<PAGE> 1
As filed with the Securities and Exchange Commission on February 10, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
GOTO.COM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------
DELAWARE 95-4652060
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
74 NORTH PASADENA AVENUE
THIRD FLOOR
PASADENA, CA 91103
(626) 685-5600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------
CADABRA INC. 1998 STOCK PLAN
(FULL NAME OF PLAN)
----------
TED MEISEL
CHIEF EXECUTIVE OFFICER
GOTO.COM, INC.
74 NORTH PASADENA AVENUE, THIRD FLOOR
PASADENA, CA 91103
(626) 685-5600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------
Copies to:
MARTIN W. KORMAN, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
----------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO TO BE PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED PER SHARE PRICE FEE
=======================================================================================================
<S> <C> <C> <C> <C>
Common Stock issuable under Cadabra Inc.
1998 Stock Plan............................ 214,833 $1.51(1) $324,398 $86.00
- -------------------------------------------------------------------------------------------------------
TOTALS................................ 214,833 $86.00
=======================================================================================================
</TABLE>
(1) Computed in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. Computation based on the weighted average
per share price (rounded to the nearest cent) of options granted under the
referenced plan, the shares issuable under which are registered hereby.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference in this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Quarterly Reports on Form 10-Q for the fiscal quarters
ended June 30, 1999 and September 30, 1999, filed pursuant to the Securities
and Exchange Act of 1934 (the "Exchange Act").
(b) The Registrant's Current Report on Form 8-K dated February 3, 2000 filed
with the Commission.
(c) The Registrant's prospectus filed pursuant to Rule 424(b) on or about June
18, 1999.
(d) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A (File No. 000-26365) filed on June 15,
1999 under the Exchange Act and any amendment or report subsequently filed
for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the filing of this
Registration Statement, and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which de-registers
all securities then remaining unsold, shall be deemed to be incorporated by
reference in the Registration Statement and to be part hereof from the date of
filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
As of the date of this filing, certain investment partnerships composed
of certain current and former members of and persons associated with Wilson
Sonsini Goodrich & Rosati, Professional Corporation, as well as certain
individual attorneys of such firm, beneficially own an aggregate of 164,894
shares of GoTo.com's common stock on an as-converted to common stock basis.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). The Registrant's Certificate of Incorporation and Bylaws provide that the
Registrant shall indemnify its directors and officers to the fullest extent
permitted by Delaware law, including circumstances in which indemnification is
otherwise discretionary under Delaware law.
The Registrant currently carries indemnity insurance pursuant to which
its directors and officers are insured under certain circumstances against
certain liabilities or losses, including liabilities under the Securities Act.
The Registrant has entered into indemnity agreements with certain directors and
executive officers. These agreements, among other things, indemnify the
directors and executive officers for certain expenses (including attorneys'
fees), judgments, fines, and settlement payments incurred by such persons in any
action, including any action by or in the right of the Registrant, in connection
with the good faith performance of their duties as a director or officer. The
indemnification agreements also provide for the advance payment by the
Registrant of defense expenses incurred by the director or officer; however, the
affected director or officer must undertake to repay such amounts advanced if it
is ultimately determined that such director or officer is not entitled to be
indemnified.
II-1
<PAGE> 3
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMS.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
4.1 Cadabra Inc. 1998 Stock Plan.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) Rule 415 Offering. The undersigned registrant hereby undertakes:
1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 ((Section)239.13 of this
chapter) or Form S-8 ((Section)239.16b of this chapter), and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(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
II-2
<PAGE> 4
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the Delaware General Corporations Law, the
Certificate of Incorporation of the Registrant, the Bylaws of the Registrant,
Indemnification Agreements entered into between the Registrant and its officers
and directors, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Pasadena, State of California, on February 10, 2000.
GOTO.COM, INC.
By: /s/ Ted Meisel
-----------------------------
Ted Meisel
President and Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Ted Meisel and Todd Tappin and
each of them severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Registration Statement on Form S-8 and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and conforming all that each said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<S> <C>
Date: February 10, 2000 /s/ Jeffrey S. Brewer
-------------------------------------------------
Jeffrey S. Brewer, Chairman of the Board
Date: February 10, 2000 /s/ Ted Meisel
-------------------------------------------------
Ted Meisel, President, Chief Executive Officer
and Director (Principal Executive Officer)
Date: February 10, 2000 /s/ Todd Tappin
-------------------------------------------------
Todd Tappin, Chief Financial Officer,
(Principal Financial Officer and Principal
Accounting Officer)
Date: February 10, 2000 /s/ Timothy Draper
-------------------------------------------------
Timothy Draper, Director
</TABLE>
II-4
<PAGE> 6
<TABLE>
<S> <C>
Date: February 10, 2000 /s/ William Elkus
-------------------------------------------------
William Elkus, Director
Date: February 10, 2000 /s/ William Gross
-------------------------------------------------
William Gross, Director
Date: February 10, 2000 /s/ Robert M. Kavner
-------------------------------------------------
Robert M. Kavner, Director
Date: February 10, 2000 /s/ Linda Fayne Levinson
-------------------------------------------------
Linda Fayne Levinson, Director
</TABLE>
II-5
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
4.1 Cadabra Inc. 1998 Stock Plan.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
II-6
<PAGE> 1
EXHIBIT 4.1
CADABRA INC.
(FORMERLY TESSERAE INFORMATION SYSTEMS, INC. )
1998 STOCK OPTION PLAN
AS ADOPTED JANUARY 21, 1998 AND AMENDED MARCH 1, 1999
1. PURPOSE. The purpose of this Plan is to provide incentives
to attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent and
Subsidiaries, by offering them an opportunity to participate in the Company's
future performance through awards of Options. Capitalized terms not defined in
the text are defined in Section 21 hereof. This Plan is intended to be a written
compensatory benefit plan within the meaning of Rule 701 promulgated under the
Securities Act.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections
2.2 and 16 hereof, the total number of Shares reserved and available for grant
and issuance pursuant to this Plan will be 2,750,000 Shares or such lesser
number of Shares as permitted under Section 260.140.45 of Title 10 of the
California Code of Regulations. Subject to Sections 2.2 and 16 hereof, Shares
that are subject to issuance upon exercise of an Option but cease to be subject
to such Option for any reason other than exercise of such Option will be
available for grant and issuance in connection with future Options under this
Plan. At all times the Company will reserve and keep available a sufficient
number of Shares as will be required to satisfy the requirements of all
outstanding Options granted under this Plan.
2.2 Adjustment of Shares. In the event that the
number of outstanding shares of the Company's Common Stock 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 and (b) the Exercise Prices of and number of Shares
subject to outstanding Options, will be proportionately adjusted, subject to any
required action by the Board or the shareholders of the Company and compliance
with applicable securities laws; provided, however, that fractions of a Share
will not be issued but will either be paid in cash at the Fair Market Value of
such fraction of a Share or will be rounded down to the nearest whole Share, as
determined by the Committee in its discretion.
3. ELIGIBILITY. ISOs (as defined in Section 5 hereof) 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. NQSOs (as
defined in Section 5 hereof) may be granted to employees, officers, directors
and consultants of the Company
1
<PAGE> 2
or of any Parent or Subsidiary of the Company; provided such consultants render
bona fide services not in connection with the offer and sale of securities in a
capital-raising transaction. A person may be granted more than one Option under
this Plan.
4. ADMINISTRATION.
4.1 Committee Authority. This Plan will be
administered by the Committee or the Board acting as the Committee. Subject to
the general purposes, terms and conditions of this Plan, and to the direction of
the Board, the Committee has full power to implement and carry out this Plan.
Without limitation, the Committee has the authority to:
(a) construe and interpret this Plan, any Stock Option
Agreement or Exercise Agreement (each as defined in
Section 5 hereof) and any other agreement or document
executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and
regulations relating to this Plan;
(c) select persons to receive Options;
(d) determine the form and terms of Options;
(e) determine the number of Shares or other
consideration subject to Options;
(f) determine whether Options will be granted singly, in
combination with, in tandem with, in replacement of,
or as alternatives to, any Options granted under this
Plan or any awards under any other incentive or
compensation plan of the Company or any Parent or
Subsidiary of the Company;
(g) grant waivers of Plan or Option conditions;
(h) determine the vesting and exercisability of
Options;
(i) correct any defect, supply any omission, or reconcile
any inconsistency in this Plan, any Option or any
Stock Option Agreement or Exercise Agreement (each as
defined in Section 5 hereof);
(j) determine whether an Option has been earned;
and
2
<PAGE> 3
(k) make all other determinations necessary or
advisable for the administration of this Plan.
4.2 Committee Discretion. Any determination made by
the Committee with respect to any Option will be made in its sole discretion at
the time of grant of the Option or, unless in contravention of any express term
of this Plan or Option, and subject to Section 5.9 hereof, at any later time,
and such determination will be final and binding on the Company and on all
persons having an interest in any Option under this Plan. The Committee may
delegate to one or more officers of the Company the authority to grant Options
under this Plan.
5. OPTIONS. The Committee may grant Options to eligible
persons and will determine whether such Options will be Incentive Stock Options
within the meaning of the Code ("ISOS") 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 Agreement which will expressly identify the
Option as an ISO or an NQSO ("STOCK OPTION AGREEMENT"), 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 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.
5.3 Exercise Period. Options may be exercisable
immediately (subject to repurchase pursuant to Section 10 hereof) or 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 SHAREHOLDER") will
be exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee 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. Subject to earlier termination
of the Option as provided herein, each Participant who is not an officer,
director or consultant of the Company or of a Parent or Subsidiary of the
Company shall have the right to exercise an Option granted hereunder at the rate
of at least twenty percent (20%) per year over five (5) years from the date such
Option is granted.
5.4 Exercise Price. The Exercise Price of an Option
will be determined by the Committee when the Option is granted and may not be
less than eighty five percent (85%) of the Fair Market Value of the Shares on
the date of grant; provided that (a) the Exercise Price of an ISO will not be
less than one hundred percent (100%) of the Fair Market Value of the Shares on
the date of grant and (b) the Exercise Price of any Option granted to a Ten
Percent Shareholder will not be less than one hundred ten percent (110%) of the
Fair Market Value of the Shares on the date of grant. Payment for the Shares
purchased must be made in accordance with Section 6 hereof.
3
<PAGE> 4
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 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, and any applicable taxes, for the
number of Shares being purchased.
5.6 Termination. Subject to earlier termination
pursuant to Sections 16 or 17 hereof and 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, Disability or Cause, then the
Participant may exercise such Participant's Options,
only to the extent that such Options are exercisable
on the Termination Date and such Options must be
exercised by the Participant, if at all, as to all or
some of the Vested Shares calculated as of the
Termination Date, within three (3) months after the
Termination Date (or within such shorter time period,
not less than thirty (30) days after the Termination
Date, or such longer time period not exceeding five
(5) years after the Termination Date as may be
determined by the Committee, with any exercise after
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 Participant's
Termination other than for Cause), then Participant's
Options may be exercised, only to the extent that
such Options are exercisable by Participant on the
Termination Date and must be exercised by Participant
(or Participant's legal representative or authorized
assignee), if at all, as to all or some of the Vested
Shares calculated as of the Termination Date, within
twelve (12) months after the Termination Date (or
within such shorter time period, not less than six
(6) months after the Termination Date, or such longer
time period not exceeding five (5) years after the
Termination Date as may be determined by the
Committee, with any exercise after (i) three (3)
months after the Termination Date when the
Termination is for any reason other than the
Participant's death or disability, within the meaning
of Code Section 22(e)(3), or (ii) twelve (12) months
after the Termination Date when the Termination is
because of Participant's disability, within the
meaning of Code Section 22(e)(3), deemed to be an
NQSO), but in any event no later than the expiration
date of the Options.
(c) If the Participant is terminated for Cause, then
Participant's Options shall expire on such
Participant's Termination Date, or at such later time
and on such conditions as are determined by the
Committee.
5.7 Limitations on Exercise. The Committee may
specify a reasonable minimum number of Shares that may be purchased on 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.
4
<PAGE> 5
5.8 Limitations on ISOs. The aggregate Fair Market
Value (determined as of the date of grant) of Shares with respect to which ISOs
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
or any 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 ISOs 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 ISOs 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 (as defined in Section 17 hereof) to provide for a
different limit on the Fair Market Value of Shares permitted to be subject to
ISOs, then such different limit will be automatically incorporated herein and
will apply to any Options granted after the effective date of such amendment.
5.9 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 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. Subject to Section 5.10 hereof, 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 5.4 hereof for Options granted on the date the action is
taken to reduce the Exercise Price.
5.10 No Disqualification. Notwithstanding any other
provision in this Plan, no term of this Plan relating to ISOs 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. PAYMENT FOR SHARE PURCHASES.
6.1 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: (i) either (A) have been
owned by the 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 (B)
were obtained by the Participant in the public market
and (ii) are clear of all liens, claims, encumbrances
or security interests;
(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;
5
<PAGE> 6
(d) by waiver of compensation due or accrued to the
Participant for services rendered;
(e) provided that a public market for the Company's stock
exists:
(1) 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
(2) through a "margin" commitment from the
Participant and an 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.
6.2 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.
7. WITHHOLDING TAXES.
7.1 Withholding Generally. Whenever Shares are to be
issued in satisfaction of Options 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 Options are to be made in cash, such payment will be
net of an amount sufficient to satisfy federal, state, and local withholding tax
requirements.
7.2 Stock Withholding. When, under applicable tax
laws, the Participant incurs tax liability in connection with the exercise or
vesting of any Option 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 purpose will be made in accordance with the
requirements established by the Committee and be in writing in a form acceptable
to the Committee.
8. PRIVILEGES OF STOCK OWNERSHIP.
6
<PAGE> 7
8.1 Voting and Dividends. No Participant will have
any of the rights of a shareholder 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 shareholder and have all the rights of a shareholder 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 the
Participant will have no right to retain such stock dividends or stock
distributions with respect to Unvested Shares that are repurchased pursuant to
Section 10 hereof. The Company will comply with Section 260.140.1 of Title 10 of
the California Code of Regulations with respect to the voting rights of Common
Stock.
8.2 Financial Statements. The Company will provide
financial statements to each Participant prior to such Participant's purchase of
Shares under this Plan, and to each Participant annually during the period such
Participant has Options outstanding, or as otherwise required under Section
260.140.46 of Title 10 of the California Code of Regulations. Notwithstanding
the foregoing, the Company will not be required to provide such financial
statements to Participants when issuance is limited to key employees whose
services in connection with the Company assure them access to equivalent
information.
9. TRANSFERABILITY. Options 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. During the lifetime of the
Participant an Option will be exercisable only by the Participant or
Participant's legal representative and any elections with respect to an Option
may be made only by the Participant or Participant's legal representative.
10. RESTRICTIONS ON SHARES.
10.1 Right of First Refusal. At the discretion of the
Committee, the Company may reserve to itself and/or its assignee(s) in the Stock
Option Agreement a right of first refusal to purchase all Shares that a
Participant (or a subsequent transferee) may propose to transfer to a third
party, unless otherwise not permitted by Section 25102(o) of the California
Corporations Code, provided, that such right of first refusal terminates upon
the Company's initial public offering of Common Stock pursuant to an effective
registration statement filed under the Securities Act.
10.2 Right of Repurchase. At the discretion of the
Committee, the Company may reserve to itself and/or its assignee(s) in the Stock
Option Agreement a right to repurchase Unvested Shares held by a Participant
following such Participant's Termination at any time within ninety (90) days
after Participant's Termination Date (or in the case of securities issued upon
exercise of an Option after the Participant's Termination Date, within ninety
(90) days after the date of such exercise) for cash and/or cancellation of
purchase money indebtedness, at the Participant's Exercise Price, provided, that
to the extent the Participant is not an officer, director or consultant of the
Company or of a Parent or Subsidiary of the Company such right to repurchase
Unvested Shares lapses at the rate of at least twenty percent (20%) per year
over five (5) years from the date of grant of the Option.
11. 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.
7
<PAGE> 8
12. 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.
13. EXCHANGE AND BUYOUT OF OPTIONS. The Committee may, at any
time or from time to time, authorize the Company, with the consent of the
respective Participants, to issue new Options in exchange for the surrender and
cancellation of any or all outstanding Options. The Committee may at any time
buy from a Participant an Option previously granted with payment in cash, shares
of Common Stock of the Company (including restricted stock) or other
consideration, based on such terms and conditions as the Committee and the
Participant may agree.
14. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. This Plan
is intended to comply with Section 25102(o) of the California Corporations Code.
Any provision of this Plan which is inconsistent with Section 25102(o) shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o). An Option will not be
effective unless such Option 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 Option 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) compliance with any exemption,
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 exemption,
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.
15. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any
Option 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.
16. CORPORATE TRANSACTIONS.
16.1 Assumption or Replacement of Options by
Successor or Acquiring Company. 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, (c) a merger in which the Company is the surviving
corporation but after which the shareholders
8
<PAGE> 9
of the Company immediately prior to such merger (other than any shareholder
which merges with the Company in such merger, or which owns or controls another
corporation which merges, with the Company in such merger) cease to own their
shares or other equity interests in the Company, or (d) the sale of all or
substantially all of the assets of the Company, any or all outstanding Options
may be assumed, converted or replaced by the successor or acquiring corporation
(if any), which assumption, conversion or replacement will be binding on all
Participants. In the alternative, the successor or acquiring corporation may
substitute equivalent Options or provide substantially similar consideration to
Participants as was provided to shareholders (after taking into account the
existing provisions of the Options). The successor or acquiring 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 and other provisions no less favorable to the
Participant than those which applied to such outstanding Shares immediately
prior to such transaction described in this Section 16.1. In the event such
successor or acquiring corporation (if any) refuses to assume or substitute
Options, as provided above, pursuant to a transaction described in this Section
16.1, then notwithstanding any other provision in this Plan to the contrary,
such Options will expire on such transaction at such time and on such conditions
as the Board will determine.
16.2 Other Treatment of Options. Subject to any
greater rights granted to Participants under the foregoing provisions of this
Section 16, in the event of the occurrence of any transaction described in
Section 16.1 hereof, any outstanding Options will be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution, liquidation
or sale of assets.
16.3 Assumption of Options by the Company. The
Company, from time to time, also may substitute or assume outstanding options
granted by another company, whether in connection with an acquisition of such
other company or otherwise, by either (a) granting an Option under this Plan in
substitution of such other company's option, or (b) assuming such option as if
it had been granted under this Plan if the terms of such assumed option could be
applied to an Option granted under this Plan. Such substitution or assumption
will be permissible if the holder of the substituted or assumed option would
have been eligible to be granted an Option under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company
assumes an option granted by another company, the terms and conditions of such
option 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.
17. ADOPTION AND SHAREHOLDER APPROVAL. This Plan will become
effective on the date that it is adopted by the Board (the "EFFECTIVE DATE").
This Plan will be approved by the shareholders of the Company (excluding Shares
issued pursuant to this Plan), consistent with applicable laws, within twelve
(12) months before or after the Effective Date. Upon the Effective Date, the
Board may grant Options pursuant to this Plan; provided, however, that: (a) no
Option may be exercised prior to initial shareholder approval of this Plan, and
(b) no Option granted pursuant to an increase in the number of Shares approved
by the Board shall be exercised prior to the time such increase has been
approved by the shareholders of the Company. In the event that initial
shareholder approval is not obtained within twelve (12) months before or after
this Plan is adopted by the Board, all Options granted hereunder will be
canceled.
18. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as
provided herein, this Plan will terminate ten (10) years from the Effective Date
or, if earlier, the date of shareholder approval. This Plan and all agreements
hereunder shall be governed by and construed in accordance with the laws of the
State of California.
9
<PAGE> 10
19. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9
hereof, the Board may at any time terminate or amend this Plan in any respect,
including without limitation amendment of any form of Stock Option Agreement or
instrument to be executed pursuant to this Plan; provided, however, that the
Board will not, without the approval of the shareholders of the Company, amend
this Plan in any manner that requires such shareholder approval pursuant to
Section 25102(o) of the California Corporations Code or the Code or the
regulations promulgated thereunder as such provisions apply to ISO plans.
20. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this
Plan by the Board, the submission of this Plan to the shareholders 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 additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options or any other equity awards outside of
this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
21. DEFINITIONS. As used in this Plan, the following terms
will have the following meanings:
"BOARD" means the Board of Directors of the Company.
"CAUSE" means Termination because of (i) any willful
material violation by the Participant of any law or regulation applicable to the
business of the Company or a Parent or Subsidiary of the Company, the
Participant's conviction for or guilty plea to, a felony or a crime involving
moral turpitude or any willful perpetration by the Participant of a common law
fraud, (ii) the Participant's commission of an act of personal dishonesty which
involves a personal profit in connection with the Company or any other entity
having a business relationship with the Company, (iii) any material breach by
the Participant of any material provision of any agreement or understanding
between the Company or a Parent or Subsidiary of the Company and the Participant
regarding the terms of the Participant's service as an employee, director or
consultant to the Company or a Parent or Subsidiary of the Company, including
without limitation, the willful and continued failure or refusal of the
Participant to perform the material duties required of such Participant as an
employee, director or consultant of the Company or a Parent or Subsidiary of the
Company, other than as a result of having a Disability, or a breach of any
applicable invention assignment and confidentiality agreement or similar
agreement between the Company or a Parent or Subsidiary of the Company and the
Participant, (iv) Participant's intentional disregard of the policies of the
Company or a Parent or Subsidiary of the Company so as to cause loss, damage or
injury to the property, reputation or employees of the Company or a Parent or
Subsidiary of the Company, or (v) any other misconduct by the Participant which
is materially injurious to the financial condition or business reputation of, or
is otherwise materially injurious to, the Company or a Parent or Subsidiary of
the Company.
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COMMITTEE" means the committee appointed by the
Board to administer this Plan, or if no committee is appointed, the Board.
"COMPANY" means Cadabra Inc. or any successor or
acquiring corporation.
"DISABILITY" means a disability, whether temporary or
permanent, partial or total, as determined by the Committee.
10
<PAGE> 11
"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;
(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 by
The Wall Street Journal (or, if not so reported, as
otherwise reported by any newspaper or other source
as the Board may determine); or
(d) if none of the foregoing is applicable, by the
Committee in good faith.
"OPTION" means an award of an option to purchase
Shares pursuant to Section 5 hereof.
"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 fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
"PARTICIPANT" means a person who receives an Option
under this Plan.
"PLAN" means this Cadabra Inc. 1998 Stock Option
Plan, as amended from time to time.
"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 16
hereof, and any successor security.
11
<PAGE> 12
"SUBSIDIARY" or "SUBSIDIARIES" means any corporation
or corporations (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 fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
"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 or consultant to
the Company or a Parent or Subsidiary of the Company. A Participant 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 ninety (90) days,
unless reinstatement (or, in the case of an employee with an ISO, 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 in writing. In the case of any Participant on
(i) sick leave, (ii) military leave or (iii) an approved leave of absence, the
Committee may make such provisions respecting suspension of vesting of the
Option while the Participant is on leave from the Company or a Parent or
Subsidiary of the Company as the Committee may deem appropriate, except that in
no event may an Option be exercised after the expiration of the term set forth
in the Stock 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 Section 2.2 of the Stock Option Agreement.
"VESTED SHARES" means "Vested Shares" as defined in
Section 2.2 of the Stock Option Agreement.
12
<PAGE> 1
Exhibit 5.1
February 10, 2000
GoTo.com, Inc.
74 N. Pasadena Avenue
Third Floor
Pasadena, CA 91105
Re: REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about the date hereof (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 214,833 shares of your
Common Stock (the "Shares") reserved for issuance under the Cadabra Inc. 1998
Stock Plan. As your legal counsel, we have examined the proceedings taken and
are familiar with the proceedings proposed to be taken by you in connection with
the sale and issuance of the Shares under the Plans. In addition, for purposes
of this opinion we have assumed that the consideration received by the Company
in connection with each issuance of the Shares will include an amount in the
form of cash, services rendered or property that exceeds the greater of (i) the
aggregate par value of such Shares or (ii) the portion of such consideration
determined by the Company's Board of Directors to be "capital" for purposes of
the Delaware General Corporation Law.
Based upon the foregoing, it is our opinion that, when issued and sold
in the manner referred to in the Plans and pursuant to the agreements which
accompany the Plans, the Shares issued and sold thereby will be legally and
validly issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including any Prospectus constituting a part thereof,
and any amendments thereto. This opinion may be incorporated by reference in any
abbreviated registration statement filed pursuant to General Instruction E of
Form S-8 under the Securities Act with respect to the Registration Statement.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
--------------------------------------
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Cababra Inc. 1998 Stock Plan, as assumed by GoTo.com,
Inc., of our report dated April 2, 1999, with respect to the financial
statements of GoTo.com, Inc. included in its Registration Statement (Form S-1)
for the year ended December 31, 1998, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Los Angeles, California
February 9, 2000
