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As filed with the Securities and Exchange Commission on December 4, 1997
Registration No. 333- _______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EXCITE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 77-0378215
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
555 BROADWAY
REDWOOD CITY, CALIFORNIA 94063
(Address of principal executive offices)
OPTIONS TO PURCHASE COMMON STOCK OF NETBOT INC. ASSUMED BY
REGISTRATION PURSUANT TO AN AGREEMENT AND PLAN OF
REORGANIZATION DATED AS OF OCTOBER 30, 1997.
(Full title of the plan)
ROBERT C. HOOD
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER
AND CHIEF ADMINISTRATIVE OFFICER
555 BROADWAY
REDWOOD CITY, CALIFORNIA 94063
(650) 568-6000
(Name, address and telephone number, including area code, of agent for service)
COPIES TO:
Mark C. Stevens, Esq.
Jeffrey R. Vetter, Esq.
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California 94306
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED
AMOUNT PROPOSED MAXIMUM
TO BE MAXIMUM OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, no par value............ 208,966(3) $0.76(1) $1,509,409.64(1) $48.31(2)
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</TABLE>
(1) Estimated pursuant to Rule 457(h)(l) under the Securities Act of 1933, as
amended (the "Securities Act"), solely for the purpose of calculating the
registration fee and based upon the weighted average exercise price of the
assumed options.
(2) Fee calculated pursuant to Section 6(b) of the Securities Act of 1933, as
amend. This amount equals 1/33 of 1% of the proposed maximum aggregate
offering price.
(3) Shares subject to assumed Netbot, Inc. stock options as of November 24,
1997.
<PAGE> 2
PART I
ITEM 1. PLAN INFORMATION.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.(1)
- --------
(1) Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance with
Rule 428 under the Securities Act of 1933, as amended (the "Securities Act")
and the Note to Part I of Form S-8.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Registrant's latest annual report on Form 10-K filed pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which contains audited financial
statements for the Registrant's latest fiscal year.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the
annual report referred to in (a) above.
(c) The description of the Registrant's Common Stock contained in the
Registrant's registration statement on Form 8-A filed with the
Commission under Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed incorporated by reference herein and to be a part hereof from the date
of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock offered
hereby upon the exercise of assumed stock options will be passed upon for the
Company by Fenwick & West LLP, Palo Alto, California. Certain members of the
firm of Fenwick & West LLP own an aggregate of 16,804 shares of the Company's
Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Articles of Incorporation include a provision that
eliminates the personal liability of its directors to the Registrant and its
shareholders for monetary damages for breach of the directors' fiduciary duties
to the fullest extent permitted by law. This limitation has no effect on a
director's liability (i) for acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, (ii) for acts or
omissions that a director believes to be contrary to the best interests of the
Registrant or its shareholders or that involve the absence of good faith on the
part of the director, (iii) for any transaction from which a director derived an
improper personal benefit, (iv) for acts or omissions that show a reckless
disregard for the director's duty to the Registrant or its shareholders in
circumstances in which the director was aware, or should have been aware, in the
ordinary course of performing a director's duties, of a risk of a serious injury
to the Registrant or its shareholders, (v) for acts or omissions that constitute
an unexcused pattern of inattention that amounts to an abdication of the
director's duty to the Registrant or its shareholders, (vi) under Section 310 of
the California Corporations Code (the "California Code") (concerning contracts
or transactions between the Registrant and a director) or (vii) under Section
316 of the California Code (concerning directors' liability for improper
dividends, loans and guarantees). The provision does not extend to acts or
omissions of a director in his capacity as an officer. Further, the provision
will not affect the availability of injunctions and other equitable remedies
available to the Registrant's shareholders for any violation of a director's
fiduciary duty to the Registrant or its shareholders.
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The Registrant's Articles of Incorporation also include an authorization for the
Registrant to indemnify its agents (as defined in Section 317 of the California
Code), through bylaw provisions, by agreement or otherwise, to the fullest
extent permitted by law. Pursuant to this latter provision, the Registrant's
Bylaws provide for indemnification of the Registrant's directors and officers.
In addition, the Registrant, at its discretion, may provide indemnification to
persons whom the Registrant is not obligated to indemnify. The Bylaws also allow
the Registrant to enter into indemnity agreements with individual directors,
officers, employees and other agents. These indemnity agreements have been
entered into with all directors and provide the maximum indemnification
permitted by law. These agreements, together with the Registrant's Bylaws and
Articles of Incorporation, may require the Registrant, among other things, to
indemnify such directors against certain liabilities that may arise by reason of
their status or service as directors (other than liabilities resulting from
willful misconduct of a culpable nature), to advance expenses to them as they
are incurred, provided that they undertake to repay the amount advanced if it is
ultimately determined by a court that they are not entitled to indemnification,
and to obtain directors' and officers' insurance if available on reasonable
terms.
Section 317 of the California Code and the Registrant's Bylaws make
provision for the indemnification of officers, directors and other corporate
agents in terms sufficiently broad to indemnify such persons, under certain
circumstances for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
The Registrant maintains directors and officers liability insurance with
a per claim and annual aggregate coverage limit of $5,000,000.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
4.01 Registrant's Articles of Incorporation, as amended incorporated
herein by reference to Registrant's Registration Statement on
Form S-8, File No. 333-07625, filed with the Commission on
July 3, 1996).
4.02 Registrant's Bylaws (incorporated herein by reference to
Registrant's Registration Statement on Form SB-2, File No.
333-2328-LA, initially filed with the Commission on March 11,
1996, and as subsequently amended through April 3, 1996 (the
"Form SB-2")).
4.03 Registrant's 1996 Equity Incentive Plan, as amended and related
documents (incorporated herein by reference to Registrant's
Registration Statement on Form S-1, File No. 333-22669,
initially filed on March 3,1997, and as subsequently amended
through June 5, 1997).
4.04 Form of Assumed Stock Option Grant Agreement, together with
Netbot, Inc. 1996 Stock Option Plan and Related Agreements.
4.05 Form of Specimen Stock Certificate for Registrant's Common Stock
(incorporated herein by reference to the Form SB-2).
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of Ernst & Young LLP, independent auditors.
23.03 Consent of Price Waterhouse LLP, independent accountants.
24.01 Power of Attorney (see page II-4).
</TABLE>
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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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply
if the Registration Statement is on Form S-3 or Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 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 that 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 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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 provisions discussed in Item 6 hereof, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereby, 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Redwood City, State of California, on the 2nd day of
December, 1997.
EXCITE, INC.
By: /s/ ROBERT C. HOOD
------------------------------------
Robert C. Hood,
Executive Vice President,
Chief Administrative Officer
and Chief Financial Officer
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints George Bell and Robert C. Hood, and each
of them, his true and lawful attorneys-in-fact and agents with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-8, and to file the same with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or his or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
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<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER
AND DIRECTOR:
/s/ GEORGE BELL
- ----------------------------------- President, Chief Executive December 2, 1997
George Bell Officer and a Director
PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER
/s/ ROBERT C. HOOD
- ------------------------------------ Executive Vice President, December 2, 1997
Robert C. Hood Chief Administrative Officer and
Chief Executive Officer
ADDITIONAL DIRECTORS:
/s/ JOSEPH R. KRAUS, IV
- ----------------------------------- Director December 2, 1997
Joseph R. Kraus, IV
/s/ VINOD KHOSLA
- ----------------------------------- Director December 2, 1997
Vinod Khosla
/s/ GEOFFREY Y. YANG
- ----------------------------------- Director December 3, 1997
Geoffrey Y. Yang
/s/ DONN M. DAVIS
- ----------------------------------- Director December 3, 1997
Donn M. Davis
</TABLE>
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
4.01 Registrant's Articles of Incorporation, as amended incorporated
herein by reference to Registrant's Registration Statement on
Form S-8, File No. 333-07625, filed with the Commission on
July 3, 1996).
4.02 Registrant's Bylaws (incorporated herein by reference to
Registrant's Registration Statement on Form SB-2, File No.
333-2328-LA, initially filed with the Commission on March 11,
1996, and as subsequently amended through April 3, 1996 (the
"Form SB-2")).
4.03 Registrant's 1996 Equity Incentive Plan, as amended and related
documents (incorporated herein by reference to Registrant's
Registration Statement on Form S-1, File No. 333-22669,
initially filed on March 3,1997, and as subsequently amended
through June 5, 1997).
4.04 Form of Assumed Stock Option Grant Agreement, together with
Netbot, Inc. 1996 Stock Option Plan and Related Agreements.
4.05 Form of Specimen Stock Certificate for Registrant's Common Stock
(incorporated herein by reference to the Form SB-2).
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of Ernst & Young LLP, independent auditors.
23.03 Consent of Price Waterhouse LLP, independent accountants.
24.01 Power of Attorney (see page II-5).
</TABLE>
<PAGE> 1
EXHIBIT 4.04
NETBOT, INC.
1996 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the Netbot, Inc. 1996 Stock Option Plan (the "Plan") is
to enhance the long-term shareholder value of Netbot, Inc., a Delaware
corporation (the "Company"), by offering opportunities to employees, directors,
officers, consultants, agents, advisors and independent contractors of the
Company and its Subsidiaries (as defined in Section 2) to participate in the
Company's growth and success, and to encourage them to remain in the service of
the Company and its Subsidiaries and to acquire and maintain stock ownership in
the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 AWARD
"Award" means an award or grant made to a Participant pursuant to the Plan,
including awards or grants of Incentive Stock Options and Nonqualified Stock
Options or any combination of the foregoing.
2.2 BOARD
"Board" means the Board of Directors of the Company.
2.3 CAUSE
"Cause" means dishonesty, fraud, misconduct, unauthorized use or disclosure of
confidential information or trade secrets, or conviction or confession of a
crime punishable by law (except minor violations), in each case as determined by
the Plan Administrator, and its determination shall be conclusive and binding.
2.4 CODE
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
2.5 COMMON STOCK
"Common Stock" means the common stock, par value $.001 per share, of the
Company.
2.6 CORPORATE TRANSACTION
"Corporate Transaction" means any of the following events:
(a) Consummation of any merger or consolidation of the Company
in which the Company is not the continuing or surviving corporation, or
pursuant to which shares of the Common Stock are converted into cash,
securities or other property, if following such merger or consolidation
the holders of the Company's outstanding voting securities
<PAGE> 2
immediately prior to such merger or consolidation own less than 66-2/3%
of the outstanding voting securities of the surviving corporation;
(b) Consummation of any sale, lease, exchange or other
transfer in one transaction or a series of related transactions of all
or substantially all of the Company's assets other than a transfer of
the Company's assets to a majority-owned subsidiary corporation (as the
term "subsidiary corporation" is defined in Section 8.3) of the Company;
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company; or
(d) Acquisition by a person, within the meaning of Section
3(a)(9) or of Section 13(d)(3) (as in effect on the date of adoption of
the Plan) of the Exchange Act of a majority or more of the Company's
outstanding voting securities (whether directly or indirectly,
beneficially or of record).
Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) pursuant to the Exchange Act.
2.7 DISABILITY
"Disability" means "disability" as that term is defined for purposes of Section
22(e)(3) of the Code. As of the date of the adoption of the Plan by the Board,
"disability" has the following meaning: "[a]n individual is permanently and
totally disabled if he is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months."
2.8 EARLY RETIREMENT
"Early Retirement" means early retirement as that term is defined by the Plan
Administrator from time to time for purposes of the Plan.
2.9 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.10 FAIR MARKET VALUE
"Fair Market Value" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the closing selling price for the Common Stock as reported by the Nasdaq
National Market for a single trading day or (b) if the Common Stock is listed on
the New York Stock Exchange or the American Stock Exchange, the closing selling
price for the Common Stock as such price is officially quoted in the composite
tape of transactions on such exchange for a single trading day. If there is no
such reported price for the Common Stock for the date in question, then such
price on the last preceding date for which such price exists shall be
determinative of Fair Market Value.
2
<PAGE> 3
2.11 GOOD REASON
"Good Reason" means the occurrence of any of the following events or conditions
and the failure of the Successor Corporation to cure such event or condition
within 30 days after receipt of written notice by the Holder:
(a) a change in the Holder's status, title, position or
responsibilities (including reporting responsibilities) that, in the
Holder's reasonable judgment, represents a substantial reduction in the
status, title, position or responsibilities as in effect immediately
prior thereto; the assignment to the Holder of any duties or
responsibilities that, in the Holder's reasonable judgment, are
materially inconsistent with such status, title, position or
responsibilities; or any removal of the Holder from or failure to
reappoint or reelect the Holder to any of such positions, except in
connection with the termination of the Holder's employment for Cause,
for Disability or as a result of his or her death, or by the Holder
other than for Good Reason;
(b) a reduction in the Holder's annual base salary;
(c) the Successor Corporation's requiring the Holder (without
the Holder's consent) to be based at any place outside a 35-mile radius
of his or her place of employment prior to a Corporate Transaction,
except for reasonably required travel on the Successor Corporation's
business that is not materially greater than such travel requirements
prior to the Corporate Transaction;
(d) the Successor Corporation's failure to (i) continue in
effect any material compensation or benefit plan (or the substantial
equivalent thereof) in which the Holder was participating at the time of
a Corporate Transaction, including, but not limited to, the Plan, or
(ii) provide the Holder with compensation and benefits substantially
equivalent (in terms of benefit levels and/or reward opportunities) to
those provided for under each material employee benefit plan, program
and practice as in effect immediately prior to the Corporate
Transaction;
(e) any material breach by the Successor Corporation of its
obligations to the Holder under the Plan or any substantially equivalent
plan of the Successor Corporation; or
(f) any purported termination of the Holder's employment or
service for Cause by the Successor Corporation that does not comply with
the terms of the Plan or any substantially equivalent plan of the
Successor Corporation.
2.12 GRANT DATE
"Grant Date" means the date the Plan Administrator adopted the granting
resolution or a later date designated in a resolution of the Plan Administrator
as the date an Award is to be granted.
2.13 HOLDER
"Holder" means the Participant to whom an Award is granted or the personal
representative of a Holder who has died.
3
<PAGE> 4
2.14 INCENTIVE STOCK OPTION
"Incentive Stock Option" means an option to purchase Common Stock granted under
Section 7 with the intention that it qualify as an "incentive stock option" as
that term is defined in Section 422 of the Code.
2.15 NONQUALIFIED STOCK OPTION
"Nonqualified Stock Option" means an option to purchase Common Stock granted
under Section 7 other than an Incentive Stock Option.
2.16 OPTION
"Option" means the right to purchase Common Stock granted under Section 7.
2.17 PARTICIPANT
"Participant" means an individual who is a Holder of an Award or, as the context
may require, any employee, director, officer, consultant, agent, advisor or
independent contractor of the Company or a Subsidiary who has been designated by
the Plan Administrator as eligible to participate in the Plan.
2.18 PLAN ADMINISTRATOR
"Plan Administrator" means the Board or any committee of the Board designated to
administer the Plan under Section 3.1.
2.19 RETIREMENT
"Retirement" means retirement as of the individual's normal retirement date
under the Company's 401(k) Plan or other similar successor plan applicable to
salaried employees or, if no such plan exists, as that term is defined by the
Plan Administrator from time to time for purposes of the Plan.
2.20 SECURITIES ACT
"Securities Act" means the Securities Act of 1933, as amended.
2.21 SUBSIDIARY
"Subsidiary," except as expressly provided otherwise, means any entity that is
directly or indirectly controlled by the Company or in which the Company has a
significant ownership interest, as determined by the Plan Administrator, and any
entity that may become a direct or indirect parent of the Company.
2.22 SUCCESSOR CORPORATION
"Successor Corporation" has the meaning set forth under Section 11.2.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board or a committee or committees (which
term includes subcommittees) appointed by, and consisting of one or more members
of, the Board. If and so long as the Common Stock is registered under Section
12(b) or 12(g) of the Exchange Act, the
4
<PAGE> 5
Plan shall be administered by the Compensation Committee of the Board, except to
the extent the Board appoints another committee (which term includes a
subcommittee) to administer the Plan (the "Plan Administrator"), such Plan
Administrator to be comprised solely of two or more members of the Board who
shall qualify to administer the Plan as contemplated by (a) Rule 16b-3 under the
Exchange Act or any successor rules and (b) Section 162(m) of the Code;
provided, however, that so long as the Company is subject to Rule 16b-3 under
the Exchange Act as such rule was in effect prior to May 1, 1991, the Plan
Administrator shall consist of at least three or more such members of the Board.
The Board may delegate the responsibility for administering the Plan with
respect to designated classes of eligible Participants to different committees,
subject to such limitations as the Board deems appropriate. Committee members
shall serve for such term as the Board may determine, subject to removal by the
Board at any time.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan, the Plan
Administrator shall have exclusive authority, in its discretion, to determine
all matters relating to Awards under the Plan, including the selection of
individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 11.1, a maximum
of 300,000 shares of Common Stock shall be available for issuance under the
Plan. Shares issued under the Plan shall be drawn from authorized and unissued
shares or shares now held or subsequently acquired by the Company as treasury
shares.
4.2 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Award that cease to
be subject to the Award (other than by reason of exercise or payment of the
Award to the extent it is exercised for in shares), shall again be available for
issuance in connection with future grants of Awards under the Plan.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those officers, directors and key
employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects. Awards may also be made to consultants, agents, advisors
and independent contractors who provide services to the Company and its
Subsidiaries.
5
<PAGE> 6
SECTION 6. AWARDS
6.1 FORM AND GRANT OF AWARDS
The Plan Administrator shall have the authority, in its sole discretion, to
determine the type or types of Awards to be made under the Plan. Such Awards may
consist of Incentive Stock Options and/or Nonqualified Stock Options. Awards may
be granted singly or in combination.
6.2 ACQUIRED COMPANY AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan Administrator may
grant Awards under the Plan in substitution for awards issued under other plans,
or assume under the Plan awards issued under other plans, if the other plans are
or were plans of other acquired entities ("Acquired Entities") (or the parent of
the Acquired Entity) and the new Award is substituted, or the old award is
assumed, by reason of a merger, consolidation, acquisition of property or of
stock, reorganization or liquidation (the "Acquisition Transaction"). In the
event that a written agreement pursuant to which the Acquisition Transaction is
completed is approved by the Board and said agreement sets forth the terms and
conditions of the substitution for or assumption of outstanding awards of the
Acquired Entity, said terms and conditions shall be deemed to be the action of
the Plan Administrator without any further action by the Plan Administrator,
except as may be required for compliance with Rule 16b-3 under the Exchange Act,
and the persons holding such Awards shall be deemed to be Participants and
Holders.
SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole discretion, to
issue Options as Incentive Stock Options or as Nonqualified Stock Options, which
shall be appropriately designated.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as determined
by the Plan Administrator, but shall not be less than 100% of the Fair Market
Value of the Common Stock on the Grant Date with respect to Incentive Stock
Options.
7.3 TERM OF OPTIONS
The term of each Option shall be as established by the Plan Administrator or, if
not so established, shall be 10 years from the Grant Date.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument that
evidences an Option the time at which or the installments in which the Option
shall become exercisable, which provisions may be waived or modified by the Plan
Administrator at any TIME. If not so established in the instrument evidencing
the Option, the Option will become exercisable according to the following
schedule, which may be waived or modified by the Plan Administrator at any time:
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<PAGE> 7
Period of Holder's Continuous Employment or
Service With the Company or Its Subsidiaries Percent of Total Option
From the Option Grant Date That Is Exercisable
-------------------------- -------------------
After 1 year 12/48ths
Every month thereafter for the next 36 months an additional 1/48th
To the extent that the right to purchase shares has accrued thereunder, an
Option may be exercised from time to time by written notice to the Company, in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the Option is being exercised and
accompanied by payment in full as described in Section 7.5. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than 100 shares at any one time (or the lesser number of remaining
shares covered by the Option).
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid in full to
the Company by delivery of consideration equal to the product of the Option
exercise price and the number of shares purchased. Such consideration must be
paid in cash or check, except that the Plan Administrator, in its sole
discretion, may, either at the time the Option is granted or at any time before
it is exercised and subject to such limitations as the Plan Administrator may
determine, authorize payment in cash and/or one or more of the following
alternative forms: (a) tendering (either actually or, if and so long as the
Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by
attestation) Common Stock already owned by the Holder for at least six months
(or any shorter period necessary to avoid a charge to the Company's earnings for
financial reporting purposes) having a Fair Market Value on the day prior to the
exercise date equal to the aggregate Option exercise price; (b) a promissory
note delivered pursuant to Section 9; (c) if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, delivery of a
properly executed exercise notice, together with irrevocable instructions, to
(i) a brokerage firm designated by the Company to deliver promptly to the
Company the aggregate amount of sale or loan proceeds to pay the Option exercise
price and any withholding tax obligations that may arise in connection with the
exercise and (ii) the Company to deliver the certificates for such purchased
shares directly to such brokerage firm, all in accordance with the regulations
of the Federal Reserve Board; or (d) such other consideration as the Plan
Administrator may permit.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument that
evidences an Option whether the Option will continue to be exercisable, and the
terms and conditions of such exercise, if a Holder ceases to be employed by, or
to provide services to, the Company or its Subsidiaries, which provisions may be
waived or modified by the Plan Administrator at any time. If not so established
in the instrument evidencing the Option, the Option will be exercisable
according to the following terms and conditions, which may be waived or modified
by the Plan Administrator at any time.
In case of termination of the Holder's employment or services other than by
reason of death or Cause, the Option shall be exercisable, to the extent of the
number of shares purchasable by the
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<PAGE> 8
Holder at the date of such termination, only (a) within one year if the
termination of the Holder's employment or services are coincident with
Retirement, Early Retirement at the Company's request or Disability or (b)
within three months after the date the Holder ceases to be an employee,
director, officer, consultant, agent, advisor or independent contractor of the
Company or a Subsidiary if termination of the Holder's employment or services is
for any reason other than Retirement, Early Retirement at the Company's request
or Disability, but in no event later than the remaining term of the Option. Any
Option exercisable at the time of the Holder's death may be exercised, to the
extent of the number of shares purchasable by the Holder at the date of the
Holder's death, by the personal representative of the Holder's estate entitled
thereto at any time or from time to time within one year after the date of
death, but in no event later than the remaining term of the Option. In case of
termination of the Holder's employment or services for Cause, the Option shall
automatically terminate upon first notification to the Holder of such
termination, unless the Plan Administrator determines otherwise. If a Holder's
employment or services with the Company are suspended pending an investigation
of whether the Holder shall be terminated for Cause, all the Holder's rights
under any Option likewise shall be suspended during the period of investigation.
A transfer of employment or services between or among the Company and its
Subsidiaries shall not be considered a termination of employment or services.
The effect of a Company-approved leave of absence on the terms and conditions of
an option shall be determined by the Plan Administrator, in its sole discretion.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock Options shall
be subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the Grant Date)
of Common Stock with respect to which Incentive Stock Options are exercisable
for the first time during any calendar year (under the Plan and all other stock
option plans of the Company) exceeds $100,000, such portion in excess of
$100,000 shall be treated as a Nonqualified Stock Option. In the event the
Participant holds two or more such Options that become exercisable for the first
time in the same calendar year, such limitation shall be applied on the basis of
the order in which such Options are granted.
8.2 10% SHAREHOLDERS
If a Participant owns 10% or more of the total voting power of all classes of
the Company's stock, then the exercise price per share of an Incentive Stock
Option shall not be less than 110% of the Fair Market Value of the Common Stock
on the Grant Date and the Option term shall not exceed five years. The
determination of 10% ownership shall be made in accordance with Section 422 of
the Code.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this
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<PAGE> 9
Section 8.3, "parent corporation" and "subsidiary corporation" shall have the
meanings attributed to those terms for purposes of Section 422 of the Code.
8.4 TERM
The term of an Incentive Stock Option shall not exceed 10 years.
8.5 EXERCISABILITY
To qualify for Incentive Stock Option tax treatment, an Option designated as an
Incentive Stock Option must be exercised within three months after termination
of employment for reasons other than death, except that, in the case of
termination of employment due to total disability, such Option must be exercised
within one year after such termination. Employment shall not be deemed to
continue beyond the first 90 days of a leave of absence unless the Participant's
reemployment rights are guaranteed by statute or contract. For purposes of this
Section 8.5, "total disability" shall mean a mental or physical impairment of
the Participant which is expected to result in death or which has lasted or is
expected to last for a continuous period of 12 months or more and which causes
the Participant to be unable, in the opinion of the Company and two independent
physicians, to perform his or her duties for the Company and to be engaged in
any substantial gainful activity. Total disability shall be deemed to have
occurred on the first day after the Company and the two independent physicians
have furnished their opinion of total disability to the Plan Administrator.
8.6 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to Incentive Stock Options
under Section 422 of the Code, the Participant must hold the shares issued upon
the exercise of an Incentive Stock Option for two years after the date of grant
of the Incentive Stock Option and one year from the date of exercise. A
Participant may be subject to the alternative minimum tax at the time of
exercise of an Incentive Stock Option. The Plan Administrator may require a
Participant to give the Company prompt notice of any disposition of shares
acquired by the exercise of an Incentive Stock Option prior to the expiration of
such holding periods.
8.7 PROMISSORY NOTES
The amount of any promissory note delivered pursuant to Section 9 in connection
with an Incentive Stock Option shall bear interest at a rate specified by the
Plan Administrator but in no case less than the rate required to avoid
imputation of interest (taking into account any exceptions to the imputed
interest rules) for federal income tax purposes.
SECTION 9. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES
To assist a Holder (including a Holder who is an officer or director of the
Company) in acquiring shares of Common Stock pursuant to an Award granted under
the Plan, the Plan Administrator, in its sole discretion, may authorize, either
at the Grant Date or at any time before the acquisition of Common Stock pursuant
to the Award, (a) the extension of a loan to the Holder by the Company, (b) the
payment by the Holder of the purchase price, if any, of the Common Stock in
installments, or (c) the guarantee by the Company of a loan obtained by the
grantee from a third party. The terms of any loans, installment payments or loan
guarantees, including the interest
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<PAGE> 10
rate and terms of repayment, will be subject to the Plan Administrator's
discretion. Loans, installment payments and loan guarantees may be granted with
or without security. The maximum credit available is the purchase price, if any,
of the Common Stock acquired, plus the maximum federal and state income and
employment tax liability that may be incurred in connection with the
acquisition.
SECTION 10. ASSIGNABILITY
No Award granted under the Plan may be assigned or transferred by the Holder
other than by will or by the laws of descent and distribution, and during the
Holder's lifetime, such Awards may be exercised only by the Holder.
Notwithstanding the foregoing, and to the extent permitted by Rule 16b-3 under
the Exchange Act and Section 422 of the Code, the Plan Administrator, in its
sole discretion, may permit such assignment, transfer and exercisability and may
permit a Holder of such Awards to designate a beneficiary who may exercise the
Award or receive compensation under the Award after the Holder's death;
provided, however, that any Award so assigned or transferred shall be subject to
all the same terms and conditions contained in the instrument evidencing the
Award.
SECTION 11. ADJUSTMENTS
11.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend, stock
split, spin-off, combination or exchange of shares, recapitalization, merger,
consolidation, distribution to shareholders other than a normal cash dividend,
or other change in the Company's corporate or capital structure results in (a)
the outstanding shares, or any securities exchanged therefor or received in
their place, being exchanged for a different number or class of securities of
the Company or of any other corporation or (b) new, different or additional
securities of the Company or of any other corporation being received by the
holders of shares of Common Stock of the Company, then the Plan Administrator,
in its sole discretion, shall make such equitable adjustments as it shall deem
appropriate in the circumstances in (i) the maximum number and class of
securities subject to the Plan as set forth in Section 4.1, (ii) the number and
class of securities that are subject to any outstanding Award and the per share
price of such securities, without any change in the aggregate price to be paid
therefor. The determination by the Plan Administrator as to the terms of any of
the foregoing adjustments shall be conclusive and binding.
11.2 CORPORATE TRANSACTION
Except as otherwise provided in the instrument that evidences the Award, in the
event of any Corporate Transaction, each Award that is at the time outstanding
shall automatically accelerate so that each such Award shall, immediately prior
to the specified effective date for the Corporate Transaction, become 100%
vested, except that such acceleration will not occur, if in the opinion of the
Company's accountants, it would render unavailable "pooling of interest"
accounting for a Corporate Transaction that would otherwise qualify for such
accounting treatment. Such Award shall not so accelerate, however, if and to the
extent that (a) such Award is, in connection with the Corporate Transaction,
either to be assumed by the successor corporation or parent thereof (the
"Successor Corporation") or to be replaced with a comparable award for the
purchase of
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<PAGE> 11
shares of the capital stock of the Successor Corporation or (b) such Award is to
be replaced with a cash incentive program of the Successor Corporation that
preserves the spread existing at the time of the Corporate Transaction and
provides for subsequent payout in accordance with the same vesting schedule
applicable to such Award. The determination of Award comparability under clause
(a) above shall be made by the Plan Administrator, and its determination shall
be conclusive and binding. All such Awards shall terminate and cease to remain
outstanding immediately following the consummation of the Corporate Transaction,
except to the extent assumed by the Successor Corporation. Any such Awards that
are assumed or replaced in the Corporate Transaction and do not otherwise
accelerate at that time shall be accelerated in the event the Holder's
employment or services should subsequently terminate within two years following
such Corporate Transaction, unless such employment or services are terminated by
the Successor Corporation for Cause or by the Holder voluntarily without Good
Reason.
11.3 FURTHER ADJUSTMENT OF AWARDS
Subject to the preceding Section 11.2, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to Participants, (but shall not
be limited to) establishing, amending or waiving the type, terms, conditions or
duration of, or restrictions on, Awards so as to provide for earlier, later,
extended or additional time for exercise and other modifications, and the Plan
Administrator may take such actions with respect to all Participants, to certain
categories of Participants or only to individual Participants. The Plan
Administrator may take such actions before or after granting Awards to which the
action relates and before or after any public announcement with respect to such
sale, merger, consolidation, reorganization, liquidation or change in control
that is the reason for such action.
11.4 LIMITATIONS
The grant of Awards will in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 12. WITHHOLDING
The Company may require the Holder to pay to the Company the amount of any
withholding taxes that the Company is required to withhold with respect to the
grant or exercise of any Award. In such instances, the Plan Administrator may,
in its discretion and subject to the Plan and applicable law, permit the Holder
to satisfy withholding obligations, in whole or in part, by paying cash, by
electing to have the Company withhold shares of Common Stock or by transferring
shares of Common Stock to the Company, in such amounts as are equivalent to the
Fair Market Value of the withholding obligation. The Company shall have the
right to withhold from any shares of Common Stock issuable pursuant to an Award
or from any cash amounts otherwise due or to become due from the Company to the
Participant an amount equal to such taxes. The Company may also deduct from any
Award any other amounts due from the Participant to the Company or a Subsidiary.
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<PAGE> 12
SECTION 13. REPURCHASE AND FIRST REFUSAL RIGHTS
13.1 REPURCHASE RIGHTS
Should the Participant cease to be employed by or provide services to the
Company, then all shares of Common Stock issued pursuant to the Plan, whether
issued before or after cessation of employment or services, shall be subject to
repurchase by the Company, at the Company's sole discretion, at the Fair Market
Value of such shares on the date of such repurchase; provided, however, that if
such shares were issued upon exercise of an Option and are unvested at the time
of cessation of employment or services, such shares shall be subject to
repurchase at the exercise price paid for such shares. The terms and conditions
upon which such repurchase right shall be exercisable (including the period and
procedure for exercise) shall be established by the Plan Administrator and set
forth in the agreements evidencing such right. The Company's right to repurchase
under this Section 13.1 shall terminate upon the date the initial registration
of the Common Stock under Section 12(b) or 12(g) of the Exchange Act first
becomes effective.
13.2 FIRST REFUSAL RIGHTS
Until the date on which the initial registration of the Common Stock under
Section 12(b) or 12(g) of the Exchange Act first becomes effective, the Company
shall have the right of first refusal with respect to any proposed sale or other
disposition by the Holder of any shares of Common Stock issued pursuant to an
Award granted under the Plan. Such right of first refusal shall be exercisable
in accordance with the terms and conditions established by the Plan
Administrator and set forth in the agreements evidencing such right.
SECTION 14. MARKET STANDOFF
In connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the
Securities Act, including the Company's initial public offering, a Participant
shall not sell, make any short sale of, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to,
any shares issued pursuant to an Award granted under the Plan without the prior
written consent of the Company or its underwriters. Such limitations shall be in
effect for such period of time as may be requested by the Company or such
underwriters and agreed to by the Company's officers and directors with respect
to their shares; provided, however, that in no event shall such period exceed
180 days. The limitations of this paragraph shall in all events terminate two
years after the effective date of the Company's initial public offering.
Participants shall be subject to the market standoff provisions of this
paragraph only if the officers and directors of the Company are also subject to
similar arrangements.
In the event of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the Company's
outstanding Common Stock effected as a class without the Company's receipt of
consideration, then any new, substituted or additional securities distributed
with respect to the purchased shares shall be immediately subject to the
provisions of this Section 14, to the same extent the purchased shares are at
such time covered by such provisions.
In order to enforce the limitations of this Section 14, the Company may impose
stop-transfer instructions with respect to the purchased shares until the end of
the applicable standoff period.
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<PAGE> 13
SECTION 15. AMENDMENT AND TERMINATION OF PLAN
15.1 AMENDMENT OF PLAN
The Plan may be amended by the shareholders of the Company. The Board may also
amend the Plan in such respects as it shall deem advisable; however, to the
extent required for compliance with Rule 16b-3 under the Exchange Act, Section
422 of the Code or any applicable law or regulation, shareholder approval will
be required for any amendment that will (a) increase the total number of shares
as to which Options may be granted under the Plan, (b) materially modify the
class of persons eligible to receive Awards, (c) materially increase the
benefits accruing to Participants under the Plan, or (d) otherwise require
shareholder approval under any applicable law or regulation.
15.2 TERMINATION OF PLAN
The Company's shareholders or the Board may suspend or terminate the Plan at any
time. The Plan will have no fixed expiration date; provided, however, that no
Incentive Stock Options may be granted more than 10 years after the earlier of
the Plan's adoption by the Board or approval by the shareholders.
15.3 CONSENT OF HOLDER
The amendment or termination of the Plan shall not, without the consent of the
Holder of any Award under the Plan, alter or impair any rights or obligations
under any Award theretofore granted under the Plan.
SECTION 16. GENERAL
16.1 AWARD AGREEMENTS
Awards granted under the Plan shall be evidenced by a written agreement which
shall contain such terms, conditions, limitations and restrictions as the Plan
Administrator shall deem advisable and which are not inconsistent with the Plan.
16.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN AWARDS
None of the Plan, participation in the Plan as a Participant or any action of
the Plan Administrator taken under the Plan shall be construed as giving any
Participant or employee of the Company any right to be retained in the employ of
the Company or limit the Company's right to terminate the employment or services
of the Participant.
16.3 REGISTRATION; CERTIFICATES FOR SHARES
The Company shall be under no obligation to any Participant to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares
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<PAGE> 14
hereunder or the unavailability of an exemption from registration for the
issuance and sale of any shares hereunder shall relieve the Company of any
liability in respect of the nonissuance or sale of such shares as to which such
requisite authority shall not have been obtained.
As a condition to the exercise of an Option or any other receipt of Common Stock
pursuant to the Plan, the Company may require the Participant to represent and
warrant at the time of any such exercise or receipt that such shares are being
purchased or received only for the Participant's own account and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any relevant
provision of the aforementioned laws. At the option of the Company, a
stop-transfer order against any such shares may be placed on the official stock
books and records of the Company, and a legend indicating that such shares may
not be pledged, sold or otherwise transferred, unless an opinion of counsel is
provided (concurred in by counsel for the Company) stating that such transfer is
not in violation of any applicable law or regulation, may be stamped on stock
certificates in order to assure exemption from registration. The Plan
Administrator may also require such other action or agreement by the
Participants as may from time to time be necessary to comply with the federal
and state securities laws.
16.4 NO RIGHTS AS A SHAREHOLDER
No Award shall entitle the Holder to any dividend, voting or other right of a
shareholder unless and until the date of issuance under the Plan of the shares
that are the subject of such Award, free of all applicable restrictions.
16.5 COMPLIANCE WITH LAWS AND REGULATIONS
It is the Company's intention that, if and so long as any of the Company's
equity securities are registered pursuant to Section 12(b) or 12(g) of the
Exchange Act, the Plan shall comply in all respects with Rule 16b-3 under the
Exchange Act and, if any Plan provision is later found not to be in compliance
with such Rule 16b-3, the provision shall be deemed null and void, and in all
events the Plan shall be construed in favor of its meeting the requirements of
Rule 16b-3. Notwithstanding anything in the Plan to the contrary, the Board, in
its sole discretion, may bifurcate the Plan so as to restrict, limit or
condition the use of any provision of the Plan to Participants who are officers
or directors subject to Section 16 of the Exchange Act without so restricting,
limiting or conditioning the Plan with respect to other Participants.
Additionally, in interpreting and applying the provisions of the Plan, any
Option granted as an Incentive Stock Option pursuant to the Plan shall, to the
extent permitted by law, be construed as an "incentive stock option" within the
meaning of Section 422 of the Code.
16.6 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained herein
shall require the Company to segregate any monies or other property, or shares
of Common Stock, or to create any trusts, or to make any special deposits for
any immediate or deferred amounts payable to any Participant, and no Participant
shall have any rights that are greater than those of a general unsecured
creditor of the Company.
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<PAGE> 15
16.7 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid, illegal
or unenforceable in any jurisdiction, or as to any person, or would disqualify
the Plan or any Award under any law deemed applicable by the Plan Administrator,
such provision shall be construed or deemed amended to conform to applicable
laws, or, if it cannot be so construed or deemed amended without, in the Plan
Administrator's determination, materially altering the intent of the Plan or the
Award, such provision shall be stricken as to such jurisdiction, person or
Award, and the remainder of the Plan and any such Award shall remain in full
force and effect.
SECTION 17. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the Board, so
long as it is approved by the Company's shareholders at any time within 12
months of such adoption or, if earlier, and to the extent required for
compliance with Rule 16b-3 under the Exchange Act, at the next annual meeting of
the Company's shareholders after adoption of the Plan by the Board.
Adopted by the Board on October 8, 1996 and approved by the Company's
shareholders on November 14, 1996.
<PAGE> 16
NETBOT, INC.
1996 STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
To: Date of Grant: ____________, 199__
We are pleased to inform you that you have been granted a stock option for the
purchase of shares of common stock of Netbot, Inc., a Delaware corporation (the
"Company"), under the 1996 Stock Option Plan (the "Plan"). The terms of the
option are as set forth in the Plan and in this Agreement and the Plan is
incorporated into this Agreement by reference. The terms are as follows:
NUMBER OF SHARES: EXERCISE PRICE: $__________
TYPE OF OPTION: Nonqualified TERM: Ten years
VESTING: This option will vest and become exercisable in accordance with the
schedule set forth in the employment agreement between you and the Company.
The Plan Administrator may, in its sole discretion at the time of exercise,
determine that the exercise of this option is subject to your execution of an
agreement, in the form in use at the time of exercise, whereby under certain
circumstances, you grant to the Company repurchase and first refusal rights with
respect to the shares acquired by you upon exercise of the option.
TERMINATION: [The option will terminate in accordance with the terms of the Plan
in the event your employment or other service with the Company terminates.] [FOR
CONSULTANTS: The option will terminate upon its expiration date and will not
sooner terminate as a result of the termination of your services for the
Company.]
PAYMENT FOR SHARES: Unless the Plan Administrator at any time determines
otherwise, the option may be exercised by the delivery of (a) cash or check; (b)
tendering (either actually or, by attestation) shares of the capital stock of
the Company held by you for a period of at least six months having a fair market
value at the time of exercise equal to the exercise price; or (c) if and so long
as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, a properly executed exercise notice together with irrevocable instructions
to a broker to promptly deliver to the Company the amount of sale or loan
proceeds to pay the exercise price and any withholding tax obligations.
WITHHOLDING TAXES: As a condition to the exercise of a nonqualified stock
option, you must make such arrangements as the Company may require for the
satisfaction of any federal, state or local withholding tax obligations that may
arise in connection with such exercise. The Company has the right to retain
without notice sufficient shares of stock to satisfy the withholding obligation.
Unless the Plan Administrator determines otherwise, you may satisfy the
withholding obligation by electing to have the Company or related corporation
withhold from the shares to be issued upon exercise that number of shares having
a fair market value equal to the amount required to be withheld.
TRANSFER OF OPTION: The option is not transferable except by will, to a
designated beneficiary, or by the applicable laws of descent and distribution.
HOLDING PERIOD: If an individual subject to Section 16 of the Exchange Act sells
shares of Common Stock obtained upon the exercise of a stock option within six
months after the date
<PAGE> 17
the option was granted, such sale may result in short-swing profit liability
under Section 16(b) of the Exchange Act.
REGISTRATION: YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 16.3 OF THE PLAN,
WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO FEDERAL AND STATE
SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE OPTION CAN BE EXERCISED AND
BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU. THE COMPANY HAS NO OBLIGATION TO
REGISTER THE SHARES THAT WOULD BE ISSUED UPON THE EXERCISE OF YOUR OPTION, AND
IF IT NEVER REGISTERS THE SHARES, YOU WILL NOT BE ABLE TO EXERCISE THE OPTION
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. AT THE PRESENT TIME,
EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES LAWS ARE VERY
LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR TO THE EXPIRATION OF THE OPTION.
CONSEQUENTLY, YOU MIGHT HAVE NO OPPORTUNITY TO EXERCISE THE OPTION AND TO
RECEIVE SHARES UPON SUCH EXERCISE.
This option is in complete fulfillment of the Company's obligations with respect
to stock options as set forth in the [letter agreement][employment
agreement][consulting agreement][other?] dated _______, 199___, between you and
the Company (the "Agreement"). In the event any conflict between any term set
forth in the Agreement and any term set forth in this option, the term set forth
in this option will control.
Please execute the Acceptance and Acknowledgment set forth below on the enclosed
copy of this Agreement and return it to the undersigned.
Very truly yours,
NETBOT, INC.
By__________________________________
Its ______________________________
2
<PAGE> 18
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of ___________________, accept the stock option
described above and the Plan, and acknowledge receipt of a copy of this
Agreement and a copy of the Plan. I have read and understand the Plan, including
the provisions of Section 16.3. [I understand that the grant of this option
fully satisfies the Company's obligation to grant options to me in accordance
with the terms of the employment agreement between the Company and me.]
Dated:
-------------------------
- ------------------------------- ----------------------------------
Taxpayer I.D. Number
Address
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----------------------------------
----------------------------------
By his or her signature below, the spouse of the Optionee, if such Optionee is
legally married as of the date of his or her execution of this Agreement,
acknowledges that he or she has read this Agreement and the Plan and is familiar
with the terms and provisions thereof, and agrees to be bound by all the terms
and conditions of this Agreement and the Plan.
Dated:
-------------------------
----------------------------------
Spouse's Signature
----------------------------------
Printed Name
By his or her signature below, the Optionee represents that he or she is not
legally married as of the date of execution of this Agreement.
Dated:
-------------------------
----------------------------------
Optionee's Signature
<PAGE> 19
NOTICE OF EXERCISE OF STOCK OPTION
To: Netbot, Inc.
I, a resident of the State of ___________________, hereby exercise my stock
option granted by Netbot, Inc. (the "Company") on _______________, 199__,
subject to all the terms and provisions thereof and of the 1996 Stock Option
Plan referred to therein, and notify the Company of my desire to purchase
________ shares of Common Stock of the Company (the "Securities") at the
exercise price of $_____ per share which were offered to me pursuant to said
option.
I hereby represent and warrant that (1) I have been furnished with a copy of the
Plan and all information which I deem necessary to evaluate the merits and risks
of the purchase of the Securities; (2) I have had the opportunity to ask
questions and receive answers concerning the information received about the
Securities and the Company; and (3) I have been given the opportunity to obtain
any additional information I deem necessary to verify the accuracy of any
information obtained concerning the Securities and the Company.
I am aware that the Securities have not been registered under the Federal
Securities Act of 1933 (the "1933 Act") [or any state securities laws], pursuant
to exemption(s) from registration. I understand that the reliance by the Company
on such exemption(s) is predicated in part upon the truth and accuracy of the
statements by me in this Notice of Exercise.
I hereby represent and warrant that I am purchasing the Securities for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Securities.
I understand that because the Securities have not been registered under the 1933
Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Securities cannot be sold unless the Securities are
subsequently registered or an exemption from registration is available.
I agree that I will in no event sell or distribute all or any part of the
Securities unless (1) there is an effective registration statement under the
1933 Act and applicable state securities laws covering any such transaction
involving the Securities or (2) the Company receives an opinion of my legal
counsel (concurred in by legal counsel for the Company) stating that such
transaction is exempt from registration or the Company otherwise satisfies
itself that such transaction is exempt from registration.
I consent to the placing of a legend on my certificate(s) for the Securities
stating that the Securities have not been registered and setting forth the
restriction on transfer contemplated hereby and to the placing of a stop
transfer order on the books of the Company and with any transfer agents against
the Securities until the Securities may be legally resold or distributed.
I understand that at the present time Rule 144 of the Securities and Exchange
Commission ("SEC") may not be relied on for the resale or distribution of the
Securities by me. I understand that the Company has no obligation to me to
register the Securities with the SEC and has not represented to me that it will
register the Securities.
I AM ADVISED, PRIOR TO MY PURCHASE OF THE SECURITIES, THAT NEITHER THE OFFERING
OF THE SECURITIES NOR ANY OFFERING MATERIALS HAVE BEEN REVIEWED BY ANY
ADMINISTRATOR UNDER THE SECURITIES ACT OF 1933, THE WASHINGTON STATE SECURITIES
ACT OR ANY OTHER APPLICABLE SECURITIES ACT (THE "ACTS") AND THAT THE SECURITIES
HAVE NOT BEEN REGISTERED UNDER ANY OF THE ACTS AND THEREFORE CANNOT BE RESOLD
UNLESS THEY ARE REGISTERED UNDER THE ACTS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
<PAGE> 20
Dated: ________________________ _________________________________
________________________________ Address __________________________
Taxpayer I.D. Number
__________________________________
__________________________________
- --------------------------------------------------------------------------------
RECEIPT
_________________________ hereby acknowledges receipt from __________ in payment
for ______________ shares of Common Stock of Netbot, Inc., a Delaware
corporation, of $_____________ in the form of
[ ] Cash
[ ] Check (personal, cashier's or bank certified)
[ ] __________ shares of the Company's Common Stock, fair market
value $_______ per share held by the Optionee for a period of at
least six months
[ ] Copy of irrevocable instructions to Broker
Date: ___________________________ _________________________________
FMV on such date: $______________ For: NETBOT, INC.
-2-
<PAGE> 21
NETBOT, INC.
1996 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
To: Date of Grant: _____________, 199__
We are pleased to inform you that you have been granted a stock option for the
purchase of shares of common stock of Netbot, Inc., a Delaware corporation (the
"Company"), under the 1996 Stock Option Plan (the "Plan"). The terms of the
option are as set forth in the Plan and in this Agreement and the Plan is
incorporated into this Agreement by reference. The terms are as follows:
NUMBER OF SHARES: EXERCISE PRICE: $__________
TYPE OF OPTION: Incentive TERM: Ten years
VESTING: This option will vest and become exercisable in accordance with the
schedule set forth in the employment agreement between you and the Company.
The Plan Administrator may, in its sole discretion at the time of exercise,
determine that the exercise of this option is subject to your execution of an
agreement, in the form in use at the time of exercise, whereby under certain
circumstances, you grant to the Company repurchase and first refusal rights with
respect to the shares acquired by you upon exercise of the option.
TERMINATION: The option will terminate in accordance with the terms of the Plan
in the event your employment or other service with the Company terminates. The
option must be exercised within three months after termination of employment for
reasons other than death or disability and one year after termination of
employment due to disability to qualify for the beneficial tax treatment
afforded to incentive stock options.
PAYMENT FOR SHARES: Unless the Plan Administrator at any time determines
otherwise, the option may be exercised by the delivery of (a) cash or check; (b)
tendering (either actually or, by attestation) shares of the capital stock of
the Company held by you for a period of at least six months having a fair market
value at the time of exercise equal to the exercise price; or (c) if and so long
as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, a properly executed exercise notice together with irrevocable instructions
to a broker to promptly deliver to the Company the amount of sale or loan
proceeds to pay the exercise price and any withholding tax obligations.
TRANSFER OF OPTION: The option is not transferable except by will, to a
designated beneficiary, or by the applicable laws of descent and distribution.
HOLDING PERIODS:
a. SECURITIES AND EXCHANGE ACT SECTION 16
If an individual subject to Section 16 of the Exchange Act sells shares of
Common Stock obtained upon the exercise of a stock option within six months
after the date the option was granted, such sale may result in short-swing
profit liability under Section 16(b) of the Exchange Act.
<PAGE> 22
b. TAXATION OF STOCK OPTIONS
In order to obtain certain tax benefits afforded to incentive stock options
under Section 422 of the Code, an optionee must hold the shares issued upon the
exercise of an incentive stock option for two years after the date of grant of
the option and one year from the date of exercise. An optionee may be subject to
the alternative minimum tax at the time of exercise. Tax advice should be
obtained when exercising any option and prior to the disposition of the shares
issued upon the exercise of any option.
REGISTRATION: YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 16.3 OF THE PLAN,
WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO FEDERAL AND STATE
SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE OPTION CAN BE EXERCISED AND
BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU. THE COMPANY HAS NO OBLIGATION TO
REGISTER THE SHARES THAT WOULD BE ISSUED UPON THE EXERCISE OF YOUR OPTION, AND
IF IT NEVER REGISTERS THE SHARES, YOU WILL NOT BE ABLE TO EXERCISE THE OPTION
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. AT THE PRESENT TIME,
EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES LAWS ARE VERY
LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR TO THE EXPIRATION OF THE OPTION.
CONSEQUENTLY, YOU MIGHT HAVE NO OPPORTUNITY TO EXERCISE THE OPTION AND TO
RECEIVE SHARES UPON SUCH EXERCISE.
Please execute the Acceptance and Acknowledgment set forth below on the enclosed
copy of this Agreement and return it to the undersigned.
Very truly yours,
NETBOT, INC.
By______________________________________
Its __________________________________
2
<PAGE> 23
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of ___________________, accept the stock option
described above and the Plan, and acknowledge receipt of a copy of this
Agreement and a copy of the Plan. I have read and understand the Plan, including
the provisions of Section 16.3.
Dated:
------------------
- ------------------------------- ----------------------------------
Taxpayer I.D. Number
Address
---------------------------
----------------------------------
----------------------------------
By his or her signature below, the spouse of the Optionee, if such Optionee is
legally married as of the date of his or her execution of this Agreement,
acknowledges that he or she has read this Agreement and the Plan and is familiar
with the terms and provisions thereof, and agrees to be bound by all the terms
and conditions of this Agreement and the Plan.
Dated:
------------------
----------------------------------
Spouse's Signature
----------------------------------
Printed Name
By his or her signature below, the Optionee represents that he or she is not
legally married as of the date of execution of this Agreement.
Dated:
------------------
----------------------------------
Optionee's Signature
<PAGE> 1
EXHIBIT 5.01
December 4, 1997
Excite, Inc.
555 Broadway
Redwood City, California 94063
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement") to be filed by you with the Securities and
Exchange Commission on or about December 4, 1997 in connection with the
registration under the Securities Act of 1933, as amended, of an aggregate of
208,966 shares of your Common Stock (the "Stock") subject to issuance by you
pursuant to the exercise of options originally granted by Netbot, Inc.
("Netbot") which options were assumed and converted into options to purchase
Stock (the "Assumed Options") pursuant to the terms of the Agreement and Plan of
Reorganization (the "Plan") dated as of October 30, 1997 by and among, Excite,
Inc. ("Excite"), Excite Merger Corporation ("Sub") and Netbot, Inc. ("Netbot").
In rendering this opinion, we have examined the following:
(1) the Registration Statement, together with the exhibits filed as a
part thereof;
(2) minutes of the Excite Board of Directors dated October 28, 1997
relating to acquisition of Netbot by Excite and the assumption of
the options to purchase shares of Common Stock of Netbot;
(3) the Articles of Incorporation of Excite, Inc. ("Excite") and the
Bylaws of Excite were both certified by Excite on November 24,
1997;
(4) the Plan;
(5) the Certificate of Merger filed with the Secretary of State of the
State of Delaware on November 24, 1997;
(6) a list of outstanding shares of Excite Common Stock, Preferred
Stock, warrants and options, dated as of November 30, 1997 which
you have provided us;
(7) the Netbot, Inc. 1996 Stock Option Plan, the form of Netbot, Inc.
1996 Stock Option Plan Incentive Stock Option Agreement and the
form of Netbot, Inc. 1996 Stock Option Plan NonQualified Stock
Option Agreement (collectively, the "Option Plan"); and
(8) a Management Certificate of even date herewith in which you have
given us certain factual representations.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the legal capacity of all natural
persons, the genuineness of all signatures on original documents, the
authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as copies, the lack of any
undisclosed terminations, modifications, waivers or amendments to any documents
reviewed by us and the due execution and delivery of all documents where due
execution and delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely
upon our examination of the documents referred to above and have assumed the
current accuracy and completeness of the information included in the documents
referred to above. We have made no independent investigation or other attempt to
verify the accuracy of
<PAGE> 2
Gentlemen/Ladies
December 4, 1997
Page 2
any of such information or to determine the existence or non-existence of any
other factual matters; however, we are not aware of any facts that would lead us
to believe that the opinion expressed herein is not accurate.
Based upon the foregoing, it is our opinion that the 208,966 shares of
Stock that may be issued and sold by you, when issued and sold in the manner
referred to in the Prospectus associated with the Registration Statement and in
accordance with Netbot's Stock Option Agreement pursuant to which the Assumed
Options were granted, will be validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and is intended solely for the
use as an exhibit to the Registration Statement for the purpose of the
above sale of the Stock and is not to be relied upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
BY: /s/ FRED GREGURAS
-----------------------------------
Fred Greguras
<PAGE> 1
EXHIBIT 23.02
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of Excite, Inc. pertaining to the Options to purchase Common Stock of
Netbot Inc. assumed by registration pursuant to an Agreement and Plan of
Reorganization dated as of October 30, 1997 of our report dated January 29, 1997
with respect to the consolidated financial statements of Excite, Inc. included
in its Annual Report (Form 10-K as amended by Form 10-K/A) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Palo Alto, California
December 4, 1997
<PAGE> 1
EXHIBIT 23.03
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated August 6, 1996, which appears on page
45 of the 1996 Annual Report on Form 10-K/A relating to the financial statements
of The McKinley Group, Inc., which do not appear in the Annual Report on Form
10-K/A.
PRICE WATERHOUSE LLP
San Jose, California
December 2, 1997
