As filed with the Securities and
Exchange Commission on July 13, 1999 Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------
GO2NET, INC.
(Exact name of issuer as specified in its charter)
Delaware 91-1710182
(State or Other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
999 Third Avenue, Suite 4700
Seattle, Washington 98104
(206) 447-1595
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
AUTHORIZE.NET CORPORATION 1999 STOCK INCENTIVE PLAN
HAGGLE ONLINE, INC. STOCK OPTION AGREEMENT
IQC CORPORATION STOCK OPTION AGREEMENT
(Full title of the Plans)
Francis J. Feeney, Jr., Esquire
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
(617) 951-6600
(Name, address and telephone number of agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed Maximum
Title of Each Class of Amount to be Maximum Offering Aggregate Offering Amount of
Securities to be Registered Registered Price Per Share(2) Price Registration Fee
<S> <C> <C> <C> <C>
Authorize.Net Corporation
1999 Stock Incentive Plan
Common Stock, $.01 par
value per share. . . . . . . . 101,825 shares(1) $0.7954854 $81,000.30 $22.52
================================ ===================== ====================== ===================== ====================
Haggle Online, Inc. Stock
Option Agreement
Common Stock, $.01 par
value per share.............. 64 shares(3) $61.00 $3,904.00 $ 1.09
================================ ===================== ====================== ===================== ====================
IQC Corporation Stock
Option Agreement
Common Stock, $.01 par
value $.01 per share 70,578 shares(4) $3.13 $220,909.14 $61.44
================================ ===================== ====================== ===================== ====================
TOTAL 172,467 shares $64.93 $305,813.44 $85.04
================================ ===================== ====================== ===================== ====================
</TABLE>
(1) Represents the number of shares of Go2Net Common Stock, $.01 par value per
share issuable upon exercise of options granted by Authorize.Net
Corporation and assumed by Go2Net pursuant to the Agreement and Plan of
Merger dated as of July 1, 1999, among Go2Net, 3I Acquisition Corp.,
Authorize.Net Corporation and the principal shareholders of Authorize. The
number of shares issuable upon exercise of such former Authorize options
was determined by multiplying the number of such options outstanding on the
closing date by 1.2571, the applicable conversion ratio.
(2) Computed in accordance with Rule 457(h) under the Securities Act solely for
the purpose of calculating the registration fee. All shares are issuable
upon exercise of outstanding options with fixed exercise prices. The
computation with respect to such outstanding options is based on the
weighted average per share exercise price of the options, the Shares
issuable under which are registered hereby.
(3) Represents the number of shares of Go2Net Common Stock, $.01 par value per
share issuable upon exercise of options granted by Haggle Online, Inc. and
assumed by Go2Net pursuant to the Agreement and Plan of Merger dated as of
April 15, 1999, among Go2Net, HO Acquisition Corp., Haggle and the
stockholders of Haggle. The number of shares issuable upon exercise of such
former Haggle options was determined by multiplying the number of such
options outstanding on the closing date by .010249, the applicable
conversion ratio.
(4) Represents the number of shares of Go2Net Common Stock issuable upon
exercise of options granted by IQC and assumed by Go2Net pursuant to the
Agreement and Plan of Merger dated May 13, 1999, among Go2Net, VA
Acquisition Corp., IQC, the stockholders of IQC and the option holders of
IQC. The number of shares issuable upon exercise of such former IQC options
was determined by multiplying the number of such options outstanding on the
closing date by .0161875, the applicable conversion ratio.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Go2Net hereby incorporates by reference the documents listed in (a) through
(c) below. In addition, all documents subsequently filed by Go2Net pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (prior
to the filing of a Post-Effective Amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold) shall be deemed to be incorporated by reference in this Registration
Statement and to be a part thereof from the date of filing of such documents.
(a) Go2Net's latest annual report filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 or the latest Prospectus filed pursuant
to Rule 424(b) under the Securities Act of 1933, which contains either directly
or by incorporation by reference audited financial statements for Go2Net's
latest fiscal year for which such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered by the
annual report or the Prospectus referred to in (a) above.
(c) The description of Go2Net's Common Stock which is contained in the
Registration Statement filed by Go2Net under the Securities Exchange Act of
1934, including any amendment or report filed for the purpose of updating such
description.
Item 4. Description of Securities
Inapplicable.
Item 5. Interests of Named Experts and Counsel
The validity of the authorization and issuance of the Common Stock offered
hereby will be passed upon for the Company by Hutchins, Wheeler & Dittmar, A
Professional Corporation, Boston, Massachusetts.
Item 6. Indemnification of Directors and Officers
As permitted by Section 145 of the Delaware General Corporation Law, Go2Net's
Amended and Restated Certificate of Incorporation, as amended, includes a
provision that eliminates the personal liability of its directors for monetary
damages for breach or alleged breach of their duty of care. In addition, the
Delaware General Corporation Law and Go2Net's Amended and Restated By-laws
provide for indemnification of Go2Net's directors and officers for liabilities
and expenses that they may incur in such capacities. In general, directors and
officers are indemnified with respect to actions taken in good faith in a manner
reasonably believed to be in, or not opposed to, the best interests of Go2Net,
and with respect to any criminal action or proceeding, actions that the
indemnitee has no reasonable choice to believe were unlawful.
Go2Net has purchased insurance with respect to, among other things, the
liabilities that may arise under the provisions referred to above. The directors
and officers of the Company also are insured against certain liabilities,
including certain liabilities arising under the Securities Act of 1933, as
amended, which might be incurred by them in such capacities and against which
they are not indemnified by Go2Net.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Number Description
4.1 Authorize.Net Corporation Stock Incentive Plan
4.2 Haggle Online, Inc. Stock Option Agreement
4.3 Form of IQC Corporation Stock Option Agreement
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<PAGE>
5.1 Opinion of Hutchins, Wheeler & Dittmar, A
Professional Corporation, as to legality of shares
being registered and consent of Hutchins, Wheeler &
Dittmar, A Professional Corporation.
23.1 Consents of Ernst & Young LLP Independent Auditors.
23.2 Consent of HWD (included in Exhibit 5.1)
24.1 Powers of Attorney (See page S-1).
Item 9. Undertakings
A. UNDERTAKING PURSUANT TO RULE 415
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 material
information with respect to the plan of distribution
not previously disclosed in the Registration
Statement or any material change to such information
in the Registration Statement; (ii) to include any
prospectus required by Section 10(a)(3) of the
Securities Act of 1933; and (iii) to reflect in the
prospectus any facts or events arising after the
effective date of the 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
the 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; and
(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
this offering.
Provided, however, that paragraphs A(1)(ii) and A(1)(iii) 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 Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE
ACT DOCUMENTS BY REFERENCE AND ANNUAL AND QUARTERLY REPORTS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (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 the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE>
C. UNDERTAKING IN RESPECT OF INDEMNIFICATION
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 Securities and Exchange 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.
* * * *
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Seattle, Washington, on July 13, 1999.
GO2NET, INC.
By: /s/ Russell C. Horowitz
Russell C. Horowitz
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below
constitutes and appoints Russell C. Horowitz his true and lawful attorney-in-
fact and agent, with full power of substitution and resubstitution, for him or
in his name, place and stead, in any and all capacities to sign any and all
amendments or post-effective amendments to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or his
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ Russell C. Horowitz Director, Chief Executive Officer and Chief July 13, 1999
Russell C. Horowitz Financial Officer (principal executive officer
and accounting officer)
/s/ William A. Fleckenstein Director July 13, 1999
William A. Fleckenstein
/s/ Dennis Cline Director July 13, 1999
Dennis Cline
/s/ William D. Savoy Director July 13, 1999
William D. Savoy
/s/ Diane Daggatt Director July 13, 1999
Diane Daggatt
</TABLE>
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<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
to
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
GO2NET, INC.
(Exact name of registrant as specified in its charter)
- 6 -
EXHIBIT 4.1
AUTHORIZE.NET CORPORATION
1999 STOCK INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Stock Incentive Plan are
to attract and retain the best available personnel, to provide additional
incentive to Employees, Directors and Consultants and to promote the success of
the Company's business.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of the
Committees appointed to administer the Plan.
(b) "Applicable Laws" means the legal requirements relating to
the administration of stock incentive plans, if any, under applicable provisions
of federal securities laws, state corporate and securities laws, the Code, the
rules of any applicable stock exchange or national market system, and the rules
of any foreign jurisdiction applicable to Awards granted to residents therein.
(c) "Award" means the grant of an Option, Restricted Stock, or
other right or benefit under the Plan.
(d) "Award Agreement" means the written agreement evidencing
the grant of an Award executed by the Company and the Grantee, including any
amendments thereto.
(e) "Board" means the Board of Directors of the Company.
(f) "Cause" means, with respect to the termination by the
Company or a Related Entity of the Grantee's Continuous Service, that such
termination is for "Cause" as such term is expressly defined in a then-effective
written agreement between the Grantee and the Company or such Related Entity, or
in the absence of such then-effective written agreement and definition, is based
on, in the determination of the Administrator, the Grantee's: (i) refusal or
failure to act in accordance with any specific, lawful direction or order of the
Company or a Related Entity; (ii) unfitness or unavailability for service or
unsatisfactory performance (other than as a result of Disability); (iii)
performance of any act or failure to perform any act in bad faith and to the
detriment of the Company or a Related Entity; (iv) dishonesty, intentional
misconduct or material breach of any agreement with the Company or a Related
Entity; or (v) commission of a crime involving dishonesty, breach of trust, or
physical or emotional harm to any person. At least thirty (30) days prior to the
termination of the Grantee's Continuous Service pursuant to (i) or (ii) above,
the Company shall provide the Grantee with notice of the Company's or such
Related Entity's intent to terminate, the reason therefor, and an opportunity
for the Grantee to cure such defects in his or her service to the Company's or
such Related Entity's satisfaction. During this thirty (30) day (or longer)
period, no Award issued to the Grantee under the Plan may be exercised or
purchased.
(g) "Code" means the Internal Revenue Code of 1986, as
amended.
(h) "Committee" means any committee appointed by the Board to
administer the Plan.
(i) "Common Stock" means the common stock of the Company.
(j) "Company" means Authorize.Net Corporation, a Utah
corporation.
<PAGE>
(k) "Consultant" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's capacity as
a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.
(l) "Continuous Service" means that the provision of services
to the Company or a Related Entity in any capacity of Employee, Director or
Consultant, is not interrupted or terminated. Continuous Service shall not be
considered interrupted in the case of (i) any approved leave of absence, (ii)
transfers between locations of the Company or among the Company, any Related
Entity, or any successor, in any capacity of Employee, Director or Consultant,
or (iii) any change in status as long as the individual remains in the service
of the Company or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Award Agreement). An approved
leave of absence shall include sick leave, military leave, or any other
authorized personal leave. For purposes of Incentive Stock Options, no such
leave may exceed ninety (90) days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract.
(m) "Corporate Transaction" means any of the following
transactions to which the Company is a party:
- 1 -
<PAGE>
(i) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Company is incorporated;
(ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Company (including the capital stock of the Company's
subsidiary corporations) in connection with the complete liquidation or
dissolution of the Company;
(iii) any reverse merger in which the Company is the surviving entity but
in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities are transferred to
a person or persons different from those who held such securities immediately
prior to such merger; or
(iv) acquisition by any person or related group of persons (other than the
Company or by a Company- sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities, but excluding any such transaction that
the Administrator determines shall not be a Corporate Transaction.
(n) "Director" means a member of the Board or the board of
directors of any Related Entity.
(o) "Disability" means that a Grantee is permanently unable to
carry out the responsibilities and functions of the position held by the Grantee
by reason of any medically determinable physical or mental impairment. A Grantee
will not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator in its
discretion.
(p) "Employee" means any person, including an Officer or
Director, who is an employee of the Company or any Related Entity. The payment
of a director's fee by the Company or a Related Entity shall not be sufficient
to constitute "employment" by the Company.
(q) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(r) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) Where there exists a public market for the Common Stock, the Fair
Market Value shall be (A) the closing price for a Share for the last market
trading day prior to the time of the determination (or, if no closing price was
reported on that date, on the last trading date on which a closing price was
reported) on the stock exchange determined by the Administrator to be the
primary market for the Common Stock or the Nasdaq National Market, whichever is
applicable, or (B) if the Common Stock is not traded on any such exchange or
national market system, the average of the closing bid and asked prices of a
Share on the Nasdaq Small Cap Market for the day prior to the time of the
determination (or, if no such prices were reported on that date, on the last
date on which such prices were reported), in each case, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or
(ii) In the absence of an established market for the Common Stock of the
type described in (i), above, the Fair Market Value thereof shall be determined
by the Administrator in good faith.
(s) "Grantee" means an Employee, Director or Consultant who
receives an Award under the Plan.
<PAGE>
(t) "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Grantee's household (other than a tenant or employee), a trust in which these
persons (or the Grantee) have more than fifty percent (50%) of the beneficial
interest, a foundation in which these persons (or the Grantee) control the
management of assets, and any other entity in which these persons (or the
Grantee) own more than fifty percent (50%) of the voting interests.
(u) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(v) "Non-Qualified Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
- 2 -
<PAGE>
(w) "Officer" means a person who is an officer of the Company
or a Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.
(x) "Option" means an option to purchase Shares pursuant to an
Award Agreement granted under the Plan.
(y) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(z) "Plan" means this 1999 Stock Incentive Plan.
(aa) "Post-Termination Exercise Period" means the period
specified in the Award Agreement of not less than three (3) months commencing on
the date of termination (other than termination by the Company or any Related
Entity for Cause) of the Grantee's Continuous Service, or such longer period as
may be applicable upon death or Disability.
(bb) "Registration Date" means the first to occur of (i) the
closing of the first sale to the general public of (A) the Common Stock or (B)
the same class of securities of a successor corporation (or its Parent) issued
pursuant to a Corporate Transaction in exchange for or in substitution of the
Common Stock, pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended; and (ii) in the event of a Corporate Transaction, the date of
the consummation of the Corporate Transaction if the same class of securities of
the successor corporation (or its Parent) issuable in such Corporate Transaction
shall have been sold to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended, on or prior to the date of
consummation of such Corporate Transaction,.
(cc) "Related Entity" means any Parent, Subsidiary and any
business, corporation, partnership, limited liability company or other entity in
which the Company, a Parent or a Subsidiary holds a substantial ownership
interest, directly or indirectly.
(dd) "Restricted Stock" means Shares issued under the Plan to
the Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture provisions,
and other terms and conditions as established by the Administrator.
(ee) "Share" means a share of the Common Stock.
(ff) "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.
(a) Subject to the provisions of Section 1 l (a) below, the
maximum aggregate number of Shares which may be issued pursuant to all Awards
(including Incentive Stock Options) is 200,000 Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.
<PAGE>
(b) Any Shares covered by an Award (or portion of an Award)
which is forfeited or canceled, expires or is settled in cash, shall be deemed
not to have been issued for purposes of determining the maximum aggregate number
of Shares which may be issued under the Plan. If any unissued Shares are
retained by the Company upon exercise of an Award in order to satisfy the
exercise price for such Award or any withholding taxes due with respect to such
Award, such retained Shares subject to such Award shall become available for
future issuance under the Plan (unless the Plan has terminated). Shares that
actually have been issued under the Plan pursuant to an Award shall not be
returned to the Plan and shall not become available for future issuance under
the Plan, except that if unvested Shares are forfeited, or repurchased by the
Company at their original purchase price, such Shares shall become available for
future grant under the Plan.
4. Administration of the Plan.
(a) Plan Administrator. With respect to grants of Awards to
Employees, Directors, or Consultants, the Plan shall be administered by (A) the
Board or (B) a Committee (or a subcommittee of the Committee) designated by the
Board, which Committee shall be constituted in such a manner as to satisfy
Applicable Laws. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.
- 3 -
<PAGE>
(b) Powers of the Administrator. Subject to Applicable Laws
and the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the Board, the
Administrator shall have the authority, in its discretion:
(i) to select the Employees, Directors and Consultants to whom Awards may
be granted from time to time hereunder;
(ii) to determine whether and to what extent Awards are granted hereunder;
(iii) to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions of any Award granted hereunder;
(vi) to establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable foreign jurisdictions and to afford
Grantees favorable treatment under such rules or laws; provided, however, that
no Award shall be granted under any such additional terms, conditions, rules or
procedures with terms or conditions which are inconsistent with the provisions
of the Plan;
(vii) to amend the terms of any outstanding Award granted under the Plan,
provided that any amendment that would adversely affect the Grantee's rights
under an outstanding Award shall not be made without the Grantee's written
consent;
(viii) to construe and interpret the terms of the Plan and Awards,
including without limitation, any notice of award or Award Agreement, granted
pursuant to the Plan; and
(ix) to take such other action, not inconsistent with the terms of the
Plan, as the Administrator deems appropriate.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be conclusive and
binding on all persons.
5. Eligibility. Awards other than Incentive Stock Options may be
granted to Employees, Directors and Consultants. Incentive Stock Options may be
granted only to Employees of the Company, a Parent or a Subsidiary. An Employee,
Director or Consultant who has been granted an Award may, if otherwise eligible,
be granted additional Awards. Awards may be granted to such Employees, Directors
or Consultants who are residing in foreign jurisdictions as the Administrator
may determine from time to time.
6. Terms and Conditions of Awards.
(a) Type of Awards. The Administrator is authorized under the
Plan to award any type of arrangement to an Employee, Director or Consultant
that is not inconsistent with the provisions of the Plan and that by its terms
involves or might involve the issuance of (i) Shares, (ii) an Option, or similar
right with a fixed or variable price related to the Fair Market Value of the
Shares and with an exercise or conversion privilege related to the passage of
time, the occurrence of one or more events, or the satisfaction of performance
criteria or other conditions, or (iii) any other security with the value derived
from the value of the Shares. Such awards include, without limitation, Options,
or sales or bonuses of Restricted Stock, and an Award may consist of one such
security or benefit, or two (2) or more of them in any combination or
alternative.
<PAGE>
(b) Designation Of Award. Each Award shall be designated in
the Award Agreement. In the case of an Option, the Option shall be designated as
either an Incentive Stock Option or a Non-Qualified Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of Shares subject to Options designated as Incentive Stock Options which
become exercisable for the first time by a Grantee during any calendar year
(under all plans of the Company or any Parent or Subsidiary) exceeds $100,000,
such excess Options, to the extent of the Shares covered thereby in excess of
the foregoing limitation, shall be treated as Non-Qualified Stock Options. For
this purpose, Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of the Shares shall be
determined as of the grant date of the relevant Option.
(c) Conditions of Award. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first
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<PAGE>
refusal, forfeiture provisions, form of payment (cash, Shares, or other
consideration) upon settlement of the Award, payment contingencies, and
satisfaction of any performance criteria. The performance criteria established
by the Administrator may be based on any one of, or combination of, increase in
share price, earnings per share, total shareholder return, return on equity,
return on assets, return on investment, net operating income, cash flow,
revenue, economic value added, personal management objectives, or other measure
of performance selected by the Administrator. Partial achievement of the
specified criteria may result in a payment or vesting corresponding to the
degree of achievement as specified in the Award Agreement.
(d) Acquisitions and Other Transactions. The Administrator may
issue Awards under the Plan in settlement, assumption or substitution for,
outstanding awards or obligations to grant future awards in connection with the
Company or a Related Entity acquiring another entity, an interest in another
entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.
(e) Deferral of Award Payment. The Administrator may establish
one or more programs under the Plan to permit selected Grantees the opportunity
to elect to defer receipt of consideration upon exercise of an Award,
satisfaction of performance criteria, or other event that absent the election
would entitle the Grantee to payment or receipt of Shares or other consideration
under an Award. The Administrator may establish the election procedures, the
timing of such elections, the mechanisms for payments of, and accrual of
interest or other earnings, if any, on amounts, Shares or other consideration so
deferred, and such other terms, conditions, rules and procedures that the
Administrator deems advisable for the administration of any such deferral
program.
(f) Award Exchange Programs. The Administrator may establish
one or more programs under the Plan to permit selected Grantees to exchange an
Award under the Plan for one or more other types of Awards under the Plan on
such terms and conditions as determined by the Administrator from time to time.
(g) Separate Programs. The Administrator may establish one or
more separate programs under the Plan for the purpose of issuing particular
forms of Awards to one or more classes of Grantees on such terms and conditions
as determined by the Administrator from time to time.
(h) Early Exercise. The Award Agreement may, but need not,
include a provision whereby the Grantee may elect at any time while an Employee,
Director or Consultant to exercise any part or all of the Award prior to full
vesting of the Award. Any unvested Shares received pursuant to such exercise may
be subject to a repurchase right in favor of the Company or a Related Entity or
to any other restriction the Administrator determines to be appropriate.
(i) Term of Award. The term of each Award shall be the term
stated in the Award Agreement. However, in the case of an Incentive Stock Option
granted to a Grantee 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 Incentive
Stock Option shall be five (5) years from the date of grant thereof or such
shorter term as may be provided in the Award Agreement.
(j) Transferability of Awards. Incentive Stock Options 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 Grantee, only by the Grantee; provided,
however, that the Grantee may designate a beneficiary of the Grantee's Incentive
Stock Option in the event of the Grantee's death on a beneficiary designation
form provided by the Administrator. Other Awards shall be transferred by will
and by the laws of descent and distribution, and during the lifetime of the
Grantee, by gift and or pursuant to a domestic relations order to members of the
Grantee's Immediate Family to the extent and in the manner determined by the
Administrator.
(k) Time of Granting Awards. The date of grant of an Award
shall for all purposes be the date on which the Administrator makes the
determination to grant such Award, or such other date as is determined by the
Administrator. Notice of the grant determination shall be given to each
Employee, Director or Consultant to whom an Award is so granted within a
reasonable time after the date of such grant.
<PAGE>
7. Award Exercise or Purchase Price, Consideration, Taxes and Reload
Options.
(a) Exercise or Purchase Price. The exercise or purchase price,
if any, for an Award shall be as follows:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time of the grant of such Incentive
Stock 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,
- 5 -
<PAGE>
the per Share exercise price shall be not less than one hundred ten percent
(110%) of the Fair Market Value per Share on the date of grant; or
(B) granted to any Employee other than an Employee described in the
preceding paragraph, the per Share exercise price shall be not less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Non-Qualified Stock Option, the per Share exercise
price shall be not less than eighty-five percent (85%) of the Fair Market Value
per Share on the date of grant unless otherwise determined by the Administrator.
(iii) In the case of other Awards, such price as is determined by the
Administrator.
(iv) Notwithstanding the foregoing provisions of this Section 7(a), in the
case of an Award issued pursuant to Section 6(d), above, the exercise or
purchase price for the Award shall be determined in accordance with the
principles of Section 424(a) of the Code.
(b) Consideration. Subject to Applicable Laws, the
consideration to be paid for the Shares to be issued upon exercise or purchase
of an Award 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). In addition to any other types of
consideration the Administrator may determine, the Administrator is authorized
to accept as consideration for Shares issued under the Plan the following:
(i) cash;
(ii) check;
(iii) delivery of Grantee's promissory note with such recourse, interest,
security, and redemption provisions as the Administrator determines as
appropriate;
(iv) if the exercise or purchase occurs on or after the Registration Date,
surrender of Shares or delivery of a properly executed form of attestation of
ownership of Shares as the Administrator may require (including withholding of
Shares otherwise deliverable upon exercise of the Award) which have a Fair
Market Value on the date of surrender or attestation equal to the aggregate
exercise price of the Shares as to which said Award shall be exercised (but only
to the extent that such exercise of the Award would not result in an accounting
compensation charge with respect to the Shares used to pay the exercise price
unless otherwise determined by the Administrator);
(v) with respect to Options, if the exercise occurs on or after the
Registration Date, payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (A) shall provide written instructions to a
Company designated brokerage firm to effect the immediate sale of some or all of
the purchased Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (B) shall provide written
directives to the Company to deliver the certificates for the purchased Shares
directly to such brokerage firm in order to complete the sale transaction; or
<PAGE>
(vi) any combination of the foregoing methods of payment.
(c) Taxes. No Shares shall be delivered under the Plan to any
Grantee or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign, federal,
state, or local income and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive Stock
Option. Upon exercise of an Award the Company shall withhold or collect from
Grantee an amount sufficient to satisfy such tax obligations.
(d) Reload Options. In the event the exercise price or tax
withholding of an Option is satisfied by the Company or the Grantee's employer
withholding Shares otherwise deliverable to the Grantee, the Administrator may
issue the Grantee an additional Option, with terms identical to the Award
Agreement under which the Option was exercised, but at an exercise price as
determined by the Administrator in accordance with the Plan.
8. Exercise of Award.
(a) Procedure for Exercise, Rights as a Shareholder.
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<PAGE>
(i) Any Award granted hereunder shall be exercisable at such times and
under such conditions as determined by the Administrator under the terms of the
Plan and specified in the Award Agreement.
(ii) An Award shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Award
by the person entitled to exercise the Award and full payment for the Shares
with respect to which the Award is exercised, including, to the extent selected,
use of the broker-dealer sale and remittance procedure to pay the purchase price
as provided in Section 7(b)(v). Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to Shares subject to an Award, notwithstanding the exercise of an
Option or other Award. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Award. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in the Award Agreement
or Section 10, below.
(b) Exercise of Award Following Termination of Continuous Service.
(i) An Award may not be exercised after the termination date of such Award
set forth in the Award Agreement and may be exercised following the termination
of a Grantee's Continuous Service only to the extent provided in the Award
Agreement.
(ii) Where the Award Agreement permits a Grantee to exercise an Award
following the termination of the Grantee's Continuous Service for a specified
period, the Award shall terminate to the extent not exercised on the last day of
the specified period or the last day of the original term of the Award,
whichever occurs first.
(iii) Any Award designated as an Incentive Stock Option to the extent not
exercised within the time permitted by law for the exercise of Incentive Stock
Options following the termination of a Grantee's Continuous Service shall
convert automatically to a Non-Qualified Stock Option and thereafter shall be
exercisable as such to the extent exercisable by its terms for the period
specified in the Award Agreement.
(c) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Award previously granted, based
on such terms and conditions as the Administrator shall establish and
communicate to the Grantee at the time that such offer is made.
<PAGE>
9. Conditions Upon Issuance of Shares.
(a) Shares shall not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of such
Shares pursuant thereto shall comply with all Applicable Laws, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
(b) As a condition to the exercise of an Award, the Company
may require the person exercising such Award 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
by any Applicable Laws.
10. Adjustments Upon Changes in Capitalization or Corporate Transaction.
(a) Adjustments upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the number of Shares covered
by each outstanding Award, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan, the exercise or purchase price of each
such outstanding Award, as well as any other terms that the Administrator
determines require adjustment shall be proportionately adjusted for (i) any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Shares, or similar transaction affecting the Shares, (ii) any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company, or (iii) as the Administrator may determine in its
discretion, any other transaction with respect to Common Stock to which Section
424(a) of the Code applies or a similar transaction; provided, however that
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 Administrator and its determination shall be final, binding and
conclusive. Except as the Administrator determines, 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 hereof shall be made
with respect to, the number or price of Shares subject to an Award.
- 7 -
<PAGE>
(b) Corporate Transaction. Except as provided otherwise in an
individual Award Agreement, in the event of a Corporate Transaction, each Award
will terminate immediately prior to the specified effective date of the
Corporate Transaction, unless the Award is assumed by the successor corporation
or Parent thereof in connection with the Corporate Transaction.
11. Effective Date and Term of Plan. The Plan shall become effective
upon the earlier to occur of its adoption by the Board or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated. Subject to Section 16, below, and Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.
12. Amendment, Suspension or Termination of the Plan.
(a) The Board may at any time amend, suspend or terminate the
Plan. To the extent necessary to comply with Applicable Laws, the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required.
(b) No Award may be granted during any suspension of the Plan
or after termination of the Plan.
(c) Any amendment, suspension or termination of the Plan
(including termination of the Plan under Section 12, above) shall not affect
Awards already granted, and such Awards shall remain in full force and effect as
if the Plan had not been amended, suspended or terminated, unless mutually
agreed otherwise between the Grantee and the Administrator, which agreement must
be in writing and signed by the Grantee and the Company.
13. Reservation of Shares.
(a) The Company, during the term of the Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
(b) 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.
14. No Effect on Terms of Employment/Consulting Relationship. The Plan
shall not confer upon any Grantee any right with respect to the Grantee's
Continuous Service, nor shall it interfere in any way with his or her right or
the Company's right to terminate the Grantee's Continuous Service at any time,
with or without cause.
<PAGE>
15. No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The Plan
is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement
Income Security Act of 1974, as amended.
16. Shareholder Approval. The grant of Incentive Stock Options under
the Plan shall be subject to approval by the shareholders of the Company within
twelve (12) months before or after the date the Plan is adopted excluding
Incentive Stock Options issued in substitution for outstanding Incentive Stock
Options pursuant to Section 424(a) of the Code. Such shareholder approval shall
be obtained in the degree and manner required under Applicable Laws. The
Administrator may grant Incentive Stock Options under the Plan prior to approval
by the shareholders, but until such approval is obtained, no such Incentive
Stock Option shall be exercisable. In the event that shareholder approval is not
obtained within the twelve (12) month period provided above, all Incentive Stock
Options previously granted under the Plan shall be exercisable as Non-Qualified
Stock Options.
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EXHIBIT 4.2
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATIONS BEING OBTAINED, UNLESS THE SALE
IS SO EXEMPT.
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.
HAGGLE ONLINE, INC.
IMMEDIATELY EXERCISABLE
NONQUALIFIED STOCK OPTION AGREEMENT
Haggle Online, Inc. (the "Company"), a California corporation, hereby
grants to James Zaun (the "Optionee"), an option to purchase a total of 3200
shares of common stock of the Company at the option price of $1.22 per share and
in the manner, and subject to the provisions of this Agreement (the "Option").
This is a nonqualified stock option and shall not be treated as an incentive
stock option as described in section 422 of the Code.
1. Administration. All questions of interpretation concerning this Option
Agreement shall be determined by the Company's Board of Directors (the
"Board") and/or by a duly appointed committee of the Board having such
powers as shall be specified by the Board. Any officer of the Company
shall have the authority to act on behalf of the Company with respect
to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided
the officer has apparent authority with respect to such matter, right,
obligation, or election.
2. Exercise of the Option.
(a) Right to Exercise. The Option shall be immediately exercisable in its
entirety.
(b) Method of Exercise. The Option shall be exercisable by written notice
in the form attached hereto as Exhibit 1 which shall state the election to
exercise the Option, the number of shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares as may be required by the
Company pursuant to the provisions of this Option Agreement. Such written notice
shall be signed by the Optionee and shall be delivered in person or by certified
mail to the Treasurer of the company prior to the expiration of the term of the
Option as set forth in section 4 below and full payment of the option price for
the number of shares being purchased (1) in cash, (2) by tender of stock of the
Company which (a) either has been owned by the Optionee for more than six (6)
months or was not acquired, directly or indirectly from the Company, and (b) has
a fair market value not less than the option price, (3) by Immediate Sales
Proceeds, as defined below, or (4) by such other consideration as may have been
approved by the Board at the time the Option was granted. "Immediate Sales
Proceeds" shall mean the assignment in form acceptable to the Company of the
proceeds of a sale of some or all of the shares acquired upon the exercise of
the Option pursuant to a program and/or procedure approved by the Company
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System). The Company reserves, at any and all
time, the right, in the Company's sole and absolute discretion, to decline to
approve any such program and/or procedure.
<PAGE>
(c) Withholding. At the time the Option is exercised, in whole or in part
or at any time thereafter as requested by the Company, the Optionee shall make
adequate provision for federal and state income tax withholding obligations of
the Company, if any, which arise upon exercise, in whole or in part, of the
Option.
(d) Certificate Registration. The certificate or certificates for the
shares as to which the Option shall be exercised shall be registered in the name
of the person or persons exercising the Option.
- 1 -
<PAGE>
(e) Restriction on Grant or Option and Issuance of Shares. The grant of the
Option and the issuance of shares pursuant to the Option shall be subject to
compliance with all applicable requirements of federal or state law. The Option
may not be exercised if the issuance of shares upon such exercise would
constitute a violation of any applicable federal or state securities laws or
other law or regulations. As a condition to exercise of the Option, the Company
may require the Optionee to make any representation or warranty to the Company
as may be required by any applicable law or regulation. The Company may at any
time place legends referring to any applicable federal and/or state securities
restrictions on all certificates representing shares of stock subject to the
provisions of this Agreement.
(f) Fractional Shares. The Company shall not be required to issue
fractional shares upon the exercise of the Option.
3. Non-Transferability of the Option. The Option may not be transferred in
any manner otherwise 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.
4. Termination of the Option.
(a) Option Term. The Option may not be exercised after five
(5) years from the date of grant of the Option set forth below (the "Option Term
Date"), and may be exercised during such period only in accordance with the
terms of the Option as set forth in this Option Agreement.
5. Transfer of Control.
(a) a merger in which the Company is not the surviving corporation;
(b) The sale or exchange by the stockholders of the Company of more than
fifty percent (50%) of the voting stock of the Company where the stockholders of
the Company before such sale or exchange do not retain, directly or indirectly
at least a majority of the beneficial interest in the voting stock of the
Company; or
(c) the sale of all or substantially all of the Company's assets (other
than a sale or transfer to a subsidiary of the Company as defined in section
424(f) of the Code).
In the event of a Transfer of Control, the surviving, continuing,
successor, or purchasing corporation, as the case may be (the "Acquiring
Corporation"), may assume the Company's rights and obligations under this Option
Agreement. The Option shall terminate effective as of the date of the Transfer
of Control to the extent that the Option is neither assumed by the Acquiring
Corporation nor exercised as of the date of the Transfer of Control.
6. Effect of Transfer of Stock Subject to the Option. Appropriate
adjustments shall be made in the number, exercise price ad class of
shares of stock subject to the Option in the event of a stock dividend,
stock split, reverse stock split, combination, reclassification or like
change in the capital structure of the Company.
7. Rights as a Stockholder. The Optionee shall have no rights as a
stockholder with respect to any shares covered by the Option until the
date of the issuance of a stock certificate(s) for the shares for which
the Option has been exercised. No adjustment shall be made for
dividends or distributions or other rights for which the record date is
prior to the date such stock certificates(s) are issued, except as
provided in paragraph 6.
<PAGE>
8. Binding Effect. This Option Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
9. Amendment or Termination. The Board may at any time amend or terminate
the Plan and/or the Option; provided, however, that no such amendment
or termination may adversely affect the Option or any unexercised
portion hereof without the consent of the Optionee.
10. Right of First Refusal.
(a) Except as provided in this Section 10, in the event the
Optionee, the Optionee's legal representative or other holder of shares acquired
upon exercise of the Option proposes to sell, exchange, transfer, pledge, or
otherwise dispose of any Option Shares (the "Transfer Shares") to any person or
entity, including, without limitation, any stockholder of a participating
Company, the Company shall have the right repurchase the Transfer Shares under
the terms and subject to the conditions set forth in this Section 10 (the "Right
of First Refusal").
- 2 -
<PAGE>
(b) Prior to any proposed transfer of the Transfer Shares, the
Optionee shall deliver written notice (the "Transfer Notice") to the Company
describing fully the proposed transfer, including the number of Transfer Shares,
the name and address of the proposed transfer (the "Proposed Transferee") and,
if the transfer is voluntary, the proposed transfer price, and containing such
information necessary to show the bona fide nature of the proposed transfer. In
the event of a bona fide gift or involuntary transfer, the proposed transfer
price shall be deemed to be the fair market value of the Transfer Shares, as
determined by the Board in good faith. If the Optionee proposes to transfer any
Transfer Shares to more than one Proposed Transferee, the Optionee shall provide
a separate Transfer Notice for the proposed transfer to each Proposed
Transferee. The Transfer Notice shall be signed by both the Optionee and the
Proposed Transferee and must constitute a binding commitment of the Optionee and
the Proposed Transferee for the transfer of the Transfer Shares to the Proposed
Transferee subject only to the Right of First Refusal.
(c) If the Company determines that the information provided by
the Optionee in the Transfer Notice is insufficient to establish the bona fide
nature of a proposed voluntary transfer, the Company shall give the Optionee
written notice of the Optionee's failure to comply with the procedure described
in this Section 10, and the Optionee shall have no right to transfer the
Transfer Shares without first complying with the procedure described in this
Section 10. The Optionee shall not be permitted to transfer the transfer Shares
if the proposed transfer is not bona fide.
(d) If the Company determines the proposed transfer to be bona
fide, the Company shall have the right to purchase all, but not less than all,
of the Transfer Shares (except as the Company and the Optionee otherwise agree)
at the purchase price and on the terms set forth in the Transfer Notice by
delivery to the Optionee of a notice of exercise of the Right of First Refusal
within thirty (30) days after the date the Transfer Notice is delivered to the
Company. The Company's exercise or failure to exercise the Right of First
Refusal with respect to any proposed transfer described in a Transfer Notice
shall not affect the Company's right to exercise the Right of First Refusal with
respect to any proposed transfer described in any other Transfer Notice, whether
or not such other Transfer Notice is issued by the Optionee or issued by a
person other than the Optionee with respect to a proposed transfer to the same
Proposed Transferee. If the Company exercises the Right of First Refusal, the
Company and the Optionee shall thereupon consummate the sale of the Transfer
Shares to the Company on the terms set forth in the Transfer notice within sixty
(60) days after the date the transfer Notice is delivered to the Company (unless
a longer period is offered by the Proposed Transferee); provided, however, that
in the event the Transfer Notice provides for the payment for the Transfer
Shares other than in cash, the Company shall have the option of paying for the
Transfer Shares by the present value cash equivalent of the consideration
described in the Transfer Notice as reasonably determined by the Company. For
purposes of the foregoing, cancellation of any indebtedness of the Optionee to
any participating Company shall be treated as payment to the Optionee in cash to
the extent of the unpaid principal and any accrued interest canceled.
(e) If the Company fails to exercise the Right of First
Refusal in full (or to such lesser extent as the Company and the Optionee
otherwise agree) within the period specified in this Section 10, the Optionee
may conclude a transfer to the Proposed Transferee of the Transfer Shares on the
terms and conditions described in the Transfer Notice, provided such transfer
occurs not later than ninety (90) days following delivery to the Company of the
Transfer Notice. The Company shall have the right to demand further assurances
from the Optionee and the Proposed transferee (in a form satisfactory to the
Company) that the transfer of the Transfer Shares was actually carried out on
the terms and conditions described in the Transfer Notice. No Transfer Shares
shall be transferred on the books of the Company until the company has received
such assurances, if so demanded, and has approved the proposed transfer as bona
fide. Any proposed transfer on terms and conditions different from those
described in the Transfer Notice, as well as any subsequent proposed transfer by
the Optionee, shall again be subject to the Right of First Refusal and shall
require compliance by the Optionee with the procedure described in this Section
10.
<PAGE>
(f) All transferees of the Transfer Shares or any interest
therein, other than the Company, shall be required as a condition of such
transfer to agree in writing (in a form satisfactory to the Company) that such
transferee shall receive and hold such Transfer Shares or interest therein
subject to all of the terms and conditions of this Option Agreement, including
this Section 10 providing for the Right of First Refusal with respect to any
subsequent transfer. Any sale or transfer of any shares acquired upon exercise
of the Option shall be void unless the provisions of this Section 10 are met.
(g) The Right of First Refusal shall not apply to any transfer
or exchange of the shares acquired upon exercise of the Option if such transfer
or exchange is in connection with an Transfer of Control. If the consideration
received pursuant to such transfer or exchange consists of stock of a
Participating Company, such considerations shall remain subject to the Right of
First Refusal unless the provisions of this Section 10 result in a termination
of the Right of First Refusal.
(h) The Company shall have the right to assign the Right of
First Refusal at any time whether or not there has been an attempted transfer,
to one or more persons as may be selected by the Company.
(i) The other provisions of this Option Agreement
notwithstanding, the Right of First Refusal shall terminate and be of no further
force and effect upon (a) the occurrence of a Transfer of Control, unless the
Acquiring Corporation assumes the
- 3 -
<PAGE>
Company's rights and obligations under the Option or substitutes a substantially
equivalent option for the Acquiring Corporation's stock for the Option, or (b)
the existence of a public market for the class of shares subject to the Right of
First Refusal. A "Public Market" shall be deemed to exist if (i) such stock is
listed on a national securities exchange (as that term is used in the Exchange
Act) or (ii) such stock is traded on the over-the-counter market and prices
therefor are published daily on business days in a recognized financial journal.
DATE OF GRANT: March 31, 1999
HAGGLE ONLINE, INC.
BY:
Title:
Optionee represents that Optionee is familiar with the terms and
provisions of this Option Agreement and hereby accepts the Option subject to all
of the terms and provisions thereof. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under this Option Agreement.
------------------------------
James Zaun
- 4 -
EXHIBIT 4.3
FORM OF OPTION
THE SECURITIES REPRESENTED BY THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT. ANY SUCH OFFER, SALE, ASSIGNMENT OR TRANSFER MUST ALSO
COMPLY WITH THE APPLICABLE STATE SECURITIES LAWS.
IQC CORPORATION
Option to Purchase Common Stock
Registered Holder:
Number of Shares:
Date of Issuance:
IQC Corporation, a California corporation (the "Company"), hereby
certifies that the registered holder hereof or his/hers permitted assigns, is
entitled, subject to the terms set forth below, to purchase from the Company
upon surrender of this Option, at any time or times on or after the date hereof,
but not after 11:59 P.M. Pacific Time on the Expiration Date (as defined herein)
__________ fully paid on assessable shares of Common Stock (as defined herein)
(the "Option Shares") at the Option Exercise Price provided in Section 1(b)
below.
Section 1. Definitions
Definitions. The following words and terms as used in this Option
shall have the following meanings:
(i) "Common Stock" means (i) the Company's common stock, no par value,
and (ii) any capital stock into which such Common Stock shall have been changed
or any capital stock resulting from a reclassification of such Common Stock.
(ii) "Convertible Securities" means any stock or securities (other than
Options) directly or indirectly convertible into or exchangeable for Common
Stock.
(iii) "Expiration Date" means __________ or, if such date fails on a
Saturday, Sunday or other day on which banks are required or authorized to be
closed in the City of Los Angeles or the State of California or on which trading
does not take place on the principal exchange, market or automated quotation
system on which the Common Stock is traded, if any (a "Holiday"), the next date
that is not a Holiday.
(iv) "Options" means any rights, Options or options to subscribe for or
purchase Common Stock or Convertible Securities. The Options shall be
nonqualified options not intended to meet the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended.
(v) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
(vi) "Securities Act" means the Securities Act of 1933, as amended.
(vii) "Option Exercise Price" shall be equal to ten cents ($0.10) per
share.
(viii) "Exercise Notice" shall mean the written notice in the form of
the subscription notice attached as Exhibit "A" hereto.
(ix) "Aggregate Exercise Price" shall mean an amount equal to the
Option Exercise Price multiplied by the number of Option Shares as to which the
Option is being exercised (plus any applicable issue or transfer taxes).
Section 2. Exercise of Option.
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<PAGE>
(a) Subject to the terms and conditions hereof, this Option may be
exercised by the holder hereof then registered on the books of the Company, in
whole or in part, at any time on any business day on or after the opening of
business on the date hereof and prior to 11:59 P.M. Pacific Time on the
Expiration Date by (i) delivery of the written Exercise Notice of such holder's
election to exercise this Option, which notice shall specify the number of
Option Shares to be purchased, (ii) payment to the Company of the Aggregate
Exercise Price in cash or by check or wire transfer, and (iii) the surrender to
a common carrier for delivery to the Company as soon as practicable following
such date, this Option (or an indemnification undertaking with respect to this
Option in the case of its loss, theft or destruction); provided, that if such
Option Shares are to be issued in any name other than that of the registered
holder of this Option, such issuance shall be deemed a transfer and the
provisions of Section 6 shall be applicable. In the event of any exercise of the
rights represented by this Option in compliance with this Section 2(a), a
certificate or certificates for the Option Shares so purchased, in such
denominations as may be requested by the holder hereof and registered in the
name of, or as directed by, the holder, shall be delivered at the Company's
expense to, or as directly by, such holder as soon as practicable after the
Company's receipt of the Exercise Notice, the Aggregate Exercise Price and this
Option (or an indemnification undertaking in customary form with respect to this
Option in the case of its loss, theft or destruction). Upon delivery of the
Exercise Notice and Aggregate Exercise Price referred to in clauses (i) and (ii)
above, the holder of this Option shall be deemed for all corporate purposes to
have become the holder of record of the Option Shares with respect to which this
Option has been exercised, irrespective of the date of delivery of this Option
as required by clause (iii) above or the certificates evidencing such Option
Shares.
(b) Unless the rights represented by this Option shall have expired or
shall have been fully exercised, the Company shall, as soon as practicable after
any exercise, issue a new Option identical in all respects to this Option
exercised except it shall represent rights to purchase the number of Option
Shares purchasable immediately prior to such exercise under this Option
exercised, less the number of Option Shares with respect to which such Option is
exercised.
(c) No fractional shares of Common Stock are to be issued upon the
exercise of this Option, but rather the number of shares of Common Stock issued
upon exercise of this Option shall be rounded up or down to the nearest whole
number
(d) The holder of this Option may, at its election exercised in its
sole discretion, exercise this Option in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company upon such
exercise in payment of the Aggregate Exercise Price, elect instead to receive
upon such exercise the "Net Number" of shares of Common Stock determined
according to the following formula:
Net Number = (AxB) - (AxC)
B
For purposes of the foregoing formula:
A= the total number shares with respect to which this Option
is then being exercised.
B= the Closing Sale Price of the Common Stock on the date
immediately preceding the date of the Exercise Notice.
C= the Option Exercise Price then in effect at the time of
such exercise.
<PAGE>
Section 3. Covenants as to Common Stock. The Company hereby
covenants and agrees as follows:
(a) This Option is, and any Options issued in substitution for or
replacement of this Option will upon issuance be, duly authorized and validly
issued.
(b) All Option Shares which may be issued upon the exercise of the
rights represented by this Option will, upon issuance, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof.
(c) During the period within which the rights represented by this
Option may be exercised, the Company will at all times have authorized and
reserved at least 100% of the number of shares of Common Stock needed to provide
for the exercise of the rights then represented by this Option and the par value
of said shares will at all times be less than or equal to the applicable Option
Exercise Price.
(d) This Option will be binding upon any entity succeeding to the
Company by merger, consolidation or acquisition of all or substantially all of
the Company's assets.
Section 4. Option Holder Not Deemed a Stockholder. Except as otherwise
specifically provided herein, no holder, as such, of this Option shall be
entitled to vote or receive dividends or be deemed the holder of shares of the
Company for any purpose,
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<PAGE>
not shall anything contained in this Option be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the holder of
this Option of the Option Shares which he or she is then entitled to receive
upon the due exercise of this Option. In addition, nothing contained in this
Option shall be construed as imposing any liabilities on such holder to purchase
any securities (upon exercise of this Option or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 4, the Company will
provide the holder of this Option with copies of the same notices and other
information given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.
Section 5. Representations of Holder. The holder of this Option, by the
acceptance hereof, represents that it is acquiring this Option and the Option
Shares for its own account for investment purposes only and not with a view
towards, or for resale in connection with, the public sale or distribution of
this Option or the Option Shares, except pursuant to sales registered or
exempted under the Securities Act. Upon exercise of this Option, the holder
shall, if requested by the Company, confirm in writing, in a form satisfactory
to the Company, that the Option Shares so purchased are being acquired solely
for the holder's own account and not as a nominee for any other party. If such
holder cannot make such representations because they would be factually
incorrect, it shall be a condition to such holder's exercise of this Option that
the Company receive such other representations as the Company considers
reasonably necessary to assure the Company that the issuance of its securities
upon exercise of this Option shall not violate any United States, state
securities or other laws. The holder of this Option acknowledges that the Option
Shares may be subject to dilution in the event the Company issues additional
shares of Common Stock.
Section 6. Ownership and Transfer.
(a) This Option and the rights granted to the holder hereof are
non-transferable, in whole or in part, other than by the laws of descent and
distribution, and shall become null and void upon any attempted assignment or
transfer, except as provided herein.
(b) The holder of this Option understands that the Common Stock
issuable upon exercise of this Option has not been and is not expected to be,
registered under the Securities Act or any state securities laws, and may not be
offered for sale, sold assigned or transferred unless: (a) subsequently
registered thereunder; or (b) such holder shall have delivered to the Company an
opinion of counsel, in generally acceptable form, to the effect that the
securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration; provided that: (i)
any sale of such securities made in reliance on Rule 144 promulgated under the
Securities Act may be made only in accordance with the terms of said Rule and
further, if said Rule is not applicable, a resale of such securities under
circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act
or the rules and regulations of the Securities and Exchange Commission
thereunder; and (ii) neither the Company nor any other person is under any
obligation to register the Options under the Securities Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder.
<PAGE>
Section 7. Adjustment of Option Exercise Price and Number of Shares.
The Option Exercise Price and the number of shares of Common Stock issuable upon
exercise of this Option shall be adjusted from time to time if the Company at
any time after the date of issuance of this Option subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Option
Exercise Price in effect immediately prior to such subdivision will be
proportionately reduced and the number of shares of Common Stock obtainable upon
exercise of this Option will be proportionately increased. If the Company at any
time after the date of issuance of this Option combines (by combination, reverse
stock split or otherwise) one or more classes of its outstanding shares of
Common Stock into a smaller number of shares, the Option Exercise Price in
effect immediately prior to such combination will be proportionately increased
and the number of shares of Common Stock obtainable upon exercise of this Option
will be proportionately decreased.
Section 8. Lost, Stolen, Mutilated or Destroyed Option. If this Option
is lost, stolen, mutilated or destroyed, the Company shall, on receipt of an
indemnification undertaking, issue a new Option of like denomination and tenor
as this Option so lost, stolen, mutilated or destroyed.
Section 9. Notice. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this Option
must be in writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); (iii) one business day after deposit with a
nationally recognized overnight delivery service when sent by one business day
overnight; or (iv) five days after sent by U.S. certified mail return receipt
requested.
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<PAGE>
Section 10. Amendments. This Option and any term hereof may be changed,
waived, discharged, or terminated only by an instrument in writing signed by the
party or holder hereof against which enforcement of such change, waiver,
discharge or termination is sought.
Section 11. Date. The date of this Option is __________.
This Option, in all events, shall be wholly void and of no effect after the
close of business on the Expiration Date.
Section 12. Descriptive Headings; Governing Law. The descriptive
headings of the several Sections and paragraphs of this Option are inserted for
convenience only and do not constitute a part of this Option. The corporate laws
of the State of California shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Option shall be
governed by the internal laws of the State of California, without giving effect
to any choice of law or conflict of law provision or rule that would cause the
application of the laws of any jurisdictions other than the State of California.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Option to be duly
executed and delivered as of the day and year first written above.
IQC CORPORATION
By: _________________________
Name: _______________________
Title: ________________________
Accepted by the undersigned holder on
____________________, 199 __
- ------------------------------
Print Name:
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<PAGE>
EXHIBIT A TO OPTION
EXERCISE NOTICE
The undersigned hereby notifies IQC CORPORATION, formerly known as I.
Q. NET CORP., a California corporation ("Company"), of its exercise of their
option to purchase __________ shares of common stock of the Company.
Date: ____________________
- ------------------------------
Print Name: ____________________
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EXHIBIT 5.1
OPINION OF COUNSEL
Hutchins, Wheeler & Dittmar, A Professional Corporation
July 13, 1999
Go2Net, Inc.
999 Third Avenue, Suite 4700
Seattle, WA 98104
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by Go2Net, Inc. (the "Company") with the Securities and
Exchange Commission (the "Commission") on or about July 13, 1999 in connection
with the registration under the Securities Act of 1933, as amended, of a total
of (i) 101,825 shares of the Company's Common Stock reserved for issuance under
the Company's assumed Authorize.Net Corporation 1999 Stock Incentive Plan (the
"Plan"); (ii) 64 shares of the Company's Common Stock reserved for issuance
under the Company's assumed Haggle Online, Inc. Stock Option Agreement (the
"Haggle Agreement"); and (iii) 70,570 shares of the Company's Common Stock
reserved for issuance under the Company's assumed IQC Corporation Stock Option
Agreements (the "IQC Agreements"). As the Company's legal counsel in connection
with this transaction, we have examined the proceedings taken and are familiar
with the proceedings proposed to be taken by the Company in connection with the
sale and issuance of the foregoing shares under the Plan, the Haggle Agreement
and the IQC Agreements, respectively (collectively, the "Shares").
Based upon the foregoing, and having regard for such legal considerations as we
deem relevant, we are of the opinion that the Shares, when issued and sold in
the manner described in the Registration Statement will be legally and validly
issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the references to us under the caption "Interests of Named
Experts and Counsel" in the Registration Statement, including the Prospectus
constituting a part thereof, and in any amendment thereto.
Very truly yours,
/s/Hutchins, Wheeler & Dittmar
HUTCHINS, WHEELER & DITTMAR,
A Professional Corporation
EXHIBIT 23.1
Consent of Ernst & Young LLP
Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the the Authorize.Net Corporation 1999 Stock Incentive
Plan, the Haggle Online, Inc. Stock Option Agreement and the IQC Corporation
Stock Option Agreement of our report dated November 9, 1998 with respect to the
financial statements Go2Net, Inc. included in its Annual Report (Form 10-K) for
the year ended September 30, 1998 filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Seattle, Washington
July 13, 1999
