As filed with the Securities and Exchange Commission on November 8, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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MEDIA METRIX, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-3374729
(State or other juris- (I.R.S. Employer
diction of incorporation Identification
or organization) Number)
250 Park Avenue South, 7th Floor
New York, New York 10003
(212) 515-8700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
1998 AdRelevance Stock Option Plan
1999 AdRelevance Stock Option Plan
(full title of the plans)
-----------
TOD JOHNSON
MEDIA METRIX, INC.
250 Park Avenue South, 7th Floor
New York, New York 10003
(212) 515-8700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies of all communications, including all communications sent to the agent for
service, should be sent to:
RICHARD H. GILDEN, ESQ.
STEVEN I. SUZZAN, ESQ.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
(212) 318-3000
-----------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================
Title of Securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price per unit aggregate offering price registration fee
=============================================================================================================
<S> <C> <C> <C> <C>
Common Stock $.01 par
value per share........ 222,164 shares $3.82(1) $848,667(1) $237.00
=============================================================================================================
Common Stock $.01 par
value per share........ 25,686 shares $42.6875(2) $1,096,472(2) $306.00
============================================================================================================
</TABLE>
<PAGE>
(1) The price is estimated in accordance with Rule 457(h) under the Securities
Act of 1933, as amended, solely for the purpose of calculating the
registration fee. The proposed maximum offering price was determined by
multiplying 222,164, the number of shares registered by this Registration
Statement as to which options have been granted under the 1998 AdRelevance
Stock Option Plan and the 1999 AdRelevance Stock Option Plan (collectively
the "Plans"), by $3.82, the weighted average exercise price of such
options.
(2) The price is estimated in accordance with Rule 457(h) under the Securities
Act of 1933, as amended, solely for the purpose of calculating the
registration fee. The proposed maximum offering price was determined by
multiplying 25,686, the number of additional shares registered by this
Registration Statement that may be issued under the Plans, by $42.6875,
the average of the high and low prices of the Common Stock as reported on
the Nasdaq National Market on November 2, 1999.
(3) This Registration Statement also covers such indeterminate number of
additional shares of Common Stock as is necessary to eliminate any dilutive
effect of any future stock dividend, stock split, recapitalization or
similar transaction.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Media Metrix, Inc. (the "Company") are
incorporated herein by reference:
(a) The Company's prospectus dated October 26, 1999 containing audited
financial statements for the fiscal year ended December 31, 1998 and unaudited
financial statements for the six months ended June 30, 1999.
(b) The Company's quarterly report on Form 10-Q dated August 12, 1999 for
the quarter ended June 30, 1999.
(c) The description of the Company's Common Stock contained in Item 1 of
the Company's Registration Statement on Form 8-A dated May 3, 1999.
In addition to the foregoing, all documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment
indicating that all of the securities offered hereunder have been sold or
deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference in this Registration Statement 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 that is
also incorporated by reference herein modifies or supersedes such statement. Any
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.
II-1
<PAGE>
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
permits indemnification of directors, officers and employees of a corporation
under certain conditions and subject to certain limitations. The Certificate of
Incorporation and By-laws of the Company provide that the Company shall
indemnify its directors and officers to the fullest extent permitted by the
Delaware Law, including those circumstances in which indemnification would
otherwise be discretionary, subject to certain exceptions. The By-laws also
provide that the Company shall advance expenses to directors and officers
incurred in connection with an action or proceeding as to which they may be
entitled to indemnification, subject to certain exceptions. In addition, the
Company has entered into Indemnity Agreements with its directors and officers
providing for the maximum indemnification allowed by Section 145.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
4(a)* Amended and Restated Certificate of Incorporation of Media Metrix,
Inc.
(b)* Amended and Restated Bylaws of Media Metrix, Inc.
(c)** 1998 AdRelevance Stock Option Plan
(d)** 1999 AdRelevance Stock Option Plan
(e) Form of 1998 AdRelevance Stock Option Plan Stock Option Agreement
(f) Form of 1999 AdRelevance Stock Option Plan Stock Option Agreement
5 Opinion of Fulbright & Jaworski L.L.P.
23(a) Consent of Ernst & Young LLP
(b) Consent of Ernst & Young LLP
II-2
<PAGE>
(c) Consent of PricewaterhouseCoopers LLP
(d) Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5)
24 Power of Attorney (included in signature page)
- ----------
* Incorporated by reference to Media Metrix, Inc.'s Registration
Statement on Form S-1 (File No. 333-72883), as amended.
** Incorporated by reference to Media Metrix, Inc.'s Registration
Statement on Form S-1 (File No. 333-88751), as amended.
II-3
<PAGE>
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post- effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total value of
securities offered would not exceed that
which was registered) and any deviation from
the low or high end of the estimated maximum
offering range may be reflected in the form
of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price
represent no more than a 20 percent change
in the maximum aggregate offering price set
forth in the "Calculation of Registration
Fee" table in the effective registration
statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
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
Exchange Act that are incorporated by reference into this
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
II-4
<PAGE>
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforce able. In the
event 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 of the registrant in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
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 New York, State of New York, on November 8,
1999.
MEDIA METRIX, INC.
By: /s/ Tod Johnson
------------------------------------
Tod Johnson
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints each of Tod Johnson and Thomas A. Lynch
as his true and lawful attorney-in-fact and agent, each acting alone, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, including post-effective amendments, and to file the
same, with all exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission, granting unto each said attorney-in-fact
and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all that any said attorney-in-fact and agent, each acting alone, or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
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.
Signature Title Date
- --------- ----- ----
/s/ Tod Johnson Chief Executive Officer and November 8, 1999
- -------------------- Chairman of the Board (Principal
Tod Johnson Executive Officer)
/s/ Thomas A. Lynch Chief Financial Officer,
- -------------------- Secretary and Treasurer (Principal November 8, 1999
Thomas A. Lynch Financial and Accounting Officer)
II-6
<PAGE>
Signature Title Date
- --------- ----- ----
/s/ Jeffrey C. Levy Vice Chairman and Director November 8, 1999
- --------------------
Jeffrey C. Levy
/s/ Michael Brooks Director November 8, 1999
- --------------------
Michael Brooks
/s/ William W. Helman Director November 8, 1999
- --------------------
William W. Helman
/s/ Stig Kry Director November 8, 1999
- --------------------
Stig Kry
/s/ James Mortensen Director November 8, 1999
- --------------------
James Mortensen
II-7
<PAGE>
Exhibit Index
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No. Description
--- -----------
4(a)* Amended and Restated Certificate of Incorporation of Media Metrix, Inc.
(b)* Amended and Restated Bylaws of Media Metrix, Inc.
(c)** 1998 AdRelevance Stock Option Plan
(d)** 1999 AdRelevance Stock Option Plan
(e) Form of 1998 AdRelevance Stock Option Plan Stock Option Agreement
(f) Form of 1999 AdRelevance Stock Option Plan Stock Option Agreement
5 Opinion of Fulbright & Jaworski L.L.P.
23(a) Consent of Ernst & Young LLP
(b) Consent of Ernst & Young LLP
(c) Consent of PricewaterhouseCoopers LLP
(d) Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5)
24 Power of Attorney (included in signature page)
- ----------
* Incorporated by reference to Media Metrix, Inc.'s Registration
Statement on Form S-1 (File No. 333-72883), as amended.
** Incorporated by reference to Media Metrix, Inc.'s Registration
Statement on Form S-1 (File No. 333-88751), as amended.
II-8
AdRelevance, Inc.
1998 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
1. Grant of Option. AdRelevance, Inc., a Washington corporation (the
"Company"), hereby grants to Optionee an option (the "Option") to purchase a
total number of shares of Common Stock (the "Shares") set forth in the Notice of
Stock Option Grant, at the exercise price per share set forth in the Notice of
Stock Option Grant (the "Exercise Price") subject to the terms, definitions and
provisions of the AdRelevance, Inc. 1998 Stock Option Plan (the "Plan") adopted
by the Company, which is incorporated herein by reference. Unless otherwise
defined herein, capitalized terms used herein shall have the same meaning as set
forth in the Notice of Stock Option Grant or Plan.
If designated an Incentive Stock Option, this Option is intended to
qualify as an Incentive Stock Option as defined in Section 422 of the Code.
2. Exercise of Option. This Option shall be exercisable during its Term in
accordance with the Vesting Schedule set out in the Notice of Stock Option Grant
and with the provisions of Section 9 of the Plan as follows:
(a) Right to Exercise
(i) This Option may not be exercised for a fraction of a
share.
(ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Sections 5, 6, 7 and 8 below, subject to the limitation contained in Section
2(a)(iii) below.
(iii) In no event may this Option be exercised after the date
of expiration of the term of this Option as set forth in the Notice of Stock
Option Grant.
(b) Method of Exercise. This Option shall be exercisable by
execution and delivery of the Exercise Notice and Restricted Stock Purchase
Agreement attached hereto as Exhibit A (the "Exercise Agreement"), or of any
other written notice approved for such purpose by the Company which shall state
the election to exercise the Option, the number of Shares in respect of which
the Option is being exercised, and such other representations and agreements as
to the holder's investment intent with respect to such shares of Common Stock as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by Optionee and shall be delivered in person or
by certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price.
<PAGE>
No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of applicable law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to Optionee on the date on which the
Option is exercised with respect to such Shares.
3. Method of Payment. Payment of the Exercise Price shall be by any
of the following, or a combination thereof, at the election of Optionee:
(a) cash;
(b) check;
(c) surrender of other shares of Common Stock of the Company which
(i) in the case of Shares acquired pursuant to the exercise of a Company option,
have been owned by 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 Exercise Price of the Shares as to which the Option is being exercised; or
(d) if there is a public market for the Shares and they are
registered under the Securities Act of 1933, as amended (the "Securities Act"),
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds required to pay the Exercise Price.
4. 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
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations as promulgated by the
Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
5. Termination of Relationship. In the event of termination of Optionee's
Continuous Status as an Employee or Consultant, Optionee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise this Option during the Termination Period set forth in the Notice of
Stock Option Grant. To the extent that Optionee was not entitled to exercise
this Option at such Termination Date, or if Optionee does not exercise this
Option within the Termination Period, the Option shall terminate.
6. Disability of Optionee
(a) Notwithstanding the provisions of Section 5 above, in the event
of termination of Optionee's Continuous Status as an Employee or Consultant as a
result of his or her total and permanent disability (as defined in Section
22(e)(3) of the Code), Optionee may,
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<PAGE>
but only within twelve (12) months from the Termination Date (but in no event
later than the date of expiration of the term of this Option set forth in the
Notice of Stock Option Grant and in Section 9 below), exercise this Option to
the extent Optionee was entitled to exercise it as of such Termination Date. To
the extent that Optionee was not entitled to exercise the Option as of the
Termination Date, or if Optionee does not exercise the Option (to the extent so
entitled) within the time specified in this Section 6(a), the Option shall
terminate.
(b) Notwithstanding the provisions of Section 5 above, in the event
of termination of Optionee's Continuous Status as an Employee or Consultant as a
result of any disability not constituting a total and permanent disability (as
set forth in Section 22(e)(3) of the Code), Optionee may, but only within six
(6) months from the Termination Date (but in no event later than the expiration
date set forth in the Notice of Stock Option Grant and in Section 9 below),
exercise this Option to the extent Optionee was entitled to exercise it as of
such Termination Date; provided, however, that if this is an Incentive Stock
Option and Optionee fails to exercise this Incentive Stock Option within three
(3) months from the Termination Date, this Option will cease to qualify as an
Incentive Stock Option (as defined in Section 422 of the Code) and Optionee will
be treated for federal income tax purposes as having received ordinary income at
the time of such exercise in an amount generally measured by the difference
between the Exercise Price for the Shares and the fair market value of the
Shares on the date of exercise. To the extent that Optionee was not entitled to
exercise the Option at the Termination Date, or if Optionee does not exercise
the Option to the extent so entitled within the time specified in this Section
6(b), the Option shall terminate.
7. Death of Optionee. In the event of the death of Optionee (a) during the
Term of this Option and while an Employee or Consultant of the Company and
having been in Continuous Status as an Employee or Consultant since the date of
grant of the Option, or (b) within thirty (30) days after Optionee's Termination
Date, the Option may be exercised at any time within six (6) months following
the date of death (but in no event later than the expiration date set forth in
the Notice of Stock Option Grant and in Section 9 below), by Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had accrued at
the Termination Date.
8. Non-Transferability of Option. 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 him or her. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.
9. Term of Option. This Option may be exercised only within the Term set
forth in the Notice of Stock Option Grant, subject to the limitations set forth
in Section 7 of the Plan.
10. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of certain of the federal tax consequences of exercise of this
Option and disposition of the Shares under the laws in effect as of the Date of
Grant. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO
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<PAGE>
CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
(a) Exercise of Incentive Stock Option. If this Option qualifies as
an Incentive Stock Option, 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 Optionee to the alternative minimum tax in the year of exercise.
(b) Exercise of Nonstatutory Stock Option. If this Option does not
qualify as an Incentive Stock Option, there may be a regular federal income tax
liability upon the exercise of the Option. 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, the Company will be
required to withhold from Optionee's compensation or collect from Optionee and
pay to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(c) Disposition of Shares. In the case of a Nonstatutory Stock
Option, if the Shares are held for at least one (1) year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. In the case of an Incentive Stock Option, if Shares
transferred pursuant to the Option are held for at least one (1) year after
exercise and are disposed of at least two (2) 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
Incentive Stock Option are disposed of within such one (1) year period or within
two (2) 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 (i) the
fair market value of the Shares on the date of exercise, or (ii) the sale price
of the Shares.
(d) Notice of Disqualifying Disposition of Incentive Stock Option
Shares. If the Option granted to Optionee herein is an Incentive Stock Option,
and if Optionee sells or otherwise disposes of any of the Shares acquired
pursuant to such Incentive Stock Option on or before the later of (i) the date
two (2) years after the Date of Grant, or (ii) the date one (1) year after the
date of exercise, Optionee shall immediately notify the Company in writing of
such disposition. Optionee acknowledges and agrees that he or she may be subject
to income tax withholding by the Company on the compensation income recognized
by Optionee from the early disposition by payment in cash or out of the current
earnings paid to Optionee.
11. Withholding Tax Obligations. Optionee understands that, upon
exercising a Nonstatutory Stock Option, he or she will recognize income for tax
purposes in an amount equal to the excess of the then fair market value of the
Shares over the Exercise Price. However, the timing of this income recognition
may be deferred for up to six (6) months if Optionee is subject
-4-
<PAGE>
to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). If Optionee is an 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 equal to a percentage of this compensation income.
Additionally, Optionee may at some point be required to satisfy tax withholding
obligations with respect to the disqualifying disposition of an Incentive Stock
Option. Optionee shall satisfy his or her tax withholding obligation arising
upon the exercise of this Option by one or some combination of the following
methods: (a) by cash payment, (b) out of Optionee's current compensation, (c) if
permitted by the Administrator, in its discretion, by surrendering to the
Company Shares which (i) in the case of Shares previously acquired from the
Company, have been owned by 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
or greater than Optionee's marginal tax rate times the ordinary income
recognized, or (d) by electing to have the Company withhold from the Shares to
be issued upon exercise of the Option that number of Shares having a fair market
value equal to the amount required to be withheld. For this purpose, 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 (the "Tax Date").
If Optionee is subject to Section 16 of the Exchange Act (an
"Insider"), any surrender of previously owned Shares to satisfy tax withholding
obligations arising upon exercise of this Option must comply with the applicable
provisions of Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3").
All elections by Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax
Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made; and
(c) all elections shall be subject to the consent or disapproval of
the Administrator.
12. Market Standoff Agreement. In connection with any public offering of
the Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Optionee hereby
agrees not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any Shares (other than those included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days in the case of Company's initial public offering and
ninety (90) days in the case of any other public offerings) from the effective
date of such registration as may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be
requested by the underwriters at the time of such public offering.
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<PAGE>
Exhibit A
AdRelevance, Inc.
1998 STOCK OPTION PLAN
EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT
This Agreement ("Agreement") is made as of ______________, by and between
AdRelevance, Inc., a Washington corporation (the "Company"), and
_________________ (also referred to as "Purchaser"). To the extent any
capitalized terms used in this Agreement are not defined, they shall have the
meaning ascribed to them in the AdRelevance, Inc.
1998 Stock Option Plan.
1. Exercise of Option. Subject to the terms and conditions hereof,
Purchaser hereby elects to exercise his or her option to purchase __________
shares of the Common Stock (the "Shares") of the Company under and pursuant to
the Company's 1998 Stock Option Plan (the "Plan") and the Stock Option Agreement
dated ______________ (the "Option Agreement"). The purchase price for the Shares
shall be $_____ per Share for a total purchase price of $_______________. The
term "Shares" refers to the purchased Shares and all securities received in
replacement of the Shares or as stock dividends or splits, all securities
received in replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional
securities or other properties to which Purchaser is entitled by reason of
Purchaser's ownership of the Shares.
2. Time and Place of Exercise. The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company simultaneously
with the execution of this Agreement in accordance with the provisions of
Section 2(b) of the Option Agreement. On such date, the Company will deliver to
Purchaser a certificate representing the Shares to be purchased by Purchaser
(which shall be issued in Purchaser's name) against payment of the purchase
price therefor by Purchaser by (a) check made payable to the Company, (b)
cancellation of indebtedness of the Company to Purchaser, (c) delivery of shares
of the Common Stock of the Company in accordance with Section 3 of the Option
Agreement, or (d) a combination of the foregoing.
3. Limitations on Transfer. In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares except in compliance with the
provisions below and applicable securities laws.
(a) Right of First Refusal. Before any Shares held by Purchaser or
any transferee of Purchaser (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this
Section 3(a) (the "Right of First Refusal").
<PAGE>
(i) Notice of Proposed Transfer. The Holder of the Shares
shall deliver to the Company a written notice (the "Notice") stating: (A) the
Holder's bona fide intention to sell or otherwise transfer such Shares; (B) the
name of each proposed purchaser or other transferee ("Proposed Transferee"); (C)
the number of Shares to be transferred to each Proposed Transferee; and (D) the
terms and conditions of each proposed sale or transfer. The Holder shall offer
the Shares at the same price (the "Offered Price") and upon the same terms (or
terms as similar as reasonably possible) to the Company or its assignee(s).
(ii) Exercise of Right of First Refusal. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.
(iii) Purchase Price. The purchase price ("Purchase Price") for
the Shares purchased by the Company or its assignee(s) under this Section 3(a)
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(iv) Payment. Payment of the Purchase Price shall be made, at
the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within thirty (30) days after receipt of the
Notice or in the manner and at the times set forth in the Notice.
(v) Holder's Right to Transfer. If all of the Shares proposed
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this Section 3(a), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within sixty (60) days after the date of the Notice and
provided further that any such sale or other transfer is effected in accordance
with any applicable securities laws and the Proposed Transferee agrees in
writing that the provisions of this Section 3 shall continue to apply to the
Shares in the hands of such Proposed Transferee. If the Shares described in the
Notice are not transferred to the Proposed Transferee within such period, or if
the Holder proposes to change the price or other terms to make them more
favorable to the Proposed Transferee, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
(vi) Exception for Certain Family Transfers. Anything to the
contrary contained in this Section 3(a) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family or a trust for the benefit of the
Purchaser's Immediate Family shall be exempt from the
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<PAGE>
provisions of this Section 3(a). "Immediate Family" as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section 3.
(b) Involuntary Transfer.
(i) Company's Right to Purchase upon Involuntary Transfer. In
the event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in Section 3(a)(vi) above)
of all or a portion of the Shares by the record holder thereof, the Company
shall have an option to purchase all of the Shares transferred at the greater of
the purchase price paid by Purchaser pursuant to this Agreement or the fair
market value of the Shares on the date of transfer. Upon such a transfer, the
person acquiring the Shares shall promptly notify the Secretary of the Company
of such transfer. The right to purchase such Shares shall be provided to the
Company for a period of thirty (30) days following receipt by the Company of
written notice by the person acquiring the Shares.
(ii) Price for Involuntary Transfer. With respect to any stock
to be transferred pursuant to Section 3(b)(i), the price per Share shall be a
price set by the Board of Directors of the Company that will reflect the current
value of the stock in terms of present earnings and future prospects of the
Company. The Company shall notify Purchaser or his or her executor of the price
so determined within thirty (30) days after receipt by it of written notice of
the transfer or proposed transfer of Shares. However, if the Purchaser does not
agree with the valuation as determined by the Board of Directors of the Company,
the Purchaser shall be entitled to have the valuation determined by an
independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the
Purchaser.
(c) Assignment. The right of the Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations; provided, however, that an
assignee, other than a corporation that is the parent or a one hundred percent
(100%) owned subsidiary of the Company, must pay the Company, upon assignment of
such right, cash equal to the difference between the original purchase price and
fair market value, if the original purchase price is less than the fair market
value of the Shares subject to the assignment.
(d) Restrictions Binding on Transferees. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement. Any sale or transfer of the Company's Shares
shall be void unless the provisions of this Agreement are satisfied.
(e) Termination of Rights. The Right of First Refusal granted the
Company by Section 3(a) above and the option to repurchase the Shares in the
event of an involuntary
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<PAGE>
transfer granted the Company by Section 3(b) above shall terminate upon the
first sale of Common Stock of the Company to the general public pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Act. Upon termination of the Right of
First Refusal described in Section 3(a) above, a new certificate or certificates
representing the Shares not repurchased shall be issued, on request, without the
legend referred to in Section 5(a)(ii) herein and delivered to Purchaser.
4. Investment and Taxation Representations. In connection with the
purchase of the Shares, Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing the Shares for investment for his or her own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act.
(b) Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
(c) Purchaser understands that the Shares are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, Purchaser must hold the Shares indefinitely unless they
are registered with the Securities and Exchange Commission and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale. Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may by conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
requirements relating to the Company which are outside of Purchaser's control,
and which the Company is under no obligation and may not be able to satisfy.
(d) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection with the purchase or disposition of the Shares and
that Purchaser is not relying on the Company for any tax advice.
5. Restrictive Legends and Stop-Transfer Orders
(a) Legends. The certificate or certificates representing the Shares
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
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<PAGE>
AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933.
(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
6. No Employment Rights. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Purchaser's employment, for any reason, with or
without cause.
7. Market Standoff Agreement. In connection with any public offering of
the Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Purchaser agrees
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any Shares (other than those included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days in the case of Company's initial public offering and
ninety (90) days in the case of any other public offering) from the effective
date of such registration as may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be
requested by the underwriters at the time of such public offering.
8. Miscellaneous
(a) Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law.
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<PAGE>
(b) Entire Agreement; Enforcement of Rights. This Agreement sets
forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the parties
to this Agreement. The failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of any rights of such party.
(c) Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(d) Construction. This Agreement has been reviewed by each of the
parties hereto and is the result of negotiations between each of the parties
hereto and their respective counsel, if any; accordingly, this Agreement shall
be deemed to be the product of all of the parties hereto, and no ambiguity shall
be construed in favor of or against any one of the parties hereto.
(e) Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient when delivered personally or
sent by telegram or fax or forty-eight (48) hours after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid, and addressed
to the party to be notified at such party's address as set forth below or as
subsequently modified by written notice.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(g) Successors and Assigns. The rights and benefits of this
Agreement shall inure to the benefit of, and be enforceable by the Company's
successors and assigns. The rights and obligations of Purchaser under this
Agreement may only be assigned with the prior written consent of the Company.
[Signature Page Follows]
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<PAGE>
The parties have executed this Exercise Notice and Restricted Stock
Purchase Agreement as of the date first set forth above.
COMPANY:
ADRELEVANCE, INC.
By:_______________________________________
(Signature)
Name:_____________________________________
(Print)
Title:____________________________________
Address: 2151 N. Northlake Way, Suite 210
Seattle, WA 98103
PURCHASER:
__________________________________________
(Signature)
__________________________________________
(Printed Name)
Address: ___________________________
___________________________
I, ______________________, spouse of ________________, have read and hereby
approve the foregoing Agreement. In consideration of the Company's granting my
spouse the right to purchase the Shares as set forth in the Agreement, I hereby
agree to be irrevocably bound by the Agreement and further agree that any
community property or other such interest shall hereby be similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.
__________________________________________
Spouse of _________________________________
<PAGE>
RECEIPT
The undersigned hereby acknowledges receipt of Certificate No. _____
representing __________ shares of Common Stock of AdRelevance, Inc. (the
"Company").
Dated: _______________
__________________________________________
(Signature)
__________________________________________
(Printed Name)
<PAGE>
RECEIPT
AdRelevance, Inc. (the "Company") hereby acknowledges receipt of (check as
applicable):
_____ A check in the amount of $__________
_____ The cancellation of indebtedness in the amount of $__________
_____ Certificate No. ____ representing ______ shares of the Company's
Common Stock with a fair market value of $__________
given by _______________________ as consideration for Certificate
No. ______ representing ___________ shares of Common Stock of the Company.
Dated: ______________
AdRelevance, Inc.
By:_______________________________________
(Signature)
Name:_____________________________________
(Print)
Title:____________________________________
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ADRELEVANCE, INC.
1999 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
1. Grant of Option. AdRelevance, Inc., a Washington corporation (the
"Company"), hereby grants to Optionee an option (the "Option") to purchase a
total number of shares of Common Stock (the "Shares") set forth in the Notice of
Stock Option Grant, at the exercise price per share set forth in the Notice of
Stock Option Grant (the "Exercise Price") subject to the terms, definitions and
provisions of the AdRelevance, Inc. 1999 Stock Option Plan (the "Plan") adopted
by the Company, which is incorporated herein by reference. Unless otherwise
defined herein, capitalized terms used herein shall have the same meaning as set
forth in the Notice of Stock Option Grant or Plan.
If designated an Incentive Stock Option, this Option is intended to
qualify as an Incentive Stock Option as defined in Section 422 of the Code.
2. Exercise of Option. This Option shall be exercisable during its Term in
accordance with the Vesting Schedule set out in the Notice of Stock Option Grant
and with the provisions of Section 9 of the Plan as follows:
(a) Right to Exercise
(i) This Option may not be exercised for a fraction of a share.
(ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Sections 5, 6, 7 and 8 below, subject to the limitation contained in Section
2(a)(iii) below.
(iii) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in the Notice of Stock Option
Grant.
(b) Method of Exercise. This Option shall be exercisable by execution and
delivery of the Exercise Notice and Restricted Stock Purchase Agreement attached
hereto as Exhibit A (the "Exercise Agreement"), or of any other written notice
approved for such purpose by the Company which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be
required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price.
<PAGE>
No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of applicable law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to Optionee on the date on which the
Option is exercised with respect to such Shares.
3. Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, at the election of Optionee:
(a) cash;
(b) check;
(c) surrender of other shares of Common Stock of the Company which
(i) in the case of Shares acquired pursuant to the exercise of a Company option,
have been owned by 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 Exercise Price of the Shares as to which the Option is being exercised; or
(d) if there is a public market for the Shares and they are
registered under the Securities Act of 1933, as amended (the "Securities Act"),
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds required to pay the Exercise Price.
4. 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
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations as promulgated by the
Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
5. Termination of Relationship. In the event of termination of Optionee's
Continuous Status as an Employee or Consultant, Optionee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise this Option during the Termination Period set forth in the Notice of
Stock Option Grant. To the extent that Optionee was not entitled to exercise
this Option at such Termination Date, or if Optionee does not exercise this
Option within the Termination Period, the Option shall terminate.
6. Disability of Optionee
(a) Notwithstanding the provisions of Section 5 above, in the event
of termination of Optionee's Continuous Status as an Employee or Consultant as a
result of his or her total and permanent disability (as defined in Section
22(e)(3) of the Code), Optionee may,
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<PAGE>
but only within twelve (12) months from the Termination Date (but in no event
later than the date of expiration of the term of this Option set forth in the
Notice of Stock Option Grant and in Section 9 below), exercise this Option to
the extent Optionee was entitled to exercise it as of such Termination Date. To
the extent that Optionee was not entitled to exercise the Option as of the
Termination Date, or if Optionee does not exercise the Option (to the extent so
entitled) within the time specified in this Section 6(a), the Option shall
terminate.
(b) Notwithstanding the provisions of Section 5 above, in the event of
termination of Optionee's Continuous Status as an Employee or Consultant as a
result of any disability not constituting a total and permanent disability (as
set forth in Section 22(e)(3) of the Code), Optionee may, but only within six
(6) months from the Termination Date (but in no event later than the expiration
date set forth in the Notice of Stock Option Grant and in Section 9 below),
exercise this Option to the extent Optionee was entitled to exercise it as of
such Termination Date; provided, however, that if this is an Incentive Stock
Option and Optionee fails to exercise this Incentive Stock Option within three
(3) months from the Termination Date, this Option will cease to qualify as an
Incentive Stock Option (as defined in Section 422 of the Code) and Optionee will
be treated for federal income tax purposes as having received ordinary income at
the time of such exercise in an amount generally measured by the difference
between the Exercise Price for the Shares and the fair market value of the
Shares on the date of exercise. To the extent that Optionee was not entitled to
exercise the Option at the Termination Date, or if Optionee does not exercise
the Option to the extent so entitled within the time specified in this Section
6(b), the Option shall terminate.
7. Death of Optionee. In the event of the death of Optionee (a) during the
Term of this Option and while an Employee or Consultant of the Company and
having been in Continuous Status as an Employee or Consultant since the date of
grant of the Option, or (b) within thirty (30) days after Optionee's Termination
Date, the Option may be exercised at any time within six (6) months following
the date of death (but in no event later than the expiration date set forth in
the Notice of Stock Option Grant and in Section 9 below), by Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had accrued at
the Termination Date.
8. Non-Transferability of Option. 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 him or her. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.
9. Term of Option. This Option may be exercised only within the Term set
forth in the Notice of Stock Option Grant, subject to the limitations set forth
in Section 7 of the Plan.
10. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of certain of the federal tax consequences of exercise of this
Option and disposition of the Shares under the laws in effect as of the Date of
Grant. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO
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<PAGE>
CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
(a) Exercise of Incentive Stock Option. If this Option qualifies as
an Incentive Stock Option, 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 Optionee to the alternative minimum tax in the year of exercise.
(b) Exercise of Nonstatutory Stock Option. If this Option does not
qualify as an Incentive Stock Option, there may be a regular federal income tax
liability upon the exercise of the Option. 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, the Company will be
required to withhold from Optionee's compensation or collect from Optionee and
pay to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(c) Disposition of Shares. In the case of a Nonstatutory Stock
Option, if the Shares are held for at least one (1) year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. In the case of an Incentive Stock Option, if Shares
transferred pursuant to the Option are held for at least one (1) year after
exercise and are disposed of at least two (2) 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
Incentive Stock Option are disposed of within such one (1) year period or within
two (2) 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 (i) the
fair market value of the Shares on the date of exercise, or (ii) the sale price
of the Shares.
(d) Notice of Disqualifying Disposition of Incentive Stock Option
Shares. If the Option granted to Optionee herein is an Incentive Stock Option,
and if Optionee sells or otherwise disposes of any of the Shares acquired
pursuant to such Incentive Stock Option on or before the later of (i) the date
two (2) years after the Date of Grant, or (ii) the date one (1) year after the
date of exercise, Optionee shall immediately notify the Company in writing of
such disposition. Optionee acknowledges and agrees that he or she may be subject
to income tax withholding by the Company on the compensation income recognized
by Optionee from the early disposition by payment in cash or out of the current
earnings paid to Optionee.
11. Withholding Tax Obligations. Optionee understands that, upon
exercising a Nonstatutory Stock Option, he or she will recognize income for tax
purposes in an amount equal to the excess of the then fair market value of the
Shares over the Exercise Price. However, the timing of this income recognition
may be deferred for up to six (6) months if Optionee is subject
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<PAGE>
to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). If Optionee is an 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 equal to a percentage of this compensation income.
Additionally, Optionee may at some point be required to satisfy tax withholding
obligations with respect to the disqualifying disposition of an Incentive Stock
Option. Optionee shall satisfy his or her tax withholding obligation arising
upon the exercise of this Option by one or some combination of the following
methods: (a) by cash payment, (b) out of Optionee's current compensation, (c) if
permitted by the Administrator, in its discretion, by surrendering to the
Company Shares which (i) in the case of Shares previously acquired from the
Company, have been owned by 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
or greater than Optionee's marginal tax rate times the ordinary income
recognized, or (d) by electing to have the Company withhold from the Shares to
be issued upon exercise of the Option that number of Shares having a fair market
value equal to the amount required to be withheld. For this purpose, 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 (the "Tax Date").
If Optionee is subject to Section 16 of the Exchange Act (an
"Insider"), any surrender of previously owned Shares to satisfy tax withholding
obligations arising upon exercise of this Option must comply with the applicable
provisions of Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3").
All elections by Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax
Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made; and
(c) all elections shall be subject to the consent or disapproval of
the Administrator.
12. Market Standoff Agreement. In connection with any public offering of
the Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Optionee hereby
agrees not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any Shares (other than those included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days in the case of Company's initial public offering and
ninety (90) days in the case of any other public offerings) from the effective
date of such registration as may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be
requested by the underwriters at the time of such public offering.
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<PAGE>
Exhibit A
ADRELEVANCE, INC.
1999 STOCK OPTION PLAN
EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT
This Agreement ("Agreement") is made as of ______________, by and between
AdRelevance, Inc., a Washington corporation (the "Company"), and
_________________ (also referred to as "Purchaser"). To the extent any
capitalized terms used in this Agreement are not defined, they shall have the
meaning ascribed to them in the AdRelevance, Inc. 1999 Stock Option Plan.
1. Exercise of Option. Subject to the terms and conditions hereof,
Purchaser hereby elects to exercise his or her option to purchase __________
shares of the Common Stock (the "Shares") of the Company under and pursuant to
the Company's 1999 Stock Option Plan (the "Plan") and the Stock Option Agreement
dated ______________ (the "Option Agreement"). The purchase price for the Shares
shall be $_____ per Share for a total purchase price of $_______________. The
term "Shares" refers to the purchased Shares and all securities received in
replacement of the Shares or as stock dividends or splits, all securities
received in replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional
securities or other properties to which Purchaser is entitled by reason of
Purchaser's ownership of the Shares.
2. Time and Place of Exercise. The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company simultaneously
with the execution of this Agreement in accordance with the provisions of
Section 2(b) of the Option Agreement. On such date, the Company will deliver to
Purchaser a certificate representing the Shares to be purchased by Purchaser
(which shall be issued in Purchaser's name) against payment of the purchase
price therefor by Purchaser by (a) check made payable to the Company, (b)
cancellation of indebtedness of the Company to Purchaser, (c) delivery of shares
of the Common Stock of the Company in accordance with Section 3 of the Option
Agreement, or (d) a combination of the foregoing.
3. Limitations on Transfer. In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares except in compliance with the
provisions below and applicable securities laws.
(a) Right of First Refusal. Before any Shares held by Purchaser or
any transferee of Purchaser (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this
Section 3(a) (the "Right of First Refusal").
<PAGE>
(i) Notice of Proposed Transfer. The Holder of the Shares
shall deliver to the Company a written notice (the "Notice") stating: (A) the
Holder's bona fide intention to sell or otherwise transfer such Shares; (B) the
name of each proposed purchaser or other transferee ("Proposed Transferee"); (C)
the number of Shares to be transferred to each Proposed Transferee; and (D) the
terms and conditions of each proposed sale or transfer. The Holder shall offer
the Shares at the same price (the "Offered Price") and upon the same terms (or
terms as similar as reasonably possible) to the Company or its assignee(s).
(ii) Exercise of Right of First Refusal. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.
(iii) Purchase Price. The purchase price ("Purchase Price") for
the Shares purchased by the Company or its assignee(s) under this Section 3(a)
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(iv) Payment. Payment of the Purchase Price shall be made, at
the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within thirty (30) days after receipt of the
Notice or in the manner and at the times set forth in the Notice.
(v) Holder's Right to Transfer. If all of the Shares proposed
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this Section 3(a), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within sixty (60) days after the date of the Notice and
provided further that any such sale or other transfer is effected in accordance
with any applicable securities laws and the Proposed Transferee agrees in
writing that the provisions of this Section 3 shall continue to apply to the
Shares in the hands of such Proposed Transferee. If the Shares described in the
Notice are not transferred to the Proposed Transferee within such period, or if
the Holder proposes to change the price or other terms to make them more
favorable to the Proposed Transferee, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
(vi) Exception for Certain Family Transfers. Anything to the
contrary contained in this Section 3(a) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family or a trust for the benefit of the
Purchaser's Immediate Family shall be exempt from the
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<PAGE>
provisions of this Section 3(a). "Immediate Family" as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section 3.
(b) Involuntary Transfer.
(i) Company's Right to Purchase upon Involuntary Transfer. In
the event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in Section 3(a)(vi) above)
of all or a portion of the Shares by the record holder thereof, the Company
shall have an option to purchase all of the Shares transferred at the greater of
the purchase price paid by Purchaser pursuant to this Agreement or the fair
market value of the Shares on the date of transfer. Upon such a transfer, the
person acquiring the Shares shall promptly notify the Secretary of the Company
of such transfer. The right to purchase such Shares shall be provided to the
Company for a period of thirty (30) days following receipt by the Company of
written notice by the person acquiring the Shares.
(ii) Price for Involuntary Transfer. With respect to any stock
to be transferred pursuant to Section 3(b)(i), the price per Share shall be a
price set by the Board of Directors of the Company that will reflect the current
value of the stock in terms of present earnings and future prospects of the
Company. The Company shall notify Purchaser or his or her executor of the price
so determined within thirty (30) days after receipt by it of written notice of
the transfer or proposed transfer of Shares. However, if the Purchaser does not
agree with the valuation as determined by the Board of Directors of the Company,
the Purchaser shall be entitled to have the valuation determined by an
independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the
Purchaser.
(c) Assignment. The right of the Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations; provided, however, that an
assignee, other than a corporation that is the parent or a one hundred percent
(100%) owned subsidiary of the Company, must pay the Company, upon assignment of
such right, cash equal to the difference between the original purchase price and
fair market value, if the original purchase price is less than the fair market
value of the Shares subject to the assignment.
(d) Restrictions Binding on Transferees. All transferees of Shares
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement. Any sale or transfer of the Company's Shares
shall be void unless the provisions of this Agreement are satisfied.
(e) Termination of Rights. The Right of First Refusal granted the
Company by Section 3(a) above and the option to repurchase the Shares in the
event of an involuntary
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<PAGE>
transfer granted the Company by Section 3(b) above shall terminate upon the
first sale of Common Stock of the Company to the general public pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Act. Upon termination of the Right of
First Refusal described in Section 3(a) above, a new certificate or certificates
representing the Shares not repurchased shall be issued, on request, without the
legend referred to in Section 5(a)(ii) herein and delivered to Purchaser.
4. Investment and Taxation Representations. In connection with the
purchase of the Shares, Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing the Shares for investment for his or her own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act.
(b) Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
(c) Purchaser understands that the Shares are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, Purchaser must hold the Shares indefinitely unless they
are registered with the Securities and Exchange Commission and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale. Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may by conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
requirements relating to the Company which are outside of Purchaser's control,
and which the Company is under no obligation and may not be able to satisfy.
(d) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection with the purchase or disposition of the Shares and
that Purchaser is not relying on the Company for any tax advice.
5. Restrictive Legends and Stop-Transfer Orders
(a) Legends. The certificate or certificates representing the Shares
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
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<PAGE>
AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933.
(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
6. No Employment Rights. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Purchaser's employment, for any reason, with or
without cause.
7. Market Standoff Agreement. In connection with any public offering of
the Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Purchaser agrees
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any Shares (other than those included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days in the case of Company's initial public offering and
ninety (90) days in the case of any other public offering) from the effective
date of such registration as may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be
requested by the underwriters at the time of such public offering.
8. Miscellaneous
(a) Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law.
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<PAGE>
(b) Entire Agreement; Enforcement of Rights. This Agreement sets
forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the parties
to this Agreement. The failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of any rights of such party.
(c) Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(d) Construction. This Agreement has been reviewed by each of the
parties hereto and is the result of negotiations between each of the parties
hereto and their respective counsel, if any; accordingly, this Agreement shall
be deemed to be the product of all of the parties hereto, and no ambiguity shall
be construed in favor of or against any one of the parties hereto.
(e) Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient when delivered personally or
sent by telegram or fax or forty-eight (48) hours after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid, and addressed
to the party to be notified at such party's address as set forth below or as
subsequently modified by written notice.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(g) Successors and Assigns. The rights and benefits of this
Agreement shall inure to the benefit of, and be enforceable by the Company's
successors and assigns. The rights and obligations of Purchaser under this
Agreement may only be assigned with the prior written consent of the Company.
[Signature Page Follows]
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<PAGE>
The parties have executed this Exercise Notice and Restricted Stock
Purchase Agreement as of the date first set forth above.
COMPANY:
ADRELEVANCE, INC.
By:_______________________________________
(Signature)
Name:_____________________________________
(Print)
Title:____________________________________
Address: 2151 N. Northlake Way, Suite 210
Seattle, WA 98103
PURCHASER:
__________________________________________
(Signature)
__________________________________________
(Printed Name)
Address: ___________________________
___________________________
I, ______________________, spouse of ________________, have read and hereby
approve the foregoing Agreement. In consideration of the Company's granting my
spouse the right to purchase the Shares as set forth in the Agreement, I hereby
agree to be irrevocably bound by the Agreement and further agree that any
community property or other such interest shall hereby be similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.
__________________________________________
Spouse of _________________________________
<PAGE>
RECEIPT
The undersigned hereby acknowledges receipt of Certificate No. _____
representing __________ shares of Common Stock of AdRelevance, Inc. (the
"Company").
Dated: _______________
__________________________________________
(Signature)
__________________________________________
(Printed Name)
<PAGE>
RECEIPT
AdRelevance, Inc. (the "Company") hereby acknowledges receipt of (check
as applicable):
_____ A check in the amount of $__________
_____ The cancellation of indebtedness in the amount of $__________
_____ Certificate No. ____ representing ______ shares of the Company's
Common Stock with a fair market value of $__________
given by _______________________ as consideration for Certificate No.
______ representing ___________ shares of Common Stock of the Company.
Dated: ______________
AdRelevance, Inc.
By:_______________________________________
(Signature)
Name:_____________________________________
(Print)
Title:____________________________________
Exhibit 5
[Letterhead of Fulbright & Jaworski L.L.P.]
November __, 1999
Media Metrix, Inc.
250 Park Avenue South, 7th Floor
New York, New York 10003
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), on behalf of Media Metrix, Inc.
(the "Company"), relating to an aggregate of 247,850 shares of the Company's
Common Stock, $.01 par value per share (the "Shares"), to be issued upon the
exercise of options granted under the 1998 AdRelevance Stock Option Plan and the
1999 AdRelevance Stock Option Plan (each, a "Plan").
As counsel for the Company, we have examined such corporate records, other
documents, and such questions of law as we have considered necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examination, advise you that in our opinion, all necessary corporate proceedings
by the Company have been duly taken to authorize the issuance of the Shares
pursuant to the applicable Plan and that the Shares being registered pursuant to
the Registration Statement, when issued and paid for under the applicable Plan
in accordance with the terms of the applicable Plan, will be duly authorized,
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. This consent is not to be construed as an admission that
we are a person whose consent is required to be filed with the Registration
Statement under the provisions of the Act.
Very truly yours,
Exhibit 23(a)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of Media Metrix, Inc. pertaining to the 1998 AdRelevance Stock Option Plan
and the 1999 AdRelevance Stock Option Plan of our report dated February 22,
1999, except for the first paragraph of Note 1--Organization as to which the
date is May 5, 1999, with respect to the financial statements of Media Metrix,
Inc. included in its prospectus (dated October 26, 1999) for the registration of
3,000,000 shares of its common stock, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
New York, New York
November 8, 1999
Exhibit 23(b)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of Media Metrix, Inc. pertaining to the 1998 AdRelevance Stock Option Plan
and the 1999 AdRelevance Stock Option Plan of our report dated October 5, 1999,
except for paragraphs 3 and 4 of Note 8 as to which the date is October 8, 1999,
with respect to the financial statements of AdRelevance, Inc. included in the
prospectus of Media Metrix, Inc. (dated October 26, 1999) for the registration
of 3,000,000 shares of Media Metrix, Inc.'s common stock, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Seattle, Washington
November 8, 1999
Exhibit 23(c)
Consent of Independent Auditors
We consent to the incorporation by reference in the Media Metrix Inc.
registration statement on Form S-8 of our report dated April 8, 1999, on our
audits of the financial statements of RelevantKnowledge, Inc.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Atlanta, Georgia
November 8, 1999
