<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
(INCLUDING REGISTRATION OF SHARES FOR RESALE
BY MEANS OF A FORM S-3 PROSPECTUS)
UNDER
THE SECURITIES ACT OF 1933
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USWEB CORPORATION
(Exact name of issuer as specified in its charter)
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DELAWARE 87-0551650
(State of Incorporation) (I.R.S. Employer Identification Number)
2880 LAKESIDE DRIVE, SUITE 300
SANTA CLARA, CA 95054
(Address of principal executive offices)
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1996 EQUITY COMPENSATION PLAN
1997 ACQUISITION STOCK OPTION PLAN
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
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CAROLYN AVER
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY
USWEB CORPORATION
2880 LAKESIDE DRIVE, SUITE 300
SANTA CLARA, CA 95054
(408) 987-3200
(Name, address, including zip code and telephone number, including area code, of
agent for service)
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Copy to:
MARK BONHAM, ESQ.
Wilson Sonsini Goodrich & Rosati, P.C.
650 PAGE MILL ROAD
Palo Alto, California 94306
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
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TITLE OF
SECURITIES MAXIMUM AMOUNT TO BE AMOUNT OF
TO BE REGISTERED(1) PROPOSED MAXIMUM PROPOSED MAXIMUM REGISTRATION
REGISTERED SHARE OFFERING PRICE PER AGGREGATE OFFERING PRICE FEE(1)
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<S> <C> <C> <C> <C>
Common Stock, $0.001 par value
To be issued under
1996 Equity Compensation Plan......... 5,000,000 shares $ 18.66(2) $ 93,310,379.90 $ 27,527
To be issued under
1997 Acquisition Stock Option Plan.... 10,000,000 shares $ 18.56(3) $185,625,000.00 $ 54,760
To be issued under
1997 Employee Stock Purchase Plan..... 2,831,798 shares $ 15.78(4) $ 44,680,462.82 $ 13,181
Issued under
1997 Employee Stock Purchase Plan..... 168,202 shares $ 18.56(5) $ 3,122,249.63 $ 922
TOTAL 18,000,000 shares $326,738,092.34 $ 96,390
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</TABLE>
(1) For the sole purpose of calculating the registration fee, the number of
shares to be registered under this Registration Statement has been broken
down into four subtotals. Note, USWeb Corporation filed a Registration
Statement on Form S-8 (File No. 333-48543) on March 24, 1998, which
registered among other things (i) 2,000,000 options and shares reserved for
issuance under the 1996 Equity Compensation Plan and (ii) 10,000,000
options and shares reserved for issuance under the 1997 Acquisition Stock
Option Plan. Accordingly, the calculation of the Registration Fee does
not include any shares that were registered in connection with Registration
Statement of Form S-8 File No. 333-48543.
(2) Estimated pursuant to Rule 457(h) and Rule 457(c) solely for the purpose of
calculating the registration fee. The price of $18.66 per share represents
the weighted average exercise price based of (a) the weighted average
exercise price of the 640,360 unregistered shares subject to options
currently outstanding under the 1996 Equity Compensation Plan of $19.34 per
share, and (b) as to the 4,359,640 unregistered shares subject to future
issuance under the 1996 Equity Compensation Plan, the estimated exercise
price of $18.56 per share computed in accordance with Rule 457(h) by
averaging the high and low prices of a share of USWeb Corporation Common
Stock as reported in the Nasdaq National Market on June 2, 1998 (the
"MARKET PRICE").
(3) Computed in accordance with Rule 457(h) under the Securities Act of 1933.
Such computation is based on the Market Price.
(4) The exercise price of $15.78 per share represents the estimated exercise
price of the 2,831,798 shares subject to future issuance under the 1997
Employee Stock Purchase Plan, which is 85% of the Market Price. Pursuant
to Section 2(m) of the 1997 Employee Stock Purchase Plan (Exhibit 4.5),
shares are sold at 85% of the lesser of the fair market value of such
shares on the Enrollment Date or on the Exercise Date.
(5) Computed in accordance with Rule 457(h) under the Securities Act of 1933.
Such computation is based on the Market Price.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement relates to (i) 17,831,798 shares of Common
Stock to be issued in the future upon the exercise of options or the purchase of
stock under the Company's employee benefit plans and (ii) the resale of 168,202
shares of Common Stock previously issued under the Company's employee benefit
plans.
<PAGE>
USWEB CORPORATION
168,202 Shares
Common Stock
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This Prospectus relates to 168,202 shares of the Common Stock (the
"SHARES") of USWEB Corporation (the "COMPANY"), which may be offered from time
to time by selling stockholders (the "SELLING STOCKHOLDERS") for their own
accounts. The Company will receive no part of the proceeds from sales made
hereunder. The Shares were acquired by the Selling Stockholders pursuant to the
Company's employee benefit plans. The Shares may be offered by the Selling
Stockholders from time to time in one or more transactions in the over-the-
counter market at prices prevailing therein, in negotiated transactions at such
prices as may be agreed upon, or in a combination of such methods of sale. See
"Plan of Distribution." The price at which any of the Shares may be sold, and
the commissions, if any, paid in connection with any such sale, are unknown and
may vary from transaction to transaction. The Selling Stockholders will bear
all sales commissions and similar expenses. Any other expenses incurred by the
Company in connection with the registration and offering and not borne by the
Selling Stockholders will be borne by the Company. None of the shares offered
pursuant to this Prospectus have been registered prior to the filing of the
Registration Statement of which this Prospectus is a part.
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THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 4.
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The Common Stock is traded on The Nasdaq National Market under the Nasdaq
symbol "USWB". On June 2, 1998, the last reported sale price of the Company's
Common Stock was $18.25 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Securities and Exchange Commission (the "COMMISSION") may take the view
that, under certain circumstances, the Selling Stockholders and any broker-
dealers or agents that participate with the Selling Stockholders in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, as amended (the "SECURITIES ACT"). Commissions,
discounts or concessions received by any such broker-dealer or agent may be
deemed to be underwriting commissions under the Securities Act. See "Plan of
Distribution."
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The date of this Prospectus is June 3, 1998
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and in accordance
therewith files reports, proxy and information statements and other information
with the Commission. Such reports, proxy and information statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
NW, Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, Suite 1300, New
York, New York 10048 and Chicago Regional Office, Northwest Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may be obtained by mail at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington,
D.C. 20549. The Commission maintains a Web site that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Commission. The address of the site is
http://www.sec.gov. The Common Stock of the Company is listed on the Nasdaq
National Market, and such reports, proxy and information statements and other
information concerning the Company may be inspected at the offices of Nasdaq
Operations, 1735 K Street, NW, Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form S-
8/S-3 (herein, together with all amendments and exhibits, referred to as the
"REGISTRATION STATEMENT") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Shares, reference is hereby made
to the Registration Statement. The Registration Statement may be inspected at
the public reference facilities maintained by the Commission at the addresses
set forth in the preceding paragraph. Statements contained herein concerning
any document filed as an exhibit are not necessarily complete, and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement. Each such statement is qualified in its entirety by
such reference.
INFORMATION INCORPORATED BY REFERENCE
There are hereby incorporated by reference in this Prospectus the following
documents and information heretofore filed with the Securities and Exchange
Commission:
(1) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, dated December 5, 1997, filed
pursuant to Section 12(g) of the Exchange Act, including any amendment or
report filed for the purpose of updating such description.
(2) The Company's Quarterly report on Form 10-Q for the fiscal quarter
ended March 31, 1998, filed pursuant to Section 13 of the Exchange Act.
(3) The Company's Annual Report on Form 10-K/A for the year ended
December 31, 1997, as amended on April 14, 1998, filed pursuant to Section
13 of the Exchange Act.
(4) The Company's Current Report on Form 8-K, dated March 13, 1998,
filed pursuant to Section 13 of the Exchange Act.
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(5) Definitive Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 as filed with the Securities and Exchange
Commission on April 28, 1998.
(6) The Company's Post Effective Amendment No. 4 to Registration
Statement on Form S-4 (File No. 333-38351) in the form declared effective
on May 27, 1998, including the Prospectus dated May 20, 1998 as filed with
such Registration Statement, as amended from time to time.
All documents subsequently filed by the company 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
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 part hereof from the date of filing of such documents.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus is delivered, upon written or oral request of any
such person, a copy of any and all of the information that has been or may be
incorporated by reference in this Prospectus, other than exhibits to such
documents. Requests for such copies should be directed to Carolyn Aver,
Executive Vice President and Chief Financial Officer, USWeb Corporation, 2880
Lakeside Drive, Suite 300, Santa Clara, CA 95054. The Company's telephone
number at that location is (408) 987-3200.
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<PAGE>
THE COMPANY
The Company was incorporated in Utah in December 1995 and changed its
jurisdiction of incorporation to Delaware in December 1997. The Company's
principal executive offices are located at 2880 Lakeside Drive, Suite 300, Santa
Clara, CA 95054; its Internet address is http://www.usweb.com and its telephone
number is (408) 987-3200.
FORWARD LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act which are subject to the "safe harbor"
created by those sections and are based on current expectations, estimates and
projections about the Company's industry, management's beliefs, and assumptions
made by management. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
forward-looking statements include, but are not limited to, statements
concerning the Company's strategy, mission, acquisition program, opportunities
and goals and the potential development of the market for Intranet, Extranet and
Web site solutions and services.
These forward-looking statements are not guarantees of future performance
and are subject to certain risks, uncertainties and assumptions that are
difficult to predict. Such risks and uncertainties include those set forth
herein under "Risk Factors," as well as those noted in the documents
incorporated herein by reference. Forward-looking statements not specifically
set forth above may also be found in other sections of this Prospectus. Actual
results could differ materially and adversely from those discussed in the
forward-looking statements as a result of certain factors, including those
discussed in "Risk Factors" and elsewhere in this Prospectus and the documents
and information incorporated by reference. The Company undertakes no obligation
to update publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
RISK FACTORS
The following risk factors should be considered carefully in addition to
the other information contained in this Prospectus before purchasing the Common
Stock offered hereby.
Limited Operating History; Accumulated Deficit. The Company was founded in
December 1995 and enrolled its first franchisee ("Affiliate") in April 1996.
Accordingly, the Company has only a limited operating history on which to base
an evaluation of its business and prospects. The Company and its prospects must
be considered in light of the risks, expenses and difficulties frequently
encountered by companies in an early stage of development, particularly
companies in new and rapidly evolving markets such an Internet professional
services. Such risks for the Company include, but are not limited to, an
evolving business model and the management of both internal and acquisition-
based growth. To address these risks, the Company must, among other things,
continue to expand its network of consulting offices, continue to develop the
strength and quality of its operations,
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maximize the value delivered to clients by the USWeb Internet Strategy and
Solutions Center (the "Strategy and Solutions Center"), enhance the USWeb brand,
respond to competitive developments and continue to attract, retain and motivate
qualified employees. There can be no assurance that the Company will be
successful in meeting these challenges and addressing such risks and the failure
to do so could have a material adverse effect on the Company's business, results
of operations and financial condition.
The Company has incurred net losses since inception and as of March 31,
1998, had an accumulated deficit of $88.5 million. Although the Company has
experienced revenue growth in recent months, such growth rates may not be
sustainable or indicative of future operating results. In addition, the Company
intends to continue to invest heavily in acquisitions, infrastructure
development and marketing. As a result, the Company expects to continue to
incur substantial operating losses at least through the remainder of 1998, and
there can be no assurance that the Company will achieve or sustain
profitability.
Risks Related to Acquisitions. A key component of the Company's growth
strategy is the acquisition of Internet professional service firms that meet the
Company's criteria for revenues, profitability, growth potential and operating
strategy. The successful implementation of this strategy depends on the
Company's ability to identify suitable acquisition candidates, acquire such
companies on acceptable terms and integrate their operations successfully with
those of the Company. As of May 19, 1998, the Company had acquired 26 companies
and three additional acquisitions were probable. There can be no assurance that
the Company will be able to continue to identify additional suitable acquisition
candidates or that the Company will be able to acquire such candidates on
acceptable terms. Moreover, in pursuing acquisition opportunities the Company
may compete with other companies with similar growth strategies, certain of
which competitors may be larger and have greater financial and other resources
than the Company. Competition for these acquisition targets likely could also
result in increased prices of acquisition targets and a diminished pool of
companies available for acquisition. Acquisitions also involve a number of
other risks, including adverse effects on the Company's reported operating
results from increases in goodwill amortization, acquired in-process technology,
stock compensation expense and increased compensation expense resulting from
newly hired employees, the diversion of management attention, potential disputes
with the sellers of one or more acquired entities and the possible failure to
retain key acquired personnel. Client satisfaction or performance problems with
an acquired firm could also have a material adverse impact on the reputation of
the Company as a whole, and any acquired subsidiary could significantly
underperform relative to the Company's expectations. Because all of the
Company's acquisitions have beeen completed since March 1997, the Company is
currently facing all of these challenges and its ability to meet them over the
long term has not been established. For all these reasons, the Company's
pursuit of an overall acquisition strategy or any individual completed, pending
or future acquisition may have a material adverse effect on the Company's
business, results of operations and financial condition. To the extent the
Company chooses to use cash consideration for acquisitions in the future, the
Company may be required to obtain additional financing, and there can be no
assurance that such financing will be available on favorable terms, if at all.
As the Company issues stock to complete future acquisitions, existing
stockholders will experience further ownership dilution.
Potential Fluctuations in Quarterly Results. As a result of the Company's
limited operating history, rapid growth and the emerging nature of the markets
in which it competes, the Company's historical financial data is of limited
value in planning future operating expenses. Accordingly, the Company's expense
levels are based in part on its expectations concerning future revenues and are
fixed to a large extent. The Company's revenues are derived primarily from
consulting fees for
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<PAGE>
Internet solution engagements, which are difficult to forecast accurately. The
Company may be unable to adjust spending in a timely manner to compensate for
any unexpected shortfall in revenues. Accordingly, a significant shortfall in
demand for the Company's services could have an immediate and material adverse
effect on the Company's business, results of operations and financial condition.
Further, the Company intends to increase its business development and marketing
expenses significantly to expand operations and enhance the Company's brand name
and to increase other operating expenses as required to build the Strategy and
Solutions Center and support the operations of the Company's consulting offices.
To the extent that such expenses precede or are not rapidly followed by
increased revenues, the Company's business, results of operations and financial
condition may be materially adversely affected.
The Company's quarterly operating results may fluctuate significantly in
the future as a result of a variety of factors, many of which are outside the
Company's control. These factors include the level of demand for Intranet,
Extranet and Web site development; the productivity of the Company's consulting
offices; the Company's success in finding and acquiring suitable acquisition
candidates; the Company's ability to attract and retain personnel with the
necessary strategic, technical and creative skills required to service clients
effectively; the cost of advertising and related media; the amount and timing of
expenditures by USWeb clients for Internet professional services; client
budgetary cycles; the amount and timing of capital expenditures and other costs
relating to the expansion of the Company's operations; the introduction of new
products or services by the Company or its competitors; pricing changes in the
industry; technical difficulties with respect to the use of the Internet;
economic conditions specific to Internet technology usage; government regulation
and legal developments regarding the use of the Internet; and general economic
conditions. As a strategic response to changes in the competitive environment,
the Company may from time to time make certain pricing, service, technology or
marketing decisions or business or technology acquisitions that could have a
material adverse effect on the Company's business, results of operations and
financial condition. The Company may also experience seasonality in its
business in the future, resulting in diminished revenues to the Company as a
consequence of decreased demand for Internet professional services during summer
and year-end vacation and holiday periods. Due to all of the foregoing factors,
in some future quarter the Company's operating results may fall below the
expectations of securities analysts and investors. In such event, the trading
price of the Company's Common Stock would likely be materially and adversely
affected and litigation may ensue.
Recruitment and Retention of Internet Solutions Professionals. The
Company's business of delivering Internet professional services is labor
intensive. Accordingly, the Company's success depends in part on its ability to
identify, hire, train and retain consulting professionals who can provide the
Internet strategy, technology, marketing, audience development and creative
skills required by clients. There is currently a shortage of such personnel,
and this shortage is likely to continue for the foreseeable future. The Company
competes intensely for qualified personnel with other companies, and there can
be no assurance that the Company will be able to attract, assimilate or retain
other highly qualified technical, marketing and managerial personnel in the
future. The inability to attract and retain the necessary technical, marketing
and managerial personnel would have a material adverse effect on the Company's
business, results of operations and financial condition.
Competition; Low Barriers to Entry. The market for Internet professional
services is relatively new, intensely competitive, rapidly evolving and subject
to rapid technological change. The Company expects competition to persist,
intensify and increase in the future. The Company's competitors can be divided
into several groups: computer hardware and service vendors such as International
Business Machines Corporation ("IBM"), Digital Equipment Corporation ("DEC") and
Hewlett-Packard
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Company ("Hewlett-Packard"); advertising and media agencies such as CKS Group,
Inc. ("CKS"), Foote, Cone & Belding and Ogilvy & Mather; Internet integrators
and Web presence providers such as iXL Holding, Inc. ("iXL"), Organic Online,
Inc. ("Organic Online'), Poppe Tyson and Proxicom, Inc. ("Proxicom"); large
information technology consulting service providers such as Andersen Consulting,
Cambridge Technology Partners and Electronic Data Systems Corporation ("EDS");
telecommunications companies such as AT&T Corporation ("AT&T") and MCI
Communications Group ("MCI"); Internet and online service providers such as
America Online Incorporated ("America Online"), NETCOM On-Line Communications
Services Inc. ("NETCOM") and UUNet Technologies, Inc. ("UUNet"); and software
vendors such as Lotus Development Corporation ("Lotus"), Microsoft Corporation
("Microsoft"), Netscape Communications Corp. ("Netscape"), Novell, Inc.
("Novell") and Oracle Corporation ("Oracle"). Although only a few of these
competitors have to date offered a full range of Internet professional services,
several have announced their intention to offer comprehensive Internet
technology solutions. Furthermore, most of the Company's current and potential
competitors have longer operating histories, larger installed customer bases,
longer relationships with clients and significantly greater financial,
technical, marketing and public relations resources than the Company, and could
decide at any time to increase their resource commitments to the Company's
market. In addition, the market for Intranet, Extranet and Web site development
is relatively new and subject to continuing definition, and, as a result, may
better position the Company's competitors to compete in this market as it
matures. Competition of the type described above could materially adversely
affect the Company's business, results of operations and financial condition.
There are relatively low barriers to entry into the Company's business.
Because professional services firms such as the Company rely on the skill of
their personnel and the quality of their client service, the Company has no
patented technology that would preclude or inhibit competitors from entering the
Internet professional services market. The Company expects that it will face
additional competition from new entrants into the market in the future. There
can be no assurance that existing or future competitors will not develop or
offer services that provide significant performance, price, creative or other
advantages over those offered by the Company, which could have a material
adverse effect on the Company's business, results of operations and financial
condition.
Management of Growth; Integration of Acquisitions. The Company's rapid
growth has placed, and is expected to continue to place, a significant strain on
the Company's managerial, operational, financial and other resources. As of
March 31, 1998, the Company had grown to 813 employees since its inception in
December 1995, and the Company expects that continued hiring of new personnel
will be required to support its business. The Company's future success will
depend, in part, upon its ability to manage its growth effectively, which will
require that the Company continue to implement and improve its operational,
administrative and financial and accounting systems and controls and to expand,
train and manage its employee base. There can be no assurance that the
Company's systems, procedures or controls will be adequate to support the
Company's operations or that the Company's management will be able to achieve
the rapid execution necessary to exploit the market for the Company's business
model. Furthermore, the Company's future performance will depend on the
Company's ability to integrate the organizations acquired by the Company, which,
even if successful, may take a significant period of time, will place a
significant strain on the Company's resources, and could subject the Company to
additional expenses during the integration process. As a result, there can be
no assurance that the Company will be able to integrate acquired businesses
successfully or in a timely manner in accordance with its strategic objectives.
If the Company is unable to manage internal or acquisition-based growth
effectively, the Company's business, results of operations and financial
condition will be materially adversely affected.
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<PAGE>
Dilution. The Company also has outstanding a large number of stock
options and warrants to purchase the Company's Common Stock with exercise prices
significantly below the initial public offering price. To the extent such
options or warrants are exercised, there will be further dilution. The Company
expects to continue its acquisition program through at least the end of 1998,
and pursuant to a "shelf" Registration Statement on Form S-4 (File No. 333-
38351) has registered 16,666,667 shares of its Common Stock that the Company has
issued, has committed to issue or intends to issue as acquisition consideration
in addition to granting substantial stock options and stock bonuses to the
employees of the acquired companies. Furthermore, the Company may be required,
pursuant to the terms of the definitive acquisition agreements, to issue
additional shares, stock options and stock bonuses to the stockholders and
employees of the acquired companies at each of six and twelve months after
acquisition of the acquired companies. Although the Company's experience to
date with such additional issuances has not resulted in significant changes,
they could be material in the future. For these reasons, the Company's
acquisition program will result in further substantial ownership dilution to
investors.
Uncertain Maintenance and Strengthening of the USWeb Brand. The Company
believes that maintaining and strengthening the USWeb brand is an important
aspect of its efforts to attract clients and that the importance of brand
recognition will increase due to the increasing number of companies entering the
market for Internet professional services. Promoting and positioning the USWeb
brand will depend largely on the success of the Company's marketing efforts and
the ability of the Company to provide high quality, reliable and cost effective
Internet solution strategy consulting, analysis and design, technology
development, implementation and integration, audience development and
maintenance services. If clients do not perceive the Company's services as
meeting their needs, or if the Company fails to market those services
effectively, the Company will be unsuccessful in maintaining and strengthening
its brand. In addition, while the Company centralizes its marketing efforts, it
provides client service through the individual consulting offices and client
dissatisfaction with the performance of a single office could tarnish the
perception of the USWeb brand as a whole. Furthermore, in order to promote the
USWeb brand in response to competitive pressures, the Company may find it
necessary to increase its marketing budget or otherwise increase its financial
commitment to creating and maintaining brand loyalty among clients. If the
Company fails to promote and maintain its brand, or incurs excessive expenses in
an attempt to promote and maintain its brand, the Company's business, results of
operations and financial condition will be materially adversely affected.
Reliance Upon Key Strategic Relationships. The Company has established a
number of strategic relationships with leading hardware and software companies,
including Intel Corporation ("Intel"), Microsoft, Hewlett-Packard, Pandesic LLC
("Pandesic," the Internet company from Intel and SAP America Inc. ("SAP")), Sun
Microsystems, Inc. ("Sun Microsystems") and Reuters Ltd. ("Reuters"). The loss
of any one of these strategic relationships would deprive the Company of the
opportunity to gain early access to leading-edge technology, cooperatively
market products with the vendor, cross-sell additional services and gain
enhanced access to vendor training and support. Maintenance of the Company's
strategic relationships is based primarily on an ongoing mutual business
opportunity and a good overall working relationship. The legal contracts
associated with these relationships, certain of which are terminable at-will by
the parties, would not be sufficient to force the strategic relationship to
continue effectively if that were otherwise not in the strategic partners' best
interests. In the event that any strategic relationship is terminated, the
Company's business, results of operations and financial condition may be
materially adversely affected.
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Uncertain Adoption of Internet Solutions; Dependence on Client Outsourcing.
The market for the Company's services will depend upon the adoption of Internet
solutions by companies to improve their business processes. The Internet may
not prove to be a viable commercial marketplace because of inadequate
development of the necessary infrastructure, lack of development of
complementary products, such as high speed modems and high speed communication
lines, implementation of competing technology, delays in the development or
adoption of new standards and protocols required to handle increased levels of
Internet activity, governmental regulation, or other reasons. The Internet has
experienced, and is expected to continue to experience, significant growth in
the number of users and volume of traffic. There can be no assurance that the
Internet infrastructure will continue to be able to support the demands placed
on it by this continued growth. Moreover, critical issues concerning the use of
Internet solutions (including security, reliability, cost, ease of deployment
and administration and quality of service) remain unresolved and may affect the
growth of the use of such technologies to solve business problems. The adoption
of Internet solutions for commerce and communications, particularly by those
individuals and enterprises that have historically relied on alternative means
of commerce and communication, generally requires the acceptance of a new way of
conducting business and exchanging information, which may be difficult for those
with substantial investments in alternate means that might be made obsolete. If
critical issues concerning the ability of Internet solutions to improve business
processes are not resolved or if the necessary infrastructure is not developed,
the Company's business, results of operations and financial condition will be
materially adversely affected.
Even if these issues are resolved, there can be no assurance that
businesses will elect to outsource the design, development and maintenance of
their Intranets, Extranets and Web sites to Internet professional services
firms. Companies may decide to assign the design, development and
implementation of Internet solutions to their Internal information technology
divisions, which have ready access to both key client decision makers and the
information required to prepare proposals for such solutions. If independent
providers of Internet professional services prove to be unreliable, ineffective
or too expensive, or if software companies develop tools that are sufficiently
user-friendly and cost-effective, enterprises may choose to design, develop or
maintain all or part of their Intranets, Extranets or Web sites in-house. If
the market for the Company's services does not continue to develop or develops
more slowly than expected, or if the Company's services do not achieve market
acceptance, the Company's business, results of operations and financial
condition will be materially adversely affected.
Rapid Technological Change. The market for Internet professional services
is characterized by rapid technological change, changes in user and client
requirements and preferences, frequent new product and service introductions
embodying new processes and technologies and evolving industry standards and
practices that could render the Company's existing service practices and
methodologies obsolete. The Company's success will depend, in part, on its
ability to improve its existing services, develop new services and solutions
that address the increasingly sophisticated and varied needs of its current and
prospective clients, and respond to technological advances, emerging industry
standards and practices, and competitive service offerings. There can be no
assurance that the Company will be successful in responding quickly, cost-
effectively and sufficiently to these developments. If the Company is unable,
for technical, financial or other reasons, to adapt in a timely manner in
response to changing market conditions or client requirements, its business,
results of operations and financial condition would be materially adversely
affected.
Risks Associated with International Operations and Expansion. The Company
intends to expand its operations into international markets. However, to date
the Company has acquired only
-9-
<PAGE>
two businesses with consulting offices outside of the United States and has no
experience in either managing an international network of consulting offices or
in marketing services to international clients. The Company expects to incur
significant costs to do both. If revenues from international consulting offices
are not adequate to offset the expenses of establishing and maintaining an
international network and of localizing the Company's marketing programs, the
Company's business, results of operations and financial condition could be
materially adversely affected. There can be no assurance that the Company will
be able to establish and maintain international consulting offices or market its
services to international clients. In addition to the uncertainty as to the
Company's ability to generate revenues from foreign operations and expand its
international presence, there are certain risks inherent in doing business on an
international level, such as unexpected changes in regulatory requirements,
export and import restrictions, tariffs and other trade barriers; difficulties
in staffing and managing foreign operations; potentially adverse differences in
business customs, practices and norms; longer payment cycles; problems in
collecting accounts receivable; political instability; fluctuations in currency
exchange rates; software piracy; seasonal reductions in business activity; and
potentially adverse tax consequences, any of which could adversely affect the
Company's international operations. There can be no assurance that one or more
of the factors described above will not have a material adverse effect on the
Company's future international operations and, consequently, on the Company's
business, results of operations and financial condition.
Risks of Fixed-Price Engagements. The Company intends to increase the
percentage of its engagements that are billed on a fixed-price basis, as well as
the percentage of revenues derived from fixed-price engagements, as
distinguished from the Company's current principal method of billing on a time
and materials basis. To date, the Company has had only limited experience with
fixed-price engagements. The Company's failure to estimate accurately the
sources and time required for an engagement, to manage client expectations
effectively regarding the scope of services to be delivered for the estimated
fees or to complete fixed-price engagements within budget, on time and to
clients' satisfaction would expose the Company to risks associated with cost
overruns and, in certain cases, penalties, any of which could have a material
adverse effect on the Company's business, results of operations and financial
condition.
Risks of Franchising. USWeb has entered into franchise agreements with
Affiliates, which manage a number of its consulting offices. While these
agreements permit the Company to terminate the franchise relationship if an
Affiliate continues to under perform relative to other Affiliates, such an
Affiliate must be given at least 12 months to improve its performance.
Consequently, a significantly underperforming Affiliate could adversely affect
the Company's reputation. In addition, a terminated Affiliate may refuse to
comply with the terms of the franchise agreement relating to relinquishment of
the USWeb brand and other Company intellectual property or initiate litigation
against the Company. The operational autonomy granted to each Affiliate through
the franchise structure, together with the absence of certain territorial
restrictions on its activities, may inhibit the Company's control over its
market presence or enable the Affiliate to compete with Company-owned offices
for client engagements. Further, despite implementation of contractual
safeguards and insurance against such a possibility, USWeb may be held by a
court to be responsible for some action or liability of an Affiliate. Varying
rights and protections under different state laws, lack of control of Affiliate
actions, or findings of vicarious liability for Affiliate actions could have a
material adverse effect on the Company's business, operating results and
financial condition. In addition, if a significant portion of the Affiliates
chose not to work cooperatively, or if any significant Affiliate or group of
Affiliates were to leave the USWeb network, the network would be correspondingly
weaker. Furthermore, although for a period of two years after the end of the
Affiliate relationship the Affiliate and key persons associated with the
Affiliate are prohibited from certain activities in competition with USWeb
-10-
<PAGE>
and from soliciting USWeb employees for alternate employment, enforceability of
these restrictions will vary depending on applicable state law. To the extent
that the action or inaction of any Affiliate proves deleterious to the
reputation associated with the USWeb brand, the Company's business, results of
operations and financial condition could be materially adversely affected.
Dependence on Key Personnel. The Company's performance is substantially
dependent on the continued services and on the performance of its executive
officers and other key employees, many of whom have worked together for only a
short period of time. Particularly in light of the Company's relatively early
stage of development, the Company is dependent on retaining and motivating
highly qualified personnel, especially its senior management. The Company does
not have "key person" life insurance policies on any of its executive officers.
The loss of the services of any of its executive officers or other key employees
could have a material adverse effect on the business, results of operations or
financial condition of the Company.
Intellectual Property Risks. The Company regards its copyrights,
trademarks, trade secrets (including its methodologies, practices and tools) and
other intellectual property rights as critical to its success. To protect its
rights in these various intellectual properties, the Company relies on a
combination of trademark and copyright law, trade secret protection and
confidentiality agreements and other contractual arrangements with its
employees, Affiliates, clients, strategic partners, acquisition targets and
others to protect its proprietary rights. The Company has also registered
several of its trademarks in the U.S. and internationally. Effective trademark,
copyright and trade secret protection may not be available in every country in
which the Company offers or intends to offer its services. There can be no
assurance that the steps taken by the Company to protect its proprietary rights
will be adequate or that third parties will not infringe or misappropriate the
Company's copyrights, trademarks and similar proprietary rights, or that the
Company will be able to detect unauthorized use and take appropriate steps to
enforce its rights. In addition, although the Company believes that its
proprietary rights do not infringe on the intellectual property rights of
others, there can be no assurance that other parties will not assert
Infringement claims against the Company. Such claims, even if not meritorious,
could result in the expenditure of significant financial and managerial
resources.
Potential Liability to Clients. Many of the Company's consulting
engagements involve the development, implementation and maintenance of
applications that are critical to the operations of its clients' businesses.
The Company's failure or inability to meet a client's expectations in the
performance of its services could injure the Company's business reputation or
result in a claim for substantial damages against the Company, regardless of the
Company's responsibility for such failure. In addition, the Company aggregates
and makes available through the Strategy and Solutions Center methodologies,
technologies and content which may include confidential or proprietary client
information. Although the Company has implemented policies to prevent such
client information from being disclosed to unauthorized parties or used
inappropriately, any such unauthorized disclosure or use could result in a claim
for substantial damages. The Company attempts to limit contractually its
damages arising from negligent acts, errors, mistakes or omissions in rendering
Internet professional services; however there can be no assurance that any
contractual protections will be enforceable in all instances or would otherwise
protect the Company from liability for damages. Although the Company maintains
general liability insurance coverage, including coverage for errors and
omissions, there can be no assurance that such coverage will continue to be
available on reasonable terms or will be available in sufficient amounts to
cover one or more large claims, or that the insurer will not disclaim coverage
as to any future claim. The successful assertion of one or more large claims
against the Company that are uninsured, exceed available insurance coverage or
result in
-11-
<PAGE>
changes to the Company's insurance policies, including premium increases or the
imposition of a large deductible or co-insurance requirements, could adversely
affect the Company's business, results of operations and financial condition.
Year 2000 Compliance. Many currently installed computer systems and
software products are coded to accept only two-digit entries in the date code
field. These date code fields will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. As a result, in less
than two years, computer systems and software used by many companies, including
customers and potential customers of the Company, may need to be upgraded to
comply with such "Year 2000" requirements. Although the Company believes that
its internal systems are Year 2000 compliant, failure to provide Year 2000
compliant business solutions to its customers could have a material adverse
effect on the Company's business, results of operations and financial condition.
Furthermore, the Company believes that the purchasing patterns of customers and
potential customers may be affected by Year 2000 issues as companies expend
significant resources to correct or patch their current software systems for
Year 2000 compliance. These expenditures may result in reduced funds available
to purchase products and services such as those offered by the Company, which
could result in a material adverse effect on the Company's business, results of
operations and financial condition.
Future Capital Needs; Uncertainty of Additional Financing. The Company
currently anticipates that its available cash resources and credit facilities,
combined with the net proceeds to the Company from its initial and follow-on
public offerings, will be sufficient to meet its presently anticipated working
capital and capital expenditure requirements through at least the first quarter
of fiscal 1999. However, the Company may need to raise additional funds in
order to support more rapid expansion, develop new or enhanced services and
products, respond to competitive pressures, acquire complementary businesses or
technologies or take advantage of unanticipated opportunities. The Company's
future liquidity and capital requirements will depend upon numerous factors,
including the success of the Company's existing and new service offerings and
competing technological and market developments. The Company may be required to
raise additional funds through public or private financing, strategic
relationships or other arrangements. There can be no assurance that such
additional funding, if needed, will be available on terms acceptable to the
Company, or at all. Furthermore, any additional equity financing may be
dilutive to stockholders, and debt financing, if available, may involve
restrictive covenants, which may limit the Company's operating flexibility with
respect to certain business matters. Strategic arrangements, if necessary to
raise additional funds, may require the Company to relinquish its rights to
certain of its intellectual property. If additional funds are raised through
the issuance of equity securities, the percentage ownership of the stockholders
of the Company will be reduced, stockholders may experience additional dilution
in net book value per share, and such equity securities may have rights,
preferences or privileges senior to those of the holders of the Company's Common
Stock. If adequate funds are not available on acceptable terms, the Company may
be unable to develop or enhance its services and products, take advantage of
future opportunities or respond to competitive pressures, any of which could
have a material adverse effect on the Company's business, results of operations
and financial condition.
Government Regulation and Legal Uncertainties. The Company is not
currently subject to direct government regulation, other than pursuant to
certain franchising regulations, the securities laws and the regulations
thereunder applicable to all publicly owned companies, and laws and regulations
applicable to businesses generally, and there are currently few laws or
regulations directly applicable to access to or commerce on the Internet.
However, due to the increasing popularity and use of the Internet, it is likely
that a number of laws and regulations may be adopted at the local, state,
national or international levels with respect to the Internet covering issues
such as user privacy, freedom of
-12-
<PAGE>
expression, pricing of products and services, taxation, advertising,
intellectual property rights, information security or the convergence of
traditional communications services with Internet communications. For example,
the Telecommunications Act of 1996 imposes criminal penalties on anyone who
distributes obscene or indecent communications over the Internet. Although the
anti-indecency provisions of the Telecommunications Act have been declared
unconstitutional by the federal courts, the increased attention focused upon
these liability issues as a result of the Telecommunications Act could adversely
affect the growth of the Internet and therefore demand for the Company's
services. In addition, because of the growth in the electronic commerce market,
Congress has held hearings on whether to regulate providers of services and
transactions in the electronic commerce market, which regulations could
negatively affect client demand for Internet solutions that facilitate
electronic commerce. Moreover, the adoption of any such laws or regulations may
decrease the growth of the Internet, which could in turn decrease the demand for
the Company's services or increase the cost of doing business or in some other
manner have a material adverse effect on the Company's business, results of
operations or financial condition. In addition, the applicability to the
Internet of existing laws governing issues such as property ownership,
copyrights and other intellectual property issues, taxation, libel and personal
privacy is uncertain. The vast majority of such laws were adopted prior to the
advent of the Internet and related technologies and, as a result, do not
contemplate or address the unique issues of the Internet and related
technologies. Changes to such laws intended to address these issues, including
some recently proposed changes, could create uncertainty in the marketplace
which could reduce demand for the Company's services or increase the cost of
doing business as a result of costs of litigation or increased service delivery
costs, or could in some other manner have a material adverse effect on the
Company's business, results of operations and financial condition.
Volatility of Stock Price. Prior to the Company's initial public offering,
there was no public market for the Company's Common Stock. The market price of
the Company's Common Stock has been and is likely to continue to be highly
volatile and could be subject to wide fluctuations in response to quarterly
variations in operating results, announcements of technological innovations or
new products by the Company or its competitors, changes in financial estimates
by securities analysts, or other events or factors. In addition, the stock
market, which has recently been at or near historic highs, has experienced
significant price and volume fluctuations that have particularly affected the
market prices of equity securities of many technology companies and that often
have been unrelated to the operating performance of such companies. In the
past, following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted against
such a company. Such litigation could result in substantial costs and a
diversion of management's attention and resources, which would have a material
adverse effect on the Company's business, operating results and financial
condition.
Effect of Certain Charter Provisions; Antitakeover Effects of Certificate
of Incorporation, Bylaws and Delaware Law. The Board of Directors has the
authority to issue up to 1,000,000 shares of Preferred Stock and to determine
the price, rights, preferences, privileges and restrictions, including voting
rights, of those shares without any further vote or action by the stockholders.
The rights of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of any Preferred Stock that may
be issued in the future. The issuance of Preferred Stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire a majority of the outstanding voting stock of the
Company. The Company has no present plans to issue shares of Preferred Stock.
Further, certain provisions of the Company's Amended and Restated Certificate of
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<PAGE>
Incorporation and Bylaws and of Delaware law could delay or make difficult a
merger, tender offer or proxy contest involving the Company.
Concentration of Stock Ownership. The present directors, executive
officers and their respective affiliates of the Company beneficially own a
substantial portion of the outstanding Common Stock. As a result, these
stockholders will be able to exercise significant influence over all matters
requiring stockholder approval, including the election of directors and approval
of significant corporate transactions. Such concentration of ownership may also
have the effect of delaying or preventing a change in control of the Company.
-14-
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of the
Selling Stockholders, as described below. See "Selling Stockholders" and "Plan
of Distribution" described below.
SELLING STOCKHOLDERS
Except as otherwise set forth below, none of the Selling Stockholders is an
executive officer or director of the Company and none of the Selling
Stockholders beneficially own individually more than 1% of the outstanding
Common Stock of the Company prior to this offering. All of the shares of Common
Stock beneficially owned by the Selling Stockholders were issued upon exercise
of stock options granted under the Company's 1997 Employee Stock Purchase Plan.
The following table shows the names of the Selling Stockholders and the number
of shares of Common Stock to be sold by them pursuant to this Prospectus.
NUMBER OF
NAME SHARES SOLD
---- -----------
Abantao, R...................................................... 341
Abbrat, R....................................................... 116
Acker, C........................................................ 74
Acquaviva, J.................................................... 105
Anderson, A..................................................... 303
Andrews, M...................................................... 94
Anton, P........................................................ 1,078
Aquino, R....................................................... 50
Arasu, V........................................................ 690
Ashman, E....................................................... 995
Bai, W.......................................................... 176
Balmaseda, R.................................................... 653
Bandy, M........................................................ 401
Barabash, M..................................................... 843
Behling, S...................................................... 470
Behn, D......................................................... 416
Benninger, J.................................................... 223
Berenson, D..................................................... 213
Bernstein, J.................................................... 345
Biggs, W........................................................ 539
Blank, J........................................................ 73
Bloomquist, J................................................... 333
Blum, J......................................................... 405
Bobo, C......................................................... 501
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NUMBER OF
NAME SHARES SOLD
---- -----------
Bogana, G....................................................... 259
Borchard, G..................................................... 1,070
Boyd, C. F...................................................... 653
Boyd, C. B...................................................... 130
Bradford, E..................................................... 892
Bramscher, C.................................................... 1,176
Brauer, C....................................................... 224
Brezinski, D.................................................... 155
Brick, M........................................................ 210
Brisko, S....................................................... 94
Brooks, S....................................................... 413
Brophy, J....................................................... 1,194
Browning, C..................................................... 254
Brunings, J..................................................... 398
Buccino, A...................................................... 523
Burke, K........................................................ 428
Caldwell, H..................................................... 380
Camenzuli, K.................................................... 448
Canare, G....................................................... 177
Caprio, B....................................................... 236
Cariapa, M...................................................... 539
Carlin, W....................................................... 1,000
Casper, K....................................................... 277
Centers, R...................................................... 745
Chacon, M....................................................... 74
Chaine, O....................................................... 490
Champlin, A..................................................... 78
Chen, H......................................................... 261
Chiang, A....................................................... 150
Chiuminatto, M.................................................. 1,058
Choksi, P....................................................... 326
Christ, J....................................................... 876
Christner, B.................................................... 441
Clark, M........................................................ 1,254
Clore, V........................................................ 245
Coffin, J....................................................... 605
Colee, M........................................................ 276
Collins, A...................................................... 1,176
-16-
<PAGE>
NUMBER OF
NAME SHARES SOLD
---- -----------
Collins, M...................................................... 1,176
Collins, P...................................................... 1,378
Comfort, C...................................................... 215
Copper, K....................................................... 53
Coraci, M....................................................... 20
Corey, T.(1).................................................... 1,960
Cottrell, R..................................................... 400
Cox, P.......................................................... 212
Crandall, C..................................................... 1,596
Crawford, T..................................................... 232
Crumpton, D..................................................... 81
Cummings, L..................................................... 196
Cuthrell, S..................................................... 1,753
Davis, T........................................................ 575
Dearing, G...................................................... 387
Dennis, D....................................................... 98
Dickerson, J.................................................... 91
Doak, J......................................................... 219
Donahoe, D...................................................... 438
Doyle, M........................................................ 1,289
Dubin, J........................................................ 265
Duckett, J...................................................... 1,188
Duran, T........................................................ 292
Dwoskin, J...................................................... 392
Dwoskin, J...................................................... 392
Elliott, C...................................................... 294
Ellis, S........................................................ 311
Engle, J........................................................ 490
Ericsson, R..................................................... 245
Erts, J......................................................... 107
Espinas, J...................................................... 263
Esposito, J..................................................... 382
Esselink, A..................................................... 260
Fennessey, P.................................................... 980
Ficklin, I...................................................... 686
Finnan, J....................................................... 125
Firmage, J. (2)................................................. 1,960
Fleming, G...................................................... 143
-17-
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NUMBER OF
NAME SHARES SOLD
---- -----------
Fogelberg, E.................................................... 758
Foral, A........................................................ 226
Foss, L......................................................... 179
Frankland, K.................................................... 882
Frattura, R..................................................... 326
Frederick, M.................................................... 356
Frey, C......................................................... 483
Frombach, E..................................................... 147
Fromson, M...................................................... 157
Fulton, T....................................................... 331
Galbreath, L.................................................... 392
Garbe, K........................................................ 1,960
Garcia, T....................................................... 226
Garrett, J...................................................... 114
Gaushell, R..................................................... 122
Geis, P......................................................... 340
Geller, L....................................................... 70
Gentner, S...................................................... 600
Getty, N........................................................ 22
Gibbs, L........................................................ 243
Gibson, G....................................................... 588
Gideon, T....................................................... 179
Gil, M.......................................................... 312
Gilligan, R..................................................... 662
Gilpin, B....................................................... 1,254
Gilroy, S....................................................... 62
Gilson, R....................................................... 310
Giron, T........................................................ 138
Glantz, J....................................................... 568
Goldberg, L..................................................... 440
Goldman, J...................................................... 934
Gordon, S....................................................... 555
Gray, M......................................................... 490
Greenberg, I.................................................... 294
Greene, J....................................................... 513
Greig, E........................................................ 228
Grimm, B........................................................ 611
Guerrero, A..................................................... 447
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NUMBER OF
NAME SHARES SOLD
---- -----------
Gull, M......................................................... 784
Gustafson, J.................................................... 188
Hackney, I...................................................... 145
Halstead, T..................................................... 578
Hantin, R....................................................... 345
Harlin, S....................................................... 195
Harmon, D....................................................... 296
Harmon, J....................................................... 287
Harper, C....................................................... 49
Hawkinson, A.................................................... 1,265
Hawthorne, B.................................................... 647
Hebert, P....................................................... 210
Heffernan, J. (3)............................................... 1,568
Herrera, N...................................................... 269
Hinckley, K..................................................... 882
Hoang, K........................................................ 106
Hoffman, J...................................................... 637
Holmen, M....................................................... 184
Howard, J....................................................... 526
Hoyt, B......................................................... 339
Hudson, D....................................................... 148
Hudson, M....................................................... 59
Hughes, M....................................................... 558
Hurzeler, B..................................................... 88
Inman, K........................................................ 36
Iyer, M......................................................... 484
Jacobson, T..................................................... 271
Jarvis, C....................................................... 254
Jeffris, B...................................................... 768
John, G......................................................... 1,147
Jones, J........................................................ 671
Juedes, P....................................................... 272
Kahn, M......................................................... 227
Kane, W......................................................... 1,176
Kaplan, L....................................................... 306
Kaplinsky, A.................................................... 647
Karakala, V..................................................... 637
Keala, L........................................................ 1,411
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NUMBER OF
NAME SHARES SOLD
---- -----------
Keller, A....................................................... 343
Kempka, D....................................................... 1,235
Kennedy, L...................................................... 54
Kerr, G......................................................... 892
Kester, D....................................................... 1,058
Kightly, P...................................................... 193
Kim, A.......................................................... 352
Kim, A.......................................................... 441
Kim, J.......................................................... 415
King, M......................................................... 382
Klem, K......................................................... 226
Kmetz, K........................................................ 86
Kotewicz, K..................................................... 196
Kowalski, K..................................................... 118
Kropp, M........................................................ 245
Kucerka, P...................................................... 107
Labbe, J........................................................ 522
Ladner, M....................................................... 411
Lally, S........................................................ 169
Lamoureaux, E................................................... 515
Larkins, J...................................................... 342
Lee, A.......................................................... 92
Lee, J.......................................................... 140
Lee, L.......................................................... 735
Levy, A......................................................... 1,078
Lewis, G........................................................ 784
Lin, S.......................................................... 274
Lindberg, S..................................................... 181
Lopez, G........................................................ 372
Lucchesi, L..................................................... 381
Lucena, J....................................................... 1,176
Lucero, M....................................................... 901
Lupke, M........................................................ 1,176
Ma, J........................................................... 456
MacCarthy, B.................................................... 78
Mageras, J...................................................... 134
Magoffin, C..................................................... 656
Maner, W........................................................ 287
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NUMBER OF
NAME SHARES SOLD
---- -----------
Marien, M....................................................... 69
Markus, S....................................................... 211
Mascha, M....................................................... 807
Mathias, R...................................................... 196
Matsuda, L...................................................... 666
Maulhardt, P.................................................... 141
Maxfield, A..................................................... 78
Mayer, D........................................................ 566
McBay, G........................................................ 216
McCracken, P.................................................... 931
McCulloch, E.................................................... 54
McKeague, D..................................................... 296
McKee, D........................................................ 176
McKeen, M....................................................... 205
Miller, B....................................................... 890
Miller, S....................................................... 88
Minter, A....................................................... 882
Mooney, J....................................................... 637
Moshell, M...................................................... 249
Mudd, D......................................................... 503
Murdoch, L...................................................... 27
Murphy, B....................................................... 635
Myers, G........................................................ 25
Ng, K........................................................... 560
Niccoli, T...................................................... 823
Niver, D........................................................ 251
Nober, J........................................................ 406
Norris, D....................................................... 52
Olczak, V....................................................... 35
Ollendorff, M................................................... 250
Ottoman, C...................................................... 260
Pae, D.......................................................... 601
Palacios, R..................................................... 18
Papador, J...................................................... 167
Paras, L........................................................ 225
Parsley, M...................................................... 201
Patel, R........................................................ 187
Patel, T........................................................ 1,176
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NUMBER OF
NAME SHARES SOLD
---- -----------
Paul, H......................................................... 119
Peace, S........................................................ 552
Peters, B....................................................... 384
Peterson, J..................................................... 74
Petralia, K..................................................... 462
Petras, M....................................................... 32
Pickering, D.................................................... 637
Price, T........................................................ 82
Punwasi, K...................................................... 833
Quigley, C...................................................... 92
Radcliffe, J.................................................... 59
Rakov, S........................................................ 399
Ramachandran, A................................................. 747
Ramirez, M...................................................... 68
Ramos, D........................................................ 182
Raniere, C...................................................... 577
Rathell, B...................................................... 46
Riley, D........................................................ 152
Rodes, J........................................................ 112
Ross, J......................................................... 1,127
Ross, T......................................................... 892
Roth, S......................................................... 270
Rothenberg, N................................................... 985
Royston, B...................................................... 840
Rudd, C......................................................... 735
Russell, S...................................................... 686
Ryan, L......................................................... 323
Ryan, S......................................................... 619
Salter, M....................................................... 59
San Filippo, F.................................................. 856
Sasso, R........................................................ 161
Saul, E......................................................... 188
Sawchenko, S.................................................... 174
Saylor, C....................................................... 588
Schaefer, K..................................................... 1,137
Schmidt, S...................................................... 224
Schneider, B.................................................... 66
Schueler, J..................................................... 326
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NUMBER OF
NAME SHARES SOLD
---- -----------
Schwab, J....................................................... 44
Schwager, K..................................................... 549
Schweninger, B.................................................. 151
Sedwick, N...................................................... 735
Segal, S........................................................ 392
Seifert, D...................................................... 637
Shaw, K......................................................... 37
Sheehan, M...................................................... 157
Shenkerman, R................................................... 1,031
Shevock, K...................................................... 441
Shih, C......................................................... 686
Shussett, M..................................................... 163
Simmons, M...................................................... 209
Simon, P........................................................ 54
Smart, J........................................................ 166
Smart, W........................................................ 686
Smith, B........................................................ 960
Smith, K........................................................ 185
Smyczek, M...................................................... 392
Soares, V....................................................... 232
Sohoni, B....................................................... 629
Solomon, K...................................................... 229
Sorra, M........................................................ 130
Sotiriades, D................................................... 401
Sparrow, H...................................................... 229
Speicher, S..................................................... 585
Spragens, J..................................................... 637
Stafura, J...................................................... 980
Stafura, P...................................................... 392
Stevens, J...................................................... 512
Stevens, P...................................................... 1,101
Stokes, J....................................................... 160
Sulak, A........................................................ 257
Sutter, C....................................................... 418
Suttle, G....................................................... 475
Sweis, D........................................................ 110
Szabados, E..................................................... 392
Szeto, E........................................................ 282
-23-
<PAGE>
NUMBER OF
NAME SHARES SOLD
---- -----------
Taubman, A...................................................... 522
Taylor, C....................................................... 1,558
Tebelak, E...................................................... 686
Teper, M........................................................ 417
Thompson, N..................................................... 529
Thornhill, G.................................................... 168
Thorsen, K...................................................... 131
Todd, D......................................................... 526
Tomlinson, A.................................................... 199
Travis, E....................................................... 148
Tsuchitani, W................................................... 1,333
Turitz, A....................................................... 128
Upchurch, T..................................................... 1,962
Uyemura, J...................................................... 13
Vail, T......................................................... 1,274
Varosy, C....................................................... 588
Vath, B......................................................... 59
Vierra, J....................................................... 217
Vincent, C...................................................... 88
Wagner, K....................................................... 588
Waineo, J....................................................... 164
Waldon, L....................................................... 356
Walker, F....................................................... 282
Walker, L....................................................... 78
Webster, J...................................................... 352
Welch, C........................................................ 137
Wells, K........................................................ 200
Widdicombe, G................................................... 377
Wiegley, J...................................................... 337
Willard, W...................................................... 119
Williams, T..................................................... 43
Winter, B....................................................... 424
Wise, R......................................................... 1,470
Wong, C......................................................... 137
Wong, C......................................................... 298
Wong, R......................................................... 632
Wood, K......................................................... 324
Woodbery, E..................................................... 154
-24-
<PAGE>
NUMBER OF
NAME SHARES SOLD
---- -----------
Woodrow, J...................................................... 784
Woods, J........................................................ 313
Woodward, T..................................................... 40
Wu, S........................................................... 323
Wu, S........................................................... 606
Wyatt, T........................................................ 115
Wygand, R....................................................... 268
Wylupski, W..................................................... 39
Wysocki-Ashleigh, M............................................. 19
Yanko, C........................................................ 32
Yeh, T.......................................................... 295
Yoshina, C...................................................... 228
Zeis, W......................................................... 24
Zhang, W........................................................ 265
Ziegler, C...................................................... 119
Zingler, B...................................................... 115
(1) Mr. Tobin Corey co-founded the Company in December 1995 and has served as
its President since June 1996. Prior to June 1996, Mr. Corey served as its
Executive Vice President, Marketing. As of the date of this Prospectus,
Mr. Corey owns 648,812 (1.7%) of the outstanding shares of the Company's
Common stock, including 105,000 shares issuable upon exercise of stock
options exercisable within 60 days of this filing.
(2) Mr. Joseph Firmage co-founded the company in December 1995 and has served
as its Chairman and Chief Executive Officer since that time. As of the
date of this Prospectus, Mr. Firmage owns 1,016,007 (2.7%) of the
outstanding shares of the Company's Common Stock, including 105,000 shares
issuable upon exercise of stock options exercisable within 60 days of this
filing.
(3) Mr. James Heffernan co-founded the company in December 1995 and has served
as a Director since that time. Since May 1998 Mr. Heffernan has also
served as a consultant to the Company. From December 1995 to May 1998, Mr.
Heffernan served as the Company's Executive Vice President, Chief Financial
Officer and Secretary. As of the date of this Prospectus, Mr. Heffernan
owns 606,041 (1.6%) of the outstanding shares of the Company's Common
stock, including 60,000 shares issuable upon exercise of stock options
exercisable within 60 days of this filing.
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Stockholders that they intend
to sell all or a portion of the Shares offered hereby from time to time in the
over-the-counter market and that sales will be made at prices prevailing in the
public market at the times of such sales. The Selling Stockholders may also
make private sales directly or through a broker or brokers, who may act as agent
or as principal. Further, the Selling Stockholders may choose to dispose of the
Shares offered hereby by gift to a third party or as a donation to a charitable
or other non-profit entity. In connection with any sales, the Selling
Stockholders and any brokers participating in such sales may be deemed to be
underwriters within the meaning of the Securities Act.
-25-
<PAGE>
Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Stockholders (and from any purchaser of shares in
such transaction). Usual and customary brokerage fees will be paid by the
Selling Stockholder. Broker-dealers may agree with the Selling Stockholders to
sell a specified number of Shares at a stipulated price per share, and, to the
extent such a broker-dealer is unable to do so acting as agent for the Selling
Stockholders, to purchase as principal any unsold Shares at the price required
to fulfill the broker-dealer commitment to the Selling Stockholders. Broker-
dealers who acquire Shares as principal may thereafter resell such Shares from
time to time in transactions (which may involve crosses and block transactions
and which may involve sales to and through other broker-dealers, including
transactions of the nature described above) in the over-the-counter market, in
negotiated transactions or otherwise at market prices prevailing at the time of
sale or at negotiated prices, and in connection with such resales may pay to or
receive from the purchasers of such Shares commissions computed as described
above.
The Company has advised the Selling Stockholders that the anti-manipulative
rules of Regulation M under the Exchange Act may apply to sales in the market
and has informed them of the possible need for delivery of copies of this
Prospectus. The Selling Stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the Shares against certain
liabilities, including liabilities arising under the Securities Act. Any
commissions paid or any discounts or concessions allowed to any such broker-
dealers, and, if any such broker-dealers purchase Shares as principal, any
profits received on the resale of such Shares, may be deemed to be underwriting
discounts and commissions under the Securities Act.
If applicable, upon the Company's being notified by the Selling
Stockholders that any material arrangement has been entered into with a broker-
dealer for the sale of Shares through a cross or block trade, a supplemental
prospectus will be filed under Rule 424(c) under the Securities Act, setting
forth the name of the participating broker-dealer(s), the number of Shares
involved, the price at which such Shares were sold by the Selling Stockholders,
the commissions paid or discounts or concessions allowed by the Selling
Stockholders to such broker-dealer(s), and, where applicable, that such broker-
dealer(s) did not conduct any investigation to verify the information set out in
this Prospectus. Any securities covered by this Prospectus that qualify for
sale pursuant to Rule 144 under the Securities Act may be sold under that Rule
rather than pursuant to this Prospectus. There can be no assurance that the
Selling Stockholders will sell any or all of the Shares of Common Stock offered
hereunder.
LEGAL MATTERS
Certain legal matters with respect to the validity of the issuance of the
Shares will be passed upon for the Company by Wilson Sonsini Goodrich & Rosati,
Professional Corporation, Palo Alto, California. Attorneys employed by Wilson
Sonsini Goodrich & Rosati, Professional Corporation, or investment partnerships
of which they are beneficial owners, hold 7,430 shares of Common Stock.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Post Effective Amendment No. 4 to its Registration Statement on Form S-4
(Registration No. 333-38351), in the form declared effective on May 27, 1998,
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
-26-
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation, the Company's Bylaws, Section
145 of the Delaware General Corporation Law and the form of indemnification
agreement entered into between the Company and certain of its directors and its
officers, subject to certain conditions, authorize the Company to indemnify, or
indemnify by their terms, as the case may be, the directors and officers of the
Company against certain liabilities and expenses incurred by such persons in
connection with claims made by reason of their being such a director or officer.
The underwriting Agreement with respect to the initial public offering made
under the Company's Registration Statement on Form S-1 (File No. 333-36827),
dated December 5, 1998, provides, and the Underwriting Agreement with respect to
the follow-on offering made under the Company's Registration Statement on Form
S-1 (File No. 333-46821), initially filed on February 24, 1998, as amended from
time to time, and any associated registration statement filed pursuant to Rule
462, provides, for indemnification by the Underwriters and their controlling
persons, on the one hand, and of the Company and its controlling persons on the
other hand, for certain liabilities arising under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, or otherwise.
The Company has obtained directors' and officers' insurance providing
indemnification for certain of the Company's directors, officers, affiliates,
partners or employees for certain liabilities.
The Company has entered into agreements to indemnify its directors and
executive officers, in addition to indemnification provided for in the Company's
Bylaws. These agreements, among other things, indemnify the Company's directors
and executive officers for certain expenses (including attorney's fees),
judgments, fines and settlement amounts incurred by any such person in any
action or proceeding, including any action by or in the right of the Company,
arising out of such person's services as a director or executive officer of the
Company, any subsidiary of the Company or any other company or enterprise to
which the person provides services at the request of the Company. The Company
believes that these provisions and agreements are necessary to attract and
retain qualified directors and executive officers.
At present, there is no material pending litigation or proceeding involving
any director, officer, employee or agent of the Company where indemnification is
expected to be required or permitted. The Company is not aware of any material
threatened litigation or proceeding that might result in a claim for such
indemnification.
-27-
<PAGE>
================================================================================
No person is authorized in connection with any offering made by this prospectus
to give any information or to make any representations not contained in this
prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by the company, any selling stockholder
or by any other person. This prospectus does not constitute an offer to sell or
a solicitation of an offer to buy any security other than the shares offered
hereby, nor does it constitute an offer to sell or a solicitation of an offer to
buy any of the shares offered hereby to any person in any jurisdiction in which
it is unlawful to make such an offer or solicitation. Neither the delivery of
this prospectus nor any sale of or offer to sell the shares made hereunder shall
under any circumstances create any implication that there has been no change in
the affairs of the company since the date hereof or that the information
contained herein is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
Page
Available Information....................................................... 2
Information Incorporated By Reference....................................... 2
The Company................................................................. 4
Forward-Looking Statements.................................................. 4
Risk Factors................................................................ 4
Use of Proceeds............................................................. 15
Selling Stockholders........................................................ 15
Plan of Distribution........................................................ 25
Legal Matters............................................................... 26
Experts..................................................................... 26
================================================================================
================================================================================
USWEB CORPORATION
Common Stock
================================================================================
PROSPECTUS
================================================================================
June 3, 1998
================================================================================
- --------------------------------------------------------------------------------
-28-
<PAGE>
REGISTRATION STATEMENT ON FORM S-8/S-3
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information previously filed with the
Securities and Exchange Commission by USWeb Corporation (the "COMPANY") are
hereby incorporated by reference in this Registration Statement:
(1) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, dated December 5, 1997, filed
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), including any amendment or report filed for
the purpose of updating such description.
(2) The Company's Quarterly report on Form 10-Q for the fiscal quarter
ended March 31, 1998, filed pursuant to Section 13 of the Exchange Act.
(3) The Company's Annual Report on Form 10-K/A for the year ended
December 31, 1997, as amended on April 14, 1998, filed pursuant to Section
13 of the Exchange Act.
(4) The Company's Current Report on Form 8-K, dated March 13, 1998,
filed pursuant to Section 13 of the Exchange Act.
(5) Definitive Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 as filed with the Securities and Exchange
Commission on April 28, 1998.
(6) The Company's Post Effective Amendment No. 4 to Registration
Statement on Form S-4 (File No. 333-38351) in the form declared effective
on May 27, 1998, including the Prospectus dated May 20, 1998 as filed with
such Registration Statement, as amended from time to time.
All documents subsequently filed by the Company 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
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 part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
On the filing date of this Registration Statement, certain members of
counsel to the Registrant, Wilson Sonsini Goodrich & Rosati, Professional
Corporation and investment partnerships of which such persons are partners,
beneficially own 7,430 shares of the company's Common Stock.
-29-
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation, the Company's Bylaws, Section
145 of the Delaware General Corporation Law and the form of indemnification
agreement entered into between the Company and certain of its directors and
officers, subject to certain conditions, authorize the Company to indemnify, or
indemnify by their terms, as the case may be, the directors and officers of the
Company against certain liabilities and expenses incurred by such persons in
connection with claims made by reason of their being such a director or officer.
The Underwriting Agreement with respect to the initial public offering made
under the Company's Registration Statement on Form S-1 (File No. 333-36827),
dated December 5, 1997, provides, and the Underwriting Agreement with respect to
the follow-on offering made under the Company's Registration Statement on Form
S-1 (File No. 333-46821), initially filed on February 24, 1998, as amended from
time to time, and any associated registration statement filed pursuant to Rule
462, provides, for indemnification by the Underwriters and their controlling
persons, on the one hand, and of the Company and its controlling persons on the
other hand, for certain liabilities arising under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, or otherwise.
The Company has obtained directors' and officers' insurance providing
indemnification for certain of the Company's directors, officers, affiliates,
partners or employees for certain liabilities.
The Company has entered into agreements to indemnify its directors and
executive officers, in addition to indemnification provided for in the Company's
Bylaws. These agreements, among other things, indemnify the Company's directors
and executive officers for certain expenses (including attorneys' fees),
judgments, fines and settlement amounts incurred by any such person in any
action or proceeding, including any action by or in the right of the Company,
arising out of such person's services as a director or executive officer of the
Company, any subsidiary of the Company or any other company or enterprise to
which the person provides services at the request of the Company. The Company
believes that these provisions and agreements are necessary to attract and
retain qualified directors and executive officers.
At present, there is no material pending litigation or proceeding involving
any director, officer, employee or agent of the Company where indemnification is
expected to be required or permitted. The Company is not aware of any material
threatened litigation or proceeding that might result in a claim for such
indemnification.
See also the undertakings set out in response to Item 9 herein.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The issuance of the Shares being offered by the Form S-3 resale prospectus
were deemed exempt from registration under the Securities Act in reliance upon
Section 4(2) of the Securities Act.
-30-
<PAGE>
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------------- --------------------------------------------------------------
<C> <S>
4.1* Form of Registrant's Signing Warrant.
4.2* Form of Registrant's AGR Warrant.
4.3+ Description of Acquisition Related Employee Stock Bonuses.
4.4 1996 Equity Compensation Plan.
4.5 1997 Employee Stock Purchase Plan.
4.6 1997 Acquisition Stock Option Plan.
5.1 Opinion of counsel as to legality of securities being
registered.
23.1 Consent of counsel (contained in Exhibit 5.1)
23.2 Consent of Independent Accountants.
24.1 Power of Attorney (see page 33).
</TABLE>
- -------------
* Incorporated by reference to the Registrant's Registration Statement on Form
S-1, as amended (File No. 333-36827).
+ Incorporated by reference to the Registrant's Registration Statement on Form
S-8 (File No. 333-48543).
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement 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.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered, which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
-31-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Santa Clara, State of California, on this 3rd day of
June, 1998.
USWEB CORPORATION
/s/ Joseph P. Firmage
---------------------
Joseph P. Firmage
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Joseph P. Firmage and Carolyn
Aver, and each of them acting individually, as his or her attorney-in-fact, each
with full power of substitution, for him or her in any and all capacities, to
sign any and all amendments to this Registration Statement on Form S-8, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorney-in-fact, or his or her substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1933, this
Report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------- ------------------------------------------------------------ -------------
<S> <C> <C>
/s/ Joseph P. Firmage Chief Executive Officer (Principal Executive Officer) and June 3, 1998
- ----------------------- Chairman of the Board
Joseph P. Firmage
/s/ Carolyn Aver Chief Financial Officer (Principal Accounting and Financial June 3, 1998
- ----------------------- Officer), Executive Vice President and Secretary
Carolyn Aver
/s/ Tobin Corey President and Director June 3, 1998
- -----------------------
Tobin Corey
/s/ Jeffrey Ballowe Director June 3, 1998
- -----------------------
Jeffrey Ballowe
/s/ Robert Hoff Director June 3, 1998
- -----------------------
Robert Hoff
/s/ Gary Rieschel Director June 3, 1998
- -----------------------
Gary Rieschel
/s/ Barry Rubenstein Director June 3, 1998
- -----------------------
Barry Rubenstein
/s/ James Heffernan Director June 3, 1998
- -----------------------
James Heffernan
</TABLE>
-32-
<PAGE>
USWEB CORPORATION
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------------- --------------------------------------------------------------
<C> <S>
4.1* Form of Registrant's Signing Warrant.
4.2* Form of Registrant's AGR Warrant.
4.3+ Description of Acquisition Related Employee Stock Bonuses.
4.4 1996 Equity Compensation Plan.
4.5 1997 Employee Stock Purchase Plan.
4.6 1997 Acquisition Stock Option Plan.
5.1 Opinion of counsel as to legality of securities being
registered.
23.1 Consent of counsel (contained in Exhibit 5.1)
23.2 Consent of Independent Accountants.
24.1 Power of Attorney (see page 33).
</TABLE>
- -------------
* Incorporated by reference to the Registrant's Registration Statement on Form
S-1, as amended (File No. 333-36827).
+ Incorporated by reference to the Registrant's Registration Statement on Form
S-8 (File No. 333-48543).
<PAGE>
EXHIBIT 4.4
USWEB CORPORATION
1996 EQUITY COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE APRIL 20, 1998)
1. Purposes of the Plan. The purposes of this Stock Plan are to attract
--------------------
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan. The Plan also provides for
automatic grants of Nonstatutory Stock Options to Outside Directors.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees as shall
-------------
be administering the Plan in accordance with Section 4 hereof.
(b) "Applicable Laws" means the requirements relating to the
-----------------
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Code" means the Internal Revenue Code of 1986, as amended.
----
(e) "Committee" means a committee of Directors appointed by the Board
---------
in accordance with Section 4 hereof.
(f) "Common Stock" means the Common Stock of the Company.
------------
(g) "Company" means USWeb Corporation, a California corporation.
-------
(h) "Consultant" means any person who is engaged by the Company or any
----------
Parent or Subsidiary to render consulting or advisory services to such entity.
(i) "Director" means a member of the Board of Directors of the Company.
--------
(j) "Employee" means any person, including Officers and Directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any
<PAGE>
successor. For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(l) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(m) "Incentive Stock Option" means an Option intended to qualify as an
----------------------
incentive stock option within the meaning of Section 422 of the Code.
(n) "Inside Director" means a Director who is an Employee.
---------------
(o) "Nonstatutory Stock Option" means an Option not intended to qualify
-------------------------
as an Incentive Stock Option.
(p) "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.
(q) "Option" means a stock option granted pursuant to the Plan.
------
(r) "Option Agreement" means a written or electronic agreement between
----------------
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of
the Plan.
-2-
<PAGE>
(s) "Option Exchange Program" means a program whereby outstanding
-----------------------
Options are exchanged for Options with a lower exercise price.
(t) "Optioned Stock" means the Common Stock subject to an Option or a
--------------
Stock Purchase Right.
(u) "Optionee" means the holder of an outstanding Option or Stock
--------
Purchase Right granted under the Plan.
(v) "Outside Director" means a Director who is not an Employee.
----------------
(w) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this 1996 Stock Plan.
----
(y) "Restricted Stock" means shares of Common Stock acquired pursuant
----------------
to a grant of a Stock Purchase Right under Section 12 below.
(z) "Section 16(b)" means Section 16(b) of the Securities Exchange Act
-------------
of 1934, as amended.
(aa) "Service Provider" means an Employee, Director or Consultant.
----------------
(bb) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 14 below.
(cc) "Stock Purchase Right" means a right to purchase Common Stock
--------------------
pursuant to Section 12 below.
(dd) "Subsidiary" means a "subsidiary corporation," whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 14 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan is 7,000,000 Shares, plus an annual increase to be added
on each anniversary date of the adoption of the Plan (beginning in 1998) equal
to the lesser of (i) 400,000 Shares, (ii) four percent (4%) of the outstanding
Shares on such date or (iii) a lesser amount determined by the Board. The
Shares may be authorized but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). However, Shares that have actually been issued under the Plan,
-3-
<PAGE>
upon exercise of either an Option or Stock Purchase Right, shall not be returned
to the Plan and shall not become available for future distribution under the
Plan, except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, such Shares shall become available for future
grant under the Plan.
4. Administration of the Plan.
--------------------------
(a) Procedure.
---------
(i) Multiple Administrative Bodies. The Plan may be
------------------------------
administered by different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator
--------------
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
----------
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iv) Grants to Outside Directors. All grants of Options to
---------------------------
Outside Directors made pursuant to Section 13 of the Plan shall be automatic and
nondiscretionary.
(v) Other Administration. Other than as provided above, the
--------------------
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan
---------------------------
and, in the case of a Committee, the specific duties delegated by the Board to
such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and
Stock Purchase Rights may from time to time be granted hereunder;
(iii) to determine the number of Shares to be covered by each
such award granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, of any Option or
Stock Purchase Right granted hereunder. Such terms and conditions include, but
are not limited to, the exercise
-4-
<PAGE>
price, the time or times when Options or Stock Purchase Rights may be exercised
(which may be based on performance criteria), any vesting acceleration or waiver
of forfeiture restrictions, and any restriction or limitation regarding any
Option or Stock Purchase Right or the Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;
(vi) to determine whether and under what circumstances an
Option may be settled in cash under subsection 10(e) instead of Common Stock;
(vi) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;
(vii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by Optionees
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable; and
(xi) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations
----------------------------------
and interpretations of the Administrator shall be final and binding on all
Optionees.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may
-----------
be granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
6. Limitations.
-----------
(a) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be
-5-
<PAGE>
taken into account in the order in which they were granted. The Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year
of the Company, Options to purchase more than 150,000 Shares.
(ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 300,000 Shares
which shall not count against the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 14.
(iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 14), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
7. Term of Plan. The Plan shall become effective upon its adoption by the
------------
Board. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 16 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
--------------
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof. In the case of an Incentive Stock Option granted
to an Optionee who, at the time the Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant or such shorter term as may be provided in the
Option Agreement.
9. Option Exercise Price and Consideration.
---------------------------------------
(a) The per share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the Administrator,
but shall be subject to the following:
-6-
<PAGE>
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of grant
of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the exercise price shall be no less than 110% of the Fair Market Value per Share
on the date of grant.
(B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price other than as required above pursuant to a
merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, or (6) any combination of the foregoing methods of payment. In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
10. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
-----------------------------------------------
hereunder shall be exercisable according to the terms hereof at such times and
under such conditions as determined by the Administrator and set forth in the
Option Agreement. Unless the Administrator provides otherwise, vesting of
Options granted hereunder shall be tolled during any unpaid leave of absence.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of
-7-
<PAGE>
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in Section 14 of
the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
-------------------------------------------------
ceases to be a Service Provider, such Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement (of at least
thirty (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Agreement). In the absence of a specified time in
the Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
----------------------
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If such disability is not a "disability" as such term is defined
in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall automatically cease to be treated as an Incentive
Stock Option and shall be treated for tax purposes as a Nonstatutory Stock
Option on the day three months and one day following such termination. If, on
the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
-----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a
-8-
<PAGE>
specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Optionee's termination. If, at the time of
death, the Optionee is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option shall immediately revert to the
Plan. The Option may be exercised by the executor or administrator of the
Optionee's estate or, if none, by the person(s) entitled to exercise the Option
under the Optionee's will or the laws of descent or distribution. If the Option
is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
-----------------
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
11. Non-Transferability of Options and Stock Purchase Rights. Unless
--------------------------------------------------------
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
12. Stock Purchase Rights.
---------------------
(a) Rights to Purchase. Stock Purchase Rights may be issued either
------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such
person must accept such offer. The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines otherwise,
-----------------
the Restricted Stock purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company.
(c) Other Provisions. The Restricted Stock purchase agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
-----------------------
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his
-9-
<PAGE>
or her purchase is entered upon the records of the duly authorized transfer
agent of the Company. No adjustment shall be made for a dividend or other right
for which the record date is prior to the date the Stock Purchase Right is
exercised, except as provided in Section 14 of the Plan.
13. Automatic Option Grants to Outside Directors. All grants of Options to
--------------------------------------------
Outside Directors pursuant to this Section shall be automatic and
nondiscretionary and shall be made strictly in accordance with the following
provisions:
(a) All Options granted pursuant to this Section shall be Nonstatutory
Stock Options and, except as otherwise provided herein, shall be subject to the
other terms and conditions of the Plan.
(b) No person shall have any discretion to select which Outside
Directors shall be granted Options under this Section or to determine the number
of Shares to be covered by such Options.
(c) Each person who is or becomes an Outside Director following the
completion of the Company's initial underwritten public offering, shall be
automatically granted an Option to purchase 25,000 Shares (the "First Option")
on the later of the following dates: (A) November 30, 1997, or (B) the date on
which such person first becomes an Outside Director, whether through election by
the shareholders of the Company or appointment by the Board to fill a vacancy;
provided, however, that an Inside Director who ceases to be an Inside Director
but who remains a Director shall not receive a First Option; provided further,
that an Outside Director who, on January 1, 1998, is a partner or member of any
venture capital firm (or similar organization) which owns securities of the
Company having more than four percent (4%) of the total voting power of the
Company shall not be granted the First Option.
(d) Each Outside Director shall be automatically granted an Option to
purchase 7,000 Shares (a "Subsequent Option") on the date of his or her
reelection at the Company's annual meeting of the stockholders each year;
provided he or she is then an Outside Director and, if as of such date, he or
she shall have served on the Board for at least the preceding six (6) months.
(e) Notwithstanding the provisions of subsections (c) and (d) hereof,
any exercise of an Option granted before the Company has obtained shareholder
approval of the Plan in accordance with Section 20 hereof shall be conditioned
upon obtaining such shareholder approval of the Plan in accordance with Section
20 hereof.
(f) The terms of a First Option granted pursuant to this Section shall
be as follows:
(i) the term of the First Option shall be ten (10) years.
(ii) the First Option shall be exercisable only while the
Outside Director remains a Director of the Company.
-10-
<PAGE>
(iii) the exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the First Option.
(iv) subject to Section 14 hereof, the First Option shall
vest and become exercisable as to 1/48 of the Shares subject to the First Option
each month, such that all Shares subject to the First Option shall be vested and
exercisable four (4) years from the date of grant of the First Option, provided
that the Optionee continues to serve as a Director on such dates.
(g) The terms of Subsequent Options granted pursuant to this Section
shall be as follows:
(i) the term of the Subsequent Option shall be ten (10)
years.
(ii) the Subsequent Option shall be exercisable only while
the Outside Director remains a Director of the Company.
(iii) the exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the Subsequent Option.
(iv) subject to Section 14 hereof, the Subsequent Option
shall vest and become exercisable as to 1/12 of the Shares subject to the
Subsequent Option each month, such that all Shares subject to the Subsequent
Option shall be vested and exercisable one (1) year after the date of grant of
the Subsequent Option, provided that the Optionee continues to serve as a
Director on such dates.
14. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
----------------------------------------------------------------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities
of the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.
-11-
<PAGE>
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has
not been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with
--------------------
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option and Stock Purchase Right shall be assumed
or an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Option or Stock
Purchase Right, the Optionee shall fully vest in and have the right to exercise
the Option or Stock Purchase Right as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an
Option or Stock Purchase Right becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
15. Time of Granting Options and Stock Purchase Rights. The date of grant
--------------------------------------------------
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
-12-
<PAGE>
whom an Option or Stock Purchase Right is so granted within a reasonable time
after the date of such grant.
16. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend, alter,
-------------------------
suspend or terminate the Plan.
(b) Shareholder Approval. The Board shall obtain shareholder approval
--------------------
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
17. Conditions Upon Issuance of Shares.
----------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the
----------------
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise of an
--------------------------
Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
18. Inability to Obtain Authority. The inability of the Company to obtain
-----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
19. Reservation of Shares. The Company, during the term of this Plan,
---------------------
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
-13-
<PAGE>
20. Shareholder Approval. The Plan shall be subject to approval by the
--------------------
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the degree and manner
required under Applicable Laws.
-14-
<PAGE>
EXHIBIT 4.5
USWEB CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED AND RESTATED EFFECTIVE APRIL 1998)
The following constitute the provisions of the 1997 Employee Stock Purchase
Plan of USWeb Corporation.
1. Purpose. The purpose of the Plan is to provide employees of the
-------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
-----------
(a) "Board" shall mean the Board of Directors of the Company.
-----
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
----
(c) "Common Stock" shall mean the Common Stock of the Company.
------------
(d) "Company" shall mean USWeb Corporation, a Delaware corporation,
-------
and any Designated Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time gross earnings,
------------
overtime and commissions, but exclusive of payments for shift premium,
incentive compensation, incentive payments, bonuses and other compensation.
(f) "Designated Subsidiary" shall mean any Subsidiary which has been
---------------------
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.
(g) "Employee" shall mean any individual who is an Employee of the
--------
Company for tax purposes whose customary employment with the Company is at least
twenty (20) hours per week and more than five (5) months in any calendar year.
For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.
(h) "Enrollment Date" shall mean the first day of each Offering
---------------
Period.
(i) "Exercise Date" shall mean the last day of each Purchase Period.
-------------
<PAGE>
(j) "Fair Market Value" shall mean, as of any date, the value of
-----------------
Common Stock determined as follows:
(1) If the Common Stock is listed on any established stock exchange or
a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day on the date of such determination, as reported in The Wall Street
---------------
Journal or such other source as the Administrator deems reliable, or;
- -------
(2) If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be the
mean of the closing bid and asked prices for the Common Stock on the date of
such determination, as reported in The Wall Street Journal or such other source
-----------------------
as the Board deems reliable, or;
(3) In the absence of an established market for the Common Stock, the
Fair Market Value thereof shall be determined in good faith by the Board, or;
(4) For purposes of the Enrollment Date of the first Offering Period
under the Plan, the Fair Market Value shall be the initial price to the public
as set forth in the final prospectus included within the registration statement
in Form S-1 filed with the Securities and Exchange Commission for the initial
public offering of the Company's Common Stock (the "Registration Statement").
(k) "Offering Periods" shall mean the periods of approximately twenty-
----------------
four (24) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after May 1 and November 1
of each year and terminating on the last Trading Day in the periods ending
twenty-four months later; provided, however, that the first Offering Period
under the Plan shall commence with the first Trading Day on or after the date on
which the Securities and Exchange Commission declares the Company's Registration
Statement effective and ending on the last Trading Day on or after October 31,
1999. The duration and timing of Offering Periods may be changed pursuant to
Section 4 of this Plan.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
----
(m) "Purchase Price" shall mean an amount equal to 85% of the Fair
--------------
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
(n) "Purchase Period" shall mean the approximately six month period
---------------
commencing after one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Enrollment Date and end with the next Exercise Date.
-2-
<PAGE>
(o) "Reserves" shall mean the number of shares of Common Stock covered
--------
by each option under the Plan which have not yet been exercised and the number
of shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.
(p) "Subsidiary" shall mean a corporation, domestic or foreign, of
----------
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
(q) "Trading Day" shall mean a day on which national stock exchanges
-----------
and the Nasdaq System are open for trading.
3. Eligibility.
-----------
(a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.
4. Offering Periods. The Plan shall be implemented by consecutive,
----------------
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after May 1 and November 1 each year, or on such other
date as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after the
date on which the Securities and Exchange Commission declares the Company's
Registration Statement effective and ending on the last Trading Day on or after
October 31, 1999. The Board shall have the power to change the duration of
Offering Periods (including the commencement dates thereof) with respect to
future offerings without stockholder approval if such change is announced at
least five (5) days prior to the scheduled beginning of the first Offering
Period to be affected thereafter.
-3-
<PAGE>
5. Participation.
-------------
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions.
------------------
(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding fifteen percent (15%)
of the Compensation which he or she receives on each pay day during the Offering
Period.
(b) All payroll deductions made for a participant shall be credited to
his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof, or may increase or decrease the rate of his or
her payroll deductions during the Offering Period by completing or filing with
the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to zero percent (0%) at any time during a
Purchase Period. Payroll deductions shall recommence at the rate provided in
such participant's subscription agreement at the beginning of the first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
-4-
<PAGE>
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period, each
---------------
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than
2,500 shares of the Company's Common Stock (subject to any adjustment pursuant
to Section 19) on the Enrollment Date, and provided further that such purchase
shall be subject to the limitations set forth in Sections 3(b) and 12 hereof.
Exercise of the option shall occur as provided in Section 8 hereof, unless the
participant has withdrawn pursuant to Section 10 hereof. The option shall
expire on the last day of the Offering Period.
8. Exercise of Option. Unless a participant withdraws from the Plan as
------------------
provided in Section 10 hereof, his or her option for the purchase of shares
shall be exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier with drawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date on
--------
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.
10. Withdrawal.
----------
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
the form of Exhibit B to this Plan. All of the participant's payroll deductions
credited to his or her account shall be paid to such participant promptly after
receipt of notice of withdrawal and such participant's option for the Offering
Period shall be automatically terminated, and no further payroll deductions for
the purchase of shares shall be made for such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions
-5-
<PAGE>
shall not resume at the beginning of the succeeding Offering Period unless the
participant delivers to the Company a new subscription agreement.
(b) A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.
11. Termination of Employment.
-------------------------
Upon a participant's ceasing to be an Employee, for any reason, he or
she shall be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the Offering Period but
not yet used to exercise the option shall be returned to such participant or, in
the case of his or her death, to the person or persons entitled thereto under
Section 15 hereof, and such participant's option shall be automatically
terminated. The preceding sentence notwithstanding, a participant who receives
payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant's customary number of hours per
week of employment during the period in which the participant is subject to such
payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a
--------
participant in the Plan.
13. Stock.
-----
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 3,000,000 shares, plus
an annual increase to be added on the date of each anniversary date of the
adoption of the Plan (beginning in 1998) equal to the lesser of (i) 50,000
shares, (ii) 4% of the outstanding shares on such date or (iii) a lesser amount
determined by the Board, subject to adjustment upon changes in capitalization of
the Company as provided in Section 19 hereof. If, on a given Exercise Date, the
number of shares with respect to which options are to be exercised exceeds the
number of shares then available under the Plan, the Company shall make a pro
rata allocation of the shares remaining available for purchase in as uniform a
manner as shall be practicable and as it shall determine to be equitable.
(b) The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.
-6-
<PAGE>
14. Administration. The Plan shall be administered by the Board or a
--------------
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision
and determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
15. Designation of Beneficiary.
--------------------------
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such partici pant's death subsequent to an Exercise
Date on which the option is exercised but prior to delivery to such participant
of such shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant's
account under the Plan in the event of such participant's death prior to
exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a
---------------
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the Company
------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each participant
-------
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
-7-
<PAGE>
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
---------------------------------------------------------------------
Merger or Asset Sale.
--------------------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
stockholders of the Company, the Reserves, the maximum number of shares each
participant may purchase each Purchase Period (pursuant to Section 7), as well
as the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration". Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all or
--------------------
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
-8-
<PAGE>
20. Amendment or Termination.
------------------------
(a) The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 19 hereof, no
such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Plan is in the best
interests of the Company and its stockholders. Except as provided in Section 19
hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or any
other applicable law, regulation or stock exchange rule), the Company shall
obtain stockholder approval in such a manner and to such a degree as required.
(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.
21. Notices. All notices or other communications by a participant to the
-------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
-9-
<PAGE>
23. Term of Plan. The Plan shall become effective upon the earlier to
------------
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 20 hereof.
24. Automatic Transfer to Low Price Offering Period. To the extent
-----------------------------------------------
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.
-10-
<PAGE>
EXHIBIT A
---------
USWEB CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. _____________________________________________________ hereby elects to
participate in the USWeb Corporation 1997 Employee Stock Purchase Plan (the
"Employee Stock Purchase Plan") and subscribes to purchase shares of the
Company's Common Stock in accordance with this Subscription Agreement and
the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of
____% of my Compensation on each payday (up to 15%) during the Offering
Period in accordance with the Employee Stock Purchase Plan. (Please note
that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise my
option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is in
all respects subject to the terms of the Plan. I understand that my
ability to exercise the option under this Subscription Agreement is subject
to stockholder approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse only):
___________________________________________________________________________
___________.
6. I understand that if I dispose of any shares received by me pursuant to the
Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares) or one year after the
Exercise Date, I will be treated for federal income tax purposes as having
received ordinary income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares at the time such
shares were purchased by me over the price which I paid for the shares. I
-
hereby agree to notify the Company in writing
---------------------------------------------
-11-
<PAGE>
within 30 days after the date of any disposition of my shares and I will
------------------------------------------------------------------------
make adequate provision for Federal, state or other tax withholding
-------------------------------------------------------------------
obligations, if any, which arise upon the disposition of the Common Stock.
-------------------------------------------------------------------------
The Company may, but will not be obligated to, withhold from my
compensation the amount necessary to meet any applicable withholding
obligation including any withholding necessary to make available to the
Company any tax deductions or benefits attributable to sale or early
disposition of Common Stock by me. If I dispose of such shares at any time
after the expiration of the 2-year and 1-year holding periods, I understand
that I will be treated for federal income tax purposes as having received
income only at the time of such disposition, and that such income will be
taxed as ordinary income only to the extent of an amount equal to the
lesser of (1) the excess of the fair market value of the shares at the time
of such disposition over the purchase price which I paid for the shares, or
(2) 15% of the fair market value of the shares on the first day of the
Offering Period. The remainder of the gain, if any, recognized on such
disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon
my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
NAME: (Please print)______________________________________________
(First) (Middle) (Last)
__________________________ _____________________________________________
Relationship
_____________________________________________
(Address)
-12-
<PAGE>
Employee's Social
Security Number: ____________________________________
Employee's Address: ____________________________________
____________________________________
____________________________________
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:_________________________ ________________________________________
Signature of Employee
_______________________________________
Spouse's Signature (If beneficiary other than
spouse)
-13-
<PAGE>
EXHIBIT B
---------
USWEB CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the USWeb Corporation
1997 Employee Stock Purchase Plan which began on ____________, 19____ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically termi nated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.
Name and Address of Participant:
________________________________
________________________________
________________________________
Signature:
________________________________
Date:__________________________
-14-
<PAGE>
EXHIBIT 4.6
USWEB CORPORATION
1997 ACQUISITION STOCK OPTION PLAN
(AS AMENDED AND RESTATED EFFECTIVE APRIL 1998)
1. Purposes of the Plan. The purposes of this Stock Option Plan are to
--------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees as shall
-------------
be administering the Plan in accordance with Section 4 hereof.
(b) "Applicable Laws" means the requirements relating to the
----------------
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Code" means the Internal Revenue Code of 1986, as amended.
----
(e) "Committee" means a committee of Directors appointed by the Board
---------
in accordance with Section 4 hereof.
(f) "Common Stock" means the Common Stock of the Company.
------------
(g) "Company" means USWeb Corporation, a Delaware corporation.
-------
(h) "Consultant" means any person who is engaged by the Company or any
----------
Parent or Subsidiary to render consulting or advisory services to such entity.
(i) "Director" means a member of the Board of Directors of the Company.
--------
(j) "Disability" means total and permanent disability as defined in
----------
Section 22(e)(3) of the Code.
<PAGE>
(k) "Employee" means any person, including Officers and Directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as an
----------------------
incentive stock option within the meaning of Section 422 of the Code.
(o) "Nonstatutory Stock Option" means an Option not intended to qualify
-------------------------
as an Incentive Stock Option.
(p) "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.
(q) "Option" means a stock option granted pursuant to the Plan.
------
-2-
<PAGE>
(r) "Option Agreement" means a written or electronic agreement between
----------------
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of
the Plan.
(s) "Option Exchange Program" means a program whereby outstanding
-----------------------
Options are exchanged for Options with a lower exercise price.
(t) "Optioned Stock" means the Common Stock subject to an Option or a
--------------
Stock Purchase Right.
(u) "Optionee" means the holder of an outstanding Option or Stock
--------
Purchase Right granted under the Plan.
(v) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(w) "Plan" means this 1997 Acquisition Stock Option Plan.
----
(x) "Restricted Stock" means shares of Common Stock acquired pursuant
----------------
to a grant of a Stock Purchase Right under Section 12 below.
(y) "Section 16(b)" means Section 16(b) of the Securities Exchange Act
-------------
of 1934, as amended.
(z) "Service Provider" means an Employee, Director or Consultant.
----------------
(aa) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 13 below.
(bb) "Stock Purchase Right" means a right to purchase Common Stock
--------------------
pursuant to Section 12 below.
(cc) "Subsidiary" means a "subsidiary corporation," whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan is 20,000,000 Shares, plus an annual increase to be
added on each anniversary date of the adoption of the Plan (beginning 1998)
equal to the lesser of (i) 400,000 Shares, (ii) four percent (4%) of the
outstanding Shares on such date or (iii) a lesser amount determined by the
Board. The Shares may be authorized, but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased
-3-
<PAGE>
Shares which were subject thereto shall become available for future grant or
sale under the Plan (unless the Plan has terminated). However, Shares that have
actually been issued under the Plan, upon exercise of either an Option or Stock
Purchase Right, shall not be returned to the Plan and shall not become available
for future distribution under the Plan, except that if Shares of Restricted
Stock are repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan.
4. Administration of the Plan.
--------------------------
(a) Procedure.
---------
(i) Multiple Administrative Bodies. The Plan may be
------------------------------
administered by different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator
--------------
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
----------
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the
--------------------
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan
---------------------------
and, in the case of a Committee, the specific duties delegated by the Board to
such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may from time to time be granted hereunder;
(iii) to determine the number of Shares to be covered by each
such award granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, of any Option or
Stock Purchase Right granted hereunder. Such terms and conditions include, but
are not limited to, the exercise price, the time or times when Options or Stock
Purchase Rights may be exercised (which may be
-4-
<PAGE>
based on performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Purchase Right or the Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;
(vi) to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(e) instead of Common Stock;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All elections by Optionees to
have Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable; and
(xi) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations
----------------------------------
and interpretations of the Administrator shall be final and binding on all
Optionees.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may
-----------
be granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
6. Limitations.
-----------
(a) $100,000 Rule. Each Option shall be designated in the Option
-------------
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options
-5-
<PAGE>
shall be taken into account in the order in which they were granted. The Fair
Market Value of the Shares shall be determined as of the time the Option with
respect to such Shares is granted.
(b) No Right to Continuing Employment. Neither the Plan nor any Option
---------------------------------
or Stock Purchase Right shall confer upon an Optionee any right with respect to
continuing the Optionee's relationship as a Service Provider with the Company,
nor shall they interfere in any way with the Optionee's right or the Company's
right to terminate such relationship at any time, with or without cause.
(c) Share Limitations. The following limitations shall apply to
-----------------
grants of Options:
(i) No Service Provider shall be granted, in any fiscal year
of the Company, Options to purchase more than 150,000 Shares.
(ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 2,000,000 Shares
which shall not count against the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.
(iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
7. Term of Plan. The Plan shall become effective upon its adoption by the
------------
Board. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
--------------
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof. In the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
---------------------------------------
(a) Exercise Price. The per share exercise price for the Shares to be
--------------
issued upon exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
-6-
<PAGE>
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.
(B) granted to any other Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a merger or other corporate transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is
---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.
(c) Consideration. The consideration to be paid for the Shares to be
-------------
issued upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option,
shall be determined at the time of grant). Such consideration may consist of
(1) cash, (2) check, (3) promissory note, (4) other Shares which (x) in the case
of Shares acquired upon exercise of an Option, have been owned by the Optionee
for more than six months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option shall be exercised, (5) consideration received by
the Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (6) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept,
the Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
10. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable according to the terms hereof at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. Unless the Administrator provides otherwise, vesting of
Options granted hereunder shall be tolled during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share.
-7-
<PAGE>
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
-------------------------------------------------
ceases to be a Service Provider, such Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement (of at least
thirty (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
----------------------
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
-----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or
-8-
<PAGE>
inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
-----------------
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
11. Non-Transferability of Options and Stock Purchase Rights. Unless
--------------------------------------------------------
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
12. Stock Purchase Rights.
---------------------
(a) Rights to Purchase. Stock Purchase Rights may be issued either
------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such
person must accept such offer. The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines otherwise,
-----------------
the Restricted Stock purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.
(c) Other Provisions. The Restricted Stock purchase agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
-9-
<PAGE>
(d) Rights as a Stockholder. Once the Stock Purchase Right is
-----------------------
exercised, the purchaser shall have rights equivalent to those of a stockholder
and shall be a stockholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 13 of
the Plan.
13. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
----------------------------------------------------------------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities
of the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option or Stock Purchase Right until
fifteen (15) days prior to such transaction as to all of the Optioned Stock
covered thereby, including Shares as to which the Option or Stock Purchase Right
would not otherwise be exercisable. In addition, the Administrator may provide
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option or Stock Purchase Right shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
--------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the
-10-
<PAGE>
successor corporation refuses to assume or substitute for the Option or Stock
Purchase Right, the Optionee shall fully vest in and have the right to exercise
the Option or Stock Purchase Right as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
or Stock Purchase Right becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
14. Time of Granting Options and Stock Purchase Rights. The date of grant
--------------------------------------------------
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option or Stock Purchase Right is so granted within a reasonable time
after the date of such grant.
15. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Board shall obtain stockholder approval
--------------------
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
-11-
<PAGE>
16. Conditions Upon Issuance of Shares.
----------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the
----------------
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise of an
--------------------------
Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
17. Inability to Obtain Authority. The inability of the Company to obtain
-----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
18. Reservation of Shares. The Company, during the term of this Plan,
---------------------
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. Stockholder Approval. The Plan shall be subject to approval by the
--------------------
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the degree and manner
required under Applicable Laws.
-12-
<PAGE>
EXHIBIT 5.1
June 2, 1998
USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about June 3, 1998 (the
"REGISTRATION STATEMENT") in connection with the registration under the
Securities Act of 1933, as amended, of 18,000,000 shares of your Common Stock
(the "SHARES"), 3,000,000 of which are to be issued pursuant to 1997 Employee
Stock Purchase Plan, 5,000,000 of which are to be issued pursuant to the 1996
Equity Compensation Plan and 10,000,000 of which are to be issued pursuant to
the 1997 Acquisition Stock Option Plan (together, the "PLANS"). As your legal
counsel, we have examined the proceedings proposed to be taken in connection
with the issuance and sale of the Shares to be issued under the Plans.
It is our opinion that the Shares, when issued and sold in the manner
referred to in the Plans and pursuant to the agreements that accompany the
Plans, will be legally and 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 the use of our name wherever appearing in the
Registration Statement, including any Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/S/ WILSON SONSINI GOODRICH & ROSATI
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-8/S-3 and in this
Registration Statement of our reports dated January 20, 1998, relating to the
consolidated financial statements of USWeb Corporation, September 17, 1997
related to the financial statements of USWeb San Francisco, September 12, 1997
related to the financial statements of USWeb Milwaukee, September 17, 1997
related to the financial statements of USWeb LA Metro, September 18, 1997
related to the financial statements of USWeb Atlanta, September 18, 1997 related
to the financial statements of USWeb DC, September 18, 1997 related to the
financial statements of USWeb Pittsburgh, October 31, 1997 related to the
financial statements of USWeb Chicago Metro, October 31, 1997 related to the
financial statements of USWeb Hollywood (formerly KandH, Inc.), October 29, 1997
related to the financial statements of USWeb Hollywood (formerly Dream Media,
Inc.), October 17, 1997 related to the financial statements of USWeb Marin,
October 31, 1997 related to the financial statements of USWeb Long Island,
October 24, 1997 related to the financial statements of USWeb Detroit, October
15, 1997 related to the financial statements of USWeb San Mateo, October 31,
1997 related to the financial statements of USWeb LA Central, November 4, 1997
related to the financial statements of USWeb Houston, November 5, 1997 related
to the financial statements of USWeb New York Central (formerly Reach Networks,
Inc.), March 24, 1998 related to the financial statements of
Inter.logic.studios, inc., March 27, 1998 related to the financial statements of
Quest Interactive Media, Inc., March 27, 1998 related to the financial
statements of Ensemble Corporation, April 15, 1998 related to the financial
statements of Ikonic Interactive, Inc., March 26, 1998 related to the financial
statements of USWeb San Jose, and April 17, 1998 related to the financial
statements of Gray Peak Technologies, Inc., which appear in the Company's
Registration Statement on Form S-4 (No. 333-38351). We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
San Jose, California
June 2, 1998
