<PAGE> 1
As filed with the Securities and Exchange Commission on November 24, 1999
Registration No. 333-_____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-----------------
DOUBLECLICK INC.
(Exact name of issuer as specified in its charter)
DELAWARE 13-3870996
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
41 MADISON AVENUE, 32ND FLOOR
NEW YORK, NEW YORK 10010
(Address of principal executive offices) (Zip Code)
-----------------
ABACUS DIRECT CORPORATION 1999 STOCK INCENTIVE PLAN
ABACUS DIRECT CORPORATION AMENDED AND RESTATED 1996 STOCK INCENTIVE PLAN
ABACUS DIRECT CORPORATION AMENDED AND RESTATED 1989 STOCK OPTION PLAN
(Full title of the plans)
-----------------
KEVIN J. O'CONNOR
CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD OF DIRECTORS
DOUBLECLICK INC.
41 MADISON AVENUE, 32ND FLOOR
NEW YORK, NEW YORK 10010
(Name and address of agent for service)
(212) 683-0001
(Telephone number, including area code, of agent for service)
-----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Amount to be Offering Price Aggregate Amount of
Title of Securities to be Registered Registered(1) per Share Offering Price Registration Fee
==================================================================================================================
Abacus Direct Corporation
1999 Stock Incentive Plan
Common Stock, $0.001 par value 32,022 $73.83(2) $2,364,269.26(2) $657.27
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C> <C> <C>
Abacus Direct Corporation
Amended and Restated 1996
Stock Incentive Plan
Common Stock, $0.001 par value 973,173 $35.22(2) $34,275,153.06(2) $9,528.49
Abacus Direct Corporation
Amended and Restated 1989
Stock Option Plan
Common Stock, $0.001 par value 376,717 $ 2.75(2) $1,035,971.75(2) $288,000
Aggregate Registration Fee $10,473.76
==================================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Registrant's Common Stock which become issuable under the Abacus Direct
Corporation 1999 Stock Incentive Plan, Abacus Direct Corporation Amended
and Restated 1996 Stock Incentive Plan and the Abacus Direct Corporation
Amended and Restated 1989 Stock Option Plan 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 Registrant's outstanding shares of 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 weighted average
exercise price of the outstanding options.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
DoubleClick Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 filed with the SEC on March 4, 1999 and
the Amendments on Form 10-K/A filed with the SEC on April 27,
1999 and October 15, 1999;
(b) The Registrant's Current Reports on Form 8-K filed with the SEC
on March 15, 1999 (for event dates January 20, 1999 and March 11,
1999, respectively), June 17, 1999 (for event date June 13,
1999), July 22, 1999 (for event date July 12, 1999) and November
10, 1999 (for event date October 26, 1999);
(c) The Registrant's Quarterly Reports on Form 10-Q for the periods
ending March 31, 1999, June 30, 1999 and September 30, 1999 filed
with the SEC on May 14, 1999, August 13, 1999 and November 15,
1999, respectively, as amended by Amendment No. 1 on Form 10-Q/A
(for period ending March 31, 1999) and as amended by Amendment
No. 1 on Form 10-Q/A (for period ending June 30, 1999),
respectively, filed with the SEC on October 15, 1999; and
(d) The Registrant's Registration Statement No. 000-23709 on Form 8-A
filed with the SEC on February 2, 1998 and amended on February 9,
1998 and December 1, 1998, in which there is 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 (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 deregisters 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 Capital Stock
Inapplicable.
II-1
<PAGE> 4
Item 5. Interests of Named Experts and Counsel
Inapplicable.
Item 6. Indemnification of Directors and Officers
The Registrant's Certificate of Incorporation (the "Certificate")
provides that, except to the extent prohibited by the Delaware General
Corporation Law(the "DGCL"), the Registrant's directors shall not be personally
liable to the Registrant or its stockholders for monetary damages for any breach
of fiduciary duty as directors of the Registrant. Under the DGCL, the directors
have a fiduciary duty to the Registrant which is not eliminated by this
provision of the Certificate and, in appropriate circumstances, equitable
remedies such as injunctive or other forms of nonmonetary relief will remain
available. In addition, each director will continue to be subject to liability
under the DGCL for breach of the director's duty of loyalty to the Registrant,
for acts or omissions which are found by a court of competent jurisdiction to be
not in good faith or involving intentional misconduct, for knowing violations of
law, for actions leading to improper personal benefit to the director, and for
payment of dividends or approval of stock repurchases or redemptions that are
prohibited by DGCL. This provision also does not affect the directors'
responsibilities under any other laws, such as the Federal securities laws or
state or Federal environmental laws. The Registrant has obtained liability
insurance for its officers and directors.
Section 145 of the DGCL empowers a corporation to indemnify its
directors and officers and to purchase insurance with respect to liability
arising out of their capacity or status as directors and officers, provided that
this provision shall not eliminate or limit the liability of a director: (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) arising under
Section 174 of the DGCL, or (iv)for any transaction from which the director
derived an improper personal benefit. The DGCL provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's bylaws, any agreement, a vote of stockholders or otherwise. The
Certificate eliminates the personal liability of directors to the fullest extent
permitted by Section 102(b)(7) of the DGCL and provides that the Registrant
shall fully indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative or investigative) by reason of the fact
that such person is or was a director or officer of the Registrant, or is or was
serving at the request of the Registrant as a director or officer of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding.
At present, there is no pending litigation or proceeding
involving any director, officer, employee or agent as to which indemnification
will be required or permitted under the Certificate. The Registrant is not aware
of any threatened litigation or proceeding that may result in a claim for such
indemnification.
II-2
<PAGE> 5
Item 7. Exemption from Registration Claimed
Inapplicable.
Item 8. Exhibits
<TABLE>
<CAPTION>
<S> <C>
Exhibit Number Exhibit
- -------------- -------
4.0 Instruments Defining Rights of Stockholders. Reference is
made to Registrant's Registration Statement No. 000-23709 on
Form 8-A, and the exhibits thereto, which are incorporated
herein by reference pursuant to Item 3(c) of this
Registration Statement.
5.0 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.
24.0 Power of Attorney. Reference is made to page II-5 of this Registration Statement.
99.1 Abacus Direct Corporation 1999 Stock Incentive Plan
99.2 Abacus Direct Corporation Amended and Restated 1996 Stock Incentive Plan
99.3 Abacus Direct Corporation Amended and Restated 1989 Stock Option Plan
99.4 Form of Assumption Agreement
</TABLE>
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement; (i) to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933, as amended (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 paragraphs 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 the
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 upon the termination of the Abacus Direct Corporation 1999 Stock
Incentive Plan, Abacus Direct Corporation Amended and Restated 1996 Stock
Incentive Plan and the Abacus Direct Corporation Amended and Restated 1989 Stock
Option Plan.
II-3
<PAGE> 6
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 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities and Exchange Act of
1934) 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 and controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item 6
above, or otherwise, the Registrant has been advised that in the opinion of the
SEC 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-4
<PAGE> 7
SIGNATURES
Registrant.
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 this 24th day
of November, 1999.
DOUBLECLICK INC.
By: /s/ KEVIN J. O'CONNOR
-------------------------------
Kevin J. O'Connor
Chief Executive Officer and
Chairman of the Board of Directors
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of DoubleClick Inc.,
a Delaware corporation, do hereby constitute and appoint Kevin J. O'Connor and
Jeffrey E. Epstein, the lawful attorneys and agents, with full power and
authority to do any and all acts and things and to execute any and all
instruments which said attorney and agent determines 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 all that said attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof.This Power of
Attorney may be signed in several counterparts.
<PAGE> 8
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>
SIGNATURES TITLE DATE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ KEVIN J. O'CONNOR Chief Executive Officer and Chairman November 24, 1999
- ------------------------ of the Board (Principal Executive
Kevin J. O'Connor Officer)
/s/ STEPHEN R. COLLINS Chief Financial Officer November 23, 1999
- -------------------------
Stephen R. Collins
/s/ DAVID N. STROHM Director November 24, 1999
- -------------------------
David N. Strohm
/s/ MARK E. NUNNELLEY Director November 24, 1999
- -------------------------
Mark E. Nunnelley
/s/ W. GRANT GREGORY Director November 23, 1999
- -------------------------
W. Grant Gregory
/s/ DONALD PEPPERS Director November 23, 1999
- -------------------------
Donald Peppers
Director
- -------------------------
Thomas S. Murphy
</TABLE>
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining Rights of Stockholders. Reference is made to
Registrant's Registration Statement No. 000-23709 on Form 8-A,
and the exhibits thereto, which are incorporated herein by
reference pursuant to Item 3(c) of this Registration Statement.
5 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this Registration Statement.
99.1 Abacus Direct Corporation 1999 Stock Incentive Plan
99.2 Abacus Direct Corporation Amended and Restated 1996 Stock Incentive Plan
99.3 Abacus Direct Corporation Amended and Restated 1989 Stock Option Plan
99.4 Form of Assumption Agreement
</TABLE>
<PAGE> 1
EXHIBIT 5
OPINION OF BROBECK, PHLEGER & HARRISON LLP
November 24, 1999
DoubleClick Inc.
41 Madison Avenue, 32nd Floor
New York, New York 10010
Re: DoubleClick Inc. Registration Statement on Form S-8 for an
aggregate of 1,381,912 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to DoubleClick 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: a) 32,072 shares
of Common Stock of the Company under the Abacus Direct Corporation 1999 Stock
Incentive Plan, b) 973,173 shares of Common Stock of the Company under the
Abacus Direct Corporation Amended and Restated 1996 Stock Incentive Plan and c)
376,717 shares of Common Stock of the Company under the Abacus Direct
Corporation Amended and Restated 1989 Stock Option Plan (collectively, the
"Plans").
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 and amendment of the
Plans. Based on such review, we are of the opinion that if, as and when the
shares of Common Stock are issued and sold (and the consideration therefor
received) pursuant to the provisions of option agreements duly authorized under
the Plans and in accordance with the Registration Statement, such shares will be
duly authorized, legally issued, fully paid and non-assessable.
We consent to the filing of this opinion letter as Exhibit 5.1 to the
Registration Statement.
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
Plans or the shares of Common Stock issuable under the Plans.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
-----------------------------------
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of DoubleClick Inc. of our report dated January 19, 1999
relating to the consolidated financial statements which appears in the Annual
Report on Form 10-K. We also consent to the application of such report to the
Financial Statement Schedule for the period from January 23, 1996 (inception) to
December 31, 1996 and for the years ended December 31, 1997 and 1998 when such
schedule is read in conjunction with the financial statements referred to in our
report. The audits referred to in such report also included this schedule.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
New York, New York
November 23, 1999
<PAGE> 1
EXHIBIT 99.1
ABACUS DIRECT CORPORATION
1999 STOCK INCENTIVE PLAN
1. PURPOSE. The purpose of the Abacus Direct Corporation 1999 Stock
Incentive Plan (the "Plan") is to provide a means through which the Company and
its Subsidiaries and Affiliates may attract able persons to enter and remain in
the employ of the Company and its Subsidiaries and Affiliates and to provide a
means whereby eligible persons can acquire and maintain Common Stock ownership,
or be paid incentive compensation measured by reference to the value of Common
Stock, thereby strengthening their commitment to the welfare of the Company and
its Subsidiaries and Affiliates and promoting an identity of interest between
stockholders and these eligible persons.
So that the appropriate incentive can be provided, the Plan provides for
granting Incentive Stock Options, Nonqualified Stock Options, Restricted Stock
Awards and Stock Bonuses, or any combination of the foregoing. Capitalized terms
not defined in the text are defined in Section 25.
2. SHARES SUBJECT TO THE PLAN. Subject to Section 18, the total number of
Shares reserved and available for grant and issuance pursuant to this Plan will
be 750,000 Shares plus Shares that are subject to: (a) issuance upon exercise of
an Option but cease to be subject to such Option for any reason other than
exercise of such Option; (b) an Award granted hereunder but are forfeited or are
repurchased by the Company at the original issue price; and (c) an Award that
otherwise terminates without Shares being issued. At all times the Company shall
reserve and keep available a sufficient number of Shares as shall be required to
satisfy the requirements of all outstanding Options granted under this Plan and
all other outstanding but unvested Awards granted under this Plan.
3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to
employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. All other Awards may be
granted to employees, officers, directors, consultants, independent contractors
and advisors of the Company or any Parent, Affiliate or Subsidiary of the
Company; provided such consultants, contractors and advisors render bona fide
services not in connection with the offer and sale of securities in a
capital-raising transaction.
4. ADMINISTRATION.
4.1 Committee Authority. This Plan will be administered by the
Committee or by the Board. Subject to the general purposes, terms and
conditions of this Plan, and to the direction of the Board, the Committee
will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:
(1) select persons to receive Awards;
(2) determine the nature, extent, form and terms of Awards and the
number of Shares or other consideration subject to Awards;
(3) determine the vesting, exercisability and payment of Awards;
(4) correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Award or any Award Agreement;
(5) determine whether Awards will be granted singly, in combination
with, in tandem with, in replacement of, or as alternatives to,
other Awards under this Plan or any other incentive or
compensation plan of the Company or any Parent or Subsidiary of
the Company;
(6) prescribe, amend and rescind rules and regulations relating to
this Plan or any Award;
(7) construe and interpret this Plan, any Award Agreement and any
other agreement or document executed pursuant to this Plan;
A-1
<PAGE> 2
(8) grant waivers of Plan or Award conditions;
(9) determine whether an Award has been earned; and
(10) make all other determinations necessary or advisable for the
administration of this Plan.
The Committee shall have the authority, subject to the provisions of the
Plan, to establish, adopt, or revise such rules and regulations and to make all
such determinations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan. The Committee's interpretation of the Plan
or any documents evidencing Awards granted pursuant thereto and all decisions
and determinations by the Committee with respect to the Plan shall be final,
binding, and conclusive on all parties unless otherwise determined by the Board.
4.2 Committee Discretion. Any determination made by the Committee
with respect to any Award will be made in its sole discretion at the time
of grant of the Award or, unless in contravention of any express term of
this Plan or Award, at any later time, and such determination will be final
and binding on the Company and on all persons having an interest in any
Award under this Plan.
5. OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be intended to be Incentive Stock Options
within the meaning of the Code ("ISO") or Nonqualified Stock Options ("NQSOS"),
the number of Shares subject to the Option, the Exercise Price of the Option,
the period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under this Plan will be
evidenced by an Award Agreement ("Stock Option Agreement"), which will
expressly identify the Option as an ISO or an NQSO, and will be in such
form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.
5.2 Exercise Period. Options may be exercisable within the times or
upon the events determined by the Committee as set forth in the Stock
Option Agreement governing such Option; provided, however, that no Option
will be exercisable after the expiration of ten (10) years from the date
the Option is granted; and provided further that no ISO granted to a person
who directly or by attribution owns more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of
any Parent or Subsidiary of the Company ("Ten Percent Stockholder") will be
exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee also may provide for Options to become exercisable
at one time or from time to time, periodically or otherwise, in such number
of Shares or percentage of Shares as the Committee determines.
5.3 Exercise Price.The Exercise Price of an Option will be determined
by the Committee when the Option is granted and may be not less than 85% of
the Fair Market Value of the Shares on the date of grant; provided that:
(i) the Exercise Price of an ISO will be not less than 100% of the Fair
Market Value of the Shares on the date of grant; and (ii) the Exercise
Price of any ISO granted to a Ten Percent Stockholder will not be less than
110% of the Fair Market Value of the Shares on the date of grant. Payment
for the Shares purchased may be made in accordance with Section 8 of this
Plan.
5.4 Date of Grant. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy
of this Plan will be delivered to the Participant within a reasonable time
after the granting of the Option.
5.5 Method of Exercise. Options may be exercised only by delivery to
the Company of a written stock option exercise agreement (the "Exercise
Agreement") in a form approved by the Committee (which need not be the same
for each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement,
if any, and such representations and agreements regarding Participant's
investment intent and access to information and
A-2
<PAGE> 3
other matters, if any, as may be required or desirable by the Company to
comply with applicable securities laws, together with payment in full of
the Exercise Price for the number of Shares being purchased.
5.6 Termination. Notwithstanding the exercise periods set forth in
the Stock Option Agreement, exercise of an Option will always be subject to
the following:
(a) If the Participant is Terminated for any reason except death or
Disability, then the Participant may exercise such
Participant's Options only to the extent that such Options
would have been exercisable upon the Termination Date no later
than three (3) months after the Termination Date (or such
shorter or longer time period not exceeding five (5) years as
may be determined by the Committee, with any exercise beyond
three (3) months after the Termination Date deemed to be an
NQSO), but in any event, no later than the expiration date of
the Options.
(b) If the Participant is Terminated because of Participant's death
or Disability (or the Participant dies within three (3) months
after a Termination other than for Cause or because of
Participant's Disability), then Participant's Options may be
exercised only to the extent that such Options would have been
exercisable by Participant on the Termination Date and must be
exercised by Participant (or Participant's legal representative
or authorized assignee) no later than twelve (12) months after
the Termination Date (or such shorter or longer time period not
exceeding five (5) years as may be determined by the Committee,
with any such exercise beyond (a) three (3) months after the
Termination Date when the Termination is for any reason other
than the Participant's death or Disability, or (b) twelve (12)
months after the Termination Date when the Termination is for
Participant's death or Disability, deemed to be an NQSO), but
in any event no later than the expiration date of the Options.
(c) Notwithstanding the provisions in paragraph 5.6(a) above, if a
Participant is terminated for Cause, neither the Participant,
the Participant's estate nor such other person who may then
hold the Option shall be entitled to exercise any Option with
respect to any Shares whatsoever, after termination of service,
whether or not after termination of service the Participant may
receive payment from the Company or Subsidiary for vacation
pay, for services rendered prior to termination, for services
rendered for the day on which termination occurs, for salary in
lieu of notice, or for any other benefits. In making such
determination, the Board shall give the Participant an
opportunity to present to the Board evidence on his behalf. For
the purpose of this paragraph, termination of service shall be
deemed to occur on the date when the Company dispatches notice
or advice to the Participant that his service is terminated.
5.7 Limitations on ISO. The aggregate Fair Market Value (determined
as of the date of grant) of Shares with respect to which ISO are
exercisable for the first time by a Participant during any calendar year
(under this Plan or under any other incentive stock option plan of the
Company, Parent or Subsidiary of the Company) will not exceed $100,000. If
the Fair Market Value of Shares on the date of grant with respect to which
ISO are exercisable for the first time by a Participant during any calendar
year exceeds $100,000, then the Options for the first $100,000 worth of
Shares to become exercisable in such calendar year will be ISO and the
Options for the amount in excess of $100,000 that become exercisable in
that calendar year will be NQSOs. In the event that the Code or the
regulations promulgated thereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of
Shares permitted to be subject to ISO, such different limit will be
automatically incorporated herein and will apply to any Options granted
after the effective date of such amendment.
5.8 Modification, Extension or Renewal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options
in substitution therefor, provided that any such action may not, without
the written consent of a Participant, impair any of such Participant's
rights under any
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Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section
424(h) of the Code. The Committee may reduce the Exercise Price of
outstanding Options without the consent of Participants affected by a
written notice to them; provided, however, that the Exercise Price may not
be reduced below the minimum Exercise Price that would be permitted under
Section 5.3 of this Plan for Options granted on the date the action is
taken to reduce the Exercise Price.
5.9 Limitations on Exercise. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an
Option, provided that such minimum number will not prevent Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.
5.10 No Disqualification. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISO will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO
under Section 422 of the Code.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to
sell to an eligible person Shares that are subject to restrictions. The
Committee will determine to whom an offer will be made, the number of Shares the
person may purchase, the price to be paid (the "Purchase Price"), the
restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases under a Restricted
Stock Award made pursuant to this Plan will be evidenced by an Award
Agreement ("Restricted Stock Purchase Agreement") that will be in such form
(which need not be the same for each Participant) as the Committee will
from time to time approve, and will comply with and be subject to the terms
and conditions of this Plan. The offer of Restricted Stock will be accepted
by the Participant's execution and delivery of the Restricted Stock
Purchase Agreement and full payment for the Shares to the Company within
thirty (30) days from the date the Restricted Stock Purchase Agreement is
delivered to the person. If such person does not execute and deliver the
Restricted Stock Purchase Agreement along with full payment for the Shares
to the Company within thirty (30) days, then the offer will terminate,
unless otherwise Determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Committee on the date the
Restricted Stock Award is granted, except in the case of a sale to a Ten
Percent Stockholder, in which case the Purchase Price will be 100% of the
Fair Market Value. Payment of the Purchase Price may be made in accordance
with Section 8 of this Plan.
6.3 Terms of Restricted Stock Awards. Restricted Stock Awards shall
be subject to such restrictions as the Committee may impose. These
restrictions may be based upon completion of a specified number of years of
service with the Company or upon completion of the performance goals as set
out in advance in the Participant's individual Restricted Stock Purchase
Agreement. Restricted Stock Awards may vary from Participant to Participant
and between groups of Participants. Prior to the grant of a Restricted
Stock Award, the Committee shall: (a) determine the nature, length and
starting date of any Performance Period for the Restricted Stock Award; (b)
select from among the Performance Factors to be used to measure performance
goals, if any; and (c) determine the number of Shares that may be awarded
to the Participant. Prior to the payment of any Restricted Stock Award, the
Committee shall determine the extent to which such Restricted Stock Award
has been earned. Performance Periods may overlap and Participants may
participate simultaneously with respect to Restricted Stock Awards that are
subject to different Performance Periods and having different performance
goals and other criteria.
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6.4 Stock Restrictions. Each certificate representing Restricted
Stock awarded under the Plan shall bear the following legend until the
lapse of all restrictions with respect to such Stock:
"Transfer of this certificate and the shares represented hereby is
restricted pursuant to the terms of a Restricted Stock Agreement, dated
as of , between Abacus Direct Corporation and
. A copy of such Agreement is on file at the Principal
executive offices of the Company."
Stop transfer orders shall be entered with the Company's transfer
agent and registrar against the transfer of legended securities.
6.5 Termination During Performance Period. If a Participant is
Terminated during a Performance Period for any reason, then such
Participant will be entitled to payment (whether in Shares, cash or
otherwise) with respect to the Restricted Stock Award only to the extent
earned as of the date of Termination in accordance with the Restricted
Stock Purchase Agreement, unless the Committee will determine otherwise.
7. STOCK BONUSES.
7.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares
(which may consist of Restricted Stock) for services rendered to the
Company or any Parent or Subsidiary of the Company. A Stock Bonus may be
awarded for past services already rendered to the Company, or any Parent or
Subsidiary of the Company pursuant to an Award Agreement (the "Stock Bonus
Agreement") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will
comply with and be subject to the terms and conditions of this Plan. A
Stock Bonus may be awarded upon satisfaction of such performance goals as
are set out in advance in the Participant's individual Award Agreement (the
"Performance Stock Bonus Agreement") that will be in such form (which need
not be the same for each Participant) as the Committee will from time to
time approve, and will comply with and be subject to the terms and
conditions of this Plan. Stock Bonuses may vary from Participant to
Participant and between groups of Participants, and may be based upon the
achievement of the Company, Parent or Subsidiary and/or individual
performance factors or upon such other criteria as the Committee may
determine.
7.2 Terms of Stock Bonuses. The Committee will determine the number
of Shares to be awarded to the Participant. If the Stock Bonus is being
earned upon the satisfaction of performance goals pursuant to a Performance
Stock Bonus Agreement, then the Committee will: (a) determine the nature,
length and starting date of any Performance Period for each Stock Bonus;
(b) select from among the Performance Factors to be used to measure the
performance, if any; and (c) determine the number of Shares that may be
awarded to the Participant. Prior to the payment of any Stock Bonus, the
Committee shall determine the extent to which such Stock Bonuses have been
earned. Performance Periods may overlap and Participants may participate
simultaneously with respect to Stock Bonuses that are subject to different
Performance Periods and different performance goals and other criteria. The
number of Shares may be fixed or may vary in accordance with such
performance goals and criteria as may be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Bonuses
to take into account changes in law and accounting or tax rules and to make
such adjustments as the Committee deems necessary or appropriate to reflect
the impact of extraordinary or unusual items, events or circumstances to
avoid windfalls or hardships.
7.3 Form of Payment. The earned portion of a Stock Bonus may be paid
currently or on a deferred basis with such interest or dividend equivalent,
if any, as the Committee may determine. Payment may be made in the form of
cash or whole Shares or a combination thereof, either in a lump sum payment
or in installments, all as the Committee will determine.
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8. PAYMENT FOR SHARE PURCHASES.
8.1 Payment. Payment for Shares purchased pursuant to this Plan may
be made in cash (by check) or, where expressly approved for the Participant
by the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares that either: (1) have been owned by
Participant for more than six (6) months and have been paid for
within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such
note has been fully paid with respect to such shares); or (2)
were obtained by Participant in the public market;
(c) by tender of a full recourse promissory note having such terms
as may be approved by the Committee and bearing interest at a
rate sufficient to avoid imputation of income under Sections
483 and 1274 of the Code; provided, however, that Participants
who are not employees or directors of the Company will not be
entitled to purchase Shares with a promissory note unless the
note is adequately secured by collateral other than the Shares;
(d) by waiver of compensation due or accrued to the Participant for
services rendered;
(e) with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company's stock exists:
i. through a "same day sale" commitment from the Participant and
a broker-dealer that is a member of the National Association
of Securities Dealers (an "NASD Dealer") whereby the
Participant irrevocably elects to exercise the Option and to
sell a portion of the Shares so purchased to pay for the
Exercise Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the Exercise
Price directly to the Company; or
ii. through a "margin" commitment from the Participant and a
NASD Dealer whereby the Participant irrevocably elects to
exercise the Option and to pledge the Shares so purchased to
the NASD Dealer in a margin account as security for a loan
from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the
Company; or
(f) by any combination of the foregoing.
8.2 Loan Guarantees. The Committee may help the Participant pay for
Shares purchased under this Plan by authorizing a guarantee by the Company
of a third-party loan to the Participant.
9. WITHHOLDING TAXES.
9.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery
of any certificate or certificates for such Shares. Whenever, under this
Plan, payments in satisfaction of Awards are to be made in cash, such
payment will be net of an amount sufficient to satisfy federal, state, and
local withholding tax requirements.
9.2 Stock Withholding. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any
Award that is subject to tax withholding and the Participant is obligated
to pay the Company the amount required to be withheld, the Committee may in
its sole discretion allow the Participant to satisfy the minimum
withholding tax obligation by electing to have the Company withhold from
the Shares to be issued that number of Shares having a Fair Market Value
equal to the minimum amount required to be withheld, determined on the date
that the amount of tax to be withheld is to be determined. All elections by
a Participant to have Shares withheld for this
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purpose will be made in accordance with the requirements established by the
Committee and be in writing in a form acceptable to the Committee.
10. PRIVILEGES OF STOCK OWNERSHIP. No Participant will have any of the
rights of a stockholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant
will be a stockholder and have all the rights of a stockholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant's Purchase Price or Exercise Price pursuant
to Section 12.
11. TRANSFERABILITY. Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution or as determined by the Committee and
set forth in the Award Agreement with respect to Awards that are not ISOs.
During the lifetime of the Participant an Award will be exercisable only by the
Participant, and any elections with respect to an Award may be made only by the
Participant unless otherwise determined by the Committee and set forth in the
Award Agreement with respect to Awards that are not ISOs.
12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company
may reserve to itself and/or its assignee(s) in the Award Agreement a right to
repurchase a portion of or all Unvested Shares held by a Participant following
such Participant's Termination at any time within ninety (90) days after the
later of Participant's Termination Date and the date Participant purchases
Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant's Exercise Price or Purchase Price, as the case
may be.
13. CERTIFICATES. All certificates for Shares or other securities delivered
under this Plan will be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted.
14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant's Shares or other collateral. In connection with any pledge of
the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.
15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, Shares (including
Restricted Stock) or other consideration, based on such terms and conditions as
the Committee and the Participant may agree.
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16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable; and/or (b) completion of any registration or other qualification
of such Shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company will be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.
17. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
cause.
18. CORPORATE TRANSACTIONS.
18.1 Assumption or Replacement of Awards by Successor. In the event
of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other
than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other
transaction in which there is no substantial change in the stockholders of
the Company or their relative stock holdings and the Awards granted under
this Plan are assumed, converted or replaced by the successor corporation,
which assumption will be binding on all Participants), (c) a merger in
which the Company is the surviving corporation but after which the
stockholders of the Company immediately prior to such merger (other than
any stockholder that merges, or which owns or controls another corporation
that merges, with the Company in such merger) cease to own their shares or
other equity interest in the Company, (d) the sale of substantially all of
the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed,
converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on all Participants.
In the alternative, the successor corporation may substitute equivalent
Awards or provide substantially similar consideration to Participants as
was provided to stockholders (after taking into account the existing
provisions of the Awards). The successor corporation may also issue, in
place of outstanding Shares of the Company held by the Participant,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection
18.1, such Awards will expire on such transaction at such time and on such
conditions as the Committee will determine. Notwithstanding anything in
this Plan to the contrary, the Committee may, in its sole discretion,
provide that the vesting of any or all Awards granted pursuant to this Plan
will accelerate upon a transaction described in this Section 18 or
otherwise. If the Committee exercises such discretion with respect to
Options, such Options will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the
Committee determines, and if such Options are not exercised prior to the
consummation of the corporate transaction, they shall terminate at such
time as determined by the Committee.
18.2 Other Treatment of Awards. Subject to any greater rights granted
to Participants under the foregoing provisions of this Section 18, in the
event of the occurrence of any transaction described in Section 18.1, any
outstanding Awards will be treated as provided in the applicable agreement
or plan of merger, consolidation, dissolution, liquidation, or sale of
assets.
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18.3 Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either; (a) granting an Award under this Plan in substitution
of such other company's award; or (b) assuming such award as if it had been
granted under this Plan if the terms of such assumed award could be applied
to an Award granted under this Plan. Such substitution or assumption will
be permissible if the holder of the substituted or assumed award would have
been eligible to be granted an Award under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company
assumes an award granted by another company, the terms and conditions of
such award will remain unchanged (except that the exercise price and the
number and nature of Shares issuable upon exercise of any such option will
be adjusted appropriately pursuant to Section 424(a) of the Code). In the
event the Company elects to grant a new Option rather than assuming an
existing option, such new Option may be granted with a similarly adjusted
Exercise Price.
18.4 Adjustment of Shares. In the event that the number of
outstanding shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without
consideration, then (a) the number of Shares reserved for issuance under
this Plan, (b) the Exercise Prices of and number of Shares subject to
outstanding Options, and (c) the number of Shares subject to other
outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that
fractions of a Share will not be issued but will either be replaced by a
cash payment equal to the Fair Market Value of such fraction of a Share or
will be rounded up to the nearest whole Share, as determined by the
Committee.
19. AUTOMATIC GRANTS OF STOCK OPTIONS TO DIRECTORS. An Outside Director
shall be automatically granted a NQSO to purchase 4,000 shares of Common Stock
(the "Initial Option") upon the date the Outside Director begins service as a
non-employee director on the Board (even if previously an employee director).
Thereafter, for the remainder of the term of the Plan and provided he remains a
Outside Director of the Company, on the date of each of the Company's Annual
Meeting of Stockholders, each Outside Director shall be automatically granted
without further action by the Board or the Committee a NQSO to purchase 8,000
shares of Stock. All such Options granted to Outside Directors shall hereinafter
be referred to as Director Stock Options.
19.1 Option Price; Term. All Director Stock Options shall have an
Exercise Price per share equal to the Fair Market Value of a share of
Common Stock on the Date of Grant. The Initial Option and 4,000 shares of
each Annual Option shall vest and become exercisable over a period of four
years at the rate of 25% of each grant annually on each of the four
consecutive anniversaries of the date of grant directly following the date
of grant provided the Outside Director's services as a director continue
through each such anniversary. The remaining 4,000 shares of each such
Annual Option shall vest and become exercisable six months following the
date of grant provided the Outside Director's services as a director
continue through such time. The term of each Director Stock Option
("Term"), after which each such Option shall expire, shall be ten years
from the date of Grant.
19.2 Expiration. If prior to the expiration of the Term of a Director
Stock Option the Outside Director shall cease to be a member of the Board
for any reason other than his death, the Director Stock Option shall expire
on the earlier of the expiration of the Term or the date that is three
months after the date of such cessation. If prior to the expiration of the
Term of a Director Stock Option, an Outside Director shall cease to be a
member of the Board by reason of his death, the Director Stock Option shall
expire on the earlier of the expiration of the Term or the date that is one
year after the date of such cessation. In the event a Outside Director
ceases to be a member of the Board for any reason, any unexpired Director
Stock Options shall thereafter be exercisable until their expiration only
to the extent that such Director Stock Options were exercisable at the time
of such cessation.
19.3 Director Stock Option Agreement. Each Director Stock Option
shall be evidenced by an Award Agreement, which shall contain such
provisions as may be determined by the Committee;
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provided, however, that such provisions shall not be inconsistent with the
provisions of Rule 16b-3 pursuant to the Exchange Act.
19.4 Nontransferability; Exclusive Grant. Subject to the terms
hereof, Outside Director Options shall not be transferable except by will
or the laws of descent and distribution and shall be exercisable during the
Non-Employee Director's lifetime only by him. Outside Directors are
eligible to receive Awards under this Plan in addition to (and not in lieu
of) any Awards pursuant to this Section 19.
20. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on
the date that this Plan is approved by the stockholders of the Company Plan),
consistent with applicable laws (the "Effective Date").
21. TERM OF PLAN. Unless earlier terminated as provided herein, this Plan
will terminate ten (10) years from the date this Plan is adopted by the Board
or, if earlier, the date of stockholder approval.
22. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate
or amend this Plan in any respect, including without limitation amendment of any
form of Award Agreement or instrument to be executed pursuant to this Plan;
provided, however, that the Board will not, without the approval of the
stockholders of the Company, amend this Plan in any manner that requires such
stockholder approval.
23. EFFECT OF SECTION 162(M) OF THE CODE. The Plan, and all Awards issued
thereunder, are intended to be exempt from the application of Section 162(m) of
the Code, which restricts under certain circumstances the Federal income tax
deduction for compensation paid by a public company to named executives in
excess of $1 million per year. The exemption is based on Treasury Regulation
Section 1.162-27(f) as in effect on the effective date of the Plan, with the
understanding that such regulation generally exempts from the application of
Section 162(m) of the Code compensation paid pursuant to a plan that existed
before a company becomes publicly held. The Committee may, without stockholder
approval (unless otherwise required to comply with Rule 16b-3 under the Exchange
Act), amend the Plan retroactively and/or prospectively to the extent it
determines necessary in order to comply with any subsequent clarification of
Section 162(m) of the Code required to preserve the Company's Federal income tax
deduction for compensation paid pursuant to the Plan. To the extent that the
Committee determines as of the Date of Grant of an Award that (i) the Award is
intended to comply with Section 162(m) of the Code and (ii) the exemption
described above is no longer available with respect to such Award, such Award
shall not be effective until any stockholder approval required under Section
162(m) of the Code has been obtained.
24. GENERAL.
24.1 Additional Provisions of an Award. Awards under the Plan also
may be subject to such other provisions (whether or not applicable to the
benefit awarded to any other Participant) as the Committee determines
appropriate including, without limitation, provisions to assist the
Participant in financing the purchase of Stock upon the exercise of
Options, provisions for the forfeiture of or restrictions on resale or
other disposition of shares of Stock acquired under any Award, provisions
giving the Company the right to repurchase shares of Stock acquired under
any Award in the event the Participant elects to dispose of such shares,
and provisions to comply with Federal and state securities laws and Federal
and state tax withholding requirements. Any such provisions shall be
reflected in the applicable Award agreement.
24.2. Claim to Awards and Employment Rights. No employee or other
person shall have any claim or right to be granted an Award under the Plan
or, having been selected for the grant of an Award, to be selected for a
grant of any other Award. Neither the Plan nor any action taken hereunder
shall be construed as giving any Participant any right to be retained in
the employ or service of the Company, a Subsidiary or an Affiliate.
24.3. Designation and Change of Beneficiary. Each Participant shall
file with the Committee a written designation of one or more persons as the
beneficiary who shall be entitled to receive the amounts payable with
respect to an Award of Restricted Stock, if any, due under the Plan upon
his death. A Participant may, from time to time, revoke or change his
beneficiary designation without the consent of any prior beneficiary by
filing a new designation with the Committee. The last such designation
received by the Committee shall be controlling; provided, however, that no
designation, or change or revocation
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thereof, shall be effective unless received by the Committee prior to the
Participant's death, and in no event shall it be effective as of a date
prior to such receipt. If no beneficiary designation is filed by the
Participant, the beneficiary shall be deemed to be his or her spouse or, if
the Participant is unmarried at the time of death, his or her estate.
24.4. Payments to Persons Other Than Participants. If the Committee
shall find that any person to whom any amount is payable under the Plan is
unable to care for his affairs because of illness or accident, or is a
minor, or has died, then any payment due to such person or his estate
(unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to
his spouse, child, relative, an institution maintaining or having custody
of such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Committee and
the Company therefor.
24.5. No Liability of Committee Members. No member of the Committee
shall be personally liable by reason of any contract or other instrument
executed by such member or on his behalf in his capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the
Company shall indemnify and hold harmless each member of the Committee and
each other employee, officer or director of the Company to whom any duty or
power relating to the administration or interpretation of the Plan may be
allocated or delegated, against any cost or expense (including counsel
fees) or liability (including any sum paid in settlement of a claim)
arising out of any act or omission to act in connection with the Plan
unless arising out of such person's own fraud or willful bad faith;
provided, however, that approval of the Board shall be required for the
payment of any amount in settlement of a claim against any such person. The
foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
24.6. Governing law. The Plan and all agreements hereunder shall be
governed by and construed in accordance with the internal laws of the State
of Delaware without regard to the principles of conflicts of law thereof.
24.7. Funding. No provision of the Plan shall require the Company, for
the purpose of satisfying any obligations under the Plan, to purchase
assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor shall the
Company maintain separate bank accounts, books, records or other evidence
of the existence of a segregated or separately maintained or administered
fund for such purposes. Participants shall have no rights under the Plan
other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.
24.8. Reliance on Reports. Each member of the Committee and each
member of the Board shall be fully justified in relying, acting or failing
to act, and shall not be liable for having so relied, acted or failed to
act in good faith, upon any report made by the independent public
accountant of the Company and its Subsidiaries and Affiliates and upon any
other information furnished in connection with the Plan by any person or
persons other than himself.
24.9. Relationship to Other Benefits. No payment under the Plan shall
be taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the
Company or any Subsidiary except as otherwise specifically provided in such
other plan.
24.10. Expenses. The expenses of administering the Plan shall be borne
by the Company and its Subsidiaries and Affiliates.
24.11. Pronouns. Masculine pronouns and other words of masculine
gender shall refer to both men and women.
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<PAGE> 12
24.12. Titles and Headings. The titles and headings of the sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings shall
control.
24.13. Termination of Employment. For all purposes herein, a person
who transfers from employment or service with the Company to employment or
service with a Subsidiary or Affiliate or vice versa shall not be deemed to
have terminated employment or service with the Company, a Subsidiary or
Affiliate.
24.14. Nonexclusivity of The Plan. Neither the adoption of this Plan
by the Board, the submission of this Plan to the stockholders of the
Company for approval, nor any provision of this Plan will be construed as
creating any limitations on the power of the Board to adopt such incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.
25. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:
"Affiliate" means any affiliate of the Company within the meaning of
17 CFR ss. 230.405.
"Award" means any award under this Plan, including any Option,
Restricted Stock or Stock Bonus.
"Award Agreement" means, with respect to each Award, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.
"Board" means the Board of Directors of the Company.
"Cause" means the Company, a Subsidiary or Affiliate having cause to
terminate a Participant's employment or service under any existing
employment, consulting or any other agreement between the Participant and
the Company or a Subsidiary or Affiliate or, in the absence of such an
employment, consulting or other agreement, upon (i) the determination by
the Committee that the Participant has ceased to perform his duties to the
Company, a Subsidiary or Affiliate (other than as a result of his
incapacity due to physical or mental illness or injury), which failure
amounts to an intentional and extended neglect of his duties to such party,
(ii) the Committee's determination that the Participant has engaged or is
about to engage in conduct materially injurious to the Company, a
Subsidiary or Affiliate or (iii) the Participant having been convicted of a
felony.
"Code" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations
under such section.
"Committee" means the Stock Option Committee or such other committee
appointed by the Board which has two or more Outside Directors or the
Board.
"Company" means Abacus Direct Corporation or any successor
corporation.
"Disability" means a disability, whether temporary or permanent,
partial or total, as determined by the Committee.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.
"Fair Market Value" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the NASDAQ National
Market, its closing price on the NASDAQ National Market on the
date of determination as reported in The Wall Street Journal;
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<PAGE> 13
(b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of
determination on the principal national securities exchange on
which the Common Stock is listed or admitted to trading as
reported in The Wall Street Journal;
(c) if such Common Stock is publicly traded but is not quoted on
the NASDAQ National Market nor listed or admitted to trading on
a national securities exchange, the average of the closing bid
and asked prices on the date of determination as reported in
The Wall Street Journal;
(d) if none of the foregoing is applicable, by the Committee in
good faith.
"Insider" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to
Section 16 of the Exchange Act.
"Option" means an award of an option to purchase Shares pursuant to
Section 5.
"Outside Director" means a person who is (i) a "nonemployee director"
within the meaning of Rule 16b-3 under the Exchange Act, or any successor
rule or regulation and (ii) an "outside director" within the meaning of
Section 162(m) of the Code.
"Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations
other than the Company owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
"Participant" means a person who receives an Award under this Plan.
"Performance Factors" means the factors selected by the Committee from
among the following measures to determine whether the performance goals
established by the Committee and applicable to Awards have been satisfied:
(a) Net revenue and/or net revenue growth;
(b) Earnings before income taxes and amortization and/or earnings
before income taxes and amortization growth;
(c) Operating income and/or operating income growth;
(d) Net income and/or net income growth;
(e) Earnings per share and/or earnings per share growth;
(f) Total stockholder return and/or total stockholder return
growth;
(g) Return on equity;
(h) Operating cash flow return on income;
(i) Adjusted operating cash flow return on income;
(j) Economic value added; and
(k) Individual confidential business objectives.
"Performance Period" means the period of service determined by the
Committee, not to exceed five years, during which years of service or
performance is to be measured for Restricted Stock Awards or Stock Bonuses.
"Plan" means this Abacus Direct Corporation 1999 Stock Incentive Plan,
as amended from time to time.
"Restricted Stock Award" means an award of Shares pursuant to Section
6.
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<PAGE> 14
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of the Company's Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Sections 2 and 18, and
any successor security.
"Stock Bonus" means an award of Shares, or cash in lieu of Shares,
pursuant to Section 7.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company 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 such chain.
"Termination" or "Terminated" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director, consultant, independent
contractor, or advisor to the Company or a Parent or Subsidiary of the
Company. An employee will not be deemed to have ceased to provide services
in the case of (i) sick leave, (ii) military leave, or (iii) any other
leave of absence approved by the Committee, provided, that such leave is
for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute or unless
provided otherwise pursuant to formal policy adopted from time to time by
the Company and issued and promulgated to employees in writing. In the case
of any employee on an approved leave of absence, the Committee may make
such provisions respecting suspension of vesting of the Award while on
leave from the employ of the Company or a Subsidiary as it may deem
appropriate, except that in no event may an Option be exercised after the
expiration of the term set forth in the Option agreement. The Committee
will have sole discretion to determine whether a Participant has ceased to
provide services and the effective date on which the Participant ceased to
provide services (the "Termination Date").
"Unvested Shares" means "Unvested Shares" as defined in the Award
Agreement.
"Vested Shares" means "Vested Shares" as defined in the Award
Agreement.
As adopted by the Board of Directors of Abacus Direct Corporation as of
April 14, 1999.
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<PAGE> 1
EXHIBIT 99.2
ABACUS DIRECT CORPORATION
AMENDED AND RESTATED
1996 STOCK INCENTIVE PLAN
1. SECURITIES OFFERED
The securities offered pursuant to the Amended and Restated 1996 Stock
Incentive Plan (the "Plan") are shares of Abacus Direct Corporation's (the
"Company") Common Stock having a par value of $.001 per share ("Common Stock").
Shares delivered upon exercise of options may be either treasury stock or newly
issued shares. The Plan authorizes the grant of options to purchase up to
725,000 shares of the Company's Common Stock.
2. PURPOSE
The purpose of the Plan is to provide a means through which the Company
and its Subsidiaries and Affiliates may attract able persons to enter and remain
in the employ of the Company and its Subsidiaries and Affiliates and to provide
a means whereby employees, directors and consultants of the Company and its
Subsidiaries and Affiliates can acquire and maintain Common Stock ownership, or
be paid incentive compensation measured by reference to the value of Common
Stock, thereby strengthening their commitment to the welfare of the Company and
its Subsidiaries and Affiliates and promoting an identity of interest between
stockholders and these employees.
The Plan provides for granting incentive Stock Options, Nonqualified
Stock Options and Restricted Stock Awards, or any combination of the foregoing.
The Plan also provides for the automatic formula grant of Nonqualified Stock
Options to Non-Employee Directors.
3. DEFINITIONS
The following definitions are used in this description of the Plan.
(a) "Affiliate" any affiliate of the Company within the meaning of 17
CFR Section 230.405.
(b) "Award" means, individually or collectively, any Incentive Stock
Option, Nonqualified Stock Option, Restricted Stock Award or Director Stock
Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means the Company, a Subsidiary or Affiliate having cause to
terminate a Participant's employment or service under any existing employment,
consulting
<PAGE> 2
or any other agreement between the Participant and the Company or a Subsidiary
or Affiliate or, in the absence of such an employment, consulting or other
agreement, upon (i) the determination by the Committee that the Participant has
ceased to perform his duties to the Company, a Subsidiary or Affiliate (other
than as a result of his incapacity due to physical or mental illness or injury),
which failure amounts to an intentional and extended neglect of his duties to
such party, (ii) the Committee's determination that the Participant has engaged
or is about to engage in conduct materially injurious to the Company, a
Subsidiary or Affiliate or (iii) the Participant having been convicted of a
felony.
(e) "Change in Control" may be deemed to have occurred upon:
(i) any "person" as such term is used in Section 13(d) and 14(d)
of the Exchange Act (other than the Company, any trustee or fiduciary holding
securities under any employee benefit plan of the Company, or any company owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of Common Stock of the Company), is or
becomes the owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing forty percent (40%) or
more of the combined voting power of the Company's then outstanding securities;
(ii) during any period of two consecutive years (not including
any period prior to the date that the Common Stock of the Company opens for
regular trading on an established trading market), individuals who at the
beginning of such period constitute the Board of Directors, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in paragraph (i), (iii), or
(iv) of this section) whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the two-year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority of the Board of Directors;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding- immediately prior thereto continuing to represent (either by
remaining or by being converted into voting securities of the surviving entity)
more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no person acquires more than forty percent (40%) of the combined voting
power of the Company's then outstanding securities shall not constitute a
Channel in Control of the Company; or
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<PAGE> 3
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company except to a person or persons
who beneficially own, directly or indirectly, at least fifty percent (50%) or
ignore of the combined voting power of the outstanding voting securities of the
Company at the time of the sale.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
Reference the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.
(h) "Committee" means the Stock Option Committee or such other Committee
appointed by the Board consisting of two or more Outside Directors (as
hereinafter defined) or the Board.
(i) "Common Stock" means the common stock par value $0.001 per share, of
the Company.
(j) "Company" means Abacus Direct Corporation, a Delaware corporation.
(k) "Date of Grant" means the date on which the granting of an Award is
authorized or such other date as may be specified in such authorization.
(l) "Director Stock Option" means the Award of a Nonqualified Stock
Option to Non-Employee Directors pursuant to Section 10 of the Plan.
(m) "Director Stock Option Agreement" means the agreement entered into
with respect to a Director Stock Option pursuant to Section 10 of the Plan.
(n) "Disability" means the complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which a
Participant was employed or served when such disability commenced as determined
by the Committee based upon medical evidence acceptable to it.
(o) "Eligible Person" means any (i) person regularly employed by the
Company, a Subsidiary or Affiliate; provided, however, that no such employee
covered by a collective bargaining agreement shall be an Eligible Person unless
and to the extent that Such disability is set forth in such collective
bargaining agreement or in an agreement or instrument relating thereto; (ii)
director of the Company, a Subsidiary or Affiliate including a director that is
serving on the Committee; or (iii) consultant to the Company, a Subsidiary or
Affiliate.
(p) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and as may be amended from time to time.
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<PAGE> 4
(q) "Fair Market Value" on a given date means (i) if the Stock is listed
on a national securities exchange, the mean between the highest and lowest sale
prices reported as having occurred on the primary exchange with which the Stock
is listed and traded on the date prior to such date, or, if there is no such
sale on that date, then on the last preceding date on which such a sale was
reported; (ii) if the Stock is not listed on any national securities exchange
but is quoted in the National Market System of the National Association of
Securities Dealers Automated Quotation System on a last sale basis, the average
between the high bid price and low ask price reported on the date prior to such
date, or, if there is no such sale on that date, then on the last preceding date
on which a sale was reported; (iii) if the Stock is not listed on a national
securities exchange nor quoted in the National Market System of the National
Association of Securities Dealers Automated Quotation System on a last sale
basis, the amount determined by the Committee to be the fair market value based
upon a good faith attempt to value the Stock accurately and Computed in
accordance with applicable regulations of the Internal Revenue Service.
(r) "Holder" means a Participant who has been granted an Award
(s) "Incentive Stock Option" means an Option granted by the Committee to
a Participant under the Plan which is designated by the Committee as an
Incentive stock Option pursuant to Section 422 of the code.
(t) "Non-Employee Director" means a director of the Company who is not
also an employee of the Company.
(u) "Nonqualified Stock Option" means an Option granted by the Committee
to a participant under the Plan which is not designated by the Committee as an
Incentive Stock Option.
(v) "Normal Termination" means termination of employment or service with
the Company and all Subsidiaries and Affiliates:
(i) Upon retirement pursuant to the retirement plan of the
Company, a Subsidiary or Affiliate, as may be applicable
at the time to the Participant in question;
(ii) On account of Disability;
(iii) With the written approval of the Committee; or
(iv) By the Company, a Subsidiary or Affiliate without Cause.
(w) "Option" means an Award granted as described in Section 8.
(x) "Option Period" means the period described in Section 8(c).
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<PAGE> 5
(aa) "Option Price" means the exercise price set for an option described
in Section 8(a).
(ab) "Outside Director" means a person who is (i) a "nonemployee
director" within the meaning of Rule 16b-3 under the Exchange Act, or any
successor rule or regulation and (ii) an "outside director" within the meaning
of Section 162(m) of the Code.
(ac) "Participant" means an Eligible Person who has been selected by the
Committee to participate in the Plan and to receive an Award pursuant to Section
6 and a Non-Employee Director who has received an automatic grant of Restricted
Stock pursuant to Section 9.
(ad) "Performance Goals" means the performance objectives of the
Company, a Subsidiary or Affiliate during a Restricted Period established for
the purpose of determining whether, and to what extent, Awards will be earned
for a Restricted Period.
(ae) "Plan" means the Company's Amended and Restated 1996 Stock
Incentive Plan.
(af) "Restricted Period" means, with respect to any share of Restricted
Stock, the period of time determined by the Committee which such Award is
subject to the restrictions described in Section 9.
(ag) "Restricted Stock" means shares of Stock issued or transferred to a
Participant subject to forfeiture and the other restrictions described in
Section 9.
(ah) "Restricted Stock Award" means an Award of Restricted Stock granted
under Section 8 of the Plan.
(ai) "Securities Act" means the Securities Act of 1933, as amended.
(aj) "Stock" means the Common Stock or such other authorized shares of
stock of the Company as the Committee may form from time to time authorize for
use under the Plan.
(ak) "Stock Option Agreement" means the agreement between the Company
and a Participant who has been granted an Option as described in Section 8 which
describes the rights and obligations of the parties as set forth in Section 7(d)
of the Plan.
(al) "Subsidiary" means any subsidiary of the Company as defined in
Section 424(f) of the Code .
4. DURATION. The expiration date of the Plan, after which no Awards may be
granted hereunder, shall be August 30, 2006; provided, however, that the
administration of the Plan
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<PAGE> 6
shall continue in effect until all matters relating to the payment of Awards
previously granted have been settled.
5. ADMINISTRATION
The Plan is administered by the Committee Currently consisting of each
of the members of the Board. Each member of the Committee shall have an equal
vote in the management and administrating the Plan. As of the date hereof, the
members of the Committee are as follows:
<TABLE>
<CAPTION>
NAME POSITION WITH THE COMPANY
---- -------------------------
<S> <C>
M. Anthony White Chairman of the Board, Chief
Executive Officer and Director
Daniel C. Snyder President, Chief Operating
Officer and Director
Frank Kenny Director
Anthony H. Lee Director
</TABLE>
The Board of Directors is elected annually by shareholders and serve
until their successors are duly elected and qualify. Board members i-nay be
remove(i for cause by the affirmative vote of the holders of a majority of
shares outstanding and entitled to vote for such purpose.
The majority of the members of the Committee shall constitute a quorum.
The acts of a majority of the members present at any meeting at which a quorum
is present or acts approved in writing by a majority of the Committee shall be
deemed the acts of the Committee.
Subject to the provisions of the Plan, the Committee shall have
exclusive power to:
(a) Select the Eligible Persons to participate in the Plan;
(b) Determine the nature and extent of the Awards, other than Director
Stock Options, to be made to each Participant;
(c) Determine the time or times when Awards, other than Director Stock
Options, will be made;
(d) Determine the duration of each Award Period and Restricted Period,
except with respect to a Director Stock Option;
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<PAGE> 7
(e) Determine the conditions to which the payment of Awards, other than
Director Stock Options, may be subject;
(f) Prescribe the form of Stock Option Agreement or other form or forms
evidencing Awards; and
(g) Cause records to be established in which there shall be entered,
from time to time as Awards are made to Participants, the date of each Award,
the number of Incentive Stock Options, Nonqualified Stock Options and shares of
Restricted Stock awarded to each Participant, the expiration date and the
duration of any applicable Restricted Period.
The Committee shall have the authority, subject to the provisions of the
Plan, to establish, adopt, or revise such rules and regulations and to make all
such determinations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan. The Committee's interpretation of the Plan
or any documents evidencing, Awards granted pursuant thereto and all decisions
and determinations by the Committee with respect to the Plan shall be final,
binding, and conclusive on all parties unless otherwise determined by the Board.
6. GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN
The Committee may, from time to time, grant Awards of Options, and/or
Restricted Stock, to one or more Participants, provided, however, that:
(a) As described in Section 15, the aggregate number of shares of Stock
made subject to all Awards may not exceed (725,000 (subject to increase or
decrease pursuant to Section 12);
(b) Such shares shall be deemed to have been used in Payment of Awards
whether they are actually delivered or the Fair Market Value equivalent of Such
shares is paid ill cash. In the event any Option or Restricted Stock, shall be
surrendered, terminate, expire, or be forfeited, the number of shares of Stock
no longer subject thereto shall thereupon be released and shall thereafter be
available for new Awards under the Plan to the fullest extent permitted by Rule
16b-3 under the Exchange Act (if applicable at the time); and
(c) Stock delivered by the Company in settlement of Awards under the
Plan may be authorized and unissued Stock or Stock held in the treasury of the
Company or may be purchased on the open market or by private purchase.
7. ELIGIBILITY
Participation shall be limited to Eligible Persons who have received
notification from the Committee, or from a person designated by the Committee,
that they have been selected to participate in the Plan.
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<PAGE> 8
8. DISCRETIONARY GRANT OF STOCK OPTIONS
The Committee is authorized to grant one or more Incentive Stock Options
or Nonqualified Stock Options to any Eligible Person; provided, however, that no
Incentive Stock Options shall be granted to any Eligible Person who is not an
employee of the Company or a Subsidiary. Each Option so granted shall be subject
to the following conditions, or to such other conditions as may be reflected in
the applicable Stock Option Agreement.
(a) OPTION PRICE. The exercise price ("Option Price") per share of Stock
for each Option shall be set by the Committee at the time of grant but shall not
be less than (i) in the case of an Incentive Stock Option, and as described in
Section 8(e), the Fair Market Value of a share of Stock at the Date of Grant,
and (ii) in the case of a Non-Qualified Stock Option, the Fair Market Value of a
share of Stock at the Date of Grant, unless the Committee, in its sole
discretion, determines to grant a discount Option in lieu of a reasonable amount
of salary or cash bonus, in which case, 65 % of the Fair Market Value of a share
of stock at the Date of Grant; provided, however, that following the date that
the exemption from the application of Section 162(m) of the Code described in
Section i5 (or any other exemption having similar effect) ceases to apply to
Options, all options intended to qualify as "performance-based compensation"
under Section 162(in) of the Code shall have an Option Price per share of Stock
no less than the Fair Market Value of a share of Stock on the Date of Grant.
(b) MANNER OF EXERCISE AND FORM OF PAYMENT. Options which have become
exercisable may be exercised by delivery of written notice of exercise to the
Committee accompanied by payment of the Option Price. The Option Price shall be
payable in cash and/or shares of Stock valued at the Fair Market Value at the
time the Option is exercised or, in the discretion of the Committee, either (i)
in other property having a fair market value on the date of exercise equal to
the Option Price, or (ii) by delivering to the Committee a copy of irrevocable
instructions to stockbroker to deliver promptly to the Company all amount of
sale or loan proceeds sufficient to pay the Option Price.
(c) OPTION PERIOD AND EXPIRATION. Options may vest and become
exercisable in such manner and on such date or dates determined by the Committee
and shall expire after such period, not to exceed ten years, as may be
determined by the Committee (the "Option Period"); provided, however, that
notwithstanding any vesting dates set by the Committee, the Committee may in its
sole discretion accelerate the exercisability of any Option, which acceleration
shall not affect the terms and conditions of any such Option other than with
respect to exercisability. If an Option is exercisable in installments, such
installments or portions thereof which become exercisable shall remain
exercisable until the Option expires. Unless otherwise stated in the applicable
Option Agreement, the Option will expire earlier than the end of the Option
Period in the following Circumstances:
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<PAGE> 9
(i) If prior to the end of the Option Period, the Holder shall
undergo a Normal Termination, the Option will expire on
the earlier of the last day of the option Period or the
date that is three months after the date of such Normal
Termination. In such event, the Option shall remain
exercisable by the Holder until its expiration, only to
the extent the Option was exercisable at the time of such
Normal Termination.
(ii) If the Holder dies prior to the end of the Option Period
and while still in the employ or service of the Company, a
Subsidiary or Affiliate, or within three months of Normal
Termination, the Option will expire on the earlier of the
last day of the Option Period or the date that is twelve
months after the date of death of the Holder. In such
event, the Option will remain exercisable by the person or
persons to whom the Holder's rights under the Option pass
by will or the applicable laws of descent and distribution
until its expiration, only to the extent the Option was
exercisable by the Holder at the time of death.
(iii) If the Holder ceases employment or service with the
Company and all Subsidiaries and Affiliates for reasons
other than Normal Termination or death, the Option will
expire immediately upon such cessation of employment or
service,
(d) STOCK OPTION AGREEMENT - OTHER TERMS AND CONDITIONS. Each Option
granted under the Plan will be evidenced by a Stock Option Agreement, which
shall contain such provisions as may be determined by the Committee and, except
as may be specifically stated otherwise in stich Stock Option Agreement, which
are subject to the following terms and conditions contained in the Plan:
(i) Each Option or portion thereof that is exercisable will be
exercisable for the frill amount or for any part thereof.
(ii) Each share of Stock purchased through the exercise of an
Option will be paid for in full at the time of the
exercise. Each Option shall cease to be exercisable, as to
any share of Stock, when the Holder purchases the share or
when the Option expires .
(iii) Subject to Section 11(k), Options will not be transferable
by the Holder except by will or the laws of descent and
distribution and shall be exercisable during the Holder's
lifetime only by him.
(iv) Each Option will vest and become exercisable by the Holder
in accordance with the vesting schedule established by the
Committee and set forth in the Stock Option Agreement.
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(v) Each Stock Option Agreement may contain a provision that,
upon demand by the Committee for such a representation,
the Holder shall deliver to the Committee at the time of
any exercise of an Option a written representation that
the Shares to be acquired upon Such exercise are to be
acquired for investment and not for resale or with a view
to the distribution thereof. Upon such demand, delivery of
such representation prior to the delivery of any shares
issued upon exercise of an Option shall be a condition
precedent to the right of the Holder or such other person
to purchase any shares. In the event certificates for
Stock are delivered under the Plan with respect to which
such investment representation has been obtained, the
Committee may cause a legend or legends to be placed on
such certificates to make appropriate reference to such
representation and to restrict transfer in the absence of
compliance with applicable federal or state securities
laws.
(vi) Each Incentive Stock Option Agreement will contain a
provision requiring the Holder to notify the Company in
writing immediately after the Holder makes a disqualifying
disposition of any Stock acquired pursuant to the exercise
of such Incentive, Stock Option. A disqualifying
disposition is any disposition (including any sale) of
such Stock before the later of (a) two years after the
Date of Grant of the Incentive Stock Option or (b) one
year after the date the Holder acquired the Stock by
exercising the Incentive Stock Option.
(e) INCENTIVE STOCK OPTION GRANTS TO 10% STOCKHOLDERS. If an Incentive
Stock Option is granted to a Holder who owns stock representing more than ten
percent of the voting power of all classes of stock of the Company or of a
Subsidiary, the Option Period shall not exceed five years from the Date of Grant
of such Option and the Option Price shall be at least 110 percent of the Fair
Market Value (on the Date of Grant) of the Stock Subject to the Option.
(f) $100,000 PER YEAR LIMITATION FOR INCENTIVE STOCK OPTION. To the
extent the aggregate Fair Market Value (determined as of the Date of Grant) of
Stock for which Incentive Stock Options are exercisable for the first time by
any Participant during any calendar year (under all plans of the Company and its
Subsidiaries) exceeds $ 100,000, such excess Incentive Stock Options shall be
treated as nonqualified Stock Options.
(g) VOLUNTARY SURRENDER. The Committee may permit the voluntary
surrender of all or any portion of any Nonqualified Stock Option granted under
the Plan to be conditioned upon the granting to the Holder of a new Option for
the same or a different number of shares as the Option surrendered or require
such voluntary surrender as a condition precedent to a grant of a new Option to
such Participant. Such new Option shall be exercisable at an option Price,
during an Option Period, and in accordance with any other terms or conditions
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<PAGE> 11
specified by the Committee at the time the new Option is granted, all determined
in accordance with the provisions of the Plan without regard to the Option
Price, Option Period, or any other terms and conditions of the Nonqualified
Stock option surrendered.
9. DISCRETIONARY RESTRICTED STOCK AWARDS
(a) AWARD OF RESTRICTED STOCK
(i) The Committee will have the authority to grant Restricted
Stock Awards to Eligible Persons, (2) to issue or transfer
Restricted Stock to Participants, and (3) to establish
terms, conditions and restrictions applicable to such
Restricted Stock including the Restricted Period, which
may differ with respect to each grantee, the time or times
at which Restricted Stock shall be granted or become
vested and the number of shares or units to be covered by
each grant.
(ii) The Holder of a Restricted Stock Award will execute and
deliver to the Company an Award agreement with respect to
the Restricted Stock setting forth the restrictions
applicable to such Restricted Stock. If the Committee
determines that the Restricted Stock will be held in
escrow rather than delivered to the Holder pending the
release of the applicable restrictions, the Holder
additionally will execute and deliver to the Company (i)
an escrow agreement satisfactory to the Committee, and
(ii) the appropriate blank stock powers with respect to
the Restricted Stock covered by such agreements. If a
Participant shall fail to execute a Restricted Stock
agreement and, if applicable, an escrow agreement and
stock powers, the Award shall be null and void. Subject to
the restrictions set forth in Section 9(b), the Holder
shall generally have the rights and privileges of a
stockholder as to such Restricted Stock, including the
right to vote such Restricted Stock. At the discretion of
the Committee, cash dividends and stock dividends with
respect to the Restricted Stock may be either currently
paid to the Holder or withheld by the Company and held in
escrow pursuant to the escrow agreement subject to the
restrictions set forth in Section 9(b) below, and interest
may be paid on the amount of cash dividends withheld at a
rate and subject to Such terms as determined by the
Committee, Cash dividends or stock dividends so withheld
by the Committee shall not be subject to forfeiture.
(iii) Upon the Award of Restricted Stock, the Committee will
cause a stock certificate registered in the name of the
Holder to be issued and, if it so determines, deposited
together with the stock powers with an escrow agent
designated by the Committee. If an escrow agreement is
used, the Committee shall cause the escrow agent to issue
to the Holder a
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<PAGE> 12
receipt evidencing any stock certificate held by it
registered in the name of the Holder.
(b) RESTRICTIONS.
(i) Restricted Stock awarded to a Participant will be Subject
to the following restrictions until the expiration Of the
Restricted Period and to Such other terms and conditions
as may be set forth in the applicable Award agreement: (1)
if an escrow arrangement is used, the Holder will not be
entitled to delivery of the stock certificate; (2) the
shares will be subject to the restrictions on
transferability set forth in the Award agreement, (3) the
shares will be subject to forfeiture to the extent
provided in subparagraph (d) and the Award Agreement and,
to the extent such shares are forfeited, the stock
certificates will be returned to the Company, and all
rights of the Holder to such shares (including all rights
to dividends) and as a shareholder will terminate without
further obligation on the part of the Company.
(ii) The Committee shall have the authority to remove any or
all of the restrictions on the Restricted Stock whenever
it may determine that, by reason of changes in applicable
laws or other changes in circumstances arising after the
date of the Restricted Stock Award such action is
appropriate.
(c) RESTRICTED PERIOD. The Restricted Period of Restricted Stock shall
commence on the Date of Grant and shall expire from time to time as to that part
of the Restricted Stock indicated in a schedule established by the Committee,
(d) FORFEITURE PROVISIONS. Except to the extent determined by the
Committee and reflected in the underlying Award agreement, in the event a Holder
terminates employment with the Company and all Subsidiaries and Affiliates
during a Restricted Period, that portion of the Award with respect to which
restrictions have not expired ("Non-Vested Portion") shall be treated as
follows.
(i) Upon the voluntary resignation of a Participant or
discharge by the Company, a Subsidiary or Affiliate for
Cause, the Non-Vested Portion of the Award shall be
completely forfeited.
(ii) Upon Normal Termination, the Non-Vested Portion of the
Award shall be prorated for service during the Restricted
Period and shill be received as soon as practicable
following such Normal Termination.
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<PAGE> 13
(iii) Upon death, the Non-Vested Portion of the Award shall be
prorated for service during the Restricted Period and be
paid to the Participant's beneficiary as soon as
practicable following death.
(e) DELIVERY OF RESTRICTED STOCK. Upon the expiration of the Restricted
Period with respect to any shares of Stock covered by a Restricted Stock Award,
the restrictions set described in Section 9(b) and the Award agreement shall be
of no further force or effect with respect to shares of Restricted Stock which
have not then been forfeited. If an escrow arrangement is used, upon such
expiration, the Company shall deliver to the Holder, or his beneficiary, without
charge, the stock certificate evidencing the shares of Restricted Stock which
have not then been forfeited and with respect to which the Restricted Period has
expired (to the nearest full share) and any cash dividends or stock dividends
credited to the Holder's account with respect to such Restricted Stock and the
interest thereon, if any.
(f) STOCK RESTRICTIONS. Each certificate representing Restricted Stock
awarded under the Plan shall bear the following legend until the lapse of all
restrictions with respect to such Stock:
"Transfer of this certificate and the shares represented
hereby is restricted pursuant to the terms of a Restricted Stock
Agreement, dated as of ____________, between to Abacus Direct
Corporation and ____________. A copy of Such Agreement is on file
at the offices of the Company at 8774 Yates Drive, Westminster,
Colorado 80030."
Stop transfer orders shall be entered with the Company's transfer agent
and registrar against the transfer of legended securities.
10. AUTOMATIC GRANTS OF STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS
A Non-Employee Director shall be automatically granted a Nonqualified
Stock Option to purchase 4,000 shares of Stock (the "Initial Option") upon the
date the Non-Employee Director begins service as a non-employee director on the
board (even if previously an employee director). Thereafter, for the remainder
of the term of the Plan and provided he remains a Non-Employee Director of the
Company, on the date of each of the Company's Annual Meeting of Stockholders,
each Non-Employee Director shall be automatically granted without further action
by the Board or the Committee a Nonqualified Stock Option to purchase 8,000
shares of Stock. All such Options granted to Non-Employee Directors will
hereinafter be referred to as Director Stock Options.
(a) OPTION PRICE; TERM. All Director Stock Options will have an Option
Price per share equal to the Fair Market Value of a share of Stock on the Date
of Grant. The Initial Option and 4,000 shares of each Annual Option will vest
and become exercisable over a period of four years at the rate of 25% of each
grant annually on each of the four consecutive anniversaries of the Date of
Grant directly following the Date of Grant provided
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<PAGE> 14
the Non-Employee Director's services as a director continue through each such
anniversary. The remaining 4,000 shares of each such Annual Option shall vest
and become exercisable six months following the Date of Grant provided the
Non-Employee Director's services as a director continue through such time. The
term of each Director Stock Option ("Term"), after which each such Option shall
expire, will be ten years from the date of Grant.
(b) EXPIRATION. If prior to the expiration of the Term of a Director
Stock Option the Non-Employee Director shall cease to be a member of the Board
for any reason other than his death, the Director Stock Option shall expire on
the earlier of the expiration of the Term or the date that is three months after
the date of such cessation. If prior to the expiration of the Term of a Director
Stock Option, a Non-Employee Director will cease to be a member of the Board by
reason of his death, the Director Stock Option shall expire on the earlier of
the expiration of the Term or the date that is one year after the date of such
cessation. In the event a Non-Employee Director ceases to be a member of the
Board for ally reason, any unexpired Director Stock Options will thereafter be
exercisable until their expiration only to the extent that such Director Stock
Options were exercisable at the time of such cessation.
(c) DIRECTOR STOCK OPTION AGREEMENT. Each Director Stock Option will be
evidenced by a Director Stock Option Agreement, which shall contain such
provisions as may be determined by the Committee; provided, however, that such
provisions shall not be inconsistent with the provisions of Rule 16b-3 pursuant
to the Exchange Act.
(d) NONTRANSFERABILITY; EXCLUSIVE GRANT. Subject to Section 10(k),
Non-Employee Director Options will not be transferable except by will or the
laws of descent and distribution and will be exercisable during the Non-Employee
Director's lifetime only by him. Non-Employee Directors are eligible to receive
Awards under the Plan in addition to (and not in lieu of) any Awards pursuant to
this Section 10.
11. GENERAL
(a) ADDITIONAL PROVISIONS OF AN AWARD. Awards under the Plan also may be
subject to such other provisions (whether or not applicable to the benefit
awarded to any other Participant) as the Committee determines appropriate
including, without limitation, provisions to assist the Participant in financing
the purchase of Stock upon the exercise or Options, provisions for the
forfeiture of or restrictions oil resale or other disposition of shares of Stock
acquired Under any Award, provisions giving the Company the right to repurchase
shares of Stock acquired under any Award in the event the Participant elects to
dispose of such shares, and provisions to comply with Federal and state
securities laws and Federal and state tax withholding requirements. Any such
provisions shall be reflected in the applicable Award agreement.
(b) PRIVILEGES OF STOCK OWNERSHIP. Except as otherwise specifically
provided in the Plan, no person shall be entitled to the privileges of stock
ownership ill respect of Shares
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<PAGE> 15
of Stock which are subject to Awards hereunder until such shares have been
issued to that person.
(c) GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by governmental agencies as
may be required. Notwithstanding any terms or conditions of any Award to the
contrary, the Company shall be under no obligation to offer to sell or to sell
and shall be prohibited from offering to sell or selling any shares of Stock
pursuant to an Award unless such shares have been property registered for sale
pursuant to the Securities Act with the Securities and Exchange Commission or
unless the Company has received ail opinion of counsel, satisfactory to the
Company, that such shares may be offered or sold without such registration
pursuant to ail available exemption therefrom and the terms and conditions of
such exemption have been fully complied with. The Company shall be under no
obligation to register for sale under the Securities Act any of the shares of
Stock to be offered or sold under the Plan. If the shares of Stock offered for
sale or sold under the Plan are offered or sold pursuant to an exemption from
registration under the Securities Act, the Company may restrict the transfer of
such shares and may legend the Stock certificates representing such shares in
such manner as it deems advisable to ensure the availability of any such
exemption.
(d) TAX WITHHOLDING. Notwithstanding any other provision of the Plan,
the Company, a Subsidiary or an Affiliate, as appropriate, will have the right
to deduct from all Awards cash and/or Stock, valued at Fair Market Value on the
date of payment, in an amount necessary to satisfy all Federal, state or local
taxes as required by law to be withheld with respect to such Awards and, in the
case of Awards paid in Stock, the Holder or other person receiving such Stock
may be required to pay to the Company or a Subsidiary, as appropriate, prior to
delivery of such Stock, the amount of taxes which the Company or Subsidiary is
required to withhold, if any, with respect to such Stock. Subject in particular
cases to the approval of the Committee, the Company may accept shares of Stock
of equivalent Fair Market Value in payment of such withholding tax obligations
if the Holder of the Award elects to make payment in such manner.
(e) CLAIM TO AWARDS AND EMPLOYMENT RIGHTS. No employee or other person
will have any claim or right to be granted an Award under the Plan or, having
been selected for the grant of an Award, to be selected for a grant of any other
Award. Neither the Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained in the employ or service of the
Company, a Subsidiary or an Affiliate.
(f) DESIGNATION AND CHANGE OF BENEFICIARY. Each Participant shall file
with the Committee a written designation of one or more persons as the
beneficiary who shall be entitled to receive the amounts payable with respect to
an Award of Restricted Stock, if any, due under the Plan upon his deaths A
Participant may, from time to Lillie, revoke or change his beneficiary
designation without the consent of any prior beneficiary by filing a new
designation with the Committee. The last such designation received by the
Committee shall
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<PAGE> 16
be controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Participants death, and in no event shall it be effective as of a date prior to
such receipt. If no beneficiary designation is filed by the Participant, the
beneficiary shall be deemed to be his or her spouse or, if the Participant is
unmarried at the time of death, his or her estate.
(g) PAYMENTS TO PERSONS OTHER THAN PARTICIPANTS. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for his affairs because of illness or accident, or is a minor, or has died,
then any payment due to such person or his estate (unless a prior claim therefor
has been by a duly appointed legal representative) may, if the Committee so
directs the Company, be paid to his spouse, child, relative, an institution
maintaining or having custody of such persons or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Company therefor.
(h) NO LIABILITY OF COMMITTEE MEMBERS. No member of the Committee will
be personally liable by reason of any contract or other instrument executed by
such member or on his behalf in his capacity as a member of the Committee nor
for any mistake of judgment made in good faith, and the Company shall indemnify
and hold harmless each member of the Committee and each other employee, officer
or director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated,
against any cost or expense (including counsel fees) or liability (including any
sum paid in settlement of a claim) arising out of any act or omission to act in
connection with the Plan unless arising out of person's own fraud or willful bad
faith; provided, however, that approval of the Board shall be required for the
payment of any amount in settlement of a claim against any such person. The
foregoing right of indemnification will not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Articles of Incorporation or By-Laws, as a matter of law, or otherwise, or any
power t hat the Company may have to indemnify them or hold them harmless.
(i) GOVERNING LAW. The Plan will be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to the
principles of conflicts of law thereof.
(j) FUNDING. Except as provided under Section 8, no provision of the
Plan shall require the Company, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any assets, nor
shall the Company maintain separate bank accounts, books, records or other
evidence of the existence of a segregated or separately maintained or
administered fund for such purposes. Holders shall have no rights under the Plan
other thin as unsecured general creditors of the Company, except that insofar as
they may have become entitled to payment of additional compensation by
performance of services, they shall have the rights as other employees under
general law.
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<PAGE> 17
(k) NONTRANSFERABILITY. A person's rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or transferred or
otherwise disposed of, mortgaged, pledged or encumbered except, in the event of
a Holder's death, to a designated beneficiary to the extent permitted by the
Plan, or in the absence of such designation, by will or the laws of descent and
distribution; provided, however, the Committee may, in its sole discretion,
allow for transfer of Awards other than Incentive Stock Options to other persons
or entities, subject to such conditions or limitations as it may establish to
ensure that Awards intended to be exempt from Section 16(b) of the Exchange Act
pursuant to Rule 16b-3 under the Exchange Act continue to be so exempt or for
other purposes.
(l) RELIANCE ON REPORTS. Each member of the Committee and each member of
the Board shall be fully justified in relying, acting or failing to act, and
will not be liable for having so relied, acted or failed to act in good faith,
upon any report inside by the independent public accountant of the Company and
its Subsidiaries and Affiliates and upon any other information furnished in
connection with the Plan by any person or persons other than himself.
(m) RELATIONSHIPS TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary except as otherwise specifically provided in such other plan.
(n) EXPENSES. The expenses of administering the Plan will be borne by
the Company and its Subsidiaries and Affiliates.
(o) PRONOUNS. Masculine pronouns and other words of masculine gender
contained in the Plan shall refer to both men and women.
(p) TITLES AND HEADINGS. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings shall control.
(q) TERMINATION OF EMPLOYMENT. A person who transfers from employment or
service with the Company to employment or service with a Subsidiary or Affiliate
or vice versa shall not be deemed to have terminated employment or service with
the Company, a Subsidiary or Affiliate.
12. CHANGES IN CAPITAL STRUCTURE
Awards granted under the Plan and any agreements evidencing such Awards,
the maximum number of shares of Stock subject to all Awards and the maximum
number of shares of Stock with respect to which any one person may be granted
Options during any year shall be subject to adjustment or substitution, as
determined by the Committee in its sole
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discretion, as to the number, price or kind of a share of Stock or other
consideration subject to such Awards or as otherwise determined by the Committee
to be equitable (i) in the event of changes in the outstanding Stock or in the
capital structure of the Company by reason of stock dividends, stock splits,
reverse stock splits, recapitalization, reorganizations, mergers consolidations
combinations, exchanges, or other relevant changes in capitalization occurring
after the Date of Grant of any such Award or (ii) in the event of any change in
applicable laws or any change in circumstances which results in or would result
in any substantial dilution or enlargement of the rights granted to, or
available for, Participants in the Plan, or which otherwise warrants equitable
adjustment because it interferes with the intended operation of the Plan. In
addition, in the event of any such adjustments or substitution, the aggregate
number of shares of Stock available under the Plan shall be appropriately
adjusted by the Committee, whose determination shall be conclusive. Any
adjustment in incentive Stock Options under this Section 12 shall be made only
to the extent not constituting a "modification" within the meaning of Section
424(h)(3) of the Code, and any adjustments under this Section 12 shall be made
in a manner which does not adversely affect the exemption provided pursuant to
Rule 16b-3 under the Exchange Act. Further, following the date that the
exemption front the application of Section 162(m) of the Code described in
Section 16 (or any other exemption having similar effect) ceases to apply to
Awards, with respect to Awards intended to qualify as "performance-based
compensation" under Section 162(m) of the Code, such adjustments or
substitutions shall be made only to the extent that the Committee determines
that such adjustments or substitutions may be made without a loss of
deductibility for Awards under Section 162(iii) of the Code. The Company shall
give each Participant notice of all adjustment hereunder and, upon notice, such
adjustment shall be conclusive and binding for all purposes.
In the event of any of the following:
A. The Company is merged or consolidated with another corporation or
entity and, in connection therewith, consideration is received by shareholders
of the Company in a form other than stock or other equity interests of the
surviving entity;
B. All or substantially all of the assets of the Company are acquired by
another person;
C. The reorganization or liquidation of the Company; or
D. The Company shall enter into a written agreement to undergo an event
described in clauses A, B or C above, then the Committee may, in its discretion
and upon at least 10 days advance notice to the affected persons, cancel any
outstanding Awards and pay to the Holders thereof, in cash or stock, or any
combination thereof, the value of such Awards based upon the price per share of
Stock received or to be received by other shareholders of the Company in the
event- The terms described in this Section 12 may be varied by the Committee in
any particular Award agreement.
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<PAGE> 19
13. EFFECT OF CHANGE IN CONTROL
Except to the extent reflected in a particular Award agreement:
(a) In the event of a Chance in Control, notwithstanding any vesting
schedule with respect to an Award of Options (including Director Stock Options),
or Restricted Stock, such Option shall become immediately exercisable with
respect to 100 percent of the shares subject to such Option, and the Restricted
Period shall expire immediately with respect to 100 percent of such shares of
Restricted Stock.
(b) In addition, in the event of a Change in Control, the Committee may
in its discretion and upon at least 10 days advance notice to the affected
persons, cancer any outstanding Awards and pay to the Holders thereof, in cash
or stock, or any combination thereof, the value of such Awards based upon the
price per share of Stock received or to be received by other shareholders of the
Company in the event.
(c) The obligations of the Company under the Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor
corporation or organization succeeding to substantially all of the assets and
business of the Company. The Company agrees that it will make appropriate
provisions for the preservation of Participant's rights under the Plan in any
agreement or plan which it may enter into or adopt to effect any such merger,
consolidation, reorganization or transfer of assets
(d) Unless the Committee provides otherwise, at the time an Option is
granted to a participant hereunder, no acceleration of exercisability shall
occur with respect to such Option if the Committee reasonably determines in good
faith, prior to the Occurrence of the Change in Control, that the Options shall
be honored or assumed, or new rights substituted therefor (each such honored,
assumed or substituted option hereinafter called an "Alternative Option"), by a
Participant's employer (or the parent or a subsidiary of such employer)
immediately following the Change in Control, provided that any such Alternative
Option must meet the following criteria:
(i) the Alternative Option must be based on stock which is traded
on all established securities market, or which will be so traded within
thirty (30) days of the Change in Control;
(ii) the Alternative Option must provide such Participant with
rights and entitlements substantially equivalent to or better than the
rights, terms and conditions applicable under Such Option, including,
but not limited to, an identical or better exercise schedule; and
(iii) the Alternative must have economic value substantially
equivalent to the value of such Option (determined at the time of the
Change in Control).
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14. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan by the stockholders shall be construed as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.
15. AMENDMENTS AND TERMINATION
The Board may at any time terminate the Plan. Subject to terms set forth
in Section 12, with the express written consent of an individual Participant,
the Board or the Committee may cancel or reduce or otherwise alter outstanding
Awards if, in its judgment, the tax, accounting, or other effects of the Plan or
potential payouts thereunder would not be in the best interest of the Company.
The Board or the Committee may, at any time, or front time to time, amend or
suspend and, if suspended, reinstate, the Plan in whole or in part; provided,
however, that without further stockholder approval neither the Board nor the
Committee shall make any amendment to the Plan which would materially alter the
Plan or which would specifically:
(a) Materially increase the maximum number of shares of Stock which may
be issued pursuant to Awards, except as provided in Section 12;
(b) Change the minimum Option Price;
(c) Extend the maximum Option Period;
(d) Extend the termination date of the Plan; or
(e) Change the class of persons eligible to receive Awards under the
Plan;
and further provided, however, that the provisions of Section 10 shall not be
amended more than once every six months other than to comport with chances in
the Code, the Employee Retirement Income Security Act, or the rules thereunder.
16. EFFECT OF SECTION 162(m) OF THE CODE
The Plan, and all Awards issued thereunder, are intended to be exempt
from the application of Section 162(m) of the Code, which restricts under
certain circumstances the Federal income tax deduction for compensation paid by
a public company to named executives in excess of $1 million per year. The
exemption is based on Treasury Regulation Section 1.162-27(f) as in effect on
the effective date of the Plan, with the understanding that such regulation
generally exempts from the application of Section 162(m) of the Code
compensation paid pursuant to a plan that existed before a company becomes
publicly held.
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The Committee may, without stockholder approval (unless otherwise required to
comply Rule 16b-3 under the Exchange Act), amend the Plan retroactively and/or
prospectively to the extent it determines necessary in order to comply with any
subsequent clarification of Section 162(m) of the Code required to preserve the
Company's Federal income tax deduction for compensation paid pursuant to the
Plan. To the extent that the Committee determines as of the Date of Grant of an
Award that (i) the Award is intended to Company with Section 162(m) of the Code
and (ii) the exemption described above is no longer available with respect to
such Award, such Award shall not be effective until any stockholder approval
required under Section 162(m) of the Code has been obtained.
17. CERTAIN TAX CONSEQUENCES.
No taxable income is realized by a Holder upon the grant or exercise of
an Incentive Stock Option. If Common Stock is issued to a Holder pursuant to the
exercise of an Incentive Stock Option, and if no disqualifying disposition of
such shares is made by such a Holder within two years after the date of grant or
within one year after the transfer of shares to such a Holder, then (i) upon
sale of such shares, any amount realized in excess of the option price will be
taxed to such a Holder as a long-term capital gain and any loss sustained will
be a long-term capital loss, and (ii) no deduction will be allowed to the
Holder's employer for federal income tax purposes. If Common Stock acquired upon
the exercise of an Incentive Stock Option is disposed of prior to the expiration
of either holding period described above, generally (i) the Holder will realize
ordinary income in the year of disposition in an amount equal to the excess (if
any) of the fair market value of such shares at exercise (or, if less, the
amount realized on the disposition of such shares) over the option price paid
for Such shares, and (ii) the Holder's employer will be entitled to deduct Such
amount for Federal income tax purposes if the amount represents an ordinary and
necessary business expense. Any further gain (or loss) realized by the Holder
upon the sale of the Common Stock will be taxed as short-term or long-term
capital gain (or loss), depending on how long the shares have been held, and
will not result in any deduction by the employer. Subject to certain exceptions
for disability or death, if an Incentive Stock Option is exercised more than
three months following termination of employment, the exercise of the option
will generally be taxed as the exercise of a Nonqualified Stock Option. For
purposes of determining whether a Holder is subject to any alternative minimum
tax liability, a Holder who exercises an Incentive Stock Option generally would
be required to increase his or her alternative minimum taxable income, and
compute the tax basis in the stock so acquired, in the same manner as if the
Holder had exercised a Nonqualified Stock Option. Each Holder is potentially
subject to the alternative minimum tax. In substance, a taxpayer is required to
pay the higher of his/her alternative minimum tax liability or his/her "regular"
income tax liability. As a result, a taxpayer has to determine his/her potential
liability under the alternative minimum tax.
With respect to Nonqualified Stock Options (i) no income is realized by
the Holder at the time the option is granted; (ii) generally, at exercise,
ordinary income is realized by the Holder in an amount equal to the difference
between the option price paid for the shares and the fair market value of the
shares, if unrestricted, on the date of exercise, and the Holder's
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<PAGE> 22
employer is generally entitled to a tax deduction in the same amount subject to
applicable to withholding requirements; and (iii) at sale, appreciation (or
depreciation) after the date of exercise is treated as either short-term or
long-term capital gain (or loss) depending on how long the shares have been
held, Individuals subject to Section 16(b) of the Exchange Act will recognize
ordinary income at the time of exercise of a Nonqualified Stock Option as noted
above, provided at least six months have elapsed from the date of grant to the
date of exercise. In the event that less than six months have elapsed, such
individual will recognize ordinary income at the nine such six month period
elapses in an amount equal to the excess of the fair market value of the shares
on such date over the exercise price.
The granting of an award of restricted stock does not result in taxable
income to the recipient unless the recipient elects to report the award as
taxable income under Section 83(b) of the Code. Absent such an election, the
value of the award is considered taxable income once it is vested and
distributed. Dividends are paid concurrent with, and in an amount equal to,
ordinary dividends and are taxable as paid. If a Section 83(b) election is
inside, the recipient recognizes ordinary income in the amount of the total
value on the date of grant and the Company receives a corresponding tax
deduction. Any gain or loss subsequently experienced will be a capital gain or
loss to the recipient and the Company does not receive an additional tax
deduction.
Holders are strongly advised to consent with their individual tax
advisers to determine their personal tax consequences resulting from the grant
and/or exercise of options or the issuance and sale of restricted stock under
the Plan.
18. RESTRICTIONS ON RESALE.
Any purchaser of Common Stock who is a "control person" of the Company,
as defined in Rule 405 under the Securities Act, may only reoffer to resell such
shares pursuant to a separate prospectus under the provisions of Rule 415
promulgated under such Act or under the provisions of Rule 144 promulgated under
such Act.
The resale of shares acquired upon the exercise of Incentive Stock
Options within one year from the date of acquisition or two years from the date
of option grant may have certain adverse federal tax consequences.
The Company's executive officers, directors and beneficial owners of
more than 10% of the Common Stock ("Insiders") acquiring options pursuant to the
Plan are subject to Section 16 of the Exchange Act. Section 16 prohibits
purchases and sales or sales and purchases of any of the Company's equity
securities by Insiders within a six month period. Any profit realized by an
Insider on any purchase and sale, or any sale and then purchase, of shares of
Common Stock or stock options issued under the Plan, which occurs within a six
month period is recoverable by the Company (or a stockholder suing on behalf of
the Company) under Section 16(b) of the Exchange Act. Section 16 of the Exchange
Act also requires all Insiders to report on Forms 3, 4 and 5 to the Securities
and Exchange
-22-
<PAGE> 23
Commission all ownership as well as any changes in such ownership of any of the
Company's equity securities that are held by such individuals. This includes
acquisitions and dispositions of shares of Common Stock and stock options issued
under the Plan to Insiders.
19. CURRENT GRANTS.
As of November 20, 1997, 110 persons have been granted options under
the Plan to purchase an aggregate of 486,500 shares of the Company's Common
Stock at a weighted average exercise price of $24.65 per share. Options to
purchase an aggregate of 8,000 shares of Common Stock under the Plan at a
weighted average exercise price of $24.75 per share were grated to the Company's
non-employee directors in 1996.
20. APPLICABILITY OF ERISA; QUALIFICATION UNDER CODE SECTION 401(a)
The Plan is not subject to the Employee Retirement Income Security Act
of 1974 ("ERISA") and is not qualified under Section 401(a) of the Code. There
will be no fees, commissions or other charges in connection with the purchase of
Common Stock pursuant to the Plan other than payment of the option exercise
price.
21. FURTHER INFORMATION REGARDING THE PLANS/ INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
Additional information about the Plan and the administrators of the Plan
may be obtained from Abacus Direct Corporation, Attention: Carlos E. Sala, 8774
Yates Drive, Westminster, Colorado 30030. The following documents filed by the
Company with the Commission are incorporated herein by reference:
A. The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996, as amended;
B. The Company's Quarterly Report on Form 10-QSB for the quarter
ended March 31, 1997;
C. The Company's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1997;
D. The Company's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1997;
E. The Company's Proxy Statement dated April 30, 1997 relating to
the Annual Meeting of Shareholders held on June 16, 1997;
-23-
<PAGE> 24
F. The description of the Company Common Stock contained in the
Company's Registration Statement on Form SB-2 (Registration No.
333-5380) filed by the Company on August 7, 1996, as amended.
All documents subsequently filed by the Company pursuant to Section s
13(a), 13(c), 14 and 15(d) of the 34 Act, prior co the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities their remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents.
Copies of all documents incorporated by reference and additional
information concerning the Plan and its administrators are available to plan
participants without charge upon a written request addressed to Abacus Direct
Corporation, Attention: Carlos E. Sala, 8774 Yates Drive, Westminster, Colorado
30030, telephone number (303) 657-2800.
-24-
<PAGE> 1
EXHIBIT 99.3
ABACUS DIRECT CORPORATION
AMENDED AND RESTATED 1989 STOCK OPTION PLAN, AS AMENDED
1. SECURITIES OFFERED. The securities offered pursuant to the
Amended and Restated 1989 Stock Option Plan, as amended (the "Plan") are shares
of Abacus Direct Corporation's (the "Corporation") Common Stock having a par
value of $.001 per Share ("Common Stock"). Shares delivered upon exercise of
options may be either treasury stock or newly issued shares. The Board, as
hereinafter defined, has determined that no additional options will be granted
under the Plan.
2. PURPOSE. The Plan was established for the purpose of providing
key employees and those associated with the Corporation, the opportunity to
participate in the growth of the Corporation through the purchase of the Common
Stock. The Board of Directors of the Corporation (the "Board") believes that the
Plan affords an appropriate means of rewarding key employees, consultants and
directors for their past and future contributions to the Corporation's growth,
and of encouraging such employees, consultants and directors to remain or enter
the service of the Corporation, Options granted under the Plan may be intended
to qualify as incentive stock options under the Internal Revenue Code of 1996,
as amended (the "Code") or may be designated as non-qualified stock options.
3. ADMINISTRATION OF THE PLAN. The Plan is currently administered
by the Board but may also be administered by or a committee of the Board
consisting of not less than three members appointed by the Board and serving at
the Board's pleasure (the "Committee"). Any vacancy occurring in the membership
of the Committee shall be filled by appointment by the Board. As used herein,
the term Board shall also mean the Committee, if any. Each member of the
committee has an equal vote in the administration of the Plan. As of the date
hereof, the members of the Committee are as follows:
<TABLE>
<CAPTION>
NAME POSITION WITH THE COMPANY
---- -------------------------
<S> <C>
M. Anthony White Chairman of the Board, Chief Executive
Officer and Director
Daniel C. Snyder President, Chief Operating Officer and
Director
Frank Kenny Director
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
Anthony H. Lee Director
</TABLE>
The Board is elected annually by stockholders and serves until
each of members successors are duly elected and qualify. Board members may be
removed for cause by the affirmative vote of the holders of a majority of shares
outstanding and entitled to vote for such purpose.
The majority of the members of the Committee constitutes a
quorum. The acts of a majority of the members present at any meeting at which a
quorum is present, or acts approved in writing by a majority of the committee,
are deemed the acts of the Committee.
The Board may from time to time adopt such rules and regulations
as it may deem advisable for the administration of the Plan, and may alter,
amend or rescind any such rules and regulations in its discretion. The Board has
the power to interpret or amend or discontinue the Plan, except that without the
written consent of an optionee, no amendment or suspension of the Plan shall
alter or impair any option previously granted to the optionee under the Plan,
subject to any provisions otherwise in the Plan. All decisions made by the Board
in the administration and interpretation of the Plan shall be binding and
conclusive on all persons for all purposes. No member of the Board shall be
liable for any action taken or decisions made by him in good faith with respect
to the Plan or any option granted under it. Options may be granted by management
of the Corporations without Board approval so long as the Board ratifies by
formal Board action all options so granted.
4. GRANT OF OPTIONS. The grant of options hereunder is evidenced
by written notice of the grant, including the terms and conditions of the option
granted, and whether the option is an incentive stock option or non-qualified
stock option, which notice shall be delivered to the individual to whom the
option is granted. An optionee may, if otherwise eligible, be granted multiple
options.
5. TERMS AND CONDITIONS OF OPTIONS. The type of option, the
number of shares which may be purchased under each option, and the purchase
price per share, is designated by the Board at the time the option is granted.
The purchase price per share of an option may in no event be less than 100% of
the fair market value of each share at the time the option is granted; provided,
however, that incentive stock options may not be granted to any holder of the
voting rights of 10% or more of total combined voting power of all classes of
stock of the Corporation at time of grant, unless the purchase price shall be at
least 100% of the fair market value of the shares at the time of grant. "Fair
market value" shall be determined as described in Section 9 below. An option
granted under the Plan is not transferable by the individual to whom it is
granted otherwise than by will or the laws of descent and distribution, and is
exercisable, during the lifetime of such individual, only by him; provided,
however, that if such individual become legally disabled,
2
<PAGE> 3
his legal representative may exercise the option on his behalf, No incentive
stock options may be granted under the Plan to any employee where the aggregate
fair market value (determined at the time the option is granted) of the stock
with respect to which incentive stock options are exercisable for the first time
by such employee during any calendar year (under all such plans of the
Corporation and its parent and subsidiary corporations) shall exceed $100,000.
Options granted under the Plan that are non-qualified stock options may exceed
the foregoing limits. All options may be exercisable without regard to whether
there may be outstanding one or more other options previously granted in favor
of the optionee, Any shares of Common Stock which are issued to an optionee upon
exercise of an option granted under the Plan shall be subject to a right of
first refusal in favor of the Corporation, the specific terms of which shall be
set forth in such optionee's option agreement. The Board may impose on any
option any additional terms and conditions which it deems advisable and which
are not inconsistent with the Plan.
6. EXERCISE OF OPTIONS.
(a) Options granted hereunder include one of the following
four vesting/repurchase alternatives:
(i) Periodic Vesting/Alternative I.
<TABLE>
<CAPTION>
Percentage of
Period of Time Shares for Which
After Date of Grant Option May Be Exercised
------------------- -----------------------
<S> <C>
0-12 months 0%
13-24 months 20%
25-36 months 40%
37-48 months 60%
49-60 months 80%
60 + months 100%
</TABLE>
In the event of death, legal disability, or merger
or sale of the Corporation as described in paragraph 10,
accelerated vesting of options granted, as described in
this paragraph 6(a)(i) occurs and 100% of the shares for
which the option was granted are immediately available for
exercise.
(ii) Periodic Vesting/Alternative II.
<TABLE>
<CAPTION>
Percentage of
Period of Time Shares for Which
<S> <C>
</TABLE>
3
<PAGE> 4
<TABLE>
<CAPTION>
After Date of Grant Option May Be Exercised
------------------- -----------------------
<S> <C>
0-12 months 0%
25-36 months 25%
37-48 months 50%
49-60 months 75%
60 + months 100%
</TABLE>
In the event of death, legal disability, or merger
or sale of the Corporation as described in paragraph 10,
accelerated vesting of options granted, as described in
this paragraph 6(a)(ii) shall occur and 100% of the shares
for which the option was granted are immediately available
for exercise.
(iii) Immediate Vesting Subject to Repurchase
Right/Alternative I. All shares subject to an option are
immediately purchasable upon issuance of an option;
provided that, if the optionee's employment with the
Corporation terminates for any reason (other than due to
the optionee's death or disability) during the five year
period following the date of grant, the Corporation has
the right to repurchase some or all of any shares that may
be or may have been acquired by the optionee pursuant to
exercise of the option, at the price paid by the optionee,
in accordance with the following formula:
<TABLE>
<CAPTION>
Percentage of Option
Months from Shares Repurchasable
Date of Grant By Corporation
----------- ---------------------
<S> <C>
1-12 months 100%
13-24 months 80%
25-36 months 60%
37-48 months 40%
49-60 months 20%
</TABLE>
(iv) Immediate Vesting Subject to Repurchase
Right/Alternative II. All shares subject to an option are
immediately purchasable upon issuance of an Option;
provided that, if the optionee's employment with the
Corporation terminates for any reason (other than due to
the optionee's death or disability) during the five year
period following the date of grant, the Corporation has
the right to repurchase some or all of any shares that may
be
4
<PAGE> 5
or may have been acquired by the optionee pursuant to
exercise of the option, at the price paid by the optionee,
in accordance with the following formula:
<TABLE>
<CAPTION>
Percentage of Option
Months from Shares Repurchasable
Date of Grant By Corporation
----------- ---------------------
<S> <C>
1-24 months 100%
25-36 months 75%
37-48 months 50%
49-60 months 25%
</TABLE>
(b) Unless otherwise specified by the Board, all
unexercised stock options granted pursuant to the Plan, if otherwise exercisable
as described in the foregoing paragraph 6(a), shall be exercisable by an
optionee only (I) for a period of three months for incentive stock options and
six months for non-qualified stock options after the optionee's employment or
other affiliation with the Corporation terminates due to the optionee's death or
disability, or due to termination by the Corporation without cause, and (II) by
midnight on the day of termination if the optionee voluntarily terminates his
employment or other affiliation, or the Corporation terminates the optionee with
cause. If the optionee's employment or other affiliation with the Corporation is
terminated by reason of the optionee's commission of a felony, fraud, or willful
misconduct which has resulted, or is likely to result, in substantial and
material damage to the Corporation, as determined in the discretion of the
Board, the option can not be exercisable at anytime after termination.
(c) Options are exercised by written notice from the
holder of the option to the Corporation, setting forth the number of shares
desired to be purchased, stating whether the employee is exercising an incentive
stock option or non-qualified stock option, and accompanied by cash or check in
the amount equal to the full purchase price of the shares being purchased;
provided, however, that the Corporation may in its discretion allow the optionee
to pay the purchase price in whole or in part by transferring to the Corporation
shares of Common Stock held by him or by being credited by the Corporation for
shares he has a right to acquire in the option being exercised, in which case
the resulting stock certificate reflects the number of shares after payment of
the exercise price. Notice of exercise must be addressed to the Corporation at
its principal place of business; Attention: President; shall be signed by the
holder of the option; and shall, at the option of the Corporation, contain a
representation that the shares are being purchased for investment only and not
for resale or distribution. The Corporation may place one or more legends on any
certificate issued hereunder which it deems necessary to comply with any
applicable law. Within a reasonable time after receipt of notice in the form
specified above, the Corporation
5
<PAGE> 6
must cause to be issued and delivered to the holder of the option a certificate
for the number of shares of Common Stock which the holder has purchased,
provided, however, that the Corporation may, in its discretion, allow the
optionee to elect to pay any withholding taxes payable, in whole or in part, by
transferring to the Corporation shares of Common Stock of the Corporation owned
by him or by being credited by the Corporation for shares he has a right to
acquire in the option being exercised, in which case the resulting stock
certificate must reflect the number of shares after payment of the taxes. All
documentary stamp taxes payable on account of such issue must be paid by the
Corporation. in no event shall the Corporation be required to issue fractional
shares upon the exercise of an option. An optionee may exercise less than all of
the matured portion of the option, in which case such unexercised, matured
portion shall continue to remain exercisable, Subject to the terms of the Plan,
until the option terminates as described below.
(d) No stock option granted hereunder is exercisable after
the expiration of ten years from the date such option is granted, provided
however, that no incentive stock option granted to a 10% stockholder (as
referenced in Section 5 hereof shall be exercisable after the expiration of 5
years from the date such option is granted.
7. INCENTIVE OPTIONS. Incentive stock options may be granted only
to employees (including officers) of the Corporation. A director of the
Corporation is not eligible to be granted an incentive stock option unless the
director is also an employee of the Corporation. Employment with the Corporation
includes employment with any parent or subsidiary as defined in Section 425 of
the Code.
8. LIMITED RIGHTS. No person has any rights as a stockholder with
respect to any shares covered by an option until the date of the issuance of a
stock certificate(s) for the shares for which the option has been exercised. No
adjustment is made for dividends or distributions or other rights for which the
record date is prior to the date such stock certificate(s) are issued, and the
Corporation is under no obligation to give optionees notice of any such record
date, except as described in Section 10. Nothing in the Plan or in any option
agreement confers upon any optionee any right to continue in the employ of the
Corporation or interfere in any way with any right of the Corporation to
terminate the optionee's employment at any time. The adoption or existence of
the Plan, of itself, shall not be deemed to entitle any employee to any rights
to be granted options.
9. DEFINITION OF FAIR MARKET VALUE. For the purposes of the Plan,
"fair market value" means either the exercise price per share established by and
in the discretion of the Board or, in the event the Corporation's stock is
publicly traded: (i) the average of the closing bid and ask price per share of
Common Stock on the date preceding the date of grant, as reported by the
National Association of Securities Dealers Automated Quotation System, (ii) the
average of the closing bid and ask price per share of Common Stock on the date
preceding the date of grant, as reported by the National Quotation Bureau,
Inc.'s "Pink
6
<PAGE> 7
Sheets," or (iii) if the Common Stock is listed on a national securities
exchange, fair market value shall mean the closing price on such preceding date
as reported by the Wall Street Journal.
10. STOCK SPLITS, MERGERS, ETC. In case of any stock split, stock
dividend or similar transaction which increases or decreases the number of
outstanding shares of the Corporation's Common Stock, appropriate adjustment
will be made to both the number of shares which may be purchased under the Plan
and the number and price per share of Common Stock which may be purchased under
any outstanding options. In the case of any merger, liquidation, sale of all or
substantially all of the assets of the Corporation or other transaction which
results in the conversion of the Corporation's Common Stock into cash and/or
securities of another corporation, the Board will either (a) provide for the
acceleration of the exercise date of any option to the day immediately preceding
the closing day of such event, or (b) provide for the replacement of any options
with comparable options to purchase the stock of such other corporation.
11. CERTAIN TAX CONSEQUENCES
No taxable income is realized by a holder of an option granted
pursuant to the Plan (a "Holder") upon the grant or exercise of all incentive
stock option. If Common Stock is issued to a Holder pursuant to the exercise of
an incentive stock option, and if no disqualifying disposition of such shares is
made by such a Holder within two years after the date of grant or within one
year after the transfer of such shares to such a Holder, then (i) upon sale of
such shares, any amount realized in excess of the option price will be taxed to
such a Holder as a long-term capital gain and any loss sustained will be a
long-term capital loss, and (ii) no deduction will be allowed to the Holder's
employer for Federal income tax purposes. if Common Stock acquired upon the
exercise of an incentive stock option is disposed of prior to the expiration of
either holding period described above, generally (i) the Holder will realize
ordinary income in the year of disposition in an amount equal to the excess (if
any) of the fair market value of such shares at exercise (or, if less, the
amount realized on the disposition of such shares) over the option price paid
for such shares, and (ii) the Holder's employer will be entitled to deduct such
amount for Federal income tax purposes if the amount represents an ordinary and
necessary business expense. Any further gain (or loss) realized by the Holder
upon the sale of the Common Stock will be taxed as short-term or long-term
capital gain (or loss), depending on how long the shares have been held, and
will not result in any deduction by the employer. Subject to certain exceptions
for disability or death, if all incentive stock option is exercised more than
three months following termination of employment, the exercise of the option
will generally be taxed as the exercise of a nonqualified stock option. For
purposes of determining whether a Holder is subject to any alternative minimum
tax liability, a Holder who exercises an incentive stock option generally would
be required to increase his or her alternative minimum taxable incomes and
compute the tax basis in the stock so acquired, in the same manner as if the
Holder had
7
<PAGE> 8
exercised a nonqualified stock option. Each Holder is potentially subject to the
alternative minimum tax. In substance, a taxpayer is required to pay the higher
of his/her alternative minimum tax liability or his/her "regular" income tax
liability. As a result, a taxpayer has to determine his/her potential liability
under the alternative minimum tax.
With respect to nonqualified stock options (i) no income is
realized by the Holder at the time the option is granted; (ii) generally, at
exercise, ordinary income is realized by the Holder in an amount equal to the
difference between the option price paid for the shares and the fair market
value of the shares, if unrestricted, on the date of exercise, and the Holder's
employer is generally entitled to a tax deduction in the same amount subject to
applicable tax withholding requirements; and (iii) at sale, appreciation (or
depreciation) after the date of exercise is treated as either short-term or
long-term capital gain (or loss) depending on how long the shares have been
held. Individuals subject to Section 16(b) of the Exchange Act will recognize
ordinary income at the time of exercise of a nonqualified stock option as noted
above, provided at least six months have elapsed from the date of grant to the
date of exercise. In the event that less than six months have elapsed, such
individual will recognize ordinary income at the time such six month period
elapses in an amount equal to the excess of the fair market value of the shares
on such date over the exercise price.
Holders are strongly advised to consult with their individual tax
advisers to determine their personal tax consequences resulting from the grant
and/or exercise of options or the issuance and sale of restricted stock under
the Plan.
12. RESTRICTIONS ON RESALE. Any purchaser of Common Stock who is
a "control person" of the Corporation, as defined in Rule 405 under the
Securities Act of 1933, as amended (the "33 Act"), may only reoffer to resell
such shares pursuant to a separate prospectus under the provisions of Rule 415
promulgated under such Act or under the provisions of Rule 144 promulgated under
such Act.
The resale of shares acquired upon the exercise of incentive
stock options within one year from the date of acquisition or two years from the
date of option grant rally have certain adverse federal tax consequences.
The Corporation's executive officers, directors and beneficial
owners of more than 10% of the Common Stock ("Insiders") acquiring options
pursuant to the Plan are subject to Section 16 of the 1934 Exchange Act
("Exchange Act"). Section 16 prohibits purchases and sales or sales and
purchases of any of the Corporation's equity securities by Insiders within a six
month period. Any profit realized by an Insider on any purchase and sale, or any
sale and then purchase, of shares of Common Stock or stock options issued under
the Plan, which occurs within a six-month period is recoverable by the
Corporation (or a stockholder suing on behalf of the Corporation) under Section
16(b) of the Exchange Act. Section 16 of the Exchange Act also requires all
Insiders to report on Forms 3, 4 and 5 to
8
<PAGE> 9
the Securities and Exchange Commission all ownership as well as any changes in
such equity securities that are held by such individual ownership of any of the
Corporation's equity securities that are held by such individuals. This includes
acquisitions and dispositions of shares of Common Stock and stock options issued
under the Plan to Insiders.
13. CURRENT GRANTS.
As of November 20, 1997, options to purchase an aggregate of
396,040 shares of the Corporation's Common Stock at a weighted average exercise
price of $3.73 per share were issued and outstanding. As of November 20, 1997,
325,819 options were issued and outstanding and held by one of the Corporation's
employee directors.
14. APPLICABILITY OF ERISA; QUALIFICATION UNDER CODE SECTION
401(a).
The Plan is not subject to the Employee Retirement Income
Security Act of 1974 ("ERISA") and is not qualified under Section 401(a) of the
Code. There will be no fees, commissions or other charges in connection with the
purchase of Common Stock pursuant to the Plan other than payment of the option
exercise price.
15. FURTHER INFORMATION REGARDING THE PLANS/INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE
Additional information about the Plan and the administrators of
the Plan may be obtained from Abacus Direct Corporation, Attention: Carlos E.
Sala, 8774 Yates Drive, Westminster, Colorado 30030. The following documents
filed by the Corporation with the Securities and Exchange Commission are
incorporated herein by reference:
A. The Corporation's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1996, as amended;
B. The Corporation's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1997;
C. The Corporation's Quarterly Report on Form 10-QSB for the
quarter ended June 30, 1997;
D. The Corporation's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1997;
E. The Corporation's Proxy Statement dated April 30, 1997
relating to the Annual Meeting of Stockholders held on
June 16, 1997;
9
<PAGE> 10
F. The description of the Corporation's Common Stock
contained in the Corporation's Registration Statement on
Form SB-2 (Registration No. 333-5380) filed by the
Corporation on August 7, 1996, as amended.
Copies of all documents incorporated by reference and additional
information concerning the Plan and its administrators are available to plan
participants without charge upon a written request address to Abacus Direct
Corporation, Attention: Carlos E. Sala, 8774 Yates Drive, Westminster, Colorado
30030, telephone number (303) 657-2800.
10
<PAGE> 1
EXHIBIT 99.4
DOUBLECLICK INC.
STOCK OPTION ASSUMPTION AGREEMENT
ABACUS DIRECT CORPORATION
________ STOCK PLAN
OPTIONEE: <<First_Name>> <<Last_Name>>,
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 23rd day of
November, 1999 by DoubleClick Inc., a Delaware corporation ("DoubleClick").
WHEREAS, the undersigned individual ("Optionee") holds one or
more outstanding options to purchase shares of the common stock of Abacus Direct
Corporation, a Delaware corporation ("Abacus"), which were granted to Optionee
under the Abacus _____ Stock Plan (the "Plan") and are each evidenced by a Stock
Option Agreement (the "Option Agreement").
WHEREAS, Abacus has been acquired by DoubleClick through the
merger of Abacus with and into DoubleClick (the "Merger") pursuant to the
Agreement and Plan of Reorganization, by and between DoubleClick and Abacus (the
"Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require
DoubleClick to assume all obligations of Abacus under all outstanding options
under the Plan at the consummation of the Merger and to issue to the holder of
each outstanding option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 1.05 shares of
DoubleClick common stock ("DoubleClick Stock") for each outstanding share of
Abacus common stock ("Abacus Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options which have become necessary by
reason of the assumption of those options by DoubleClick in connection with the
Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Abacus Stock subject to the options
held by Optionee immediately prior to the Effective Time (the "Abacus Options")
and the exercise price payable per share are set forth below. DoubleClick hereby
assumes, as of the Effective Time, all the duties and obligations of Abacus
under each of the Abacus Options. In connection with such assumption, the number
of shares of DoubleClick Stock purchasable under each Abacus
<PAGE> 2
Option hereby assumed and the exercise price payable thereunder have been
adjusted to reflect the Exchange Ratio. Accordingly, the number of shares of
DoubleClick Stock subject to each Abacus Option hereby assumed shall be as
specified for that option below, and the adjusted exercise price payable per
share of DoubleClick Stock under the assumed Abacus Option shall also be as
indicated for that option below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
ABACUS STOCK OPTIONS DOUBLECLICK ASSUMED OPTIONS
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
# of Shares of Abacus Exercise Price per # of Shares of Adjusted Exercise
Common Stock Share DoubleClick Common Price per Share
Stock
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Abacus Shares $Abacus Price DC Shares $DC Price
- -------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed Abacus
Option is to assure that the spread between the aggregate fair market value of
the shares of DoubleClick Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this Agreement will,
immediately after the consummation of the Merger, be not less than the spread
which existed, immediately prior to the Merger, between the then aggregate fair
market value of the Abacus Stock subject to the Abacus Option and the aggregate
exercise price in effect at such time under the Option Agreement. Such
adjustments are also intended to preserve, immediately after the Merger, on a
per share basis, the same ratio of exercise price per option share to fair
market value per share which existed under the Abacus Option immediately prior
to the Merger.
3. The following provisions shall govern each Abacus Option
hereby assumed by DoubleClick:
(a) Unless the context otherwise requires, all references
in each Option Agreement and, if applicable, in the Plan (as
incorporated into such Option Agreement) (i) to the "Company"
shall mean DoubleClick, (ii) to "Share" shall mean share of
DoubleClick Stock, (iii) to the "Board" shall mean the Board of
Directors of DoubleClick and (iv) to the "Committee" shall mean
the Compensation Committee of the DoubleClick Board of Directors.
(b) The grant date and the expiration date of each assumed
Abacus Option and all other provisions which govern either the
exercise or the termination of the assumed Abacus Option shall
remain the same as set forth in the Option Agreement applicable
to that option, and the provisions of the Option Agreement shall
accordingly govern and control Optionee's rights under this
Agreement to purchase DoubleClick Stock.
(c) Pursuant to the terms of the Option Agreement, none of
your options assumed by DoubleClick in connection with the
transaction will vest and become exercisable on an accelerated
basis upon the consummation of the Merger. Each Abacus Option
shall be assumed by DoubleClick as of the Effective Time. Each
such assumed Abacus Option shall thereafter continue to vest for
any remaining unvested shares of DoubleClick Stock subject to
that
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option in accordance with the same installment vesting schedule
in effect under the applicable Option Agreement immediately prior
to the Effective Time; provided, however, that the number of
shares subject to each such installment shall be adjusted to
reflect the Exchange Ratio.
(d) For purposes of applying any and all provisions of the
Option Agreement and/or the Plan relating to Optionee's status as
an employee or a consultant of Abacus, Optionee shall be deemed
to continue in such status as an employee or a consultant for so
long as Optionee renders services as an employee or a consultant
to DoubleClick or any present or future DoubleClick subsidiary.
Accordingly, the provisions of the Option Agreement governing the
termination of the assumed Abacus Options upon Optionee's
cessation of service as an employee or a consultant of Abacus
shall hereafter be applied on the basis of Optionee's cessation
of employee or consultant status with DoubleClick and its
subsidiaries, and each assumed Abacus Option shall accordingly
terminate, within the designated time period in effect under the
Option Agreement for that option, generally a three (3) month
period, following such cessation of service as an employee or a
consultant of DoubleClick and its subsidiaries.
(e) The adjusted exercise price payable for the
DoubleClick Stock subject to each assumed Abacus Option shall be
payable in any of the forms authorized under the Option Agreement
applicable to that option. For purposes of determining the
holding period of any shares of DoubleClick Stock delivered in
payment of such adjusted exercise price, the period for which
such shares were held as Abacus Stock prior to the Merger shall
be taken into account.
(f) In order to exercise each assumed Abacus Option,
Optionee must deliver to DoubleClick a written notice of exercise
in which the number of shares of DoubleClick Stock to be
purchased thereunder must be indicated. The exercise notice must
be accompanied by payment of the adjusted exercise price payable
for the purchased shares of DoubleClick Stock and should be
delivered to DoubleClick at the following address:
DoubleClick Inc.
________________________________
________________________________
4. Except to the extent specifically modified by this Option
Assumption Agreement, all of the terms and conditions of each Option Agreement
as in effect immediately prior to the Merger shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.
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IN WITNESS WHEREOF, DoubleClick Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 23rd day of November, 1999.
DOUBLECLICK INC.
By:_____________________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock
Option Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Abacus Options hereby assumed by DoubleClick are
as set forth in the Option Agreement, the Plan, as applicable, and such Stock
Option Assumption Agreement.
________________________________________
<<First_Name>> <<Last_Name>>, OPTIONEE
DATED: __________________, 1999
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