<PAGE>
As filed with the Securities and Exchange Commission on June 25, 1999
Registration No. 333-__________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
YAHOO! INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 77-0398689
(State of Incorporation) (I.R.S. Employer Identification No.)
3420 CENTRAL EXPRESSWAY
SANTA CLARA, CA 95051
(Address of principal executive offices)
-----------------------
ONLINE ANYWHERE 1997 STOCK PLAN
ENCOMPASS, INC. STOCK OPTION PLAN
(Full title of the Plan(s))
-----------------------
GARY VALENZUELA
SENIOR VICE PRESIDENT, FINANCE AND
ADMINISTRATION AND CHIEF FINANCIAL OFFICER
3420 CENTRAL EXPRESSWAY
SANTA CLARA, CA 95051
408-731-3300
(Name, address and telephone number, including area code, of agent for service)
-----------------------
Copy to:
Joshua L. Green
Patrick R. Barry
Venture Law Group
A Professional Corporation
2800 Sand Hill Road
Menlo Park, California 94025
(650) 854-4488
(Calculation of Registration Fee on following page)
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Amount to Maximum Maximum Amount of
be Registered Offering Price Aggregate Registration
Title of Securities to be Registered Per Share Offering Price Fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ONLINE ANYWHERE 1997 STOCK PLAN (1)
Common Stock,
$0.001 par value............................ 86,960 Shares $10.55 (2) $ 917,428.00 $255.05
ENCOMPASS, INC. STOCK OPTION PLAN (3)
Common Stock,
$0.001 par value............................ 110,003 Shares $2.19 (2) $ 240,787.84 $ 66.94
Total................................ 196,963 Shares $1,158,215.84 $321.99
</TABLE>
- -----------------------
(1) Pursuant to the Agreement and Plan of Merger dated as of May 25, 1999,
among Registrant, Airborne Acquisition Corporation and Online Anywhere,
Registrant assumed, effective as of May 28, 1999, all of the
outstanding options to purchase Common Stock of Online Anywhere under
the Online Anywhere 1997 Stock Plan, and such options became
exercisable to purchase shares of Registrant's Common Stock, with
appropriate adjustments to the number of shares and exercise price of
each assumed option.
(2) Computed in accordance with Rule 457(h) under the Securities Act of
1933, as amended (the "SECURITIES ACT"), solely for the purpose of
calculating the registration fee.
(3) Pursuant to the Agreement and Plan of Merger dated as of May 19, 1999,
among Registrant, Scarlett Acquisition Corporation and Encompass, Inc.
("ENCOMPASS"), Registrant assumed, effective as of May 26, 1999, all of
the outstanding options to purchase Common Stock of Encompass under the
Encompass Stock Option Plan, and such options became exercisable to
purchase shares of Registrant's Common Stock, with appropriate
adjustments to the number of shares and exercise price of each assumed
option.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "COMMISSION") are hereby incorporated by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 (as amended April 29, 1999) (File No. 0-28018).
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999 (File No. 0-28018).
(c) The Registrant's Current Reports on Form 8-K, filed with
the Commission on January 13, 1999, January 29, 1999, April 5, 1999 (as
amended on April 19, 1999), April 8, 1999 and June 2, 1999 (as amended on
June 8, 1999) (File No. 0-28018).
(d) Registrant's Registration Statement on Form S-4 dated April
26, 1999 (as amended April 28, 1999).
(e) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A filed with the Commission on
March 12, 1996, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby 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 such documents.
Item 4. DESCRIPTION OF SECURITIES. Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law allows for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Securities Act"). Article VII of the
Registrant's Certificate of Incorporation and Article VI of the Registrant's
Bylaws provide for indemnification of the Registrant's directors, officers,
employees and other agents to the extent and under the circumstances permitted
by the Delaware General Corporation Law. The Registrant has also entered into
agreements with its directors and officers that will require the Registrant,
among other things, to indemnify them against certain liabilities that may arise
by reason of their status or service as directors to the fullest extent not
prohibited by law.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
Item 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<S> <C>
4.1 Online Anywhere 1997 Stock Plan
</TABLE>
<PAGE>
<TABLE>
<S> <C>
4.2 Encompass, Inc. Stock Option Plan
5.1 Opinion of Venture Law Group, a Professional Corporation.
23.1 Consent of Venture Law Group, a Professional Corporation (included in
Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.1 Power of Attorney (see II-3).
</TABLE>
II-1
<PAGE>
Item 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement 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 purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as the 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 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 a successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereunder, the Registrant will, unless in the opinion of its counsel
the question has already been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
[Signature Pages Follow]
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Yahoo! Inc., a corporation organized and existing under the laws of
the State of Delaware, 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 25th
day of June, 1999.
YAHOO! INC.
By: /s/ Gary Valenzuela
----------------------------------------------
Gary Valenzuela, Senior Vice President,
Finance and Administration and Chief
Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Timothy Koogle and Gary Valenzuela,
jointly and severally, his attorneys-in-fact and agents, each with the power of
substitution and resubstitution, for him or her and in his name, place or stead,
in any and all capacities, to sign any amendments to this Registration Statement
on Form S-8, and to file such amendments, together with exhibits and other
documents in connection therewith, with the Securities and Exchange Commission,
granting to each attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully as he or she might or could do in person, and
ratifying and confirming all that the attorney-in-facts and agents, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ TIMOTHY KOOGLE Chief Executive Officer and Director June 25, 1999
- ------------------------------------ (Principal Executive Officer)
Timothy Koogle
/s/ GARY VALENZUELA Senior Vice President, Finance and June 25, 1999
- ------------------------------------ Administration and Chief Financial
Gary Valenzuela Officer (Principal Financial Officer)
/s/ JAMES J. NELSON Vice President, Finance (Chief Accounting June 25, 1999
- ------------------------------------ Officer)
James J. Nelson
/s/ JEFF MALLETT President, Chief Operating Officer and June 25, 1999
- ------------------------------------ Director
Jeff Mallett
/s/ ERIC HIPPEAU Director June 25, 1999
- ------------------------------------
Eric Hippeau
/s/ ARTHUR H. KERN Director June 25, 1999
- ------------------------------------
Arthur H. Kern
/s/ MICHAEL MORITZ Director June 25, 1999
- ------------------------------------
Michael Moritz
/s/ JERRY YANG Director June 25, 1999
- ------------------------------------
Jerry Yang
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C>
4.1 Online Anywhere 1997 Stock Plan
4.2 Encompass, Inc. Stock Option Plan
5.1 Opinion of Venture Law Group, a Professional Corporation.
23.1 Consent of Venture Law Group, a Professional Corporation (included in
Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.1 Power of Attorney (see II-3).
</TABLE>
<PAGE>
EXHIBIT 4.1
ONLINE ANYWHERE
(FORMERLY, VIDAM COMMUNICATIONS, INC.)
1997 STOCK PLAN
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.
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 Vidam Communications, Inc., 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 and is
compensated for such services.
(i) "DIRECTOR" means a member of the Board of Directors of the
Company.
-1-
<PAGE>
(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 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) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.
(o) "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.
(p) "OPTION" means a stock option granted pursuant to the Plan.
-2-
<PAGE>
(q) "OPTION AGREEMENT" means an 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.
(r) "OPTION EXCHANGE PROGRAM" means a program whereby
outstanding Options are exchanged for Options with a lower exercise price.
(s) "OPTIONED STOCK" means the Common Stock subject to an
Option or a Stock Purchase Right.
(t) "OPTIONEE" means the holder of an outstanding Option or
Stock Purchase Right granted under the Plan.
(u) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(v) "PLAN" means this 1996 Stock Plan.
(w) "RESTRICTED STOCK" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11 below.
(x) "SECTION 16(B)" means Section 16(b) of the Securities
Exchange Act of 1934, as amended.
(y) "SERVICE PROVIDER" means an Employee, Director or
Consultant.
(z) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(aa) "STOCK PURCHASE RIGHT" means a right to purchase Common
Stock pursuant to Section 11 below.
(bb) "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 12
of the Plan, the maximum aggregate number of Shares which may be subject to
option and sold under the Plan is 2,389,500 Shares. 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) The Plan shall be administered by the Board or a Committee
appointed by the Board, which Committee shall be constituted to comply with
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 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(f) 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;
-4-
<PAGE>
(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.
(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
(b) 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 5(b), Incentive Stock Options 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.
(c) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon any Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall it interfere in
any way with his or her right or the Company's right to terminate such
relationship at any time, with or without cause.
6. 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 14 of the Plan.
7. 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.
-5-
<PAGE>
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.
8. 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:
(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
(A) granted to a Service Provider 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 the grant.
(B) granted to any other Service Provider, the per
Share exercise price shall be no less than 85% 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
-6-
<PAGE>
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.
9. 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, but in no case at a rate of less than 20% per year over
five (5) years from the date the Option is granted. 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 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 12 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). To the extent that the Optionee is not
entitled to exercise the Option on the date of such termination, or if the
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, 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 Optionee's disability, the Optionee may within twelve
(12) months from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise an Option to the extent otherwise entitled to exercise it
at the date of such termination. If such disability is not a "disability" as
such term is defined in Section 22(e)(3)
-7-
<PAGE>
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. To the extent that
the Optionee is not entitled to exercise the Option on the date of
termination, or if the Optionee does not exercise such Option to the extent
so entitled 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 at any time within twelve (12) months
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant) to the extent vested
on the date of death. If, at the time of death, the Optionee is not vested as
to the entire Option, the Shares covered by the unvested portion of the
Option shall 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.
10. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Options
and Stock Purchase Rights 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.
11. 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 terms of the offer shall
comply in all respects with Section 260.140.42 of Title 10 of the California
Code of Regulations. 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
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cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may
determine, but in no case at a rate of less than 20% per year over five years
from the date of purchase.
(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 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 12 of the Plan.
12. 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.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee at least fifteen (15) days prior to such proposed action. To the
extent it has not been previously exercised, the Option or Stock Purchase
Right shall 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
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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.
13. 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.
14. 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
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exercise the powers granted to it hereunder with respect to Options granted
under the Plan prior to the date of such termination.
15. 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.
16. 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.
17. 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.
18. 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.
19. INFORMATION TO OPTIONEES AND PURCHASERS. The Company shall provide
to each Optionee and to each individual who acquires Shares pursuant to the
Plan, not less frequently than annually during the period such Optionee or
purchaser has one or more Options or Stock Purchase Rights outstanding, and,
in the case of an individual who acquires Shares pursuant to the Plan, during
the period such individual owns such Shares, copies of annual financial
statements. The Company shall not be required to provide such statements to
key employees whose duties in connection with the Company assure their access
to equivalent information.
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EXHIBIT 4.2
ENCOMPASS, INC.
STOCK+OPTION+PLAN
SECTION 1.
PURPOSE
The purpose of this Plan is to promote the interests of the Company by
granting Options to purchase Shares to (i) Employees in order (a) to attract
and retain Employees, (b) to provide an additional incentive to each Employee
to work to increase the value of Shares, and (c) to provide each Employee
with a stake in the future of the Company which corresponds to the stake of
each of the Company's shareholders, and (ii) Key Persons who have rendered
valuable services to the Company, and to provide such Key Person with a stake
in the future of the Company which corresponds to each of the Company's
shareholders.
SECTION 2.
DEFINITIONS
Each term set forth in this Section 2 shall have the meaning set forth
opposite such term for purposes of this Plan and, for purposes of such
definitions, the singular shall include the plural and the plural shall
include the singular, and reference to one gender shall include the other
gender.
2.1 BOARD means the Board of Directors of the Company.
2.2 CODE means the Internal Revenue Code of 1986, as amended.
2.3. COMMITTEE means the Compensation Committee of the Board.
2.4 COMMON+STOCK means the common stock of the Company, par value
$.01 per share.
2.5 COMPANY means Encompass, Inc., a Georgia corporation, and any
successor to such organization.
2.6 EMPLOYEE means an employee of the Company, a Subsidiary or a
Parent.
2.7 EXCHANGE+ACT means the Securities Exchange Act of 1934, as amended.
2.8 EXERCISE+PRICE means the price which shall be paid to purchase
one (1) Share upon the exercise of an Option granted under this Plan.
2.9 FAIR+MARKET+VALUE means the price at which the Committee or the Board
acting in good faith determines through any reasonable valuation method that a
Share might change hands between a willing buyer and a willing seller, neither
being under any compulsion to buy or to sell and both having reasonable
knowledge of the relevant facts.
2.10 ISO means an option granted under this Plan to purchase Shares which
is intended by the Company to satisfy the requirements of Code Section 422 as an
incentive stock option.
2.11 KEY+PERSON means (i) a member of the Board who is not an Employee,
(ii) a consultant, distributor or other person who has rendered valuable
services to the Company, a Subsidiary or a Parent, (iii) a person who has
incurred, or is willing to incur, financial risk in the form of guaranteeing or
acting as co-obligor with respect to debts or other obligations of the Company,
or (iv) a person who has extended credit to the Company.
<PAGE>
Key Persons are not limited to individuals and, subject to the
preceding definition, may include corporations, partnerships, associations
and other entities.
2.12 NON-ISO means an option granted under this Plan to purchase Shares
which is not intended by the Company to satisfy the requirements of Code Section
422.
2.13 OPTION means an ISO or a Non-ISO.
2.14 OPTIONEE means grantee of an Option.
2.15 PARENT means any corporation which is a parent of the Company
(within the meaning of Code Section 424).
2.16 PLAN means the Encompass, Inc. Stock Option Plan, as amended from
time to time.
2.17 SHARE means a share of the Common Stock of the Company.
2.18 STOCK OPTION GRANT means the written agreement or instrument which
sets forth the terms of an Option granted to an Employee or Key Person under
this Plan.
2.19 SUBSIDIARY means any corporation which is a subsidiary of the
Company (within the meaning of Code Section 424(f)).
2.20 SURRENDERED+SHARES means the Shares described in Section 11.2
which (in lieu of being purchased) are surrendered for cash or Shares, or for
a combination of cash and Shares, in accordance with Section 11.
2.21 TEN+PERCENT+SHAREHOLDER means a person who owns (after taking
into account the attribution rules of Code Section 424(d)) more than ten
percent (10%) of the total combined voting power of all classes of shares of
either the Company, a Subsidiary or a Parent.
SECTION 3.
SHARES SUBJECT TO OPTIONS
One million three hundred seventy-one thousand four hundred
twenty-eight (1,371,428) Shares of Common Stock shall be reserved for
issuance under this Plan. Such Shares shall be reserved, to the extent that
the Company deems appropriate, from authorized but unissued Shares, and from
Shares which have been reacquired by the Company. Furthermore, any Shares
subject to an Option which remain after the cancellation, expiration or
exchange of such Option thereafter shall again become available for use under
this Plan, but any Surrendered Shares which remain after the surrender of an
Option under Section 11 shall not again become available for use under this
Plan.
SECTION 4.
EFFECTIVE DATE
The effective date of this Plan shall be the date it is adopted by the
Board provided the shareholders of the Company approve this Plan within
twelve (12) months after such effective date. If such effective date comes
before such shareholder approval, any Options granted under this Plan before
the date of such approval automatically shall be granted subject to such
approval.
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<PAGE>
SECTION 5.
COMMITTEE
Unless the Board reserves the power to administer the Plan to itself,
this Plan shall be administered by the Committee. The Committee acting in its
absolute discretion shall exercise such powers and take such action as
expressly called for under this Plan and, further, the Committee shall have
the power to interpret this Plan and (subject to Section 16) to take such
other action in the administration and operation of this Plan as the
Committee deems equitable under the circumstances. The Committee's actions
shall be binding on the Company, on each affected Employee or Key Person, and
on each other person directly or indirectly affected by such actions.
Notwithstanding anything else to the contrary herein, the Board shall have
the authority to assume the powers and responsibilities outlined above with
respect to the Committee, in whole or in part.
SECTION 6.
ELIGIBILITY
Except as provided below, only Employees shall be eligible for the
grant of Options under this Plan, but no Employee shall have the right to be
granted an Option under this Plan merely as a result of his or her status as
an Employee. Key Persons may be eligible, subject to written approval by the
Board, for the grant of Options under this Plan, but only if the Key Person
has provided valuable services to the Company, a Subsidiary or a Parent and
only if the Option is a Non-ISO.
SECTION 7.
GRANT OF OPTIONS
The Committee, acting pursuant to the procedure established by the
Board, shall either grant Options under this Plan, or recommend to the Board
that Options be granted under this Plan. In accordance with the procedure
established by the Board, the Committee, or the Board, in its absolute
discretion, shall grant Options under this Plan from time to time to purchase
Shares and, further, shall have the right to grant new Options in exchange
for outstanding Options. Such Options shall be granted to Employees or Key
Persons selected by the Committee, acting in its discretion as set forth
above, and neither the Board nor the Committee shall be under any obligation
whatsoever to grant Options to all Employees or Key Persons, or to grant all
Options subject to the same terms and conditions. Each grant of an Option
shall be evidenced by a Stock Option Grant and each Stock Option Grant shall:
1. specify whether the Option is an ISO or Non-ISO; and
2. incorporate such other terms and conditions as the Committee
or the Board, acting in its absolute discretion, deems
consistent with the terms of this Plan, including (without
limitation) a restriction on the number of Shares subject to
the Option which first become exercisable or subject to
surrender during any calendar year.
In determining Employee(s) or Key Person(s) to whom an Option shall be
granted and the number of Shares to be covered by such Option, the Committee
or the Board may take into account the recommendations of the President of
the Company and its other officers, the duties of the Employee or Key Person,
the present and potential contributions of the Employee or Key Person to the
success of the Company, the anticipated number of years of service remaining
before the attainment by the Employee of retirement age, and other factors
deemed relevant by the Committee or the Board, in its sole discretion, in
connection with accomplishing the purpose of this Plan. An Employee or Key
Person who has been granted an Option to purchase Shares of the Company,
whether under this Plan or otherwise, may be granted one or more additional
Options.
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If the Committee or the Board grants an ISO and a Non-ISO to an
Employee on the same date, the right of the Employee to exercise or surrender
one such Option shall not be conditioned on his or her failure to exercise or
surrender the other such Option.
SECTION 8.
EXERCISE PRICE
If an Option is an ISO, the Exercise Price for each Share subject to
such Option shall be no less than the Fair Market Value of a Share on the
date such Option is granted or, if such Option is granted to a Ten Percent
Shareholder, the Exercise Price for each Share subject to such Option shall
be no less than 110% of the Fair Market Value of a Share on the date such
Option is granted. If an Option is a Non-ISO, the Exercise Price for each
Share shall be no less than the minimum price required by applicable state
law, or by the Company's governing instrument, or $0.01, whichever price is
greater. The Exercise Price shall be payable in full upon the exercise of any
Option, and a Stock Option Grant, at the discretion of the Committee or the
Board, can provide for the payment of the Exercise Price either in cash, or
in Shares acceptable to the Committee or the Board, or in any combination of
cash and Shares acceptable to the Committee or the Board. Any payment made in
Shares shall be treated as equal to the Fair Market Value of such Shares on
the date the properly endorsed certificate for such Shares is delivered to
the Committee or the Board.
Notwithstanding the above, and in the sole discretion of the Committee
or the Board, an Option may be exercised as to a portion or all (as
determined by the Committee or the Board) of the number of Shares specified
in the Stock Option Grant by delivery to the Company of a promissory note,
such promissory note to be executed by the Optionee and which shall include,
with such other terms and conditions as the Committee or the Board shall
determine, provisions in a form approved by the Committee or the Board under
which (i) the balance of the aggregate purchase price shall be payable in
equal installments over such period and shall bear interest at such rate
(which shall not be less than the prime bank loan rate as determined by the
Committee or the Board) as the Committee or the Board shall approve and (ii)
the Optionee shall be personally liable for payment of the unpaid principal
balance and all accrued but unpaid interest.
SECTION 9.
EXERCISE PERIOD
Each Option granted under this Plan shall be exercisable in whole or
in part at such time or times as set forth in the related Stock Option Grant,
but no Stock Option Grant shall:
1. make an Option exercisable before the date such Option is
granted; or
2. make an Option exercisable after the earlier of the:
(a) the date such Option is exercised in full, or
(b) the date which is the tenth (10th) anniversary of the
date such Option is granted, if such Option is a
Non-ISO or an ISO granted to a non-Ten Percent
Shareholder, or the date which is the fifth (5th)
anniversary of the date such Option is granted, if
such Option is an ISO granted to a Ten Percent
Shareholder.
A Stock Option Grant may provide for the exercise of an Option after
the employment of an Employee has terminated for any reason whatsoever,
including death or disability.
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SECTION 10.
NONTRANSFERABILITY
No Option granted under this Plan shall be transferable by an Employee
or Key Person other than by will or by the laws of descent and distribution,
and such Option shall be exercisable during an Employee's or Key Person's
lifetime only by the Employee or Key Person, as the case may be. The person
or persons to whom an Option is transferred by will or by the laws of descent
and distribution thereafter shall be treated as the Employee or Key Person.
SECTION 11.
SURRENDER OF OPTIONS
11.1 GENERAL+RULE. The Committee or the Board, acting in its absolute
discretion may incorporate a provision in a Stock Option Grant to allow an
Employee or Key Person to surrender his or her Option in whole or in part in
lieu of the exercise in whole or in part of that Option on any date that:
1. the Fair Market Value of the Shares subject to such Option
exceeds the Exercise Price for such Shares, and
2. the Option to purchase such Shares is otherwise exercisable.
11.2 PROCEDURE. The surrender of an Option in whole or in part shall
be effected by the delivery of the Stock Option Grant to the Committee or the
Board, together with a statement signed by the Employee or Key Person which
specifies the number of Shares ("Surrendered Shares") as to which the
Employee or Key Person surrenders his or her Option and how he or she desires
payment be made for such Surrendered Shares.
11.3 PAYMENT. An Employee or Key Person in exchange for his or her
Surrendered Shares shall receive a payment in cash or in Shares, or in a
combination of cash and Shares, equal in amount on the date such surrender is
effected to the excess of the Fair Market Value of the Surrendered Shares on
such date over the Exercise Price for the Surrendered Shares. The Committee
or the Board, acting in its absolute discretion, can approve or disapprove an
Employee's or Key Person's request for payment in whole or in part in cash
and can make that payment in cash or in such combination of cash and Shares
as the Committee or the Board deems appropriate. A request for payment only
in Shares shall be approved and made in Shares to the extent payment can be
made in whole shares of Shares and (at the Committee's or the Board's
discretion) in cash in lieu of any fractional Shares.
11.4 RESTRICTIONS. Any Stock Option Grant which incorporates a
provision to allow an Employee or Key Person to surrender his or her Option
in whole or in part also shall incorporate such additional restrictions on
the exercise or surrender of such Option as the Committee or the Board deems
necessary to satisfy the conditions to the exemption under Rule 16b-3 (or any
successor exemption) to Section 16(b) of the Exchange Act.
SECTION 12.
SECURITIES REGISTRATION
Each Stock Option Grant may provide that, upon the receipt of Shares
as a result of the surrender or exercise of an Option, the Employee or Key
Person shall, if so requested by the Company, hold such Shares for investment
and not with a view of resale or distribution to the public and, if so
requested by the Company, shall deliver to the Company a written statement
satisfactory to the Company to that effect. Each Stock Option Grant may also
provide that, if so requested by the Company, the Employee or Key Person
shall make a written representation to the Company that he or she will not
sell or offer to sell any of such Shares unless a registration
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<PAGE>
statement shall be in effect with respect to such Shares under the Securities
Act of 1933, as amended ("1933 Act"), and any applicable state securities law
or, unless he or she shall have furnished to the Company an opinion, in form
and substance satisfactory to the Company, of legal counsel acceptable to the
Company, that such registration is not required. Certificates representing
the Shares transferred upon the exercise or surrender of an Option granted
under this Plan may at the discretion of the Company bear a legend to the
effect that such Shares have not been registered under the 1933 Act or any
applicable state securities law and that such Shares may not be sold or
offered for sale in the absence of an effective registration statement as to
such Shares under the 1933 Act and any applicable state securities law or an
opinion, in form and substance satisfactory to the Company, of legal counsel
acceptable to the Company, that such registration is not required.
SECTION 13.
LIFE OF PLAN
No Option shall be granted under this Plan on or after the earlier of:
1. the tenth (10th) anniversary of the effective date of this
Plan (as determined under Section 4 of this Plan), in which
event this Plan otherwise thereafter shall continue in
effect until all outstanding Options have been surrendered
or exercised in full or no longer are exercisable, or
2. the date on which all of the Shares reserved under Section 3
of this Plan have (as a result of the surrender or exercise
of Options granted under this Plan) been issued or no longer
are available for use under this Plan, in which event this
Plan also shall terminate on such date.
SECTION 14.
ADJUSTMENT
The number of Shares reserved under Section 3 of this Plan, and the
number of Shares subject to Options granted under this Plan, and the Exercise
Price of such Options shall be adjusted by the Committee in an equitable
manner to reflect any change in the capitalization of the Company, including,
but not limited to, such changes as stock dividends or stock splits.
Furthermore, the Committee or the Board shall have the right to adjust (in a
manner which satisfies the requirements of Code Section 424(a)) the number of
Shares reserved under Section 3 of this Plan, and the number of Shares
subject to Options granted under this Plan, and the Exercise Price of such
Options in the event of any corporate transaction described in Code Section
424(a) which provides for the substitution or assumption of such Options. If
any adjustment under this Section 14 creates a fractional Share or a right to
acquire a fractional Share, such fractional Share shall be disregarded, and
the number of Shares reserved under this Plan and the number subject to any
Options granted under this Plan shall be the next lower number of Shares,
rounding all fractions downward. An adjustment made under this Section 14 by
the Committee or the Board shall be conclusive and binding on all affected
persons and, further, shall not constitute an increase in the number of
Shares reserved under Section 3 of this Plan.
SECTION 15.
SALE OR MERGER OF THE COMPANY
If the Company agrees to sell substantially all of its assets for cash
or property, or for a combination of cash and property, or agrees to any
merger, consolidation, reorganization, division or other transaction in which
Shares are converted into another security or into the right to receive
securities or property and such agreement does not provide for the assumption
or substitution of the Options granted under this Plan, each Option at the
direction and discretion of the Committee or the Board, or as is otherwise
provided in the Stock Option Grants, may be canceled unilaterally by the
Company in exchange for the whole Shares (or, subject to satisfying the
conditions to the exemption under Rule 16b-3 or any successor exemption to
Section 16(b) of the Exchange
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<PAGE>
Act, for the whole Shares and the cash in lieu of a fractional Share) which
each Employee or Key Person otherwise would receive if he or she had the
right to surrender his or her outstanding Option in full under Section 11 of
this Plan and he or she exercised that right exclusively for Shares on a date
fixed by the Committee or the Board which comes before such sale or other
corporate transaction.
SECTION 16.
AMENDMENT OR TERMINATION
This Plan may be amended by the Committee or the Board from time to
time to the extent that the Committee or the Board deems necessary or
appropriate; provided, however, no such amendment shall be made absent the
approval of the shareholders of the Company (1) to increase the number of
Shares reserved under Section 3 except as set forth in Section 14, (2) to
extend the maximum life of the Plan under Section 13 or the maximum exercise
period under Section 9, (3) to decrease the minimum Exercise Price under
Section 8, or (4) to change the designation of Employees or Key Persons
eligible for Options under Section 6. The Committee or the Board also may
suspend the granting of Options under this Plan at any time and may terminate
this Plan at any time; provided, however, the Company shall not have the
right to modify, amend or cancel any Option granted before such suspension or
termination unless (1) the Employee or Key Person consents in writing to such
modification, amendment or cancellation or (2) there is a dissolution or
liquidation of the Company or a transaction described in Section 14 or
Section 15 of this Plan.
SECTION 17.
MISCELLANEOUS
18.1 SHAREHOLDER+RIGHTS. No Employee or Key Person shall have any rights
as a shareholder of the Company as a result of the grant of an Option to him or
to her under this Plan or his or her exercise or surrender of such Option
pending the actual delivery of Shares subject to such Option to such Employee or
Key Person.
18.2 NO+CONTRACT+OF+EMPLOYMENT. The grant of an Option to an Employee or
Key Person under this Plan shall not constitute a contract of employment and
shall not confer on an Employee any rights upon his or her termination of
employment in addition to those rights, if any, expressly set forth in the Stock
Option Grant which evidences his or her Option.
18.3 WITHHOLDING. The exercise or surrender of any Option granted under
this Plan shall constitute an Employee's or Key Person's full and complete
consent to whatever action the Committee or the Board directs to satisfy the
federal and state tax withholding requirements, if any, which the Committee or
the Board in its discretion deems applicable to such exercise or surrender.
18.4 TRANSFER. The transfer of an Employee between or among the Company,
a Subsidiary or a Parent shall not be treated as a termination of his or her
employment under this Plan.
18.5 CONSTRUCTION. This Plan shall be construed under the laws of the
State of Georgia.
<PAGE>
EXHIBIT 5.1
June 25, 1999
Yahoo! Inc.
3420 Central Expressway
Santa Clara, CA 95051
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the
"REGISTRATION STATEMENT") filed by you with the Securities and Exchange
Commission (the "COMMISSION") on or about June 25, 1999 in connection with
the registration under the Securities Act of 1933, as amended, of a aggregate
of 196,963 shares of your Common Stock (the "SHARES") reserved for issuance
under the Online Anywhere 1997 Stock Plan and the Encompass, Inc. Stock
Option Plan. As your counsel in connection with these transactions, we have
examined the proceedings taken and are familiar with the proceedings proposed
to be taken by you in connection with the sale and issuance of the Shares.
It is our opinion that upon conclusion of the proceedings being taken
or contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares, and upon completion of the proceedings being taken in order to permit
such transactions to be carried out in accordance with the securities laws of
the various states where required, the Shares when issued and sold in the manner
described in the Registration Statement will be legally and validly issued,
fully paid and non-assessable.
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 the Prospectus constituting a part thereof,
and in any amendment thereto.
Very truly yours,
VENTURE LAW GROUP
A Professional Corporation
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated January 8, 1999, except
as to the stock split described in Note 1 which is as of February 8, 1999,
relating to the consolidated financial statements and financial statement
schedules, which appears in Yahoo! Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1998, as amended on April 29, 1999, and our report dated
January 8, 1999, except as to the stock split described in Note 1 which is as of
February 8, 1999 and the poolings of interests with GeoCities, Encompass, Inc.,
and Online Anywhere and the reincorporation as described in Note 1 and Note 11
which are as of May 28, 1999, relating to the supplementary consolidated
financial statements of Yahoo! Inc.
/s/ PRICEWATERHOUSECOOPERS LLP
San Jose, California
June 25, 1999
