<PAGE> 1
As filed with the Securities and Exchange Commission on December 1, 1999
Registration No. 333-____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------
TICKETS.COM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1424841
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
555 ANTON BOULEVARD, 12TH FLOOR
COSTA MESA, CALIFORNIA 92626
(Address of principal executive offices) (Zip Code)
----------
1999 STOCK INCENTIVE PLAN
1999 EMPLOYEE STOCK PURCHASE PLAN
TICKETS.COM, INC. 1998 STOCK PLAN
TICKETSLIVE CORPORATION AMENDED AND RESTATED STOCK AWARD AND INCENTIVE PLAN
OPTIONS/WARRANTS GRANTED TO CERTAIN INDIVIDUALS
(Full title of the Plans)
----------
W. THOMAS GIMPLE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TICKETS.COM, INC.
555 ANTON BOULEVARD, 12TH FLOOR
COSTA MESA, CALIFORNIA 92626
(Name and address of agent for service)
(714) 327-5400
(Telephone number, including area code, of agent for service)
----------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================================
Proposed Proposed
Amount to be Maximum Offering Maximum Aggregate Amount of
Title of Securities to be Registered Registered(1) Price per Share Offering Price Registration Fee
- ------------------------------------ ------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
1999 Stock Incentive Plan
- -------------------------
Common Stock, $0.001 par value 10,506,313 shares $20.0625(2) $ 210,782,904(2) $55,646.69
1999 Employee Stock Purchase Plan
- ---------------------------------
Common Stock, $0.001 par value 666,667 shares $20.0625(2) $13,375,006.69(2) $ 3,531.01
Tickets.com, Inc. 1998 Stock Plan
- ---------------------------------
Common Stock, $0.001 par value 248,881 shares $ 0.5523(3) $ 137,485(3) $ 36.30
TicketsLive Corporation
Amended and Restated Stock
Award and Incentive Plan
- ------------------------
Common Stock, $0.001 par value 579,915 shares $ 1.2906(3) $ 613,992(3) $ 162.10
Options/Warrants
Granted to Certain Individuals(4)
- ---------------------------------
Common Stock, $0.001 par value 144,140 shares $ 2.831 (5) $ 408,060.34(5) $ 107.73
----------------- ----------
12,145,916 shares
=================
Aggregate Registration Fee $59,483.83
==========
===========================================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Employee Stock Purchase
Plan, the 1999 Stock Incentive Plan, the Tickets.Com 1998 Stock Plan,
the TicketsLive Corporation Amended and Restated Stock Award and
Incentive Plan and the Options and Warrants by reason of any stock
dividend, stock split, recapitalization or other similar transaction
effected without the Registrant's receipt of consideration which
results in an increase in the number of the outstanding shares of
Registrant's Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, on the basis of the average
of the high and low selling prices per share of Registrant's Common
Stock on November 29, 1999, as reported by the Nasdaq National
Market.
(3) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, on the basis of the weighted
average exercise price per share in effect for the outstanding
options under the Tickets.Com 1998 Stock Plan and the TicketsLive
Corporation Amended and Restated Stock Award and Incentive Plan.
(4) The options and warrants were granted pursuant to written
compensation agreements to the following individuals in the
Registrant's service: Pat Magnarella, Andrew Klein, Jay Coleman, Jeff
Kwatinez, Lisa Hendricks, Michael Green, Neal Tomblyn, David A.
Riley, Irwin L. Kwatek and Albert Shvartsman.
(5) Calculated solely for the purposes of this offering under Rule 457(h)
of the 1933 Act, as amended, on the basis of the weighted average
exercise price of $2.831 per share in effect for the
options/warrants.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Tickets.com, Inc. (the "Registrant") hereby incorporates by reference
into this Registration Statement the following documents previously filed with
the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Registration Statement No. 333-79709 on Form
S-1 filed with the Commission on June 1, 1999, together with
the amendments thereto on Form S-1/A filed with the Commission
on June 22, 1999; September 22, 1999; October 19, 1999;
November 1, 1999; and November 3, 1999, respectively;
(b) The Registrant's prospectus filed with the Commission on
November 4, 1999, pursuant to Rule 424(b) promulgated under
the Securities Act of 1933, as amended (the "1933 Act"), in
connection with the Registrant's Registration Statement No.
333-79709, in which there is set forth the audited financial
statements for the Registrant's fiscal year ended December 31,
1998; and
(c) The Registrant's Registration Statement on Form 8-A12G filed
with the Commission on November 1, 1999, in which are
described the terms, rights and provisions applicable to the
Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act") after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which de-registers all securities
then remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits
indemnification of officers and directors of the Registrant under certain
conditions and subject to certain limitations. Section 145 of the Delaware
General Corporation Law also provides that a corporation has the power to
purchase and maintain insurance on behalf of its officers and directors against
any liability asserted against such person and incurred by him or her in such
capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against such liability
under the provisions of Section 145 of the Delaware General Corporation Law.
II-1
<PAGE> 3
Article VII, Section I of the Restated Bylaws of the Registrant
provides that the Registrant shall indemnify its directors and executive
officers to the fullest extent not prohibited by the Delaware General
Corporation Law. The rights to indemnity thereunder continue as to a person who
has ceased to be a director, officer, employee or agent and inure to the benefit
of the heirs, executors and administrators of the person. In addition, expenses
incurred by a director or executive officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding by reason of the fact
that he or she is or was a director or officer of the Registrant (or was serving
at the Registrant's request as a director or officer of another corporation)
shall be paid by the Registrant in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
that director or officer to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the Registrant as
authorized by the relevant section of the Delaware General Corporation Law.
As permitted by Section 102(b)(7) of the Delaware General Corporation
Law, Article V, Section (A) of the Registrant's Restated Certificate of
Incorporation provides that a director of the Registrant shall not be personally
liable for monetary damages for breach of fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to the
Registrant or its stockholders, (ii) for acts or omissions not in good faith or
acts or omissions that involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for
any transaction from which the director derived any improper personal benefit.
The Registrant has entered into indemnification agreements with each of
its directors and executive officers. Generally, the indemnification agreements
attempt to provide the maximum protection permitted by Delaware law as it may be
amended from time to time. Moreover, the indemnification agreements provide for
certain additional indemnification. Under such additional indemnification
provisions, however, an individual will not receive indemnification for
judgments, settlements or expenses if he or she is found liable to the
Registrant (except to the extent the court determines he or she is fairly and
reasonably entitled to indemnity for expenses), for settlements not approved by
the Registrant or for settlements and expenses if the settlement is not approved
by the court. The indemnification agreements provide for the Registrant to
advance to the individual any and all reasonable expenses (including legal fees
and expenses) incurred in investigating or defending any such action, suit or
proceeding. In order to receive an advance of expenses, the individual must
submit to the Registrant copies of invoices presented to him or her for such
expenses. Also, the individual must repay such advances upon a final judicial
decision that he or she is not entitled to indemnification.
The Registrant has purchased liability insurance for its directors and
officers. The Registrant intends to enter into additional indemnification
agreements with each of its directors and executive officers to effectuate these
indemnity provisions.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
Exhibit Number Exhibit
-------------- -------
4 Instruments Defining the Rights of Stockholders. Reference is
made to Registrant's Registration Statement No. 000-27893 on
Form 8-A12G, together with any exhibits thereto, which are
incorporated herein by reference pursuant to Item 3(c) to this
Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP, Independent Public
Accountants.
23.2 Consent of KPMG LLP.
23.3 Consent of Burr, Pilger & Meyer.
23.4 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to the Signature Page of
this Registration Statement.
99.1 1999 Stock Incentive Plan.
99.2 1999 Employee Stock Purchase Plan.
99.3 Form of Warrant to Purchase Common Stock Granted to Certain
Individuals.
99.4 Form of Option to Purchase Common Stock Granted to Certain
Individuals.
99.5 Tickets.com, Inc. 1998 Stock Plan.
99.6 Form of Tickets.com, Inc. Stock Option Agreement.
99.7 TicketsLive Corporation Amended and Restated Stock Award and
Incentive Plan.
99.8 Form of TicketsLive Corporation Stock Option Agreement.
II-2
<PAGE> 4
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file, during
any period in which offers or sales are being made, a post-effective amendment
to this Registration Statement: (i) to include any prospectus required by
Section 10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts or
events arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall
not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 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 the Registrant's 1999
Stock Incentive Plan and Employee Stock Purchase Plan, the assumed Tickets.Com
1998 Stock Plan and TicketsLive Corporation Amended and Restated Stock Award and
Incentive Plan and the Options/Warrants granted to certain individuals.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item 6 or
otherwise, the Registrant has been advised that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
1933 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 1933 Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Costa Mesa, State of California on this 30th day
of November, 1999.
TICKETS.COM, INC.
By: /s/ W. THOMAS GIMPLE
-------------------------------------
W. Thomas Gimple
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Tickets.com, Inc., a
Delaware corporation, do hereby constitute and appoint W. Thomas Gimple and John
M. Markovich and each of them, the lawful attorneys-in-fact and agents with full
power and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and any one of them, determine may
be necessary or advisable or required to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments, both
pre-effective and post-effective, and supplements to this Registration
Statement, and to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or supplements
thereof, and each of the undersigned hereby ratifies and confirms that all said
attorneys and agents, or any one of them, shall do or cause to be done by virtue
hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ C. IAN SYM-SMITH Chairman of the Board November 30, 1999
- ----------------------------------------
C. Ian Sym-Smith
/s/ W. THOMAS GIMPLE President, Chief Executive Officer November 30, 1999
- ---------------------------------------- (Principal Executive Officer) and Director
W. Thomas Gimple
/s/ JOHN M. MARKOVICH Chief Financial Officer (Principal November 30, 1999
- ---------------------------------------- Financial Officer)
John M. Markovich
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ GEORGE BELL Director November 30, 1999
- ----------------------------------------
George Bell
/s/ JAMES A. CACCAVO Director November 30, 1999
- ----------------------------------------
James A. Caccavo
/s/ PETER CHERNIN Director November 30, 1999
- ----------------------------------------
Peter Chernin
Director November 30, 1999
- ----------------------------------------
Christos M. Cotsakos
/s/ WILLIAM E. FORD Director November 30, 1999
- ----------------------------------------
William E. Ford
/s/ HOWARD L. MORGAN Director November 30, 1999
- ----------------------------------------
Howard L. Morgan
/s/ JANICE L. RICHTER Director November 30, 1999
- ----------------------------------------
Janice L. Richter
/s/ NICOLAS E. SINACORI Director November 30, 1999
- ----------------------------------------
Nicolas E. Sinacori
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<C> <S>
4 Instruments Defining the Rights of Stockholders. Reference is
made to Registrant's Registration Statement No. 000-27893 on
Form 8-A12G, together with any exhibits thereto, which are
incorporated herein by reference pursuant to Item 3(c) to this
Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP, Independent Public
Accountants.
23.2 Consent of KPMG LLP.
23.3 Consent of Burr, Pilger & Meyer.
23.4 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to the Signature Page of
this Registration Statement.
99.1 1999 Stock Incentive Plan.
99.2 1999 Employee Stock Purchase Plan.
99.3 Form of Warrant to Purchase Common Stock Granted to Certain
Individuals.
99.4 Form of Option to Purchase Common Stock Granted to Certain
Individuals.
99.5 Tickets.com, Inc. 1998 Stock Plan.
99.6 Form of Tickets.com, Inc. Stock Option Agreement.
99.7 TicketsLive Corporation Amended and Restated Stock Award and
Incentive Plan.
99.8 Form of TicketsLive Corporation Stock Option Agreement.
</TABLE>
<PAGE> 1
EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
December 1, 1999
Tickets.com, Inc.
555 Anton Boulevard, 12th Floor
Costa Mesa, California 92626
Re: Tickets.com, Inc. - Registration Statement for Offering of an
Aggregate of 12,145,916 Shares of Common Stock
Dear Ladies and Gentlemen:
We have acted as counsel to Tickets.com, Inc., a Delaware corporation
(the "Company"), in connection with the registration on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended, of (i)
12,145,916 shares of the Company's common stock authorized for issuance under
the Company's Employee Stock Purchase Plan and the 1999 Stock Incentive Plan
(collectively, the "Plans"); (ii) an additional 248,881 shares of the Company's
common stock issuable pursuant to outstanding options under the Tickets.com,
Inc. 1998 Stock Plan as assumed by the Company in connection with the Company's
acquisition of Tickets.com, (iii) an additional 579,915 shares of the Company's
common stock issuable pursuant to outstanding options under the TicketsLive
Corporation Amended and Restated Stock Award and Incentive Plan as assumed by
the Company in connection with the Company's acquisition of TicketsLive
Corporation and (iv) an additional 144,140 shares of the Company's common stock
issuable pursuant to stock options and warrants granted to certain individuals
in the Company's service pursuant to their written compensation agreements with
the Company. The clause (i) shares will be hereinafter referred to as the "Plan
Shares," the clause (ii) and clause (iii) shares will be hereinafter referred to
as the "Assumed Plan Shares," and the clause (iv) shares will be hereinafter
referred to as the "Warrant Shares."
This opinion is being furnished in accordance with the requirements of
Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the establishment of the
Plans and the Company's assumption of the Tickets.com 1998 Stock Plan and the
TicketsLive Corporation Amended and Restated Stock Award and Incentive Plan and
the options outstanding thereunder, and we have also reviewed the written
compensation agreements and other documentation evidencing the options and
warrants for the Warrant Shares. Based on such review, we are of the opinion
that, if, as and when the Plan Shares are issued and sold (and the consideration
therefor received) pursuant to (a) the provisions of option agreements or stock
purchase rights duly authorized under the Plans and in accordance with the
Registration Statement, or (b) duly authorized direct stock issuances under the
1999 Stock Incentive Plan and in accordance with the Registration Statement,
such Plan Shares will be duly authorized, legally issued, fully paid and
nonassessable. We are also of the opinion that, if, as and when the Assumed Plan
Shares are issued and sold (and the consideration therefor received) pursuant to
the provisions of option agreements evidencing the outstanding options under the
assumed Tickets.com and TicketsLive Corporation plans specified above and in
accordance with the Registration Statement, such Assumed Plan Shares will be
duly authorized, legally issued, fully paid and nonassessable. Finally we are of
the opinion that, if, as and when the Warrant Shares are issued and sold (and
the consideration therefor received) pursuant to the provisions of the stock
option agreements or warrants covering those Warrant Shares and in accordance
with the Registration Statement, the Warrant Shares will be duly authorized,
legally issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement.
<PAGE> 2
This opinion letter is rendered as of the date first written above and
we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Plan Shares, the Assumed Plan Shares and the Warrant Shares.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
-----------------------------------
Brobeck, Phleger & Harrison LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Tickets.com, Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 (dated 12/1/99) of our
reports dated (1) May 17, 1999 except for Note 12 for which the date is May 28,
1999 for Tickets.com, Inc. and subsidiaries, (2) January 30, 1998 for Bay Area
Seating Service, Inc., (3) May 17, 1999 for ProTix, Inc., and (4) May 17, 1999
for California Tickets.com, Inc. included on Form S-1 Registration Statement
File No. 333-79709 dated November 4, 1999 and to all references to our Firm
included in this registration statement.
ARTHUR ANDERSEN LLP
Orange County, California
November 29, 1999
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
TicketsLive Corporation:
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Tickets.com, Inc., of our report dated June 12, 1998, relating to
the consolidated balance sheets of TicketsLive Corporation (formerly Select
Technologies Corporation) and subsidiaries as of April 30, 1997 and 1998, and
the related consolidated statements of operations, redeemable preferred stock,
stockholders' equity (deficit) and comprehensive income (loss), and cash flows
for the years then ended, which report appears in the Tickets.com, Inc.
Registration Statement No. 333-79709 on Form S-1.
/s/ KPMG LLP
--------------------------------------------
KPMG LLP
Syracuse, New York
November 29, 1999
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this
Registration Statement of Tickets.com, Inc. on Form S-8 of our report dated May
15, 1997 for Bay Area Seating Service, Inc., appearing in Tickets.Com, Inc.'s
Registration Statement No. 333-79709 on Form S-1, and to all references to us
included in this registration statement.
BURR, PILGER & MAYER
San Francisco, California
November 30, 1999
<PAGE> 1
EXHIBIT 99.1
TICKETS. COM, INC.
1999 STOCK INCENTIVE PLAN
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 1999 Stock Incentive Plan is intended to promote the interests
of Tickets.com, Inc., a Delaware corporation, by providing eligible persons in
the Corporation's service with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Corporation
as an incentive for them to remain in such service.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into five separate equity programs:
- the Discretionary Option Grant Program under which eligible
persons may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock,
- the Salary Investment Option Grant Program under which
eligible employees may elect to have a portion of their base salary invested
each year in special option grants,
- the Stock Issuance Program under which eligible persons may,
at the discretion of the Plan Administrator, be issued shares of Common Stock
directly, either through the immediate purchase of such shares or as a bonus for
services rendered the Corporation (or any Parent or Subsidiary),
- the Automatic Option Grant Program under which eligible
non-employee Board members shall automatically receive option grants at
designated intervals over their period of continued Board service, and
- the Director Fee Option Grant Program under which non-employee
Board members may elect to have all or any portion of their annual retainer fee
otherwise payable in cash applied to a special stock option grant.
B. The provisions of Articles One and Seven shall apply to all
equity programs under the Plan and shall govern the interests of all persons
under the Plan.
<PAGE> 2
III. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to Section 16 Insiders. Administration of the Discretionary Option Grant
and Stock Issuance Programs with respect to all other persons eligible to
participate in those programs may, at the Board's discretion, be vested in the
Primary Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to all such persons. However, any
discretionary option grants or stock issuances for members of the Primary
Committee shall be made by a disinterested majority of the Board.
B. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time. The Board may also at any time terminate the functions of
any Secondary Committee and reassume all powers and authority previously
delegated to such committee.
C. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Discretionary Option Grant and
Stock Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of those programs and any outstanding options
or stock issuances thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant and Stock Issuance Programs under its jurisdiction or
any option or stock issuance thereunder.
D. The Primary Committee shall have the sole and exclusive authority
to determine which Section 16 Insiders and other highly compensated Employees
shall be eligible for participation in the Salary Investment Option Grant
Program for one or more calendar years. However, all option grants under the
Salary Investment Option Grant Program shall be made in accordance with the
express terms of that program, and the Primary Committee shall not exercise any
discretionary functions with respect to the option grants made under that
program.
E. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.
F. Administration of the Automatic Option Grant and Director Fee
Option Grant Programs shall be self-executing in accordance with the terms of
those programs, and no Plan Administrator shall exercise any discretionary
functions with respect to any option grants or stock issuances made under those
programs.
2.
<PAGE> 3
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option
Grant and Stock Issuance Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of directors
of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. Only Employees who are Section 16 Insiders or other highly
compensated individuals shall be eligible to participate in the Salary
Investment Option Grant Program.
C. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority to determine,
(i) with respect to the option grants under the Discretionary Option Grant
Program, which eligible persons are to receive such grants, the time or times
when those grants are to be made, the number of shares to be covered by each
such grant, the status of the granted option as either an Incentive Option or a
Non-Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the option shares and
the maximum term for which the option is to remain outstanding and (ii) with
respect to stock issuances under the Stock Issuance Program, which eligible
persons are to receive such issuances, the time or times when the issuances are
to be made, the number of shares to be issued to each Participant, the vesting
schedule (if any) applicable to the issued shares and the consideration for such
shares.
D. The Plan Administrator shall have the absolute discretion either
to grant options in accordance with the Discretionary Option Grant Program or to
effect stock issuances in accordance with the Stock Issuance Program.
E. The individuals who shall be eligible to participate in the
Automatic Option Grant Program shall be limited to (i) those individuals serving
as non-employee Board members on the Underwriting Date who have not previously
received an option grant from the Corporation in connection with their Board
service, (ii) those individuals who first become non-employee Board members
after the Underwriting Date, whether through appointment by the Board or
election by the Corporation's stockholders, and (iii) those individuals who
continue to serve as non-employee Board members at one or more Annual
Stockholders Meetings held after the Underwriting Date. A non-employee Board
member who has previously been in the employ of the Corporation (or any Parent
or Subsidiary) shall not be eligible to receive an option grant under the
Automatic Option Grant Program at the time he or she first becomes a
non-employee Board member, but shall be eligible to receive periodic option
grants under the Automatic Option Grant Program while he or she continues to
serve as a non-employee Board member.
3.
<PAGE> 4
F. All non-employee Board members shall be eligible to participate
in the Director Fee Option Grant Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The number of shares of Common Stock initially
reserved for issuance over the term of the Plan shall not exceed 17,500,000
shares. Such reserve shall consist of (i) the number of shares estimated to
remain available for issuance, as of the Plan Effective Date, under the
Predecessor Plans as last approved by the Corporation's stockholders, including
the shares subject to outstanding options under those Predecessor Plans, (ii)
plus an additional increase of approximately 2,500,000 shares to be approved by
the Corporation's stockholders prior to the Underwriting Date.
B. The number of shares of Common Stock available for issuance under
the Plan shall automatically increase on the first trading day of January each
calendar year during the term of the Plan, beginning with calendar year 2000, by
an amount equal to four percent (4%) of the total number of shares of Common
Stock outstanding on the last trading day in December of the immediately
preceding calendar year, but in no event shall any such annual increase exceed
5,000,000 shares.
C. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than 1,000,000 shares of Common Stock in the aggregate per calendar year.
D. Shares of Common Stock subject to outstanding options (including
options incorporated into this Plan from the Predecessor Plan) shall be
available for subsequent issuance under the Plan to the extent (i) those options
expire or terminate for any reason prior to exercise in full or (ii) the options
are cancelled in accordance with the cancellation-regrant provisions of Article
Two. Unvested shares issued under the Plan and subsequently cancelled or
repurchased by the Corporation at the original issue price paid per share,
pursuant to the Corporation's repurchase rights under the Plan shall be added
back to the number of shares of Common Stock reserved for issuance under the
Plan and shall accordingly be available for reissuance through one or more
subsequent option grants or direct stock issuances under the Plan. However,
should the exercise price of an option under the Plan be paid with shares of
Common Stock or should shares of Common Stock otherwise issuable under the Plan
be withheld by the Corporation in satisfaction of the withholding taxes incurred
in connection with the exercise of an option or the vesting of a stock issuance
under the Plan, then the number of shares of Common Stock available for issuance
under the Plan shall be reduced by the gross number of shares for which the
option is exercised or which vest under the stock issuance, and not by the net
number of shares of Common Stock issued to the holder of such option or stock
issuance. Shares of Common Stock underlying one or more stock appreciation
rights exercised under Section IV of Article Two, Section III of Article Three,
Section 11 of Article Five or Section III of Article Six of the Plan shall NOT
be available for subsequent issuance under the Plan.
4.
<PAGE> 5
E. If any change is made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made by the Plan Administrator to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the number and/or class of securities
for which any one person may be granted stock options, separately exercisable
stock appreciation rights and direct stock issuances under the Plan per calendar
year, (iii) the number and/or class of securities for which grants are
subsequently to be made under the Automatic Option Grant Program to new and
continuing non-employee Board members, (iv) the number and/or class of
securities and the exercise price per share in effect under each outstanding
option under the Plan, (v) the number and/or class of securities and price per
share in effect under each outstanding option incorporated into this Plan from
the Predecessor Plan and (vi) the maximum number and/or class of securities by
which the share reserve is to increase automatically each calendar year pursuant
to the provisions of Section V.B of this Article One. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
5.
<PAGE> 6
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon exercise
of the option and shall, subject to the provisions of Section I of Article Seven
and the documents evidencing the option, be payable in one or more of the forms
specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date,
or
(iii) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to
which the Optionee shall concurrently provide irrevocable instructions
to (a) a Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased shares plus
all applicable Federal, state and local income and employment taxes
required to be withheld by the Corporation by reason of such exercise
and (b) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
6.
<PAGE> 7
C. EFFECT OF TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option, but
no such option shall be exercisable after the expiration of the option
term.
(ii) Any option held by the Optionee at the time of death
and exercisable in whole or in part at that time may be subsequently
exercised by the personal representative of the Optionee's estate or by
the person or persons to whom the option is transferred pursuant to the
Optionee's will or the laws of inheritance or by the Optionee's
designated beneficiary or beneficiaries of that option.
(iii) Should the Optionee's Service be terminated for
Misconduct, then all outstanding options held by the Optionee shall
terminate immediately and cease to be outstanding.
(iv) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term,
the option shall terminate and cease to be outstanding for any vested
shares for which the option has not been exercised. However, the option
shall, immediately upon the Optionee's cessation of Service, terminate
and cease to be outstanding to the extent the option is not otherwise at
that time exercisable for vested shares.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service from
the limited exercise period otherwise in effect for that option to such
greater period of time as the Plan Administrator shall deem appropriate,
but in no event beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the
applicable post-Service exercise period, not only with respect to the
number of vested shares of Common Stock for which such option is
exercisable at the time
7.
<PAGE> 8
of the Optionee's cessation of Service but also with respect to one or
more additional installments in which the Optionee would have vested had
the Optionee continued in Service.
D. STOCKHOLDER RIGHTS. The holder of an option shall have no
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. REPURCHASE RIGHTS. The Plan Administrator shall have the
discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase, at the exercise price paid per
share, any or all of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall be established
by the Plan Administrator and set forth in the document evidencing such
repurchase right.
F. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or the laws of inheritance
following the Optionee's death. However, a Non-Statutory Option may, in
connection with the Optionee's estate plan, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate. Notwithstanding the foregoing, the Optionee may also designate
one or more persons as the beneficiary or beneficiaries of his or her
outstanding options under this Article Two, and those options shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while holding those
options. Such beneficiary or beneficiaries shall take the transferred options
subject to all the terms and conditions of the applicable agreement evidencing
each such transferred option, including (without limitation) the limited time
period during which the option may be exercised following the Optionee's death.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section 11, all the
provisions of Articles One, Two and Seven shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options when
issued under the Plan shall not be subject to the terms of this Section 11.
A. ELIGIBILITY. Incentive Options may only be granted to Employees.
8.
<PAGE> 9
B. DOLLAR LIMITATION. The aggregate Fair Market Value of the shares
of Common Stock (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
C. 10% STOCKHOLDER. If any Employee to whom an Incentive Option is
granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each outstanding
option shall automatically accelerate so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become
fully exercisable for the total number of shares of Common Stock at the time
subject to such option and may be exercised for any or all of those shares as
fully vested shares of Common Stock. However, an outstanding option shall NOT
become exercisable on such an accelerated basis if and to the extent: (i) such
option is, in connection with the Corporate Transaction, to be assumed by the
successor corporation (or parent thereof) or (ii) such option is to be replaced
with a cash incentive program of the successor corporation which preserves the
spread existing at the time of the Corporate Transaction on any shares for which
the option is not otherwise at that time exercisable and provides for subsequent
payout in accordance with the same exercise/vesting schedule applicable to those
option shares or (iii) the acceleration of such option is subject to other
limitations imposed by the Plan Administrator at the time of the option grant.
B. All outstanding repurchase rights shall automatically terminate,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent: (i) those repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator at the time the repurchase right is issued.
C. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments to reflect such Corporate Transaction shall also
9.
<PAGE> 10
be made to (i) the exercise price payable per share under each outstanding
option, provided the aggregate exercise price payable for such securities shall
remain the same, (ii) the maximum number and/or class of securities available
for issuance over the remaining term of the Plan and (iii) the maximum number
and/or class of securities for which any one person may be granted stock
options, separately exercisable stock appreciation rights and direct stock
issuances under the Plan per calendar year and (iv) the maximum number and/or
class of securities by which the share reserve is to increase automatically each
calendar year.
E. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding options under the Discretionary Option Grant
Program so that those options shall, immediately prior to the effect date of
such Corporate Transaction, become fully exercisable for the total number of
shares of Common Stock at the time subject to those options and may be exercised
for any or all of those shares as fully vested shares of Common Stock, whether
or not those options are to be assumed in the Corporate Transaction. In
addition, the Plan Administrator shall have the discretionary authority to
structure one or more of the Corporation's repurchase rights under the
Discretionary Option Grant Program so that those rights shall not be assignable
in connection with such Corporate Transaction and shall accordingly terminate
upon the consummation of such Corporate Transaction, and the shares subject to
those terminated rights shall thereupon vest in full.
F. The Plan Administrator shall have full power and authority to
structure one or more outstanding options under the Discretionary Option Grant
Program so that those options shall become fully exercisable for the total
number of shares of Common Stock at the time subject to those options in the
event the Optionee's Service is subsequently terminated by reason of an
Involuntary Termination within a designated period (not to exceed eighteen (18)
months) following the effective date of any Corporate Transaction in which those
options are assumed and do not otherwise accelerate. Any options so accelerated
shall remain exercisable for fully vested shares until the earlier of (i) the
expiration of the option term or (ii) the expiration of the one (1) year period
measured from the effective date of the Involuntary Termination. In addition,
the Plan Administrator may structure one or more of the Corporation's repurchase
rights so that those rights shall immediately terminate with respect to any
shares held by the Optionee at the time of such Involuntary Termination, and the
shares subject to those terminated repurchase rights shall accordingly vest in
full at that time.
G. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding options under the Discretionary Option Grant
Program so that those options shall, immediately prior to the effect date of a
Change in Control, become fully exercisable for the total number of shares of
Common Stock at the time subject to those options and may be exercised for any
or all of those shares as fully vested shares of Common Stock. In addition, the
Plan Administrator shall have the discretionary authority to structure one or
more of the Corporation's repurchase rights under the Discretionary Option Grant
Program so that those rights shall terminate automatically upon the consummation
of such Change in Control, and the shares subject to those terminated rights
shall thereupon vest in full. Alternatively, the Plan Administrator may
condition the automatic acceleration of one or more outstanding options
10.
<PAGE> 11
under the Discretionary Option Grant Program and the termination of one or more
of the Corporation's outstanding repurchase rights under such program upon the
subsequent termination of the Optionee's Service by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18) months)
following the effective date of such Change in Control. Each option so
accelerated shall remain exercisable for fully vested shares until the earlier
of (i) the expiration of the option term or (ii) the expiration of the one (1)
year period measured from the effective date of Optionee's cessation of Service.
H. The portion of any Incentive Option accelerated in connection
with a Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
($100,000) limitation is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be exercisable as a
Nonstatutory Option under the Federal tax laws.
I. The outstanding options shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option
Grant Program (including outstanding options incorporated from the Predecessor
Plan) and to grant in substitution new options covering the same or different
number of shares of Common Stock but with an exercise price per share based on
the Fair Market Value per share of Common Stock on the new grant date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority to
grant to selected Optionees tandem stock appreciation rights and/or limited
stock appreciation rights.
B. The following terms shall govern the grant and exercise of tandem
stock appreciation rights:
(i) One or more Optionees may be granted the right,
exercisable upon such terms as the Plan Administrator may establish, to
elect between the exercise of the underlying option for shares of Common
Stock and the surrender of that option in exchange for a distribution
from the Corporation in an amount equal to the excess of (a) the Fair
Market Value (on the option surrender date) of the number of shares in
which the Optionee is at the time vested under the surrendered option
(or surrendered portion thereof) over (b) the aggregate exercise price
payable for such shares.
11.
<PAGE> 12
(ii) No such option surrender shall be effective unless it
is approved by the Plan Administrator, either at the time of the actual
option surrender or at any earlier time. If the surrender is so
approved, then the distribution to which the Optionee shall be entitled
may be made in shares of Common Stock valued at Fair Market Value on the
option surrender date, in cash, or partly in shares and partly in cash,
as the Plan Administrator shall in its sole discretion deem appropriate.
(iii) If the surrender of an option is not approved by the
Plan Administrator, then the Optionee shall retain whatever rights the
Optionee had under the surrendered option (or surrendered portion
thereof) on the option surrender date and may exercise such rights at
any time prior to the later of (a) five (5) business days after the
receipt of the rejection notice or (b) the last day on which the option
is otherwise exercisable in accordance with the terms of the documents
evidencing such option, but in no event may such rights be exercised
more than ten (10) years after the option grant date.
C. The following terms shall govern the grant and exercise of
limited stock appreciation rights:
(i) One or more Section 16 Insiders may be granted limited
stock appreciation rights with respect to their outstanding options.
(ii) Upon the occurrence of a Hostile Take-Over, each
individual holding one or more options with such a limited stock
appreciation right shall have the unconditional right (exercisable for a
thirty (30)-day period following such Hostile Take-Over) to surrender
each such option to the Corporation. In return for the surrendered
option, the Optionee shall receive a cash distribution from the
Corporation in an amount equal to the excess of (A) the Take-Over Price
of the shares of Common Stock at the time subject to such option
(whether or not the option is otherwise at that time exercisable for
those shares) over (B) the aggregate exercise price payable for the
shares. Such cash distribution shall be paid within five (5) days
following the option surrender date.
(iii) At the time such limited stock appreciation right is
granted, the Plan Administrator shall pre-approve any subsequent
exercise of that right in accordance with the terms of this Paragraph C.
Accordingly, no further approval of the Plan Administrator or the Board
shall be required at the time of the actual option surrender and cash
distribution.
12.
<PAGE> 13
ARTICLE THREE
SALARY INVESTMENT OPTION GRANT PROGRAM
I. OPTION GRANTS
The Primary Committee shall have the sole and exclusive authority to
determine the calendar year or years (if any) for which the Salary Investment
Option Grant Program is to be in effect and to select the Section 16 Insiders
and other highly compensated Employees eligible to participate in the Salary
Investment Option Grant Program for such calendar year or years. Each selected
individual who elects to participate in the Salary Investment Option Grant
Program must, prior to the start of each calendar year of participation, file
with the Plan Administrator (or its designate) an irrevocable authorization
directing the Corporation to reduce his or her base salary for that calendar
year by an amount not less than Ten Thousand Dollars ($10,000.00) nor more than
Fifty Thousand Dollars ($50,000.00). Each individual who files such a timely
authorization shall automatically be granted an option under the Salary
Investment Grant Program on the first trading day in January of the calendar
year for which the salary reduction is to be in effect.
II. OPTION TERMS
Each option shall be a Non-Statutory Option evidenced by one or more
documents in the form approved by the Plan Administrator; provided, however,
that each such document shall comply with the terms specified below.
A. EXERCISE PRICE.
1. The exercise price per share shall be thirty-three and
one-third percent (33-1/3%) of the Fair Market Value per share of Common Stock
on the option grant date.
2. The exercise price shall become immediately due upon exercise
of the option and shall be payable in one or more of the alternative forms
authorized under the Discretionary Option Grant Program. Except to the extent
the sale and remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.
B. NUMBER OF OPTION SHARES. The number of shares of Common Stock
subject to the option shall be determined pursuant to the following formula
(rounded down to the nearest whole number):
X = A divided by (B x 66-2/3%), where
X is the number of option shares,
A is the dollar amount of the reduction in the Optionee's base
salary for the calendar year to be in effect pursuant to this program,
and
13.
<PAGE> 14
B is the Fair Market Value per share of Common Stock on the
option grant date.
C. EXERCISE AND TERM OF OPTIONS. The option shall become exercisable
in a series of twelve (12) successive equal monthly installments upon the
Optionee's completion of each calendar month of Service in the calendar year for
which the salary reduction is in effect. Each option shall have a maximum term
of ten (10) years measured from the option grant date.
D. EFFECT OF TERMINATION OF SERVICE. Should the Optionee cease
Service for any reason while holding one or more options under this Article
Three, then each such option shall remain exercisable, for any or all of the
shares for which the option is exercisable at the time of such cessation of
Service, until the earlier of (i) the expiration of the ten (10)-year option
term or (ii) the expiration of the three (3)-year period measured from the date
of such cessation of Service. Should the Optionee die while holding one or more
options under this Article Three, then each such option may be exercised, for
any or all of the shares for which the option is exercisable at the time of the
Optionee's cessation of Service (less any shares subsequently purchased by
Optionee prior to death), by the personal representative of the Optionee's
estate or by the person or persons to whom the option is transferred pursuant to
the Optionee's will or the laws of inheritance or by the designated beneficiary
or beneficiaries of such option. Such right of exercise shall lapse, and the
option shall terminate, upon the earlier of (i) the expiration of the ten
(10)-year option term or (ii) the three (3)-year period measured from the date
of the Optionee's cessation of Service. However, the option shall, immediately
upon the Optionee's cessation of Service for any reason, terminate and cease to
remain outstanding with respect to any and all shares of Common Stock for which
the option is not otherwise at that time exercisable.
III. CORPORATE TRANSACTION/ CHANGE IN CONTROL/ HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction while the Optionee
remains in Service, each outstanding option held by such Optionee under this
Salary Investment Option Grant Program shall automatically accelerate so that
each such option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable for the total number of shares of Common
Stock at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. Each such outstanding
option shall terminate immediately following the Corporate Transaction, except
to the extent assumed by the successor corporation (or parent thereof) in such
Corporate Transaction. Any option so assumed and shall remain exercisable for
the fully-vested shares until the earlier of (i) the expiration of the ten
(10)-year option term or (ii) the expiration of the three (3)-year period
measured from the date of the Optionee's cessation of Service.
B. In the event of a Change in Control while the Optionee remains in
Service, each outstanding option held by such Optionee under this Salary
Investment Option Grant Program shall automatically accelerate so that each such
option shall immediately become fully exercisable for the total number of shares
of Common Stock at the time subject to such option and may be exercised for any
or all of those shares as fully-vested shares of Common Stock.
14.
<PAGE> 15
The option shall remain so exercisable until the earliest to occur of (i) the
expiration of the ten (10)-year option term, (ii) the expiration of the three
(3)-year period measured from the date of the Optionee's cessation of Service,
(iii) the termination of the option in connection with a Corporate Transaction
or (iv) the surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each
outstanding option granted him or her under the Salary Investment Option Grant
Program. The Optionee shall in return be entitled to a cash distribution from
the Corporation in an amount equal to the excess of (i) the Take-Over Price of
the shares of Common Stock at the time subject to the surrendered option
(whether or not the option is otherwise at the time exercisable for those
shares) over (ii) the aggregate exercise price payable for the shares. Such cash
distribution shall be paid within five (5) days following the surrender of the
option to the Corporation. The Primary Committee shall, at the time the option
with such limited stock appreciation right is granted under the Salary
Investment Option Grant Program, pre-approve any subsequent exercise of that
right in accordance with the terms of this Paragraph C. Accordingly, no further
approval of the Primary Committee or the Board shall be required at the time of
the actual option surrender and cash distribution.
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the exercise price payable per
share under each outstanding option, provided the aggregate exercise price
payable for such securities shall remain the same.
E. The grant of options under the Salary Investment Option Grant
Program shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
IV. REMAINING TERMS
The remaining terms of each option granted under the Salary
Investment Option Grant Program shall be the same as the terms in effect for
option grants made under the Discretionary Option Grant Program.
15.
<PAGE> 16
ARTICLE FOUR
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance
Program through direct and immediate issuances without any intervening option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below. Shares of Common Stock
may also be issued under the Stock Issuance Program pursuant to share right
awards which entitle the recipients to receive those shares upon the attainment
of designated performance goals.
A. PURCHASE PRICE.
1. The purchase price per share shall be fixed by the Plan
Administrator, but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the issuance date.
2. Subject to the provisions of Section I of Article Seven,
shares of Common Stock may be issued under the Stock Issuance Program for any of
the following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
B. VESTING PROVISIONS.
1. Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program shall be
determined by the Plan Administrator and incorporated into the Stock Issuance
Agreement. Shares of Common Stock may also be issued under the Stock Issuance
Program pursuant to share right awards which entitle the recipients to receive
those shares upon the attainment of designated performance goals.
2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or
16.
<PAGE> 17
other change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration shall be issued subject to (i) the same
vesting requirements applicable to the Participant's unvested shares of Common
Stock and (ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.
3. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase money note of
the Participant attributable to the surrendered shares.
5. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of Common Stock which
would otherwise occur upon the cessation of the Participant's Service or the
non-attainment of the performance objectives applicable to those shares. Such
waiver shall result in the immediate vesting of the Participant's interest in
the shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.
6. Outstanding share right awards under the Stock Issuance
Program shall automatically terminate, and no shares of Common Stock shall
actually be issued in satisfaction of those awards, if the performance goals
established for such awards are not attained. The Plan Administrator, however,
shall have the discretionary authority to issue shares of Common Stock under one
or more outstanding share right awards as to which the designated performance
goals have not been attained.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the Corporation's outstanding repurchase rights under the
Stock Issuance Program shall terminate automatically, and all the shares of
Common Stock subject to those terminated rights shall immediately vest in full,
in the event of any Corporate Transaction, except to the extent (i) those
repurchase rights are to be assigned to the successor corporation (or parent
thereof) in connection with such Corporate Transaction or (ii) such accelerated
vesting is precluded by other limitations imposed in the Stock Issuance
Agreement.
17.
<PAGE> 18
B. The Plan Administrator shall have the discretionary authority to
structure one or more of the Corporation's repurchase rights under the Stock
Issuance Program so that those rights shall automatically terminate in whole or
in part, and the shares of Common Stock subject to those terminated rights shall
immediately vest, in the event the Participant's Service should subsequently
terminate by reason of an Involuntary Termination within a designated period
(not to exceed eighteen (18) months) following the effective date of any
Corporate Transaction in which those repurchase rights are assigned to the
successor corporation (or parent thereof).
C. The Plan Administrator shall also have the discretionary
authority to structure one or more of the Corporation's repurchase rights under
the Stock Issuance Program so that those rights shall automatically terminate in
whole or in part, and the shares of Common Stock subject to those terminated
rights shall immediately vest, in the event the Participant's Service should
subsequently terminate by reason of an Involuntary Termination within a
designated period (not to exceed eighteen (18) months) following the effective
date of any Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.
18.
<PAGE> 19
ARTICLE FIVE
AUTOMATIC OPTION GRANT PROGRAM
I. OPTION TERMS
A. GRANT DATES. Option grants shall be made on the dates specified
below:
1. Each individual serving as a non-employee Board member on the
Underwriting Date shall automatically be granted at that time a Non-Statutory
Option to purchase 30,000 shares of Common Stock, provided that individual has
not previously been in the employ of the Corporation or any Parent or Subsidiary
and has not previously received an option grant from the Corporation (either
directly or through his or her affiliation with a venture capital fund) in
connection with his or her Board service.
2. Each individual who is first elected or appointed as a
nonemployee Board member at any time after the Underwriting Date shall
automatically be granted, on the date of such initial election or appointment, a
Non-Statutory Option to purchase 30,000 shares of Common Stock, provided that
individual has not previously been in the employ of the Corporation or any
Parent or Subsidiary.
3. On the date of each Annual Stockholders Meeting, beginning
with the first Annual Stockholders Meeting after the Underwriting Date, each
individual who is to continue to serve as a non-employee Board member, whether
or not that individual is standing for re-election to the Board at that
particular Annual Meeting, shall automatically be granted a Non-Statutory Option
to purchase 10,000 shares of Common Stock, provided such individual has served
as a non-employee Board member for at least six (6) months. There shall be no
limit on the number of such 10,000-share option grants any one non-employee
Board member may receive over his or her period of Board service, and
non-employee Board members who have previously been in the employ of the
Corporation (or any Parent or Subsidiary) or who have previously received stock
options in connection with their Board service prior to the Underwriting Date
shall be eligible to receive one or more such annual option grants over their
period of continued Board service.
B. EXERCISE PRICE.
1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
C. OPTION TERM. Each option shall have a term of ten (10) years
measured from the option grant date.
19.
<PAGE> 20
D. EXERCISE AND VESTING OF OPTIONS. Each option shall be immediately
exercisable for any or all of the option shares. However, any unvested shares
purchased under the option shall be subject to repurchase by the Corporation, at
the exercise price paid per share, upon the Optionee's cessation of Board
service prior to vesting in those shares. The shares subject to each initial
30,000-share grant shall vest, and the Corporation's repurchase right shall
lapse, in a series of three (3) successive equal annual installments upon the
Optionee's completion of each year of service as a Board member over the three
(3) year period measured from the option grant date. The shares subject to each
annual 10,000-share option grant shall be fully vested as of the grant date.
E. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this
Article Five may, in connection with the Optionee's estate plan, be assigned in
whole or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. The Optionee may also designate one or more persons as the
beneficiary or beneficiaries of his or her outstanding options under this
Article Three, and those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding those options. Such beneficiary or beneficiaries
shall take the transferred options subject to all the terms and conditions of
the applicable agreement evidencing each such transferred option, including
(without limitation) the limited time period during which the option may be
exercised following the Optionee's death.
F. TERMINATION OF BOARD SERVICE. The following provisions shall
govern the exercise of any options held by the Optionee at the time the Optionee
ceases to serve as a Board member:
(i) The Optionee (or, in the event of Optionee's death, the
personal representative of the Optionee's estate or the person or
persons to whom the option is transferred pursuant to the Optionee's
will or the laws of inheritance or the designated beneficiary or
beneficiaries of such option) shall have a twelve (12)-month period
following the date of such cessation of Board service in which to
exercise each such option.
(ii) During the twelve (12)-month exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares of Common Stock for which the option is exercisable at the
time of the Optionee's cessation of Board service.
20.
<PAGE> 21
(iii) Should the Optionee cease to serve as a Board member
by reason of death or Permanent Disability, then all shares at the time
subject to the option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following such cessation of
Board service, be exercised for all or any portion of those shares as
fully-vested shares of Common Stock.
(iv) In no event shall the option remain exercisable after
the expiration of the option term. Upon the expiration of the twelve
(12)-month exercise period or (if earlier) upon the expiration of the
option term, the option shall terminate and cease to be outstanding for
any vested shares for which the option has not been exercised. However,
the option shall, immediately upon the Optionee's cessation of Board
service for any reason other than death or Permanent Disability,
terminate and cease to be outstanding to the extent the option is not
otherwise at that time exercisable for vested shares.
G. SPECIAL MODIFICATION. If the financial accounting treatment for
non-employee director stock options proposed in the March 31, 1999 Exposure
Draft of the Financial Accounting Standards Board under APB Opinion No. 25 is
adopted, then following changes shall be made to the foregoing provisions of the
Automatic Option Grant Program:
- The 30,000-share option grant shall not be made to a
newly-elected or appointed non-employee Board member until the
first Annual Stockholders Meeting held more than twelve (12)
months after the date of his or her initial election or
appointment to the Board. At that annual meeting, the
non-employee Board member shall also receive an option grant for
an additional 10,000 shares under the annual grant portion of
the Automatic Option Grant Program.
- One-third of the shares subject to the 30,000-share
option grant shall be immediately vested at the time of the
option grant, and the remaining shares shall vest in a series of
twenty-four (24) successive equal monthly installments upon the
Optionee's completion of each month of Board service over the
twenty-four (24)-month period measured from the grant date.
II. CORPORATE TRANSACTION/ CHANGE IN CONTROL/ HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the shares of Common
Stock at the time subject to each outstanding option but not otherwise vested
shall automatically vest in full so that each such option shall, immediately
prior to the effective date of the Corporate Transaction, become exercisable for
all of the option shares as fully-vested shares of Common Stock and may be
exercised for all or any portion of those vested shares. Immediately following
the consummation of the Corporate Transaction, each automatic option grant shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).
21.
<PAGE> 22
B. In connection with any Change in Control, the shares of Common
Stock at the time subject to each outstanding option but not otherwise vested
shall automatically vest in full so that each such option shall, immediately
prior to the effective date of the Change in Control, become exercisable for all
of the option shares as fully-vested shares of Common Stock and may be exercised
for all or any portion of those vested shares. Each such option shall remain
exercisable for such fully-vested option shares until the expiration or sooner
termination of the option term or the surrender of the option in connection with
a Hostile Take-Over.
C. All outstanding repurchase rights shall automatically terminate,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction or Change in
Control.
D. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each of
his or her outstanding automatic option grants. The Optionee shall in return be
entitled to a cash distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock at the time
subject to each surrendered option (whether or not the Optionee is otherwise at
the time vested in those shares) over (ii) the aggregate exercise price payable
for such shares. Such cash distribution shall be paid within five (5) days
following the surrender of the option to the Corporation. No approval or consent
of the Board or any Plan Administrator shall be required at the time of the
actual option surrender and cash distribution.
E. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the exercise price payable per
share under each outstanding option, provided the aggregate exercise price
payable for such securities shall remain the same.
F. The grant of options under the Automatic Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Option Grant Program.
22.
<PAGE> 23
ARTICLE SIX
DIRECTOR FEE OPTION GRANT PROGRAM
I. OPTION GRANTS
The Primary Committee shall have the sole and exclusive authority to
determine the calendar year or years for which the Director Fee Option Grant
Program is to be in effect. For each such calendar year the program is in
effect, each non-employee Board member may elect to apply all or any portion of
the annual retainer fee otherwise payable in cash for his or her service on the
Board for that year to the acquisition of a special option grant under this
Director Fee Option Grant Program. Such election must be filed with the
Corporation's Chief Financial Officer prior to first day of the calendar year
for which the annual retainer fee which is the subject of that election is
otherwise payable. Each non-employee Board member who files such a timely
election shall automatically be granted an option under this Director Fee Option
Grant Program on the first trading day in January in the calendar year for which
the annual retainer fee which is the subject of that election would otherwise be
payable in cash.
II. OPTION TERMS
Each option shall be a Non-Statutory Option governed by the terms
and conditions specified below.
A. EXERCISE PRICE.
1. The exercise price per share shall be thirty-three and
one-third percent (33-1/3%) of the Fair Market Value per share of Common Stock
on the option grant date.
2. The exercise price shall become immediately due upon exercise
of the option and shall be payable in one or more of the alternative forms
authorized under the Discretionary Option Grant Program. Except to the extent
the sale and remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.
B. NUMBER OF OPTION SHARES. The number of shares of Common Stock
subject to the option shall be determined pursuant to the following formula
(rounded down to the nearest whole number):
X = A divided by (B x 66-2/3%), where
X is the number of option shares,
A is the portion of the annual retainer fee subject to the non-
employee Board member's election, and
B is the Fair Market Value per share of Common Stock on the
option grant date.
23.
<PAGE> 24
C. EXERCISE AND TERM OF OPTIONS. The option shall become exercisable
in a series of twelve (12) equal monthly installments upon the Optionee's
completion of each month of Board service over the twelve (12)-month period
measured from the grant date. Each option shall have a maximum term of ten (10)
years measured from the option grant date.
D. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this
Article Six may, in connection with the Optionee's estate plan, be assigned in
whole or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. The Optionee may also designate one or more persons as the
beneficiary or beneficiaries of his or her outstanding options under this
Article Three, and those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding those options. Such beneficiary or beneficiaries
shall take the transferred options subject to all the terms and conditions of
the applicable agreement evidencing each such transferred option, including
(without limitation) the limited time period during which the option may be
exercised following the Optionee's death.
E. TERMINATION OF BOARD SERVICE. Should the Optionee cease Board
service for any reason (other than death or Permanent Disability) while holding
one or more options under this Director Fee Option Grant Program, then each such
option shall remain exercisable, for any or all of the shares for which the
option is exercisable at the time of such cessation of Board service, until the
earlier of (i) the expiration of the ten (10)-year option term or (ii) the
expiration of the three (3)-year period measured from the date of such cessation
of Board service. However, each option held by the Optionee under this Director
Fee Option Grant Program at the time of his or her cessation of Board service
shall immediately terminate and cease to remain outstanding with respect to any
and all shares of Common Stock for which the option is not otherwise at that
time exercisable.
F. DEATH OR PERMANENT DISABILITY. Should the Optionee's service as a
Board member cease by reason of death or Permanent Disability, then each option
held by such Optionee under this Director Fee Option Grant Program shall
immediately become exercisable for all the shares of Common Stock at the time
subject to that option, and the option may be exercised for any or all of those
shares as fully-vested shares until the earlier of (i) the expiration of the ten
(10)-year option term or (ii) the expiration of the three (3)-year period
measured from the date of such cessation of Board service. Should the Optionee
die while holding such option, then the option may be exercised by the personal
representative of the Optionee's estate or by the person or persons to whom the
option is transferred pursuant to the Optionee's will or the laws of inheritance
or by the designated beneficiary or beneficiaries of that option.
24.
<PAGE> 25
Should the Optionee die after cessation of Board service but
while holding one or more options under this Director Fee Option Grant Program,
then each such option may be exercised, for any or all of the shares for which
the option is exercisable at the time of the Optionee's cessation of Board
service (less any shares subsequently purchased by Optionee prior to death), by
the personal representative of the Optionee's estate or by the person or persons
to whom the option is transferred pursuant to the Optionee's will or the laws of
inheritance or by the designated beneficiary or beneficiaries of such option.
Such right of exercise shall lapse, and the option shall terminate, upon the
earlier of (i) the expiration of the ten (10)-year option term or (ii) the three
(3)-year period measured from the date of the Optionee's cessation of Board
service.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction while the Optionee
remains a Board member, each outstanding option held by such Optionee under this
Director Fee Option Grant Program shall automatically accelerate so that each
such option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable for all the shares of Common Stock at the
time subject to such option and may be exercised for any or all of those shares
as fully-vested shares of Common Stock. Each such outstanding option shall
terminate immediately following the Corporate Transaction, except to the extent
assumed by the successor corporation (or parent thereof) in such Corporate
Transaction. Any option so assumed and shall remain exercisable for the
fully-vested shares until the earlier of (i) the expiration of the ten (10)-year
option term or (ii) the expiration of the three (3)-year period measured from
the date of the Optionee's cessation of Board service.
B. In the event of a Change in Control while the Optionee remains in
Service, each outstanding option held by such Optionee under this Director Fee
Option Grant Program shall automatically accelerate so that each such option
shall immediately become fully exercisable for all the shares of Common Stock at
the time subject to such option and may be exercised for any or all of those
shares as fully-vested shares of Common Stock. The option shall remain so
exercisable until the earliest to occur of (i) the expiration of the ten
(10)-year option term, (ii) the expiration of the three (3)-year period measured
from the date of the Optionee's cessation of Board service, (iii) the
termination of the option in connection with a Corporate Transaction or (iv) the
surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each
outstanding option granted him or her under the Director Fee Option Grant
Program. The Optionee shall in return be entitled to a cash distribution from
the Corporation in an amount equal to the excess of (i) the Take-Over Price of
the shares of Common Stock at the time subject to each surrendered option
(whether or not the option is otherwise at the time exercisable for those
shares) over (ii) the aggregate exercise price payable for the shares. Such cash
distribution shall be paid within five (5) days following the surrender of the
option to the Corporation. No approval or consent of the Board or any Plan
Administrator shall be required at the time of the actual option surrender and
cash distribution.
25.
<PAGE> 26
D. The grant of options under the Director Fee Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
IV. REMAINING TERMS
The remaining terms of each option granted under this Director Fee
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Option Grant Program.
26.
<PAGE> 27
ARTICLE SEVEN
MISCELLANEOUS
I. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest rate
and the terms of repayment) shall be established by the Plan Administrator in
its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares (less the par value of
those shares) plus (ii) any Federal, state and local income and employment tax
liability incurred by the Optionee or the Participant in connection with the
option exercise or share purchase.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options or the issuance or vesting of such shares under the
Plan shall be subject to the satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan (other than the options granted or the shares issued under the Automatic
Option Grant or Director Fee Option Grant Program) with the right to use shares
of Common Stock in satisfaction of all or part of the Withholding Taxes to which
such holders may become subject in connection with the exercise of their options
or the vesting of their shares. Such right may be provided to any such holder in
either or both of the following formats:
Stock Withholding. The election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such Non-Statutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the
Withholding Taxes (not to exceed one hundred percent (100%)) designated by the
holder.
Stock Delivery: The election to deliver to the Corporation, at
the time the Non-Statutory Option is exercised or the shares vest, one or more
shares of Common Stock previously acquired by such holder (other than in
connection with the option exercise or share vesting triggering the Withholding
Taxes) with an aggregate Fair Market Value equal to the percentage of the
Withholding Taxes (not to exceed one hundred percent (100%)) designated by the
holder.
27.
<PAGE> 28
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective immediately on the Plan Effective
Date. However, the Salary Investment Option Grant Program and the Director Fee
Option Grant Program shall not be implemented until such time as the Primary
Committee may deem appropriate. Options may be granted under the Discretionary
Option Grant at any time on or after the Plan Effective Date, and the initial
option grants under the Automatic Option Grant Program shall also be made on the
Plan Effective Date to any non-employee Board members eligible for such grants
at that time. However, no options granted under the Plan may be exercised, and
no shares shall be issued under the Plan, until the Plan is approved by the
Corporation's stockholders. If such stockholder approval is not obtained within
twelve (12) months after the Plan Effective Date, then all options previously
granted under this Plan shall terminate and cease to be outstanding, and no
further options shall be granted and no shares shall be issued under the Plan.
B. The Plan shall serve as the successor to each of the Predecessor
Plans, and no further option grants or direct stock issuances shall be made
under the Predecessor Plans after the Plan Effective Date. All options
outstanding under the Predecessor Plans on the Plan Effective Date shall be
incorporated into the Plan at that time and shall be treated as outstanding
options under the Plan. However, each outstanding option so incorporated shall
continue to be governed solely by the terms of the documents evidencing such
option, and no provision of the Plan shall be deemed to affect or otherwise
modify the rights or obligations of the holders of such incorporated options
with respect to their acquisition of shares of Common Stock.
C. One or more provisions of the Plan, including (without
limitation) the option/vesting acceleration provisions of Article Two relating
to Corporate Transactions and Changes in Control, may, in the Plan
Administrator's discretion, be extended to one or more options incorporated from
the Predecessor Plans which do not otherwise contain such provisions.
D. The Plan shall terminate upon the earliest to occur of (i) May
15, 2009, (ii) the date on which all shares available for issuance under the
Plan shall have been issued as fully vested shares or (iii) the termination of
all outstanding options in connection with a Corporate Transaction. Should the
Plan terminate on May 15, 2009, then all option grants and unvested stock
issuances outstanding at that time shall continue to have force and effect in
accordance with the provisions of the documents evidencing such grants or
issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects. However, no such amendment
or modification shall adversely affect the rights and obligations with respect
to stock options or unvested stock issuances at the time outstanding under the
Plan unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require stockholder approval
pursuant to applicable laws or regulations.
28.
<PAGE> 29
B. Options to purchase shares of Common Stock may be granted under
the Discretionary Option Grant and Salary Investment Option Grant Programs and
shares of Common Stock may be issued under the Stock Issuance Program that are
in each instance in excess of the number of shares then available for issuance
under the Plan, provided any excess shares actually issued under those programs
shall be held in escrow until there is obtained stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan. If such stockholder approval is not obtained within
twelve (12) months after the date the first such excess issuances are made, then
(i) any unexercised options granted on the basis of such excess shares shall
terminate and cease to be outstanding and (ii) the Corporation shall promptly
refund to the Optionees and the Participants the exercise or purchase price paid
for any excess shares issued under the Plan and held in escrow, together with
interest (at the applicable Short Term Federal Rate) for the period the shares
were held in escrow, and such shares shall thereupon be automatically cancelled
and cease to be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option
under the Plan and the issuance of any shares of Common Stock (i) upon the
exercise of any granted option or (ii) under the Stock Issuance Program shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.
29.
<PAGE> 30
APPENDIX
The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option
grant program in effect under Article Five of the Plan.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership or control of
the Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a period
of thirty-six (36) consecutive months or less such that a majority of
the Board members ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in
clause (A) who were still in office at the time the Board approved such
election or nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
<PAGE> 31
G. CORPORATION shall mean Tickets.com, Inc., a Delaware corporation,
and any corporate successor to all or substantially all of the assets or voting
stock of Tickets.com, Inc. which shall by appropriate action adopt the Plan.
H. DIRECTOR FEE OPTION GRANT PROGRAM shall mean the special stock
option grant in effect for non-employee Board members under Article Six of the
Plan.
I. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary
option grant program in effect under Article Two of the Plan.
J. ELIGIBLE DIRECTOR shall mean a non-employee Board member eligible
to participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Articles One and Five.
K. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
L. EXERCISE DATE shall mean the date on which the Corporation shall
have received written notice of the option exercise.
M. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price
is reported by the National Association of Securities Dealers on the
Nasdaq National Market. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price
for the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which
such quotation exists.
(iii) For purposes of any option grants made on the
Underwriting Date, the Fair Market Value shall be deemed to be equal to
the price per share at which the Common Stock is to be sold in the
initial public offering pursuant to the Underwriting Agreement.
A-2.
<PAGE> 32
N. HOSTILE TAKE-OVER shall mean the acquisition, directly or
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept.
O. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
P. INVOLUNTARY TERMINATION shall mean the termination of the Service
of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a
change in his or her position with the Corporation which materially
reduces his or her duties and responsibilities or the level of
management to which he or she reports, (B) a reduction in his or her
level of compensation (including base salary, fringe benefits and target
bonus under any corporate-performance based bonus or incentive programs)
by more than fifteen percent (15%) or (C) a relocation of such
individual's place of employment by more than fifty (50) miles, provided
and only if such change, reduction or relocation is effected by the
Corporation without the individual's consent.
Q. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
R. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
S. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
T. OPTIONEE shall mean any person to whom an option is granted under
the Discretionary Option Grant, Salary Investment Option Grant, Automatic Option
Grant or Director Fee Option Grant Program.
A-3.
<PAGE> 33
U. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
V. PARTICIPANT shall mean any person who is issued shares of Common
Stock under the Stock Issuance Program.
W. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for purposes of the Automatic Option Grant
and Director Fee Option Grant Programs, Permanent Disability or Permanently
Disabled shall mean the inability of the non-employee Board member to perform
his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
X. PLAN shall mean the Corporation's 1999 Stock Incentive Plan, as
set forth in this document.
Y. PLAN ADMINISTRATOR shall mean the particular entity, whether the
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction.
Z. PLAN EFFECTIVE DATE shall mean the date the Plan shall become
effective and shall be coincident with the Underwriting Date.
AA. PREDECESSOR PLANS shall mean the Corporation's (i) 1998 Stock
Incentive Plan, (ii) the 1997 Stock Option Plan, (iii) the 1997 Non-Employee
Directors Option Plan and (iv) the 1996 Stock Option Plan, as each of those
plans is in effect immediately prior to the Plan Effective Date hereunder.
BB. PRIMARY COMMITTEE shall mean the committee of two (2) or more
nonemployee Board members appointed by the Board to administer the Discretionary
Option Grant and Stock Issuance Programs with respect to Section 16 Insiders and
to administer the Salary Investment Option Grant Program solely with respect to
the selection of the eligible individuals who may participate in such program.
CC. SALARY INVESTMENT OPTION GRANT PROGRAM shall mean the salary
investment option grant program in effect under Article Three of the Plan.
A-4.
<PAGE> 34
DD. SECONDARY COMMITTEE shall mean a committee of one or more Board
members appointed by the Board to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to eligible persons other than Section 16
Insiders.
EE. SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
FF. SERVICE shall mean the performance of services for the
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in the
documents evidencing the option grant or stock issuance.
GG. STOCK EXCHANGE shall mean either the American Stock Exchange or
the New York Stock Exchange.
HH. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into
by the Corporation and the Participant at the time of issuance of shares of
Common Stock under the Stock Issuance Program.
II. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
effect under Article Four of the Plan.
JJ. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
KK. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.
LL. 10% STOCKHOLDER shall mean the owner of stock (as determined
under Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
MM. UNDERWRITING AGREEMENT shall mean the agreement between the
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
NN. UNDERWRITING DATE shall mean the date on which the Underwriting
Agreement is executed and priced in connection with an initial public offering
of the Common Stock.
A-5.
<PAGE> 35
OO. WITHHOLDING TAXES shall mean the Federal, state and local income
and employment withholding taxes to which the holder of Non-Statutory Options or
unvested shares of Common Stock may become subject in connection with the
exercise of those options or the vesting of those shares.
A-6.
<PAGE> 36
TICKETS.COM, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or of the
board of directors of any Parent or Subsidiary and consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY.
(a) This option shall be neither transferable nor assignable
by Optionee other than by will or the laws of inheritance following Optionee's
death and may be exercised, during Optionee's lifetime, only by Optionee.
However, Optionee may designate one or more persons as the beneficiary or
beneficiaries of this option, and this option shall, in accordance with such
designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee's death while holding such option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be exercised
following Optionee's death.
(b) If this option is designated a Non-Statutory Option in the
Grant Notice, then this option may, in connection with the Optionee's estate
plan, be assigned in whole or in part during Optionee's lifetime to one or more
members of Optionee's immediate family or to a trust established for the
exclusive benefit of one or more such family members. The assigned portion shall
be exercisable only by the person or persons who acquire a proprietary interest
in the option pursuant to such assignment. The terms applicable to the assigned
portion shall be the same as those in effect for this option immediately prior
to such assignment.
<PAGE> 37
4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(a) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or Misconduct) while holding this
option, then Optionee shall have a period of three (3) months (commencing with
the date of such cessation of Service) during which to exercise this option, but
in no event shall this option be exercisable at any time after the Expiration
Date.
(b) Should Optionee die while holding this option, then the
personal representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or the laws of inheritance
shall have the right to exercise this option. However, if Optionee has
designated one or more beneficiaries of this option, then those persons shall
have the exclusive right to exercise this option following Optionee's death. Any
such right to exercise this option shall lapse, and this option shall cease to
be outstanding, upon the earlier of (i) the expiration of the twelve (12)-month
period measured from the date of Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Permanent
Disability while holding this option, then Optionee shall have a period of
twelve (12) months (commencing with the date of such cessation of Service)
during which to exercise this option. In no event shall this option be
exercisable at any time after the Expiration Date.
(d) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number of
Option Shares for which the option is exercisable at the time of Optionee's
cessation of Service. Upon the expiration of such limited exercise period or (if
earlier) upon the Expiration Date, this option shall terminate and cease to be
outstanding for any exercisable Option Shares for which the option has not been
exercised. However, this option shall, immediately upon Optionee's cessation of
Service for any reason, terminate and cease to be outstanding with respect to
any Option Shares for which this option is not otherwise at that time
exercisable.
(e) Should Optionee's Service be terminated for Misconduct,
then this option shall terminate immediately and cease to remain outstanding.
2
<PAGE> 38
6. SPECIAL ACCELERATION OF OPTION.
(a) This option, to the extent outstanding at the time of a
Corporate Transaction but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the effective date of
such Corporate Transaction, become exercisable for all of the Option Shares at
the time subject to this option and may be exercised for any or all of those
Option Shares as fully vested shares of Common Stock. No such acceleration of
this option shall occur, however, if and to the extent: (i) this option is, in
connection with the Corporate Transaction, to be assumed by the successor
corporation (or parent thereof) or (ii) this option is to be replaced with a
cash incentive program of the successor corporation which preserves the spread
existing at the time of the Corporate Transaction on the Option Shares for which
this option is not otherwise at that time exercisable (the excess of the Fair
Market Value of those Option Shares over the aggregate Exercise Price payable
for such shares) and provides for subsequent payout in accordance with the same
option exercise/vesting schedule set forth in the Grant Notice.
(b) Immediately following the Corporate Transaction, this
option shall terminate and cease to be outstanding, except to the extent assumed
by the successor corporation (or parent thereof) in connection with the
Corporate Transaction.
(c) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same.
(d) This Agreement shall not in any way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
3
<PAGE> 39
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
(i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the
Corporation;
(B) a promissory note payable to the
Corporation, but only to the extent authorized by the Plan
Administrator in accordance with Paragraph 13;
(C) shares of Common Stock held by Optionee (or
any other person or persons exercising the option) for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or
(D) through a special sale and remittance
procedure pursuant to which Optionee (or any other person or
persons exercising the option) shall concurrently provide
irrevocable instructions (i) to a Corporation-designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus
all applicable Federal, state and local income and employment
taxes required to be withheld by the Corporation by reason of
such exercise and (ii) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to
the Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option
(if other than Optionee) have the right to exercise this option.
4
<PAGE> 40
(iv) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the option
exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any
fractional shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be necessary
to the lawful issuance and sale of any Common Stock pursuant to this option
shall relieve the Corporation of any liability with respect to the non-issuance
or sale of the Common Stock as to which such approval shall not have been
obtained. The Corporation, however, shall use its best efforts to obtain all
such approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee, Optionee's assigns, the legal representatives, heirs and legatees
of Optionee's estate and any beneficiaries of this option designated by
Optionee.
12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. FINANCING. The Plan Administrator may, in its absolute discretion
and without any obligation to do so, permit Optionee to pay the Exercise Price
for the purchased Option Shares by delivering a full-recourse promissory note
payable to the Corporation. The terms of any such promissory note (including the
interest rate, the requirements for collateral and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion.
5
<PAGE> 41
14. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
15. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
16. EXCESS SHARES. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:
(a) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is exercised
for one or more Option Shares: (A) more than three (3) months after the date
Optionee ceases to be an Employee for any reason other than death or Permanent
Disability or (B) more than twelve (12) months after the date Optionee ceases to
be an Employee by reason of Permanent Disability.
(b) No installment under this option shall qualify for
favorable tax treatment as an Incentive Option if (and to the extent) the
aggregate Fair Market Value (determined at the Grant Date) of the Common Stock
for which such installment first becomes exercisable hereunder would, when added
to the aggregate value (determined as of the respective date or dates of grant)
of the Common Stock or other securities for which this option or any other
Incentive Options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any Parent or Subsidiary)
first become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should such One Hundred Thousand
Dollar ($100,000) limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.
(c) Should the exercisability of this option be accelerated
upon a Corporate Transaction, then this option shall qualify for favorable tax
treatment as an Incentive Option only to the extent the aggregate Fair Market
Value (determined at the Grant Date) of the Common Stock for which this option
first becomes exercisable in the calendar year in which the Corporate
Transaction occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other securities
for which this option
6
<PAGE> 42
or one or more other Incentive Options granted to Optionee prior to the Grant
Date (whether under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same calendar year,
exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should the
applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in the
calendar year of such Corporate Transaction, the option may nevertheless be
exercised for the excess shares in such calendar year as a Non-Statutory Option.
(d) Should Optionee hold, in addition to this option, one or
more other options to purchase Common Stock which become exercisable for the
first time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.
7
<PAGE> 1
EXHIBIT 99.2
TICKETS.COM, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the
interests of Tickets.com, Inc., a Delaware corporation, by providing eligible
employees with the opportunity to acquire a proprietary interest in the
Corporation through participation in a payroll-deduction based employee stock
purchase plan designed to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to
such terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret
and construe any provision of the Plan and to adopt such rules and regulations
for administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares of Common
Stock purchased on the open market. The number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall be limited to
One Million Five Hundred Thousand (1,500,00) shares.
B. The number of shares of Common Stock available for issuance
under the Plan shall automatically increase on the first trading day of January
each calendar year during the term of the Plan, beginning with calendar year
2000, by an amount equal to one percent (1%) of the total number of shares of
Common Stock outstanding on the last trading day in December of the immediately
preceding calendar year, but in no event shall any such annual increase exceed
One Million Five Hundred Thousand (1,500,000) shares.
C. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of securities
issuable under the Plan, (ii) the maximum number and class of securities
purchasable per Participant on any one Purchase Date, (iii) the maximum number
and class of securities purchasable by all Participants in the aggregate on any
one Purchase Date, (iv) the maximum
<PAGE> 2
number and/or class of securities by which the share reserve is to increase
automatically each calendar year pursuant to the provisions of Section III.B of
this Article One and (v) the number and class of securities and the price per
share in effect under each outstanding purchase right in order to prevent the
dilution or enlargement of benefits thereunder.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under
the Plan through a series of successive offering periods until such time as (i)
the maximum number of shares of Common Stock available for issuance under the
Plan shall have been purchased or (ii) the Plan shall have been sooner
terminated.
B. Each offering period shall be of such duration (not to exceed
twenty-four (24) months) as determined by the Plan Administrator prior to the
start date of such offering period. However, the initial offering period shall
commence at the Effective Time and terminate on the last business day in July
2001. The next offering period shall commence on the first business day in
August 2001, and subsequent offering periods shall commence as designated by the
Plan Administrator.
C. Each offering period shall be comprised of a series of one or
more successive Purchase Intervals. Purchase Intervals shall run from the first
business day in February to the last business day in July each year and from the
first business day in August each year to the last business day in January in
the following year. However, the first Purchase Interval in effect under the
initial offering period shall commence at the Effective Time and terminate on
the last business day in January 2000.
D. Should the Fair Market Value per share of Common Stock on any
Purchase Date within an offering period be less than the Fair Market Value per
share of Common Stock on the start date of that offering period, then the
offering period shall automatically terminate immediately after the purchase of
shares of Common Stock on such Purchase Date, and a new offering period shall
commence on the next business day following such Purchase Date. The new offering
period shall have a duration of twenty (24) months, unless a shorter duration is
established by the Plan Administrator within five (5) business days following
the start date of that offering period.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date
of any offering period under the Plan may enter that offering period on such
start date or on any subsequent Semi-Annual Entry Date within that offering
period, provided he or she remains an Eligible Employee.
B. Each individual who first becomes an Eligible Employee after
the start date of an offering period may enter that offering period on any
subsequent Semi-Annual Entry Date within that offering period on which he or she
is an Eligible Employee.
2.
<PAGE> 3
C. The date an individual enters an offering period shall be
designated his or her Entry Date for purposes of that offering period.
D. To participate in the Plan for a particular offering period,
the Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its
designate) on or before his or her scheduled Entry Date.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for
purposes of acquiring shares of Common Stock during an offering period may be
any multiple of one percent (1%) of the Base Salary paid to the Participant
during each Purchase Interval within that offering period, up to a maximum of
ten percent (10%). The deduction rate so authorized shall continue in effect
throughout the offering period, except to the extent such rate is changed in
accordance with the following guidelines:
(i) The Participant may, at any time during the offering
period, reduce his or her rate of payroll deduction to become effective
as soon as possible after filing the appropriate form with the Plan
Administrator. The Participant may not, however, effect more than one
(1) such reduction per Purchase Interval.
(ii) The Participant may, prior to the commencement of
any new Purchase Interval within the offering period, increase the rate
of his or her payroll deduction by filing the appropriate form with the
Plan Administrator. The new rate (which may not exceed the ten percent
(10%) maximum) shall become effective on the start date of the first
Purchase Interval following the filing of such form.
B. Payroll deductions shall begin on the first pay day
administratively feasible following the Participant's Entry Date into the
offering period and shall (unless sooner terminated by the Participant) continue
through the pay day ending with or immediately prior to the last day of that
offering period. The amounts so collected shall be credited to the Participant's
book account under the Plan, but no interest shall be paid on the balance from
time to time outstanding in such account. The amounts collected from the
Participant shall not be required to be held in any segregated account or trust
fund and may be commingled with the general assets of the Corporation and used
for general corporate purposes.
C. Payroll deductions shall automatically cease upon the
termination of the Participant's purchase right in accordance with the
provisions of the Plan.
D. The Participant's acquisition of Common Stock under the Plan
on any Purchase Date shall neither limit nor require the Participant's
acquisition of Common Stock on any subsequent Purchase Date, whether within the
same or a different offering period.
3.
<PAGE> 4
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a
separate purchase right for each offering period in which he or she
participates. The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock, in a series of successive installments over
the remainder of such offering period, upon the terms set forth below. The
Participant shall execute a stock purchase agreement embodying such terms and
such other provisions (not inconsistent with the Plan) as the Plan Administrator
may deem advisable.
Under no circumstances shall purchase rights be granted under
the Plan to any Eligible Employee if such individual would, immediately after
the grant, own (within the meaning of Code Section 424(d)) or hold outstanding
options or other rights to purchase, stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Corporation or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
automatically exercised in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant on each such Purchase Date. The purchase shall be
effected by applying the Participant's payroll deductions for the Purchase
Interval ending on such Purchase Date to the purchase of whole shares of Common
Stock at the purchase price in effect for the Participant for that Purchase
Date.
C. PURCHASE PRICE. The purchase price per share at which Common
Stock will be purchased on the Participant's behalf on each Purchase Date within
the offering period shall be equal to eighty-five percent (85%) of the lower of
(i) the Fair Market Value per share of Common Stock on the Participant's Entry
Date into that offering period or (ii) the Fair Market Value per share of Common
Stock on that Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common
Stock purchasable by a Participant on each Purchase Date during the offering
period shall be the number of whole shares obtained by dividing the amount
collected from the Participant through payroll deductions during the Purchase
Interval ending with that Purchase Date by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed 1,200 shares, subject to periodic adjustments in the event of certain
changes in the Corporation's capitalization. In addition, the maximum number of
shares of Common Stock purchasable in the aggregate by all Participants on any
one Purchase Date shall not exceed 600,000 shares, subject to periodic
adjustments in the event of certain changes in the Corporation's capitalization.
However, the Plan Administrator shall have the discretionary authority,
exercisable prior to the start of any offering period under the Plan, to
increase or decrease the limitations to be in effect for the number of shares
purchasable per Participant and in the aggregate by all Participants on each
Purchase Date during that offering period.
4.
<PAGE> 5
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied
to the purchase of shares of Common Stock on any Purchase Date because they are
not sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable per Participant or in the
aggregate on the Purchase Date shall be promptly refunded.
F. TERMINATION OF PURCHASE RIGHT. The following provisions shall
govern the termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the next
scheduled Purchase Date in the offering period, terminate his or her
outstanding purchase right by filing the appropriate form with the Plan
Administrator (or its designate), and no further payroll deductions
shall be collected from the Participant with respect to the terminated
purchase right. Any payroll deductions collected during the Purchase
Interval in which such termination occurs shall, at the Participant's
election, be immediately refunded or held for the purchase of shares on
the next Purchase Date. If no such election is made at the time such
purchase right is terminated, then the payroll deductions collected with
respect to the terminated right shall be refunded as soon as possible.
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the
offering period for which the terminated purchase right was granted. In
order to resume participation in any subsequent offering period, such
individual must re-enroll in the Plan (by making a timely filing of the
prescribed enrollment forms) on or before his or her scheduled Entry
Date into that offering period.
(iii) Should the Participant cease to remain an Eligible
Employee for any reason (including death, disability or change in
status) while his or her purchase right remains outstanding, then that
purchase right shall immediately terminate, and all of the Participant's
payroll deductions for the Purchase Interval in which the purchase right
so terminates shall be immediately refunded. However, should the
Participant cease to remain in active service by reason of an approved
unpaid leave of absence, then the Participant shall have the right,
exercisable up until the last business day of the Purchase Interval in
which such leave commences, to (a) withdraw all the payroll deductions
collected to date on his or her behalf for that Purchase Interval or (b)
have such funds held for the purchase of shares on his or her behalf on
the next scheduled Purchase Date. In no event, however, shall any
further payroll deductions be collected on the Participant's behalf
during such leave. Upon the Participant's return to active service (x)
within ninety (90) days following the commencement of such leave or (y)
prior to the expiration of any longer period for which such
Participant's right to reemployment with the Corporation is guaranteed
by statute or contract, his or her payroll deductions under the Plan
shall automatically resume at the rate in
5.
<PAGE> 6
effect at the time the leave began, unless the Participant withdraws
from the Plan prior to his or her return. An individual who returns to
active employment following a leave of absence which exceeds in duration
the applicable (x) or (y) time period will be treated as a new Employee
for purposes of subsequent participation in the Plan and must
accordingly re-enroll in the Plan (by making a timely filing of the
prescribed enrollment forms) on or before his or her scheduled Entry
Date into the offering period.
G. CHANGE IN CONTROL. Each outstanding purchase right shall
automatically be exercised, immediately prior to the effective date of any
Change in Control, by applying the payroll deductions of each Participant for
the Purchase Interval in which such Change in Control occurs to the purchase of
whole shares of Common Stock at a purchase price per share equal to eighty-five
percent (85%) of the lower of (i) the Fair Market Value per share of Common
Stock on the Participant's Entry Date into the offering period in which such
Change in Control occurs or (ii) the Fair Market Value per share of Common Stock
immediately prior to the effective date of such Change in Control. However, the
applicable limitation on the number of shares of Common Stock purchasable per
Participant shall continue to apply to any such purchase, but not the limitation
applicable to the maximum number of shares of Common Stock purchasable in the
aggregate by all participants.
The Corporation shall use its best efforts to provide at least
ten (10)-days prior written notice of the occurrence of any Change in Control,
and Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Change in Control.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of
shares of Common Stock to be purchased pursuant to outstanding purchase rights
on any particular date exceed the number of shares then available for issuance
under the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.
I. ASSIGNABILITY. The purchase right shall be exercisable only
by the Participant and shall not be assignable or transferable by the
Participant.
J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under this Plan if and
to the extent such accrual, when aggregated with (i) rights to purchase Common
Stock accrued under any other purchase right granted under this Plan and (ii)
similar rights accrued under other employee stock purchase plans
6.
<PAGE> 7
(within the meaning of Code Section 423) of the Corporation or any Corporate
Affiliate, would otherwise permit such Participant to purchase more than
Twenty-Five Thousand Dollars ($25,000.00) worth of stock of the Corporation or
any Corporate Affiliate (determined on the basis of the Fair Market Value per
share on the date or dates such rights are granted) for each calendar year such
rights are at any time outstanding.
B. For purposes of applying such accrual limitations to the
purchase rights granted under the Plan, the following provisions shall be in
effect:
(i) The right to acquire Common Stock under each
outstanding purchase right shall accrue in a series of installments on
each successive Purchase Date during the offering period on which such
right remains outstanding.
(ii) No right to acquire Common Stock under any
outstanding purchase right shall accrue to the extent the Participant
has already accrued in the same calendar year the right to acquire
Common Stock under one or more other purchase rights at a rate equal to
Twenty-Five Thousand Dollars ($25,000.00) worth of Common Stock
(determined on the basis of the Fair Market Value per share on the date
or dates of grant) for each calendar year such rights were at any time
outstanding.
C. If by reason of such accrual limitations, any purchase right
of a Participant does not accrue for a particular Purchase Interval, then the
payroll deductions which the Participant made during that Purchase Interval with
respect to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of
this Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on May 24, 1999 and shall
become effective at the Effective Time, provided no purchase rights granted
under the Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the stockholders of
the Corporation and (ii) the Corporation shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any stock exchange (or the Nasdaq National Market, if applicable) on which the
Common Stock is listed for trading and all other applicable requirements
established by law or regulation. In the event such stockholder approval is not
obtained, or such compliance is not effected, within twelve (12) months after
the date on which the Plan is adopted by the Board, the Plan shall terminate and
have no further force or effect, and all sums collected from Participants during
the initial offering period hereunder shall be refunded.
7.
<PAGE> 8
B. Unless sooner terminated by the Board, the Plan shall
terminate upon the earliest of (i) the last business day in July 2009, (ii) the
date on which all shares available for issuance under the Plan shall have been
sold pursuant to purchase rights exercised under the Plan or (iii) the date on
which all purchase rights are exercised in connection with a Change in Control.
No further purchase rights shall be granted or exercised, and no further payroll
deductions shall be collected, under the Plan following such termination.
X. AMENDMENT OF THE PLAN
A. The Board may alter, amend, suspend or terminate the Plan at
any time to become effective immediately following the close of any Purchase
Interval. However, the Plan may be amended or terminated immediately upon Board
action, if and to the extent necessary to assure that the Corporation will not
recognize, for financial reporting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase under the Plan,
should the financial accounting rules applicable to the Plan at the Effective
Time be subsequently revised so as to require the Corporation's recognition of
compensation expense in the absence of such amendment or termination.
B. In no event may the Board effect any of the following
amendments or revisions to the Plan without the approval of the Corporation's
stockholders: (i) increase the number of shares of Common Stock issuable under
the Plan, except for permissible adjustments in the event of certain changes in
the Corporation's capitalization, (ii) alter the purchase price formula so as to
reduce the purchase price payable for the shares of Common Stock purchasable
under the Plan or (iii) modify the eligibility requirements for participation in
the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the
Plan shall be paid by the Corporation; however, each Plan Participant shall bear
all costs and expenses incurred by such individual in the sale or other
disposition of any shares purchased under the Plan.
B. Nothing in the Plan shall confer upon the Participant any
right to continue in the employ of the Corporation or any Corporate Affiliate
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any Corporate Affiliate employing such
person) or of the Participant, which rights are hereby expressly reserved by
each, to terminate such person's employment at any time for any reason, with or
without cause.
C. The provisions of the Plan shall be governed by the laws of
the State of California without resort to that State's conflict-of-laws rules.
8.
<PAGE> 9
SCHEDULE A
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE TIME
Tickets.com, Inc.
<PAGE> 10
APPENDIX
The following definitions shall be in effect under the Plan:
A. BASE SALARY shall mean the regular base salary paid to a
Participant by one or more Participating Companies during such individual's
period of participation in one or more offering periods under the Plan. Base
Salary shall be calculated before deduction of (A) any income or employment tax
withholdings or (B) any and all contributions made by the Participant to any
Code Section 401 (k) salary deferral plan or Code Section 125 cafeteria benefit
program now or hereafter established by the Corporation or any Corporate
Affiliate. Base Salary shall not include (i) any overtime payments, bonuses,
commissions, profit-sharing distributions and other incentive-type payments
received during the period of participation in the Plan and (ii) any
contributions made on the Participant's behalf by the Corporation or any
Corporate Affiliate to any employee benefit or welfare plan now or hereafter
established (other than Code Section 401 (k) or Code Section 125 contributions
deducted from Base Salary).
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership of the
Corporation pursuant to any of the following transactions:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
(iii) the acquisition, directly or indirectly by an
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by or is
under common control with the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's stockholders.
D. CODE shall mean the Internal Revenue Code of 1986, as
amended.
E. COMMON STOCK shall mean the Corporation's common stock.
A-1.
<PAGE> 11
F. CORPORATE AFFILIATE shall mean any parent or subsidiary
corporation of the Corporation (as determined in accordance with Code Section
424), whether now existing or subsequently established.
G. CORPORATION shall mean Tickets.com, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Tickets.com, Inc. which shall by appropriate action
adopt the Plan.
H. EFFECTIVE TIME shall mean the time at which the Underwriting
Agreement is executed and the Common Stock priced for the initial public
offering. Any Corporate Affiliate which becomes a Participating Corporation
after such Effective Time shall designate a subsequent Effective Time with
respect to its employee-Participants.
I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
Participating Corporation on a basis under which he or she is regularly expected
to render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).
J. ENTRY DATE shall mean the date an Eligible Employee first
commences participation in the offering period in effect under the Plan. The
earliest Entry Date under the Plan shall be the Effective Time.
K. FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as such
price is reported by the National Association of Securities Dealers on
the Nasdaq National Market. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing
selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(iii) For purposes of the initial offering period which
begins at the Effective Time, the Fair Market Value shall be deemed to
be equal to the price per share at which the Common Stock is sold in the
initial public offering pursuant to the Underwriting Agreement.
A-2.
<PAGE> 12
L. 1933 ACT shall mean the Securities Act of 1933, as amended.
M. PARTICIPANT shall mean any Eligible Employee of a
Participating Corporation who is actively participating in the Plan.
N. PARTICIPATING CORPORATION shall mean the Corporation and such
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan are listed in attached Schedule A.
O. PLAN shall mean the Corporation's 1999 Employee Stock
Purchase Plan, as set forth in this document.
P. PLAN ADMINISTRATOR shall mean the committee of two (2) or
more Board members appointed by the Board to administer the Plan.
Q. PURCHASE DATE shall mean the last business day of each
Purchase Interval. The initial Purchase Date shall be January 31, 2000.
R. PURCHASE INTERVAL shall mean each successive six (6)-month
period within the offering period at the end of which there shall be purchased
shares of Common Stock on behalf of each Participant.
S. SEMI-ANNUAL ENTRY DATE shall mean the first business day in
February and August each year on which an Eligible Employee may first enter an
offering period.
T. STOCK EXCHANGE shall mean either the American Stock Exchange
or the New York Stock Exchange.
U. UNDERWRITING AGREEMENT shall mean the agreement between the
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
A-3.
<PAGE> 13
TICKETS.COM, INC.
STOCK PURCHASE AGREEMENT
I hereby elect to participate in the 1999 Employee Stock
Purchase Plan (the "ESPP") for the offering period specified below, and I hereby
subscribe to purchase shares of Common Stock of Tickets.com, Inc. (the
"Corporation") in accordance with the provisions of this Agreement and the ESPP.
I hereby authorize payroll deductions from each of my paychecks following my
entry into the ESPP in the 1% multiple of my base salary (not to exceed a
maximum of 10%) specified in my attached Enrollment Form.
The offering period is divided into a series of consecutive
purchase intervals. With the exception of the initial purchase interval which
will begin at the time of the initial public offering of the Common Stock and
end on January 31, 2000, those purchase intervals will each be of six months
duration and will run from the first business day of February to the last
business day of July each year and from the first business day of August each
year to the last business day of January in the following year. My participation
will automatically remain in effect from one purchase interval to the next in
accordance with my payroll deduction authorization, unless I withdraw from the
ESPP or change the rate of my payroll deduction or unless my employment status
changes. I may reduce the rate of my payroll deductions on one occasion per
purchase interval, and I may increase my rate of payroll deductions to become
effective at the beginning of any subsequent purchase interval.
My payroll deductions will be accumulated for the purchase of
shares of common stock on the last business day of each purchase interval within
the offering period. The purchase price per share will be equal to 85% of the
lower of (i) the fair market value per share of Common Stock on my Entry Date
into the offering period or (ii) the fair market value per share on the purchase
date. I will also be subject to ESPP restrictions (i) limiting the maximum
number of shares which I may purchase per purchase interval, (ii) limiting the
maximum number of shares which may be purchased in total by all participants per
purchase interval and (iii) prohibiting me from purchasing more than $25,000
worth of Common Stock for each calendar year my purchase right remains
outstanding.
I may withdraw from the ESPP at any time prior to the last
business day of the purchase interval and elect either to have the Corporation
refund all my payroll deductions for that interval or to have such payroll
deductions applied to the purchase of Common Stock at the end of such interval.
However, I may not rejoin that particular offering period at any later date.
Upon the termination of my employment for any reason, including death or
disability, or my loss of eligible employee status, my participation in the ESPP
will immediately cease, and all my payroll deductions for the purchase interval
in which my employment terminates or my loss of eligibility occurs will
immediately be refunded.
If I take an unpaid leave of absence, my payroll deductions will
immediately cease, and any payroll deductions for the purchase interval in which
my leave begins will, at my election, either be refunded or applied to the
purchase of shares of Common Stock at the end of that purchase interval. If my
re-employment is guaranteed by either law or contract, or if I return to active
service within ninety (90) days, then upon my return my payroll deductions will
automatically resume at the rate in effect when my leave began.
The Corporation will issue a stock certificate for the shares
purchased on my behalf after the end of each purchase interval. The certificate
will be issued in street name and will be deposited directly in my
Corporation-designated brokerage account. I will notify the Corporation of any
disposition of shares purchased under the ESPP, and I will satisfy all
applicable income and employment tax withholding requirements at the time of
such disposition.
The Corporation has the right, exercisable in its sole
discretion, to amend or terminate all outstanding purchase rights under the ESPP
at any time, with such amendment or termination to become effective immediately
following the end of any purchase interval. However, such purchase rights may be
amended or terminated with an immediate effective date to the extent necessary
to avoid the Corporation's recognition of compensation expense for financial
reporting purposes, should the accounting principles applicable to the ESPP
change. Upon any such termination, I will cease to have any further rights to
purchase shares of common stock under this Agreement.
I have read this Agreement and hereby agree to be bound by the
terms of both this Agreement and the ESPP. The effectiveness of this Agreement
is dependent upon my eligibility to participate in the ESPP.
Date:
------------------------------
Signature of Employee
--------------------
Printed Name:
----------------------------
Offering Period: Initial Offering Period Ending July 31, 2001
<PAGE> 1
EXHIBIT 99.3
FORM OF WARRANT TO PURCHASE COMMON STOCK
GRANTED TO CERTAIN INDIVIDUALS
TICKETS.COM, INC.
FORM OF WARRANT
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), AND THIS WARRANT CANNOT BE SOLD OR TRANSFERRED AND THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT CANNOT BE SOLD OR TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT RELATED THERETO OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY ISSUING THIS WARRANT THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT.
Warrant No. 99-[__]
[_____] Shares
(Subject to Adjustment)
COMMON STOCK PURCHASE WARRANT
[_______________],1999
This certifies that, for value received, [____________________]
("Warrantholder") is entitled to subscribe for and purchase from Tickets.com,
Inc., a Delaware corporation ("Company"), [______] shares of the Company's
Common Stock ("Common Stock") at a price per share of $[_____] ("Exercise
Price"), subject to the terms and conditions stated herein.
1. Exercise of Warrant.
1.1 Manner of Exercise. The rights represented by this Warrant
may be exercised in whole or in part by the holder hereof by the surrender of
this Warrant and delivery of an executed Subscription Agreement in the form
attached hereto as Annex A to the Company at its principal executive office, or
such other place as the Company shall designate in writing, at any time prior to
the termination of this Warrant, accompanied by payment for the Common Stock so
subscribed for in cash or certified bank or cashier's checks.
1.2 Exercise Period. This Warrant shall first become exercisable
immediately upon issuance. Unless terminated earlier pursuant to the terms
hereof, this Warrant shall terminate on [__________], 2004.
1.3 Net Issue Exercise. In lieu of exercising this Warrant
pursuant to Section 1.1 hereof, the Warrantholder may elect to receive a number
of shares of Common Stock equal to the value (as determined below) of this
Warrant by surrender of this Warrant at the principal office of the Company
together with the Notice of Exercise (a form of which is attached hereto as
Annex A) in which Alternative No. 2 thereof is initialed by the Warrantholder.
In such event, the Company shall issue to the Warrantholder a number of shares
of Common Stock computed using the following formula:
X = Y(A-B)
------
A
Where X = the number of shares of Common Stock to be issued
to the Warrantholder.
Y = the number of shares of Common Stock subject to
this Warrant.
A = the fair market value of one share of Common Stock
at the time of exercise.
1
<PAGE> 2
B = the Exercise Price (as adjusted to the date of such
calculation).
For purposes of the above calculation, the fair market value of one share of
Common Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, that where there exists a public market for the
Company's Common Stock at the time of such exercise, the fair market value per
share shall be the average of the closing bid and asked prices of the Common
Stock quoted in the Over-The-Counter Market Summary or the last reported sale
price of the Common Stock or the closing price quoted on the Nasdaq National
Market or on any exchange on which the Common Stock is listed, whichever is
applicable, as published in the Western Edition of The Wall Street Journal for
the five (5) trading days prior to the exercise date. Notwithstanding the
foregoing, in the event this Warrant is exercised within five (5) trading days
after an initial public offering of the Company's Common Stock, the fair market
value per share shall be the per share offering "Price to Public" of the
Company's initial public offering.
1.4 Issuance of Shares. This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise or net exercise as provided above, and the person
entitled to receive the shares of Common Stock issuable upon such exercise shall
be treated for all purposes as the holder of record of such shares as of the
close of business on such date. As promptly as practicable on or after such date
and in any event within fifteen (15) business days thereafter, the Company at
its expense shall issue and deliver to the person or persons entitled to receive
the same a certificate or certificates for the number of shares issuable upon
such exercise.
1.5 No Fractional Shares. No fractional shares shall be issued
upon the exercise of this Warrant. In lieu of any fractional share to which the
Warrantholder would otherwise be entitled, the Company shall make a cash payment
equal to the Exercise Price multiplied by such fraction.
2. Representations and Warranties of Warrantholder. The Warrantholder
by accepting this Warrant represents and warrants as follows:
2.1 Investment Representation. The Warrant is acquired for
Warrantholder's own account for investment purposes and not with a view to any
offering or distribution and Warrantholder has no present intention of selling
or otherwise disposing of the Warrant or the underlying shares of Common Stock
in violation of applicable securities laws. Upon exercise, Warrantholder will
confirm, in respect of securities obtained upon such exercise, that
Warrantholder is acquiring such securities for Warrantholder's own account and
not with a view to any offering or distribution in violation of applicable
securities laws. Warrantholder acknowledges that shares of Common Stock issued
upon exercise of this Warrant have not been registered under the Act and are
"restricted securities" as that term is defined in Rule 144 promulgated under
the Act and must be held indefinitely unless they are subsequently registered
under the Act or an exemption from such registration is available. Warrantholder
further acknowledges that the certificate(s) representing the Common Stock
issued upon exercise of this Warrant shall be endorsed with a legend similar to
the legend set forth on this Warrant and all other legends, if any, required by
applicable federal and state securities laws to be placed on the certificate(s).
2.2 Tax Matters. Warrantholder will consult his own tax counsel
with respect to implications under the Internal Revenue Code relating to the
acceptance and exercise of this Warrant.
3. Validity of Common Stock. The Company warrants and agrees that all
shares of Common Stock which may be issued upon the exercise of this Warrant
will, upon issuance, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issue thereof. The Company
further warrants and agrees that during the period within which this Warrant may
be exercised the Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock to provide for the exercise of this
Warrant.
4. Adjustments. The number of shares of Common Stock for which
Warrantholder is entitled to subscribe and purchase from the Company pursuant to
this Warrant and the Exercise Price for such shares shall be subject to
adjustment from time to time only as follows:
2
<PAGE> 3
4.1 Adjustments for Stock Splits and Combinations. If the
Company at any time or from time to time after the date hereof effects a
subdivision of the outstanding Common Stock, the number of shares of Common
Stock for which Warrantholder is entitled to subscribe and purchase from the
Company upon exercise of this Warrant shall be proportionately increased and the
Exercise Price then in effect immediately before the subdivision shall be
proportionately decreased, and conversely, if the Company at any time or from
time to time after the date hereof combines the outstanding shares of Common
Stock, the number of shares of Common Stock for which Warrantholder is entitled
to subscribe and purchase from the Company shall be proportionately decreased
and the Exercise Price then in effect immediately before the subdivision shall
be proportionately increased. Any adjustment under this subsection shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
4.2 Adjustments for Certain Dividends and Distributions. In the
event the Company at any time or from time to time after the date hereof makes,
or fixes a record date for the determination of holders of Common Stock entitled
to receive, a dividend or other distribution payable in additional shares of
Common Stock, then and in each such event the number of shares of Common Stock
for which Warrantholder is entitled to subscribe and purchase from the Company
upon exercise of this Warrant shall be proportionately increased and the
Exercise Price then in effect shall be proportionately decreased as of the time
of such issuance or, in the event such a record date is fixed, as of the close
of business on such record date; provided, however, that if such record date is
fixed and such dividend is not fully paid or if such distribution is not fully
made on the date fixed therefor, the number of shares of Common Stock for which
Warrantholder is entitled to subscribe and purchase from the Company and the
Exercise Price therefor shall be recomputed accordingly as of the close of
business on such record date and thereafter the number of shares of Common Stock
then issuable on exercise of this Warrant and the Exercise Price therefor shall
be adjusted pursuant to this subsection as of the time of actual payment of such
dividends or distributions.
4.3 Adjustment for Reclassification, Exchange and Substitution.
If the Common Stock issuable upon the exercise of this Warrant is changed into
the same or a different number of shares of any class or classes of stock,
whether by reclassification, recapitalization or otherwise, other than a
subdivision or combination of shares or stock dividend or a capital
reorganization, merger, consolidation or sale of assets provided for elsewhere
in this Section 4 or pursuant to a Change of Control described in Section 5,
then and in any such event Warrantholder shall have the right thereafter to
purchase the kind and amount of stock and other securities and property
receivable upon such reclassification, recapitalization or other change, by
holders of the number of shares of Common Stock which might have been purchased
upon exercise of this Warrant immediately prior to such reclassification,
recapitalization or change, all subject to further adjustment as provided
herein.
4.4 Adjustment for Reorganizations, Mergers, Consolidations or
Sales of Assets. If at any time or from time to time there is a capital
reorganization or any merger of the Company with or into any other corporation
or corporations or a sale of all or substantially all of the assets of the
Company to any other person, other than pursuant to a Change of Control
described in Section 5, or any voluntary or involuntary liquidation, dissolution
or winding up of the Company (any such transaction referred to herein as a
"Reorganization") involving the Common Stock then, as a part of such
Reorganization, provision shall be made so that Warrantholder shall thereafter
be entitled to receive, upon exercise of this Warrant, the number of shares of
stock or other securities or property of the Company or of the successor
corporation resulting from such Reorganization to which a holder of Common Stock
deliverable upon exercise of this Warrant would have been entitled on such
Reorganization. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 4 with respect to the rights of
Warrantholder after such Reorganization to the end that the provisions of this
Section 4 (including adjustments of the Exercise Price then in effect and number
of shares of stock purchasable upon exercise of this Warrant) shall be
applicable after that event and be as nearly equivalent to the provisions hereof
as may be practicable.
4.5 Notice of Adjustments. Upon any adjustments of the Exercise
Price or the amount or kind of securities or other property issuable upon
exercise of this Warrant, then and in each case the Company shall give written
notice of such adjustment by first class mail, postage prepaid, addressed to the
holder of this Warrant at holder's address registered on the books of the
Company, which notice shall state the Exercise Price resulting from
3
<PAGE> 4
such adjustment and the amount and kind of securities purchasable at such price
upon the exercise of this Warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.
4.6 Notice of Record Date. In the event of (i) any taking by
the Company of a record of the holders of any class of Common Stock for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any capital transaction that the Company
proposes to effect requiring adjustments pursuant to this Section 4 ("Capital
Transaction"), the Company shall mail to Warrantholder at least twenty (20) days
prior to the date specified therein, a notice specifying (1) the date on which
any such record is to be taken for the purpose of such dividend or distribution
and a description of such dividend or distribution, (2) the date on which any
such Capital Transaction is expected to become effective, and (3) the time, if
any, that is to be fixed, as to when the holders of record of Common Stock shall
be entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such Capital Transaction.
5. Early Expiration of Warrant Upon a Change of Control. Upon the
occurrence of a Change of Control (as defined below), as of the effective date
of the Change of Control this Warrant shall terminate. The Company shall give
the Warrantholder at least twenty (20) days' advance written notice of the
closing of such Change of Control transaction. For purposes of this Section 5, a
Change in Control shall be deemed to have occurred if (a) there shall be
consummated (I) any reorganization, consolidation or merger of the Company or
any ultimate parent of the Company (the "Parent") in which the Company or its
Parent is not the continuing or surviving corporation or pursuant to which
shares of the Company's or its Parent's Common Stock would be converted into
cash, securities or other property, in either case other than a reorganization,
consolidation or merger of the Company or its Parent in which the holders of the
Company's or its Parent's Common Stock immediately prior to such transaction
would be the beneficial owner (as defined below) of a majority of the voting
stock of the surviving corporation immediately after the merger, or (II) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of the
Company, or (b) any "person" (as defined in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than any
stockholder of the Company as of the close of business on the date hereof, shall
become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50% or more of the Company's or its Parent's
outstanding Common Stock. The term "Parent" means a corporation, partnership,
trust, limited liability company or other entity that is the ultimate beneficial
owner (as defined above) of 50% or more of the Company's outstanding voting
securities.
6. Amendments. Any term of this Warrant may be amended only upon the
written consent of the Company and the Warrantholder.
7. Transfer of Warrant.
7.7 This Warrant may not be assigned or transferred without the
prior written consent of the Company, which consent may be withheld for any
reason in the sole and subjective discretion of the Company.
7.8 No transfer or assignment of this Warrant shall be made
without compliance with the legend set forth on the first page of this Warrant.
7.9 In order to effectuate any transfer of this Warrant, or any
rights or obligations hereunder, the Warrantholder must execute an assignment in
form and substance acceptable to Company, the proposed transferee must execute
an acknowledgment and agreement in form and substance acceptable to Company, and
the Warrantholder and proposed transferee shall execute all other documents,
representations and warranties which Company may request. No proposed transfer
shall have any effect unless and until Company gives its written consent to the
proposed transfer and acknowledges that the proposed transferee has become the
current Warrantholder and registered owner of this Warrant.
8. Holdback Agreement. The Warrantholder by accepting this Warrant
agrees that to the extent requested by the managing underwriter in the case of
an underwritten public offering by the Company of its Common Stock,
Warrantholder will not affect any sale, short sale, loan, grant any option for
the purchase of, or otherwise dispose of any shares of the Company's Common
Stock received upon exercise of this Warrant, including a sale pursuant to Rule
144 under the Securities Act of 1933, as amended, during (i) with respect to an
initial public
4
<PAGE> 5
offering, the 180-day period or such shorter period agreed upon by Warrantholder
and the requesting underwriter or (ii) in any other case the 90-day period or
such shorter period agreed upon by the Warrantholder and any underwriter,
beginning on the effective date of the applicable registration statement. The
Company may impose stop-transfer instructions with respect to such securities
subject to the foregoing registration until the end of such period.
9. Miscellaneous Matters.
9.10 As used herein, the term "Common Stock" shall mean the
Company's presently authorized Common Stock and stock of any other class into
which such presently authorized Common Stock may hereafter have been converted.
9.11 As used herein, the word "person" shall mean an individual
or entity.
9.12 This Warrant and the name and address of the holder have
been registered in a Warrant Register that is kept at the principal office of
the Company, and the Company may treat the holder so registered as the owner of
this Warrant for all purposes.
9.13 This Warrant shall not entitle the holder hereof to any
voting rights or other rights as a shareholder of the Company, or to any other
rights whatsoever except the rights herein expressed, and no cash dividend paid
out of earnings or surplus or interest shall be payable or accrue in respect of
this Warrant or the interest represented hereby or the shares which may be
subscribed for and purchased hereunder until and unless and except to the extent
that the rights represented by this Warrant shall be exercised.
9.14 This Warrant shall be governed by and interpreted in
accordance with the internal laws, and not the law of conflicts, of the State of
California.
9.15 All notices under this Warrant shall be given as set forth
in the Agreement.
TICKETS.COM, INC., a Delaware corporation
By: /s/
-------------------------------------
John M. Markovich, Executive Vice
President, Finance and Chief
Financial Officer
---------------------------------------
[---------------]
5
<PAGE> 6
SUBSCRIPTION AGREEMENT
--------------------, ----
To: Tickets.com, Inc.
The undersigned, pursuant to the provisions set forth in Warrant No.
99-[___], hereby agrees to subscribe for and purchase __________ shares of the
Common Stock covered by such Warrant, and makes payment herewith in full for
such Common Stock at the Exercise Price, payable as follows (initial one
alternative).
1. Bank or cashiers check
2. Net issue
The undersigned represents and warrants to you that the undersigned is
acquiring the shares covered hereby for the undersigned's own account for
investment purposes and not with a view to any offering or distribution in
violation of applicable securities laws.
Signature:
------------------------------
Printed Name
and Title:
------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
<PAGE> 1
EXHIBIT 99.4
FORM OF OPTION TO PURCHASE COMMON STOCK
GRANTED TO CERTAIN INDIVIDUALS
TICKETS.COM, INC.
NEITHER THIS OPTION NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE
OPTION HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), AND THIS OPTION CANNOT BE SOLD OR TRANSFERRED AND THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS OPTION CANNOT BE SOLD OR TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT RELATED THERETO OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY ISSUING THIS OPTION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT.
Option No. [_____] [____] Shares
(Subject to Adjustment)
OPTION TO PURCHASE COMMON STOCK
[________], 1999
This certifies that, for value received, [__________]
("Optionee") is entitled to subscribe for and purchase from Tickets.com, Inc., a
Delaware corporation ("Company"), [___] shares of the Company's Common Stock
("Common Stock") at a price per share of [$____] ("Exercise Price"), subject to
the terms and conditions stated herein.
1. Exercise of Option.
1.1 Manner of Exercise. The rights represented by this Option
may be exercised in whole or in part by the holder hereof by the surrender of
this Option and delivery of an executed Exercise Notice in the form attached
hereto as Annex A to the Company at its principal executive office, or such
other place as the Company shall designate in writing, at any time prior to the
termination of this Option, accompanied by payment for the Common Stock so
subscribed for in cash or certified bank or cashier's checks.
1.2 Exercise Period. This Option shall first become exercisable
on [______], 1999, and shall remain exercisable until [_______], 2004.
1.3 Net Issue Exercise. In lieu of exercising this Option
pursuant to Section 1.1 hereof, the Optionee may elect to receive, without
payment of cash, a number of shares of Common Stock equal to the value (as
determined below) of this Option by surrender of this Option at the principal
office of the Company together with the Exercise Notice (a form of which is
attached hereto as Annex A) in which Alternative No. 2 thereof is initialed by
the Optionee. In such event, the Company shall issue to the Optionee a number of
shares of Common Stock computed using the following formula:
<PAGE> 2
X = Y(A-B)
------
A
Where X = the number of shares of Common Stock to be
issued to the Optionee.
Y = the number of shares of Common Stock as to
which this Option has been exercised.
A = the fair market value of one share of Common
Stock at the time of exercise.
B = the Exercise Price (as adjusted to the date
of such calculation).
For purposes of the above calculation, the fair market value of one share of
Common Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, that where there exists a public market for the
Company's Common Stock at the time of such exercise, the fair market value per
share shall be the average of the closing bid and asked prices of the Common
Stock quoted in the Over-The-Counter Market Summary or the last reported sale
price of the Common Stock or the closing price quoted on the Nasdaq National
Market or on any exchange on which the Common Stock is listed, whichever is
applicable, as published in the Western Edition of The Wall Street Journal for
the five (5) trading days prior to the exercise date. Notwithstanding the
foregoing, in the event this Option is exercised within five (5) trading days
after an initial public offering of the Company's Common Stock, the fair market
value per share shall be the per share offering "Price to Public" of the
Company's initial public offering.
1.4 Issuance of Shares. This Option shall be deemed to have
been exercised immediately prior to the close of business on the date of its
surrender for exercise or net exercise as provided above, and the person
entitled to receive the shares of Common Stock issuable upon such exercise shall
be treated for all purposes as the holder of record of such shares as of the
close of business on such date. As promptly as practicable on or after such date
and in any event within fifteen (15) business days thereafter, the Company at
its expense shall issue and deliver to the person or persons entitled to receive
the same a certificate or certificates for the number of shares issuable upon
such exercise.
1.5 No Fractional Shares. No fractional shares shall be issued
upon the exercise of this Option. In lieu of any fractional share to which the
Optionee would otherwise be entitled, the Company shall make a cash payment
equal to the Exercise Price multiplied by such fraction.
2. Representations and Warranties of Optionee. The Optionee by
accepting this Option represents and Options as follows:
2.1 Purchase for Own Account. This Option is acquired for
Optionee's own account and with no intention of distributing or reselling this
Option or the underlying shares of Common Stock in any transaction that would be
in violation of the securities laws of the United states of America, or any
state, without prejudice, however, to the rights of Optionee at all times to
sell or otherwise dispose of this Option or the underlying shares of Common
Stock under an effective registration statement under the Securities Act, or
under an exemption from such registration available under the Securities Act. If
the Optionee should in the future decide to dispose of this Option or the
underlying shares of Common Stock, the Optionee understands and agrees that it
may do so only in compliance with the Securities Act and applicable state
securities laws, as then in effect.
2.2 Restricted Securities. Optionee acknowledges that the
Option and the underlying shares of Common Stock issued upon exercise of this
Option have not been registered under the Securities Act and are "restricted
securities" as that term is defined in Rule 144 promulgated under the Securities
Act and must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available. Optionee
agrees that the certificate(s) representing the Common Stock issued upon
exercise of this Option shall be endorsed with a legend similar to the legend
set forth on this Option and all other legends, if any, required by applicable
federal and state securities laws to be placed on the certificate(s).
2
<PAGE> 3
2.3 Accredited Investor. Optionee is experienced in evaluating
companies such as the Company, is an "accredited investor" within the meaning of
Rule 501 promulgated under the Securities Act, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment and has the ability to suffer the total loss of its
investment.
2.4 Tax Matters. Optionee will consult his own tax counsel with
respect to implications under the Internal Revenue Code relating to the
acceptance and exercise of this Option.
3. Validity of Common Stock. The Company warrants and agrees that all
shares of Common Stock which may be issued upon the exercise of 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. The Company
further warrants and agrees that during the period within which this Option may
be exercised the Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock to provide for the exercise of this
Option.
4. Adjustments. The number of shares of Common Stock for which
Optionee is entitled to subscribe and purchase from the Company pursuant to this
Option and the Exercise Price for such shares shall be subject to adjustment
from time to time only as follows:
4.1 Adjustments for Stock Splits and Combinations. If the
Company at any time or from time to time after the date hereof effects a
subdivision of the outstanding Common Stock, the number of shares of Common
Stock for which Optionee is entitled to purchase from the Company upon exercise
of this Option shall be proportionately increased and the Exercise Price then in
effect immediately before the subdivision shall be proportionately decreased,
and conversely, if the Company at any time or from time to time after the date
hereof combines the outstanding shares of Common Stock, the number of shares of
Common Stock for which Optionee is entitled to purchase from the Company shall
be proportionately decreased and the Exercise Price then in effect immediately
before the subdivision shall be proportionately increased. Any adjustment under
this subsection shall become effective at the close of business on the date the
subdivision or combination becomes effective.
4.2 Adjustments for Certain Dividends and Distributions. In the
event the Company at any time or from time to time after the date hereof makes,
or fixes a record date for the determination of holders of Common Stock entitled
to receive, a dividend or other distribution payable in additional shares of
Common Stock, then and in each such event the number of shares of Common Stock
for which Optionee is entitled to purchase from the Company upon exercise of
this Option shall be proportionately increased and the Exercise Price then in
effect shall be proportionately decreased as of the time of such issuance or, in
the event such a record date is fixed, as of the close of business on such
record date; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the number of shares of Common Stock for which Optionee is
entitled to purchase from the Company and the Exercise Price therefor shall be
recomputed accordingly as of the close of business on such record date and
thereafter the number of shares of Common Stock then issuable on exercise of
this Option and the Exercise Price therefor shall be adjusted pursuant to this
subsection as of the time of actual payment of such dividends or distributions.
4.3 Adjustment for Reclassification, Exchange and Substitution.
If the Common Stock issuable upon the exercise of this Option is changed into
the same or a different number of shares of any class or classes of stock,
whether by reclassification, recapitalization or otherwise, other than a
subdivision or combination of shares or stock dividend or a capital
reorganization, merger, consolidation or sale of assets provided for elsewhere
in this Section 4, then and in any such event Optionee shall have the right
thereafter to purchase the kind and amount of stock and other securities and
property receivable upon such reclassification, recapitalization or other
change, by holders of the number of shares of Common Stock which might have been
purchased upon exercise of this Option immediately prior to such
reclassification, recapitalization or change, all subject to further adjustment
as provided herein.
4.4 Adjustment for Reorganizations, Mergers, Consolidations or
Sales of Assets. If at any time or from time to time there is a capital
reorganization or any merger of the Company with or into any other corporation
or corporations or a sale of all or substantially all of the assets of the
Company to any other person or any voluntary or involuntary liquidation,
dissolution or winding up of the Company (any such transaction referred to
herein as a "Reorganization") involving the Common Stock then, as a part of such
Reorganization, provision shall be
3
<PAGE> 4
made so that Optionee shall thereafter be entitled to receive, upon exercise of
this Option, the number of shares of stock or other securities or property of
the Company or of the successor corporation resulting from such Reorganization
to which a holder of Common Stock deliverable upon exercise of this Option would
have been entitled on such Reorganization. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 4
with respect to the rights of Optionee after such Reorganization to the end that
the provisions of this Section 4 (including adjustments of the Exercise Price
then in effect and number of shares of stock purchasable upon exercise of this
Option) shall be applicable after that event and be as nearly equivalent to the
provisions hereof as may be practicable.
4.5 Notice of Adjustments. Upon any adjustments of the Exercise
Price or the amount or kind of securities or other property issuable upon
exercise of this Option, then and in each case the Company shall give written
notice of such adjustment by first class mail, postage prepaid, addressed to the
holder of this Option at holder's address registered on the books of the
Company, which notice shall state the Exercise Price resulting from such
adjustment and the amount and kind of securities purchasable at such price upon
the exercise of this Option, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4.6 Notice of Record Date. In the event of (i) any taking by
the Company of a record of the holders of any class of Common Stock for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any capital transaction that the Company
proposes to effect requiring adjustments pursuant to this Section 4 ("Capital
Transaction"), the Company shall mail to Optionee at least twenty (20) days
prior to the date specified therein, a notice specifying (1) the date on which
any such record is to be taken for the purpose of such dividend or distribution
and a description of such dividend or distribution, (2) the date on which any
such Capital Transaction is expected to become effective, and (3) the time, if
any, that is to be fixed, as to when the holders of record of Common Stock shall
be entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such Capital Transaction.
5. Amendments. Any term of this Option may be amended only upon the
written consent of the Company and the Optionee.
6. Transfer of Option.
6.1 This Option may not be assigned or transferred without the
prior written consent of the Company, which consent may be withheld for any
reason in the sole and subjective discretion of the Company.
6.2 No transfer or assignment of this Option shall be made
without compliance with the legend set forth on the first page of this Option.
6.3 In order to effectuate any transfer of this Option, or any
rights or obligations hereunder, the Optionee must execute an assignment in form
and substance acceptable to Company, the proposed transferee must execute an
acknowledgment and agreement in form and substance acceptable to Company, and
the Optionee and proposed transferee shall execute all other documents,
representations and warranties which Company may request. No proposed transfer
shall have any effect unless and until Company gives its written consent to the
proposed transfer and acknowledges that the proposed transferee has become the
current Optionee and registered owner of this Option.
7. Holdback Agreement. The Optionee by accepting this Option agrees
that to the extent requested by the managing underwriter in the case of an
underwritten public offering by the Company of its Common Stock, Optionee will
not affect any sale, short sale, loan, grant any option for the purchase of, or
otherwise dispose of any shares of the Company's Common Stock received upon
exercise of this Option, including a sale pursuant to Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), during (i) with
respect to an initial public offering, the 180-day period or such shorter period
agreed upon by Optionee and the requesting underwriter or (ii) in any other case
the 90-day period or such shorter period agreed upon by the Optionee and any
underwriter, beginning on the effective date of the applicable registration
statement. The Company may impose stop-transfer instructions with respect to
such securities subject to the foregoing registration until the end of such
period.
4
<PAGE> 5
8. Miscellaneous Matters.
8.1 As used herein, the term "Common Stock" shall mean the
Company's presently authorized Common Stock and stock of any other class into
which such presently authorized Common Stock may hereafter have been converted.
8.2 As used herein, the word "person" shall mean an individual
or entity.
8.3 This Option and the name and address of the holder have
been registered in a Option Register that is kept at the principal office of the
Company, and the Company may treat the holder so registered as the owner of this
Option for all purposes.
8.4 This Option shall not entitle the holder hereof to any
voting rights or other rights as a shareholder of the Company, or to any other
rights whatsoever except the rights herein expressed, and no cash dividend paid
out of earnings or surplus or interest shall be payable or accrue in respect of
this Option or the interest represented hereby or the shares which may be
subscribed for and purchased hereunder until and unless and except to the extent
that the rights represented by this Option shall be exercised.
8.5 This Option shall be governed by and interpreted in
accordance with the internal laws, and not the law of conflicts, of the State of
California.
TICKETS.COM, INC.
By:
----------------------------------------
John M. Markovich, Executive Vice
President, Finance and Chief Financial
Officer
--------------------------------------------
[-------]
5
<PAGE> 6
EXERCISE NOTICE
--------------------, ----
To: Tickets.com, Inc.
The undersigned, pursuant to the provisions set forth in Option
No. [______], hereby agrees to subscribe for and purchase __________ shares of
the Common Stock covered by such Option, and makes payment herewith in full for
such Common Stock at the Exercise Price, payable as follows (initial one
alternative).
1. Bank or cashiers check
2. Net issue
The undersigned represents and Options to you that the
undersigned is acquiring the shares covered hereby for the undersigned's own
account for investment purposes and not with a view to any offering or
distribution in violation of applicable securities laws.
Signature:
------------------------------------
Printed Name
and Title:
------------------------------------
Address:
--------------------------------------
--------------------------------------
--------------------------------------
<PAGE> 1
EXHIBIT 99.5
TICKETS.COM INC.,
A DELAWARE CORPORATION
1998 STOCK PLAN
1. Purposes of the Plan. The purposes of this 1998 Stock Plan are
(a) to formalize the terms of options granted to employees, service providers
and others prior to the date hereof, and (b) to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to Employees, Directors and Consultants and (c) to promote
the success of the business of TICKETS.COM INC., a Delaware corporation (the
"Company"). Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan in accordance with Section 4 hereof.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws
of any other country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 hereof.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means TICKETS.COM INC., a Delaware corporation.
(h) "Consultant" means any person who is engaged by the Company
or any Parent or Subsidiary to render consulting or advisory services to such
entity.
(i) "Director" means a member of the Board of Directors of the
Company.
(j) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code, provided, however, that in the case of an
Optionee who has entered into an
<PAGE> 2
Employment Agreement with the Company, any definition of "Disability" in such
agreement shall govern and be incorporated herein by this reference.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive
Stock Option held by the Optionee shall cease to be treated as an Incentive
Stock Option and shall be treated for tax purposes as Nonstatutory Stock
Option. Neither service as a Director nor payment of a director's fee by the
Company shall be sufficient to constitute "employment" by the Company.
(l) "Employment Agreement" shall mean an agreement between the Optionee
and the Company which is valid and in force on the date of any action or
determination required hereunder.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(n) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of the Nasdaq Stock Market, its Fair
Market Value shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system for the
last market trading day prior to the time of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(o) "Incentive Stock Option: means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(p) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
2
<PAGE> 3
(q) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
(s) "Option Agreement" means a written or electronic agreement
between the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(t) "Option Exchange Program" means a program whereby outstanding
Options are exchanged for Options with a lower exercise price.
(u) "Optioned Stock" means the Common Stock subject to an Option or
a Stock Purchase Right.
(v) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
(w) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this 1998 Stock Plan.
(y) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11 below.
(z) "Section 16(b)" means Section 16(b) of the Securities Exchange
Act of 1934, as amended.
(aa) "Service Provider" means an Employee, Director or Consultant.
(bb) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(cc) "Stock Purchase Right" means a right to purchase Common Stock
pursuant to Section 11 below.
(dd) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan is 4,425,000 Shares. The Shares may be authorized but
unissued, or reacquired Common Stock.
3
<PAGE> 4
If an Option or Stock Purchase Right granted pursuant to the Plan
expires or becomes unexercisable without having been exercised in full, or is
surrendered pursuant to an Option Exchange Program, the unpurchased Shares which
were subject thereto shall become available for future grant or sale under the
Plan (unless the Plan has terminated). However, Shares that have actually been
issued under the Plan, upon exercise of either an Option or Stock Purchase
Right, shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if Shares of Restricted Stock
are repurchased by the Company at their original purchase price, such Shares
shall become available for future grant under the Plan.
4. Administration of the Plan.
(a) Administrator. The Plan shall be administered by the Board,
which shall be the Administrator. The Board may appoint a Committee with the
power to make recommendations to the Board for its approval with respect to any
matter delegated by the Board to the Committee.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, the Administrator shall have the authority, in its discretion to:
(i) determine the Fair Market Value;
(ii) select the Service Providers to whom Options and Stock
Purchase Rights may from time to time be granted hereunder;
(iii) determine the number of Shares to be covered by each such
award granted hereunder;
(iv) approve forms of agreement for use under the Plan;
(v) determine the terms and conditions, of any Option or
Stock Purchase Right granted hereunder. Such terms and conditions include, but
are not limited to, the exercise price, the time or times when Options or Stock
Purchase Rights may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Option or Stock Purchase Right or the
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vi) determine whether and under what circumstances to make an
offer that an Option may be settled in cash under subsection 9(c) instead of
Common Stock;
(vii) reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;
4
<PAGE> 5
(viii) initiate an Option Exchange Program;
(ix) prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option or Stock Purchase Right that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by Optionees to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; and
(xi) construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(c) Effect of Administrator's Decision. Subject to any contrary
provisions in any Stock Option Agreement or Employment Agreement, all decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.
5. Eligibility.
(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
(b) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(c) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon any Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall it interfere in
any way with his or her right or the Company's right to terminate such
relationship at any time, with or without cause, subject to the terms and
conditions of any Employment Agreements.
(d) The maximum number of Shares of Common Stock with respect to
which Options may be granted to any single Optionee during any three year
period shall be 50% of all Shares reserved for issuance pursuant to the Plan.
5
<PAGE> 6
6. Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 14 of the Plan.
7. Term of Option. The term of each Option shall be stated in the Option
Agreement; provided, however, that the term shall be no more than ten (10)
years from the date of grant thereof. In the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.
(B) granted to any other Employee, the per Share exercise
price shall be not less than 100% of the Fair Market Value per Share on the
date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a Service Provider who, at the time of grant
of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.
(B) granted to any other Service Provider, the per Share
exercise price shall be no less than 85% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price other than as required above pursuant to a merger or
other corporate transaction.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the
6
<PAGE> 7
case of an Incentive Stock Option, shall be determined at the time of grant).
Such consideration may consist of (1) cash, (2) check, (3) promissory note, (4)
other Shares which (x) in the case of Shares acquired upon exercise of an
Option, have been owned by the Optionee for more than six months on the date of
surrender, and (y) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which such Option shall be
exercised, (5) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan, or (6) any
combination of the foregoing methods of payment. In making its determination as
to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.
(c) The Administrator may provide for such additional terms and
conditions in the grant of the Option as it deems appropriate, which terms
shall be set forth in a written Option Agreement to be executed by the Company
and the Optionee.
9. Exercise of Option; Vesting; Termination.
(a) Procedure for Exercise; Vesting; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms hereof at
such times and under such conditions, including vesting conditions, as
determined by the Administrator and set forth in the Option Agreement. Unless
the Administrator provides otherwise, vesting of Options granted hereunder
shall be tolled during any unpaid leave of absence. An Option may not be
exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by
the Administrator and permitted by the Option Agreement and the Plan. Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Shares, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 12 of the Plan.
7
<PAGE> 8
Exercise of an Option in any manner shall result in a decrease
in the number of Shares thereafter available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, such Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement (of
at least ninety (90) days) to the extent that the Option is vested on the date
of termination (but in no event later than the expiration of the term of the
Option as set forth in the Option Agreement). In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for three (3)
months following the Optionee's termination. If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered
by the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise
his or her Option within such period of time as is specified in the Option
Agreement (of at least twelve (12) months) to the extent the Option is vested
on the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement). In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered
by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (of at least twelve (12) months) to the extent that the Option
is vested on the date of death (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement) by the Optionee's
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance. In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to the
entire Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. If the Option is not so exercised within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made, provided, however, that
the Optionee shall have no obligation by virtue of this provision to accept the
offer.
8
<PAGE> 9
10. Transferability of Options and Stock Purchase Rights. Without the
express consent of the Administrator, which may be granted or withheld in the
Administrator's sole discretion at the time of the grant or thereafter, the
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or
by the laws of descent or distribution and may be exercised, during the lifetime
of the Optionee, only by the Optionee. Notwithstanding the foregoing, Incentive
Stock Options shall not be transferable unless transfers are permitted under
then-applicable provisions of the Code.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such
person must accept such offer. The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine. Except with respect to Shares purchased by
Officers, Directors and Consultants, the repurchase option shall in no case
lapse at a rate of less than 20% per year over five (5) years from the date of
purchase.
(c) Other Provisions. The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions, including vesting
provisions, not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in section 12 of
the Plan.
9
<PAGE> 10
12. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option or Stock Purchase Right until
fifteen (15) days prior to such transaction as to all of the Optioned Stock
covered thereby, including Shares as to which the Option or Stock Purchase Right
would not otherwise be exercisable. In addition, the Administrator may provide
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option or Stock Purchase Right shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option or Stock Purchase Right will terminate immediately prior to the
Consummation of such proposed action.
(c) Merger or Asset Sale. The Option Agreement with any Optionee may,
but need not, in the discretion of the Administrator, contain provisions
regarding acceleration of vesting or other arrangements in the event of a merger
of the Company, the sale of substantially all of its assets, other business
combination or change of control.
13. Time of Granting Options and Stock Purchase Rights. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator. Notice
of the determination shall be given to each Service Provider to whom an Option
or Stock Purchase Right is so granted within a reasonable time after the date of
such grant.
10
<PAGE> 11
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Board shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to
exercise the powers granted to it hereunder with respect to Options granted
under the Plan prior to the date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise of
an Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell
or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
16. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
17. Reservation of Shares. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan
is adopted. Such shareholder approval shall be obtained in the degree and
manner required under Applicable Laws.
19. Information to Optionees and Purchasers. The Company shall provide to
each Optionee and to each individual who acquires Shares pursuant to the Plan,
not less frequently than annually during the period such Optionee or purchaser
has one or more Options or Stock
11
<PAGE> 12
Purchase Rights outstanding, and, in the case of an individual who acquires
Shares pursuant to the Plan, during the period such individual owns such
Shares, copies of annual financial statements. The Company shall not be
required to provide such statements to key employees whose duties in connection
with the Company assure their access to equivalent information.
20. Effectiveness of Plan. The Plan shall be effective upon approval by
the Board, and the terms of the Plan shall apply retroactively to all stock
options and stock purchase rights granted by the Company since incorporation.
12
<PAGE> 1
EXHIBIT 99.6
TICKETS.COM INC.,
a Delaware corporation
1998 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.
1. NOTICE OF STOCK OPTION GRANT
Mr. James B. Goodman
1543 10th Street #8
Santa Monica, CA 90401
The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:
Grant Number ____________________
Date of Grant April 20, 1998
Vesting Commencement Date April 20, 1998
Exercise Price per Share $0.05
Total Number of Shares Granted 125,000
Total Exercise Price $6,250.00
Type of Option: -x- Incentive Stock Option
(Check One)
__ Nonstatutory Stock Option
Term/Expiration Date: July 1, 2003
Vesting Schedule: 4 years annually
This Option shall be exercisable, in whole or in part, according to the
following vesting schedule:
The options shall vest in four (4) equal portions at the end of each year
during the term of Optionee's Employment by the Company; provided that all
vesting shall cease immediately upon the Optionee ceasing to be a Service
Provider.
<PAGE> 2
Termination Period:
This Option shall be exercisable for three months after Optionee
ceases to be a Service Provider. Upon Optionee's death or Disability, this
Option may be exercised for one year after Optionee ceases to be a Service
Provider. In no event may Optionee exercise this Option after the
Term/Expiration Date as provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant (the "Optionee"), an option (the
"Option") to purchase the number of Shares set forth in the Notice of Grant, at
the exercise price per Share set forth in the Notice of Grant (the "Exercise
Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 14(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this
Option Agreement, the terms and conditions of the Plan shall prevail. This
Agreement and the Plan shall supersede the provisions of any written or oral
employment or other agreement relating to the Option or the Shares issuable
pursuant to the Option between Optionee and Company.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds
the $100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
(a) Right to Exercise. This Option shall be exercisable during its
term in accordance with the Vesting Schedules set out in the Notice of Grant
and with the applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option shall be exercisable by delivery
of an exercise notice in the form attached as Exhibit A (the Exercise Notice)
which shall state the election to exercise the Option, the number of Shares
with respect to which the Option is being exercised, and such other
representations and agreements as may be required by the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to
all Exercised Shares. This Option shall be deemed to be exercised upon receipt
by the Company of such fully executed Exercise Notice accompanied by the
aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of an Option
unless such issuance and such exercise complies with Applicable laws. Assuming
such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.
3. Optionee's Representations. In the event the Shares have not been
registered under
2
<PAGE> 3
the Securities Act of 1933, as amended, at the time this Option is exercised,
the Optionee shall, if required by the Company, concurrently with the exercise
of all or any portion of this Option, deliver to the Company his or her
Investment Representation Statement in the form attached hereto as Exhibit B.
4. Lock-Up Period. Optionee hereby agrees that, if so requested by the
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the "Market Standoff Period") following
the effective date of a registration statement of the Company filed under the
Securities Act. Such restriction shall apply only to the first registration
statement of the Company to become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.
5. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash or check;
(b) consideration received by the Company under a formal cashless
exercise program adopted by the Company in connection with the Plan; or
(c) surrender of other Shares which, (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
6. Restrictions on Exercise. This Option may not be exercised until
such time as the Plan has been approved by the shareholders of the Company, or
if the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any Applicable
Law.
7. Transferability of Option. Without the express written consent of
the Administrator, this 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 Optionee only by Optionee. The terms of the Plan and
this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
8. Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
3
<PAGE> 4
9. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of ISO. If this Option qualifies as an ISO, there
will be no regular federal income tax liability upon the exercise of the
Option, although the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price will be treated as an adjustment
to the alternative minimum tax for federal tax purposes and may subject the
Optionee to the alternative minimum tax in the year of exercise.
(b) Exercise of Nonstatutory Stock Option. There may be a regular
federal income tax liability upon the exercise of a Nonstatutory Stock Option.
The Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price. If
Optionee is an Employee or a former Employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(c) Disposition of Shares. In the case of an NSO, if Shares are
held for at least one year, any gain realized on disposition of the Shares will
be treated as long-term capital gain for federal income tax purposes if the
Optionee has a timely election under Section 83b of the Code. In the case of an
ISO, if Shares transferred pursuant to the Option are held for at least one
year after exercise and of at least two years after the Date of Grant, any gain
realized on disposition of the Shares will also be treated as long-term capital
gain for federal income tax purposes. If Shares purchased under an ISO are
disposed of within one year after exercise or two years after the Date of
Grant, any gain realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the difference
between the Exercise Price and the lesser of (1) the Fair Market Value of the
Shares on the date of exercise, or (2) the sale price of the Shares. Any
additional gain will be taxed as capital gain, short-term or long-term
depending on the period that the ISO Shares were held.
(d) Notice of Disqualifying Disposition of ISO Shares. If the
Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.
10. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference.
4
<PAGE> 5
The Plan and this Option Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of California.
11. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN
DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE, SUBJECT TO ANY EMPLOYMENT AGREEMENT.
12. Forfeiture For Fraud, Unlawful Competition and Other Acts.
A. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE PLAN OR IN
THIS AGREEMENT, ALL OPTION AND OTHER RIGHTS WITH RESPECT TO ALL STOCK OPTIONS
GRANTED TO OPTIONEE HEREUNDER BUT NOT YET EXERCISED SHALL IMMEDIATELY TERMINATE
AND BE NULL AND VOID IF: (i) THE ADMINISTRATOR DETERMINES THAT THE OPTIONEE
ENGAGED IN ILLEGAL ACTS, FRAUD, OR OTHER WILLFUL MISCONDUCT DETRIMENTAL TO THE
COMPANY, INCLUDING VIOLATION OF THE COMPANY'S INSIDER TRADING POLICY; (ii)
OPTIONEE ENGAGES IN ANY CONDUCT IN VIOLATION OF OPTIONEE'S CONTRACTUAL
OBLIGATIONS TO THE COMPANY, INCLUDING BUT NOT LIMITED TO A VIOLATION OF ANY
VALID NON-COMPETITION, NON-DISCLOSURE, NON-SOLICITATION OR OTHER WRITTEN
AGREEMENT; OR (iii) OPTIONEE FAILS TO ASSIGN TO THE COMPANY ANY PATENT,
COPYRIGHT, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHT IN VIOLATION OF ANY
OF THE COMPANY'S POLICIES OR ANY AGREEMENT BETWEEN THE COMPANY AND OPTIONEE.
THE ACTS OR CIRCUMSTANCES DESCRIBED IN THE PRECEDING SENTENCE SHALL BE REFERRED
TO AS "EVENTS OF FORFEITURE."
B. THE OPTIONEE MAY BE RELEASED FROM OPTIONEE'S OBLIGATIONS
UNDER THIS SECTION 12 ONLY IF THE ADMINISTRATOR DETERMINES, IN ITS SOLE
DISCRETION, THAT SUCH A RELEASE IS IN THE BEST INTERESTS OF THE COMPANY. ALL
DETERMINATIONS BY THE ADMINISTRATOR
5
<PAGE> 6
MADE PURSUANT TO THIS SECTION 12 SHALL BE SUBJECT TO BINDING AND NONAPPEALABLE
ARBITRATION IN ACCORDANCE WITH SECTION 13.
13. Arbitration.
A. Any controversy, claim or dispute arising out of or relating to
this Option Agreement or the Option, or any act or occurrence relating to the
foregoing, or any decision of the Administrator relating to an option or its
forfeiture shall be determined and resolved by binding arbitration in
accordance with Title IX of The United States Code and The Commercial
Arbitration Rules (the "Rules") of the American Arbitration Association ("AAA")
in effect on the date the arbitration is commenced in accordance herewith. In
the event of any inconsistency between such Rules of the AAA and the terms of
this Agreement, this Agreement shall supersede the Rules of the AAA. Judgment
upon any award rendered in the arbitration may be entered in any court having
jurisdiction and shall be final, binding, non-appealable and conclusive. The
provisions of this Agreement shall govern the rights of all parties hereto,
including but not limited to any party claiming for or on behalf of Optionee,
including Optionee's heirs, successors, assigns, personal representatives and
bankruptcy trustees.
B. Any party may commence arbitration by serving upon all other
parties a written demand for arbitration sent by Certified Mail, Return Receipt
Requested to the Company at its principal place of business or to the Optionee
at his/her residence address as reflected in the records of the Company, by
Certified Mail, Return Receipt Requested to the AAA Office in the AAA Region in
which Pasadena, California is located.
C. The AAA shall administer the arbitration. The AAA shall appoint a
single arbitrator to conduct the arbitration within thirty (30) days of the
AAA's receipt of a demand for arbitration in accordance with this Section 13.
The arbitrator shall, by virtue of background, similar experience, be
knowledgeable in matters pertaining to stock option agreements and employment
relationships. There shall be no right of discovery in connection with the
arbitration except in accordance with the AAA's Rules. Not earlier than thirty
(30) nor more than forty-five (45) days after appointment, the arbitrator shall
conduct a preliminary hearing in accordance with the AAA "Guidelines for
Expediting Large, Complex Commercial Arbitrations." Not less than five (5) days
prior to the preliminary hearing, all parties to the arbitration shall serve
upon all other parties to the arbitration a written list of witnesses and
exhibits to be used in the arbitration hearing. Except for good cause shown, no
witness or exhibit may be utilized at the arbitration hearing other than those
set forth on such list.
D. The arbitrator shall receive evidence in a single hearing which
shall be conducted in Pasadena, California, unless the arbitrator determines by
written application of a party that such location would represent an
unreasonable hardship and that the hearing should be conducted in another
location. The hearing shall be commenced not more than sixty (60) days after the
appointment of the arbitrator.
E. The arbitrator shall award reasonable attorneys fees and costs in
favor of the prevailing party. The arbitrator shall issue a final award not more
than twenty (20) days following.
<PAGE> 7
the conclusion of the hearing. The arbitrator shall have the power to hear and
decide, by documents only or with the hearing (at the arbitrator's sole
discretion) any pre-hearing motions which are in the nature of pre-trial motions
to dismiss or for summary judgment. The arbitrator shall be entitled to receive
reasonable compensation at an hourly rate to be established by agreement between
the arbitrator and the AAA.
14. Acceleration of Vesting; Change of Control. In the event of a merger
of the Company with or into another corporation, or the sale of substantially
all of the assets of the Company, each outstanding Option and Stock Purchase
Right shall be assumed or an equivalent option or right substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation. In
the event that the successor corporation refuses to assume or substitute for the
Option or Stock Purchase Right, the Optionee shall fully vest in and have the
right to exercise the Option or Stock Purchase Right as to all of the Optioned
Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option or Stock Purchase Right shall terminate upon the expiration of such
period. For the purposes of this Section 14, the Option or Stock Purchase Right
shall be considered assumed if, following the merger or sale of assets, the
option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger or sale of assets, the consideration (whether stock, cash, or
other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.
Optionee acknowledges receipt of a copy of the Plan and represents that
he or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.
7
<PAGE> 8
OPTIONEE: James B. Goodman TICKETS.COM INC., a
Delaware corporation
- ---------------------------------- ----------------------------------
Signature By
- ---------------------------------- ----------------------------------
Print Name Title
- ----------------------------------
- ----------------------------------
Residence Address
8
<PAGE> 1
EXHIBIT 99.7
TICKETSLIVE CORPORATION
AMENDED AND RESTATED STOCK AWARD AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF PLAN: DEFINITIONS.
The name of this plan is the TicketsLive Corporation Amended and
Restated Stock Award and Incentive Plan (the "Plan"). The Plan amends and
restates the TicketsLive 1997 Incentive Program (the "Original Plan"). The
Original Plan was adopted by the Board of Directors of TicketsLive Corporation,
a New York corporation ("TicketsLive") on September 8, 1997. The Plan was
adopted by the Board on February 3, 1999, subject to the approval of the
shareholders of TicketsLive. The purpose of the Plan is to enable the Company
and its affiliates to attract and retain highly qualified personnel who will
contribute to the Company's success by their ability, ingenuity and industry and
to provide incentives to the participating officers, other key employees,
directors, consultants and advisors that are linked directly to increases in
stockholder value and will therefore inure to the benefit of all stockholders of
the Company.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(1) "Administrator" means the Board, or if the Board does not administer
the Plan, the Committee in accordance with Section 2.
(2) "Board" means the Board of Directors of TicketsLive.
(3) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto.
(4) "Committee" means the Compensation Committee of the Board plus such
additional individuals as the Board shall designate in order to fulfill, if
applicable, the Disinterested Persons requirement of Rule 16b-3 as promulgated
by the Securities and Exchange Commission (the "Commission") under the
Securities Exchange Act of 1934 (the "Act"), and as such Rule may be amended
from time to time, or any successor definition adopted by the Commission, or any
other Committee the Board may subsequently appoint to administer the Plan. If at
any time the Board shall not administer the Plan, then the functions of the
Board specified in the Plan shall be exercised by the Committee.
(5) "Company" means TicketsLive and any Subsidiary (or any successor
corporation).
(6) "Disability" means the inability of a Participant to perform
substantially his full-time duties and responsibilities to the Company by reason
of a physical or mental disability or
<PAGE> 2
infirmity (as determined good faith by a physicians acceptable to the Company)
for a period of 180 consecutive days within any 12 month period. The date of
such Disability shall be on the last day of such 180 day period.
(7) "Disinterested Person" shall have the meaning set forth in Rule 16b-3
of the Act "Rule 16b-3" and as such Rule may be amended from time to time, or
any successor definition adopted by the Commission.
(8) "Effective Date" shall mean the date provided pursuant to Section 11.
(9) "Eligible Director" means a director of the Company eligible to
participate in the Plan pursuant to Section 4.
(10) "Eligible Employee" means an employee of the Company eligible to
participate in the Plan pursuant to Section 4.
(11) "Fair Value" shall mean the fair market value of the Stock, as
reasonably determined by the Administrator or the Board.
(12) "Incentive Stock Option" means any Stock Option intended to be
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
(13) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option, including any Stock Option that provides (as of the
time such option is granted) that it will not be treated as an Incentive Stock
Option.
(14) "Participant" means any Eligible Employee, Eligible Director or any
consultant or advisor to the Company selected by the Administrator, pursuant to
the Administrator's authority in Section 2 below to receive grants of Stock
Options.
(15) "Stock" means the Common Stock, $0.01 par value, of TicketsLive.
(16) "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 5.
(17) "Subsidiary" means any corporation (other than TicketsLive) in an
unbroken chain of corporations beginning with TicketsLive, if each of the
corporations (other than the last corporation) in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
2
<PAGE> 3
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Board, or by the Committee which
shall be appointed by the Board and which shall serve at the pleasure of the
Board.
The Administrator shall have the power and authority to grant Stock Options
to Eligible Employees, Eligible Directors, and consultants and advisors to the
Company, pursuant to the terms of the Plan.
In particular, the Administrator shall have the authority:
(a) to select those employees of the Company who shall be Eligible
Employees and those directors of the Company who shall be Eligible Directors;
(b) to determine whether and to what extent Stock Options are to be granted
hereunder to Eligible Employees, Eligible Directors, and consultants and
advisors to the Company;
(c) to determine the number of shares to be covered by each such award
granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any award granted hereunder, and
(e) to determine the terms and conditions, not inconsistent with the terms
of the Plan, which shall govern all written instruments evidencing the Stock
Options.
The Administrator shall have the authority, in its discretion, to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall from time to time deem advisable; to interpret the terms
and provisions of the Plan and any award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
the Plan.
All decisions made by the Administrator pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and the
Participants.
SECTION 3. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for issuance
under the Plan shall be equal to 2,105,306, subject to appropriate adjustment in
the event of changes in the capital stock of the Company by reason of stock
dividends, splits or combinations of shares, reclassification, mergers,
consolidations, reorganizations or liquidations. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares. The
aggregate number of shares of Stock as to which Stock Options may be granted and
outstanding at any time
3
<PAGE> 4
may not, subject to adjustment as provided in this Section 3, exceed 100% of the
shares of Stock reserved for the purposes of the Plan in accordance with the
provisions of this Section 3.
To the extent that a Stock Option expires or is otherwise terminated
without being exercised, such shares shall again be available for issuance in
connection with future awards under the Plan. If any shares of Stock have been
pledged as collateral indebtedness incurred by a Participant in connection with
the exercise of a Stock Option and such shares are returned to the Company in
satisfaction of such indebtedness, such shares shall again be available for
issuance in connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend or other change in corporate structure
affecting the Stock, a substitution or adjustment shall be made in (i) the
aggregate number of shares reserved for issuance under the Plan and (ii) the
kind, number and option price of shares subject to outstanding Stock Options
granted under the Plan, as may be determined by the Administrator in its sole
discretion. Such other substitutions or adjustments shall be made as may be
determined by the Administrator in its sole discretion.
SECTION 4. ELIGIBILITY.
Officers, other key employees of the Company, directors of the Company
(other than members of the Committee), and consultants and advisors to the
Company who are responsible for or contribute to the management, growth and/or
profitability of the business of the Company shall be eligible to be granted
Stock Options hereunder. The Participants under the Plan shall be selected from
time to time by the Administrator, in its sole discretion, from among the
Eligible Employees, Eligible Directors and consultant and advisors to the
Company recommended by the senior management of the Company, and the
Administrator shall determine, in its sole discretion, the number of shares
covered by each award.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone or in addition to other awards
granted under the Plan. Any Stock Option granted under the Plan shall be in
such form as the Administrator may from time to time approve, and the
provisions of Stock Option awards need not be the same with respect to each
optionee. Recipients of Stock Options shall enter into a subscription and/or
award agreement with TicketsLive, in such form as the Administrator shall
determine, which agreement shall set forth, among other things, the exercise
price of the option, the term of the option and provisions regarding
exercisability of the option granted thereunder.
The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.
The Administrator shall have the authority to grant any Eligible
Employee Incentive Stock Options, Non-Qualified Stock Options, or both types of
Stock Option. Directors, consultants and advisors may only be granted
Non-Qualified Stock Options. To the extent that
4
<PAGE> 5
any Stock Option does not qualify as an Incentive Stock Option, it shall
constitute a separate Non-Qualified Stock Option. More than one option may be
granted to the same optionee and be outstanding concurrently hereunder.
Stock Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Administrator
shall deem desirable:
(1) Option Price. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Administrator in its sole
discretion at the time of grant but shall not, in the case of Incentive Stock
Options, be less than 100% of the Fair Value of the Stock on such date, and
shall not, in any event, be less than the par value of the Stock. If an
employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company and an Incentive Stock
Option is granted to such employee, the option price of such Incentive Stock
Option (to the extent required by the Code at the time of grant) shall be no
less than 110% of the Fair Value of the Stock Option on the date such Incentive
Stock Option is granted.
(2) Option Term. The term of each Stock Option shall be fixed by the
Administrator, but no Stock Option shall be exercisable more than ten years
after the date such Stock Option is granted; provided, however, that if an
employee owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10% of the combined voting power of all
classes of stock of the Company and an Incentive Stock Option is granted to
such employee, the term of such Incentive Stock Option (to the extent required
by the Code at the time of grant) shall be no more than five years from the
date of grant.
(3) Exercisability. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by the
Administrator at or after grant.
(4) Method of Exercise. Subject to Section 5(3) above, Stock Options
may be exercised in whole or in part at any time during the option period, by
giving written notice of exercise to the Company specifying the number of shares
to be purchased, accompanied by payment in full of the purchase price in cash or
its equivalent as determined by the Administrator. As determined by the
Administrator, in its sole discretion, payment in whole or in part may also be
made in the form of unrestricted Stock already owned by the optionee; provided,
however, that in the case of an Incentive Stock Option, the right to make
payment in the form of already owned shares may be authorized only at the time
of grant. An optionee shall generally have the rights to dividends and any other
rights of a stockholder with respect to the Stock subject to the option only
after the optionee has given written notice of exercise, has paid in full for
such shares, and, if requested, has given the representation described in
paragraph (1) of Section 8.
The Administrator may require the voluntary surrender of all or a
portion of any Stock Option granted under the Plan as a condition precedent to
a grant of a new Stock Option. Subject to the provisions of the Plan, such new
Stock Option shall be exercisable at the price,
5
<PAGE> 6
during such period and on such other terms and conditions as are specified by
the Administrator at the time the new Stock Option is granted; provided,
however, should the Administrator so require, the number of shares subject to
such new Stock Option shall not be greater than the number of shares subject to
the surrendered Stock Option. Upon their surrender, Stock Options shall be
canceled and the shares previously subject to such canceled Stock Options shall
again be available for grants of Stock Options and other awards hereunder.
(5) Loans. The Company may make loans available to Stock Option
holders in connection with the exercise of outstanding options granted under the
Plan, as the Administrator, in its discretion, may determine. Such loans shall
(i) be evidenced by promissory notes entered into by the Stock Option holders in
favor of the Company, (ii) be subject to the terms and conditions set forth in
this Section 5(5) and such other terms and conditions, not inconsistent with the
Plan, as the Administrator shall determine, and (iii) bear interest, if any, at
such rate as the Administrator shall determine. In no event may the principal
amount of any such loan exceed the sum of (x) the exercise price less the par
value of the shares of Stock covered by the option, or portion thereof,
exercised by the holder, and (y) any federal, state, and local income tax
attributable to such exercise. The initial term of the loan, the schedule of
payment of principal and interest under the loan, the extent to which the loan
is to be with or without recourse against the holder with respect to principal
or interest and the conditions upon which the loan will become payable in the
event of the holder's termination of employment shall be determined by the
Administrator. Unless the Administrator determines otherwise, when a loan is
made, shares of Stock having a Fair Value at least equal to the principal amount
of the loan shall be pledged by the holder to the Company as security for
payment of the unpaid balance of the loan, and such pledge shall be evidenced by
a pledge agreement, the terms of which shall be determined by the Administrator,
in its discretion; provided, however, that each loan shall comply with all
applicable laws, regulations and rules of the Board of Governors of the Federal
Reserve System and any over governmental agency having jurisdiction.
(6) Non-Transferability of Options. Unless otherwise determined by
the Administrator subject to the limitations on transferability set forth in
Rule 16b-3, no Stock Option shall be transferable by the optionee, and all
Stock Options shall be exercisable, during the optionee's lifetime, only by the
optionee.
(7) Termination of Employment or Service. If an optionee's employment
with or service as a director of or consultant or advisor to, the Company
terminates by reason of death, Disability or for any other reason, the Stock
Option may thereafter be exercised to the extent provided in the applicable
subscription or award agreement, or as otherwise determined by the
Administrator.
(8) Annual Limit on Incentive Stock Options. To the extent that the
aggregate Fair Value (determined as of the date the Incentive Stock Option is
granted) of shares of Stock with respect to which Incentive Stock Options
granted to an Optionee under this Plan and all other option plans of the Company
become exercisable for the first time by the Optionee during any calender year
exceeds $100,000, such Stock Options shall be treated as Non-Qualified Stock
Options.
6
<PAGE> 7
SECTION 6. AMENDMENT AND TERMINATION.
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made that would impair the rights of a
Participant under any award thereto granted without such Participant's consent,
or that without the approval of the stockholders (as described below) would:
(1) except as provided in Section 3, increase the total number of shares
of Stock reserved for the purpose of the Plan;
(2) change the class of employees, directors, consultants and advisors
eligible to participate in the Plan; or
(3) extend the maximum option period under paragraph (2) of Section 5 of
the Plan.
Notwithstanding the foregoing, stockholder approval under this Section 6
shall only be required at such time and under such circumstances as stockholder
approval would be required under Rule 16b-3 with respect to any material
amendment to any employee benefit plan of the Company in order to maintain the
qualified status of the Plan under Rule 16b-3.
The Administrator may amend the terms of any award theretofore granted,
prospectively or retroactively, but, subject to Section 3 above, no such
amendment shall impair the rights of any holder without his or her consent.
SECTION 7. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.
SECTION 8. GENERAL PROVISIONS.
(1) The Administrator may require each person purchasing shares pursuant
to a Stock Option to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to distribution thereof. The
certificates for such shares may include any legend which the Administrator
deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements as the Commission, any stock exchange upon which the Stock is then
listed, and any applicable federal or state securities law, and the
7
<PAGE> 1
EXHIBIT 99.8
STOCK OPTION AGREEMENT, dated as of the _________ day of __________
1998, by and between TicketsLive Corporation, a New York corporation (the
"Company"), and [name] the (the "Optionee"), an [employee] of the Company.
Pursuant to the Company's Incentive Program approved September 8,
1997 (the "Plan"), the Administrator of the Plan (the "Committee") has
determined that the Optionee is to be granted an option (the "Option") to
purchase shares of the Company's Common Stock, par value $.01 per share
("Common Stock"), on the terms and conditions set forth herein and in the Grant
Notice attached as Exhibit A hereto, and hereby grants such Option. Any
capitalized terms not defined herein shall have their respective meanings set
forth in the Plan. This Stock Option Agreement is intended to be an employee
benefit plan within the meaning of Rule 405 of the Securities Act of 1933.
1. Number of Shares and Option Price. The Option entitles the
Optionee to purchase _________ shares of Common Stock (the "Option Shares"), at
a price (the "Option Price") of $[ ] per share, which is not less than the
Fair Value of the Option Shares as of the date hereof. In the event that the
Fair Value of the Common Stock is less than the Option Price, the Administrator
may, in its discretion, reduce the Option Price for the Options to the Fair
Value as of such date.
2. Period of Option. The term of the Option and of this Option
Agreement shall commence on the date hereof (the "Date of Grant") and, unless
the Option is previously terminated pursuant to this Option Agreement, shall
terminate upon the expiration of ten (10) years from the Date of Grant. Upon
the termination of the Option, all rights of the Optionee hereunder shall cease.
3. Conditions of Exercise. (a) Subject to the provisions of
paragraphs (b) and (c) of this Section 3, the Option shall vest and become
exercisable in 48 equal monthly installments commencing at the end of the first
full calendar month after the date of grant.
(b) Except as set forth in Section 3(c) below, no portion of the
Option shall vest and become exercisable prior to the six month anniversary of
the commencement of the Optionee's employment with the Company (the "Six Month
Anniversary"), provided that on the Six Month Anniversary, all Options that
would have vested by such date pursuant to Section 3(a), above but for the
application of this Section 3(b) shall vest and become immediately exercisable.
(c) Any portion of the Option that is outstanding and not yet fully
exercisable shall become fully exercisable immediately prior to the date upon
which a Change of Control occurs. For purposes hereof, "Change of Control"
means:
(A) any person or group (within the meaning of Section 13(d)(3) of
the Securities Exchange Act, whether or not the Corporation has
any
<PAGE> 2
capital stock subject to such section), other than Karen Goetz,
together with any affiliates and associates of any such person or
member of such group (within the meaning of Rule 12b-2 under the
Securities Exchange Act, whether or not the Corporation has any
capital stock subject to such Section), shall at any time
beneficially own (within the meaning of Rule 13d-3 under the
Securities Exchange Act, whether or not the Corporation has any
capital stock subject to such Section) more than 50% of the total
voting power of all classes of capital stock of the Corporation
entitled to vote generally for the election of directors of the
Company;
(B) the sale, lease, transfer or other disposition of all or
substantially all of the consolidated assets of the Corporation
and its subsidiaries or of any Significant Subsidiary in a single
transaction or series of related transactions.
(C) the corporation or any subsidiary thereof is consolidated with or
merged into any other person or entity, or any other person or
entity (other than a wholly-owned subsidiary of the Company) is
merged into or sells, leases or transfers all or substantially
all of its property, assets or capital stock to the Company.
(d) Notwithstanding anything to the contrary herein, no portion of
the Option shall vest and become exercisable following the effective date of
the termination of the Optionee's employment for any reason.
(e) Except as otherwise provided herein, the right of the Optionee
to purchase Option Shares with respect to which this Option has become
exercisable as herein provided may be exercised in whole or in part at any
time or from time to time prior to the tenth anniversary of the Date of Grant.
4. Adjustment of Option. The number and class of shares subject to
the Option and the Option Price shall be subject to appropriate adjustment in
the event of changes in the capital stock of the Company by reason of stock
dividends, split-ups or combinations of shares, reclassification, mergers,
consolidations, reorganizations or liquidations. Subject to any required action
of the shareholders of the Company, if the Company shall be the surviving
corporation in any merger or consolidation, the Option (to the extent that it
is still outstanding) shall pertain to and apply to that number of securities
that a holder of the same number of shares of Common Stock as are then subject
to the Option would have been entitled to receive in exchange for such shares.
To the extent that the foregoing adjustments relate to stock or securities of
the Company, such adjustments shall be made by the Board of Directors of the
Company, whose determination in that respect shall be final, binding and
conclusive.
<PAGE> 3
5. Non-transferability of Option. Except as otherwise provided
herein, the Option and this Option Agreement shall not be transferable. More
Particularly, but not by way of limiting the generality of the foregoing, except
as otherwise provided herein, the Option may not be assigned, transferred,
pledged or hypothecated in any way, shall not be assignable by operation of law,
and shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option shall be null and void and without
effect.
6. Exercise of Option (a) In order to exercise this option with
respect to all or any part of the Option Shares for which this option is at the
time exercisable, Optionee (or any other person or persons exercising the
Option) must take the following actions:
(i) Deliver to the Secretary of the Company an executed
notice of exercise in substantially the form of Exhibit B to this
Agreement (the "Exercise Notice") in which there is specified the number
of Option Shares which are to be purchased under the exercised option.
(ii) Pay the aggregate Option Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Company; or
(B) a promissory note payable to the Company, but only to
the extent approved by the Administrator.
The Option Price may also be paid as follows:
(C) on and after the date of the initial public offering
of the Common Stock, through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable
written instructions (a) to a Company designated brokerage firm to
effect the immediate sale 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 Option Price payable for the
purchased shares plus all applicable Federal, state and local income
and employment taxes required to be withheld by the Company by
reason of such exercise and (b) to the Company to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale.
<PAGE> 4
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Option
Price must accompany the Exercise Notice delivered to the Company in
connection with the option exercise.
(iii) Furnish to the Company appropriate documentation that
the person or persons exercising the option (if other than Optionee) have
the right to exercise this option.
(iv) Execute and deliver to the Company such written
representations as may be requested by the Company in order for it to
comply with the applicable requirements of Federal and state securities
laws.
(v) Pay, in cash or check made payable to the Company, for
the satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.
(b) As soon as practical after the exercise date set forth in
the Exercise Notice, the Company shall issue to or on behalf of Optionee (or
any other person or persons exercising this option) a certificate for the
purchased Option Shares, with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
(d) The Optionee will not be deemed to be a holder of any Option
Shares pursuant to exercise of the Option until the date of the issuance of a
stock certificate for such Option Shares and until the Option Shares are paid
in full.
7. Drag Along Right. In the event that the holders of a majority of
the issued and outstanding Common Stock agree in a bona fide arms' length
transaction or series of transactions (the "Transaction") to sell 51% or more
of the aggregate number of shares of Common Stock then held by them (the
"Selling Stockholders"), then upon the demand (the "Demand") of such Selling
Stockholders, the Optionee will sell the same percentage of its Option Shares
held by it, as is proposed to be sold by the Selling Stockholders, at the same
price and on the same terms and conditions as those set forth in the Demand, to
the buyer designated by the Selling Stockholders.
8. Termination by Death. If the Optionee's employment with the
Company or any of its affiliates terminates by reason of death, the Option may
thereafter be exercised by the legal representative of Optionee's estate, to
the extent vested as of the date of such death until the earlier of (i) one
year following such date of (ii) ten years
<PAGE> 5
following the Date of Grant.
9. Other Termination. If the Optionee's employment with the Company or
any of its affiliates terminates for any reason other than death, the Option may
be exercised, to the extent vested as of the date of such termination and
subject to Section 7(c), until the earlier of (i) ninety (90) days following the
date of such termination or (ii) ten (10) years following the Date of Grant.
10. Notices. Any notice required or permitted under this Option
Agreement shall be deemed given when delivered personally,or when deposited in a
United States Post Office, postage prepaid, addressed, as appropriate, to the
Optionee either at the address herein below set forth or such other address as
the Optionee may designate in writing to the Company, or to the Company:
Attention: Secretary (or his designee), at the Company's address or such other
address as the Company may designate in writing to the Company may designate in
writing to the Optionee.
11. Failure to Enforce Not a Waiver. The failure of the Company to
enforce at any time any provision of this Option Agreement shall in no way be
construed to be a waiver of such provision or of any other provision hereof.
12. Governing Law. This Option Agreement shall be governed by and
construed according to the laws of the State of New York without regard to its
principles of conflict of laws.
13. Incorporation of Plan. The Plan is hereby incorporated by
reference and made a part hereof, and the Option and this Option Agreement shall
be subject to all terms and conditions of the Plan.
16. Amendments. This Option Agreement may be amended or modified at
any time only be an instrument in writing signed by the parties hereto.
17. Rights as a Shareholder. Neither the Optionee nor any successor in
interest shall have any rights as a stockholder of the Company with respect to
any shares of Common Stock subject to the Option until the date of issuance of a
stock certificate for such shares of Common Stock.
18. Agreement Not a Contract of Employment. Neither the Plan, the
granting of the Option, this Option Agreement nor any other action taken
pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Optionee has a right to continue as
an employee of the Company or any subsidiary or affiliate for any period of time
or at any specific rate of compensation.
19. Investment Representation. Upon the exercise of all or any part of
the Option, the Committee may require the Optionee to furnish to the Company an
agreement (in such form as the Committee may specify) in which the Optionee
shall represent that the share of Common Stock to be acquired upon exercise of
the Option are to be
<PAGE> 6
acquired for the Optionee's own account and not with a view to the sale or
distribution thereof.
20. Authority of the Committee. The Committee shall have full authority to
interpret and construe the terms of the Plan and this Option Agreement. The
determination of the Committee as to any such matter of interpretation or
construction shall be final, binding and conclusive.
IN WITNESS WHEREOF, the parties have executed this Option
Agreement as of the day and year first above written.
TICKETSLIVE CORPORATION
By
------------------------------
Its
------------------------------
The undersigned hereby accepts and agrees to
all the terms and provisions of the foregoing
Option Agreement and to all the terms and
provisions of the Plan herein incorporated by
reference.
--------------------------------
Optionee
--------------------------------
--------------------------------
Address
