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EXHIBIT 4.2
MESSAGEMEDIA, INC.
1999 NON-OFFICER STOCK OPTION PLAN
ADOPTED BY THE BOARD OF DIRECTORS OCTOBER 27, 1999
STOCKHOLDER APPROVAL NOT REQUIRED
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Consultants who are not Officers or members of the Board of
Directors of the Company may be given an opportunity to benefit from increases
in value of the Common Stock of the Company through the granting of Nonstatutory
Stock Options. Only Nonstatutory Stock Options may be granted hereunder.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are Employees or Consultants at the time of grant of an option and
who are not Officers or members of the Board of Directors, to secure and retain
the services of such new Employees and Consultants, and to provide incentives
for such persons to exert maximum efforts for the success of the Company and its
Affiliates.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "AFFILIATE" shall mean any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f) respectively, of the Code, or such other
entity which controls the Company or is controlled by the Company.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" shall mean a committee comprised of one or more members
of the Board appointed by the Board in accordance with subsection 4(a) of the
Plan.
(e) "COMMON STOCK" shall mean the Company's common stock.
(f) "COMPANY" shall mean MessageMedia, Inc., a Delaware corporation.
(g) "CONSULTANT" shall mean any person, including an advisor or other
form of independent contractor, engaged by the Company or an Affiliate to render
consulting services and who is compensated for such services (provided that such
services are not in connection with the offer or sale of securities in a
capital-raising transaction, and do not directly or indirectly promote or
maintain a market for the Company's securities), provided that the term
"Consultant" shall not include Employees, Officers, Directors, or stockholders
beneficially owning ten percent (10%) or more of the Company's Common Stock.
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(h) "CONTINUOUS SERVICE AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" shall
mean that the service of an individual to the Company, whether as an Employee,
Director or Consultant, is not interrupted or terminated. The Board, in its sole
discretion, may determine whether Continuous Service as an Employee, Director or
Consultant shall be considered interrupted in the case of: (i) any leave of
absence approved by the Board, including sick leave, military leave, or any
other personal leave; or (ii) transfers between the Company, Affiliates or their
successors.
(i) "DIRECTOR" shall mean a member of the Board.
(j) "DISABILITY" shall mean inability of a person, in the opinion of a
qualified physician acceptable to the Company, to perform the major duties of
that person's position with the Company or an Affiliate of the Company because
of the sickness or injury of the person.
(k) "EMPLOYEE" shall mean any person employed by the Company or by any
Affiliate, excluding Officers and Directors of the Company (and of any Affiliate
which controls the Company) and excluding stockholders beneficially owning ten
percent (10%) or more of the Company's Common Stock.
(l) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(m) "FAIR MARKET VALUE" means, as of any date, the value of a Share
determined as follows:
(i) If the Common Stock is listed on any established stock
exchange, or traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted
on such exchange or market (or if the Common Stock is traded on more than one
exchange or market, on the exchange or market with the greatest volume of
trading in Common Stock) on the trading day prior to the day of determination,
as reported in THE WALL STREET JOURNAL or such other source as the Board deems
reliable;
(ii) In the absence of such markets for the Common Stock, the
Fair Market Value shall be determined in good faith by the Board.
(n) "NONSTATUTORY STOCK OPTION" shall mean an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(o) "OFFICER" shall mean a person who is an officer of the Company
including any corporate officer with the title of vice president and above and
any other Employee of the Company whom the Board or the Committee classifies as
"Officer".
(p) "OPTION" shall mean a Nonstatutory Stock Option granted pursuant to
the Plan.
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(q) "OPTION AGREEMENT" shall mean a written agreement between the
Company and an Optionholder setting forth the terms and conditions of the grant
of an individual Option. Each Option Agreement shall be subject to the terms and
conditions of the Plan.
(r) "OPTIONHOLDER" shall mean a person to whom an Option is granted
pursuant to the Plan, or, if applicable, such other person who holds an
outstanding Option.
(s) "PLAN" shall mean this 1999 Non-Officer Stock Option Plan.
(t) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
(u) "SHARE" shall mean a share of Common Stock, as adjusted in
accordance with Section 11 of the Plan.
3. SHARES SUBJECT TO THE PLAN.
Subject to the provisions of Section 11 of the Plan, the maximum
aggregate number of Shares which may be issued under the terms of an Option
Agreement and the Plan is one million one hundred fifty eight thousand
(1,158,000) Shares. The Shares may be authorized but unissued Common Stock or
reacquired Common Stock treated as shares or otherwise. If an Option should
expire or become unexercisable for any reason without having been exercised in
full, the unpurchased Shares that were subject thereto shall, unless the Plan
shall have been terminated, become available for future grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE. The Plan shall be administered by the Board. The Board
may appoint a Committee to administer the Plan on behalf of the Board, subject
to such terms and conditions as the Board may prescribe. Once appointed, the
Committee shall continue to serve (and references in the Plan to the Board shall
thereafter be to the Committee), until otherwise directed by the Board. From
time to time the Board may, in its sole and complete discretion, increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause, for any reason or no reason) and appoint new members in
substitution therefor, fill vacancies however caused, and/or remove all members
of the Committee and thereafter directly administer the Plan.
(b) POWERS OF THE BOARD. Subject to the provisions of the Plan, the
Board shall have the authority to administer, interpret and amend the Plan and
the Options so long as no such exercise of authority is directly contradictory
to the terms and conditions of the Plan. The Board's authority shall include the
following powers: (i) to grant options under the Plan; provided, however, that
only Nonstatutory Stock Options may be granted under the Plan; (ii) to
determine, upon review of relevant information and in accordance with subsection
2(m) of the Plan, the Fair Market Value of the Common Stock; (iii) to determine
the exercise price per share of Options to be granted, which exercise price
shall be determined in accordance with subsection 8(a) of the Plan; (iv) to
determine the Employees or Consultants to whom, and the time or times at which,
Options shall be granted and the number of Shares to be represented by each
Option, provided that no Options may be granted to a person who is not either an
Employee or a
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Consultant; (v) to interpret the Plan and any Option Agreement; (vi) to
prescribe, amend and rescind rules and regulations relating to the Plan; (vii)
to determine the terms and provisions of each Option granted (which need not be
identical) in accordance with the Plan, and, with the consent of the holder
thereof with respect to any adverse change, modify or amend each Option; (viii)
to accelerate or defer (the latter with the consent of the Optionholder) the
exercise date and vesting schedule of any Option; (ix) to authorize any person
to execute on behalf of the Company any instrument required to effectuate the
grant of an Option previously granted by the Board or to carry out any other
task related to the administration of the Plan; (x) to amend, suspend or
terminate the Plan in accordance with Section 14 of the Plan; and (xi) to make
all other determinations deemed by the Board to be necessary or advisable or
appropriate for the administration of the Plan. Any and all of these powers, as
well as the Board's overall authority to administer the Plan, may be exercised
in the Board's sole discretion.
(c) EFFECT OF BOARD'S DECISION. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionholders and
any other holders of any Options granted under the Plan.
5. ELIGIBILITY.
(a) Options may be granted only to Employees or Consultants as defined
in Section 2 hereof. An Employee or Consultant who has been granted an Option,
if he or she remains eligible, may be granted an additional Option or Options.
Notwithstanding the foregoing, no Employee who is an Officer of the Company (and
of any Affiliate which controls the Company) or who is a Director shall be
entitled to receive the grant of an Option under the Plan.
(b) Options may not be granted to Consultants who are not natural
persons unless the Company determines both (i) that such grant (A) shall be
registered in a manner other than on the Form S-8 Registration Statement under
the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not
require registration under the Securities Act in order to comply with the
requirements of the Securities Act, if applicable, and (ii) that such grant
complies with the securities laws of all other relevant jurisdictions.
(c) The Plan shall not confer upon any Optionholder any right with
respect to continuation of employment or consultancy by the Company, nor shall
it interfere in any way with the Optionholder's right or the Company's right to
terminate the Optionholder's employment at any time, for any reason or no
reason, with or without cause, or to terminate the Optionholder's consultancy
pursuant to the terms of the Consultant's agreement with the Company.
6. TERM OF THE PLAN.
The Plan shall become effective upon its adoption by the Board of
Directors. It shall continue in effect until terminated under Section 14 of the
Plan.
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7. TERM OF OPTION.
The term of each Option shall be ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
8. EXERCISE PRICE, CONSIDERATION AND VESTING.
(a) EXERCISE PRICE. The exercise price of each Option shall be not less
than 100% of the Fair Market Value of the Common Stock subject to the Option on
the date of grant.
(b) CONSIDERATION. The consideration to be paid for the Shares to be
issued upon exercise of an Option shall be paid, to the extent permitted by
applicable statutes and regulations, as follows: (i) in cash (or by check), or
(ii) at the discretion of the Board, as determined either at the time of the
grant of the Option or at any time thereafter at or before the time the Option
is exercised: (A) by delivery to the Company of other Common Stock of the
Company (which has either been held for the period required to avoid a charge to
the Company's reported earnings (generally six months) or that was not acquired,
directly or indirectly from the Company, that are owned free and clear of any
liens, claims, encumbrances or security interests, and that are valued at Fair
Market Value on the date of exercise), or (B) in any other form of legal
consideration that may be acceptable to the Board, or (iii) any combination
thereof.
(c) VESTING. The total number of Shares subject to an Option may, but
need not, become exercisable in periodic installments (which may, but need not,
be equal). The Option Agreement may provide that, from time to time during each
of such installment periods, the Option may become exercisable ("vest") with
respect to some or all of the Shares allotted to that period, and may be
exercised with respect to some or all of the Shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. The provisions of this
subsection 8(c) are subject to any Option provisions governing the minimum
number of Shares as to which an Option may be exercised.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Board, including performance criteria with respect to the
Company and/or the Optionholder, and as shall be permissible under the terms of
the Plan.
(i) An Option may not be exercised for a fraction of a Share.
(ii) An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board, consist
of any consideration and method of payment allowable under subsection 8(b) of
the Plan. Until the issuance (as evidenced by the appropriate entry on the books
of the Company
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or of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, 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. No adjustment will be made (for example, for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued), except as provided in Section 11 of the Plan.
(iii) Exercise of an Option in any manner shall result in a
decrease in the number of Shares that thereafter may be issued, for purposes of
the Plan and such Option, by the number of Shares as to which the Option is
exercised.
(iv) The Option may, but need not, include a provision whereby
the Optionholder may elect to exercise the Option at any time while the Option
remains outstanding as to any part or all of the Shares subject to the Option,
subject to a repurchase right in favor of the Company on such terms as the Board
shall establish, which may include the use of an escrow account to hold Shares
remaining subject to the Company's repurchase right.
(b) TERMINATION OF CONTINUOUS SERVICE AS AN EMPLOYEE, DIRECTOR OR
CONSULTANT. If an Optionholder ceases his or her Continuous Service as an
Employee, Director or Consultant for any reason other than death or Disability,
the Optionholder may, but only within three (3) months (or such longer or
shorter period, which in no event shall be less than thirty (30) days, specified
in the Option Agreement) after the end of the Optionholder's Continuous Service
as an Employee, Director or Consultant, exercise the Option to the extent that
the Optionholder was entitled to exercise it at the date of such termination. To
the extent that the Optionholder was not entitled to exercise the Option at the
date of such termination, or if the Optionholder does not exercise such Option
within the time specified herein, the Option shall terminate.
(c) DEATH OF OPTIONHOLDER. In the event of the death of an Optionholder
during the term of an Option granted to such Optionholder and who remained at
the time of his or her death in Continuous Service as an Employee, Director or
Consultant since the date of grant of the Option, the Option may be exercised at
any time within twelve (12) months (or such longer or shorter period, which in
no event shall be less than six (6) months, specified in the Option Agreement)
following the date of death, by the Optionholder's estate or by a person who
acquired the right to exercise the Option by bequest, inheritance, beneficiary
designation or otherwise, to the extent that the Optionholder was entitled to
exercise it on the date of death. To the extent that the Optionholder was not
entitled to exercise the Option on the date of death that portion of the Option
shall terminate on the Optionholder's date of death. To the extent that the
Optionholder was entitled to exercise the Option on the date of death, if the
Option is not exercised within the time specified herein, the Option shall
terminate.
(d) DISABILITY OF OPTIONHOLDER. In the event of the termination of an
Optionholder's Continuous Service as an Employee, Director or Consultant on
account of Disability of the Optionholder during the term of an Option granted
to such Optionholder and who remained at the time of his or her termination on
account of Disability in Continuous Service as an Employee, Director or
Consultant since the date of grant of the Option, the Optionholder may, but only
within twelve (12) months (or such longer or shorter period, which in no event
shall be less than six (6) months, specified in the Option Agreement) after the
date
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the Optionholder ceases Continuous Service as an Employee, Director or
Consultant on account of such Disability, exercise the Option to the extent that
the Optionholder was entitled to exercise it at the date of such termination. To
the extent that the Optionholder was not entitled to exercise the Option at the
date of such termination, that portion of the Option shall terminate on the
Optionholder's date of Disability. To the extent that the Optionholder was
entitled to exercise the Option on the date of Disability if the Optionholder
does not exercise such Option (which the Optionholder was entitled to exercise)
within the time specified herein, the Option shall terminate.
(e) WITHHOLDING. To the extent provided by the terms of the Option
Agreement, the Optionholder may satisfy any federal, state or local tax
withholding obligation relating to the exercise of such Option by any of the
following means or by a combination of such means or by a combination of such
means: (i) tendering a cash payment; (ii) authorizing the Company to withhold
Shares from the Shares otherwise issuable to the Optionholder as a result of the
exercise of the Option; or (iii) delivering to the Company owned and
unencumbered Shares of the Common Stock of the Company. Notwithstanding the
foregoing, nothing in this subsection 9(e) shall abridge the Company's right to
withhold from any remuneration paid to the Optionholder by the Company.
10. TRANSFERABILITY OF OPTIONS.
Except as otherwise expressly provided in the terms of the Option
Agreement, the Option 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
Optionholder, only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
(a) CAPITALIZATION ADJUSTMENTS. If any change is made in the Common
Stock subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to Section 3, and the outstanding Options will be appropriately
adjusted in the class(es) and number of securities and price per Share subject
to such outstanding Options. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)
(b) CHANGE IN CONTROL--DISSOLUTION OR LIQUIDATION. In the event of a
dissolution or liquidation of the Company, then all outstanding Options shall
terminate immediately prior to such event.
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(c) CHANGE IN CONTROL--ASSET SALE, MERGER, CONSOLIDATION OR REVERSE
MERGER. In the event of (i) a sale, lease or other disposition of all or
substantially all of the assets of the Company, (ii) a merger or consolidation
in which the Company is not the surviving corporation, or (iii) a reverse merger
in which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, then any surviving corporation or acquiring corporation shall assume
any Options outstanding under the Plan or shall substitute similar options
(including an award to acquire the same consideration paid to the stockholders
in the transaction described in this subsection 11(c)) for those outstanding
under the Plan. In the event any surviving corporation or acquiring corporation
refuses to assume such Options or to substitute similar options for those
outstanding under the Plan, then with respect to Options held by Optionholders
whose Continuous Service has not terminated, the vesting of such Options (and,
if applicable, the time during which such Options may be exercised) shall be
accelerated in full, and the Options shall terminate if not exercised (if
applicable) at or prior to such event. With respect to any other Options
outstanding under the Plan, such Options shall terminate if not exercised (if
applicable) prior to such event.
12. CONDITIONS UPON ISSUANCE OF SHARES.
The Company may require the Optionholder (or any person to whom an
Option is transferred under Section 10) to execute such documents and to provide
such representations, written assurances or information which the Company shall
determine is necessary, desirable or appropriate to comply with applicable
securities and other laws as a condition of granting an Option to such
Optionholder or permitting the Optionholder (or any person to whom an Option is
transferred under Section 10) to exercise such Option. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities and other laws, including, but not limited to,
legends restricting the transfer of the shares.
13. RESERVATION OF SHARES.
(a) The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
(b) 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.
14. AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN AND OPTIONS.
(a) AMENDMENT, SUSPENSION AND TERMINATION. The Board may amend, suspend
or terminate the Plan from time to time in such respects as the Board may deem
advisable in the Board's sole discretion. Notwithstanding the foregoing, the
Plan terminates when all reserved Shares have been issued and cannot return to
the reserve.
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(b) EFFECT OF AMENDMENT, SUSPENSION OR TERMINATION. Any amendment,
suspension or termination of the Plan shall not adversely affect Options already
granted, as determined by the Board in good faith, and such Options shall remain
in full force and effect as if the Plan had not been amended, suspended or
terminated unless mutually agreed otherwise between the Optionholder and the
Board, which agreement must be in writing and signed by the Optionholder and the
Company. Notwithstanding the foregoing, any amendment which increases the
benefits provided or to be provided under the Plan shall not require the consent
of the Optionholders.
(c) AMENDMENT OF OPTIONS. The Board at any time, and from time to time,
may amend the terms of some or all Options; provided, however, that if the Board
makes a good faith determination that the effect of such an amendment, taken as
a whole, would be to impair the Optionholder's rights and/or increase the
Optionholder's obligations under the Option, then such amendment shall not be
effective as to a particular Option unless the Company requests the consent of
the Optionholder and such Optionholder consents in writing.
15. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of Common Stock pursuant to Options shall
constitute general funds of the Company.
16. EFFECTIVE DATE.
The Plan shall become on the date the Plan is adopted by the Board.
17. CHOICE OF LAW.
The law of the State of Colorado shall govern all questions concerning
the construction, validity and interpretation of this Plan, without regard to
such state's conflict of laws rules.
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