<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 23, 1997
REGISTRATION NO. 333-33027
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
BIG DOG HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
-------------------
<TABLE>
<S> <C> <C>
DELAWARE 5651 52-1868665
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) No.)
</TABLE>
-------------------
121 GRAY AVENUE
SANTA BARBARA, CALIFORNIA 93101
(805) 963-8727
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-------------------
ANTHONY J. WALL
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
BIG DOG HOLDINGS, INC.
121 GRAY AVENUE
SANTA BARBARA, CALIFORNIA 93101
(805) 963-8727
FAX: (805) 962-9460
(Name and address, including zip code and telephone and fax number, of agent for
service)
-------------------
COPIES TO:
<TABLE>
<S> <C>
JEFFREY M. WEINER, ESQ. THOMAS A. BEVILACQUA, ESQ.
Kimball & Weiner LLP Brobeck, Phleger & Harrison LLP
555 S. Flower Street Two Embarcadero Place
Suite 4540 2200 Geng Road
Los Angeles, CA 90071 Palo Alto, CA 94303-0913
(213) 538-3800 (415) 424-0160
</TABLE>
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
-------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Amendment No. 3 is being filed by Big Dog Holdings, Inc., a Delaware
corporation (the "Company"), in order to amend certain portions of Part II of
the Company's Registration Statement on Form S-1. Accordingly, Part I of the
Form S-1 is not included in this Amendment No. 3.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses, other than underwriting
discounts, which the Company expects to incur in connection with the issuance
and distribution of the securities being registered under this registration
statement. All expenses are estimated except for the Securities and Exchange
Commission registration fee, the NASD filing fee and Nasdaq application fee.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee....................... $ 17,076
Nasdaq National Market Application Fee.................................... 49,000
NASD Filing Fee........................................................... 6,135
Blue Sky Qualification Fees and Expenses.................................. 25,000
Legal Fees and Expenses................................................... 75,000
Accounting Fees and Expenses.............................................. 100,000
Printing and Engraving Expenses........................................... 100,000
Transfer Agent's and Registrar Fees....................................... 2,000
Miscellaneous............................................................. 25,789
---------
Total................................................................. $ 400,000
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
("Section 145") permits a Delaware corporation to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit, or
proceeding if such person acted in good faith and in a manner such person
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 such person's conduct was unlawful.
In the case of an action by or in the right of the corporation, Section 145
permits the corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against expenses (including attorney's
fees) actually and reasonably incurred by such person in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation. No indemnification may be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
To the extent that a director, officer, employee, or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit,
or proceeding referred to in the proceeding two paragraphs, Section 145
II-1
<PAGE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS (CONTINUED)
requires that such person be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection therewith.
Section 145 provides that expenses (including attorneys' fees) incurred by
an officer or director in defending any civil, criminal, administrative, or
investigative action, suit, or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit, or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to repay
such amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in Section 145.
Article Tenth of the Company's Amended and Restated Certificate of
Incorporation eliminates the personal liability of the directors of the Company
to the Company or its stockholders for monetary damages for breach of fiduciary
duty as directors, with certain exceptions. In addition, the Company's Bylaws
require indemnification of directors and officers of the Company to the fullest
extent permitted by Section 145. The Company will enter into indemnification
agreements with its directors, a form of which is attached as Exhibit 10.14
hereto and incorporated herein by reference. The indemnification agreements
provide the Company's directors with further indemnification to the maximum
extent permitted by the DGCL. The Company will also obtain directors and
officers insurance to insure its directors and officers against certain
liabilities, including liabilities under the federal securities laws.
The Underwriting Agreement filed herewith as Exhibit 1.1 provides for
indemnification of the directors, certain officers, and controlling persons of
the Company by the Underwriters against certain civil liabilities, including
liabilities under the Securities Act.
See Item 17 below.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The following are all securities sold by the Company since July 31, 1994:
1. On January 1, 1995, the Company issued and sold 1,800,000 shares of
its common stock (post-split) to its two then-existing stockholders for an
aggregate of $3.0 million.
2. On April 3, 1995, the Company issued and sold 67 Units to seven
investors for an aggregate purchase price of $5,025,000. Each Unit consisted
of a $60,000 unsecured promissory note of the Company and 10,000 shares of
Common Stock (post-split).
3. On February 27, 1996, the Company issued and sold 50 Units to three
investors for an aggregate purchase price of $2,500,000. Each Unit consisted
of a $40,000 unsecured promissory note of the registrant and 3,861 shares of
Common Stock.
4. On July 29, 1996, the Company issued and sold 347,500 shares of
Common Stock to 18 officers, key employees and consultants for an aggregate
purchase price of $900,025, 5% of which was paid in cash and the balance of
which was paid by delivering promissory notes bearing interest at 7% per
annum and due in 2006. All such sale were made under the registrant's 1996
Stock Incentive Plan.
5. On November 4, 1996, the Company issued and sold 20 Units consisting
of ten A Units and ten B Units to nine investors for an aggregate purchase
price of $4,240,000. Each Unit consisted of a $200,000 unsecured promissory
note of the Company and a warrant to purchase 12,000 shares of Common Stock.
The terms of the A and B Units are the same except that the exercise price
for the warrants included in the A Units is $4.00 per share (which, pursuant
to the terms of the warrants, was automatically reduced to $3.00 as of June
30, 1997) and the exercise price for the warrants included in the B Units is
$5.00 per share (which, pursuant to the terms of the warrants, was
automatically reduced to $4.00 as of June 30, 1997).
II-2
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES. (CONTINUED)
6. On September 23, 1997, the Company issued and sold to the Company's
Chairman (i) 35,000 shares of its common stock for an aggregate purchase
price of $90,650 pursuant to the exercise of stock options that had been
granted by the Company on March 6, 1996, (ii) 20,000 shares of its common
stock for an aggregate purchase price of $80,000 pursuant to the exercise of
stock options that had been granted by the Company on August 1, 1996, and
(iii) 120,000 shares of its common stock for an aggregate purchase price of
$480,000 pursuant to the exercise of warrants that had been issued by the
Company as part of B Units on November 4, 1996 (see paragraph 5 above).
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement*
3.1 Amended and Restated Certificate of Incorporation*
3.1A Certificate of Correction*
3.2 Amended and Restated Bylaws*
4.1 Reference is hereby made to Exhibits 3.1*, 3.1A* and 3.2*
4.2 Specimen Stock Certificate*
5.1 Opinion of Kimball & Weiner LLP*
10.1 Amended and Restated Credit Agreement dated as of June 30, 1995 between Big Dog Holdings,
Inc., Big Dog USA, Inc. and Fortune Dogs, Inc., as amended by First Amendment, dated as
of February 15, 1996, Second Amendment dated as of April 30, 1996, and Third Amendment
dated as of May 3, 1997*
10.2 Form of Stockholder Agreement made as of January 2, 1996 between Big Dog Holdings, Inc.
and certain stockholders*
10.3 Forms of Notes and Warrants issued November 4, 1996*
10.4 Consulting Agreement between Big Dog Holdings, Inc. and Fortune Financial dated as of
March 1, 1997*
10.5 Buy-Sell Agreement among Big Dog Holdings, Inc., Fred Kayne and Andrew D. Feshbach dated
as of January 1, 1997*
10.6 1996 Stock Incentive Plan*
10.7 Form of Purchase Agreement under the Big Dog Holdings, Inc. 1996 Stock Incentive Plan*
10.8 1997 Stock Option Plan*
10.9 Form of Stock Option Agreement under the 1997 Stock Option Plan*
10.10 Amended and Restated 1997 Performance Award Plan*
10.10A Form of Stock Option Agreement under 1997 Performance Award Plan*
10.11 Lease Agreement between Big Dog Holdings, Inc. and State of California Public Retirement
System dated January 13, 1995*
10.12 Lease Agreement between Big Dog Holdings, Inc. and S.V.B. Properties dated as of June 1,
1994, as amended by Lease Agreement dated as of December 1, 1994, Second Lease
Amendment dated as of March 1, 1996 and Third Lease Amendment dated as of July 22,
1996*
10.13 Lease Agreement between Big Dog Holdings, Inc. and the Eldred Family Trust & Jason Eldred
Trust dated as of April 4, 1996*
10.14 Form of Indemnification Agreement*
10.15 Stock Option Agreement dated March 6, 1996 between Big Dog Holdings, Inc. and Fred Kayne
10.16 Stock Option Agreement dated August 1, 1996 between Big Dog Holdings, Inc. and Fred Kayne
11.1 Statement regarding computation of per share earnings (loss)*
21.1 List of Subsidiaries of Big Dog Holdings, Inc.*
23.1 Consent of Kimball & Weiner LLP (included in Opinion filed in Exhibit 5.1)*
</TABLE>
II-3
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------
<C> <S>
23.2 Consent of Deloitte & Touche LLP*
24.1 Power of Attorney (included in signature page)*
27.1 Financial data schedule*
99.1 Consent of Robert Schnell*
99.2 Consent of Steven C. Good*
99.3 Consent of David J. Walsh*
99.4 Consent of NPD Group*
</TABLE>
- -------
* Previously Filed
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 3 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Santa
Barbara, State of California, on September 22, 1997.
<TABLE>
<S> <C> <C>
BIG DOG HOLDINGS, INC.
By: /s/ ANTHONY J. WALL
-----------------------------------------
Anthony J. Wall
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
*
- ------------------------------ Chairman of the Board September 22, 1997
Fred Kayne
President, Chief Executive
* Officer (Principal
- ------------------------------ Executive Officer) and September 22, 1997
Andrew D. Feshbach Director
/s/ ANTHONY J. WALL Executive Vice President,
- ------------------------------ General Counsel, Secretary September 22, 1997
Anthony J. Wall and Director
* Chief Financial Officer
- ------------------------------ (Principal Financial September 22, 1997
Jonathan Howe Officer)
Senior Vice President,
* Finance
- ------------------------------ (Principal Accounting September 22, 1997
Roberta Morris Officer)
*By: /s/ ANTHONY J. WALL
-------------------------
Anthony J. Wall
(ATTORNEY-IN-FACT)
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement*
3.1 Amended and Restated Certificate of Incorporation*
3.1A Certificate of Correction*
3.2 Amended and Restated Bylaws*
4.1 Reference is hereby made to Exhibits 3.1*, 3.1A* and 3.2*
4.2 Specimen Stock Certificate*
5.1 Opinion of Kimball & Weiner LLP*
10.1 Amended and Restated Credit Agreement dated as of June 30, 1995 between Big Dog Holdings, Inc., Big
Dog USA, Inc. and Fortune Dogs, Inc., as amended by First Amendment, dated as of February 15, 1996,
Second Amendment dated as of April 30, 1996, and Third Amendment dated as of May 3, 1997*
10.2 Form of Stockholder Agreement made as of January 2, 1996 between Big Dog Holdings, Inc. and certain
stockholders*
10.3 Forms of Notes and Warrants issued November 4, 1996*
10.4 Consulting Agreement between Big Dog Holdings, Inc. and Fortune Financial dated as of March 1, 1997*
10.5 Buy-Sell Agreement among Big Dog Holdings, Inc., Fred Kayne and Andrew D. Feshbach dated as of January
1, 1997*
10.6 1996 Stock Incentive Plan*
10.7 Form of Purchase Agreement under the Big Dog Holdings, Inc. 1996 Stock Incentive Plan*
10.8 1997 Stock Option Plan*
10.9 Form of Stock Option Agreement under the 1997 Stock Option Plan*
10.10 Amended and Restated 1997 Performance Award Plan*
10.10A Form of Stock Option Agreement under 1997 Performance Award Plan*
10.11 Lease Agreement between Big Dog Holdings, Inc. and State of California Public Retirement System dated
January 13, 1995*
10.12 Lease Agreement between Big Dog Holdings, Inc. and S.V.B. Properties dated as of June 1, 1994, as
amended by Lease Agreement dated as of December 1, 1994, Second Lease Amendment dated as of March 1,
1996 and Third Lease Amendment dated as of July 22, 1996*
10.13 Lease Agreement between Big Dog Holdings, Inc. and the Eldred Family Trust & Jason Eldred Trust dated
as of April 4, 1996*
10.14 Form of Indemnification Agreement*
10.15 Stock Option Agreement dated March 6, 1996 between Big Dog Holdings, Inc. and Fred Kayne
10.16 Stock Option Agreement dated August 1, 1996 between Big Dog Holdings, Inc. and Fred Kayne
11.1 Statement regarding computation of per share earnings (loss)*
21.1 List of Subsidiaries of Big Dog Holdings, Inc.*
23.1 Consent of Kimball & Weiner LLP (included in Opinion filed in Exhibit 5.1)*
23.2 Consent of Deloitte & Touche LLP*
24.1 Power of Attorney (included in signature page)*
27.1 Financial data schedule*
99.1 Consent of Robert Schnell*
99.2 Consent of Steven C. Good*
99.3 Consent of David J. Walsh*
99.4 Consent of NPD Group*
</TABLE>
- -------
* Previously Filed
<PAGE>
BIG DOG HOLDINGS, INC.
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT (the "Agreement") is entered into as of March
6, 1996 between BIG DOG HOLDINGS, INC., a Delaware corporation (the "Company"),
and Fred Kayne ("Option Holder").
WHEREAS in consideration of the Option Holder's past and future services as
Chairman of the Board of Directors of the Company, the Board of Directors has
authorized the grant to Option Holder of a stock option on the terms and
conditions described herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein, it is hereby agreed:
1. GRANT OF OPTION
Effective as of the date of this Agreement the Company hereby grants to
Option Holder an option (the "Option") to purchase, subject to the terms of this
Agreement, all or part of 35,000 shares of Common Stock at the price of $2.59
per share. The number of shares subject to the Option and the price per share
thereof are subject to adjustment under certain circumstances, as provided in
Section 6.
2. TERM OF OPTION
The Option shall be immediately exercisable and shall expire on the date
five years from the date hereof.
3. MANNER OF EXERCISE
The Option may be exercised by written notice delivered to the Company
stating the number of shares with respect to which the Option is being
exercised, together with any written statement provided for in Section 7 hereof,
if applicable, together with such additional information or forms as the Company
may require, and the purchase price of such shares in the form of either cash or
check.
4. ASSIGNMENT OR TRANSFER
The Option may be assigned or transferred by Option Holder, provided that
the Compliance Conditions (as defined in Section 7 below) shall be met as to
such assignment.
<PAGE>
5. NO RIGHTS AS SHAREHOLDER
Option Holder shall have no rights as a shareholder with respect to shares
of the Common Stock covered by this Option until the date of the issuance of
such shares. No adjustment will be made for dividends or other rights for which
the record date is prior to the date such stock is issued, except as is
expressly provided in Section 6.
6. ADJUSTMENT.
Subject to the provisions of the next sentence of this Section 6, if the
outstanding shares of Common Stock are increased, decreased, changed into or
exchanged for a different number or kind of shares or securities of the Company
as the result of any one or more reorganizations, recapitalizations,
reclassifications, stock dividends, stock splits, reverse stock splits and the
like, upon proper authorization of the Board an appropriate and proportionate
adjustment shall be made in the number and/or type of shares or other securities
subject to the Option, and the price for each share or other unit of any
security, but only to the extent this option, but only to the extent this Option
then remains unexercised.
7. SECURITIES ACT OF 1933
(a) Subject to the provision of subsection (b) hereof, no shares of Common
Stock shall be issued or transferred pursuant to this Agreement until (i) a
registration statement under the Securities Act of 1933 relating to the stock
issuable upon exercise of the Option has been declared effective and there is
available for delivery a prospectus meeting the requirements of Section 10 of
said Act, and (ii) the Company shall have complied, in the opinion of counsel to
the Company, with all other legal requirements that may be applicable to the
issuance of shares upon exercise of the Option. Such conditions are hereinafter
collectively referred to as the "Compliance Conditions."
(b) It is the Company's intention that the Compliance Conditions be met at
all times. However, should compliance not be secured only with subsection (a)
(i) above, then notwithstanding the foregoing, Option Holder may exercise all or
any portion of the Option at a time when such condition is not met, if, and only
if, Option Holder (i) submits to the Company a request to exercise the Option
and acknowledges in such request that Option Holder will acquire such shares
upon such exercise not with a view to their resale or distribution, and (ii)
upon each such exercise of the Option, Option Holder will furnish to the Company
a written statement to such effect in a form satisfactory to the Committee and
counsel to the Company. In addition, the Option Holder shall, if requested by
the Board or the Committee, give assurances satisfactory to counsel to the
Company with respect to such matters as the Board or the Committee may deem
desirable to assure compliance with subsection (a) (ii) above. Furthermore, any
person or persons entitled to exercise such Option under the provisions of
Section 4 hereof shall, upon such exercise of the Option under such
circumstances, furnish similar requests, statements or documents to the Company.
2
<PAGE>
(c) Inability of the Company to secure compliance with the Compliance
Conditions shall relieve the Company from any liability for failure to issue
stock to satisfy the Option for such period of time if an effective registration
statement or appropriate prospectus has not been secured or compliance with the
other Compliance Conditions has not been effected, unless stock is issued
pursuant to request of the Option Holder under subsection (b) above. Further,
failure of the Company to secure compliance with the compliance conditions
stated in subsection (a) (i) above shall extend the expiration date of such
Option as provided in Section 2 of this Agreement for such period of time as an
effective registration statement or appropriate prospectus has not been secured
or such compliance has not been effected.
8. WITHHOLDING
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which the Company determines it is required to withhold
in connection with this Agreement and the transactions contemplated hereby.
9. AMENDMENT
This Agreement maynot be amended other than by a written amendment executed
by both parties.
10. APPLICABLE LAW
The interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BIG DOG HOLDINGS, INC.
By: Anthony J. Wall
-------------------------------
Its: Executive Vice President
-------------------------------
OPTION HOLDER
FRED KAYNE
Fred Kayne
-------------------------------
3
<PAGE>
BIG DOG HOLDINGS, INC.
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT (the "Agreement") is entered into as of August
1, 1996 between BIG DOG HOLDINGS, INC., a Delaware corporation (the "Company"),
and Fred Kayne (the "Option Holder").
WHEREAS, in consideration of Option Holder agreeing to continue to serve a
Chairman of the Board of Directors of the Company, the Board has authorized the
grant to Option holder of a stock option on the terms and conditions described;
and
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein, it is hereby agreed:
1. GRANT OF OPTION
Effective as of the date of this Agreement, the Company grants to Option
Holder an option (the "Option") to purchase, upon and subject to the terms and
conditions of this Agreement, all or part of 20,000 shares of Common Stock at
the price of $4.00 per share. The number of shares subject to the Option and
the price per share thereof are subject to adjustment under certain
circumstances, as provided in Section 6.
2. TERM OF OPTION
Such Option shall be immediately exercisable and shall expire on the date
five years from the date hereof.
3. MANNER OF EXERCISE
The Option may be exercised by written notice delivered to the Company
stating the number of shares with respect to which the Option is being
exercised, together with any written statement provided for in Section 7 hereof,
if applicable, together with such additional information or forms as the Company
may require, and the purchase price of such shares in the form of either cash or
check.
4. ASSIGNMENT OR TRANSFER
The Option may be assigned or transferred by Option Holder, provided that
the Compliance Conditions (as defined in Section 7 below) shall be met as to
such assignment.
<PAGE>
5. NO RIGHTS AS SHAREHOLDER
Option Holder shall have no rights as a shareholder with respect to shares
of the Common Stock covered by this Option until the date of the issuance of the
shares. No adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock is issued, except as is expressly
provided in Section 6.
6. ADJUSTMENT.
Subject to the provisions of the next sentence of this Section 6, if the
outstanding shares of Common Stock are increased, decreased, changed into or
exchanged for a different number or kind of shares or securities of the Company
as the result of any one or more reorganizations, recapitalizations,
reclassifications, stock dividends, stock splits, reverse stock splits and the
like, upon proper authorization of the Board an appropriate and proportionate
adjustment shall be made in the number and/or type of shares or other securities
subject to the Option, and the price for each share or other unit of any
security, but only to the extent this option, but only to the extent this Option
then remains unexercised.
7. SECURITIES ACT OF 1933
(a) Subject to the provision of subsection (b) hereof, no shares of Common
Stock shall be issued or transferred pursuant to this Agreement until (i) a
registration statement under the Securities Act of 1933 relating to the stock
issuable upon exercise of the Option has been declared effective and there is
available for delivery a prospectus meeting the requirements of Section 10 of
said Act, and (ii) the Company shall have complied, in the opinion of counsel to
the Company, with all other legal requirements that may be applicable to the
issuance of shares upon exercise of the Option. Such conditions are hereinafter
collectively referred to as the "Compliance Conditions."
(b) It is the Company's intention that the Compliance Conditions be met at
all times. However, should compliance not be secured only with subsection (a)
(i) above, then notwithstanding the foregoing, Option Holder may exercise all or
any portion of the Option at a time when such condition is not met, if, and only
if, Option Holder (i) submits to the Company a request to exercise the Option
and acknowledges in such request that Option Holder will acquire such shares
upon such exercise not with a view to their resale or distribution, and (ii)
upon each such exercise of the Option, Option Holder will furnish to the Company
a written statement to such effect in a form satisfactory to the Committee and
counsel to the Company. In addition, the Option Holder shall, if requested by
the Board or the Committee, give assurances satisfactory to counsel to the
Company with respect to such matters as the Board or the Committee may deem
desirable to assure compliance with subsection (a) (ii) above. Furthermore, any
person or persons entitled to exercise such Option under the provisions of
Section 4 hereof shall, upon such exercise of the Option under such
circumstances, furnish similar requests, statements or documents to the Company.
2
<PAGE>
(c) Inability of the Company to secure compliance with the Compliance
Conditions shall relieve the Company from any liability for failure to issue
stock to satisfy the Option for such period of time if an effective registration
statement or appropriate prospectus has not been secured or compliance with the
other Compliance Conditions has not been effected, unless stock is issued
pursuant to request of the Option Holder under subsection (b) above. Further,
failure of the Company to secure compliance with the compliance conditions
stated in subsection (a) (i) above shall extend the expiration date of such
Option as provided in Section 2 of this Agreement for such period of time as an
effective registration statement or appropriate prospectus has not been secured
or such compliance has not been effected.
8. WITHHOLDING
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which the Company determines it is required to withhold
in connection with this Agreement and the transactions contemplated hereby.
9. AMENDMENT
No such amendment may be made to this Agreement other by a written
amendment executed by both parties.
10. APPLICABLE LAW
The interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of California.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BIG DOG HOLDINGS, INC.
By: Anthony J. Wall
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Its: Executive Vice President
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OPTION HOLDER
By: Fred Kayne
-------------------------------
Fred Kayne
-------------------------------
(Print Name)
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