disposed of in any way (whether
by operation of law or otherwise) and shall not be subject to execution,
attachment or
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<PAGE>
similar process, and any such attempted assignment, transfer, pledge,
hypothecation or disposition shall be null and void ab initio and of no force or
effect.
14. This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to any heir, distributee, executor,
administrator or legal representative entitled to the Optionee's rights
hereunder.
15. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) Constituent Corporation. The term "Constituent Corporation"
shall mean any corporation which engages with the Company, any of its
Subsidiaries or a Parent in a transaction to which Section 424(a) of the Code
applies (or would apply if the option assumed or substituted were an ISO), or
any Parent or any Subsidiary of such corporation.
(b) Consultant Option. The term "Consultant Option" shall mean a
NQSO granted pursuant to the Plan to a person who, at the time of grant, is a
consultant to the Company or a Subsidiary of the Company, and at such time is
not a salaried employee of the Company or any of its Subsidiaries.
(c) Disability. The term "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
(d) Employee Option. The term "Employee Option" shall mean an
option granted pursuant to this Contract to an individual who, at the time of
grant, is a key employee of the Company or any of its Subsidiaries.
(e) Legal Representative. The term "Legal Representative" shall
mean the executor, administrator or other person who at the time is entitled by
law to exercise the rights of a deceased or incapacitated optionee with respect
to an option granted under this Contract.
(f) Non-Employee Director. The term "Non-Employee Director" shall
mean a person who is a director of the Company but who is not a salaried
employee of the Company or any of its Subsidiaries.
(g) Non-Employee Director Option. The term "Non-Employee
Director Option" shall mean a NQSO granted pursuant to this Contract to a person
who, at the time of the grant, is a Non-Employee Director.
(h) Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
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<PAGE>
(i) Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.
16. This Contract shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to the
conflicts of law rules thereof.
17. The invalidity, illegality or unenforceability of any provision
herein shall not affect the validity, legality or enforceability of any other
provision.
18. The Optionee agrees that the Company may amend this Contract and
the options granted to the Optionee under the Contract, subject to the
limitations contained in the Contract.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the day and year first above written.
SMARTSERV ONLINE, INC.
By: ________________________________________
_____________________________________________
, Optionee
_____________________________________________
_____________________________________________
Address
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EXHBIT 99.4
NONQUALIFIED STOCK OPTION CONTRACT
----------------------------------
THIS NONQUALIFIED STOCK OPTION CONTRACT entered into as of
______________, 1998 between SMARTSERV ONLINE, INC., a Delaware corporation (the
"Company"), and ____________________ (the "Optionee").
W I T N E S S E T H:
- - - - - - - - - -
1. Grant; Exercise Price. The Company, in accordance with the allotment
made by the Stock Option Committee of the Company's Board of Directors (the
"Committee"), and subject to the terms and conditions set forth herein, grants
to the Optionee an option to purchase an aggregate of ______ shares of the
Common Stock, $.01 par value per share, of the Company ("Common Stock") at an
exercise price of $_____ per share (the "Option"), being at least equal to the
fair market value of such shares of Common Stock on the date hereof. The Option
is not an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Administration. Subject to the express provisions of this Contract,
the Committee shall have the authority, in its sole discretion, to determine
whether to accelerate the date of exercise of the Option or any installment
hereof, whether shares of Common Stock may be issued upon the exercise of the
Option as partly paid and, if so, the dates when future installments of the
exercise price shall become due and the amounts of such installments, the form
of payment of the exercise price, whether to restrict the sale or other
disposition of the shares of Common Stock acquired upon the exercise of the
Option and, if so, whether to waive any such restriction, whether the Optionee
is Disabled (as defined in Paragraph 14); the amount, if any, necessary to
satisfy the Company's obligation to withhold taxes or other amounts and the fair
market value of a share of Common Stock (within the meaning of Paragraph 6); to
construe this Contract; with the consent of the Optionee, to cancel or modify
the Option; to prescribe, amend and rescind rules and regulations relating to
this Contract; to approve any provision which under Rule 16b-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (as said Rule may be in effect and interpreted from time to
time, "Rule 16b-3") requires approval by the Board of Directors of the Company,
a committee of non-employee directors or the stockholders of the Company in
order to be exempt under Rule 16b-3 (unless otherwise specifically provided
herein); and to make all other determinations necessary or advisable for
administering this Contract. Any controversy or claim arising out of or relating
to this Contract or the Option shall be determined unilaterally by the Committee
in its sole discretion. The determinations of the Committee on the matters
referred to in this Paragraph 2 shall be conclusive and binding on the parties.
No member or former member of the Committee shall be liable for any action,
failure to act or determination made in good faith with respect to this Contract
or the Option.
<PAGE>
3. Term. The term of the Option shall be 10 years from the date hereof,
subject to earlier termination as provided herein. However, the Option shall not
be exercisable until the first anniversary of the date hereof, at which time it
shall become exercisable ________. The right to purchase shares of Common Stock
under the Option shall be cumulative, so that if the full number of shares
purchasable in a period shall not be purchased, the balance may be purchased at
any time or from time to time thereafter, but not after the expiration of the
Option. Notwithstanding any of the foregoing, in no event may a fraction of a
share of Common Stock be purchased under the Option. The Company shall at all
times during the term of this Contract reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of this
Contract.
4. Exercise. The Option shall be exercised by giving written notice to
the Company at its then principal office, presently Metro Center, One Station
Place, Stamford, Connecticut 06902 Attn: Chief Financial Officer, stating that
the Optionee is exercising the Option, specifying the number of shares being
purchased and accompanied by payment in full of the aggregate purchase price
therefor (a) in cash or by certified check, (b) with previously acquired shares
of Common Stock which have been held by the Optionee for at least six months, or
(c) a combination of the foregoing. The Company shall not be required to issue
any shares of Common Stock pursuant to the Option until all required payments,
including any required withholding, have been made.
The Optionee shall not have the rights of a stockholder with respect to
shares of Common Stock until the date of issuance of a stock certificate to him
for such shares; provided, however, that until such stock certificate is issued,
the Optionee, if using previously acquired shares of Common Stock in payment of
the exercise price, shall continue to have the rights of a stockholder with
respect to such previously acquired shares.
The Committee may, in its sole discretion, permit payment of the
exercise price of the Option by delivery by the Optionee of a properly executed
notice, together with a copy of his irrevocable instructions to a broker
acceptable to the Committee to deliver promptly to the Company the amount of
sale or loan proceeds sufficient to pay such exercise price. In connection
therewith, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms.
5. Withholding Taxes. The Company may withhold (a) cash, (b) subject to
any limitations under Rule 16b-3, shares of Common Stock to be issued with
respect thereto having an aggregate fair market value on the exercise date, or
(c) any combination thereof, in an amount equal to the amount which the
Committee determines is necessary to satisfy the Company's obligation to
withhold federal, state and local income taxes or other amounts incurred by
reason of the grant or exercise of the Option, its disposition, or the
disposition of the underlying shares of Common Stock. Alternatively, the Company
may require the Optionee to pay the Company such amount in cash promptly upon
demand.
6. Determination of Fair Market Value. The fair market value of a share
of Common Stock on any day shall be (a) if the principal market for the Common
Stock is a national
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<PAGE>
securities exchange, the average of the highest and lowest sales prices per
share of Common Stock on such day as reported by such exchange or on a composite
tape reflecting transactions on such exchange, (b) if the principal market for
the Common Stock is not a national securities exchange and the Common Stock is
quoted on The Nasdaq Stock Market ("Nasdaq"), and (i) if actual sales price
information is available with respect to the Common Stock, the average of the
highest and lowest sales prices per share of Common Stock on such day on Nasdaq,
or (ii) if such information is not available, the average of the highest bid and
lowest asked prices per share of Common Stock on such day on Nasdaq, or (c) if
the principal market for the Common Stock is not a national securities exchange
and the Common Stock is not quoted on Nasdaq, the average of the highest bid and
lowest asked prices per share of Common Stock on such day as reported on the OTC
Bulletin Board Service or by National Quotation Bureau, Incorporated or a
comparable service; provided, however, that if clauses (a), (b) and (c) of this
paragraph are all inapplicable, or if no trades have been made or no quotes are
available for such day, the fair market value of the Common Stock shall be
determined by the Committee by any method consistent with applicable regulations
adopted by the Treasury Department relating to stock options.
7. Compliance With Securities Laws. Notwithstanding anything herein to
the contrary, the Option shall not be exercisable by the Optionee unless (a) a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the shares of Common Stock to be received upon
the exercise of the Option shall be effective and current at the time of
exercise or (b) there is an exemption from registration under the Securities Act
for the issuance of the shares of Common Stock upon such exercise. The Optionee
hereby represents and warrants to the Company that, unless such a Registration
Statement is effective and current at the time of exercise of the Option, the
shares of Common Stock to be issued upon the exercise of the Option will be
acquired by the Optionee for his own account, for investment only and not with a
view to the resale or distribution thereof. In any event, the Optionee shall
notify the Company of any proposed resale of the shares of Common Stock issued
to him upon exercise of the Option. Any subsequent resale or distribution of
shares of Common Stock by the Optionee shall be made only pursuant to (x) a
Registration Statement under the Securities Act which is effective and current
with respect to the sale of shares of Common Stock being sold, or (y) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption, the Optionee shall, prior to any offer of sale or sale
of such shares of Common Stock, provide the Company (unless waived by the
Company) with a favorable written opinion of counsel, in form and substance
satisfactory to the Company, as to the applicability of such exemption to the
proposed sale or distribution. Such representations and warranties shall also be
deemed to be made by the Optionee upon each exercise of the Option. Nothing
herein shall be construed as requiring the Company to register the shares
subject to the Option under the Securities Act.
The Optionee represents and agrees that he will comply with all
applicable laws relating to this Contract and the grant and exercise of the
Option and the disposition of the shares of Common Stock acquired upon exercise
of the Option, including without limitation, federal and state securities and
"blue sky" laws.
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<PAGE>
Notwithstanding anything herein to the contrary, if at any time the
Committee shall determine, in its discretion, that the listing or qualification
of the shares of Common Stock subject to the Option on any securities exchange
or under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to, or in connection
with, the issuance of shares of Common Stock hereunder, the Option may not be
exercised in whole or in part unless such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
8. Legends; Payment of Expenses. The Company may affix appropriate
legends upon the certificates for shares of Common Stock issued upon exercise of
the Option and may issue such "stop transfer" instructions to its transfer agent
in respect of such shares as it determines, in its discretion, to be necessary
or appropriate to (a) prevent a violation of, or to perfect an exemption from,
the registration requirements of the Securities Act and any applicable state
securities laws or (b) implement the provisions of this Contract or any other
agreement between the Company and the Optionee with respect to such shares of
Common Stock.
The Company shall pay all issuance taxes with respect to the issuance
of shares of Common Stock upon the exercise of the Option, as well as all fees
and expenses incurred by the Company in connection with such issuance.
9. Termination of Relationship. If the Optionee's relationship with the
Company, its Parent and Subsidiaries (as defined in Paragraph 14) as an employee
has terminated for any reason (other than as a result of the death or Disability
of the Optionee), the Optionee may exercise the Option, to the extent
exercisable on the date of such termination, at any time within three months
after the date of termination, but not thereafter and in no event after the date
the Option would otherwise have expired; provided, however, that if such
relationship is terminated either (a) for cause, or (b) without the consent of
the Company, the Option shall terminate immediately.
For the purposes of this Contract, an employment relationship shall be
deemed to exist between the Optionee and the Company if, at the time of the
determination, the Optionee was an employee of the Company for purposes of
Section 422(a) of the Code. As a result, if the Optionee is on military, sick
leave or other bona fide leave of absence, he shall continue to be considered an
employee for purposes of this Contract during such leave if the period of the
leave does not exceed 90 days, or, if longer, so long as the Optionee's right to
reemployment with the Company (or a related corporation) is guaranteed either by
statute or by contract. If the period of leave exceeds 90 days and the
Optionee's right to reemployment is not guaranteed by statute or by contract,
the employment relationship shall be deemed to have terminated on the 91st day
of such leave.
Except as may otherwise be expressly provided herein, the Option shall
not be affected by any change in the status of the Optionee so long as the
Optionee continues to be an employee of the Company, any of its Subsidiaries or
a Parent (regardless of having changed from one to the other or having been
transferred from one corporation to another).
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<PAGE>
Nothing herein shall confer upon the Optionee any right to continue in
the employ of the Company, any Parent or any of its Subsidiaries, or interfere
in any way with any right of the Company, any Parent or its Subsidiaries to
terminate such employment at any time for any reason whatsoever without
liability to the Company, any Parent or any of its Subsidiaries.
10. Death or Disability of Optionee. If the Optionee dies (a) while he
is an employee of the Company, any of its Subsidiaries or a Parent, (b) within
three months after the termination of such relationship (unless such termination
was for cause or without the consent of the Company) or (c) within one year
following the termination of such relationship by reason of his Disability, the
Option may be exercised, to the extent exercisable on the date of his death, by
his Legal Representative (as defined in Paragraph 14), at any time within one
year after death, but not thereafter and in no event after the date the Option
would otherwise have expired.
If the Optionee's relationship as an employee of the Company, its
Parent and Subsidiaries has terminated by reason of the Optionee's Disability,
the Optionee may exercise the Option to the extent exercisable upon the
effective date of such termination, at any time within one year after such date,
but not thereafter and in no event after the date the Option would otherwise
have expired.
11. Adjustments Upon Changes in Common Stock. Notwithstanding any other
provision of this Contract, in the event of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spin-off, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately prior
to such event, the aggregate number and kind of shares subject to the Option
Contract and the exercise price thereof shall be appropriately adjusted by the
Board of Directors of the Company, whose determination shall be conclusive and
binding on all parties. Such adjustment may provide for the elimination of
fractional shares which might otherwise be subject to the Option without payment
therefor.
This Option shall become immediately exercisable in full upon the
occurrence of a "Change in Control". For this purpose, a Change in Control shall
be deemed to have occurred if (a) there has occurred a change in control as the
term "control" is defined in Rule 12b-2 promulgated under the Exchange Act; (b)
when any "person" (as such term is defined in Sections 3(a)(9) and 13(d)(3) of
the Exchange Act), except for an employee stock ownership trust (or any of the
trustees thereof), becomes a beneficial owner, directly or indirectly, of
securities of the Company representing 15% or more of the Company's then
outstanding securities having the right to vote on the election of directors,
unless the transaction in which such person becomes such a beneficial owner was
approved by a vote of at least two-thirds of the directors then still in office
who were directors before such transaction was consummated; (c) during any
period of not more than two consecutive years, individuals who at the beginning
of such period constitute the Board of Directors, and any new director whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of the period or whose
election or nomination for election was previously approved,
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<PAGE>
cease for any reason to constitute at least 51% of the entire Board of
Directors; (d) when a majority of the directors elected at any annual or special
meeting of stockholders (or by written consent in lieu of a meeting) are not
individuals nominated by the Company's incumbent Board of Directors; (e) if the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the holders of voting securities of the Company outstanding
immediately prior thereto being the holders of at least 80% of the voting
securities of the surviving entity outstanding immediately after such merger or
consolidation; (f) if the stockholders of the Company approve a plan of complete
liquidation of the Company; or (g) if the stockholders of the Company approve an
agreement for the sale or disposition of all or substantially all of the
Company's assets.
12. Amendments; Termination. The Board of Directors, without further
approval of the Company's stockholders, may amend this Contract from time to
time in such respects as it may deem advisable, including, without limitation,
to comply with the provisions of Rule 16b-3 or any change in applicable law,
regulations, rulings or interpretations of administrative agencies; provided,
however, that no amendment shall be effective without the requisite prior or
subsequent stockholder approval which would make any change for which applicable
law or regulatory authority requires stockholder approval. No amendment of this
Contract shall, without the consent of the Optionee, adversely affect his rights
hereunder.
13. Non-transferability of Option. The Option granted under this
Contract shall not be transferable by the Optionee otherwise than by will or the
laws of descent and distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee or the Optionee's Legal Representative.
Except to the extent provided above, the Option may not be assigned,
transferred, pledged, hypothecated or disposed of in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process, and any such attempted assignment, transfer, pledge,
hypothecation or disposition shall be null and void ab initio and of no force or
effect.
This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to any heir, distributee or Legal
Representative entitled to the Optionee's rights hereunder.
14. Definitions. For purposes of this Contract, the following terms
shall be defined as set forth below:
(a) Disability. The term "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
(b) Legal Representative. The term "Legal Representative" shall
mean the executor, administrator or other person who at the time is entitled by
law to exercise the rights of a deceased or incapacitated Optionee with respect
to the Option granted under this Contract.
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<PAGE>
(c) Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
(d) Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.
15. Governing Law; Construction. This Contract shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Delaware, without regard to the conflicts of law rules thereof.
This Contract shall not be construed or interpreted with any
presumption against the Company by reason of the Company causing the Contract to
be drafted. Whenever from the context it appears appropriate, any term stated in
either the singular or plural shall include the singular and plural, and any
term stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter.
16. Partial Invalidity. The invalidity, illegality or unenforceability
of any provision herein shall not affect the validity, legality or
enforceability of any other provision.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the day and year first above written.
SMARTSERV ONLINE, INC.
By: ________________________________________
Sebastian E. Cassetta
Chairman & Chief Executive Officer
_____________________________________________
, Optionee
_____________________________________________
_____________________________________________
Address
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EXHIBIT 99.5
NONQUALIFIED STOCK OPTION CONTRACT
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THIS NONQUALIFIED STOCK OPTION CONTRACT entered into as of January 1,
1999 between SMARTSERV ONLINE, INC., a Delaware corporation (the "Company"), and
____________________ (the "Optionee").
W I T N E S S E T H:
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1. Grant; Exercise Price. The Company, in accordance with the allotment
made by the Stock Option Committee of the Company's Board of Directors (the
"Committee"), and subject to the terms and conditions set forth herein, grants
to the Optionee an option to purchase an aggregate of 10,000 shares of the
Common Stock, $.01 par value per share, of the Company ("Common Stock") at an
exercise price of $2.3438 per share (the "Option"), being at least equal to the
fair market value of such shares of Common Stock on the date hereof. The Option
is not an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Administration. Subject to the express provisions of this Contract,
the Committee shall have the authority, in its sole discretion, to determine
whether to accelerate the date of exercise of the Option or any installment
hereof, whether shares of Common Stock may be issued upon the exercise of the
Option as partly paid and, if so, the dates when future installments of the
exercise price shall become due and the amounts of such installments, the form
of payment of the exercise price, whether to restrict the sale or other
disposition of the shares of Common Stock acquired upon the exercise of the
Option and, if so, whether to waive any such restriction, whether the Optionee
is Disabled (as defined in Paragraph 14); the amount, if any, necessary to
satisfy the Company's obligation to withhold taxes or other amounts and the fair
market value of a share of Common Stock (within the meaning of Paragraph 6); to
construe this Contract; with the consent of the Optionee, to cancel or modify
the Option; to prescribe, amend and rescind rules and regulations relating to
this Contract; to approve any provision which under Rule 16b-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (as said Rule may be in effect and interpreted from time to
time, "Rule 16b-3") requires approval by the Board of Directors of the Company,
a committee of non-employee directors or the stockholders of the Company in
order to be exempt under Rule 16b-3 (unless otherwise specifically provided
herein); and to make all other determinations necessary or advisable for
administering this Contract. Any controversy or claim arising out of or relating
to this Contract or the Option shall be determined unilaterally by the Committee
in its sole discretion. The determinations of the Committee on the matters
referred to in this Paragraph 2 shall be conclusive and binding on the parties.
No member or former member of the Committee
<PAGE>
shall be liable for any action, failure to act or determination made in good
faith with respect to this Contract or the Option.
3. Term. The term of the Option shall be 5 years from the date hereof,
subject to earlier termination as provided herein. This Option shall be
immediately exercisable in full. The right to purchase shares of Common Stock
under the Option shall be cumulative, so that if the full number of shares
purchasable in a period shall not be purchased, the balance may be purchased at
any time or from time to time thereafter, but not after the expiration of the
Option. Notwithstanding any of the foregoing, in no event may a fraction of a
share of Common Stock be purchased under the Option. The Company shall at all
times during the term of this Contract reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of this
Contract.
4. Exercise. The Option shall be exercised by giving written notice to
the Company at its then principal office, presently Metro Center, One Station
Place, Stamford, Connecticut 06902 Attn: Chief Financial Officer, stating that
the Optionee is exercising the Option, specifying the number of shares being
purchased and accompanied by payment in full of the aggregate purchase price
therefor (a) in cash or by certified check, (b) with previously acquired shares
of Common Stock which have been held by the Optionee for at least six months, or
(c) a combination of the foregoing. The Company shall not be required to issue
any shares of Common Stock pursuant to the Option until all required payments,
including any required withholding, have been made.
The Optionee shall not have the rights of a stockholder with respect to
shares of Common Stock until the date of issuance of a stock certificate to him
for such shares; provided, however, that until such stock certificate is issued,
the Optionee, if using previously acquired shares of Common Stock in payment of
the exercise price, shall continue to have the rights of a stockholder with
respect to such previously acquired shares.
The Committee may, in its sole discretion, permit payment of the
exercise price of the Option by delivery by the Optionee of a properly executed
notice, together with a copy of his irrevocable instructions to a broker
acceptable to the Committee to deliver promptly to the Company the amount of
sale or loan proceeds sufficient to pay such exercise price. In connection
therewith, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms.
5. Withholding Taxes. The Company may withhold (a) cash, (b) subject to
any limitations under Rule 16b-3, shares of Common Stock to be issued with
respect thereto having an aggregate fair market value on the exercise date, or
(c) any combination thereof, in an amount equal to the amount which the
Committee determines is necessary to satisfy the Company's obligation to
withhold federal, state and local income taxes or other amounts incurred by
reason of the grant or exercise of the Option, its disposition, or the
disposition of the
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<PAGE>
underlying shares of Common Stock. Alternatively, the Company may require the
Optionee to pay the Company such amount in cash promptly upon demand.
6. Determination of Fair Market Value. The fair market value of a share
of Common Stock on any day shall be (a) if the principal market for the Common
Stock is a national securities exchange, the average of the highest and lowest
sales prices per share of Common Stock on such day as reported by such exchange
or on a composite tape reflecting transactions on such exchange, (b) if the
principal market for the Common Stock is not a national securities exchange and
the Common Stock is quoted on The Nasdaq Stock Market ("Nasdaq"), and (i) if
actual sales price information is available with respect to the Common Stock,
the average of the highest and lowest sales prices per share of Common Stock on
such day on Nasdaq, or (ii) if such information is not available, the average of
the highest bid and lowest asked prices per share of Common Stock on such day on
Nasdaq, or (c) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on Nasdaq, the average of
the highest bid and lowest asked prices per share of Common Stock on such day as
reported on the OTC Bulletin Board Service or by National Quotation Bureau,
Incorporated or a comparable service; provided, however, that if clauses (a),
(b) and (c) of this paragraph are all inapplicable, or if no trades have been
made or no quotes are available for such day, the fair market value of the
Common Stock shall be determined by the Committee by any method consistent with
applicable regulations adopted by the Treasury Department relating to stock
options.
7. Compliance With Securities Laws. Notwithstanding anything herein to
the contrary, the Option shall not be exercisable by the Optionee unless (a) a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the shares of Common Stock to be received upon
the exercise of the Option shall be effective and current at the time of
exercise or (b) there is an exemption from registration under the Securities Act
for the issuance of the shares of Common Stock upon such exercise. The Optionee
hereby represents and warrants to the Company that, unless such a Registration
Statement is effective and current at the time of exercise of the Option, the
shares of Common Stock to be issued upon the exercise of the Option will be
acquired by the Optionee for his own account, for investment only and not with a
view to the resale or distribution thereof. In any event, the Optionee shall
notify the Company of any proposed resale of the shares of Common Stock issued
to him upon exercise of the Option. Any subsequent resale or distribution of
shares of Common Stock by the Optionee shall be made only pursuant to (x) a
Registration Statement under the Securities Act which is effective and current
with respect to the sale of shares of Common Stock being sold, or (y) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption, the Optionee shall, prior to any offer of sale or sale
of such shares of Common Stock, provide the Company (unless waived by the
Company) with a favorable written opinion of counsel, in form and substance
satisfactory to the Company, as to the applicability of such exemption to the
proposed sale or distribution. Such representations and warranties shall also be
deemed to be made by the Optionee upon each exercise of the Option. Nothing
herein shall be construed as requiring the Company to register the shares
subject to the Option under the Securities Act.
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<PAGE>
The Optionee represents and agrees that he will comply with all
applicable laws relating to this Contract and the grant and exercise of the
Option and the disposition of the shares of Common Stock acquired upon exercise
of the Option, including without limitation, federal and state securities and
"blue sky" laws.
Notwithstanding anything herein to the contrary, if at any time the
Committee shall determine, in its discretion, that the listing or qualification
of the shares of Common Stock subject to the Option on any securities exchange
or under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to, or in connection
with, the issuance of shares of Common Stock hereunder, the Option may not be
exercised in whole or in part unless such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
8. Legends; Payment of Expenses. The Company may affix appropriate
legends upon the certificates for shares of Common Stock issued upon exercise of
the Option and may issue such "stop transfer" instructions to its transfer agent
in respect of such shares as it determines, in its discretion, to be necessary
or appropriate to (a) prevent a violation of, or to perfect an exemption from,
the registration requirements of the Securities Act and any applicable state
securities laws or (b) implement the provisions of this Contract or any other
agreement between the Company and the Optionee with respect to such shares of
Common Stock.
The Company shall pay all issuance taxes with respect to the issuance
of shares of Common Stock upon the exercise of the Option, as well as all fees
and expenses incurred by the Company in connection with such issuance.
9. Termination of Relationship. Nothing herein shall confer upon the
Optionee any right to continue as a director of the Company, or interfere in any
way with any right of the Company, to terminate such relationship at any time
for any reason whatsoever without liability to the Company.
Except as provided below, this Option may be exercised at any time
during its five-year term. This Option shall not be affected by the Optionee
ceasing to be a director of the Company or becoming an employee of, or
consultant to, the Company, any of its Subsidiaries or a Parent; provided,
however, that if (a) the Optionee is terminated as a director of the Company for
cause, such Option shall terminate immediately, or (b) the Optionee ceases to be
a director of the Company because the Optionee is not nominated by the Board of
Directors for reelection as a director, such Option may be exercised at any time
within one year after the Optionee ceases to be a director of the Company, but
not thereafter and in no event after the date the Option otherwise would have
expired.
10. Death or Disability of Optionee. The term of this Option shall not
be affected by the death or Disability of the Optionee. If the Optionee dies
during the term of such
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<PAGE>
Option, the Option may be exercised at any time during its term by the
Optionee's Legal Representative.
11. Adjustments Upon Changes in Common Stock. Notwithstanding any other
provision of this Contract, in the event of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spin-off, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately prior
to such event, the aggregate number and kind of shares subject to the Option
Contract and the exercise price thereof shall be appropriately adjusted by the
Board of Directors of the Company, whose determination shall be conclusive and
binding on all parties. Such adjustment may provide for the elimination of
fractional shares which might otherwise be subject to the Option without payment
therefor.
12. Amendments; Termination. The Board of Directors, without further
approval of the Company's stockholders, may amend this Contract from time to
time in such respects as it may deem advisable, including, without limitation,
to comply with the provisions of Rule 16b-3 or any change in applicable law,
regulations, rulings or interpretations of administrative agencies; provided,
however, that no amendment shall be effective without the requisite prior or
subsequent stockholder approval which would make any change for which applicable
law or regulatory authority requires stockholder approval. No amendment of this
Contract shall, without the consent of the Optionee, adversely affect his rights
hereunder.
13. Non-transferability of Option. The Option granted under this
Contract shall not be transferable by the Optionee otherwise than by will or the
laws of descent and distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee or the Optionee's Legal Representative.
Except to the extent provided above, the Option may not be assigned,
transferred, pledged, hypothecated or disposed of in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process, and any such attempted assignment, transfer, pledge,
hypothecation or disposition shall be null and void ab initio and of no force or
effect.
This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to any heir, distributee or Legal
Representative entitled to the Optionee's rights hereunder.
14. Definitions. For purposes of this Contract, the following terms
shall be defined as set forth below:
(a) Disability. The term "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
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<PAGE>
(b) Legal Representative. The term "Legal Representative" shall
mean the executor, administrator or other person who at the time is entitled by
law to exercise the rights of a deceased or incapacitated Optionee with respect
to the Option granted under this Contract.
(c) Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
(d) Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.
15. Governing Law; Construction. This Contract shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Delaware, without regard to the conflicts of law rules thereof.
This Contract shall not be construed or interpreted with any
presumption against the Company by reason of the Company causing the Contract to
be drafted. Whenever from the context it appears appropriate, any term stated in
either the singular or plural shall include the singular and plural, and any
term stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter.
16. Partial Invalidity. The invalidity, illegality or unenforceability
of any provision herein shall not affect the validity, legality or
enforceability of any other provision.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the day and year first above written.
SMARTSERV ONLINE, INC.
By: ___________________________________
Sebastian E. Cassetta
Chairman & Chief Executive Officer
________________________________________
, Optionee
________________________________________
________________________________________
Address
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