<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 17, 1999
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)
<TABLE>
<S> <C>
DELAWARE 91-1646860
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
</TABLE>
1200 - 12TH AVENUE S., SUITE 1200
SEATTLE, WASHINGTON 98144
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
E-NICHE INCORPORATED AMENDED AND RESTATED
1998 STOCK OPTION AND GRANT PLAN
(FULL TITLE OF THE PLAN)
JEFFREY P. BEZOS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AMAZON.COM, INC.
1200 - 12TH AVENUE S., SUITE 1200
SEATTLE, WASHINGTON 98144
(206) 266-1000
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
SCOTT L. GELBAND
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1)(2) SHARE(3) PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.01 par
value per share........ 81,733 $0.68 $55,578.44 $15.46
12,175 $3.41 $41,516.75 $11.55
732 $3.42 $ 2,503.44 $ .70
TOTAL.......... 94,640 $99,598.63 $28.00
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to an Agreement and Plan of Merger dated as of April 24, 1999 (the
"Merger Agreement"), by and among the Registrant, Amazon.com Auctions, Inc.,
e-Niche Incorporated and the stockholders of e-Niche Incorporated, the
Registrant assumed outstanding options to purchase capital stock of e-Niche
Incorporated ("e-Niche") under the e-Niche Amended and Restated 1998 Stock
Option and Grant Plan (the "e-Niche Assumed Options"), with appropriate
adjustments to the number of shares and the exercise price of each e-Niche
Assumed Option to reflect the ratio at which e-Niche capital stock was
converted into Common Stock of the Registrant under the Merger Agreement.
(2) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
the e-Niche Amended And Restated 1998 Stock Option and Grant Plan as the
result of any future stock split, stock dividend or similar adjustment to
the Registrant's outstanding Common Stock.
(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 proposed maximum aggregate offering price and the registration
fee have been computed upon the basis at which the options may be exercised.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") are hereby incorporated by reference in this Registration
Statement:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998;
(b) The Registrant's Current Reports on Form 8-K filed on August 27,
1998, October 26, 1998, January 5, 1999, January 27, 1999, January 28,
1999, January 29, 1999, February 4, 1999, March 29, 1999, March 30, 1999,
April 27, 1999, April 29, 1999 and May 12, 1999;
(c) The description of the Common Stock in the Registrant's
Registration Statement on Form 8-A filed on May 2, 1997, under Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), including any amendments or reports for the purpose of updating such
description; and
(d) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered
by the Annual Report on Form 10-K referred to in (a) above.
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 indicates that the securities offered hereby have
been sold or which deregisters 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
None.
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 Bylaws provide
an unconditional right to indemnification for all expense, liability and loss
(including attorneys' fees, judgments, 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.
II-1
<PAGE> 3
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
------- -----------
<C> <S>
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)
23.3 Consent of Deloitte & Touche LLP, Independent Auditors
23.4 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.5 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
24.1 Power of Attorney (see signature page)
99.1 e-Niche Incorporated Amended and Restated 1998 Stock Option
and Grant Plan
</TABLE>
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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(b) 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; and
(c) 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;
II-2
<PAGE> 4
provided, however, that paragraphs (1)(a) and (1)(b) 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 Section 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 benefits 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
jurisdiction the question 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-3
<PAGE> 5
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 the 17th day of May,
1999.
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 either of them, as attorneys-in-fact with
full power of substitution, to execute in the name and on the behalf of each
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 17th day of May, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ JEFFREY P. BEZOS President, Chief Executive Officer and
- -------------------------------------------- Chairman of the Board (Principal Executive
Jeffrey P. Bezos Officer)
/s/ JOY D. COVEY Chief Financial Officer and Vice President
- -------------------------------------------- of Finance and Administration (Principal
Joy D. Covey Financial and Accounting Officer)
/s/ TOM A. ALBERG Director
- --------------------------------------------
Tom A. Alberg
/s/ SCOTT D. COOK Director
- --------------------------------------------
Scott D. Cook
/s/ L. JOHN DOERR Director
- --------------------------------------------
L. John Doerr
/s/ PATRICIA Q. STONESIFER Director
- --------------------------------------------
Patricia Q. Stonesifer
</TABLE>
II-4
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
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)
23.3 Consent of Deloitte & Touche LLP, Independent Auditors
23.4 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.5 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
24.1 Power of Attorney (see signature page)
99.1 e-Niche Incorporated Amended and Restated 1998 Stock Option
and Grant Plan
</TABLE>
<PAGE> 1
EXHIBIT 5.1
PERKINS COIE LLP
A LAW PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
1201 THIRD AVENUE, 40TH FLOOR, SEATTLE, WASHINGTON 98101-3099
TELEPHONE: 206 583-8888 FACSIMILE: 206 583-8500
May 17, 1999
Amazon.com, Inc.
1516 Second Avenue, 4th Floor
Seattle, Washington 98101
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), which you are filing with the
Securities and Exchange Commission with respect to up to 94,640 shares of Common
Stock, par value $0.01 per share (the "Shares"), pursuant to the Act. The Shares
may be issued under the e-Niche Incorporated Amended and Restated 1998 Stock
Option and Grant Plan (the "Plan").
We have examined the Registration Statement and such documents and
records of the Company and other documents as we have deemed relevant and
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 any
Shares that may be issued pursuant to the Plan have been duly authorized and
that, upon the due execution by the Company and the registration by its
registrar of such Shares and the sale thereof by the Company in accordance with
the terms of the Plan, and the receipt of consideration therefor in accordance
with the terms of the Plan, such 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,
/s/ 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 e-Niche Incorporated Amended and Restated 1998 Stock
Option and Grant Plan of our report dated January 22, 1999, except for Note 11
as to which the date is February 10, 1999, with respect to the consolidated
financial statements and schedule of Amazon.com, Inc. included in its Annual
Report (Form 10-K) for the year ended December 31, 1998, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Seattle, Washington
May 17, 1999
-1-
<PAGE> 1
EXHIBIT 23.3
CONSENT OF DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS
We consent to the incorporating by reference in this Registration Statement of
Amazon.com, Inc. on Form S-8 of our report dated February 6, 1998, on the
financial statements of Junglee Corp. as of December 31, 1997 and 1996 and for
the year ended December 31, 1997 and for the period from June 3, 1996
(inception) to December 31, 1996, appearing in the Current Report on Form 8-K of
Amazon.com, Inc. filed August 27, 1998.
Deloitte & Touche LLP
San Jose, California
May 17, 1999
-2-
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Amazon.com, Inc. of our report dated May 3, 1999
relating to the financial statements of e-Niche Incorporated, which appears in
the Current Report on Form 8-K of Amazon.com, Inc. dated May 12, 1999.
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 17, 1999
-3-
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 (No. 333-______) of our report dated April 23, 1999
relating to the financial statements of Alexa Internet, appearing in the
Current Report on Form 8-K of Amazon.com, Inc. filed May 12, 1999.
PricewaterhouseCoopers LLP
San Francisco, California
May 17, 1999
-4-
<PAGE> 1
EXHIBIT 99.1
E-NICHE INCORPORATED
AMENDED AND RESTATED 1998 STOCK OPTION AND GRANT PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the e-Niche Incorporated Amended and Restated
1998 Stock Option and Grant Plan (the "Plan"). The purpose of the Plan is to
encourage and enable the officers, employees, directors, consultants, advisors
and other key persons of e-Niche Incorporated (the "Company") and its
Subsidiaries (as defined below) upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" or "Awards", except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards and Unrestricted Stock Awards.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" has the meaning specified in Section 2.
"Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 16.
"Fair Market Value" of the Stock on any given date means (i) if the
Stock is admitted to quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the Fair Market Value on any given date
shall not be less than the average of the highest bid and lowest asked prices of
the Stock reported for such date or, if no bid and asked prices were reported
for such date, for the last day preceding such date for which such prices were
reported; or (ii) if the Stock is admitted to trading on a national securities
exchange or the NASDAQ National Market System, the Fair Market Value on any date
shall not be less than the closing price reported for the Stock on such exchange
or system for such date or, if no sales were reported for such date, for the
last date preceding such date for which a sale was reported; or (iii)
notwithstanding clauses (i) and (ii) above, if the date for which Fair Market
Value is determined is the first day when trading prices for the Stock are
reported on NASDAQ or trading on a national securities exchange, the Fair Market
Value shall be the "Price to the Public" (or equivalent) set forth on the cover
page for the final prospectus relating to the Company's Initial Public Offering;
or (iv) if the Stock is not publicly traded on a securities exchange or traded
in the over-the-counter market or, if traded or quoted, there are no
transactions or quotations within the last ten trading days or trading has been
halted for extraordinary reasons, the Fair Market Value on any given date shall
be determined in good faith by the Committee with reference to the rules and
principles of valuation set forth in Section 20.2031-2 of the Treasury
Regulations.
<PAGE> 2
"Incentive Stock Option" means any Stock Option designated and qualified
as an "incentive stock option" as defined in Section 422 of the Code.
"Independent Director" means a member of the Board who is neither an
employee or officer of the Company or any Subsidiary.
"Initial Public Offering" means the first underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of Stock to the public.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Restricted Stock Award" means any Award granted pursuant to Section 6.
"Stock" means the Common Stock, par value $.01 per share, of the
Company, subject to adjustments pursuant to Section 3.
"Subsidiary" means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities, beginning with
the Company, if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
"Unrestricted Stock Award" means any Award granted pursuant to Section
7.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS
(a) Committee. The Plan shall be administered by the Board, or at the
discretion of the Board, by a committee of the Board. All references herein to
the Committee, if established, shall be deemed to refer to the group then
responsible for administration of the Plan at the relevant time (i.e., either
the Board of Directors or a committee of the Board, as applicable).
(b) Powers of Committee. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the officers, employees, Independent Directors,
consultants, advisers and key persons of the Company and its Subsidiaries to
whom Awards may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if
any, of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock
Awards and Unrestricted Stock Awards or any combination of the foregoing,
granted to any one or more participants;
(iii) to determine the number of shares of Stock to be covered by
any Award;
(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the Plan,
of any Award, which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards and any amendments thereto;
<PAGE> 3
(v) to accelerate at any time the exercisability or vesting of
all or any portion of any Award and/or to include provisions in Awards providing
for such acceleration;
(vi) to impose any limitations on Awards granted under the Plan,
including limitations on transfers, repurchase provisions and the like and to
exercise repurchase rights or obligations;
(vii) subject to the provisions of Section 5(a)(iii), to extend
at any time the period in which Stock Options may be exercised;
(viii) to determine at any time whether, to what extent, and
under what circumstances, Stock and other amounts payable with respect to an
Award shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or credit
amounts constituting interest (at rates determined by the Committee) or
dividends or deemed dividends on such deferrals; and
(ix) at any time to adopt, alter and repeal such rules,
guidelines and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and provisions of
the Plan and any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to decide
all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
(c) Delegation of Authority to Grant Awards. The Board, in its
discretion, may appoint the Chief Executive Officer of the Company as a
one-person Committee in addition to the Committee contemplated by Section 2(a)
having authority (co-extensive with such other Committee) to grant Awards to
individuals who are not subject to the reporting and other provisions of Section
16 of the Act or "covered employees" within the meaning of Section 162(m) of the
Code.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock Issuable. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 1,150,000 shares of Common Stock,
subject to adjustment as provided in Section 3(b). For purposes of the foregoing
limitations, the shares of Stock underlying any Awards which are forfeited,
canceled, reacquired by the Company, satisfied without the issuance of Stock or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. Subject to such overall
limitation, shares of Stock may be issued up to such maximum number pursuant to
any type or types of Award. The shares available for issuance under the Plan may
be authorized but unissued shares of Stock or shares of Stock reacquired by the
Company.
(b) Recapitalizations. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, the outstanding shares of
Stock are increased or decreased or are exchanged for a different number or kind
of shares or other securities of the Company or any successor company, or
additional shares or new or different shares or other securities of the Company
or other noncash assets are distributed with respect to such shares of Stock or
other securities, the Committee shall make an appropriate or proportionate
adjustment in (i) the maximum number of shares reserved for issuance under the
Plan, (ii) the number of Stock Options or other Awards that can be granted to
any one individual participant, (iii) the number and kind of shares or other
securities subject to any then outstanding Awards under the Plan, and (iv) the
price (or repurchase price) for each share subject to any then outstanding Stock
Options or other Awards under the Plan, without changing the aggregate exercise
price (i.e., the exercise price multiplied by the number of shares) as to which
such Stock Options remain exercisable and the repurchase price for shares
subject to repurchase. The
<PAGE> 4
adjustment by the Committee shall be final, binding and conclusive. No
fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Committee in its discretion may make a cash payment in
lieu of fractional shares.
The Committee may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Committee that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of the participant, if it would constitute a modification, extension
or renewal of the Option within the meaning of Section 424(h) of the Code.
(c) Mergers and Other Transactions. In the case of (i) the dissolution
or liquidation of the Company, (ii) a merger, reorganization or consolidation in
which the Company is acquired by another person or entity (other than a holding
company formed by the Company), (iii) the sale of all or substantially all of
the assets of the Company to an unrelated person or entity, or (iv) the sale of
all of the Stock of the Company to an unrelated person or entity (in each case,
a "Transaction"), all outstanding Options held by participants shall become
fully vested and exercisable, unless provision is made in connection with the
Transaction for the assumption of Options heretofore granted, or the
substitution for such Options of new options of the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and, if
appropriate, the per share exercise prices, as provided in Section 3(b) above.
Upon the effectiveness of the Transaction, the Plan and all Options not so
assumed or substituted for shall terminate and each optionee holding such an
Option shall be permitted to exercise for a period of at least 15 days prior to
the date of such termination all outstanding Options held by such optionee which
are then exercisable. In the event that provision is made in connection with the
Transaction for the assumption of Options, or the substitution for such Options
of new Options of the successor entity or parent thereof, then, except as the
Committee may otherwise determine with respect to particular Options, the
vesting schedule, if any, relating to any Option so assumed or substituted for
shall accelerate twelve (12) months upon the date on which the grantee's
employment or service relationship with the Company and its subsidiaries or
successor entity terminates if such termination occurs (i) within twelve (12)
months after such Transaction and (ii) such termination is by the Company or its
Subsidiaries or successor entity without Cause (as defined below) or by the
grantee for Good Reason (as defined below), subject, however, to the following
sentence. Notwithstanding the foregoing, in the event that the Company receives
written advice from its independent public accountants in connection with any
Transaction to the effect that vesting of any Option under the circumstances
contemplated by the preceding sentence would preclude or otherwise adversely
affect the ability of the Company or any other party to such Transaction to
account for the same as a "pooling of interests" within the meaning of APB No.
16 (or any successor provision), which Transaction would otherwise qualify for
such accounting treatment, then vesting of such Option shall not accelerate on a
subsequent termination of grantee's employment or service relationship within 12
months following such Transaction as contemplated by the preceding sentence. For
purposes of this Section 3(c), the term "Cause" means a vote of the Board of
Directors of the Company or the successor entity, as the case may be, resolving
that the grantee should be dismissed as a result of (i) any material breach by
the grantee of any agreement to which the grantee and the Company are parties,
(ii) any act (other than retirement) or omission to act by the grantee which
would reasonably be likely to have a material adverse effect on the business of
the Company or its subsidiaries or successor entity, as the case may be, or on
the grantee's ability to perform services for the Company or its subsidiaries or
successor entity, as the case may be, including, without limitation, the
conviction of any crime (other than ordinary traffic violations), or (iii) any
material misconduct or willful and deliberate nonperformance of duties by the
grantee in connection with the business or affairs of the Company or its
subsidiaries or successor entity, as the case may be; and the term "Good Reason"
means the occurrence of any of the following events: (A) a substantial adverse
change in the nature or scope of the grantee's responsibilities, authorities,
title, powers, functions, or duties; (B) a reduction in the grantee's annual
base salary except for across-the-board salary reductions similarly affecting
all or substantially all management employees; or (C) the relocation of the
offices at which the grantee is principally employed to a location more than
forty (40) miles from such
<PAGE> 5
offices. The treatment of Restricted Stock Awards and Unrestricted Stock Awards
in connection with any such transaction shall be as specified in the relevant
agreement relating to such Award.
(d) Substitute Awards. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who become employees of the Company or a Subsidiary as the result of
a merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Committee may direct that the substitute
awards be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.
SECTION 4. ELIGIBILITY
Participants in the Plan will be such directors, officers and other
employees, Independent Directors, consultants, advisors and other key persons of
the Company and its Subsidiaries who are responsible for or contribute to the
management, growth or profitability of the Company and its Subsidiaries as are
selected from time to time by the Committee, in its sole discretion.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be pursuant to a stock
option agreement which shall be in such form as the Committee may from time to
time approve. Option agreements need not be identical.
Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. Incentive Stock Options may be granted
only to employees of the Company or any Subsidiary that is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code. Non-Qualified
Stock Options may be granted to officers, employees, Independent Directors,
advisors, consultants and other key persons of the Company and its Subsidiaries.
To the extent that any Option does not qualify as an Incentive Stock Option, it
shall be deemed a Non-Qualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after
September 4, 2008.
(a) Terms of Stock Options. Stock Options granted under the Plan shall
be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable:
(i) Exercise Price. The exercise price per share for the Stock
covered by a Stock Option shall be determined by the Committee at the time of
grant but shall not be less than 100% of the Fair Market Value on the date of
grant in the case of Incentive Stock Options. If an employee owns or is deemed
to own (by reason of the attribution rules applicable under Section 424(d) of
the Code) more than 10% of the combined voting power of all classes of stock of
the Company or any parent or subsidiary corporation and an Incentive Stock
Option is granted to such employee, the option price of such Incentive Stock
Option shall be not less than 110% of the Fair Market Value on the grant date.
(ii) Grant of Discount Options in Lieu of Cash Compensation. Upon
the request of a participant and with the consent of the Committee, such
participant may elect each calendar year to receive a Non-Qualified Stock Option
in lieu of any cash bonus or other compensation to which he may become entitled
during the following calendar year, but only if such participant makes an
irrevocable election to waive receipt of all or a portion of such cash
compensation. Such election shall be made on or before the date set by the
Committee which date shall be no later than 15 days (or such shorter period
permitted by the Committee) preceding January 1 of the calendar year for which
the cash compensation would otherwise be paid. A Non-Qualified Stock Option
shall be granted to each participant who made such an irrevocable election on
the date the waived cash compensation would otherwise be paid. The exercise
price per share shall be determined by the Committee. The number of
<PAGE> 6
shares of Stock subject to the Stock Option shall be determined by dividing the
amount of the waived cash compensation by the difference between the Fair Market
Value of the Stock on the date the Stock Option is granted and the exercise
price per share of the Stock Option. The Stock Option shall be granted for a
whole number of shares so determined; the value of any fractional share shall be
paid in cash.
(iii) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Incentive Stock Option shall be exercisable more than
ten years after the date the option is granted. If an employee owns or is deemed
to own (by reason of the attribution rules of Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of the Company or
any parent or subsidiary corporation and an Incentive Stock Option is granted to
such employee, the term of such option shall be no more than five years from the
date of grant.
(iv) Exercisability; Rights of a Stockholder. Stock Options shall
become vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Committee at or after the grant
date; provided, however, that Stock Options granted in lieu of cash compensation
shall be exercisable in full as of the grant date. The Committee may at any time
accelerate the exercisability of all or any portion of any Stock Option. An
optionee shall have the rights of a stockholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock Options.
(v) Method of Exercise. Stock Options may be exercised in whole
or in part, by giving written notice of exercise to the Company, specifying the
number of shares to be purchased. Payment of the purchase price may be made by
one or more of the following methods; provided, however, that the methods set
forth in subsections (B) and (C) below shall become available only after the
closing of the Initial Public Offering:
(A) In cash, by certified or bank check or other instrument acceptable
to the Committee;
(B) If permitted by the Committee, through the delivery (or attestation
to the ownership of) shares of Stock that have been purchased by the optionee on
the open market or have been beneficially owned by the optionee for at least six
months and are not the subject to restrictions under any Company plan. Such
surrendered shares shall be valued at Fair Market Value on the exercise date;
(C) If permitted by the Committee, by the optionee delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price; provided that
in the event the optionee chooses to pay the purchase price as so provided, the
optionee and the broker shall comply with such procedures and enter into such
agreements of indemnity and other agreements as the Committee shall prescribe as
a condition of such payment procedure; or
(D) If permitted by the Committee, by the optionee delivering to the
Company a promissory note if the Board has authorized the loan of funds to the
optionee for the purpose of enabling or assisting the optionee to effect the
exercise of his Stock Option; provided that at least so much of the exercise
price as represents the par value of the Stock shall be paid other than with a
promissory note.
Payment instruments will be received subject to collection. The delivery
of certificates representing the shares of Stock to be purchased pursuant to the
exercise of a Stock Option will be contingent upon receipt from the optionee (or
a purchaser acting in his stead in accordance with the provisions of the Stock
Option) by the Company of the full purchase price for such shares and the
fulfillment of any other requirements contained in the Stock Option or
applicable provisions of law.
(vi) Termination. Unless otherwise provided in the option
agreement or determined by the Committee, upon the optionee's termination of
employment (or other business relationship) with the Company and its
Subsidiaries, the optionee's rights in his Stock Options shall automatically
terminate.
<PAGE> 7
(vii) Annual Limit on Incentive Stock Options. To the extent
required for "incentive stock option" treatment under Section 422 of the Code,
the aggregate Fair Market Value (determined as of the time of grant) of the
shares of Stock with respect to which Incentive Stock Options granted under this
Plan and any other plan of the Company or its parent and subsidiary corporations
become exercisable for the first time by an optionee during any calendar year
shall not exceed $100,000. To the extent that any Stock Option exceeds this
limit, it shall constitute a Non-Qualified Stock Option.
(b) Reload Options. At the discretion of the Committee, Options granted
under the Plan may include a "reload" feature pursuant to which an optionee
exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(v)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with the same expiration
date as the original Option being exercised, and with such other terms as the
Committee may provide) to purchase that number of shares of Stock equal to the
sum of (i) the number delivered to exercise the original Option and (ii) the
number withheld to satisfy tax liabilities.
(c) Non-transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee, or by the optionee's legal
representative or guardian in the event of optionee's incapacity.
Notwithstanding the foregoing, the Committee may provide in an option agreement
that the optionee may transfer, without consideration for the transfer, his
Non-Qualified Stock Options to members of his immediate family, to trusts for
the benefit of such family members, to partnerships in which such family members
are the only partners, or to charitable organizations; provided, however, that
the transferee agrees in writing to be bound by the terms and conditions of this
Plan and the applicable Option Agreement.
SECTION 6. RESTRICTED STOCK AWARDS
(a) Nature of Restricted Stock Awards. A Restricted Stock Award is an
Award entitling the recipient to acquire, at par value or such other purchase
price determined by the Committee, shares of Stock subject to such restrictions
and conditions as the Committee may determine at the time of grant ("Restricted
Stock"). Conditions may be based on continuing employment (or other business
relationship) and/or achievement of pre-established performance goals and
objectives.
(b) Rights as a Stockholder. Upon execution of a written instrument
setting forth the Restricted Stock Award and paying any applicable purchase
price, a participant shall have the rights of a stockholder with respect to the
voting of the Restricted Stock, subject to such conditions contained in the
written instrument evidencing the Restricted Stock Award. Unless the Committee
shall otherwise determine, certificates evidencing the Restricted Stock shall
remain in the possession of the Company until such Restricted Stock is vested as
provided in Section 6(d) below.
(c) Restrictions. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein or in the written instrument evidencing the
Restricted Stock Award. If a participant's employment (or other business
relationship) with the Company and its Subsidiaries terminates under the
conditions specified in the relevant instrument relating to the Award, or upon
such other event or events as may be stated in the instrument evidencing the
Award, the Company or its assigns shall have the right or shall agree, as may be
specified in the relevant instrument, to repurchase some or all of the shares of
Stock subject to the Award at such purchase price as is set forth in such
instrument.
(d) Vesting of Restricted Stock. The Committee at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which Restricted Stock
shall become vested, subject to such further rights of the Company or its
assigns as may be specified in the instrument evidencing the Restricted Stock
Award.
<PAGE> 8
(e) Waiver, Deferral and Reinvestment of Dividends. The written
instrument evidencing the Restricted Stock Award may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on the
Restricted Stock.
SECTION 7. UNRESTRICTED STOCK AWARDS
(a) Grant or Sale of Unrestricted Stock. The Committee may, in its sole
discretion, grant (or sell at a purchase price determined by the Committee) an
Unrestricted Stock Award to any participant, pursuant to which such participant
may receive shares of Stock free of any vesting restrictions ("Unrestricted
Stock") under the Plan. Unrestricted Stock Awards may be granted or sold as
described in the preceding sentence in respect of past services or other valid
consideration, or in lieu of any cash compensation due to such individual.
(b) Elections to Receive Unrestricted Stock In Lieu of Compensation.
Upon the request of a participant and with the consent of the Committee, each
such participant may, pursuant to an advance written election delivered to the
Company no later than the date specified by the Committee, receive a portion of
the cash compensation otherwise due to such participant in the form of shares of
Unrestricted Stock either currently or on a deferred basis.
(c) Restrictions on Transfers. The right to receive shares of
Unrestricted Stock on a deferred basis may not be sold, assigned, transferred,
pledged or otherwise encumbered, other than by will or the laws of descent and
distribution.
SECTION 8. TAX WITHHOLDING
(a) Payment by Participant. Each participant shall, no later than the
date as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.
(b) Payment in Stock. Subject to approval by the Committee, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.
SECTION 9. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or
from the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
<PAGE> 9
SECTION 10. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the
Committee may, at any time, amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price in a manner not inconsistent with the terms of the
Plan, but such price, if any, must satisfy the requirements which would apply to
the substitute or amended Award if it were then initially granted under this
Plan for the purpose of satisfying changes in law or for any other lawful
purpose), but no such action shall adversely affect rights under any outstanding
Award without the holder's consent. If and to the extent determined by the
Committee to be required by the Act to ensure that Incentive Stock Options
granted under the Plan are qualified under Section 422 of the Code, Plan
amendments shall be subject to approval by the Company's stockholders who are
eligible to vote at a meeting of stockholders.
SECTION 11. STATUS OF PLAN
With respect to the portion of any Award which has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.
SECTION 12. GENERAL PROVISIONS
(a) No Distribution; Compliance with Legal Requirements. The Committee
may require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Committee may require the placing of such
stop-orders and restrictive legends on certificates for Stock and Awards as it
deems appropriate.
(b) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
(c) Loans to Award Recipients. The Company shall have the authority to
make loans to recipients of Awards hereunder (including to facilitate the
purchase of shares) and shall further have the authority to issue shares for
promissory notes hereunder.
(d) Stockholder's Agreement. The Committee may require, at the time of
and as a condition to the issuance to a participant of the Stock underlying any
Option, that such participant enter into a stockholder's agreement with the
Company containing any customary terms and conditions the Company reasonably
requests, including without limitation, restrictions on the transfer of such
Stock, a right of first refusal in favor of the Company in the event the
participant proposes to sell such Stock and so-called "drag-along" rights
allowing the Company to require the sale of such Stock by the participant to
another person or entity in connection with a Transaction or other sale of the
Company.
<PAGE> 10
SECTION 13. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a
majority of the shares of Stock of the Company present or represented and
entitled to vote at a meeting of stockholders. Subject to such approval by the
stockholders and to the requirement that no Stock may be issued hereunder prior
to such approval, Stock Options and other Awards may be granted hereunder on and
after adoption of this Plan by the Board.
SECTION 14. GOVERNING LAW
This Plan shall be governed by Delaware law except to the extent such
law is preempted by federal law.
Adopted and Effective: February 25, 1999
