<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 11, 1998
REGISTRATION NO. 333-_____
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
AMAZON.COM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 91-1646860
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1516 SECOND AVENUE, 4TH FLOOR
SEATTLE, WASHINGTON 98101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
JUNGLEE CORP. 1996 STOCK PLAN
JUNGLEE CORP. 1998 EQUITY INCENTIVE PLAN
SAGE ENTERPRISES, INC. 1997 AMENDED STOCK OPTION PLAN
SAGE ENTERPRISES, INC. MVP STOCK OPTION PLAN
(FULL TITLE OF THE PLANS)
JEFFREY P. BEZOS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AMAZON.COM, INC.
1516 SECOND AVENUE, 4TH FLOOR
SEATTLE, WASHINGTON 98101
(206) 622-2335
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPIES TO:
SCOTT L. GELBAND
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
(206) 583-8888
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED (1)(2) OFFERING PRICE PER SHARE(3) AGGREGATE OFFERING PRICE REGISTRATION FEE
---------------- ----------------- --------------------------- ------------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value per
share
1996 Stock Plan(1) 90,303 $ 2.217 $ 200,202 $ 60
119,692 $ 3.695 $ 442,262 $ 131
1998 Equity Incentive Plan(1) 97,063 $14.781 $1,434,689 $ 424
5,954 $23.280 $ 138,610 $ 41
1997 Amended Stock Option Plan 2,681 $ .179 $ 480 $ 1
(2) 9,052 $ .896 $ 8,111 $ 3
46,328 $ 8.963 $ 415,238 $ 123
39,910 $13.444 $ 536,590 $ 159
MVP Stock Option Plan (2) 28 $ 8.963 $ 251 $ 1
17 $13.445 $ 229 $ 1
TOTAL 411,028 $3,176,662 $ 944
</TABLE>
<PAGE> 2
(1) Pursuant to an Agreement and Plan of Merger dated as of August 3, 1998 (the
"Merger Agreement"), by and among the Registrant, AJ Acquisition, Inc. and
Junglee Corp. ("Junglee"), the Registrant assumed all the outstanding
options to purchase capital stock of Junglee under the Junglee 1996 Stock
Plan and the Junglee 1998 Equity Incentive Plan (the "Junglee Assumed
Options"), with appropriate adjustments to the number of shares and
exercise price of each Junglee Assumed Option to reflect the ratio at which
Junglee capital stock was converted into Common Stock of the Registrant
under the Merger Agreement.
(2) Pursuant to an Agreement and Plan of Merger dated as of August 3, 1998 (the
"Merger Agreement"), by and among the Registrant, Pacific Acquisition, Inc.
and Sage Enterprises, Inc. ("PlanetAll"), the Registrant assumed all the
outstanding options to purchase capital stock of PlanetAll under the
PlanetAll 1997 Amended Stock Option Plan and the PlanetAll MVP Stock Option
Plan (the "PlanetAll Assumed Options"), with appropriate adjustments to the
number of shares and exercise price of each PlanetAll Assumed Option to
reflect the ratio at which PlanetAll capital stock was converted into
Common Stock of the Registrant under the Merger Agreement.
(3) Shares are issuable upon exercise of outstanding options with fixed
exercise prices. Pursuant to Rule 457(h) under the Securities Act of 1933,
as amended, the aggregate offering price and the registration fee have been
computed upon the basis of the price at which the options may be exercised.
<PAGE> 3
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the fiscal year covered by the Annual Report on Form
10-K referred to in (a) above; and
(c) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A, filed with the Commission on May 2, 1997,
under Section 12(g) of the Exchange Act.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date hereof and prior to the filing of a
post-effective amendment, which indicate that the securities offered hereby have
been sold or which deregister the securities covered hereby then remaining
unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
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 (the "DGCL") provides
that a corporation may indemnify its directors and officers, as well as other
employees and individuals, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation--a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) incurred in connection with the
defense or settlement of such actions, and the statute requires court approval
before there can be any indemnification in which the person seeking
indemnification has been found liable to the corporation. The statute provides
that it is not exclusive of other indemnification that may be granted by a
corporation's charter, bylaws, disinterested director vote, stockholder vote,
agreement or otherwise.
Section 10 of the Registrant's Bylaws requires indemnification to the full
extent permitted under Delaware law as it now exists or may hereafter be
amended. Subject to any restrictions imposed by Delaware law, the
II-1
<PAGE> 4
Bylaws provide an unconditional right to indemnification for all expense,
liability and loss (including attorneys' fees, judgment, fines, ERISA excise
taxes or penalties and amounts paid in settlement) actually and reasonably
incurred or suffered by any person in connection with any actual or threatened
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, to the extent permitted by law, any derivative action)
by reason of the fact that such person is or was serving as a director or
officer of the Registrant or that, being or having been a director or officer of
the Registrant, such person is or was serving at the request of the Registrant
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan. The Bylaws also provide that the Registrant may, by
action of its Board of Directors, provide indemnification to its employees and
agents with the same scope and effect as the foregoing indemnification of
directors and officers.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability for (i) any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) payments of unlawful dividends or unlawful
stock repurchases or redemptions, or (iv) any transaction from which the
director derived an improper personal benefit.
Article 10 of the Registrant's Restated Certificate of Incorporation
provides that to the full extent that the DGCL, as it now exists or may
hereafter be amended, permits the limitation or elimination of the liability of
directors, a director of the Registrant shall not be liable to the Registrant or
its stockholders for monetary damages for breach of fiduciary duty as a
director. Any amendment to or repeal of such Article 10 shall not adversely
affect any right or protection of a director of the Registrant for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
The Registrant has entered into certain indemnification agreements with its
officers and directors. The indemnification agreements provide the Registrant's
officers and directors with further indemnification, to the maximum extent
permitted by the DGCL.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------ --------------------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Perkins Coie LLP (included in the opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see signatures page)
99.1 Junglee Corp. 1996 Option Plan
99.2 Junglee Corp. 1998 Equity Incentive Plan
99.3 Sage Enterprises, Inc. 1997 Amended Stock Option Plan
99.4 Sage Enterprises, Inc. MVP Stock Option Plan
</TABLE>
II-2
<PAGE> 5
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
II-3
<PAGE> 6
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.
II-4
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Seattle, State of Washington, on September 11, 1998.
AMAZON.COM, INC.
By /s/ Jeffrey P. Bezos
--------------------------------
Jeffrey P. Bezos
President, Chief Executive Officer
and Chairman of the Board
POWER OF ATTORNEY
EACH PERSON WHOSE INDIVIDUAL SIGNATURE APPEARS BELOW HEREBY AUTHORIZES
JEFFREY P. BEZOS AND JOY D. COVEY, OR EACH OF THEM, AS ATTORNEYS-IN-FACT, WITH
FULL POWER OF SUBSTITUTION, TO EXECUTE IN THE NAME AND ON BEHALF OF SUCH PERSON,
INDIVIDUALLY AND IN EACH CAPACITY STATED BELOW, AND TO FILE, ANY AND ALL
AMENDMENTS TO THIS REGISTRATION STATEMENT, INCLUDING ANY AND ALL POST-EFFECTIVE
AMENDMENTS.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
below on the 11th day of September, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Jeffrey P. Bezos
- --------------------------------------------------------
Jeffrey P. Bezos Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)
/s/ Joy D. Covey
- --------------------------------------------------------
Joy D. Covey Chief Financial Officer, Vice President of Finance and Administration
and Secretary (Principal Financial and Accounting Officer)
/s/ Tom A. Alberg
- --------------------------------------------------------
Tom A. Alberg Director
/s/ Scott D. Cook
- --------------------------------------------------------
Scott D. Cook Director
/s/ L. John Doerr
- --------------------------------------------------------
L. John Doerr Director
/s/ Patricia Q. Stonesifer
- --------------------------------------------------------
Patricia Q. Stonesifer Director
</TABLE>
II-5
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Perkins Coie LLP (included in opinion filed as Exhibit 5.1).
24.1 Power of Attorney (see signatures page)
99.1 Junglee Corp. 1996 Stock Plan
99.2 Junglee Corp. 1998 Equity Incentive Plan
99.3 Sage Enterprises, Inc. 1997 Amended Stock Option Plan
99.4 Sage Enterprises, Inc. MVP Stock Option Plan
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[PERKINS COIE LLP LETTERHEAD]
September 11, 1998
Amazon.com, Inc.
1516 Second Avenue, 4th Floor
Seattle, WA 98101
RE: REGISTRATION ON FORM S-8 OF SHARES OF COMMON STOCK, PAR VALUE $0.01
PER SHARE, OF AMAZON.COM, INC.
Gentlemen and Ladies:
We have acted as counsel to Amazon.com, Inc. (the "Company") in connection
with the preparation of a Registration Statement on Form S-8 (the "Registration
Statement") which is being filed with the Securities and Exchange Commission
with respect to up to 411,028 shares of common stock, par value $0.01 per share,
of the Company (the "Shares") pursuant to the Securities Act of 1933, as amended
(the "Act"). The Shares may be issued pursuant to the Junglee Corp. ("Junglee")
1996 Stock Plan, the Junglee 1998 Equity Incentive Plan, the Sage Enterprises,
Inc. ("Sage") 1997 Amended Stock Option Plan and Sage MVP Stock Option Plan (the
"Plans").
We have examined the Registration Statement and such documents and records
of the Company and other documents as we have deemed necessary for the purpose
of this opinion. In giving this opinion, we are assuming the authenticity of all
instruments presented to us as originals, the conformity with originals of all
instruments presented to us as copies and the genuineness of all signatures.
Based on and subject to the foregoing, we are of the opinion that, upon the
due execution by the Company and the registration by its registrar of the Shares
and the issuance and sale thereof by the Company in accordance with the terms of
the respective Plans and the receipt of consideration therefor in accordance
with the terms of the respective Plans, the Shares will be validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
PERKINS COIE LLP
<PAGE> 1
EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8), pertaining to the Junglee Corp. 1996 Stock Plan, the
Junglee Corp. 1998 Equity Incentive Plan, the Sage Enterprises, Inc. 1997
Amended Stock Option Plan and the Sage Enterprises, Inc. MVP Stock Option Plan,
of Amazon.com, Inc. of our report dated January 19, 1998, with respect to the
financial statements and schedule of Amazon.com, Inc. included in its Annual
Report (Form 10-K) for the year ended December 31, 1997, and our report
dated January 19, 1998, except for paragraphs 2 and 3 of Note 1 as to which the
date is August 27, 1998, with respect to the supplemental consolidated
financial statements and schedule of Amazon.com, Inc. included in its Current
Report on Form 8-K dated August 27, 1998, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Seattle, Washington
September 11, 1998
<PAGE> 1
EXHIBIT 99.1
JUNGLEE CORP.
1996 STOCK PLAN
(AS AMENDED JUNE 19, 1997)
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 Junglee Corp., a Delaware corporation.
(h) "Consultant" means any person who is engaged by the Company or any
Parent or Subsidiary to render consulting or advisory services to such entity.
(i) "Director" means a member of the Board of Directors of the
Company.
(j) "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
<PAGE> 2
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.
(q) "Option Agreement" means a written or electronic agreement between
the Company and an Optionee evidencing the terms and conditions or an
-2-
<PAGE> 3
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 2,050,000 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, 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.
-3-
<PAGE> 4
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 Cornmon Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;
(vi) to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(e) instead of Common Stock;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option or Stock Purchase Right that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by Optionees to have Shares
withheld
-4-
<PAGE> 5
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. 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.
-5-
<PAGE> 6
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
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.
-6-
<PAGE> 7
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable according to the terms hereof at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement, 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 stockholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 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). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the
-7-
<PAGE> 8
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If such
disability is not a "disability" as such term is defined in Section 22(e)(3) of
the Code, in the case of an Incentive Stock Option such Incentive Stock Option
shall automatically cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option on the day three
months and one day following such termination. If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
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
-8-
<PAGE> 9
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 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 Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a stockholder
and shall be a stockholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 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
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.
-9-
<PAGE> 10
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option and Stock Purchase Right shall be assumed
or an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Option or Stock
Purchase Right, the Optionee shall fully vest in and have the right to exercise
the Option or Stock Purchase Right as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
or Stock Purchase Right becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
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
-10-
<PAGE> 11
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) Stockholder Approval. The Board shall obtain stockholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
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. Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the degree and manner
required under Applicable Laws.
-11-
<PAGE> 12
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.
-12-
<PAGE> 1
EXHIBIT 99.2
JUNGLEE CORPORATION
AMENDED AND RESTATED
1998 EQUITY INCENTIVE PLAN AS
ADOPTED MAY 20, 1998 AND AMENDED THROUGH JUNE 10, 1998
1. PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company's future performance
through awards of Options and Restricted Stock. Capitalized terms not defined in
the text are defined in Section 22 hereof. This Plan is intended to be a written
compensatory benefit plan within the meaning of Rule 701 promulgated under the
Securities Act.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and 17 hereof,
the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 2,700,000 Shares or such lesser number of Shares
as permitted under Section 260.140.45 of Title 10 of the California Code of
Regulations. Subject to Sections 2.2 and 17 hereof, Shares will again be
available for grant and issuance in connection with future Awards under this
Plan that: (a) are subject to issuance upon exercise of an Option but cease to
be subject to such Option for any reason other than exercise of such Option or
(b) are subject to a Restricted Stock Award that otherwise terminates without
Shares being issued. At all times the Company will reserve and keep available a
sufficient number of Shares as will be required to satisfy the requirements of
all Awards granted under this Plan.
2.2 Adjustment of Shares. In the event that the number of outstanding
shares of the Company's Common Stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (a) the number of Shares reserved for issuance under
this Plan, (b) the Exercise Prices of and number of Shares subject to
outstanding Options and (c) the Purchase Prices of and number of Shares subject
to other outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and compliance
with applicable securities laws; provided, however, that fractions of a Share
will not be issued but will either be paid in cash at Fair Market Value of such
fraction of a Share or will be rounded down to the nearest whole Share, as
determined by the Committee and provided, further, that
<PAGE> 2
the Exercise Price of any Option may not be decreased to below the par value of
the Shares.
3. ELIGIBILITY. ISOs (as defined in Section 5 hereof) may be granted only
to employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. NQSOs (as defined in
Section 5 hereto) and Restricted Stock Awards may be granted to employees,
officers, directors and consultants of the Company or any Parent or Subsidiary
of the Company; provided such consultants render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Award under this Plan.
4. ADMINISTRATION.
4.1 Committee Authority. This Plan will be administered by the
Committee or the Board acting as the Committee. Subject to the general purposes,
terms and conditions of this Plan, and to the direction of the Board, the
Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any
other agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to
this Plan;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to
Awards;
(f) determine whether Awards will be granted singly, in combination
with, in tandem with, in replacement of, or as alternatives to,
other Awards under this Plan or awards under any other incentive
or compensation plan of the Company or any Parent or Subsidiary
of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission, or reconcile any
inconsistency in this Plan, any Award, any Award Agreement,
-2-
<PAGE> 3
any Exercise Agreement or any Restricted Stock Purchase
Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for the
administration of this Plan.
4.2 Committee Discretion. Any determination made by the Committee with
respect to any Award will be made in its sole discretion at the time of grant of
the Award or, unless in contravention of any express term of this Plan or Award,
and subject to Section 5.9 hereof, at any later time, and such determination
will be final and binding on the Company and on all persons having an interest
in any Award under this Plan. The Committee may delegate to one or more officers
of the Company the authority to grant an Award under this Plan.
5. OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISOS") or Nonqualified Stock Options ("NQSOS"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under this Plan will be
evidenced by an Award Agreement which will expressly identify the Option as an
ISO or an NQSO ("STOCK OPTION AGREEMENT"), and will be in such form and contain
such provisions (which need not be the same for each Participant) as the
Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.
5.2 Date of Grant. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.
5.3 Exercise Period. Options may be exercisable immediately (subject
to repurchase pursuant to Section 11 hereof) or may be exercisable within the
times or upon the events determined by the Committee as set forth in the Stock
Option Agreement governing such Option; provided, however, that no Option will
be exercisable after the expiration of ten (10) years from the date the Option
is granted; and provided further that no ISO granted to a person who directly or
by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of
-3-
<PAGE> 4
stock of the Company or of any Parent or Subsidiary of the Company ("TEN PERCENT
STOCKHOLDER") will be exercisable after the expiration of five (5) years from
the date the ISO is granted. The Committee also may provide for Options to
become exercisable at one time or from time to time, periodically or otherwise,
in such number of Shares or percentage of Shares as the Committee determines.
Subject to earlier termination of the Option as provided herein, each
Participant who is not an officer, director or consultant of the Company or of a
Parent or Subsidiary of the Company shall have the right to exercise an Option
granted hereunder at the rate of at least twenty percent (20%) per year over
five (5) years from the date such Option is granted.
5.4 Exercise Price. The Exercise Price of an Option will be determined
by the Committee when the Option is granted and may not be less than eighty-five
percent (85%) of the Fair Market Value of the Shares on the date of grant;
provided that (a) the Exercise Price of an ISO will not be less than one hundred
percent (100%) of the Fair Market Value of the Shares on the date of grant and
(b) the Exercise Price of any Option granted to a Ten Percent Stockholder will
not be less than one hundred ten percent (110%) of the Fair Market Value of the
Shares on the date of grant. Payment for the Shares purchased must be made in
accordance with Section 7 hereof.
5.5 Method of Exercise. Options may be exercised only by delivery to
the Company of a written stock option exercise agreement (the "EXERCISE
AGREEMENT") in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price, and any applicable taxes, for the
number of Shares being purchased.
5.6 Termination. Subject to earlier termination pursuant to Sections
17 and 18 hereof and notwithstanding the exercise periods set forth in the Stock
Option Agreement, exercise of an Option will always be subject to the following:
(a) If the Participant is Terminated for any reason except death,
Disability or for Cause, then the Participant may exercise such
Participant's Options only to the extent that such Options are
exercisable upon the Termination Date and such Options must be
exercised by the Participant, if at all, as to all or some of the
Vested Shares calculated as of the Termination Date, within three
-4-
<PAGE> 5
(3) months after the Termination Date (or within such shorter
time period, not less than thirty (30) days, or within such
longer time period, not exceeding five (5) years, after the
Termination Date as may be determined by the Committee, with any
exercise beyond three (3) months after the Termination Date
deemed to be an NQSO) but in any event, not later than the
expiration date of the Options.
(b) If the Participant is Terminated because of Participant's death
or Disability (or the Participant dies within three (3) months
after a Termination other than for Cause), then Participant's
Options may be exercised only to the extent that such Options are
exercisable by Participant on the Termination Date and must be
exercised by Participant (or Participant's legal representative
or authorized assignee), if at all, as to all or some of the
Vested Shares calculated as of the Termination Date, within
twelve (12) months after the Termination Date (or within such
shorter time period, not less than six (6) months, or within such
longer time period, not exceeding five (5) years, after the
Termination Date as may be determined by the Committee, with any
exercise beyond (i) three (3) months after the Termination Date
when the Termination is for any reason other than the
Participant's death or disability, within the meaning of Section
22(e)(3) of the Code, or (ii) twelve (12) months after the
Termination Date when the Termination is for Participant's
disability, within the meaning of Section 22(e)(3) of the Code,
deemed to be an NQSO) but in any event no later than the
expiration date of the Options.
(c) If the Participant is terminated for Cause, then Participant's
Options shall expire on such Participant's Termination Date, or
at such later time and on such conditions as are determined by
the Committee.
5.7 Limitations on Exercise. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market Value (determined
as of the date of grant) of Shares with respect to which ISOs are exercisable
for the first time by a Participant during any calendar year (under this Plan or
under any other incentive stock option plan of the Company or any Parent or
-5-
<PAGE> 6
Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value of
Shares on the date of grant with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year exceeds $100,000, then the
Options for the first $100,000 worth of Shares to become exercisable in such
calendar year will be ISOs and the Options for the amount in excess of $100,000
that become exercisable in that calendar year will be NQSOs. In the event that
the Code or the regulations promulgated thereunder are amended after the
Effective Date (as defined in Section 18 hereof) to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to ISOs, then
such different limit will be automatically incorporated herein and will apply to
any Options granted after the effective date of such amendment.
5.9 Modification, Extension or Removal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code. Subject to Section 5.10 hereof, the Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the Exercise Price
may not be reduced below the minimum Exercise Price that would be permitted
under Section 5.4 hereof for Options granted on the date the action is taken to
reduce the Exercise Price; provided, further, that the Exercise Price will not
be reduced below the par value of the Shares, if any.
5.10 No Disqualification. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to
sell to an eligible person Shares that are subject to restrictions. The
Committee will determine to whom an offer will be made, the number of Shares the
person may purchase, the Purchase Price, the restrictions to which the Shares
will be subject, and all other terms and conditions of the Restricted Stock
Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases under a Restricted
Stock Award made pursuant to this Plan will be evidenced by an Award Agreement
("RESTRICTED STOCK PURCHASE AGREEMENT") that will be in such form (which need
not be the same for each Participant) as the Committee will from time to
-6-
<PAGE> 7
time approve, and will comply with and be subject to the terms and conditions of
this Plan. The Restricted Stock Award will be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within such thirty (30) days , then
the offer will terminate, unless otherwise determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Committee and will be at least
eighty-five percent (85%) of the Fair Market Value of the Shares on the date the
Restricted Stock Award is granted or at the time the purchase is consummated,
except in the case of a sale to a Ten Percent Stockholder, in which case the
Purchase Price will be one hundred percent (100%) of the Fair Market Value on
the date the Restricted Stock Award is granted or at the time the purchase is
consummated. Payment of the Purchase Price must be made in accordance with
Section 7 hereof.
6.3 Restrictions. Restricted Stock Awards may be subject to the
restrictions set forth in Section 11 hereof or such other restrictions not
inconsistent with Section 25102(o) of the California Corporations Code.
7. PAYMENT FOR SHARE PURCHASES.
7.1 Payment. Payment for Shares purchased pursuant to this Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares that: (i) either (A) have been owned by
Participant for more than six (6) months and have been paid for
within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such note
has been fully paid with respect to such shares) or (B) were
obtained by Participant in the public market and (ii) are clear
of all liens, claims, encumbrances or security interests;
(c) by tender of a full recourse promissory note having such terms as
may be approved by the Committee and bearing interest at a rate
sufficient to avoid imputation of income under Sections 483 and
1274 of the Code; provided, however, that Participants who are
-7-
<PAGE> 8
not employees or directors of the Company will not be entitled to
purchase Shares with a promissory note unless the note is
adequately secured by collateral other than the Shares; provided,
further, that the portion of the Exercise Price or Purchase
Price, as the case may be, equal to the par value of the Shares
must be paid in cash or other legal consideration permitted by
Delaware General Corporation Law;
(d) by waiver of compensation due or accrued to the Participant for
services rendered;
(e) with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from the Participant
and a broker-dealer that is a member of the National
Association of Securities Dealers (an "NASD DEALER") whereby
the Participant irrevocably elects to exercise the Option
and to sell a portion of the Shares so purchased to pay for
the Exercise Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the Exercise
Price directly to the Company; or
(2) through a "margin" commitment from the Participant and an
NASD Dealer whereby the Participant irrevocably elects to
exercise the Option and to pledge the Shares so purchased to
the NASD Dealer in a margin account as security for a loan
from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the
Company; or
(f) by any combination of the foregoing.
7.2 Loan Guarantees. The Committee may help the Participant pay for
Shares purchased under this Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.
8. WITHHOLDING TAXES.
8.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
-8-
<PAGE> 9
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.
8.2 Stock Withholding. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may in its sole
discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee for such elections and be in writing in a form
acceptable to the Committee.
9. PRIVILEGES OF STOCK OWNERSHIP.
9.1 Voting and Dividends. No Participant will have any of the rights
of a stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Unvested
Shares that are repurchased pursuant to Section 11 hereof. The Company will
comply with Section 260.140.1 of Title 10 of the California Code of Regulations
with respect to the voting rights of Common Stock.
9.2 Financial Statements. The Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding, or as otherwise required under Section
260.140.46 of Title 10 of the California Code of Regulations. Notwithstanding
the foregoing, the Company will not be required to provide such financial
statements to Participants when issuance is
-9-
<PAGE> 10
limited to key employees whose services in connection with the Company assure
them access to equivalent information.
10. TRANSFERABILITY. Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution. During the lifetime of the
Participant an Award will be exercisable only by the Participant or
Participant's legal representative and any elections with respect to an Award
may be made only by the Participant or Participant's legal representative.
11. RESTRICTIONS OF SHARES.
11.1 Right of First Refusal. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right of first refusal to purchase all Shares that a Participant (or a
subsequent transferee) may propose to transfer to a third party, unless
otherwise not permitted by Section 25102(o) of the California Corporations Code,
provided, that such right of first refusal terminates upon the Company's initial
public offering of Common Stock pursuant to an effective registration statement
filed under the Securities Act.
11.2 Right of Repurchase. At the discretion of the Committee, the
Company reserves to itself and/or its assignee(s) in the Award Agreement a right
to repurchase Unvested Shares held by a Participant for cash and/or cancellation
of purchase money indebtedness following such Participant's Termination at any
time within the later of ninety (90) days after the Participant's Termination
Date and the date the Participant purchases Shares under the Plan at the
Participant's Exercise Price or Purchase Price, as the case may be, provided,
that unless the Participant is an officer, director or consultant of the Company
or of a Parent or Subsidiary of the Company, such right of repurchase lapses at
the rate of at least twenty percent (20%) per year over five (5) years from: (a)
the date of grant of the Option or (b) in the case of Restricted Stock, the date
the Participant purchases the Shares.
12. CERTIFICATES. All certificates for Shares or other securities delivered
under this Plan will be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted.
13. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of
-10-
<PAGE> 11
transfer approved by the Committee, appropriately endorsed in blank, with the
Company or an agent designated by the Company to hold in escrow until such
restrictions have lapsed or terminated, and the Committee may cause a legend or
legends referencing such restrictions to be placed on the certificates. Any
Participant who is permitted to execute a promissory note as partial or full
consideration for the purchase of Shares under this Plan will be required to
pledge and deposit with the Company all or part of the Shares so purchased as
collateral to secure the payment of Participant's obligation to the Company
under the promissory note; provided, however, that the Committee may require or
accept other or additional forms of collateral to secure the payment of such
obligation and, in any event, the Company will have full recourse against the
Participant under the promissory note notwithstanding any pledge of the
Participant's Shares or other collateral. In connection with any pledge of the
Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.
14. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, shares of Common
Stock of the Company (including Restricted Stock) or other consideration, based
on such terms and conditions as the Committee and the Participant may agree.
15. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. This Plan is intended
to comply with Section 25102(o) of the California Corporations Code. Any
provision of this Plan which is inconsistent with Section 25102(o) shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o). An Award will not be effective
unless such Award is in compliance with all applicable federal and state
securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable, and/or (b) compliance with any exemption, completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The
-11-
<PAGE> 12
Company will be under no obligation to register the Shares with the SEC or to
effect compliance with the exemption, registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so.
16. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
Cause.
17. CORPORATE TRANSACTIONS.
17.1 Assumption or Replacement of Awards by Successor or Acquiring
Corporation. In the event of (a) a dissolution or liquidation of the Company,
(b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders of
the Company or their relative stock holdings and the Awards granted under this
Plan are assumed, converted or replaced by the successor or acquiring
corporation, which assumption, conversion or replacement will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder which merges with the Company in such merger, or
which owns or controls another corporation which merges, with the Company in
such merger) cease to own their shares or other equity interests in the Company,
or (d) the sale of all or substantially all of the assets of the Company, any or
all outstanding Awards may be assumed, converted or replaced by the successor or
acquiring corporation (if any), which assumption, conversion or replacement will
be binding on all Participants. In the alternative, the successor or acquiring
corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking into
account the existing provisions of the Awards). The successor or acquiring
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions and other provisions no less favorable to the
Participant than those which applied to such outstanding Shares immediately
prior to such transaction described in this Section 17.1. In the event such
successor or acquiring corporation (if any) does not assume or substitute
Awards, as provided above, pursuant to a transaction described in this Section
17.1, then notwithstanding any other provision in this Plan to the contrary, the
vesting of such Awards will accelerate and the Options
-12-
<PAGE> 13
will become exercisable in full prior to the consummation of such event at such
times and on such conditions as the Committee determines, and if such Options
are not exercised prior to the consummation of the corporate transaction, they
shall terminate in accordance with the provisions of this Plan.
17.2 Other Treatment of Awards. Subject to any greater rights granted
to Participants under the foregoing provisions of this Section 17, in the event
of the occurrence of any transaction described in Section 17.1 hereof, any
outstanding Awards will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation or sale of assets.
17.3 Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either (a) granting an Award under this Plan in substitution of
such other company's award or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
18. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on
the date that it is adopted by the Board (the "EFFECTIVE DATE"). This Plan will
be approved by the stockholders of the Company (excluding Shares issued pursuant
to this Plan), consistent with applicable laws, within twelve (12) months before
or after the Effective Date. Upon the Effective Date, the Board may grant Awards
pursuant to this Plan; provided, however, that: (a) no Option may be exercised
prior to initial stockholder approval of this Plan; (b) no Option granted
pursuant to an increase in the number of Shares approved by the Board shall be
exercised prior to the time such increase has been approved by the stockholders
of the Company; (c) in the event that initial stockholder approval is not
obtained within the time period provided herein, all Awards granted hereunder
shall be canceled, any Shares issued pursuant to any Award shall be canceled and
any purchase of Shares issued hereunder shall be rescinded; and (d) Awards
granted pursuant to an increase in the number of Shares approved by the Board
which increase is not timely approved by stockholders shall be canceled, any
Shares issued pursuant to any such Awards shall
-13-
<PAGE> 14
be canceled, and any purchase of Shares subject to any such Award shall be
rescinded. In the event that initial stockholder approval is not obtained within
twelve (12) months before or after the date this Plan is adopted by the Board,
all Awards granted hereunder will be canceled, any Shares issued pursuant to any
Award will be canceled and any purchase of Shares hereunder will be rescinded.
19. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the Effective Date or, if
earlier, the date of stockholder approval. This Plan and all agreements
hereunder shall be governed by and construed in accordance with the laws of the
State of California.
20. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9 hereof, the
Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the stockholders of the Company, amend this Plan in any
manner that requires such stockholder approval pursuant to Section 25102(o) of
the California Corporations Code or the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.
21. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the stockholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and other equity awards otherwise than under this
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.
22. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:
"AWARD" means any award under this Plan, including any Option or
Restricted Stock Award.
"AWARD AGREEMENT" means, with respect to each Award, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means Termination because of (i) any willful material
violation by the Participant of any law or regulation applicable to the business
of the Company or a Parent or Subsidiary of the Company, the Participant's
conviction for, or guilty
-14-
<PAGE> 15
plea to, a felony or a crime involving moral turpitude, any willful perpetration
by the Participant of a common law fraud, (ii) the Participant's commission of
an act of personal dishonesty which involves personal profit in connection with
the Company or any other entity having a business relationship with the Company,
(iii) any material breach by the Participant of any provision of any agreement
or understanding between the Company or any Parent or Subsidiary of the Company
and the Participant regarding the terms of the Participant's service as an
employee, director or consultant to the Company or a Parent or Subsidiary of the
Company, including without limitation, the willful and continued failure or
refusal of the Participant to perform the material duties required of such
Participant as an employee, director or consultant of the Company or a Parent or
Subsidiary of the Company, other than as a result of having a Disability, or a
breach of any applicable invention assignment and confidentiality agreement or
similar agreement between the Company and the Participant, (iv) Participant's
disregard of the policies of the Company or any Parent or Subsidiary of the
Company so as to cause loss, damage or injury to the property, reputation or
employees of the Company or a Parent or Subsidiary of the Company, or (v) any
other misconduct by the Participant which is materially injurious to the
financial condition or business reputation of, or is otherwise materially
injurious to, the Company or a Parent or Subsidiary of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the committee appointed by the Board to administer
this Plan, or if no committee is appointed, the Board.
"COMPANY" means Junglee Corporation, or any successor corporation.
"DISABILITY" means a disability, whether temporary or permanent,
partial or total, as determined by the Committee.
"EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National
Market, its closing price on the Nasdaq National Market on the
date of determination as reported in The Wall Street Journal;
(b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of
determination on the principal national securities exchange on
-15-
<PAGE> 16
which the Common Stock is listed or admitted to trading as
reported in The Wall Street Journal;
(c) if such Common Stock is publicly traded but is not quoted on the
Nasdaq National Market nor listed or admitted to trading on a
national securities exchange, the average of the closing bid and
asked prices on the date of determination as reported by The Wall
Street Journal (or, if not so reported, as otherwise reported by
any newspaper or other source as the Board may determine); or
(d) if none of the foregoing is applicable, by the Committee in good
faith.
"OPTION" means an award of an option to purchase Shares pursuant to
Section 5 hereof.
"PARENT" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations other
than the Company owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
"PARTICIPANT" means a person who receives an Award under this Plan.
"PLAN" means this Junglee Corporation Amended and Restated 1998 Equity
Incentive Plan, as amended from time to time.
"PURCHASE PRICE" means the price at which a Participant may purchase
Restricted Stock.
"RESTRICTED STOCK" means Shares purchased pursuant to a Restricted
Stock Award.
"RESTRICTED STOCK AWARD" means an award of Shares pursuant to Section
6 hereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means shares of the Company's Common Stock par value $.001,
reserved for issuance under this Plan, as adjusted pursuant to Sections 2 and 17
hereof, and any successor security.
-16-
<PAGE> 17
"SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director or consultant to the Company
or a Parent or Subsidiary of the Company. A Participant will not be deemed to
have ceased to provide services in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence approved by the Committee, provided
that such leave is for a period of not more than ninety (90) days unless
reinstatement (or, in the case of an employee with an ISO, reemployment) upon
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company and issued and promulgated in writing. In the case of any Participant on
(i) sick leave, (ii) military leave or (iii) an approved leave of absence, the
Committee may make such provisions respecting suspension of vesting of the Award
while on leave from the Company or a Parent or Subsidiary of the Company as it
may deem appropriate, except that in no event may an Option be exercised after
the expiration of the term set forth in the Stock Option Agreement. The
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "TERMINATION DATE").
"UNVESTED SHARES" means "Unvested Shares" as defined in the Award
Agreement.
"VESTED SHARES" means "Vested Shares" as defined in the Award
Agreement.
-17-
<PAGE> 1
EXHIBIT 99.3
SAGE ENTERPRISES, INC.
1997 AMENDED STOCK OPTION PLAN
1. PURPOSE
This Plan is intended to encourage ownership of Stock by employees and
consultants of the Company and its Affiliates and to provide additional
incentives for them to promote the success of the Company's business. The Plan
is intended to be an incentive stock option plan within the meaning of Section
422 of the Code but not all Options granted hereunder are required to be
Incentive Options.
2. DEFINITIONS
As used in this Plan the following terms shall have the following meanings:
2.1. "Act" means the Securities Act of 1933, as amended.
2.2. "Affiliate" means a parent or subsidiary corporation of the Company,
as defined in Sections 424(e) and (f), respectively, of the Code.
2.3. "Board" means the Company's Board of Directors.
2.4. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any statute successor thereto, and any regulations issued from time
to time thereunder.
2.5. "Committee" means a committee appointed by the Board, responsible for
the administration of the Plan, as provided in Section 5 of the Plan. For any
period during which no such committee is in existence all authority and
responsibility assigned the Committee under the Plan shall be exercised, if at
all, by the Board.
2.6. "Company" means Sage Enterprises, Inc., a corporation organized under
the laws of the Commonwealth of Massachusetts.
2.7. "Employment Agreement" means an agreement, if any, between the Company
and an Optionee, setting forth, inter alia, conditions and restrictions upon the
transfer of shares of Stock.
2.8. "Fair Market Value" means the value of a share of Stock on any date as
determined by the Committee.
<PAGE> 2
2.9. "Grant Date" means the date as of which an Option is granted, as
determined under Section 7.
2.10. "Incentive Option" means an Option which by its terms is to be
treated as an "incentive stock option" within the meaning of Section 422 of the
Code.
2.11. "Nonstatutory Option" means any Option that is not an Incentive
Option.
2.12. "Option" means an option to purchase shares of Stock granted under
the Plan.
2.13. "Option Agreement" means an agreement between the Company and an
Optionee, setting forth the terms and conditions of an Option.
2.14. "Option Price" means the price paid by an Optionee for a share of
Stock upon exercise of an Option.
2.15. "Optionee" means a person eligible to receive an Option, as provided
in Section 6, to whom an Option shall have been granted under the Plan.
2.16. "Plan" means this 1997 Stock Option Plan of the Company, as amended
from time to time.
2.17. "Stock" means Common Stock, par value $.01 per share, of the Company.
2.18. "Stock Restriction Agreement" means an agreement between the Company
and the Optionee in such form as the Committee may prescribe in connection with
the grant of any Option, setting forth certain restrictions upon the transfer of
shares of Stock.
2.19. "Ten Percent Owner" means a person who owns, or is deemed within the
meaning of Section 422(b)(6) of the Code to own, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company (or
any Affiliate). Whether a person is a Ten Percent Owner shall be determined with
respect to each Option based on the facts existing immediately prior to the
Grant Date of such Option.
3. TERM OF THE PLAN
Options may be granted hereunder at any time in the period commencing on
the approval of the Plan by the Board and ending immediately prior to the tenth
-2-
<PAGE> 3
anniversary of the earlier of the adoption of the Plan by the Board or approval
of the Plan by the Company's shareholders. Options granted prior to shareholder
approval of the Plan are hereby expressly conditioned upon such approval, and
shall be void ab initio in the event the shareholders of the Company shall fail
to approve the Plan within twelve (12) months of the Board's approval of the
Plan. Stock options granted by the Board prior to the adoption of the Plan by
the Board are deemed to be granted under the Plan; provided, however, that the
inclusion of such stock options under the Plan is subject to the approval of the
Plan by the shareholders of the Company within twelve (12) months of the Board's
approval of the Plan.
4. STOCK SUBJECT TO THE PLAN
At no time shall the number of shares of Stock then outstanding which are
attributable to the exercise of Options granted under the Plan, plus the number
of shares then issuable upon exercise of outstanding Options granted under the
Plan, exceed 1,758,122 shares, subject, however, to the provisions of Section 17
of the Plan. Shares to be issued upon the exercise of Options granted under the
Plan may be either authorized but unissued shares or shares held by the Company
in its treasury. If any Option expires, terminates, or is canceled for any
reason without having been exercised in full, the shares not purchased
thereunder shall again be available for Options thereafter to be granted.
5. ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the provisions
of the Plan, the Committee shall have complete authority, in its discretion, to
make or to select the manner of making the following determinations with respect
to each Option to be granted by the Company in addition to any other
determinations allowed the Committee under the Plan: (a) the employee or
consultant to receive the Option; (b) whether the Option (if granted to an
employee) will be an Incentive Option or Nonstatutory Option; (c) the time of
granting the Option; (d) the number of shares subject to the Option; (e) the
Option Price; (f) the Option period; (g) the Option exercise date or dates; and
(h) the effect of termination of employment or other association with the
Company and its Affiliates on the subsequent exercisability of the Option. In
making such determinations, the Committee may take into account the nature of
the services rendered by the respective employees and consultants, their present
and potential contributions to the success of the Company and its subsidiaries,
and such other factors as the Committee in its discretion shall deem relevant.
Subject to the provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
respective Option Agreements (which
-3-
<PAGE> 4
need not be identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's determinations
made in good faith on matters referred to in this Plan shall be conclusive.
6. ELIGIBILITY
An Option shall be granted only to an employee, director or consultant of
one or more of the Company or an Affiliate.
7. TIME OF GRANTING OPTIONS
The granting of an Option shall take place at the time specified in the
Option Agreement. Only if expressly so provided in the Option Agreement shall
the Grant Date be the date on which an Option Agreement shall have been duly
executed and delivered by the Company and the Optionee.
8. OPTION PRICE
The Option Price under each Incentive Option shall be not less than 100% of
the Fair Market Value of Stock on the Grant Date, or not less than 110% of the
Fair Market Value of Stock on the Grant Date if the Optionee is a Ten Percent
Owner. The Option Price under each Nonstatutory Option shall not be so limited
solely by reason of this Section 8.
9. OPTION PERIOD
No Incentive Option may be exercised on or after the tenth anniversary of
the Grant Date, or on or after the fifth anniversary of the Grant Date, if the
Optionee is a Ten Percent Owner. The Option period under each Nonstatutory
Option shall not be so limited solely by reason of this Section 9. An Option may
be immediately exercisable or become exercisable in such installments,
cumulative or non-cumulative, as the Committee may determine. In the case of an
Option not otherwise immediately exercisable in full the Committee may
accelerate the exercisability of such Option in whole or in part at any time,
provided the acceleration of the exercisability of any Incentive Option would
not cause the Option to fail to comply with the provisions of Section 422 of the
Code.
10. LIMIT ON INCENTIVE OPTION CHARACTERIZATION
An Incentive Option shall be considered to be an Incentive Option only to
the extent that the number of shares of Stock for which the Option first becomes
exercisable in a calendar year do not have an aggregate Fair Market Value (as of
the date of the grant of the Option) in excess of the "current limit". The
current limit for
-4-
<PAGE> 5
any Optionee for any calendar year shall be $100,000 minus the aggregate Fair
Market Value at the date of grant of the number of shares of Stock available for
purchase for the first time in the same year under each other Incentive Option
previously granted to the Optionee under the Plan, and under each other
incentive stock option previously granted to the Optionee under any other
incentive stock option plan of the Company and its Affiliates, after December
31, 1986. Any shares of Stock which would cause the foregoing limit to be
violated shall be deemed to have been granted under a separate Nonstatutory
Option, otherwise identical in its terms to those of the Incentive Option.
11. EXERCISE OF OPTION
An Option may be exercised by the Optionee giving written notice, in the
manner provided in Section 22, specifying the number of shares with respect to
which the Option is then being exercised. The notice shall be accompanied by
payment in the form of cash, or certified or bank check payable to the order of
the Company in an amount equal to the Option Price of the shares to be purchased
or, if the Committee had so authorized on the grant of any particular Option
hereunder (and subject to such conditions, if any, as the Committee may deem
necessary to avoid adverse accounting effects to the Company) by delivery of
that number of shares of Stock having a Fair Market Value equal to the Option
Price of the shares to be purchased. Receipt by the Company of such notice and
payment shall constitute the exercise of the Option. Within 30 days thereafter,
but subject to the remaining provisions of the Plan, the Company shall deliver
or cause to be delivered to the Optionee or his agent a certificate or
certificates for the number of shares then being purchased. Such shares shall be
fully paid and nonassessable. Nothing herein shall be construed to preclude the
Company from participating in a so-called "cashless exercise", provided the
Optionee or other person exercising the Option and each other party involved in
any such exercise shall comply with such procedures, and enter into such
agreements, of indemnity or otherwise, as the Company shall specify.
12. RESTRICTIONS ON ISSUE OF SHARES
12.1. VIOLATION OF LAW
Notwithstanding any other provision of the Plan, if, at any time, in the
reasonable opinion of the Company the issuance of shares of Stock covered by the
exercise of any Option may constitute a violation of law, then the Company may
delay such issuance and the delivery of a certificate for such shares until (i)
approval shall have been obtained from such governmental agencies, other than
the Securities and Exchange Commission, as may be required under any applicable
law, rule, or regulation; and (ii) in the case where such issuance would
constitute a violation of a
-5-
<PAGE> 6
law administered by or a regulation of the Securities and Exchange Commission,
one of the following conditions shall have been satisfied:
(a) the shares with respect to which such Option has been exercised are at
the time of the issue of such shares effectively registered under the Act; or
(b) the Company shall have received an opinion, in form and substance
satisfactory to the Company, from the Company's legal counsel to the effect that
the sale, transfer, assignment, pledge, encumbrance or other disposition of such
Shares or such beneficial interest, as the case may be does not require
registration under the Act or any applicable State securities laws.
The Company shall make all reasonable efforts to bring about the occurrence
of said events.
12.2. EXECUTION OF STOCK RESTRICTION AGREEMENT; INTERPRETATION
Whenever shares are to be issued pursuant to an Option, the Company shall
be under no obligation to issue such shares until such time, if ever, as person
who exercises such Option, in whole or in part, shall have executed and
delivered to the Company the Stock Restriction Agreement specified by the
Committee in connection with the grant of such Option, if any. In the event of
any conflict between the provisions of this Plan and provisions of a Stock
Restriction Agreement or Employment Agreement, the provisions of the Stock
Restriction Agreement or Employment Agreement shall control, but insofar as
possible the provisions of the Plan and any such Agreement shall be construed so
as to give full force and effect to all such provisions.
12.3. PLACEMENT OF LEGENDS
Each certificate representing shares issued upon the exercise of an Option
will bear restrictive legends which may refer to applicable restrictions under
the Stock Restriction Agreement and Employment Agreement, if any.
13. PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION.
13.1. INVESTMENT REPRESENTATIONS
Unless the shares to be issued upon exercise of an Option granted under the
Plan have been effectively registered under the Act, the Company shall be under
no obligation to issue any shares covered by any Option unless the person who
exercises such Option, in whole or in part, shall give a written representation
to the Company which is satisfactory in form and substance to its counsel and
upon which the
-6-
<PAGE> 7
Company may reasonably rely, that he or she is acquiring the shares issued
pursuant to such exercise of the Option of his or her own account for the
purpose of investment and not with a view to, or for sale in connection with the
distribution of any such shares.
13.2. REGISTRATION
If the Company shall deem it necessary or desirable to register under the
Act or other applicable statutes any shares with respect to which an Option
shall have been granted, or to qualify any such shares for exemption from the
Act or other applicable statutes, then the Company shall take such action at its
own expense. The Company may require from each Option holder or each holder of
shares of Stock acquired pursuant to the Plan, such information in writing for
use in any registration statement, prospectus, preliminary prospectus or
offering circular as is reasonably necessary for such purpose and may require
reasonable indemnity to the Company and its officers and directors from such
holder against all losses, claims, damage and liabilities arising from such use
of the information so furnished and caused by any untrue statement of any
material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made. In
addition, the Company may require of any such person that he or she agree that,
without the prior written consent of the Company or such managing underwriter,
he or she will not sell, make any short sale of, loan, grant any option for the
purchase of, pledge or otherwise encumber, or otherwise dispose of, any shares
of Stock during the 180 day period commencing on the effective date of the
registration statement relating to such underwritten public offering of
securities.
13.3. PLACEMENT OF LEGENDS, STOP ORDERS, ETC.
Each share of Stock issued pursuant to any Option granted under this Plan
may bear a reference to the investment representation made in accordance with
Section 13.1 in addition to any other applicable restriction under the Plan and
the terms of the Option and to the fact that no registration statement has been
filed with the Securities and Exchange Commission in respect to said Stock. All
certificates for shares of Stock or other securities delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of any stock exchange upon which the Stock is then listed, and any
applicable Federal or state securities law, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.
-7-
<PAGE> 8
14. WTHHOLDING; NOTICE OF DISPOSITION OF STOCK PRIOR TO EXPIRATION OF SPECIFIED
HOLDING PERIOD
14.1. TAX WITHHOLDING
Whenever shares are to be issued in satisfaction of an Option granted
hereunder, the Company shall have the right to require the Optionee to remit to
the Company an amount sufficient to satisfy federal, state, local or other
withholding tax requirements if and to the extent required by law (whether so
required to secure for the Company an otherwise available tax deduction or
otherwise) prior to the delivery of any certificate or certificates for such
shares.
14.2. NOTIFICATION OF DISPOSITION
Each person exercising any Incentive Option granted under the Plan shall be
deemed to have covenanted with the Company to report to the Company any
disposition of such shares prior to the expiration of the holding periods
specified by Section 422(a)(1) of the Code and if and to the extent that the
realization of income in such a disposition imposes upon the Company federal,
state, local or other withholding tax requirements or any such withholding is
required to secure for the Company an otherwise available tax deduction, to
remit to the Company an amount in cash sufficient to satisfy those requirements.
15. TERMINATION OF ASSOCIATION WITH THE COMPANY
Unless the Committee shall provide otherwise in the grant of a particular
Option under the Plan, if the Optionee's employment or other association with
the Company is terminated, whether voluntarily or otherwise, the Option shall
immediately cease to be exercisable in any respect. Military or sick leave shall
not be deemed a termination of employment or other association, provided that it
does not exceed the longer of 90 days or the period during which the absent
Optionee's reemployment rights, if any, are guaranteed by statute or by
contract.
16. TRANSFERABILITY OF OPTIONS
Options shall not be transferable, other than by will or the laws of
descent and distribution, and may be exercised during the life of the Optionee
only by the Optionee and except as otherwise provided hereinbelow.
Notwithstanding the foregoing, the Committee may, in its discretion, authorize
all or a portion of the options to be granted to an Optionee to be on terms
which permit transfer by such Optionee to (i) the spouse, former spouse,
children (including stepchildren) or grandchildren of the Optionee ("Immediate
Family Members"), (ii) a trust or trusts for
-8-
<PAGE> 9
the exclusive benefit of such Immediate Family Members, (iii) a partnership in
which such Immediate Family Members are the only partners including family
limited partnerships controlled by the Optionee or (iv) to any other persons or
entities in the discretion of the Committee, provided that (x) the Option
Agreement pursuant to which such Options are granted must be approved by the
Committee, and must expressly provide for transferability in a manner consistent
with this Section 16, and (y) subsequent transfers of transferred options shall
be prohibited except those in accordance with this Section 16 (by will or the
laws of descent and distribution). Following transfer, any such options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of this Section 16
hereof the term "Optionee" shall be deemed to refer to the transferee. The
events of termination of association of Section 15 hereof shall continue to be
applied with respect to the original Optionee, following which the options shall
be exercisable by the transferee only to the extent, and for the periods
specified at Section 15.
17. ADJUSTMENTS FOR CORPORATE TRANSACTIONS
17.1. STOCK DIVIDEND, ETC.
In the event of any stock dividend payable in Stock or any split-up or
contraction in the number of shares of Stock after the date of the Option
Agreement and prior to the exercise in full of the Option, the number of shares
subject to such Option Agreement and the price to be paid for each share subject
to the Option shall be proportionately adjusted.
17.2. STOCK RECLASSIFICATION
In the event of any reclassification or change of outstanding shares of
Stock, shares of stock or other securities equivalent in kind and value to those
shares an Optionee would have received if he or she had held the full number of
shares of Stock subject to the Option immediately prior to such reclassification
or change and had continued to hold those shares (together with all other
shares, stock and securities thereafter issued in respect thereof) to the time
of the exercise of the Option shall thereupon be subject to the Option.
17.3. CONSOLIDATION OR MERGER
If the Company is to be consolidated with or acquired by another entity in
a merger, sale of all or substantially all of the Company's assets or otherwise
(an "Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor Board"),
shall, as to
-9-
<PAGE> 10
outstanding Options, either (i) make appropriate provision for the continuation
of such Options by substituting on an equitable basis for the shares then
subject to such Options the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Acquisition; or (ii)
upon written notice to the Optionees, provide that all Options must be
exercised, to the extent then exercisable, within a specified number of days of
the date of such notice, at the end of which period the Options shall terminate;
or (iii) terminate all Options in exchange for a cash payment equal to the
excess of the Fair Market Value of the shares subject to such Options (to the
extent then exercisable) over the exercise price thereof.
17.4. DISSOLUTION OR LIQUIDATION
Upon dissolution or liquidation of the Company, the Option shall terminate,
but the Optionee (if at the time in the employ of or otherwise associated with
the Company or any of its Affiliates) shall have the right, immediately prior to
such dissolution or liquidation, to exercise the Option to the extent
exercisable on the date of such dissolution or liquidation.
17.5. RELATED MATTERS
Any adjustment required by this Section 17 shall be determined and made by
the Committee. No fraction of a share shall be purchasable or deliverable upon
exercise, but in the event any adjustment hereunder of the number of shares
covered by the Option shall cause such number to include a fraction of a share,
such number of shares shall be adjusted to the nearest smaller whole number of
shares. In the event of changes in the outstanding Stock by reason of any stock
dividend, split-up, contraction, reclassification, or change of outstanding
shares of Stock of the nature contemplated by this Section 17, the number of
shares of Stock available for the purposes of the Plan as stated in Section 4
shall be correspondingly adjusted.
18. RESERVATION OF STOCK
The Company shall at all times during the term of the Plan and any
outstanding Options granted hereunder reserve or otherwise keep available such
number of shares of Stock as will be sufficient to satisfy the requirements of
the Plan (if then in effect) and such Options and shall pay all fees and
expenses necessarily incurred by the Company in connection therewith.
-10-
<PAGE> 11
19. LIMITATION OF RIGHTS IN STOCK; NO SPECIAL EMPLOYMENT OR OTHER RIGHTS
The Optionee shall not be deemed for any purpose to be a shareholder of the
Company with respect to any of the shares of Stock covered by an Option, except
to the extent that the Option shall have been exercised with respect thereto
and, in addition, a certificate shall have been issued therefor and delivered to
the Optionee or his agent. Any Stock issued pursuant to the Option shall be
subject to all restrictions upon the transfer thereof which may be now or
hereafter imposed by the Certificate of Incorporation, the By-laws of the
Company, the Stock Restriction Agreement and the Employment Agreement. Nothing
contained in the Plan or in any Option Agreement shall confer upon any Optionee
any right with respect to the continuation of his or her employment or other
association with the Company (or any Affiliate), or interfere in any way with
the right of the Company (or any Affiliate), subject to the terms of any
separate employment or consulting agreement or provision of law or corporate
articles or by-laws to the contrary, at any time to terminate such employment or
consulting agreement or to increase or decrease the compensation of the Optionee
from the rate in existence at the time of the grant of an Option.
20. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to the shareholders of the Company shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangement
as it may deem desirable, including without limitation, the granting of stock
options other than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
21. TERMINATION AND AMENDMENT OF THE PLAN
The Board may at any time terminate the Plan or make such modifications of
the Plan as it shall deem advisable. No termination or amendment of the Plan
may, without the consent of the Optionee to whom any Option shall therefore have
been granted, adversely affect the rights of such Optionee under such Option.
22. NOTICES AND OTHER COMMUNICATIONS
Any notice, demand, request or other communication hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or duty sent by first class registered, certified or overnight mail,
postage prepaid, or telecopied with a confirmation copy by regular certified or
overnight mail, addressed or telecopied, as the case may be, (i) if to the
Optionee, at his or her
-11-
<PAGE> 12
residence address last filed with the Company and (ii) if to the Company, at 17
Sellers Street, 2nd Floor, Cambridge, MA 02139, Attention: President,
Telecopier: (617) 621-1578 or to such other address or telecopier number, as the
case may be, as the addressee may have designated by notice to the addresser.
All such notices, requests, demands and other communications shall be deemed to
have been received: (i) in the case of personal delivery, on the date of such
delivery; (ii) in the case of mailing, when received by the addressee; and (iii)
in the case of facsimile transmission, when communicated by facsimile machine
report.
23. GOVERNING LAW
The Plan and all Options and actions taken thereunder shall be governed,
interpreted and enforced in accordance with the laws of the Commonwealth of
Massachusetts, without regard to the conflict of laws principles thereof.
* * * * * *
The following does not form part of this Plan but is included solely for
information purposes:
Date of Board Approval: October 1, 1997
Date of Shareholder Approval: October 1, 1997
-12-
<PAGE> 1
EXHIBIT 99.4
SAGE ENTERPRISES, INC.
MVP STOCK OPTION PLAN
1. PURPOSE
This Plan is intended to reward employees of the Company for outstanding
efforts in the performance of their duties on behalf of the Company. The Plan is
not intended to be an incentive stock option plan within the meaning of Section
422 of the Code.
2. DEFINITIONS
As used in this Plan the following terms shall have the following meanings:
2.1. "Act" means the Securities Act of 1933, as amended.
2.2. "Board" means the Company's Board of Directors.
2.3. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any statute successor thereto, and any regulations issued from time
to time thereunder.
2.4. "Committee" means a committee appointed by the Board, responsible for
the administration of the Plan, as provided in Section 5 of the Plan. For any
period during which no such committee is in existence all authority and
responsibility assigned the Committee under the Plan shall be exercised, if at
all, by the Board.
2.5. "Company" means Sage Enterprises, Inc., a corporation organized under
the laws of the Commonwealth of Massachusetts.
2.6. "Employment Agreement" means an agreement, if any, between the Company
and an Optionee, setting forth, inter alia, conditions and restrictions upon the
transfer of shares of Stock.
2.7. "Fair Market Value" means the value of a share of Stock on any date as
determined by the Committee. The Fair Market Value shall be determined in good
faith by the Committee.
2.8. "Grant Date" means the date as of which an Option is granted, as
determined under Section 7.
<PAGE> 2
2.9. "Option" means an option to purchase shares of Stock granted under the
Plan.
2.10. "Option Agreement" means an agreement between the Company and an
Optionee, setting forth the terms and conditions of an Option.
2.11. "Option Price" means the price paid by an Optionee for a share of
Stock upon exercise of an Option.
2.12. "Optionee" means a person eligible to receive an Option, as provided
in Section 6, to whom an Option shall have been granted under the Plan.
2.13. "Plan" means this MVP Stock Option Plan of the Company, as amended
from time to time.
2.14. "Stock" means Common Stock, par value $.01 per share, of the Company.
2.15. "Stock Restriction Agreement" means an agreement between the Company
and the Optionee in such form as the Committee may prescribe in connection with
the grant of any Option, setting forth certain restrictions upon the transfer of
shares of Stock.
3. TERM OF THE PLAN
Options may be granted hereunder at any time in the period commencing on
the approval of the Plan by the Board and ending immediately prior to the tenth
anniversary of the earlier of the adoption of the Plan by the Board or approval
of the Plan by the Company's shareholders. Options granted prior to shareholder
approval of the Plan are hereby expressly conditioned upon such approval, and
shall be void ab initio in the event the shareholders of the Company shall fail
to approve the Plan within twelve (12) months of the Board's approval of the
Plan. Stock options granted by the Board prior to the adoption of the Plan by
the Board are deemed to be granted under the Plan; provided, however, that the
inclusion of such stock options under the Plan is subject to the approval of the
Plan by the shareholders of the Company within twelve (12) months of the Board's
approval of the Plan.
4. STOCK SUBJECT TO THE PLAN
At no time shall the number of shares of Stock then outstanding which are
attributable to the exercise of Options granted under the Plan, plus the number
of shares then issuable upon exercise of outstanding Options granted under the
Plan, exceed 2,600 shares, subject, however, to the provisions of Section 15 of
the Plan.
-2-
<PAGE> 3
Shares to be issued upon the exercise of Options granted under the Plan may be
either authorized but unissued shares or shares held by the Company in its
treasury. If any Option expires, terminates, or is canceled for any reason
without having been exercised in full, the shares not purchased thereunder shall
again be available for Options thereafter to be granted.
5. ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the provisions
of the Plan, the Committee shall have complete authority, in its discretion, to
make or to select the manner of making the following determinations with respect
to each Option to be granted by the Company in addition to any other
determinations allowed the Committee under the Plan: (a) the employee or
consultant to receive the Option; (b) the time of granting the Option; (c) the
number of shares subject to the Option; or (d) the Option Price. In making such
determinations, the Committee may take into account the nature of the services
rendered by the respective employees, their contributions to the success of the
Company, and such other factors as the Committee in its discretion shall deem
relevant.
6. ELIGIBILITY
An Option shall be granted only to an employee of the Company, provided
such employee is not a member of the Company's senior management. The maximum
number of shares of the Company's Stock with respect to which an option or
options may be granted to any employee in any one calendar year of the Company
shall not exceed 1,200 shares, taking into account shares subject to options
granted and terminated, or repriced, during such calendar year.
7. TIME OF GRANTING OPTIONS; EXERCISABILITY
The granting of an Option shall take place at the time specified in the
Option Agreement. Only if expressly so provided in the Option Agreement shall
the Grant Date be the date on which an Option Agreement shall have been duly
executed and delivered by the Company and the Optionee. An Option shall be
immediately exercisable in full as of the Grant Date.
8. OPTION PRICE
The Option Price shall be not less than 100% of the Fair Market Value of
Stock on the Grant Date.
-3-
<PAGE> 4
9. EXERCISE OF OPTION
An Option may be exercised by the Optionee giving written notice, in the
manner provided in Section 20, specifying the number of shares with respect to
which the Option is then being exercised. The notice shall be accompanied by
payment in the form of cash, or certified or bank check payable to the order of
the Company in an amount equal to the Option Price of the shares to be purchased
or, if the Committee had so authorized on the grant of any particular Option
hereunder (and subject to such conditions, if any, as the Committee may deem
necessary to avoid adverse accounting effects to the Company) by delivery of
that number of shares of Stock having a Fair Market Value equal to the Option
Price of the shares to be purchased. Receipt by the Company of such notice and
payment shall constitute the exercise of the Option. Within 30 days thereafter,
but subject to the remaining provisions of the Plan, the Company shall deliver
or cause to be delivered to the Optionee or his agent a certificate or
certificates for the number of shares then being purchased. Such shares shall be
fully paid and nonassessable. Nothing herein shall be construed to preclude the
Company from participating in a so-called "cashless exercise", provided the
Optionee or other person exercising the Option and each other party involved in
any such exercise shall comply with such procedures, and enter into such
agreements, of indemnity or otherwise, as the Company shall specify.
To the extent that an option to purchase shares is not exercised by an
optionee when it becomes initially exercisable, it shall not expire but shall be
carried forward and shall be exercisable, on a cumulative basis, until the
expiration of the exercise period. No partial exercise may be made for less than
25 full shares of Common Stock.
10. RESTRICTIONS ON ISSUE OF SHARES
10.1. VIOLATION OF LAW
Notwithstanding any other provision of the Plan, if, at any time, in the
reasonable opinion of the Company the issuance of shares of Stock covered by the
exercise of any Option may constitute a violation of law, then the Company may
delay such issuance and the delivery of a certificate for such shares until (i)
approval shall have been obtained from such governmental agencies, other than
the Securities and Exchange Commission, as may be required under any applicable
law, rule, or regulation; and (ii) in the case where such issuance would
constitute a violation of a law administered by or a regulation of the
Securities and Exchange Commission, one of the following conditions shall have
been satisfied:
-4-
<PAGE> 5
(a) the shares with respect to which such Option has been exercised are at
the time of the issue of such shares effectively registered under the Act; or
(b) the Company shall have received an opinion, in form and substance
satisfactory to the Company, from the Company's legal counsel to the effect that
the sale, transfer, assignment, pledge, encumbrance or other disposition of such
Shares or such beneficial interest, as the case may be does not require
registration under the Act or any applicable State securities laws.
The Company shall make all reasonable efforts to bring about the occurrence
of said events.
10.2. EXECUTION OF STOCK RESTRICTION AGREEMENT; INTERPRETATION
Whenever shares are to be issued pursuant to an Option, the Company shall
be under no obligation to issue such shares until such time, if ever, as person
who exercises such Option, in whole or in part, shall have executed and
delivered to the Company the Stock Restriction Agreement specified by the
Committee in connection with the grant of such Option, if any. In the event of
any conflict between the provisions of this Plan and provisions of a Stock
Restriction Agreement or Employment Agreement, the provisions of the Stock
Restriction Agreement or Employment Agreement shall control, but insofar as
possible the provisions of the Plan and any such Agreement shall be construed so
as to give full force and effect to all such provisions.
10.3. PLACEMENT OF LEGENDS
Each certificate representing shares issued upon the exercise of an Option
will bear restrictive legends which may refer to applicable restrictions under
the Stock Restriction Agreement and Employment Agreement, if any.
11. PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION
11.1. INVESTMENT REPRESENTATIONS
Unless the shares to be issued upon exercise of an Option granted under the
Plan have been effectively registered under the Act, the Company shall be under
no obligation to issue any shares covered by any Option unless the person who
exercises such Option, in whole or in part, shall give a written representation
to the Company which is satisfactory in form and substance to its counsel and
upon which the Company may reasonably rely, that he or she is acquiring the
shares issued pursuant to such exercise of the Option of his or her own account
for the purpose of investment
-5-
<PAGE> 6
and not with a view to, or for sale in connection with the distribution of any
such shares.
11.2. REGISTRATION
If the Company shall deem it necessary or desirable to register under the
Act or other applicable statutes any shares with respect to which an Option
shall have been granted, or to qualify any such shares for exemption from the
Act or other applicable statutes, then the Company shall take such action at its
own expense. The Company may require from each Option holder or each holder of
shares of Stock acquired pursuant to the Plan, such information in writing for
use in any registration statement, prospectus, preliminary prospectus or
offering circular as is reasonably necessary for such purpose and may require
reasonable indemnity to the Company and its officers and directors from such
holder against all losses, claims, damage and liabilities arising from such use
of the information so furnished and caused by any untrue statement of any
material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made. In
addition, the Company may require of any such person that he or she agree that,
without the prior written consent of the Company or such managing underwriter,
he or she will not sell, make any short sale of, loan, grant any option for the
purchase of, pledge or otherwise encumber, or otherwise dispose of, any shares
of Stock during the 180 day period commencing on the effective date of the
registration statement relating to such underwritten public offering of
securities.
11.3. PLACEMENT OF LEGENDS, STOP ORDERS, ETC.
Each share of Stock issued pursuant to any Option granted under this Plan
may bear a reference to the investment representation made in accordance with
Section 11.1 in addition to any other applicable restriction under the Plan and
the terms of the Option and to the fact that no registration statement has been
filed with the Securities and Exchange Commission in respect to said Stock. All
certificates for shares of Stock or other securities delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of any stock exchange upon which the Stock is then listed, and any
applicable Federal or state securities law, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.
-6-
<PAGE> 7
12. TAX WITHHOLDING
The Company's obligation to deliver shares upon the exercise of any option
granted under the Plan and any payments or transfers under Section 15 hereof
shall be subject to the option holder's satisfaction of all applicable Federal,
state and local income, excise and employment tax withholding requirements.
13. TERMINATION OF ASSOCIATION WITH THE COMPANY
Unless the Committee shall provide otherwise in the grant of a particular
Option under the Plan, if the Optionee's employment or other association with
the Company is terminated, whether voluntarily or otherwise, the Option shall
immediately cease to be exercisable in any respect. Military or sick leave shall
not be deemed a termination of employment or other association, provided that it
does not exceed the longer of 90 days or the period during which the absent
Optionee's reemployment rights, if any, are guaranteed by statute or by
contract.
14. TRANSFERABILITY OF OPTIONS
Options shall not be transferable, other than by will or the laws of
descent and distribution, or the rules thereunder, and may be exercised during
the life of the Optionee only by the Optionee and except as otherwise provided
hereinbelow. Notwithstanding the foregoing, the Committee may, in its
discretion, authorize all or a portion of the options to be granted to an
Optionee to be on terms which permit transfer by such Optionee to (i) the
spouse, former spouse, children (including stepchildren) or grandchildren of the
Optionee ("Immediate Family Members"), (ii) a trust or trusts for the exclusive
benefit of such Immediate Family Members, (iii) a partnership in which such
Immediate Family Members are the only partners including family limited
partnerships controlled by the Optionee or (iv) to any other persons or entities
in the discretion of the Committee, provided that (x) the Option Agreement
pursuant to which such Options are granted must be approved by the Committee,
and must expressly provide for transferability in a manner consistent with this
Section 14, and (y) subsequent transfers of transferred options shall be
prohibited except those in accordance with this Section 14 (by will or the laws
of descent and distribution). Following transfer, any such options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of this Section 14
hereof the term "Optionee" shall be deemed to refer to the transferee. The
events of termination of association of Section 13 hereof shall continue to be
applied with respect to the original Optionee, following which the options shall
be exercisable by the transferee only to the extent, and for the periods
specified at Section 13.
-7-
<PAGE> 8
15. ADJUSTMENTS FOR CORPORATE TRANSACTIONS
15.1. STOCK DIVIDEND, ETC.
In the event of any stock dividend payable in Stock or any split-up or
contraction in the number of shares of Stock after the date of the Option
Agreement and prior to the exercise in full of the Option, the number and the
kind of shares subject to such Option Agreement and the price to be paid for
each share subject to the Option shall be proportionately adjusted.
15.2. STOCK RECLASSIFICATION
In the event of any reclassification or change of outstanding shares of
Stock, shares of stock or other securities equivalent in kind and value to those
shares an Optionee would have received if he or she had held the full number of
shares of Stock subject to the Option immediately prior to such reclassification
or change and had continued to hold those shares (together with all other
shares, stock and securities thereafter issued in respect thereof) to the time
of the exercise of the Option shall thereupon be subject to the Option.
15.3. CONSOLIDATION OR MERGER
If the Company is to be consolidated with or acquired by another entity in
a merger, sale of all or substantially all of the Company's assets or otherwise
(an "Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor Board"),
shall, as to outstanding Options, either (i) make appropriate provision for the
continuation of such Options by substituting on an equitable basis for the
shares then subject to such Options the consideration payable with respect to
the outstanding shares of Common Stock in connection with the Acquisition; or
(ii) upon written notice to the Optionees, provide that all Options must be
exercised, to the extent then exercisable, within a specified number of days of
the date of such notice, at the end of which period the Options shall terminate;
or (iii) terminate all Options in exchange for a cash payment equal to the
excess of the Fair Market Value of the shares subject to such Options (to the
extent then exercisable) over the exercise price thereof.
15.4. DISSOLUTION OR LIQUIDATION
Upon dissolution or liquidation of the Company, the Option shall terminate,
but the Optionee (if at the time in the employ of or otherwise associated with
the Company or any of its Affiliates) shall have the right, immediately prior to
such
-8-
<PAGE> 9
dissolution or liquidation, to exercise the Option to the extent exercisable on
the date of such dissolution or liquidation.
15.5. RELATED MATTERS
Any adjustment required by this Section 15 shall be determined and made by
the Committee. No fraction of a share shall be purchasable or deliverable upon
exercise, but in the event any adjustment hereunder of the number of shares
covered by the Option shall cause such number to include a fraction of a share,
such number of shares shall be adjusted to the nearest smaller whole number of
shares. In the event of changes in the outstanding Stock by reason of any stock
dividend, split-up, contraction, reclassification, or change of outstanding
shares of Stock of the nature contemplated by this Section 15, the number of
shares of Stock available for the purposes of the Plan as stated in Section 4
shall be correspondingly adjusted.
16. RESERVATION OF STOCK
The Company shall at all times during the term of the Plan and any
outstanding Options granted hereunder reserve or otherwise keep available such
number of shares of Stock as will be sufficient to satisfy the requirements of
the Plan (if then in effect) and such Options and shall pay all fees and
expenses necessarily incurred by the Company in connection therewith.
17. LIMITATION OF RIGHTS IN STOCK; NO SPECIAL EMPLOYMENT OR OTHER RIGHTS
The Optionee shall not be deemed for any purpose to be a shareholder of the
Company with respect to any of the shares of Stock covered by an Option, except
to the extent that the Option shall have been exercised with respect thereto
and, in addition, a certificate shall have been issued therefor and delivered to
the Optionee or his agent. Any Stock issued pursuant to the Option shall be
subject to all restrictions upon the transfer thereof which may be now or
hereafter imposed by the Certificate of Incorporation, the By-laws of the
Company, the Stock Restriction Agreement and the Employment Agreement. Nothing
contained in the Plan or in any Option Agreement shall confer upon any Optionee
any right with respect to the continuation of his or her employment or other
association with the Company (or any Affiliate), or interfere in any way with
the right of the Company (or any Affiliate), subject to the terms of any
separate employment or consulting agreement or provision of law or corporate
articles or by-laws to the contrary, at any time to terminate such employment or
consulting agreement or to increase or decrease the compensation of the Optionee
from the rate in existence at the time of the grant of an Option.
-9-
<PAGE> 10
18. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to the shareholders of the Company shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangement
as it may deem desirable, including without limitation, the granting of stock
options other than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
19. TERMINATION AND AMENDMENT OF THE PLAN
The Board may at any time terminate the Plan or make such modifications of
the Plan as it shall deem advisable, otherwise, the Plan shall terminate ten
(10) years from the date upon which the Plan was duly adopted by the Board of
Directors of the Company. No termination or amendment of the Plan may, without
the consent of the Optionee to whom any Option shall therefore have been
granted, adversely affect the rights of such Optionee under such Option.
20. NOTICES AND OTHER COMMUNICATIONS
Any notice, demand, request or other communication hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or duty sent by first class registered, certified or overnight mail,
postage prepaid, or telecopied with a confirmation copy by regular certified or
overnight mail, addressed or telecopied, as the case may be, (i) if to the
Optionee, at his or her residence address last filed with the Company and (ii)
if to the Company, at 17 Sellers Street, 2nd Floor, Cambridge, MA 02139,
Attention: President, Telecopier: (617) 354-7325 or to such other address or
telecopier number, as the case may be, as the addressee may have designated by
notice to the addresser. All such notices, requests, demands and other
communications shall be deemed to have been received: (i) in the case of
personal delivery, on the date of such delivery; (ii) in the case of mailing,
when received by the addressee; and (iii) in the case of facsimile transmission,
when communicated by facsimile machine report.
21. GOVERNING LAW
The Plan and all Options and actions taken thereunder shall be governed,
interpreted and enforced in accordance with the laws of the Commonwealth of
Massachusetts, without regard to the conflict of laws principles thereof.
The following does not form part of this Plan but is included solely for
information purposes:
-10-
<PAGE> 11
Date of Board Approval: December 8, 1997
Date of Shareholder Approval: August 27, 1998
-11-
