<PAGE> 1
As filed with the Securities and Exchange Commission on May 6, 1998
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 ASSUMED BY REGISTRANT PURSUANT TO AN
AGREEMENT AND PLAN OF REORGANIZATION DATED AS OF APRIL 8, 1998 AND AN
AGREEMENT AND PLAN OF REORGANIZATION DATED AS OF MARCH 31, 1998.
(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 151,613 $0.81 $122,807 $37.00
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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.
<PAGE> 2
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 8,605 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.
II-1
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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 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable
ITEM 8. EXHIBITS
Exhibit No. Description
4.01 Registrant's Amended and Restated Articles of Incorporation, as
amended (incorporated herein by reference to Registrant's Annual
Report on Form 10-K, filed with the Commission on March 31, 1998).
4.02 Registrant's Bylaws, as amended (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).
4.03 Form of Throw Inc. Incentive Stock Option Letter Agreement and
Nonqualified Stock Option Letter Agreement.
4.04 Form of Classifieds2000, Inc. Incentive Stock Option and
Nonstatutory Stock Option.
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).
II-2
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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 6th day of
May, 1998.
EXCITE, INC.
By: /s/ ROBERT C. HOOD
---------------------------------
Robert C. Hood,
Executive Vice President,
Chief Administrative Officer
and Chief Financial Officer
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 May 6, 1998
- ----------------------------------------------- Officer and a Director
George Bell
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
/s/ ROBERT C. HOOD Executive Vice President, May 6, 1998
- ----------------------------------------------- Chief Administrative Officer and
Robert C. Hood Chief Executive Officer
ADDITIONAL DIRECTORS:
/s/ JOSEPH R. KRAUS, IV
- ----------------------------------------------- Director May 6, 1998
Joseph R. Kraus, IV
/s/ VINOD KHOSLA
- ----------------------------------------------- Director May 6, 1998
Vinod Khosla
/s/ GEOFFREY Y. YANG
- ----------------------------------------------- Director May 6, 1998
Geoffrey Y. Yang
</TABLE>
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EXHIBIT INDEX
Exhibit No. Description
4.01 Registrant's Amended and Restated Articles of Incorporation, as
amended (incorporated herein by reference to Registrant's Annual
Report on Form 10-K, filed with the Commission on March 31, 1998).
4.02 Registrant's Bylaws, as amended (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).
4.03 Form of Throw Inc. Incentive Stock Option Letter Agreement and
Nonqualified Stock Option Letter Agreement.
4.04 Form of Classifieds2000, Inc. Incentive Stock Option and
Nonstatutory Stock Option.
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).
<PAGE> 1
EXHIBIT 4.03
THROW INC.
INCENTIVE STOCK OPTION LETTER AGREEMENT
TO: _____________________ Date of Grant: _________________
We are pleased to inform you that you have been selected by the Plan
Administrator of Throw Inc.'s (the "Company") 1996 Stock Option Plan (the
"Plan") to receive an incentive stock option for the purchase of ______ shares
of the Company's Common Stock at an exercise price of $____ per share. A copy of
the Plan is attached and incorporated into this Incentive Stock Option Letter
Agreement (the "Stock Option Letter Agreement") by reference. If such Plan has
not been or is not approved by the shareholders of the Company within twelve
(12) months before or after the adoption of this Plan, this option will be
invalid.
The terms of the option are as set forth in the Plan and in this
Agreement. This Agreement is subject to and in accordance with the express terms
and conditions of the Plan and is in all respects limited by and subject to the
express terms and provisions of the Plan. The most important of the terms set
forth in the Plan are summarized as follows:
TERM: The term of the option is ten (10) years from date of grant,
unless sooner terminated.
VESTING: The option shall vest and become exercisable according to the
following schedule.
<TABLE>
<CAPTION>
Date on and Portion of Total
After which Option is Exercisable Option which is Exercisable
--------------------------------- ---------------------------
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</TABLE>
TERMINATION: Unless otherwise determined at any time by the Plan
Administrator, the option will terminate immediately upon termination for Cause
(as defined in the Plan) or one (1) year after termination of service as a
result of retirement, early retirement at the Company's request, disability, or
death or three (3) months after all other terminations, but in each case not
later than the remaining term of the option. The option must be exercised within
three (3) months after termination of employment for reasons other than death or
disability and one (1) year after termination of employment due to disability to
qualify for the beneficial tax treatment afforded to incentive stock options.
EXERCISE: During your lifetime only you can exercise the option. The
Plan also provides for exercise of the option by the personal representative of
your estate or the beneficiary thereof
<PAGE> 2
following your death. You may use the Notice of Exercise of Incentive Stock
Option in the form attached to this Agreement when you exercise the option.
PAYMENT FOR SHARES: Unless the Plan Administrator at any time determines
otherwise, the option may be exercised by the delivery of:
(a) Cash, personal check, bank certified or cashier's check;
(b) Shares of the capital stock of the Company held by you for a period
of at least six (6) months having a fair market value at the time of exercise,
as determined in good faith by the Plan Administrator, equal to the exercise
price. (You should consult your tax advisor before exercising this option with
stock you received upon the exercise of an incentive stock option); or
(c) 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; or
(d) Such other consideration as the Plan Administrator may permit,
including without limitation cancellation of indebtedness owed to you by Throw
as of the date of exercise.
TRANSFER OF OPTION: The option is not transferable except by will 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 (6) months after the date the option was
granted, such sale may result in short-swing profit recovery under Section 16(b)
of the Exchange Act.
(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 (2) years after the date of grant of the option and one (1) 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.
MARKET STANDOFF AGREEMENT: In connection with the initial public
offering of the Company's securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company's securities,
you hereby agree not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any portion of the option without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed one hundred eighty (180) days) from the
effective date of such registration as may be requested by the Company or such
managing underwriters and to
2
<PAGE> 3
execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company's public offering.
REGISTRATION: YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 14.3 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 SELL THE
SHARES ISSUED UPON THE 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.
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,
THROW INC.
By
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3
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ACCEPTANCE AND ACKNOWLEDGMENT
I, ___________________, a resident of the State of ________________,
accept the incentive stock option described above and in Throw Inc.'s 1996 Stock
Option 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 14.3.
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:
------------------
-----------------------------------
-----------------------------------
<PAGE> 5
NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION
To: Throw Inc.
I, ___________________, a resident of the State of ________________,
hereby exercise my incentive stock option granted by Throw Inc. (the "Company")
on __________, 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
Securities Act of 1933, as amended (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.
In connection with the initial public offering of the Company's
Securities and upon request of the Company or the underwriters managing such
underwritten offering of the Company's Securities, I agree not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any portion of the Securities without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to
<PAGE> 6
exceed one hundred eighty (180) days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of such initial public offering.
In addition to any other limitation on transfer created by applicable
securities laws, I shall not assign, encumber or dispose of any interest in the
Securities except in compliance with the following provisions and applicable
securities laws.
(a) Right of First Refusal. Before any Securities held by me or any
transferee of mine (either being sometimes referred to as the "Holder") may be
sold or otherwise transferred (including transfer by gift or operation of law),
the Company or its assignee(s) shall have a right of first refusal to purchase
the Securities on the terms and conditions set forth in this section (a) (the
"Right of First Refusal").
(i) Notice of Proposed Transfer. The Holder of the Securities
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer such Securities; (ii)
the name of each proposed purchaser or other transferee ("Proposed Transferee");
(iii) the number of Securities to be transferred to each Proposed Transferee;
and (iv) the terms and conditions of each proposed sale or transfer. The Holder
shall offer the Securities at the same price (the "Offered Price") and upon the
same terms (or terms as similar as reasonably possible) to the Company or its
assignee(s).
(ii) Exercise of Right of First Refusal. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Securities proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (a)(iii) below.
(iii) Purchase Price. The purchase price ("Purchase Price") for
the Securities purchased by the Company or its assignee(s) under this section
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(iv) Payment. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within thirty (30) days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(v) Holder's Right to Transfer. If all of the Securities proposed
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this section (a), then the
Holder may sell or otherwise transfer such Securities to that Proposed
Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within sixty (60) days after the date of the
Notice and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this section
2
<PAGE> 7
(a) shall continue to apply to the Securities in the hands of such Proposed
Transferee. If the Securities described in the Notice are not transferred to the
Proposed Transferee within such period, or if the Holder proposes to change the
price or other terms to make them more favorable to the Proposed Transferee, a
new Notice shall be given to the Company, and the Company and/or its assignees
shall again be offered the Right of First Refusal before any Securities held by
the Holder may be sold or otherwise transferred.
(vi) Exception for Certain Family Transfers. Anything to the
contrary contained in this section notwithstanding, the transfer of any or all
of the Securities during my lifetime or on my death by will or intestacy to my
Immediate Family (as defined below) or a trust for the benefit of my Immediate
Family shall be exempt from the provisions of this section (a). "Immediate
Family" as used herein shall mean my spouse, lineal descendant or antecedent,
father, mother, brother or sister. In such case, the transferee or other
recipient shall receive and hold the Securities so transferred subject to the
provisions of this section (a), and there shall be no further transfer of such
Securities except in accordance with the terms of this section.
(b) Involuntary Transfer
(i) Company's Right to Purchase upon Involuntary Transfer. In the
event, at any time after the date of this Notice of Exercise, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in the above) of all or a
portion of the Securities by the record holder thereof, the Company shall have
the right to purchase all of the Securities transferred at the greater of the
exercise price paid by me or the fair market value of the Securities on the date
of transfer. Upon such a transfer, the person acquiring the Securities shall
promptly notify the Secretary of the Company of such transfer. The right to
purchase such Securities shall be provided to the Company for a period of thirty
(30) days following receipt by the Company of written notice by the person
acquiring the Securities.
(ii) Price for Involuntary Transfer. With respect to any
Securities to be transferred pursuant to the above subsection (b)(i), the price
per share shall be a price set by the Board of Directors of the Company that
will reflect the current value of the Securities in terms of present earnings
and future prospects of the Company. The Company shall notify me or my executor
of the price so determined within thirty (30) days after receipt by it of
written notice of the transfer or proposed transfer of Securities.
(c) Assignment. The right of the Company to purchase any part of the
Securities may be assigned in whole or in part to any shareholder or
shareholders of the Company or other persons or organizations; provided,
however, that an assignee, other than a corporation that is the parent or a 100%
owned subsidiary of the Company, must pay the Company, upon assignment of such
right, cash equal to the difference between the original purchase price and fair
market value, if the original purchase price is less than the fair market value
of the Securities subject to the assignment.
(d) Restrictions Binding on Transferees. All transferees of Securities
or any interest therein will receive and hold such Securities or interest
subject to the provisions of this Notice of
3
<PAGE> 8
Exercise, the Plan and the Stock Option Letter Agreement. Any sale or transfer
of the Company's Securities shall be void unless the provisions of this Notice
of Exercise are satisfied.
(e) Termination of Rights. The Right of First Refusal granted the
Company and the right to repurchase the Securities in the event of an
involuntary transfer granted the Company, shall terminate upon the first sale of
Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission under the 1933 Act. Upon termination of the Right of First Refusal, a
new certificate or certificates representing the Securities not repurchased
shall be issued, on request, without the legend referred to in this Notice of
Exercise and delivered to me.
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.
The certificate or certificates representing the Securities shall
bear the following legends (as well as any legends required by applicable state
and federal corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE, DISTRIBUTION OR OTHER DISPOSITION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
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
4
<PAGE> 9
UNLESS THEY ARE REGISTERED UNDER THE ACTS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
Dated:
------------------
- ------------------------------------ -----------------------------------
Taxpayer I.D. Number
-----------------------------------
Address
----------------------------
----------------------------
5
<PAGE> 10
RECEIPT
The Company hereby acknowledges receipt from ___________________ in
payment for shares of Common Stock of Throw Inc., a Washington corporation, of
$__________________ in the form of:
[ ] Cash
[ ] Check (personal, cashier's or bank certified)
[ ] Cancellation of indebtedness owed by Throw Inc. as of the date
hereof
[ ] shares of the Company's Common Stock, fair market value
$_______________ per share held by the Optionee for a period of
at least six (6) months
[ ] Copy of irrevocable instructions to Broker
THROW INC.
-----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Date:
----------------------------
FMV on such date: $
-------------
<PAGE> 11
THROW INC.
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: _____________________ Date of Grant: _________________
We are pleased to inform you that you have been selected by the Plan
Administrator of Throw Inc.'s (the "Company") 1996 Stock Option Plan (the
"Plan") to receive a nonqualified option for the purchase of _______ shares of
the Company's Common Stock at an exercise price of $_____ per share. A copy of
the Plan is attached and incorporated into this Nonqualified Stock Option Letter
Agreement (the "Stock Option Letter Agreement") by reference. If such Plan has
not been or is not approved by the shareholders of the Company, this option will
be invalid.
The terms of the option are as set forth in the Plan and in this
Agreement. This Agreement is subject to and in accordance with the express terms
and conditions of the Plan and is in all respects limited by and subject to the
express terms and provisions of the Plan. The most important of the terms set
forth in the Plan are summarized as follows:
TERM: The option will expire on __________.
VESTING: The option shall vest and become exercisable according to the
following schedule.
<TABLE>
<CAPTION>
Date on and Portion of Total
After which Option is Exercisable Option which is Exercisable
--------------------------------- ---------------------------
<S> <C>
</TABLE>
TERMINATION: Unless otherwise determined at any time by the Plan
Administrator, the option will terminate immediately upon termination for Cause
(as defined in the Plan) or one (1) year after termination of service as a
result of retirement, early retirement at the Company's request, disability, or
death, but in each case not later than the remaining term of the option.
EXERCISE: During your lifetime only you can exercise the option. The
Plan also provides for exercise of the option by the personal representative of
your estate or the beneficiary thereof following your death. You may use the
Notice of Exercise of Nonqualified Stock Option in the form attached to this
Agreement when you exercise the option.
PAYMENT FOR SHARES: Unless the Plan Administrator at any time determines
otherwise, the option may be exercised by the delivery of:
<PAGE> 12
(a) Cash, personal check, bank certified or cashier's check;
(b) 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)
shares of the capital stock of the Company held by you for a period of at least
six (6) months (or any shorter period necessary to avoid a charge to the
Company's earnings for financial reporting purposes) having a fair market value
at the time of exercise, as determined in good faith by the Plan Administrator,
equal to the exercise price;
(c) 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;
or
(d) Such other consideration as the Plan Administrator may permit,
including without limitation cancellation of indebtedness owed to you by Throw
as of the date of exercise.
WITHHOLDING TAXES: As a condition to the exercise of a nonqualified
stock option, you shall 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 shall have 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 or by
the applicable laws of descent and distribution.
HOLDING PERIOD: In the case of a Nonqualified Stock Option, if shares
are held for at least one year, any gain realized on disposition of the shares
will be treated as long-term capital gain for federal income tax purposes. 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 (6) months after
the date the option was granted, such sale may result in short-swing profit
recovery under Section 16(b) of the Exchange Act.
MARKET STANDOFF AGREEMENT: In connection with the initial public
offering of the Company's securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company's securities,
you hereby agree not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any portion of the option without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed one hundred eighty (180) days) from the
effective date of such registration as may be requested by the Company or such
managing underwriters and to execute an agreement reflecting the foregoing as
may be requested by the underwriters at the time of the Company's public
offering.
2
<PAGE> 13
REGISTRATION: YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 14.3 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 SELL THE
SHARES ISSUED UPON THE 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.
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,
THROW INC.
By
---------------------------------------
3
<PAGE> 14
ACCEPTANCE AND ACKNOWLEDGMENT
I, ___________________, a resident of the State of ________________,
accept the nonqualified stock option described above and in Throw Inc.'s 1996
Stock Option 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 14.3.
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:
-------------------
------------------------------
------------------------------
<PAGE> 15
NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION
To: Throw Inc.
I, ___________________, a resident of the State of ________________,
hereby exercise my nonqualified stock option granted by Throw Inc. (the
"Company") on ____________, 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
Securities Act of 1933, as amended (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.
In connection with the initial public offering of the Company's
Securities and upon request of the Company or the underwriters managing such
underwritten offering of the Company's Securities, I agree not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any portion of the Securities without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to
<PAGE> 16
exceed one hundred eighty (180) days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of such initial public offering.
(a) Right of First Refusal. Before any Securities held by me or any
transferee of mine (either being sometimes referred to as the "Holder") may be
sold or otherwise transferred (including transfer by gift or operation of law),
the Company or its assignee(s) shall have a right of first refusal to purchase
the Securities on the terms and conditions set forth in this section (a) (the
"Right of First Refusal").
(i) Notice of Proposed Transfer. The Holder of the Securities
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer such Securities; (ii)
the name of each proposed purchaser or other transferee ("Proposed Transferee");
(iii) the number of Securities to be transferred to each Proposed Transferee;
and (iv) the terms and conditions of each proposed sale or transfer. The Holder
shall offer the Securities at the same price (the "Offered Price") and upon the
same terms (or terms as similar as reasonably possible) to the Company or its
assignee(s).
(ii) Exercise of Right of First Refusal. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Securities proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (a)(iii) below.
(iii) Purchase Price. The purchase price ("Purchase Price") for
the Securities purchased by the Company or its assignee(s) under this section
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(iv) Payment. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within thirty (30) days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(v) Holder's Right to Transfer. If all of the Securities proposed
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this section (a), then the
Holder may sell or otherwise transfer such Securities to that Proposed
Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within sixty (60) days after the date of the
Notice and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this section (a) shall continue to
apply to the Securities in the hands of such Proposed Transferee. If the
Securities described in the Notice are not transferred to the Proposed
Transferee within such period, or if the Holder proposes to change the price or
other terms to make them more favorable to the Proposed Transferee, a new Notice
shall be given to the Company, and the Company
2
<PAGE> 17
and/or its assignees shall again be offered the Right of First Refusal before
any Securities held by the Holder may be sold or otherwise transferred.
(vi) Exception for Certain Family Transfers. Anything to the
contrary contained in this section notwithstanding, the transfer of any or all
of the Securities during my lifetime or on my death by will or intestacy to my
Immediate Family (as defined below) or a trust for the benefit of my Immediate
Family shall be exempt from the provisions of this section (a). "Immediate
Family" as used herein shall mean my spouse, lineal descendant or antecedent,
father, mother, brother or sister. In such case, the transferee or other
recipient shall receive and hold the Securities so transferred subject to the
provisions of this section (a), and there shall be no further transfer of such
Securities except in accordance with the terms of this section.
(b) Involuntary Transfer
(i) Company's Right to Purchase upon Involuntary Transfer. In the
event, at any time after the date of this Notice of Exercise, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in the above) of all or a
portion of the Securities by the record holder thereof, the Company shall have
the right to purchase all of the Securities transferred at the greater of the
exercise price paid by me or the fair market value of the Securities on the date
of transfer. Upon such a transfer, the person acquiring the Securities shall
promptly notify the Secretary of the Company of such transfer. The right to
purchase such Securities shall be provided to the Company for a period of thirty
(30) days following receipt by the Company of written notice by the person
acquiring the Securities.
(ii) Price for Involuntary Transfer. With respect to any
Securities to be transferred pursuant to the above subsection (b)(i), the price
per share shall be a price set by the Board of Directors of the Company that
will reflect the current value of the Securities in terms of present earnings
and future prospects of the Company. The Company shall notify me or my executor
of the price so determined within thirty (30) days after receipt by it of
written notice of the transfer or proposed transfer of Securities.
(c) Assignment. The right of the Company to purchase any part of the
Securities may be assigned in whole or in part to any shareholder or
shareholders of the Company or other person or organizations; provided, however,
that an assignee, other than a corporation that is the parent or a 100% owned
subsidiary of the Company, must pay the Company, upon assignment of such right,
cash equal to the difference between the original purchase price and fair market
value, if the original purchase price is less than the fair market value of the
Securities subject to the assignment.
(d) Restrictions Binding on Transferees. All transferees of Securities
or any interest therein will receive and hold such Securities or interest
subject to the provisions of this Notice of Exercise, the Plan and the Stock
Option Letter Agreement. Any sale or transfer of the Company's Securities shall
be void unless the provisions of this Notice of Exercise are satisfied.
3
<PAGE> 18
(e) Termination of Rights. The Right of First Refusal granted the
Company and the right to repurchase the Securities in the event of an
involuntary transfer granted the Company, shall terminate upon the first sale of
Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission under the 1933 Act. Upon termination of the Right of First Refusal, a
new certificate or certificates representing the Securities not repurchased
shall be issued, on request, without the legend referred to in this Notice of
Exercise and delivered to me.
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.
The certificate or certificates representing the Securities shall
bear the following legends (as well as any legends required by applicable state
and federal corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933.
(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
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
4
<PAGE> 19
UNLESS THEY ARE REGISTERED UNDER THE ACTS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
Dated:
---------------------
- ------------------------------------ -----------------------------------
Taxpayer I.D. Number
-----------------------------------
Address
----------------------------
----------------------------
5
<PAGE> 20
RECEIPT
The Company hereby acknowledges receipt from ___________________ in
payment for shares of Common Stock of Throw Inc., a Washington corporation, of
$__________________ in the form of:
[ ] Cash
[ ] Check (personal, cashier's or bank certified)
[ ] Cancellation of indebtedness owed by Throw Inc. as of the date
hereof
[ ] shares of the Company's Common Stock, fair market value
$_______________ per share held by the Optionee for a period of
at least six (6) months
[ ] Copy of irrevocable instructions to Broker
THROW INC.
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------
FMV on such date: $
--------------
<PAGE> 1
EXHIBIT 4.04
INCENTIVE STOCK OPTION
1~, Optionee:
CLASSIFIEDS2000, INC. (the "Company"), pursuant to its Amended and
Restated 1996 Stock Option Plan (the "Plan"), has granted to you, the optionee
named above, an option to purchase shares of the common stock of the Company
("Common Stock"). This option is intended to qualify as an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit for participation of the Company's employees
(including officers), directors or consultants and is intended to comply with
the provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"). Defined terms not
explicitly defined in this agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of
shares of Common Stock subject to this option is 2~.
2. VESTING. Subject to the limitations contained herein, 3~ of the
shares will vest (become exercisable) on 4~ and 5~ of the shares will then vest
each month thereafter until either (i) you cease to provide services to the
Company for any reason, or (ii) this option becomes fully vested.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) EXERCISE PRICE. The exercise price of this option is _____
($____) per share, being not less than the fair market value of the Common Stock
on the date of grant of this option.
(b) METHOD OF PAYMENT. Payment of the exercise price per share is
due in full upon exercise of all or any part of each installment which has
accrued to you. You may elect, to the extent permitted by applicable statutes
and regulations, to make payment of the exercise price under one of the
following alternatives:
(i) Payment of the exercise price per share in cash
(including check) at the time of exercise;
(ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior to the
issuance of Common Stock,
<PAGE> 2
results in either the receipt of cash (or check) by the Company or the receipt
of irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds;
(iii) Provided that at the time of exercise the Company's
Common Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of already-owned shares of Common Stock, held for the period
required to avoid a charge to the Company's reported earnings, and owned free
and clear of any liens, claims, encumbrances or security interests, which Common
Stock shall be valued at its fair market value on the date of exercise; or
(iv) Payment by a combination of the methods of payment
permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
4. EXERCISE PRIOR TO VESTING PERMITTED.
(a) CONDITIONS OF EARLY EXERCISE. Subject to the provisions of
this option you may elect at any time during your Continuous Status as an
Employee, Director or Consultant with the Company or an Affiliate of the
Company, to exercise the option as to any part or all of the shares subject to
this option at any time during the term hereof, including without limitation, a
time prior to the date of earliest exercise ("vesting") stated in paragraph 2
hereof; provided, however, that:
(i) a partial exercise of this option shall be deemed to
cover first vested shares and then the earliest vesting installment of unvested
shares;
(ii) any shares so purchased from installments which have
not vested as of the date of exercise shall be subject to the purchase option in
favor of the Company as described in the Early Exercise Stock Purchase Agreement
to be provided;
(iii) you shall enter into an Early Exercise Stock
Purchase Agreement in the form to be provided with a vesting schedule that will
result in the same vesting as if no early exercise had occurred; and
(iv) this option shall not be exercisable under this
paragraph 4 to the extent such exercise would cause the aggregate fair market
value of any shares subject to incentive stock options granted you by the
Company or any Affiliate (valued as of their grant date) which would become
exercisable for the first time during any calendar year to exceed $100,000.
(b) EXPIRATION OF EARLY EXERCISE ELECTION. The election provided
in this paragraph 4 to purchase shares upon the exercise of this option prior to
the vesting dates shall cease upon termination of your Continuous Status as an
Employee, Director or Consultant with the Company or an Affiliate of the Company
and may not be exercised after the date thereof.
2
<PAGE> 3
5. WHOLE SHARES. This option may not be exercised for any number of
shares which would require the issuance of anything other than whole shares.
6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, this option may not be exercised unless the shares issuable
upon exercise of this option are then registered under the Act or, if such
shares are not then so registered, the Company has determined that such exercise
and issuance would be exempt from the registration requirements of the Act.
7. TERM. The term of this option commences on 6~, the date of grant, and
expires on 7~ (the "Expiration Date," which date shall be no more than ten (10)
years from date this option is granted), unless this option expires sooner as
set forth below or in the Plan. In no event may this option be exercised on or
after the Expiration Date. This option shall terminate prior to the Expiration
Date as follows: three (3) months after the termination of your Continuous
Status as an Employee, Director or Consultant with the Company or an Affiliate
of the Company unless one of the following circumstances exists:
(a) Your termination of Continuous Status as an Employee,
Director or Consultant is due to your disability. This option will then expire
on the earlier of the Expiration Date set forth above or twelve (12) months
following such termination of Continuous Status as an Employee, Director or
Consultant. You should be aware that if your disability is not considered a
permanent and total disability within the meaning of Section 422(c)(6) of the
Code, and you exercise this option more than three (3) months following the date
of your termination of employment, your exercise will be treated for tax
purposes as the exercise of a "nonstatutory stock option" instead of an
"incentive stock option."
(b) Your termination of Continuous Status as an Employee,
Director or Consultant is due to your death or your death occurs within three
(3) months following your termination of Continuous Status as an Employee,
Director or Consultant for any other reason. This option will then expire on the
earlier of the Expiration Date set forth above or eighteen (18) months after
your death.
(c) If during any part of such three (3) month period you may not
exercise your option solely because of the condition set forth in paragraph 6
above, then your option will not expire until the earlier of the Expiration Date
set forth above or until this option shall have been exercisable for an
aggregate period of three (3) months after your termination of Continuous Status
as an Employee, Director or Consultant.
(d) If your exercise of the option within three (3) months after
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or with an Affiliate of the Company would result in liability
under Section 16(b) of the Securities Exchange Act of 1934, then your option
will expire on the earlier of (i) the Expiration Date set forth above, (ii) the
tenth (10th) day after the last date upon which exercise would result in such
liability or (iii) six (6) months and ten (10) days after the termination of
your Continuous Status as an Employee, Director or Consultant with the Company
or an Affiliate of the Company.
3
<PAGE> 4
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to that number
of shares as to which it was exercisable on the date of termination of
Continuous Status as an Employee, Director or Consultant under the provisions of
paragraph 2 of this option.
In order to obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or an
Affiliate of the Company, except in the event of your death or permanent and
total disability. The Company has provided for continued vesting or extended
exercisability of your option under certain circumstances for your benefit, but
cannot guarantee that your option will necessarily be treated as an "incentive
stock option" if you provide services to the Company or an Affiliate of the
Company as a consultant or exercise your option more than three (3) months after
the date your employment with the Company and all Affiliates of the Company
terminates.
8. EXERCISE.
(a) This option may be exercised, to the extent specified above,
by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require pursuant
to subSection 6(f) of the Plan.
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any exercise of
this option, the Company may require you to enter an arrangement providing for
the payment by you to the Company of any tax withholding obligation of the
Company arising by reason of (1) the exercise of this option; (2) the lapse of
any substantial risk of forfeiture to which the shares are subject at the time
of exercise; or (3) the disposition of shares acquired upon such exercise;
(ii) you will notify the Company in writing within fifteen
(15) days after the date of any disposition of any of the shares of the Common
Stock issued upon exercise of this option that occurs within two (2) years after
the date of this option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of this option; and
(iii) the Company (or a representative of the
underwriters) may, in connection with the first underwritten registration of the
offering of any securities of the Company under the Act, require that you not
sell or otherwise transfer or dispose of any shares of Common Stock or other
securities of the Company during such period (not to exceed one hundred eighty
(180) days) following the effective date (the "Effective Date") of the
registration statement of the Company filed under the Act as may be requested by
the Company or the representative of the underwriters. You further agree that
the Company may impose stop-
4
<PAGE> 5
transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
9. TRANSFERABILITY. This option is not transferable, except by will or
by the laws of descent and distribution, and is exercisable during your life
only by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise this
option.
10. OPTION NOT A SERVICE CONTRACT. This option is not an employment
contract and nothing in this option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company,
or of the Company to continue your employment with the Company. In addition,
nothing in this option shall obligate the Company or any Affiliate of the
Company, or their respective shareholders, Board of Directors, officers or
employees to continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
11. NOTICES. Any notices provided for in this option or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after deposit
in the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you hereafter designate by written
notice to the Company.
12. GOVERNING PLAN DOCUMENT. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its provisions
are hereby made a part of this option, including without limitation the
provisions of Section 6 of the Plan relating to option provisions, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of this option and those of the
Plan, the provisions of the Plan shall control.
Dated the 8~.
Very truly yours,
CLASSIFIEDS2000, INC.
By
--------------------------------------
Duly authorized on behalf
of the Board of Directors
ATTACHMENTS
Amended and Restated 1996 Stock Option Plan
Notice of Exercise
5
<PAGE> 6
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee and the Company
and its Affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the undersigned
under stock option plans of the Company, and (ii) the following agreements only:
NONE
------------------------
(Initial)
OTHER
------------------------------------
------------------------------------
------------------------------------
------------------------------------
1~, OPTIONEE
Address:
----------------------------
----------------------------
6
<PAGE> 7
NOTICE OF EXERCISE
Classifieds2000, Inc.
617 Palomar
Sunnyvale, CA 94048 Date of Exercise:
Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase
the number of shares for the price set forth below.
Type of option (check one): Incentive [ ] Nonstatutory [ ]
Stock option dated:
---------------------------
Number of shares as to which
option is exercised:
---------------------------
Certificates to be issued in
name of:
---------------------------
Total exercise price:
$
---------------------------
Cash payment delivered
herewith: $
---------------------------
Value of shares of common
stock delivered herewith
---------------------------
By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms of the Amended and Restated 1996 Stock
Option Plan, (ii) to provide for the payment by me to you (in the manner
designated by you) of your withholding obligation, if any, relating to the
exercise of this option, and (iii) if this exercise relates to an incentive
stock option, to notify you in writing within fifteen (15) days after the date
of any disposition of any of the shares of Common Stock issued upon exercise of
this option that occurs within two (2) years after the date of grant of this
option or within one (1) year after such shares of Common Stock are issued upon
exercise of this option.
I hereby make the following certifications and representations with
respect to the number of shares of Common Stock of the Company listed above (the
"Shares"), which are being acquired by me for my own account upon exercise of
the Option as set forth above:
I acknowledge that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are deemed to constitute
"restricted securities" under Rule 701 and
<PAGE> 8
"control securities" under Rule 144 promulgated under the Act. I warrant and
represent to the Company that I have no present intention of distributing or
selling said Shares, except as permitted under the Act and any applicable state
securities laws.
I further acknowledge that I will not be able to resell the Shares for
at least ninety days after the stock of the Company becomes publicly traded
(i.e., subject to the reporting requirements of Section 13 or l5(d) of the
Securities Exchange Act of 1934) under Rule 701 and that more restrictive
conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the
Shares subject to the provisions of the Option shall have endorsed thereon
appropriate legends reflecting the foregoing limitations, as well as any legends
reflecting restrictions pursuant to the Company's Articles of Incorporation,
Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of
the underwriters) in connection with the first underwritten registration of the
offering of any securities of the Company under the Act, I will not sell or
otherwise transfer or dispose of any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed
under the Act (the "Effective Date") as may be requested by the Company or the
representative of the underwriters. I further agree that the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
Very truly yours,
------------------------------------
1~
2
<PAGE> 9
NONSTATUTORY STOCK OPTION
1~, Optionee:
CLASSIFIEDS2000, INC. (the "Company"), pursuant to its Amended and
Restated 1996 Stock Option Plan (the "Plan"), has granted to you, the optionee
named above, an option to purchase shares of the common stock of the Company
("Common Stock"). This option is not intended to qualify as and will not be
treated as an "incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants and is intended to comply with
the provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"). Defined terms not
explicitly defined in this agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of
shares of Common Stock subject to this option is 2~ .
2. VESTING. Subject to the limitations contained herein, 3~ of the
shares will vest (become exercisable) on 4~ and 5~ of the shares will then vest
each thereafter until either (i) you cease to provide services to the Company
for any reason, or (ii) this option becomes fully vested.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) EXERCISE PRICE. The exercise price of this option is seven
cents ($0.07) per share, being not less than 85 % of the fair market value of
the Common Stock on the date of grant of this option.
(b) METHOD OF PAYMENT. Payment of the exercise price per share is
due in full upon exercise of all or any part of each installment which has
accrued to you. You may elect, to the extent permitted by applicable statutes
and regulations, to make payment of the exercise price under one of the
following alternatives:
(i) Payment of the exercise price per share in cash
(including check) at the time of exercise;
(ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior to the
issuance of Common Stock,
<PAGE> 10
results in either the receipt of cash (or check) by the Company or the receipt
of irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds;
(iii) Provided that at the time of exercise the Company's
Common Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of already-owned shares of Common Stock, held for the period
required to avoid a charge to the Company's reported earnings, and owned free
and clear of any liens, claims, encumbrances or security interests, which Common
Stock shall be valued at its fair market value on the date of exercise; or
(iv) Payment by a combination of the methods of payment
permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
4. EXERCISE PRIOR TO VESTING PERMITTED.
(a) CONDITIONS OF EARLY EXERCISE. Subject to the provisions of
this option you may elect at any time during your Continuous Status as an
Employee, Director or Consultant with the Company or an Affiliate of the
Company, to exercise the option as to any part or all of the shares subject to
this option at any time during the term hereof, including without limitation, a
time prior to the date of earliest exercise ("vesting") stated in paragraph 2
hereof; provided, however, that:
(i) a partial exercise of this option shall be deemed to
cover first vested shares and then the earliest vesting installment of unvested
shares;
(ii) any shares so purchased from installments which have
not vested as of the date of exercise shall be subject to the purchase option in
favor of the Company as described in the Early Exercise Stock Purchase Agreement
attached hereto; and
(iii) you shall enter into an Early Exercise Stock
Purchase Agreement in the form attached hereto with a vesting schedule that will
result in the same vesting as if no early exercise had occurred.
(b) EXPIRATION OF EARLY EXERCISE ELECTION. The election provided
in this paragraph 4 to purchase shares upon the exercise of this option prior to
the vesting dates shall cease upon termination of your Continuous Status as an
Employee, Director or Consultant with the Company or an Affiliate of the Company
and may not be exercised after the date thereof.
5. WHOLE SHARES. This option may not be exercised for any number of
shares which would require the issuance of anything other than whole shares.
6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, this option may not be exercised unless the shares issuable
upon exercise of this option are then registered under the Act or, if such
Shares are not then so registered, the
2
<PAGE> 11
Company has determined that such exercise and issuance would be exempt from the
registration requirements of the Act.
7. TERM. The term of this option commences on 6~, the date of grant and
expires on 7~ (the "Expiration Date," which date shall be no more than ten (10)
years from the date this option is granted), unless this option expires sooner
as set forth below or in the Plan. In no event may this option be exercised on
or after the Expiration Date. This option shall terminate prior to the
Expiration Date as follows: three (3) months after the termination of your
Continuous Status as an Employee, Director or Consultant with the Company or an
Affiliate of the Company for any reason or for no reason unless:
(a) such termination of Continuous Status as an Employee,
Director or Consultant is due to your disability, in which event the option
shall expire on the earlier of the Expiration Date set forth above or twelve
(12) months following such termination of Continuous Status as an Employee,
Director or Consultant; or
(b) such termination of Continuous Status as an Employee,
Director or Consultant is due to your death or your death occurs within three
(3) months following your termination for any other reason, in which event the
option shall expire on the earlier of the Expiration Date set forth above or
eighteen (18) months after your death; or
(c) during any part of such three (3) month period the option is
not exercisable solely because of the condition set forth in paragraph 6 above,
in which event the option shall not expire until the earlier of the Expiration
Date set forth above or until it shall have been exercisable for an aggregate
period of three (3) months after the termination of Continuous Status as an
Employee, Director or Consultant; or
(d) exercise of the option within three (3) months after
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or with an Affiliate of the Company would result in liability
under Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act),
in which case the option will expire on the earlier of (i) the Expiration Date
set forth above, (ii) the tenth (10th) day after the last date upon which
exercise would result in such liability or (iii) six (6) months and ten (10)
days after the termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to that number
of shares as to which it was exercisable on the date of termination of
Continuous Status as an Employee, Director or Consultant under the provisions of
paragraph 2 of this option.
8. EXERCISE.
(a) This option may be exercised, to the extent specified above,
by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular
3
<PAGE> 12
business hours, together with such additional documents as the Company may then
require pursuant to subSection 6(f) of the Plan.
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any exercise of
this option, the Company may require you to enter an arrangement providing for
the cash payment by you to the Company of any tax withholding obligation of the
Company arising by reason of: (1) the exercise of this option; (2) the lapse of
any substantial risk of forfeiture to which the shares are subject at the time
of exercise; or (3) the disposition of shares acquired upon such exercise. You
also agree that any exercise of this option has not been completed and that the
Company is under no obligation to issue any Common Stock to you until such an
arrangement is established or the Company's tax withholding obligations are
satisfied, as determined by the Company; and
(ii) the Company (or a representative of the underwriters)
may, in connection with the first underwritten registration of the offering of
any securities of the Company under the Act, require that you not sell or
otherwise transfer or dispose of any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days)
following the effective date (the "Effective Date") of the registration
statement of the Company filed under the Act as may be requested by the Company
or the representative of the underwriters. You further agree that the Company
may impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such period.
9. TRANSFERABILITY. This option is not transferable, except by will or
by the laws of descent and distribution, and is exercisable during your life
only by you or pursuant to a qualified domestic relations order satisfying the
requirements of Rule 16b-3 of the Exchange Act (a "QDRO"), and is exercisable
during your life only by you or a transferee pursuant to a QDRO. Notwithstanding
the foregoing, by delivering written notice to the Company, in a form
satisfactory to the Company, you may designate a third party who, in the event
of your death, shall thereafter be entitled to exercise this option.
10. OPTION NOT A SERVICE CONTRACT. This option is not an employment
contract and nothing in this option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company,
or of the Company to continue your employment with the Company. In addition,
nothing in this option shall obligate the Company or any Affiliate of the
Company, or their respective shareholders, Board of Directors, officers, or
employees to continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
11. NOTICES. Any notices provided for in this option or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after deposit
in the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you hereafter designate by written
notice to the Company.
4
<PAGE> 13
12. GOVERNING PLAN DOCUMENT. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its provisions
are hereby made a part of this option, including without limitation the
provisions of Section 6 of the Plan relating to option provisions, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of this option and those of the
Plan, the provisions of the Plan shall control.
Dated the 8~.
Very truly yours,
CLASSIFIEDS2000, INC.
By
--------------------------------------
Duly authorized on behalf
of the Board of Directors
ATTACHMENTS
Amended and Restated 1996 Stock Option Plan
Notice of Exercise
5
<PAGE> 14
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set form in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee and the Company
and its Affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the undersigned
under stock option plans of the Company, and (ii) the following agreements only:
NONE
-------------------
(Initial)
OTHER
-----------------------------
-----------------------------
-----------------------------
-----------------------------------
1~, OPTIONEE
Address:
---------------------------
---------------------------
6
<PAGE> 15
NOTICE OF EXERCISE
Classifieds2000, Inc.
2975 Scott Boulevard, Suite 203
Santa Clara, CA 95054 Date of Exercise:
Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase
the number of shares for the price set forth below.
Type of option (check one): Incentive [ ] Nonstatutory [ ]
Stock option dated:
---------------------------
Number of shares as to which
option is exercised:
---------------------------
Certificates to be issued in
name of:
---------------------------
Total exercise price:
$
---------------------------
Cash payment delivered
herewith: $
---------------------------
Value of shares of common
stock delivered herewith ---------------------------
By this exercise, I agree (i) to provide such additional documents as you
may require pursuant to the terms of the Amended and Restated 1996 Stock Option
Plan, (ii) to provide for the payment by me to you (in the manner designated by
you) of your withholding obligation, if any, relating to the exercise of this
option, and (iii) if this exercise relates to an incentive stock option, to
notify you in writing within fifteen (15) days after the date of any disposition
of any of the shares of Common Stock issued upon exercise of this option that
occurs within two (2) years after the date of grant of this option or within one
(1) year after such shares of Common Stock are issued upon exercise of this
option.
I hereby make the following certifications and representations with
respect to the number of shares of Common Stock of the Company listed above (the
"Shares"), which are being acquired by me for my own account upon exercise of
the Option as set forth above:
<PAGE> 16
I acknowledge that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are deemed to constitute
"restricted securities" under Rule 701 and "control securities" under Rule 144
promulgated under the Act. I warrant and represent to the Company that I have no
present intention of distributing or selling said Shares, except as permitted
under the Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for
at least ninety days after the stock of the Company becomes publicly traded
(i.e., subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934) under Rule 701 and that more restrictive
conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the
Shares subject to the provisions of the Option shall have endorsed thereon
appropriate legends reflecting the foregoing limitations, as well as any legends
reflecting restrictions pursuant to the Company's Articles of Incorporation,
Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of
the underwriters) in connection with the first underwritten registration of the
offering of any securities of the Company under the Act, I will not sell or
otherwise transfer or dispose of any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed
under the Act (the "Effective Date") as may be requested by the Company or the
representative of the underwriters. I further agree that the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
Very truly yours,
----------------------------------------
2
<PAGE> 1
EXHIBIT 5.01
May 6, 1998
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 May 6, 1998 in connection with the registration
under the Securities Act of 1933, as amended, of an aggregate of 148,293 shares
of your Common Stock (the "Stock") subject to issuance by you pursuant to the
exercise of options originally granted by Throw Inc. ("Throw") and
Classifieds2000, Inc. ("Classifieds2000"), 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 dated as of April 8, 1998 by
and among, Excite, Inc. ("Excite"), Clwyd Corporation ("Clwyd"), Throw Inc.
("Throw") and Scott Moody (the "Throw Agreement"), and the Agreement and Plan of
Reorganization dated as of March 31, 1998 by and among Excite, Excite 2000
Acquisition Corporation ("Excite 2000"), Classifieds2000, Sani El-Fishawy and
Karim El-Fishawy (the "Classifieds2000 Agreement").
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 meeting of your Board of Directors dated March 27,
1998 relating to the acquisitions by Excite, Inc. ("Excite") of
Throw and Classifieds2000 and the assumption of options to
purchase shares of Common Stock of Throw and Classifieds2000;
(3) the resolutions of Excite dated March 27, 1998 as the sole
stockholder of Clwyd;
(4) the Articles of Incorporation and Bylaws of Excite, both as
certified by Excite on March 27, 1998;
(5) the Throw Agreement and the Classifieds2000 Agreement;
(6) the Certificate of Merger with respect to Throw.
(7) the Agreement of Merger with respect to Classifieds2000.
(8) a list of outstanding shares of Excite Common Stock, warrants and
options, dated as of April 30, 1998 which you have provided us;
(9) the Throw Inc. 1996 Stock Option Plan and the Classifieds2000,
Inc. Amended and Restated 1996 Stock Option Plan; and
(10) 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.
<PAGE> 2
Excite, Inc.
May 6, 1998
Page 2
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 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 148,293 shares
of Stock that may be issued and sold by you, when issued and sold in the manner
referred to in the S-8 prospectuses associated with the Registration Statement
and in accordance with the applicable Throw Stock Option Agreement or
Classifieds2000 Stock Option Agreement, as applicable, pursuant to which the
applicable 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
2
<PAGE> 1
EXHIBIT 23.02
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8), pertaining to the options to purchase common
stock assumed by registrant pursuant to an Agreement and Plan of Reorganization
dated April 8, 1998 and Agreement and Plan of Reorganization dated March 31,
1998, of our report dated January 22, 1998, with respect to the consolidated
financial statements of Excite, Inc. included in its Annual Report (Form 10-k)
for the year ended December 31, 1997, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Palo Alto, California
April 30, 1998
<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
April 30, 1998
2
