AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 27, 1999
REGISTRATION NO. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
AND
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8 REGISTRATION STATEMENT
(FILE NO. 333-57257)
UNDER THE
SECURITIES ACT OF 1933
ZIFF-DAVIS INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
13-3987754
(I.R.S. Employer Identification Number)
28 EAST 28TH STREET, NEW YORK, NEW YORK 10016
(Address of Principal Executive Offices, Zip Code)
ZIFF-DAVIS 1998 EMPLOYEE STOCK PURCHASE PLAN
ZIFF-DAVIS 1998 INCENTIVE COMPENSATION PLAN
ZIFF-DAVIS 1998 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(Full Title of the Plans)
TIMOTHY C. O'BRIEN
ZIFF-DAVIS INC.
28 EAST 28TH STREET
NEW YORK, NEW YORK 10016
(Name and Address of Agent for Service)
(212) 503-3500
(Telephone Number, Including Area Code, of Agent for Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
PROPOSED
PROPOSED MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED (1) PER SHARE (2) OFFERING PRICE FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ZIFF-DAVIS INC. - ZD COMMON STOCK,
PAR VALUE $.01 PER SHARE ("ZD STOCK") 1,800,000 $12.91 $23,238,000 $6,460.17
ZIFF-DAVIS INC. - ZD NET COMMON STOCK,
PAR VALUE $.01 PER SHARE ("ZDNET
STOCK") 14,100,000 $19.47 $274,527,000 $76,318.51
====================================================================================================================================
<FN>
(1) 1,000,000 shares of ZDNet Stock are being registered pursuant to the 1998 Employee Stock Purchase Plan; 1,800,000 shares of ZD
Stock and 13,000,000 shares of ZDNet Stock are being registered pursuant to the 1998 Incentive Compensation Plan; and 100,000
shares of ZDNet Stock are being registered pursuant to the 1998 Non-Employee Directors' Stock Option Plan.
(2) Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(c) and 457(h), based upon the average
of the high and low sales prices of the Company's ZD Stock and ZDNet Stock, as quoted through the New York Stock Exchange, on
May 26, 1999.
</FN>
</TABLE>
THIS REGISTRATION STATEMENT CONTAINS, PURSUANT TO RULE 429, A COMBINED
PROSPECTUS THAT ALSO RELATES TO 10,200,000 SHARES OF ZD STOCK REGISTERED ON FORM
S-8, REGISTRATION STATEMENT NO. 333-57257. THIS FILING ALSO CONSTITUTES A
POST-EFFECTIVE AMENDMENT TO THAT REGISTRATION STATEMENT.
<PAGE>
PART I
- --------------------------------------------------------------------------------
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Omitted pursuant to the instructions and provisions of
Form S-8.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Omitted Pursuant to the instructions and provisions of
Form S-8.
UPDATE
On March 30, 1999 the shareholders of Ziff-Davis Inc. (the "Company")
approved amendments to each of the 1998 Incentive Compensation Plan (the
"Incentive Plan"), the 1998 Employee Stock Purchase Plan (the "Stock Purchase
Plan") and 1998 Non-Employee Directors' Stock Option Plan (the "Non-Employee
Directors Plan") to (1) permit grants of awards under each plan with respect to
either series of common stock of Ziff-Davis Inc. (Ziff-Davis Inc. - ZD Common
Stock, par value $.01 per share or Ziff-Davis Inc. - ZDNet Common Stock, par
value $.01 per share), (2) to increase the number of shares authorized for
issuance, (3) solely with respect to the Incentive Plan, to provide that shares
issuable thereunder may be supplied from outstanding shares of ZD Stock held by
the Company's majority shareholder, and solely for calendar year 1998, to
increase the number of shares in respect of which options to acquire shares of
common stock of the Company may be granted to any single participant and (4)
solely with respect to the Non-Employee Directors Plan, to permit discretionary
grants of additional options from time to time.
On April 7, 1999, GameSpot Inc., a California Corporation ("Gamespot"),
merged with and into ZD Inc., a Delaware corporation ("ZD") and a wholly owned
subsidiary of the Company (the "Merger"). In connection with the Merger, all
options to purchase GameSpot common stock outstanding under the GameSpot 1997
Option Plan immediately prior to the effective time of the Merger were replaced
with options to purchase ZDNet Stock in substitution therefor pursuant to the
Incentive Plan.
I-2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the registrant, Ziff-Davis Inc., a Delaware
corporation (the "Company"), pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), are incorporated by reference in this registration
statement.
1. The Company's Registration Statement on Form S-1 (File No.
333-69447).
2. The description of Ziff-Davis Inc. - ZD Common Stock, par value $.01
per share ("ZD Stock") and Ziff-Davis Inc. - ZDNet Common Stock, par value $.01
per share (the "ZDNet Stock"), contained in the Company's Registration Statement
on Form S-1 (File No. 333-69447) and incorporated by reference in the Company's
Registration Statement on Form 8-A (File No. 001-14055).
3. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, pursuant to the Exchange Act (File No. 1-9676).
4. The Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1998, pursuant to the Exchange Act (File No. 1-9676).
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all shares of ZD Stock and ZDNet
Stock offered hereby have been sold or which deregisters all such shares then
remaining unsold, shall be deemed to be incorporated by reference in 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 other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
registration statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed actions, suits or
proceedings, in which such person is made a party by reason of such person being
or having been a director, officer, employee or agent to the registrant. The
statute provides that it is not exclusive of other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise. Section 6.4 of the
Company's By-laws provides for indemnification by the Company of its directors,
officers and employees to the fullest extent permitted by Delaware General
Corporation Law.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except for liability (a) for any breach of the director's duty of loyalty to the
corporation or its shareholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) for
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
(d) for any transaction from which the director derived an improper personal
benefit. The Company's Amended and Restated Certificate of Incorporation
provides for such limitation of liability. The directors and officers of the
Company are also insured under policies of insurance maintained by the Company,
subject to the limits of such policies, against certain losses arising from any
claim made against them by reason of being or having been such officers or
directors. In addition to the protection available under our restated charter,
by-laws and insurance policies, we have entered into agreements with our
outside directors to indemnify them to the fullest extent permitted by law
against losses arising from any claim against them by reason of being or
having been a director.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
Exhibit
No. Description
- ------- -----------
3.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1, File No. 333-69447).
3.2 By-laws of the Company (incorporated herein by reference to Exhibit
3.3 to the Company's Registration Statement on Form S-1, File No.
333-69447).
4.1 Specimen of certificate representing Ziff-Davis Inc. - ZD Common
Stock, par value $.01 per share (incorporated by reference to
Exhibit 4.2 to the Company's Registration Statement on Form S-1,
File No. 333-69447).
4.2 Specimen of certificate representing Ziff-Davis Inc. - ZDNet Common
Stock, par value $.01 per share (incorporated by reference to
Exhibit 4.3 to the Company's Registration Statement on Form S-1,
File No. 333-69447).
4.3 Ziff-Davis 1998 Employee Stock Purchase Plan (the "Stock Purchase
Plan").
II-2
<PAGE>
4.4 Ziff-Davis 1998 Incentive Compensation Plan (the "Incentive
Plan").
4.5 Ziff-Davis 1998 Non-Employee Directors' Stock Option Plan (the
"Directors Plan" and, together with the Stock Purchase Plan and the
Incentive Plan, the "Plans").
5.1 Opinion of Sullivan & Cromwell as to the validity of ZD Stock and
ZDNet Stock issued under the Plans.
23.1 Consent of Sullivan & Cromwell (contained in Exhibit 5.1 attached
hereto).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included in the signature page of this
Registration Statement).
ITEM 9. REQUIRED 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 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in this registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective 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 the undertakings set forth in paragraphs (a)(1)(i)
and (a)(1)(ii) above do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this registration statement.
II-3
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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, New York on the 26th day of May, 1999.
ZIFF-DAVIS INC.
By /s/ Eric Hippeau
--------------------------------------
Eric Hippeau
Chairman, Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned hereby constitutes and appoints Timothy C.
O'Brien (Chief Financial Officer of the Company) and J. Malcolm Morris (Senior
Vice President and General Counsel), and each of them severally, his/her true
and lawful attorney-in-fact or attorneys-in-fact with power of substitution and
resubstitution to sign in his/her name, place and stead in any and all such
capacities the Registration Statement, any and all amendments thereto and any
and all registration statements necessary to register additional securities or
register a reoffer prospectus and any documents in connection therewith, and to
file the same with the Commission, each of said attorneys-in-fact to have power
to act with or without the other, and to have full power and authority to do and
perform, in the name and on behalf of each such officer and director of the
Registrant who shall have executed such power of attorney, every act whatsoever
which such attorneys-in-fact, or any of them, may deem necessary or desirable to
be done in connection therewith as fully and to all intents and purposes as such
officer or director of the registrant might or could do in person.
Pursuant to the requirements of the Securities Act, this Amendment to
the Registration Statement has been signed by the following persons in the
capacities indicated on May 26, 1999.
Name Title
/s/ Eric Hippeau
- ----------------------------------- Chairman, Chief Executive Officer, Director
Eric Hippeau (Principal Executive Officer)
/s/ Timothy C. O'Brien
- ----------------------------------- Chief Financial Officer, Director
Timothy C. O'Brien (Principal Financial Officer)
/s/ Mark D. Moyer
- ----------------------------------- Controller
Mark D. Moyer (Principal Accounting Officer)
II-5
<PAGE>
Name Title
/s/ Jason E. Chudnofsky
- ----------------------------------- Director
Jason E. Chudnofsky
/s/ Daniel L. Rosensweig
- ----------------------------------- Director
Daniel L. Rosensweig
- ----------------------------------- Director
Masayoshi Son
- ----------------------------------- Director
Yoshitaka Kitao
/s/ Ronald D. Fisher
- ----------------------------------- Director
Ronald D. Fisher
/s/ Jonathan D. Lazarus
- ----------------------------------- Director
Jonathan D. Lazarus
/s/ Jerry Yang
- ----------------------------------- Director
Jerry Yang
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
3.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1, File No. 333-69447).
3.2 By-laws of the Company (incorporated herein by reference to Exhibit
3.3 to the Company's Registration Statement on Form S-1, File No.
333-69447).
4.1 Specimen of certificate representing Ziff-Davis Inc. - ZD Common
Stock, par value $.01 per share (incorporated by reference to
Exhibit 4.2 to the Company's Registration Statement on Form S-1,
File No. 333-69447).
4.2 Specimen of certificate representing Ziff-Davis Inc. - ZDNet Common
Stock, par value $.01 per share (incorporated by reference to
Exhibit 4.3 to the Company's Registration Statement on Form S-1,
File No. 333-69447).
4.3 Ziff-Davis 1998 Employee Stock Purchase Plan (the "Stock Purchase
Plan").
4.4 Ziff-Davis 1998 Incentive Compensation Plan (the "Incentive
Plan").
4.5 Ziff-Davis Inc. 1998 Non-Employee Directors' Stock Option Plan (the
"Directors Plan" and, together with the Stock Purchase Plan and the
Incentive Plan, the "Plans").
5.1 Opinion of Sullivan & Cromwell as to the validity of the ZD Stock
and ZDNet Stock issued under the Plans.
23.1 Consent of Sullivan & Cromwell (contained in Exhibit 5.1 attached
hereto).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included in the signature page of the
Registration Statement).
(EXHIBIT 4.3)
ZIFF-DAVIS
1998 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
-------
The purpose of the Ziff-Davis 1998 Employee Stock Purchase Plan (the
"Plan") is to provide employees of Ziff-Davis Inc. (the "Company") and its
Subsidiaries with an opportunity to acquire an interest in the Company through
the purchase of common stock of the Company, par value $0.01 per share
(regardless of series, the "Common Stock") with accumulated payroll deductions.
The Company intends the Plan to qualify as an "employee stock purchase plan"
within the meaning of Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the provisions of the Plan shall be construed in a
manner consistent with the requirements of Section 423 of the Code. For purposes
of the Plan, "Subsidiary" shall mean any corporation, if any, having the
relationship to the Company described in Section 424(f) of the Code.
2. Administration.
--------------
The Plan shall be administered by a committee (the "Committee")
appointed by the board of directors of the Company (the "Board") to administer
the Plan and which shall, solely to the extent to comply with Rule 16b-3 as
promulgated under Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and Section 162(m) of the Code, be comprised of
"non-employee directors" within the meaning of Rule 16b-3 as promulgated under
the Exchange Act and "outside directors" within the meaning of Section 162(m) of
the Code. A majority of the Committee shall constitute a quorum, and the acts of
the majority of such quorum shall be the acts of the Committee. The Committee
may select an administrator to whom its duties and responsibilities hereunder
may be delegated. The Committee shall have full power and authority, subject to
the provisions of the Plan, to promulgate such rules and regulations as it deems
necessary for the proper administration of the Plan, to interpret the provisions
and supervise the administration of the Plan, and to take all action in
connection therewith or in relation thereto as it deems necessary or advisable.
The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent it shall deem
desirable to carry it into effect. The determinations of the Committee in the
administration of the Plan, as described herein, shall be final, conclusive and
binding on all persons, including the Company and its Subsidiaries, its
shareholders, Participants and their estates and beneficiaries. Members of the
Committee and any officer or employee of the Company or any Subsidiary acting at
the direction of, or on behalf of, the Committee shall not be personally liable
for any action or determination taken or made in good faith with respect to the
Plan, and shall, to the extent permitted by law, be fully indemnified by the
Company with respect to any such action or determination.
3. Eligibility and Participation.
-----------------------------
(a) Any person, including an officer, who is regularly employed by the
Company or one of its Subsidiaries (an "Employee") who is an Eligible Employee
on an Offering Date (as defined in Section 5(a)) shall be eligible to become a
Participant in the Plan beginning on such Offering Date. For purposes of the
Plan, an "Eligible Employee" is any Employee of the Company or a Subsidiary
excluding:
(1) any Employee who customarily is employed for 20 hours per week
or less;
(2) any Employee who customarily is employed for not more than five
(5) months in a calendar year; or
(3) any Employee who (immediately after the grant of an option under
the Plan and applying the rules of Section 424(d) of the Code in
determining stock ownership) would own shares, and/or hold outstanding
options to purchase shares, possessing five percent (5%) or more of the
total combined voting power or value of all classes of shares of the
Company (or its "parent corporation" or "subsidiary corporation" as such
terms are defined in Section 424 of the Code).
<PAGE>
(b) Any Employee who first becomes an Eligible Employee during an
Offering Period (as defined in Section 5(a)) shall be eligible to become a
Participant in the Plan as of the first day of the Offering Period occurring
after the date on which such Employee becomes an Eligible Employee.
(c) An Eligible Employee shall become a Participant in the Plan by
completing a form (an "Authorization Form") supplied by and delivered to the
Company by a Participant authorizing payroll deductions as set forth in Section
6 hereof and such other terms and conditions as the Company from time to time
may determine, and filing such Authorization Form with the Company by the date
required by the Company, or by any other means prescribed by the Committee. Such
Authorization Form shall remain in effect for subsequent Offering Periods, until
modified or terminated by the Participant.
(d) A person shall cease to be a Participant upon the earliest to occur
of:
(1) the date the Participant ceases to be an Eligible Employee, for
any reason;
(2) the first day of the Offering Period beginning after the date on
which the Participant ceases payroll deductions under the Plan; or
(3) the date of a withdrawal from the Plan by the Participant.
4. Shares Subject to Plan.
----------------------
(a) The maximum number of shares of Common Stock reserved for sale under
the Plan shall be 2,500,000, subject to adjustment as provided in Section 13. If
the total number of shares which would otherwise be subject to options granted
pursuant to Section 5(a) on an Offering Date exceeds the number of shares then
available under the Plan (after deduction of all shares for which options have
been exercised or are then outstanding), the Committee shall make a pro rata
allocation of the shares remaining available for option grant in as uniform a
manner as shall be practicable and as it shall determine in its sole discretion
to be equitable. In such event, the Committee shall give written notice to each
Participant of such reduction of the number of option shares affected thereby
and shall similarly reduce the rate of payroll deductions, if necessary. The
Plan shall terminate upon the issuance of the maximum number of shares of Common
Stock (unless sooner terminated under Section 14).
(b) Shares of Common Stock to be delivered to a Participant under the
Plan shall be registered in the name of the Participant or, at the election of
the Participant, in the name of the Participant and another person as joint
tenants with rights of survivorship.
5. Grant of Option.
---------------
(a) On each Offering Date the Company shall grant each Eligible Employee
an option to purchase shares of Common Stock, on such terms and conditions as it
shall determine, including whether the shares underlying an option during any
Offering Period shall be shares of one or more series of Common Stock, and each
Eligible Employee shall have the same rights and privileges under the Plan,
subject only to the limitations set forth in Sections 4, 5(b), and 5(c). For
purposes of the Plan, "Offering Date" means the first business day of any period
of time (the "Offering Period") as determined from time to time by the Committee
during the effectiveness of the Plan during which options to purchase shares of
Common Stock are granted to Participants.
(b) The option price per share of Common Stock in respect of any
Offering Period shall be an amount equal to the lesser of: (1) eighty-five
percent (85%) of the Fair Market Value of a share of Common Stock on the
Offering Date or (2) eighty-five percent (85%) of the Fair Market Value of a
share of Common Stock on the last business day of such Offering Period (the
"Exercise Date"). For purposes of the Plan, "Fair Market Value" shall mean, per
share of Common Stock, the closing price of the Common Stock on the New York
Stock Exchange (the "NYSE") on the applicable date, or, if there are no sales of
Common Stock on the NYSE on such date, then the closing price of the Common
Stock on the last previous day on which a sale on the NYSE is reported. For
purposes
2
<PAGE>
of the Plan, in the context of an option to purchase Common Stock that is
granted during any Offering Period, references to Common Stock during any
Offering Period shall be deemed to refer to the applicable series of Common
Stock with respect to which such option is granted.
(c) No Participant shall be granted an option which permits such
Participant's rights to purchase Common Stock under all employee stock purchase
plans of the Company to accrue at a rate which exceeds $25,000 of the Fair
Market Value of the Common Stock (determined at the time the option is granted)
for each calendar year in which such stock option is outstanding at any time.
6. Payroll Deductions.
------------------
A Participant may, in accordance with rules adopted by the Committee,
submit an Authorization Form that authorizes a payroll deduction of any whole
percentage (from one (1) percent to ten (10) percent) of such Participant's
Compensation (as defined below) on each pay period during the Offering Period. A
Participant may increase, decrease or cease such payroll deduction effective as
of the beginning of each calendar quarter, provided such Participant files with
the Company an Authorization Form requesting such change by the date required by
the Company. For purposes of the Plan, "Compensation" means base salary or wage,
including salary deferral contributions pursuant to Section 401(k) of the Code
and any amount excludable pursuant to Section 125 of the Code, but excluding any
bonus, fee, overtime pay, severance pay, incentive commission or other special
emolument or any credit or benefit under any employee plan maintained by the
Company or any Subsidiary. All payroll deductions made by a Participant shall be
credited to such Participant's account under the Plan. A Participant may not
make any additional payments into such account.
7. Exercise of Option.
------------------
(a) Unless a Participant withdraws from the Plan as provided in Section
9 hereof, such Participant's election to purchase shares shall be exercised
automatically on the Exercise Date, and the maximum number of full shares
subject to such option shall be purchased for such Participant at the applicable
option price with the accumulated payroll deductions and cash dividends
(credited pursuant to Section 10 hereof) in such Participant's account. During a
Participant's lifetime, such Participant's option to purchase shares hereunder
is exercisable only by such Participant.
(b) The shares of Common Stock purchased upon exercise of an option
hereunder shall be credited to the Participant's account under the Plan and
shall be deemed to be transferred to the Participant on the Exercise Date and,
except as otherwise provided herein, the Participant shall have all rights of a
shareholder with respect to such shares. Notwithstanding the foregoing, in
accordance with the rules and procedures prescribed by the Committee, in lieu of
crediting shares of Common Stock to the Participant's account, such shares may
be issued or transferred to the Participant.
(c) Shares of Common Stock held in nominee name for the account of a
Participant shall be voted as the Participant directs.
8. Delivery of Common Stock.
------------------------
As promptly as practicable after receipt by the Committee of a written
request by a Participant for withdrawal of Common Stock, the Company shall cause
to be delivered to such Participant a stock certificate representing the shares
of Common Stock which the Participant requests to withdraw. Withdrawals may be
made no more frequently than once each Offering Period unless otherwise approved
by the Committee in its sole discretion.
3
<PAGE>
9. Withdrawal; Termination of Employment.
-------------------------------------
(a) A Participant may withdraw all, but not less than all, the payroll
deductions and cash dividends credited to such Participant's account (that have
not been used to purchase shares of Common Stock) under the Plan at any time by
giving written notice to the Company received at least 15 days prior to the next
Exercise Date. All such payroll deductions and cash dividends credited to such
Participant's account shall be paid to such Participant promptly after receipt
of such Participant's notice of withdrawal and such Participant's option for the
Offering Period in which the withdrawal occurs shall be automatically
terminated. No further payroll deductions for the purchase of shares of Common
Stock shall be made for such Participant during such Offering Period, and any
additional cash dividends during the Offering Period shall be distributed to the
Participant.
(b) Upon termination of a Participant's status as an Eligible Employee
during the Offering Period for any reason, including voluntary or involuntary
termination, retirement or death, the payroll deductions and cash dividends
credited to such Participant's account that have not been used to purchase
shares of Common Stock shall be returned (and any future cash dividends shall be
distributed) to such Participant or, in the case of such Participant's death,
his designated beneficiary, or if no beneficiary has been designated, his
estate, and such Participant's option with respect to such Offering Period shall
be automatically terminated. A Participant's status as an Employee shall not be
considered terminated in the case of a leave of absence agreed to in writing by
the Company (including, but not limited to, military and sick leave), provided
that such leave is for a period of not more than ninety (90) days or
reemployment upon expiration of such leave is guaranteed by contract or statute.
(c) A Participant's withdrawal from an offering shall not have any
effect upon such Participant's eligibility to participate in a succeeding
offering or in any similar plan which may hereafter be adopted by the Company.
10. Dividends.
---------
(a) Cash dividends paid on Common Stock held in a Participant's account
shall be credited to such Participant's account and used in addition to payroll
deductions to purchase shares of Common Stock on the Exercise Date. Dividends
paid in Common Stock or stock splits of the Common Stock shall be credited to
the accounts of Participants. Dividends paid in property other than cash or
Common Stock shall be distributed to Participants as soon as practicable.
(b) No interest shall accrue on or be payable with respect to the
payroll deductions or credited cash dividends of a Participant in the Plan.
11. Nontransferability.
------------------
Neither payroll deductions credited to a Participant's account nor any
rights with regard to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of by the
Participant in any way (other than by shall and the laws of descent and
distribution) by the Participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Section 9
hereof.
12. Use of Funds.
------------
All payroll deductions received or held by the Company under the Plan
may be used by the Company for any corporate purpose, and the Company shall not
be obligated to segregate such payroll deductions.
13. Adjustment of and Change in Stock.
---------------------------------
(a) In the event of any change in the outstanding shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other corporate
change, or any distributions to common shareholders other than cash dividends,
the Committee shall in its sole
4
<PAGE>
discretion conclusively determine the appropriate equitable adjustments, if any,
to be made under the Plan, including without limitation adjustments to the
number of shares of Common Stock which have been authorized for issuance under
the Plan but have not yet been placed under option, as well as the price per
share of Common Stock covered by each option under the Plan which has not yet
been exercised.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company as a result of which the
Company is not the surviving corporation, or upon a sale of substantially all of
the Company's assets, or a sale or distribution of a Subsidiary, any affected
Participant shall thereafter be entitled to receive on the next Exercise Date
for each share of Common Stock subject to such Participant's option, the cash,
securities and/or property which a holder of one share of Common Stock was
entitled to receive upon and at the time of such transaction. The Board and the
Committee shall take such steps in connection with such transaction as the Board
and the Committee respectively shall deem necessary to assure that the
provisions of this Section 13(b) shall be complied with.
14. Amendment or Termination.
------------------------
The Board may at any time terminate or amend the Plan. Except as
provided in Section 4, no such termination shall adversely affect options
previously granted and no amendment may make any change in any option
theretofore granted which adversely affects the rights of any Participant. No
amendment shall be effective unless approved by the shareholders of the Company
if shareholder approval of such amendment is required to comply with any law,
regulation or stock exchange rule.
15. Notices.
-------
All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.
16. Governing Law; Regulatory Approvals.
-----------------------------------
(a) This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of New York
applicable to contracts made and to be performed in such State.
(b) The obligation of the Company to sell or deliver shares of Common
Stock with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable Federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
17. Notice of Sale.
--------------
If the Participant makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any share or
shares issued to such Participant pursuant to such Participant's exercise of an
option granted hereunder, and such disposition occurs within the two-year period
commencing on the day after the Offering Date or within the one-year period
commencing on the day after the Exercise Date, such Participant shall, within
five (5) days of such disposition, notify the Company thereof (including the
proceeds of such disposition).
18. Reports.
-------
Each Participant having an account balance in the Plan shall receive a
quarterly statement of such Participant's account.
5
<PAGE>
19. Effective Date; Approval of Shareholders.
----------------------------------------
The Plan shall be effective as of July 1, 1998, subject to the approval
of the shareholders of the Company within 12 months before or after the date the
Plan is adopted, and failure to receive such approval shall render the Plan and
all outstanding options issued thereunder void and of no effect.
6
(EXHIBIT 4.4)
ZIFF-DAVIS
1998 INCENTIVE COMPENSATION PLAN
1. Purpose.
-------
The purpose of the Ziff-Davis 1998 Incentive Compensation Plan (the
"Plan") is to promote the growth and performance of Ziff-Davis Inc., a Delaware
corporation (the "Company") and its affiliates, by encouraging employees and
consultants of the Company and its affiliates to acquire an ownership position
in the Company through the holding of common stock of the Company, par value
$0.01 per share (regardless of series, the "Common Stock"), enhancing the
ability of the Company and its affiliates to attract and retain employees and
consultants of outstanding ability, and providing such employees and consultants
with an interest in the Company parallel to that of the Company's shareholders.
2. Plan Administration.
-------------------
The Plan shall be administered by the Board of Directors of the Company
(the "Board"), or by a Compensation Committee (the "Committee") appointed by the
Board which shall, following the initial public offering of the Company's Common
Stock, solely to the extent required to comply with Rule 16b-3 as promulgated
under Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act") and
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), be
composed of "non-employee directors" within the meaning of Rule 16b-3 as
promulgated under the Exchange Act and "outside directors" within the meaning of
Section 162(m) of the Code. To the extent the Plan is administered by the Board,
the term "Committee" shall refer to the Board. A majority of the Committee shall
constitute a quorum, and the acts of the majority of such quorum shall be the
acts of the Committee. Subject to the provisions of the Plan, the Committee (a)
shall select the participants in the Plan ("Participants"), determine the type
of awards ("Awards") to be made to Participants, determine the number of shares
or share units subject to Awards, and (b) shall have the authority to interpret
the Plan, to establish, amend, and rescind any rules and regulations relating to
the Plan, to determine the terms and provisions of any Award agreements entered
into hereunder, and to make all other determinations necessary or advisable for
the administration of the Plan. The Committee may accelerate the exercisability
of any Award granted hereunder, and may correct any defect, supply any omission
or reconcile any inconsistency in the Plan or in any Award in the manner and to
the extent it shall deem desirable to carry it into effect. The determinations
of the Committee in the administration of the Plan, as described herein, shall
be final, conclusive and binding on all persons, including the Company and its
subsidiaries, its Shareholders, Participants and their estates and
beneficiaries. Members of the Committee and any officer or employee of the
Company or any subsidiary acting at the direction of, or on behalf of, the
Committee shall not be personally liable for any action or determination taken
or made in good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified by the Company with respect to any such
action or determination. It is the intention of the Company that the Plan and
the administration thereof comply in all respects with Section 16(b) of the
Exchange Act and the rules and regulations thereunder, and in all events the
Plan shall be construed in favor of its meeting the requirements of Rule 16b-3
promulgated under the Exchange Act.
3. Eligibility.
-----------
All employees and consultants of the Company and its affiliates who have
demonstrated significant management potential or who have the capacity for
contributing in a substantial measure to the successful performance of the
Company and its affiliates, as determined by the Committee, are eligible to be
Participants in the Plan and to receive Awards under Section 5.
<PAGE>
4. Shares Subject to the Plan.
--------------------------
Subject to adjustment as provided in Section 9, under the Plan, up to
23,000,000 shares of Common Stock shall be available for issuance out of
authorized and unissued shares or treasury shares, as the Company may from time
to time determine. In addition, up to 327,500 shares supplied from outstanding
shares of Common Stock held by the majority shareholder of the Company shall be
available for issuance in respect of Awards of stock options granted to certain
participants in connection with the cancellation of such Participants'
corresponding options to purchase stock of SOFTBANK Corp. Shares subject to or
underlying an Award that expires unexercised, or is forfeited, terminated or
canceled, or is paid in cash in lieu of Common Stock and shares that are
tendered to pay for the exercise of a stock option shall thereafter again be
available for grant under the Plan.
5. Types of Awards.
---------------
Awards under the Plan may consist of one or more of the following: stock
awards, stock options (either incentive stock options within the meaning of Code
Section 422 or nonstatutory stock options), stock appreciation rights,
performance shares (which may be granted as performance share units), and
restricted stock (which may be granted as restricted stock units). Awards of
performance shares and restricted stock may provide the Participant with
dividends or dividend equivalents and voting rights prior to vesting (whether
based on a period of time or based on attainment of specified performance
conditions). For purposes of the Plan, with respect to any award granted under
the Plan, references to the term "Common Stock" shall be deemed to refer to the
applicable series of Common Stock with respect to which such award is granted.
(a) Stock Awards. Awards of Common Stock (other than pursuant to
Sections 5(d) and 5(e)) may be granted in the form of actual shares of Common
Stock. At the discretion of the Committee, a stock certificate may be issued in
respect of Stock Awards or a book entry of the Stock Award may be made. If a
certificate is issued, such certificate shall be registered in the name of and
be delivered to the Participant. Full ownership of such shares, whether issued
in the form of a certificate or in book entry, including the right to vote and
receive dividends, shall immediately vest in such Participant.
(b) Stock Options. The Committee shall establish the option price at the
time each stock option is granted, which price shall generally not be less than
100% of the Fair Market Value (as defined below) of the Common Stock on the date
of grant, unless otherwise specifically determined by the Committee. Stock
options shall vest and become exercisable at a rate determined by the Committee,
and shall remain exercisable for such period as specified by the Committee.
The option price of each share as to which a stock option is exercised
shall be paid in full at the time of such exercise in cash, by tender of shares
of Common Stock owned by the Participant valued at Fair Market Value as of the
date of exercise (subject to such guidelines for the tender of Common Stock as
the Committee may establish), by a "sale to cover" broker transaction or other
cashless exercise method permitted under Regulation T of the Federal Reserve
Board, or by a combination of cash, shares of Common Stock and other
consideration as the Committee deems appropriate. In no event may any
Participant receive grants of stock options with respect to more than 1,000,000
shares of Common Stock in any calendar year provided that solely for the 1998
calendar year, no individual employee may receive grants of options with respect
to more than 2,600,000 shares of Common Stock. For purposes of the Plan, "Fair
Market Value" means, per share of Common Stock, the closing price of the Common
Stock on the New York Stock Exchange (the "NYSE") on the applicable date, or, if
there are no sales of Common Stock on the NYSE on such date, then the closing
price of the Common Stock on the last previous day on which a sale on the NYSE
is reported; provided, that prior to the initial public offering of the Common
Stock, Fair Market Value means such value as determined in good faith by the
Committee.
2
<PAGE>
(c) Stock Appreciation Rights. Stock appreciation rights ("SARs") may be
granted in tandem with a stock option, in addition to a stock option, or may be
freestanding and unrelated to a stock option. SARs granted in tandem or in
addition to a stock option may be granted either at the same time as the stock
option or at a later time. SARs shall vest and become exercisable at a rate
determined by the Committee, and shall remain exercisable for such period as
specified by the Committee. A SAR shall entitle the Participant to receive from
the Company an amount equal to the excess of the Fair Market Value of a share of
Common Stock on the exercise of the SAR over the Fair Market Value of a share of
Common Stock on the date of grant. The Committee shall determine in its sole
discretion whether the SAR shall be settled in cash, Common Stock or a
combination of cash and Common Stock. In no event may any Participant receive
grants of stock appreciation rights with respect to more than 500,000 shares of
Common Stock in any calendar year.
(d) Performance Shares. Performance shares may be granted in the form of
actual shares of Common Stock or share units having a value equal to an
identical number of shares of Common Stock. In the event that a stock
certificate is issued in respect of performance shares, such certificate shall
be registered in the name of the Participant but shall be held by the Company
until the time the performance shares are earned. The performance conditions and
the length of the performance period shall be determined by the Committee but in
no event may a performance period be less than 12 months. The Committee shall
determine in its sole discretion whether performance shares granted in the form
of share units shall be paid in cash, Common Stock, or a combination of cash and
Common Stock.
Awards of performance shares to a Covered Employee (as defined below)
shall (unless the Committee determines otherwise) be subject to performance
conditions based on the achievement by the Company relating to one or more of
the following: consolidated operating profit, consolidated net income, funds
from operations, return on or growth in Shareholders' equity, return on net
assets, attainment of specified levels of earnings per share or improvements in
the Company's revenue, share price performance, enterprise value, enterprise
value per share, equity value, EBITDA (earnings before interest, taxes,
depreciation and amortization), free cash flow or any combination of the
foregoing. The Committee shall establish the relevant performance conditions
within 90 days after the commencement of the performance period (or such later
date as may be required or permitted by Section 162(m) of the Code). The
Committee may, in its discretion, reduce or eliminate the amount of payment with
respect to an Award of performance shares to a Covered Employee, notwithstanding
the achievement of a specified performance condition. The maximum number of
performance shares subject to any Award to a Covered Employee shall be 500,000
for the first 12 months during the performance period and each 12-month period
thereafter (or, to the extent the Award is paid in cash, the maximum dollar
amount of any such Award shall be the equivalent cash value of such number of
shares of Common Stock at the closing price on the last day of the performance
period on which shares of Common Stock are traded on the NYSE). An Award of
performance shares to a Participant who is a Covered Employee shall (unless the
Committee determines otherwise) provide that in the event of the employee's
termination of employment prior to the end of the performance period for any
reason, such Award shall be payable only (x) if the applicable performance
conditions are achieved and (y) to the extent, if any, as the Committee shall
determine.
For purposes of the Plan, "Covered Employee" means, at the time of an
Award (or such other time as required or permitted by Section 162(m) of the
Code) (1) the Company's Chief Executive Officer (or an individual acting in such
capacity), (2) any employee of the Company or its subsidiaries who, in the
discretion of the Committee for purposes of determining those employees who are
"covered employees" under Section 162(m) of the Code, is likely to be among the
four other highest compensated officers of the Company for the year in which an
Award is made or payable, and (3) any other employee of the Company or its
subsidiaries designated by the Committee in its discretion.
(e) Restricted Stock. Restricted stock may be granted in the form of
actual shares of Common Stock or share units having a value equal to an
identical number of shares of Common Stock. The employment conditions and the
length of the period for vesting of restricted stock shall be established by the
Committee at time of grant, except that each restriction period shall not be
less than 12 months. In the event that a stock certificate is issued in
3
<PAGE>
respect of restricted stock, such certificate shall be registered in the name of
the Participant but shall be held by the Company until the end of the restricted
period. During the restricted period, shares of restricted stock may not be
sold, assigned, transferred or otherwise disposed of, or pledged or hypothecated
as collateral for a loan or as security for the performance of any obligation or
for any other purpose as the Committee shall determine. The Committee shall
determine in its sole discretion whether restricted stock granted in the form of
share units shall be paid in cash, Common Stock, or a combination of cash and
Common Stock.
6. Award Agreements.
----------------
Each Award under the Plan shall be evidenced by an agreement setting
forth the terms and conditions, as determined by the Committee, which shall
apply to such Award (including the effect upon such Award of a Participant's
termination of employment), in addition to the terms and conditions specified in
the Plan. In the sole discretion of the Committee, a Participant may be
permitted to defer, on such terms and conditions as the Committee shall specify,
the receipt of cash or Common Stock otherwise deliverable under any Award.
7. Withholding.
-----------
The Company shall have the right to deduct from any payment to be made
pursuant to the Plan the amount of any taxes required by law to be withheld
therefrom, or to require a Participant to pay to the Company such amount
required to be withheld prior to the issuance or delivery of any shares of
Common Stock or the payment of cash under the Plan. The Committee may, in its
discretion, permit a Participant to elect to satisfy such withholding obligation
by having the Company retain the number of shares of Common Stock whose Fair
Market Value equals the amount required to be withheld. Any fraction of a share
of Common Stock required to satisfy such obligation shall be disregarded and the
amount due shall instead be paid in cash to the Participant.
8. Nontransferability; Forfeiture.
------------------------------
No Award shall be assignable or transferable, and no right or interest
of any Participant shall be subject to any lien, obligation or liability of the
Participant, except by shall or the laws of descent and distribution.
Notwithstanding the immediately preceding sentence, the Committee may, subject
to the terms and conditions it may specify, permit a Participant to transfer any
stock options (other than incentive stock options) granted to him pursuant to
the Plan to one or more of his immediate family members or to trusts established
in whole or in part for the benefit of the Participant and/or one or more of
such immediate family members. During the lifetime of the Participant, stock
options shall be exercisable only by the Participant or by the immediate family
member or trust to whom such stock options have been transferred in accordance
with this Section 8. For purposes of this Plan, (a) "immediate family" shall
mean the Participant's spouse and issue (including adopted and step children)
and (b) "immediate family members and trusts established in whole or in part for
the benefit of the Participant and/or one or more of such immediate family
members" shall be further limited, if necessary, so that neither the transfer of
a stock option to such immediate family member or trust, nor the ability of a
Participant to make such a transfer shall have adverse consequences to the
Company or the Participant by reason of Section 162(m) of the Code. In addition,
notwithstanding anything in the Plan to the contrary, the Committee may provide
in any Award agreement that such Award may be forfeited for Cause. Furthermore,
no share of Common Stock acquired pursuant to an exercise of a stock option
hereunder shall be transferable or assignable except as provided under Section
14; provided, however, that upon the consummation of an initial public offering
of the Common Stock, such restriction on the transferability or assignability of
the Common Stock acquired upon exercise of a stock option hereunder shall lapse
and be without further effect.
4
<PAGE>
9. Adjustment of and Changes in Stock.
----------------------------------
In the event of any change in the outstanding shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, spinoff, combination or exchange of shares or other corporate
change, or any distributions to common Shareholders other than regular cash
dividends, the Committee may make such substitution or adjustment, if any, as it
deems to be equitable, as to the number or kind of shares of Common Stock or
other securities issued or reserved for issuance pursuant to the Plan and to
outstanding Awards.
10. Change of Control.
-----------------
(a) In the event of a Change of Control, (1) all SARs which have not
been granted in tandem with stock options shall become exercisable in full, (2)
the restrictions applicable to all shares of restricted stock shall lapse and
such shares shall be deemed fully vested and all restricted stock granted in the
form of share units shall be paid in cash, (3) all performance shares shall be
deemed to be earned at target level, (4) all performance shares granted in the
form of share units shall be paid in cash, and (5) all stock options shall be
fully vested and exercisable in full. For purposes of the Plan, "Change in
Control" means the occurrence of any one of the following events:
(A) individuals who, on June 1, 1998, are members of the Board (the
"Incumbent Directors") cease for any reason following June 1, 1998, to
constitute at least a majority of the Board; provided, that any new
director who is approved by a vote of at least a majority of the
Incumbent Directors shall be treated as an Incumbent Director;
(B) the shareholders of the Company approve a merger, consolidation,
statutory share exchange or similar form of corporate transaction in
which the Company is not the surviving corporation or entity; provided,
however, that such approval shall not be a Change in Control if
immediately following such transaction, SOFTBANK Corporation, directly
or indirectly, would be the beneficial owner of more than 25% of the
securities entitled to vote for the election of the board of directors
of the surviving corporation or entity; or
(C) the Shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or
substantially all of the Company's assets.
(b) The Committee, in its sole discretion, may further provide that in
the event of a Change of Control, each Participant shall receive in cancellation
of such Participant's outstanding and unexercised stock options and SARs, a cash
payment in an amount equal to the difference between the option price of such
stock options or, in the case of SARs, the Fair Market Value of a share of
Common Stock on the date of grant and (1) in the event the Change of Control is
the result of a tender offer or exchange offer for the Common Stock, the final
offer price per share paid for the Common Stock, or such lower price as the
Committee may determine with respect to any incentive stock option to preserve
its incentive stock option status, multiplied by the number of shares of Common
Stock covered by such stock options, or (2) in the event the Change of Control
is the result of any other occurrence, the aggregate value of the Common Stock
covered by such stock options, as determined by the Committee at such time;
provided, that such cash payment election shall not be available in the event
such cancellation and payment would prevent the Company from using the
pooling-of-interests method of accounting with respect to the transaction giving
rise to the Change of Control.
(c) In the event that the Committee shall determine, in its sole
discretion, that any payment, acceleration of vesting or lapse of restrictions
with respect to an Award would subject a Participant to an excise tax under
Section 4999 of the Code, such payment shall be reduced (but not below zero) or
such acceleration of vesting or lapse of restrictions shall not occur (a
"Cutback") to the extent necessary to avoid imposition of such excise tax, but
only if by reason of such Cutback the resulting Net After-Tax Benefit (as
defined below) exceeds the Net After-Tax Benefit (determined without giving
effect to this sentence); provided, however, that no Cutback shall occur in
5
<PAGE>
respect of any Participant if (1) any contract or agreement between such
Participant and the Company or any of its affiliates provides otherwise, or (2)
such Cutback would prevent the use of the pooling-of-interests method of
accounting in respect of the transaction giving rise to the Change of Control.
For purposes of the Plan, "Net After-Tax Benefit" means the sum of (x) the total
amount payable to the Participant hereunder, plus (y) all other benefits and
payments which are payable to or for the benefit of such Participant that
constitute "parachute payments" within the meaning of Code Section 280G, less
(z) the amount of federal, state and local income taxes and other taxes
(including any excise tax imposed under Code Section 4999) payable with respect
to the foregoing amounts, calculated assuming the Participant was subject to the
maximum income tax rates for each year in which such foregoing amounts are paid.
The Committee may, in its discretion, include such further provisions and
limitations in any agreement documenting such Awards as it may deem equitable
and in the best interests of the Company.
11. No Right to Employment.
----------------------
No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Company or its subsidiaries. Further, the Company
and its subsidiaries expressly reserve the right at any time to dismiss a
Participant free from any liability, or any claim under the Plan, except as
provided herein or in any Award agreement entered into hereunder.
12. Governmental Compliance.
-----------------------
Each Award under the Plan shall be subject to the requirement that if at
any time the Committee shall determine that the listing, registration or
qualification of any shares issuable or deliverable thereunder upon any
securities exchange or under any Federal or state law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition thereof, or in connection therewith, no such grant or award may be
exercised or shares issued or delivered unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
13. Amendment and Termination.
-------------------------
The Board may amend, suspend or terminate the Plan or any portion
thereof at any time, provided that (a) no amendment shall be made without
shareholder approval (including an amendment to increase the number of shares
reserved for issuance under the Plan) if such approval is necessary in order for
the Plan to comply with any applicable law, regulations or stock exchange rule,
and (b) except as provided in Section 10, no amendment shall be made that would
adversely affect the rights of a Participant under any Award previously granted,
without such Participant's written consent.
14. Sale to Company.
---------------
(a) Except as provided in Section 14(c), and subject to the provisions
of the Plan, an optionee that acquires shares of Common Stock pursuant to the
exercise of a stock option hereunder shall be permitted to put to the Company
such shares of Common Stock at Fair Market Value as of the date of sale, in
accordance with regulations and procedures established by the Committee for such
purpose; provided, however, that no such shares of Common Stock shall be
permitted to be put to the Company unless such shares of Common Stock have been
held by the optionee for at least six months as of the date of sale.
6
<PAGE>
(b) Except as provided in Section 14(c), in the event of an optionee's
termination of employment for any reason whatsoever, the Company shall have the
right to call shares of Common Stock acquired by such optionee pursuant to the
exercise of a stock option hereunder at Fair Market Value as of the date of
sale. The Company may exercise its right to call with respect to all or any
portion of the shares of Common Stock subject to such call, and if the Company
calls only a portion of such shares, the remaining shares shall continue to be
subject to the Company's right to call.
(c) Notwithstanding the provisions of Sections 14(a) and 14(b), in the
event of an initial public offering of the Common Stock, the put rights of an
optionee under Section 14(a), and the call rights of the Company under Section
14(b), shall terminate immediately and be without further force or effect.
15. Effective Date; Approval of Shareholders.
----------------------------------------
The Plan shall be effective as of February 13, 1998 (the "Effective
Date"). Subject to earlier termination pursuant to Section 13, the Plan shall
have a term of ten years from its Effective Date. The Plan is conditioned upon
the approval of the Shareholders of the Company prior to the initial public
offering of shares of Common Stock of the Company, and failure to receive such
approval shall render the Plan and all outstanding Awards issued thereunder void
and of no effect.
7
(EXHIBIT 4.5)
ZIFF-DAVIS
1998 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. Purpose.
-------
The purpose of the Ziff-Davis 1998 Non-Employee Directors' Stock Option
Plan (the "Plan") is to promote the interests of Ziff-Davis Inc., a Delaware
corporation (the "Company") and its affiliates and shareholders, by allowing the
Company to attract and retain highly qualified directors who are not employees
of the Company, SOFTBANK Corp., SOFTBANK Holdings Inc. or SOFTBANK America Inc.
("Non-Employee Directors") by permitting such Non-Employee Directors to obtain
or increase their ownership position in the Company through the holding of
common stock of the Company, par value $0.01 per share (regardless of series,
the "Common Stock"), and providing such Non-Employee Directors with an interest
in the Company parallel to that of the Company's shareholders.
2. Plan Administration.
-------------------
The Plan shall be administered by the Board of Directors of the Company
(the "Board") or by a Compensation Committee appointed by the Board. A majority
of the Committee shall constitute a quorum, and the acts of the majority of such
quorum shall be the acts of the Committee. Subject to the provisions of the
Plan, the Committee shall have the authority to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any option agreements entered into
hereunder, and to make all other determinations necessary or advisable for the
administration of the Plan. The Committee may accelerate the exercisability of
any option granted hereunder, and may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or in any option agreement in the manner
and to the extent it shall deem desirable to carry it into effect. The
determinations of the Committee in the administration of the Plan, as described
herein, shall be final, conclusive and binding on all persons, including the
Company and its subsidiaries, its shareholders, Non-Employee Directors and their
estates and beneficiaries. Members of the Committee and any officer or employee
of the Company or any subsidiary acting at the direction of, or on behalf of,
the Committee shall not be personally liable for any action or determination
taken or made in good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified by the Company with respect to any such
action or determination. It is the intention of the Company that the Plan and
the administration thereof comply in all respects with Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations thereunder, and in all events the Plan shall be construed in
favor of its meeting the requirements of Rule 16b-3 promulgated under the
Exchange Act.
3. Eligibility.
-----------
Each Non-Employee Director is eligible to receive awards of stock
options ("Awards") under Section 5.
4. Shares Subject to the Plan.
--------------------------
Subject to adjustment as provided in Section 8, the number of shares of
Common Stock available for the grant of Awards under the Plan shall not exceed
300,000 shares. The shares issued under the Plan may be authorized and unissued
shares or treasury shares, as the Company may from time to time determine.
Shares subject to or underlying an Award that expires unexercised, or is
forfeited, terminated or canceled, or is paid in cash in lieu of Common Stock
and shares that are tendered to pay for the exercise of a stock option shall
thereafter again be available for grant under the Plan.
<PAGE>
5. Awards.
------
(a) Non-Discretionary Grants. Each Non-Employee Director shall receive
upon election as a member of the Board an initial grant of stock options
("Initial Grant") to purchase 15,000 shares of Common Stock; which, in the event
of a reclassification of the Common Stock into (x) a series of Common Stock that
is intended to reflect the performance of the ZDNet division of the Company
("ZDNet Common Stock"), and (y) a series of Common Stock that is intended to
reflect the performance of the business of the Company other than the ZDNet
division, plus a retained interest in the ZDNet division ("ZD Common Stock")
(the "Reclassification"), shall be composed of 15,000 shares of ZD Common Stock;
provided that following an initial public offering of the ZDNet Common Stock,
the Initial Grant shall be composed of Shares of ZD Common Stock and shares of
ZDNet Common Stock in such proportion as determined by the Committee; provided
that each Non-Employee Director who is on the Board on the date of the initial
public offering of Common Stock (prior to the Reclassification) shall receive
such Initial Grant on the date of such initial public offering; provided,
further that each Non-Employee Director who is on the Board on the date of the
initial public offering of ZDNet Common Stock shall receive a grant of stock
options to purchase 25,000 shares of ZDNet Common Stock on the date of such
offering at the initial public offering price, which shall vest and become
exercisable with respect to 25% of the shares on December 31 of the year in
which the consummation of the offering occurs, and an additional 6.25% of the
shares at the end of each three-month period thereafter. On the date of each
annual shareholders meeting thereafter, each Non-Employee Director shall
automatically receive an annual grant of stock options to purchase 7,500
additional shares of Common Stock which, following the Reclassification, shall
be composed of 7,500 shares of ZD Common Stock; provided that following an
initial public offering of the ZDNet Common Stock, such annual grant shall be
composed of shares of ZD Common Stock and shares of ZDNet Common Stock in such
proportion as determined by the Committee; provided that a Non-Employee Director
shall not receive such annual grant of options to purchase 7,500 shares of
common stock in any year in which such Non-Employee Director also receives the
Initial Grant. Except as otherwise provided above in this Section 5(a), and
unless otherwise determined by the Committee in its discretion, the terms of
each stock option granted under this Section 5(a) shall provide that (1) the
option price shall be equal to 100% of the Fair Market Value of the Common Stock
on the date of grant, (2) such option shall not be exercisable for a period more
than 10 years following the date of grant, and (3) such option shall vest and
become exercisable with respect to 20% of the shares on the first anniversary of
the date of grant, and an additional 5% of the shares at the end of each
three-month period thereafter. For purposes of the Plan, "Fair Market Value"
means, per share of Common Stock, the closing price of the Common Stock on the
New York Stock Exchange (the "NYSE") on the applicable date, or, if there are no
sales of Common Stock on the NYSE on such date, then the closing price of the
Common Stock on the last previous day on which a sale on the NYSE is reported;
provided that prior to the initial public offering of the Common Stock, Fair
Market Value means such value as determined in good faith by the Committee.
Unless otherwise determined by the Committee in its discretion, if an optionee
ceases to be a Non-Employee Director, options granted under this Section 5(a)
shall terminate except with respect to any portion of such option then
exercisable, which portion shall remain exercisable for a period of (x) 90 days,
if the termination as Non-Employee Director resulted from any reason other than
death, disability or cause, or (y) one year, if the termination resulted from
death or disability; provided that in the event the termination resulted from a
removal for cause, such option shall immediately terminate and no longer be
exercisable to any extent; provided, further, that in no event shall any such
option remain exercisable past the remainder of its scheduled ten-year term. For
purposes of the Plan, with respect to any stock option granted under the Plan,
references to the term "Common Stock" shall be deemed to refer to the applicable
series of Common Stock with respect to which such option is granted.
(b) Method of Exercise. The option price of each share as to which a
stock option is exercised shall be paid in full at the time of such exercise in
cash, by tender of shares of Common Stock owned by the Non-Employee Director
valued at Fair Market Value as of the date of exercise (subject to such
guidelines for the tender of Common Stock as the Committee may establish), by a
"sale to cover" broker transaction or other cashless exercise method permitted
under Regulation T of the Federal Reserve Board, or by a combination of cash,
shares of Common Stock and other consideration as the Committee deems
appropriate.
2
<PAGE>
(c) Discretionary Grants. In addition, each Non-Employee Director shall
be eligible to receive additional grants of stock options to purchase Common
Stock from time to time on such terms and conditions as the Committee shall
determine.
6. Award Agreements.
----------------
Each Award under the Plan shall be evidenced by an agreement setting
forth the terms and conditions, as determined by the Committee, which shall
apply to such Award, in addition to the terms and conditions specified in the
Plan. In the sole discretion of the Committee, a Non-Employee Director may be
permitted to defer, on such terms and conditions as the Committee shall specify,
the receipt of Common Stock otherwise deliverable under any Award.
7. Nontransferability; Forfeiture.
------------------------------
No Award shall be assignable or transferable, and no right or interest
of any Non-Employee Director shall be subject to any lien, obligation or
liability of the Non-Employee Director, except by shall or the laws of descent
and distribution. Notwithstanding the immediately preceding sentence, the
Committee may, subject to the terms and conditions it may specify, permit a
Non-Employee Director to transfer any stock options granted to him pursuant to
the Plan to one or more of his immediate family members or to trusts established
in whole or in part for the benefit of the Non-Employee Director and/or one or
more of such immediate family members. During the lifetime of the Non-Employee
Director, stock options shall be exercisable only by the Non-Employee Director
or by the immediate family member or trust to whom such stock options have been
transferred in accordance with this Section 7. For purposes of this Plan,
"immediate family" shall mean the Non-Employee Director's spouse and issue
(including adopted and stepchildren). In addition, notwithstanding anything in
the Plan to the contrary, the Committee may provide in any Award agreement that
such Award may be forfeited for Cause (as determined by the Committee).
8. Adjustment of and Changes in Stock.
----------------------------------
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spinoff, combination or exchange of shares or other corporate change, or any
distributions to common shareholders other than regular cash dividends, the
Committee may make such substitution or adjustment, if any, as it deems to be
equitable, as to the number or kind of shares of Common Stock or other
securities issued or reserved for issuance pursuant to the Plan and to
outstanding Awards.
9. Change of Control.
-----------------
(a) In the event of a Change of Control, all stock options shall be
fully vested and exercisable in full. For purposes of the Plan, "Change in
Control" means the occurrence of any one of the following events:
(1) individuals who, on June 1, 1998, are members of the Board (the
"Incumbent Directors") cease for any reason following June 1, 1998 to
constitute at least a majority of the Board; provided that any new
director who is approved by a vote of at least a majority of the
Incumbent Directors shall be treated as an Incumbent Director;
(2) the shareholders of the Company approve a merger, consolidation,
statutory share exchange or similar form of corporate transaction in
which the Company is not the surviving corporation or entity; provided,
however, that such approval shall not be a Change in Control if
immediately following such transaction, SOFTBANK Corporation, directly
or indirectly, would be the beneficial owner of more than 25% of the
securities entitled to vote for the election of the board of directors
of the surviving corporation or entity; or
3
<PAGE>
(3) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or
substantially all of the Company's assets.
(b) The Committee, in its sole discretion, may further provide that in
the event of a Change of Control, each Non-Employee Director shall receive in
cancellation of such Non-Employee Director's outstanding and unexercised stock
options, a cash payment in an amount equal to the difference between the option
price of such stock options and (A) in the event the Change of Control is the
result of a tender offer or exchange offer for the Common Stock, the final offer
price per share paid for the Common Stock, or such lower price as the Committee
may determine with respect to any incentive stock option to preserve its
incentive stock option status, multiplied by the number of shares of Common
Stock covered by such stock options, or (B) in the event the Change of Control
is the result of any other occurrence, the aggregate value of the Common Stock
covered by such stock options, as determined by the Committee at such time;
provided that such cash payment election shall not be available in the event
such cancellation and payment would prevent the Company from using the
pooling-of-interests method of accounting with respect to the transaction giving
rise to the Change of Control.
10. Governmental Compliance.
-----------------------
Each Award under the Plan shall be subject to the requirement that if at
any time the Committee shall determine that the listing, registration or
qualification of any shares issuable or deliverable thereunder upon any
securities exchange or under any Federal or state law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition thereof, or in connection therewith, no such grant or award may be
exercised or shares issued or delivered unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
11. Amendment and Termination.
-------------------------
The Board may amend, suspend or terminate the Plan or any portion
thereof at any time, provided that (a) no amendment shall be made without
shareholder approval (including an amendment to increase the number of shares
reserved for issuance under the Plan) if such approval is necessary in order for
the Plan to comply with any applicable law, regulations or stock exchange rule,
and (b) except as provided in Section 9, no amendment shall be made that would
adversely affect the rights of a Non-Employee Director under any Award
previously granted, without such Non-Employee Director's written consent.
12. Effective Date; Approval of Shareholders.
----------------------------------------
The Plan shall be effective as of February 13, 1998. Subject to earlier
termination pursuant to Section 11, the Plan shall have a term of ten years from
its Effective Date. The Plan is conditioned upon the approval of the
shareholders of the Company prior to the initial public offering of shares of
Common Stock of the Company, and failure to receive such approval shall render
the Plan and all outstanding Awards issued thereunder void and of no effect.
4
<TABLE>
<S> <C>
SULLIVAN & CROMWELL
NEW YORK TELEPHONE: (212) 558-4000
TELEX: 62694 (INTERNATIONAL) 127816 (DOMESTIC) 125 Broad Street, New York 10004-2498
CABLE ADDRESS: LADYCOURT, NEW YORK __________
FACSIMILE: (212) 558-3588 (125 Broad Street)
1701 PENNSYLVANIA AVE, N.W., WASHINGTON, D.C. 20006-5805
1888 CENTURY PARK EAST, LOS ANGELES 90067-1725
8, PLACE VENDOME, 75001 PARIS
ST. OLAVE'S HOUSE, 9a IRONMONGER LANE, LONDON EC2V 8EY
101 COLLINS STREET, MELBOURNE 3000
2-1, MARUNOUCHI 1-CHOME, CHIYODA-KU, TOKYO 100
NINE QUEEN'S ROAD, CENTRAL, HONG KONG
OBERLINDAU 54-56, 60323 FRANKFURT AM MAIN
</TABLE>
EXHIBIT 5.1
[Letterhead of Sullivan & Cromwell]
May 26, 1999
Ziff-Davis Inc.,
28 East 28th Street,
New York, New York 10016.
Dear Sirs:
In connection with the registration under the Securities Act of 1933
(the "Act") of 1,800,000 shares (the "Securities") of Ziff-Davis Inc. - ZD
Common Stock, par value $.01 per share (the "ZD Stock"), and 14,100,000 shares
of Ziff-Davis Inc. - ZDNet Common Stock, par value $.01 per share (the "ZDNet
Stock"), of Ziff-Davis Inc., a Delaware corporation (the "Company"), which shall
be newly issued by the Company after the date hereof pursuant to the terms of
the Ziff-Davis Inc. 1998 Employee Stock Purchase Plan, 1998 Incentive
Compensation Plan and 1998 Non-Employee Directors' Stock Option Plan, we, as
your counsel, have examined such corporate records, certificates and other
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our opinion,
when the registration statement relating to the
<PAGE>
Securities (the "Registration Statement") has become effective under the Act,
the terms of the issue and sale of the Securities have been duly established in
conformity with the Company's amended and restated certificate of incorporation,
and the Securities have been duly issued and sold as contemplated by the
Registration Statement and the terms of the 1998 Employee Stock Purchase Plan,
1998 Incentive Compensation Plan and 1998 Non-Employee Directors' Stock Option
Plan under which such Securities are to be issued, the Securities shall be
validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the Federal laws of the United
States and the General Corporation Law of the State of Delaware, and we are
expressing no opinion as to the effect of the laws of any other jurisdiction.
With your approval, we have relied as to certain matters on information
obtained from public officials, officers of the Company and other sources
believed by us to be responsible, and we have assumed that the certificates for
the Securities will conform to the specimens thereof examined by us and will be
duly countersigned by a transfer agent and duly registered by a registrar of the
ZD Stock and the ZDNet Stock, respectively, and that the signatures on all
documents examined by us are genuine, assumptions which we have not
independently verified.
2
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
SULLIVAN & CROMWELL
3
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Ziff-Davis Inc., of (I) our report dated February 22,
1999 appearing on page F16 of Ziff-Davis Inc's Annual Report on Form 10-K for
the year ended December 31, 1998, (II) our report dated February 22, 1999
appearing on page F5 of Ziff Davis Inc's Form S-1 (No. 333-69447) relating to
the Combined Financial Statements of ZDNet (a division of Ziff Davis Inc) for
the year ended December 31, 1998 and (III) our report dated February 22, 1999
appearing on page F33 of Ziff Davis Inc's Form S-1 (No. 333-69447) relating to
the Combined Financial Statements of ZD (a division of Ziff Davis Inc) for the
year ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
New York, New York
May 26, 1999
