As filed with the Securities and Exchange Commission on September 24, 1999.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
LYCOS, INC.
(Exact name of issuer as specified in its charter)
Delaware 04-3277338
(State of Incorporation) (IRS Employer Identification Number)
400-2 Totten Pond Road, Waltham, Massachusetts 02451
(Address of Principal Executive Offices) (Zip Code)
WIRED VENTURES, INC. EQUITY INCENTIVE PLAN
(Full title of the Plan)
Robert J. Davis
President and Chief Executive Officer
Lycos, Inc.
400-2 Totten Pond Road
Waltham, Massachusetts 02451
(Name and address of agent for service)
(781) 370-2700
(Telephone number, including area code, of agent for service)
copy to:
Francis J. Feeney, Jr., Esquire
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
(617) 951-6600
(Name, address and telephone number of agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities to be Amount to be registered Proposed Maximum Proposed Maximum Amount of Registration
registered Offering Price Per Unit Aggregate Offering Price Fee
<S> <C> <C> <C> <C>
WIRED VENTURES, INC.
EQUITY INCENTIVE PLAN(1)
Common Stock,
$0.01 par value. 1,188 Shares $14.27 (2) $16,952.76(2) $4.72(2)
</TABLE>
(1) Pursuant to the Agreement and Plan of Merger and Reorganization dated as of
May 26, 1999, among Registrant, BF Acquisition Corp., Wired Ventures, Inc. and
the stockholder representatives of Wired Ventures, Inc., Registrant assumed,
effective June 30, 1999, all outstanding options to purchase common stock of
Wired Ventures under the Equity Incentive Plan, and such options became
exercisable to purchase shares of Registrant's common stock, with appropriate
adjustments to the number of shares and exercise price of each assumed option.
(2) Computed in accordance with Rule 457(h) under the Securities Act solely for
the purpose of calculating the registration fee. All such shares are issuable
upon the exercise of outstanding options with fixed exercise prices. The
computation with respect to such outstanding options is based on the weighted
average per share exercise price of the options, the shares issuable under which
are registered hereby.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Lycos hereby incorporates by reference the documents listed in (a)
through (c) below. In addition, all documents subsequently filed by Lycos
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934 (prior to the filing of a Post-Effective Amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold) shall be deemed to be incorporated by reference in this
Registration Statement and to be a part thereof from the date of filing of such
documents.
(a) Lycos' latest annual report filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 or the latest Prospectus filed
pursuant to Rule 424(b) under the Securities Act of 1933, which contains either
directly or by incorporation by reference audited financial statements for
Lycos' latest fiscal year for which such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered by the
annual report or the Prospectus referred to in (a) above.
(c) The description of Lycos' Common Stock which is contained in the
Registration Statement filed by Lycos under the Securities Exchange Act of 1934,
including any amendment or report filed for the purpose of updating such
description.
ITEM 4. DESCRIPTION OF SECURITIES
Inapplicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The financial statements and schedules incorporated by reference in
this registration statement have been audited by KPMG LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance on the authority of said firm as
experts in giving said reports.
The validity of the authorization and issuance of the shares of Common
Stock offered hereby will be passed upon by Hutchins, Wheeler & Dittmar, A
Professional Corporation, Boston, Massachusetts, counsel to Lycos.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Delaware General Corporation Law and the Company's Amended and
Restated By-laws provide for indemnification of Lycos' directors and officers
for liabilities and expenses that they may incur in such capacities. In general,
directors and officers are indemnified with respect to actions taken in good
faith in a manner reasonably believed to be in, or not opposed to, the best
interests of Lycos, and with respect to any criminal action or proceeding,
actions that the indemnitee has no reasonable choice to believe were unlawful.
Lycos has purchased insurance with respect to, among other things, the
liabilities that may arise under the provisions referred to above. The directors
and officers of Lycos also are insured against certain liabilities, including
certain liabilities arising under the Securities Act of 1933, as amended, which
might be incurred by them in such capacities and against which they are not
indemnified by Lycos.
Lycos has entered into separate indemnification agreements with its
directors and officers. The indemnification agreements create certain
indemnification obligations of Lycos in favor of the directors and officers and,
as permitted by applicable law, will clarify and expand the circumstances under
which a director or officer will be indemnified.
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
ITEM 8. EXHIBITS
Exhibit
Number
4.1 Wired Ventures, Inc. Equity Incentive Plan.
5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional Corporation.
23.1 Consent of KPMG LLP Boston, Independent Accountants regarding Lycos,
Inc.
23.2 Consent of KPMG LLP San Francisco, Independent Accountants regarding
Wired Ventures, Inc.
23.3 Consent of Hutchins, Wheeler & Dittmar, A Professional Corporation.
(included in Exhibit 5.1).
24.1 Powers of Attorney (included on page II-3).
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes the following:
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(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;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the 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 Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes, that, insofar as
indemnification for liabilities arising under the Securities Act of 1933 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant 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 Waltham, Commonwealth of Massachusetts on September
24, 1999.
LYCOS, INC.
/s/ Robert J. Davis
Robert J. Davis
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Robert J. Davis and Edward M. Philip, and each of
them, with the power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or in his name, place and stead, in any and all capacities to sign any
and all amendments or post-effective amendments to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or 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
attorney-in-fact and agents or either of them, or their or his substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ Robert J. Davis President, Chief Executive Officer and September 24, 1999
Robert J. Davis Director (principal executive officer)
/s/ Edward M. Philip Chief Operating Officer, Chief Financial September 24, 1999
Edward M. Philip Officer and Secretary (principal financial
and accounting officer)
/s/ John M. Connors, Jr. Director September 24, 1999
John M. Connors, Jr.
/s/ Daniel J. Nova Director September 24, 1999
Daniel J. Nova
/s/ Richard H. Sabot Director September 24, 1999
Richard H. Sabot
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number
4.1 Wired Ventures, Inc. Equity Incentive Plan.
5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional Corporation.
23.1 Consent of KPMG LLP Boston, Independent Accountants regarding Lycos,
Inc.
23.2 Consent of KPMG LLP San Francisco, Independent Accountants regarding
Wired Ventures, Inc.
23.3 Consent of Hutchins, Wheeler & Dittmar, A Professional Corporation
(included in Exhibit 5.1).
24.1 Powers of Attorney (See page II-3).
<PAGE>
EXHIBIT 4.1
WIRED VENTURES, INC.
EQUITY INCENTIVE PLAN
Adopted on March 29, 1996
Amended on May 26, 1996
Approved by the Stockholders on May
28, 1996 Adjusted to reflect 1-for-2 Reverse Stock
Split effective on September 25, 1996
Amended on August 12, 1997
Approved by Stockholders on September 22, 1997
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company, and its Affiliates,
may be given an opportunity to benefit from increases in value of the stock of
the Company through the granting of (1) Incentive Stock Options, (2)
Nonstatutory Stock Options, (3) stock bonuses, (4) rights to purchase restricted
stock, and (5) stock appreciation rights, all as defined below.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Directors of or Consultants to the Company or
its Affiliates, to secure and retain the services of new Employees, Directors
and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.
(c) The Company intends that the Stock Awards issued under the Plan
will, in the discretion of the Board or any Committee to which responsibility
for administration of the Plan has been delegated pursuant to subsection 3(c),
be either (1) Options granted pursuant to Section 6 hereof, including Incentive
Stock Options and Nonstatutory Stock Options, (2) stock bonuses or rights to
purchase restricted stock granted pursuant to Section 7 hereof, or (3) stock
appreciation rights granted pursuant to Section 8 hereof. All Options will be
separately designated Incentive Stock Options or Nonstatutory Stock Options at
the time of grant, and in such form as issued pursuant to Section 6, and a
separate certificate or certificates will be issued for shares purchased on
exercise of each type of Option.
2. DEFINITIONS.
(a) "Affiliate" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(e) "Company" means Wired Ventures, Inc., a Delaware corporation.
(f) "Concurrent Stock Appreciation Right" or "Concurrent Right" means a
right granted pursuant to subsection 8(b)(2) of the Plan.
(g) "Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services, provided that the term "Consultant" will not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.
(h) "Continuous Status as an Employee, Director or Consultant" means
the employment or relationship as a Director or Consultant is not interrupted or
terminated. The Board, in its sole discretion, may determine whether Continuous
Status as an Employee, Director or Consultant will be considered interrupted in
the case of: (1) any approved leave of absence, including sick leave, military
leave, or any other personal leave; or (2) transfers between locations of the
Company or between the Company, Affiliates or their successors.
(i) "Covered Employee" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total
compensation is required to be reported to shareholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.
(j) "Director" means a member of the Board.
(k) "Disinterested Person" means a Director: who either (1) was not
during the one year prior to service as an administrator of the Plan granted or
awarded equity securities pursuant to the Plan or any other plan of the Company
or any Affiliate entitling the participants therein to acquire equity securities
of the Company or any Affiliate except as permitted by Rule 16b-3(c)(2)(i); or
(2) is otherwise considered to be a "disinterested person" in accordance with
Rule 16b-3(c)(2)(i), or any other applicable rules, regulations or
interpretations of the Securities and Exchange Commission.
(l) "Employee" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company will be sufficient to
constitute "employment" by the Company.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(n) "Fair Market Value" means the value of the common stock of the
Company as determined in good faith by the Board and in a manner consistent with
Section 260.140.50 of Title 10 of the California Code of Regulations.
(o) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the code and the
regulations promulgated thereunder.
(p) "Independent Stock Appreciation Right" or "Independent Right" means
a right granted pursuant to subsection 8(b)(3) of the Plan.
(q) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
(r) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(s) "Option" means a stock option granted pursuant to the Plan.
(t) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. Each Option Agreement will be subject to the terms and conditions of the
Plan.
(u) "Optionee" means an Employee, Director or Consultant who holds an
outstanding Option.
(v) "Outside Director" means a Director who either (1) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
Treasury regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time, and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director, or (2) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.
(w) "Plan" means this 1996 Equity Incentive Plan.
(x) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.
(y) "Stock Appreciation Right" means any of the various types of
rights which may be granted under Section 8 of the Plan.
(z) "Stock Award" means any right granted under the Plan, including any
Option, any stock bonus, any right to purchase restricted stock, and any Stock
Appreciation Right.
(aa) "Stock Award Agreement" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement will be subject to the
terms and conditions of the Plan.
(bb) "Tandem Stock Appreciation Right" or "Tandem Right" means a right
granted pursuant to subsection 8(b)(1) of the Plan.
3. ADMINISTRATION.
(a) The Plan will be administered by the Board unless and until the
Board delegates administration to a Committee, as provided in subsection 3(c).
(b) The Board will have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan will be granted Stock Awards; when and how each Stock
Award will be granted; whether a Stock Award will be an Incentive Stock Option,
a Nonstatutory Stock Option, a stock bonus, a right to purchase restricted
stock, a Stock Appreciation Right, or a combination of the foregoing; the
provisions of each Stock Award granted (which need not be identical), including
the time or times when a person will be permitted to receive stock pursuant to a
Stock Award; whether a person will be permitted to receive stock upon exercise
of an Independent Stock Appreciation Right; and the number of shares with
respect to which a Stock Award will be granted to each such person.
(2) To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it will deem necessary or expedient to make the
Plan fully effective.
(3) To amend the Plan or a Stock Award as provided in Section
14.
(4) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of
the Company which are not in conflict with the provisions of the Plan.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of which Committee will be Disinterested Persons and may also be, in the
discretion of the Board, Outside Directors. If administration is delegated to a
Committee, the Committee will have, in connection with the administration of the
Plan, the powers theretofore possessed by the Board (and references in this Plan
to the Board will thereafter be to the Committee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board. The Board may abolish the Committee at any time
and revest in the Board the administration of the Plan. Additionally, prior to
the dated of the first registration of an equity security of the Company under
Section 12 of the Exchange Act, and notwithstanding anything to the contrary
contained herein, the Board may delegate administration of the Plan to any
person or persons and the term "Committee" will apply to any person or persons
to whom such authority has been delegated. Notwithstanding anything in this
Section 3 to the contrary, at any time the Board or the Committee may delegate
to a committee of one or more members of the Board the authority to grant Stock
Awards to eligible persons who (1) are not then subject to Section 16 of the
Exchange Act and/or (2) are either (A) not then Covered Employees and are not
expected to be Covered Employees at the time of recognition of income resulting
from such Stock Award, or (B) not persons with respect to whom the Company
wishes to avoid the application of Section 162(m) of the Code.
(d) Any requirement that an administrator of the Plan be a
Disinterested Person will not apply (1) prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, or (2) if the Board or the Committee expressly declares that such
requirement will not apply. Any Disinterested Person will otherwise comply with
the requirements of Rule 16b-3.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 13 relating to adjustments
upon changes in stock, the stock that may be issued pursuant to Stock Awards
will not exceed in the aggregate Five Million Seven Hundred Fifty Thousand
(5,750,000) shares of the Company's common stock. If any Stock Award for any
reasons expires or otherwise terminates, in whole or in part, without having
been exercised in full, the stock not acquired under such Stock Award will
revert to and again become available for issuance under the Plan. Shares subject
to Stock Appreciation Rights exercised in accordance with Section 8 of the Plan
will not be available for subsequent issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. ELIGIBILITY.
(a) Incentive Stock Options and Stock Appreciation Rights appurtenant
thereto may be granted only to Employees. Stock Awards other than Incentive
Stock Options and Stock Appreciation Rights appurtenant thereto may be granted
only to Employees, Directors or Consultants.
(b) A Director will in no event be eligible for the benefits of the
Plan unless at the time discretion is exercised in the selection of the Director
as a person to whom Stock Awards may be granted, or in the determination of the
number of shares which may be covered by Stock Awards granted to the Director:
(1) the Board has delegated its discretionary authority over the Plan to a
Committee which consists solely of Disinterested Persons; or (2) the Plan
otherwise complies with the requirements of Rule 16b-3. The Board will otherwise
comply with the requirements of 16b-3. This subsection 5(b) will not apply (1)
prior to the date of the first registration of an equity security of the Company
under Section 12 of the Exchange Act , or (2) if the Board or Committee
expressly declares that it will not apply.
(c) No person will be eligible for the grant of an Option or an award
to purchase restricted stock if, at the time of grant, such person owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of any of its Affiliates unless the exercise price of such Option
is at least one hundred ten percent (110%) of the Fair Market Value of such
stock at the date of grant and the Option is not exercisable after the
expiration of five (5) years from the date of grant, or in the case of a
restricted stock purchase award, the purchase price is at least one hundred
percent (100%) of the Fair Market Value of such stock at the date of grant.
(d) Subject to the provisions of Section 13 relating to adjustments
upon changes in stock, no person will be eligible to be granted Options and
Stock Appreciation Rights covering more than One Hundred Thousand (100,000)
shares of the Company's common stock in any calendar year.
6. OPTION PROVISIONS.
Each Option will be in such form and will contain such terms and
conditions as the Board will deem appropriate. The provisions of separate
Options need not be identical, but each Option will include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) Term. No Option will be exercisable after the expiration of
ten (10) years from the date it was granted.
(b) Price. The exercise price of each Incentive Stock Option will be
not less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted; the exercise price of
each Nonstatutory Stock Option will be not less than eighty-five percent (85%)
of the Fair Market Value of the stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Option (whether an
Incentive Stock Option or a Nonstatutory Stock Option ) may be granted with an
exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code.
(c) Consideration. The purchase price of stock acquired pursuant to an
Option will be paid, to the extent permitted by applicable statutes and
regulations, either (1) in cash at the time the Option is exercised, or (2) at
the discretion of the Board or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the Option is granted or to whom the Option is
transferred pursuant to subsection 6(d), or (C) in any other form of legal
consideration that may be acceptable to the Board. In the case of any deferred
payment arrangement, interest will be payable at least annually and will be
charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other than
amounts stated to be interest under the deferred payment arrangement.
(d) Transferability. An Incentive Stock Option will not be transferable
except by will or by the laws of descent and distribution, and will be
exercisable during the lifetime of the person to whom the Incentive Stock Option
is granted only by such person. A Nonstatutory Stock Option will not be
transferable except by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order satisfying the requirements of
Rule 16b-3 and any administrative interpretations or propounded thereunder (a
"QDRO"), and will be exercisable during the lifetime of the person to whom the
Option is granted only by such person or any transferee pursuant to a QDRO.
Notwithstanding the foregoing, the person to whom the Option is granted may, by
delivering written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the Optionee, will
thereafter be entitled to exercise the Option.
(e) Vesting. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the Option may become exercisable ("vest")
with respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. The vesting provisions of
individual Options may vary but in each case will provide for vesting of at
least twenty percent (20%) per year of the total number of shares subject to the
Option. The provisions of this subsection 6(e) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.
(f) Termination of Employment or Relationship as a Director or
Consultant. In the event an Optionee's Continuous Status as an Employee,
Director or Consultant terminates (other than upon the Optionee's death or
disability), the Optionee may exercise his or her Options (to the extent that
the Optionee was entitled to exercise it at the date of termination) but only
within such period of time ending on the earlier of (1) the date three (3)
months after the termination of the Optionee's Continuous Status as an Employee,
Director or Consultant ( or such longer or shorter period, which in no event
will be less than thirty (30) days, specified in the Option Agreement), or (2)
the expiration of the term of the Option as set forth in the Option Agreement.
If, after termination, the Optionee does not exercise his or her Option within
the time specified in the Option Agreement, the Option will terminate, and the
shares covered by such Option will revert to and again become available for
issuance under the Plan. An Optionee's Option Agreement may also provide that if
the exercise of the Option following the termination of the Optionee's
Continuous Status as an Employee, Director or Consultant (other than upon the
Optionee's death or disability) would result in liability under Section 16(b) of
the Exchange Act, then the Option will terminate on the earlier of (1) the
expiration of the term of the Option set forth in the Option Agreement, or (2)
the tenth (10th) day after the last date on which such exercise would result in
such liability under Section 16(b) of the Exchange Act. Finally, an Optionee's
Option Agreement may also provide that if the exercise of the Option following
the termination of the Optionee's Continuous Status as an Employee, Director or
Consultant (other than upon the Optionee's death or disability) would be
prohibited at any time solely because the issuance of shares would violate the
registration requirements under the Act, then the Option will terminate on the
earlier of (1) the expiration of the term of the Option set forth in the first
paragraph of this subsection 6(f), or (2) the expiration of a period of three
(3) months after the termination of the Optionee's Continuous Status as an
Employee, Director or Consultant during which the exercise of the Option would
not be in violation of such registration requirements.
(g) Disability of Optionee. In the event an Optionee's Continuous
Status as an Employee, Director or Consultant terminates as a result of the
Optionee's disability, the Optionee may exercise his or her Option (to the
extent that the Optionee was entitled to exercise it at the date of
termination), but only within such period of time ending on the earlier of (1)
the date twelve (12) months following such termination (or such longer or
shorter period, which in no event will be less than six (6) months, specified in
the Option Agreement), or (2) the expiration of the term of the Option as set
forth in the Option Agreement. If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option will revert to and again become available
for issuance under the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option will
terminate, and the shares covered by such Option will revert to and again become
available for issuance under the Plan.
(h) Death of Optionee. In the event of the death of an Optionee during,
or within a period specified in the Option after the termination of the
Optionee's Continuous Status as an Employee, Director or Consultant, the Option
may be exercised (to the extent the Optionee was entitled to exercised the
Option at the date of death) by the Optionee's estate, by a person who acquired
the right to exercise the Option by bequest or inheritance or by a person
designated to exercise the option upon the Optionee's death pursuant to
subsection 6(d), but only within the period ending on the earlier of (1) the
date eighteen (18) months following the date of death (or such longer or shorter
period, which in no event will be less than (6) months, specified in the Option
Agreement), or (2) the expiration of the term of such Option as set forth in the
Option Agreement. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option will revert to and again become available for issuance
under the Plan. If, after death, the Option is not exercised within the time
specified herein, the Option will terminate, and the shares covered by such
Option will revert to and again become available for issuance under the Plan.
(i) Early Exercise. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject to
the Option prior to the full vesting of the Option. Any unvested shares so
purchased will be subject to a repurchase right in favor of the Company, with
the repurchase price to be equal to the original purchase price of the stock, or
to any other restriction the Board determines to be appropriate; provided,
however, that (1) the right to repurchase at the original purchase price will
lapse at a minimum rate of twenty percent (20%) per year over five (5) years
from the date the Option was granted, and (2) such right will be exercisable
only within (A) the ninety (90) day period following the termination of
employment or the relationship as a Director or Consultant, or (B) such longer
period as may be agreed to by the Company and the Optionee (for example, for
purposes of satisfying the requirements of Section 1202(c)(3) of the Code
(regarding "qualified small business stock"), and (3) such right will be
exercisable only for cash or cancellation of purchase money indebtedness for the
shares. Should the right of repurchase be assigned by the Company, the assignee
will pay the Company cash equal to the difference between the original purchase
price and the stock's Fair Market Value if the original purchase price is less
than the stock's Fair Market Value.
(j) Right of Repurchase. The Option may, but need not, include a
provision whereby the Company may elect, prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, to repurchase all or any part of the vested shares exercised
pursuant to the Option; provided, however, that (1) such repurchase right will
be exercisable only within (A) the ninety (90) day period following the
termination of employment or the relationship as a Director or Consultant, or
(B) such longer period as may be agreed to be the Company and the Optionee (for
example, for purposes of satisfying the requirements of Section 1202(c)(3) of
the Code (regarding "qualified small business stock")), and (2) such right will
be exercisable only for cash or cancellation of purchase money indebtedness for
the shares at a repurchase price equal to the greater of (A) the stock's Fair
Market Value at the time of such termination, or (B) the original purchase price
paid for such shares by the Optionee.
(k) Right of First Refusal. The Option may, but need not, include a
provision whereby the Company may elect, prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, to exercise a right of first refusal following receipt of notice
from the Optionee of the intent to transfer all or any part of the shares
exercised pursuant to the Option.
(l) Re-Load Options. Without in any way limiting the authority of the
Board or Committee to make or not to make grants of Options hereunder, the Board
or Committee will have the authority (but not an obligation) to include as part
of any Option Agreement a provision entitling the Optionee to a further Option
(a "Re-Load Option") in the event the Optionee exercises the Option evidenced by
the Option agreement, in whole or in part, by surrendering other shares of
Common Stock in accordance with this Plan and the terms and conditions of the
Option Agreement. Any such Re-Load Option (1) will be for a number of shares
equal to the number of shares surrendered as part or all of the exercise price
of such Option; (2) will have an expiration date which is the same as the
expiration date of the Option the exercise of which gave rise to such Re-Load
Option; and (3) will have an exercise price which is equal to one hundred
percent (100%) of the Fair Market Value of the Common Stock subject to the
Re-Loan Option on the date of exercise of the original Option. Notwithstanding
the foregoing, a Re-Load Option that is granted to a 10% stockholder (as
described in subsection 5(c)), will have an exercise price which is equal to one
hundred ten percent (110%) of the Fair Market Value of the stock subject to the
Re-Load Option on the date of exercise of the original Option and will have a
term which is no longer than five (5) years. Any such Re-Loan Option may be an
Incentive Stock Option or a Nonstatutory Stock Option, as the Board or Committee
may designate at the time of the grant of the original Option; provided,
however, that the designation of any Re-Loan Option as an Incentive Stock Option
will be subject to the one hundred thousand dollar ($100,000) annual limitation
on exercisability of Incentive Stock Options described in subsection 12(e) of
the Plan and in Section 422(d) of the Code. There will be no Re-Load Options on
a Re-Load Option. Any such Re-Load Option will be subject to the availability of
sufficient shares under subsection (a) and will be subject to the availability
of sufficient shares under subsection 4(a) and will be subject to such other
terms and conditions as the Board or Committee may determine which are not
inconsistent with the express provisions of the Plan regarding the terms of
Options.
7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
Each stock bonus or restricted stock purchase agreement will be in such
form and will contain such terms and conditions as the Board or the Committee
will deem appropriate. The terms and conditions of stock bonus or restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate agreements need not be identical, but each stock bonus or
restricted stock purchase agreement will include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions as appropriate:
(a) Purchase Price. The purchase price under each restricted purchase
agreement will be such amount as of the Board or Committee will determine and
designate in such agreement, but in no event will the purchase price be less
than eight-five percent (85%) of the stock's Fair Market Value on the date such
award is made. Notwithstanding the foregoing, the Board or the Committee may
determine that eligible participants in the Plan may be awarded stock pursuant
to a stock bonus agreement in consideration for past services actually rendered
to the Company or for its benefits.
(b) Transferability. No rights under a stock bonus or restricted stock
purchase agreement will be transferable except by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order satisfying
the requirements of Rule 16b-3 and any administrative interpretations or
pronouncements thereunder, so long as stock awarded under such agreement remains
subject the terms of the agreement.
(c) Consideration. The purchase price of stock acquired pursuant to a
stock purchase agreement will be paid either: (1) in cash at the time of
purchase; (2) at the discretion of the Board or the Committee, according to a
deferred payment or other arrangement with the person to whom the stock is sold;
or (3) in any other form of legal consideration that may be acceptable to the
Board or the Committee in its discretion. Notwithstanding the foregoing, the
Board or the Committee to which administration of the Plan has been delegated
may award stock pursuant to a stock bonus agreement in consideration for past
services actually rendered to the Company or for its benefit.
(d) Vesting. Shares of stock sold or awarded under the Plan may, but
need not, be
subject to a repurchase option in favor of the Company in accordance with a
vesting schedule to be determined by the Board or the Committee; provided,
however, that (1) the right to repurchase at the original purchase price will
lapse at a minimum rate of twenty percent (20%) per year over five (5) years
from the date the Stock Award was granted, and (2) such right will be
exercisable only (A) within the ninety (90) day period following the termination
of employment or the relationship as a Director or Consultant, or (B) such
longer period as may be agreed to by the Company and the holder of the Stock
Award (for example, for purposes of satisfying the requirements of Section
1202(c)(3) of the Code (regarding "qualified small business stock")), and (3)
such right will be exercisable only for cash or cancellation of purchase money
indebtedness for the shares. Should the right of repurchase be assigned by the
Company, the assignee will pay the Company cash equal to the difference between
the original purchase price and the stock's Fair Market Value if the original
purchase price is less than the stock's Fair Market Value.
(e) Termination of Employment or Relationship as a Director or
Consultant. In the event a Participant's Continuous Status as an Employee,
Director or Consultant terminates, the Company may repurchase or otherwise
reacquire, subject to the limitations described in subsection 7(d), any or all
of the shares of stock held by that person which have not vested as of the date
of termination under the terms of the stock bonus or restricted stock purchase
agreement between the Company and such person.
8. STOCK APPRECIATION RIGHTS.
(a) The Board or Committee will have full power and authority,
exercisable in its sole discretion, to grant Stock Appreciation Rights under the
Plan to Employees or Directors of or Consultants to, the Company or its
Affiliates. To exercise any outstanding Stock Appreciation Right, the holder
must provide written notice of exercise to the Company in compliance with the
provisions of the Stock Award Agreement evidencing such right. If a Stock
Appreciation Right is granted to an individual who is at the time subject to
Section 16(b) of the Exchange Act (a "Section 16(b) Insider"), the Stock Award
Agreement of grant will incorporate all the terms and conditions at the time
necessary to assure that the subsequent exercise of such right will qualify for
the safe-harbor exemption from short-swing profit liability provided by Rule
l6b-3 promulgated under the Exchange Act (or any successor rule or regulation).
Except as provided in subsection 5(d), no limitation will exist on the aggregate
amount of cash payments the Company may make under the Plan in connection with
the exercise of a Stock Appreciation Right.
(b) Three types of Stock Appreciation Rights will be authorized for
issuance under the Plan:
(1) Tandem Stock Appreciation Rights. Tandem Stock Appreciation Rights will
be granted appurtenant to an Option, and will, except as specifically set forth
in this Section 8, be subject to the same terms and conditions applicable to the
particular Option grant to which it pertains. Tandem Stock Appreciation Rights
will require the holder to elect between the exercise of the underlying Option
for shares of stock and the surrender, in whole or in part, of such Option for
an appreciation distribution. The appreciation distribution payable on the
exercised Tandem Right will be in cash (or, if so provided, in an equivalent
number of shares of stock based on Fair Market Value on the date of the Option
surrender) in an amount up to the excess of (A) the Fair Market Value (on the
date of the Option surrender) of the number of shares of stock covered by that
portion of the surrendered Option in which the Optionee is vested over (B) the
aggregate exercise price payable for such vested shares.
(2) Concurrent Stock Appreciation Rights. Concurrent Rights will be granted
appurtenant to an option and may apply to all or any portion of the shares of
stock subject to the underlying Option and will, except as specifically set
forth in this Section 8, be subject to the same terms and conditions applicable
to the particular Option grant to which it pertains. A Concurrent Right will be
exercised automatically at the same time the underlying Option is exercised with
respect to the particular shares of stock to which the Concurrent Right
pertains. The appreciation distribution payable on an exercised Concurrent Right
will be in cash (or, if so provided, in an equivalent number of shares of stock
based on Fair Market Value on the date of the exercise of the Concurrent Right)
in an amount equal to such portion as will be determined by the Board or the
Committee at the time of the grant of the excess of (A) the aggregate Fair
Market Value (on the date of the exercise of the Concurrent Right) of the vested
shares of stock purchased under the underlying Option which have Concurrent
Rights appurtenant to them over (B) the aggregate exercise price paid for such
shares.
(3) Independent Stock Appreciation Rights. Independent Rights will be
granted independently of any Option and will, except as specifically set forth
in this Section 8, be subject to the same terms and conditions applicable to
Nonstatutory Stock Options as set forth in Section 6. They will be denominated
in share equivalents. The appreciation distribution payable on the exercised
Independent Right will be not greater than an amount equal to the excess of (A)
the aggregate Fair Market Value (on the date of the exercise of the Independent
Right) of a number of shares of Company stock equal to the number of share
equivalents in which the holder is vested under such Independent Right, and with
respect to which the holder is exercising the Independent Right on such date,
over (B) the aggregate Fair Market Value (on the date of the grant of the
Independent Right) of such number of shares of Company stock. The appreciation
distribution payable on the exercised Independent Right will be in cash or, if
so provided, in an equivalent number of shares of stock based on Fair Market
Value on the date of the exercise of the Independent Right.
9. CANCELLATION AND RE-GRANT OF OPTIONS.
(a) The Board or the Committee will have the authority to effect, at
any time and from time to time, (1) the repricing of any outstanding Options
and/or any Stock Appreciation Rights under the Plan and/or (2) with the consent
of the affected holders of Options and/or Stock Appreciation Rights, the
cancellation of any outstanding Options and/or any Stock Appreciation Rights
under the Plan and the grant in substitution therefor of new Options and/or
Stock Appreciation Rights under the Plan covering the same or different numbers
of shares of stock, but having an exercise price per share not less than
eighty-five percent (85%) of the Fair Market Value (one hundred percent (100%)
of the Fair Market Value in the case of an Incentive Stock Option) or, in the
case of a 10% stockholder (as described in subsection 5(c)), not less than one
hundred ten percent (110%) of the Fait Market Value) per share of stock on the
new grant date. Notwithstanding the foregoing, the Board or the Committee may
grant an Option and/or Stock Appreciation Right with an exercise price lower
than that set forth above if such Option and/or Stock Appreciation Right is
granted as part of a transaction to which section 424(a) of the Code applies.
(b) Shares subject to an Option or Stock Appreciation Right canceled
under this Section 9 will continue to be counted against the maximum award of
Options and Stock Appreciation Rights permitted to be granted pursuant to
subsection 5(d) of the Plan. The repricing of an Option and/or Stock
Appreciation Right under this Section 9, resulting in a reduction of the
exercise price, will be deemed to be a cancellation of the original Option
and/or Stock Appreciation Right and the grant of a substitute Option and/or
Stock Appreciation Right; in the event of such repricing, both the original and
the substituted Options and Stock Appreciation Rights will be counted against
the maximum awards of Options and Stock Appreciation Rights permitted to be
granted pursuant to subsection 5(d) of the Plan. The provisions of this
subsection 9(b) will be applicable only to the extent required by Section 162(m)
of the Code.
10. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards, the Company will keep
available at all times the number of shares of stock required to satisfy such
Stock Awards.
(b) The Company will seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Stock Award; provided,
however, that this undertaking will not require the Company to register under
the Securities Act of 1933, as amended (the "Securities Act") either the Plan,
any Stock Award or any stock issued or issuable pursuant to any such Stock
Award. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company will be relieved from any liability for failure to issue and sell stock
upon exercise of such Stock Awards unless and until such authority is obtained.
11. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Stock Awards will
constitute general funds of the Company.
12. MISCELLANEOUS.
(a) Neither an Employee, Director or Consultant nor any person to whom
a Stock Award is transferred under subsection 6(d), 7(b), or 8(b) will be deemed
to be the holder of, or to have any of the rights of a holder with respect to,
any shares subject to such Stock Award unless and until such person has
satisfied all requirements for exercise of the Stock Award pursuant to its
terms.
(b) Throughout the term of any Stock Award, the Company will deliver to
the holder of such Stock Award, not later than one hundred twenty (120) days
after the close of each of the Company's fiscal years during the term of such
Stock Award, a balance sheet and an income statement. This section will not
apply when issuance is limited to key employees whose duties in connection with
the Company assure them access to equivalent information.
(c) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto will confer upon any Employee, Director, Consultant or
other holder of Stock Awards any right to continue in the employ of the Company
or any Affiliate (or to continue acting as a Director or Consultant) or will
affect the right of the Company or any Affiliate to terminate the employment of
any Employee with or without cause the right of the Company's Board of Directors
and/or the Company's shareholders to remove any Director pursuant to the terms
of the Company's By-Laws and the provisions of the Delaware General Corporation
Law or the right to terminate the relationship of any Consultant pursuant to the
terms of such Consultant's agreement with the Company or Affiliate.
(d) To the extent that the aggregate Fair Market Value (determined at
the time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds One Hundred Thousand Dollars
($100,000), the Options or portions thereof which exceed such limit (according
to the order in which they were granted) will be treated as Nonstatutory Stock
Options.
(e) The Company may require any person to whom a Stock Award is
granted, or any person to whom a Stock Award is transferred pursuant to
subsection 6(d), 7(b) or 8(b), as a condition of exercising or acquiring stock
under any Stock Award, (1) to give written assurances satisfactory to the
Company as to such person's knowledge and experience in financial and business
matters and/or to employ a purchaser representative reasonably satisfactory to
the Company who is knowledgeable and experienced in financial and business
matters, and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Stock Award;
and (2) to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the Stock Award for such person's own
account and not with any present intention of selling or otherwise distributing
the stock. The foregoing requirements, and any assurances given pursuant to such
requirements, will be inoperative if (1) the issuance of the shares upon the
exercise or acquisition of stock under the Stock Award has been registered under
a then currently effective registration statement under the Securities Act, or
(2) as to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.
(f) To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of stock
under a Stock Award by any of the following means or by a combination of such
means: (1) tendering a cash payment; (2) authorizing the Company to withhold
shares from the shares of the common stock otherwise issuable to the participant
as a result of the exercise or acquisition of stock under the Stock Award; or
(3) delivering to the Company owned and unencumbered shares of the common stock
of the Company.
13. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan pursuant to subsection 4(a) and the maximum
number of shares subject to award to any person during any calendar year
pursuant to subsection 5(d), and the outstanding Stock Awards will be
appropriately adjusted in the class(es) and number of shares and price per share
of stock subject to such outstanding Stock Awards. Such adjustments will be made
by the Board or the Committee, the determination of which will be final, binding
and conclusive. (The conversion of any convertible securities of the Company
will not be treated as a "transaction not involving the receipt of consideration
by the Company".)
(b) In the event of: (1) a merger or consolidation in which the Company
is not the surviving corporation or (2) a reverse merger in which the Company is
the surviving corporation but the shares of the Company's common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise; or (3) the acquisition by any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable
successor provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any Affiliate of the Company) of the
beneficial ownership (within the meaning of Rule l3d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors, then to the extent not prohibited by
applicable law: (i) any surviving or acquiring corporation shall assume any
Options outstanding under the Plan or shall substitute similar Options
(including an option to acquire the same consideration paid to the stockholders
in the transaction described in this subsection 13(b)) for those outstanding
under the Plan, or (ii) such Options shall continue in full force and effect. In
the event any surviving or acquiring corporation refuses to assume such Options,
or to substitute similar options for those outstanding under the Plan, then such
Options shall be terminated if not exercised prior to such event. In the event
of a dissolution or liquidation of the Company, any Options outstanding under
the Plan shall terminate if not exercised prior to such event.
14. AMENDMENT OF THE PLAN AND STOCK AWARDS.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 13 relating to adjustments upon changes
in stock, no amendment will be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(1) Increase the number of shares reserved for Stock
Awards under the Plan;
(2) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422 of the
Code); or
(3) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to satisfy the requirements
of Section 422 of the Code or to comply with the requirements of Rule 16b-3.
(b) The Board may in its sole discretion submit any other amendment to
the Plan for stockholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible
Employees, Directors or Consultants with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(d) Rights and obligations under any Stock Award granted before
amendment of the Plan will not be impaired by any amendment of the Plan unless
(1) the Company requests the consent of the person to whom the Stock Award was
granted and (2) such person consents in writing.
(e) The Board at any time, and from time to time, may amend the terms
of any one or more Stock Awards; provided, however, that the rights and
obligations under any Stock Award will not be impaired by any such amendment
unless (1) the Company requests the consent of the person to whom the Stock
Award was granted and (2) such person consents in writing.
15. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan will terminate on March 28, 2006, which will be
within ten (10) years from the date the Plan is adopted by the Board or approved
by the stockholders of the Company, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any Stock Award granted while the Plan
is in effect will not be impaired by suspension or termination of the Plan,
except with the consent of the person to whom the Stock Award was granted.
16. EFFECTIVE DATE OF PLAN.
The Plan will become effective as determined by the Board, but no Stock
Awards granted under the Plan will be exercised unless and until the Plan has
been approved by the stockholders of the Company, which approval will be within
twelve (12) months before or after the date the Plan is adopted by the Board,
and, if required, an appropriate permit has been issued by the Commissioner of
Corporations of the State of California.
EXHIBIT 5.1
OPINION OF COUNSEL
September 24, 1999
Lycos, Inc.
400-2 Totten Pond Road
Waltham, MA 02451
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by Lycos, Inc. (the "Company") with the
Securities and Exchange Commission (the "Commission") on or about September 24,
1999 in connection with the registration under the Securities Act of 1933, as
amended, of 1,188 shares of Lycos' Common Stock reserved for issuance under
Lycos' assumed Wired Ventures, Inc. Equity Incentive Plan (the "Plan"). As
Lycos' legal counsel in connection with this transaction, we have examined the
proceedings taken and are familiar with the proceedings proposed to be taken by
Lycos in connection with the sale and issuance of the foregoing shares under the
Plan, (collectively, the "Shares").
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares, when
issued and sold in the manner described in the Registration Statement will be
legally and validly issued, fully paid and non-assessable, and no personal
liability will attach thereto.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the caption "Interests
of Named Experts and Counsel" in the Registration Statement.
Very truly yours,
/s/ Hutchins, Wheeler & Dittmar
HUTCHINS, WHEELER & DITTMAR,
A Professional Corporation
EXHIBIT 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors
Lycos, Inc.:
We consent to the incorporation by reference in this registration statement on
Form S-8 of Lycos, Inc. of our report dated August 18, 1998, relating to the
balance sheets of Lycos, Inc. as of July 31, 1998 and 1997, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended July 31, 1998, which report
appears in the annual report on Form 10K/A of Lycos, Inc.
/s/ KPMG LLP
Boston, Massachusetts
September 24, 1999
Exhibit 23.2
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors
Lycos, Inc.:
We consent to the incorporation by reference in this registration statement on
Form S-8 of Lycos, Inc. of our report dated February 26, 1999, relating to the
consolidated balance sheets of Wired Ventures, Inc. and subsidiaries as of
December 31, 1997 and 1998, and the related consolidated statements of
operations and comprehensive income (loss), minority interest and stockholders'
(deficit) equity and cash flows for each of the years in the three-year period
ended December 31, 1998, which report appears in the From 8-K of Lycos, Inc.
dated July 15, 1999.
/s/ KPMG LLP
San Francisco, California
September 24, 1999
