As filed with the Securities and Exchange Commission on April 14, 1999
Registration No. 333-_______________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
-------------------------
Beyond.com Corporation
(Exact name of Registrant as specified in its charter)
Delaware 94-3212136
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1195 West Fremont Ave.
Sunnyvale, CA 94087
(Address of Principal Executive Offices)
BuyDirect.com, Inc. 1998 Stock Option Plan
(Full title of the plan)
-------------------------
Mark L. Breier
President and Chief Executive Officer
Beyond.com Corporation
1195 West Fremont Ave.
Sunnyvale, CA 94087
(Name and address of agent for service)
408-616-4200
(Telephone number, including area code, of agent for service)
-------------------------
Copy to:
Kevin P. Kennedy, Esq.
Shearman & Sterling
1550 El Camino Real
Menlo Park, CA 94025-4100
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to be to be Offering Price Per Aggregate Registration
Registered Registered (1) Share (2) Offering Price (2) Fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 281,757 $1.39 $392,231.75 $109.04
par value $.001 per share Shares
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<FN>
(1) The shares of Common Stock being registered represent the shares of Common Stock which may be issued upon the
exercise of options outstanding under the BuyDirect.com, Inc. 1998 Stock Option Plan which were assumed by the
Registrant and converted into options to acquire Common Stock in connection with the acquisition of
BuyDirect.com, Inc. by the Registrant. Pursuant to Rule 416 promulgated pursuant to the Securities Act of 1933,
as amended, this registration statement also covers such indeterminable number of additional shares of Common Stock
as may be issuable pursuant to antidilution provisions of such plan.
(2) Pursuant to Rule 457(h)(1), the Proposed Maximum Aggregate Offering Price and Registration Fee are based on the
aggregate exercise price of all such outstanding options. The Proposed Maximum Offering Price Per Share was
determined by dividing the Proposed Maximum Aggregate Offering Price by the number of shares registered.
</FN>
</TABLE>
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<PAGE>
Part I
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
- ----------------
* Information required by Part I to be contained in the Section 10(a) prospectus
is omitted from this Registration Statement in accordance with Rule 428 under
the Securities Act, and the "Note" to Part I of Form S-8.
<PAGE>
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange Commission (the
"Commission") by Beyond.com Corporation (the "Registrant") are incorporated by
reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998;
(b) The Registrant's Current Report on Form 8-K filed on March 3, 1999;
(c) The Registrant's Current Report on Form 8-K filed on January 21,
1999;
(d) The description of the Registrant's Common Stock set forth in the
Registrant's registration statement on Form S-1/A (Reg. No. 333-74545)
filed on April 8, 1999;
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities and Exchange Act of 1934,
as amended (the "Exchange Act") prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or
which deregisters all securities that have not been sold, also shall be
deemed to be incorporated by reference into this Registration Statement
and to be part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed
incorporated by reference in this Registration Statement shall be
deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law permits a corporation to
include in its charter documents, and in agreements between the corporation and
its directors and officers, provisions expanding the scope of indemnification
beyond the indemnification specifically provided by the current law.
<PAGE>
3
Article IX of our Certificate of Incorporation, as amended, provides for the
indemnification of directors to the fullest extent permissible under Delaware
law.
Article VI of our Bylaws provides for the indemnification of officers, directors
and third parties acting on our behalf if such person acted in good faith and in
a manner reasonably believed to be in, and not opposed to, our best interest
and, with respect to any criminal action or proceeding, the indemnified party
had no reason to believe his or her conduct was unlawful.
We have entered into indemnification agreements with our directors and executive
officers, in addition to providing indemnification in our Bylaws, and intend to
enter into indemnification agreements with any new directors and executive
officers in the future.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits.
The following exhibits are filed as part of this Registration
Statement:
4.1 Specimen Stock Certificate (incorporated herein by reference to
Exhibit 4.1 to the Registrant's Registration Statement on Form S-1
(Reg. No. 333-51121), as amended, filed with the Commission on June
17, 1998).
4.2 Form of Certificate of Incorporation of the Registrant (incorporated
herein by reference to Exhibit 3.1 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 333-51121), as amended, filed with the
Commission on June 17, 1998).
4.3 Form of Bylaws of the Registrant (incorporated herein by reference to
Exhibit 3.2 to the Registrant's Registration Statement on Form S-1
(Reg. No. 333-51121), as amended, filed with the Commission on June
17, 1998).
4.4 BuyDirect.com, Inc. 1998 Stock Option Plan
5.1 Opinion of Shearman & Sterling as to the legality of the Registrant's
Common Stock.
23.1 Consent of Ernst & Young LLP, independent certified public
accountants.
23.2 Consent of Shearman & Sterling (included in Exhibit 5.1)
24 Powers of Attorney (included on signature page).
<PAGE>
4
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes;
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement
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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (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.
(3) To remove from registration by means of a post-effective
amendment any of the securities bring 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 15(d) of the
Exchange Act that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
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 the 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.
<PAGE>
5
SIGNATURES
Pursuant to the requirements of the Securities Act, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Sunnyvale, State of California on the day of
April 14, 1999.
BEYOND.COM CORPORATION
By:/s/ Mark L. Breier
----------------------------------
Name: Mark L. Breier
Title: President, Chief Executive
Officer
<PAGE>
POWER OF ATTORNEY
Each of the undersigned whose signature appears below hereby
constitutes and appoints Mark L. Breier and Michael J. Praisner, and each of
them acting alone, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) and supplements to this Registration Statement and
any and all related registration statements necessary to register additional
securities, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following persons in the
indicated capacities on April , 1999.
Signature Title
--------- -----
/s/ Mark L. Breier
- ---------------------------------- President, Chief Executive Officer
Mark L. Breier and Director
/s/ Michael J. Praisner
- ---------------------------------- Vice President, Finance &
Michael J. Praisner Administration and Chief Financial
Officer (Principal Financial and
Accounting Officer)
/s/ William S. McKiernan
- ---------------------------------- Chairman of the Board of Directors
William S. McKiernan
/s/ Douglas Carlston
- ---------------------------------- Director
Douglas Carlston
/s/ John S. Chen
- ---------------------------------- Director
John S. Chen
/s/ Bert Kolde
- ---------------------------------- Director
Bert Kolde
__________________________________ Director
Ronald S. Posner
<PAGE>
7
Exhibit Index
Exhibit No. Description of Document
The following exhibits are filed as part of this Registration
Statement:
4.1 Specimen Stock Certificate (incorporated herein by reference to
Exhibit 4.1 to the Registrant's Registration Statement of Form
S-1 (Reg. No. 333-51121), as amended, filed with the Commission
on June 17, 1998).
4.2 Form of Certificate of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3.1 to the
Registrant's Registration Statement on From S-1 (Reg. No.
333-51121), as amended, filed with the Commission on June 17,
1998).
4.3 Form of Bylaws of the Registrant (incorporated herein by
reference to Exhibit 3.2 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 333-51121), as amended, filed
with the Commission on June 17, 1998).
4.4 BuyDirect.com, Inc. 1998 Stock Option Plan
5.1 Opinion of Shearman & Sterling as to the legality of the
Registrant's Common Stock.
23.1 Consent of Ernst & Young LLP, independent certified public
accountants.
23.2 Consent of Shearman & Sterling (included in Exhibit 5.1)
24 Powers of Attorney (included on signature page).
BUYDIRECT.COM, INC.
1998 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this 1998 Stock Option Plan
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be Incentive Stock
Options (as defined under Section 422 of the Code) or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant of an Option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Affiliate" means an entity other than a Subsidiary (as
defined below) in which the Company owns an equity interest.
(c) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any Stock Exchange and the
applicable laws of any other country or jurisdiction where Options are granted
under the Plan.
(d) "Board" means the Board of Directors of the Company.
(e) "Change in Control" means a sale of all or substantially
all of the Company's assets, or a merger, consolidation or other capital
reorganization of the Company with or into another corporation; provided however
that a merger, consolidation or other capital reorganization in which the
holders of more than 50% of the shares of capital stock of the Company
outstanding immediately prior to such transaction continue to hold (either by
the voting securities remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the total voting power
represented by the voting securities of the Company, or such surviving entity,
outstanding immediately after such transaction shall not constitute a Change in
Control.
(f) "Code" means the Internal Revenue Code of 1986, as
amended.
(g) "Committee" means the Committee appointed by the Board of
Directors to administer the Plan in accordance with Section 4 below.
(h) "Common Stock" means the Common Stock of the Company.
<PAGE>
(i) "Company" means BuyDirect.com, Inc., a Delaware
corporation.
(j) "Consultant" means any person, including an advisor, who
renders services to the Company, or any Parent, Subsidiary or Affiliate, and is
compensated for such services, and any director of the Company whether
compensated for such services or not.
(k) "Continuous Status as an Employee or Consultant" means the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Administrator, provided that
such leave is for a period of not more than 90 days, unless reemployment upon
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (iv)
in the case of transfers between locations of the Company or between the
Company, its Parent(s), Affiliates, Subsidiaries or their respective successors.
For purposes of this Plan, a change in status from an Employee to a Consultant
or from a Consultant to an Employee will not constitute an interruption of
Continuous Status as an Employee or Consultant.
(l) "Director" means a member of the Board.
(m) "Employee" means any person, including officers and
directors, employed by the Company or any Parent, Subsidiary or Affiliate of the
Company, with the status of employment determined based upon such minimum number
of hours or periods worked as shall be determined by the Administrator in its
discretion, subject to any requirements of the Code. The payment of a director's
fee to a director shall not be sufficient to constitute "employment" of such
director by the Company.
(n) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(o) "Fair Market Value" means, as of any date, the fair market
value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system including without limitation the
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported), as quoted on such system or exchange, or the exchange with the
greatest volume of trading in Common Stock for the last market trading day prior
to the time of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq
System (but not on the National Market thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock for the last market trading day prior to the time of determination,
as reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or
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<PAGE>
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(p) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code, as designated in the applicable written Option Agreement.
(q) "Listed Security" means any security of the Company which
is listed or approved for listing on a national securities exchange or
designated or approved for designation as a national market system security on
an interdealer quotation system by the National Association of Securities
Dealers, Inc.
(r) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option, as designated in the applicable written
Option Agreement.
(s) "Option" means a stock option granted pursuant to the
Plan.
(t) "Option Agreement" means a written agreement between an
Optionee and the Company reflecting the terms of an Option granted under the
Plan and includes any documents attached to such Option Agreement, including,
but not limited to, a notice of stock option grant and a form of exercise
notice.
(u) "Option Exchange Program" means a program whereby
outstanding Options are exchanged for Options with a lower exercise price.
(v) "Optioned Stock" means the Common Stock subject to an
Option.
(w) "Optionee" means an Employee or Consultant who receives an
Option.
(x) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code, or any successor
provision.
(y) "Plan" means this 1998 Stock Option Plan.
(z) "Reporting Person" means an officer, director, or greater
than 10% stockholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.
(aa) "Rule 16b-3" means Rule 16b-3 promulgated under the
Exchange Act, as the same may be amended from time to time, or any successor
provision.
(bb) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(cc) "Stock Exchange" means any stock exchange or consolidated
stock price reporting system on which prices for the Common Stock are quoted at
any given time.
-3-
<PAGE>
(dd) "Subsidiary" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code, or any
successor provision.
3. Stock Subject to the Plan. Subject to the provisions of Section 11
of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 2,309,661 Shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock. If an Option expires or
becomes unexercisable for any reason without having been exercised in full, or
is surrendered pursuant to an Option Exchange Program, the unpurchased Shares
that were subject thereto shall, unless the Plan shall have been terminated,
become available for future grant under the Plan. In addition, any shares of
Common Stock that are retained by the Company upon exercise of an Option in
order to satisfy the exercise or purchase price for such Option or any
withholding taxes due with respect to such exercise shall be treated as not
issued and shall continue to be available under the Plan. Shares repurchased by
the Company pursuant to any repurchase right that the Company may have shall not
be available for future grant under the Plan.
4. Administration of the Plan.
(a) Initial Plan Procedure. Prior to the date, if any, upon
which the Company becomes subject to the Exchange Act, the Plan shall be
administered by the Board or a Committee appointed by the Board.
(b) Plan Procedure After the Date, if any, Upon Which the
Company Becomes Subject to the Exchange Act.
(i) Multiple Administrative Bodies. If permitted by
Rule 16b-3, grants under the Plan may be made by different bodies with respect
to Directors, non-Director officers and Employees or Consultants who are not
Reporting Persons.
(ii) Administration With Respect to Reporting
Persons. With respect to grants of Options to Employees who are Reporting
Persons, such grants shall be made by (A) the Board if the Board may make grants
to Reporting Persons under the Plan in compliance with Rule 16b-3, or (B) a
Committee designated by the Board to make grants to Reporting Persons under the
Plan, which Committee shall be constituted in such a manner as to permit grants
under the Plan to comply with Rule 16b-3. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly make grants to
Reporting Persons under the Plan, all to the extent permitted by Rule 16b-3.
(iii) Administration With Respect to Consultants and
Other Employees. With respect to grants of Options to Employees or Consultants
who are not Reporting Persons, the Plan shall be administered by (A) the Board
or (B) a Committee designated by the Board, which Committee shall be constituted
in such a manner as to satisfy the Applicable Laws. Once appointed, such
Committee shall continue to serve in its designated
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<PAGE>
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.
(c) Powers of the Administrator. Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, including the approval, if required, of any Stock Exchange, the
Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(o) of the Plan;
(ii) to select the Consultants and Employees to whom
Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options
are granted hereunder;
(iv) to determine the number of shares of Common
Stock to be covered by each such Option granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option granted hereunder, which
terms and conditions include but are not limited to the exercise price, the time
or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or any Optioned Stock, based
in each case on such factors as the Administrator, in its sole discretion, shall
determine;
(vii) to determine whether and under what
circumstances an Option may be settled in cash under Section 9(g) instead of
Common Stock;
(viii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option has declined since the date the Option was granted;
(ix) to initiate an Option Exchange Program;
(x) to construe and interpret the terms of the Plan
and Options granted under the Plan; and
(xi) in order to fulfill the purposes of the Plan and
without amending the Plan, to modify grants of Options to participants who are
foreign nationals or employed
-5-
<PAGE>
outside of the United States in order to recognize differences in local law, tax
policies or customs.
(d) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all holders of Options.
5. Eligibility.
(a) Recipients of Grants. Nonstatutory Stock Options may be
granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees; provided however that Employees of Affiliates shall not be
eligible to receive Incentive Stock Options. An Employee or Consultant who has
been granted an Option may, if he or she is otherwise eligible, be granted
additional Options.
(b) Type of Option. Each Option shall be designated in the
Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designations, to the extent that the
aggregate Fair Market Value of Shares with respect to which Options designated
as Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares subject to an Incentive Stock Option shall
be determined as of the date of the grant of such Option.
(c) At-Will Relationship. The Plan shall not confer upon any
Optionee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with such
Optionee's right or the Company's right to terminate his or her employment or
consulting relationship at any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for a term of ten years unless sooner
terminated under Section 14 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement. However, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Option is granted, owns stock representing
more than 10% of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five years
from the date of grant thereof or such shorter term as may be provided in the
Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board and set forth in the applicable Option Agreement, but shall be subject to
the following:
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<PAGE>
(i) In the case of an Incentive Stock Option that is:
(A) granted to an Employee who, at the time
of the grant of such Incentive Stock Option, owns stock representing more than
10% of the total combined voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.
(B) granted to any other Employee, the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option that
is:
(A) granted to a person who, at the time of
the grant of such Option, owns stock representing more than 10% of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of the grant.
(B) granted to any other eligible person,
the per Share exercise price shall be no less than 85% of the Fair Market Value
per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price other than as required above pursuant to
a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) cancellation of indebtedness, (5) other Shares
that (x) in the case of Shares acquired upon exercise of an Option, have been
owned by the Optionee for more than six months on the date of surrender or such
other period as may be required to avoid a charge to the Company's earnings, and
(y) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which such Option shall be exercised, (6)
authorization for the Company to retain from the total number of Shares as to
which the Option is exercised that number of Shares having a Fair Market Value
on the date of exercise equal to the exercise price for the total number of
Shares as to which the Option is exercised, (7) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price and any applicable income or employment taxes, (8) delivery of an
irrevocable subscription agreement for the Shares that irrevocably obligates the
option holder to take and pay for the Shares not more than twelve months after
the date of delivery of the subscription agreement, (9) any combination of the
foregoing methods of payment, or (10) such other consideration and method of
payment for the issuance of Shares to the extent permitted under the Applicable
Laws. In making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
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9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator and reflected in the Option
Agreement, which may include vesting requirements and/or performance criteria
with respect to the Company and/or the Optionee; provided however, that any
Option granted prior to the date, if any, upon which the Common Stock becomes a
Listed Security shall become exercisable at the rate of at least 20% per year
over five years from the date the Option is granted. In the event that any of
the Shares issued upon exercise of an Option (which exercise occurs prior to the
date, if any, upon which the Common Stock becomes a Listed Security) should be
subject to a right of repurchase in the Company's favor, such repurchase right
shall lapse at the rate of at least 20% per year over five years from the date
the Option is granted. Notwithstanding the above, in the case of an Option
granted to an officer, Director or Consultant of the Company or any Parent or
Subsidiary of the Company, the Option may become fully exercisable, or a
repurchase right, if any, in favor of the Company shall lapse, at any time or
during any period established by the Administrator. The Administrator shall have
the discretion to determine whether and to what extent the vesting of Options
shall be tolled during any unpaid leave of absence; provided however that in the
absence of such determination, vesting of Options shall be tolled during any
such leave.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be available, both for purposes of the Plan
and for sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Employment or Consulting Relationship.
Subject to Section 9(c) below, in the event of termination of an Optionee's
Continuous Status as an Employee or Consultant with the Company, such Optionee
may, but only within ninety (90) days (or such other period of time not less
than 30 days as is determined by the Administrator, with such determination in
the case of an Incentive Stock Option being made at the time of grant of the
Option and not exceeding three months) after the date of such termination (but
in no event later than the expiration date of the term of such Option as set
forth in the Option Agreement),
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<PAGE>
exercise his or her Option to the extent that the Optionee was entitled to
exercise it at the date of such termination. To the extent that the Optionee was
not entitled to exercise the Option at the date of such termination, or if the
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate and the Optioned Stock underlying
the unexercised portion of the Option shall revert to the Plan. No termination
shall be deemed to occur and this Section 9(b) shall not apply if (i) the
Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is an
Employee who becomes a Consultant.
(c) Disability of Optionee.
(i) Notwithstanding Section 9(b) above, in the event
of termination of an Optionee's Continuous Status as an Employee or Consultant
as a result of his or her total and permanent disability (within the meaning of
Section 22(e)(3) of the Code), such Optionee may, but only within twelve (12)
months from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or if the Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate and the Optioned Stock underlying
the unexercised portion of the Option shall revert to the Plan.
(ii) In the event of termination of an Optionee's
Continuous Status as an Employee or Consultant as a result of a disability which
does not fall within the meaning of total and permanent disability (as set forth
in Section 22(e)(3) of the Code), such Optionee may, but only within six (6)
months from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. However, to the extent that such Optionee fails
to exercise an Option which is an Incentive Stock Option (within the meaning of
Section 422 of the Code) within three months of the date of such termination,
the Option will not qualify for Incentive Stock Option treatment under the Code.
To the extent that the Optionee was not entitled to exercise the Option at the
date of termination, or if the Optionee does not exercise such Option to the
extent so entitled within six months from the date of termination, the Option
shall terminate and the Optioned Stock underlying the unexercised portion of the
Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an
Optionee during the period of Continuous Status as an Employee or Consultant
since the date of grant of the Option, or within 30 days following termination
of the Optionee's Continuous Status as an Employee or Consultant, the Option may
be exercised, at any time within twelve (12) months following the date of death
(but in no event later than the expiration date of the term of such Option as
set forth in the Option Agreement), by such Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of death or, if
earlier, the date of termination of the Optionee's Continuous Status as an
Employee or Consultant. To the extent that the Optionee was not entitled to
exercise the Option at the date of death or termination, as the case may be, or
if the Optionee does not exercise such Option to the extent so entitled within
the time specified herein,
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<PAGE>
the Option shall terminate and the Optioned Stock underlying the unexercised
portion of the Option shall revert to the Plan.
(e) Extension of Exercise Period. The Administrator shall have
full power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Continuous Status as
an Employee or Consultant from the periods set forth in Sections 10(b), 10(c)
and 10(d) above or in the Option Agreement to such greater time as the Board
shall deem appropriate, provided, that in no event shall such option be
exercisable later than the date of expiration of the term of such Option as set
forth in the Option Agreement.
(f) Rule 16b-3. Options granted to Reporting Persons shall
comply with Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
for Plan transactions.
(g) Buy-Out Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares an Option previously granted,
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time such offer is made.
10. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (a) by cash or check payment, (b) out of the Optionee's
current compensation, (c) if permitted by the Administrator, in its discretion,
by surrendering to the Company Shares that (i) in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six
months on the date of surrender, and (ii) have a Fair Market Value on the date
of surrender equal to or less than the amount required to be withheld, or (d) by
electing to have the Company withhold from the Shares to be issued upon exercise
of the Option, if any, that number of Shares having a Fair Market Value equal to
the amount required to be withheld. For this purpose, the Fair Market Value of
the Shares to be withheld shall be determined on the date that the amount of tax
to be withheld is to be determined (the "Tax Date").
Any surrender by a Reporting Person of previously owned Shares to
satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3.
All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
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<PAGE>
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made; and
(c) all elections shall be subject to the consent or
disapproval of the Administrator.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option is exercised but such
Optionee shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.
11. Adjustments Upon Changes in Capitalization, Merger or Certain Other
Transactions.
(a) Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and the number of shares of Common Stock that have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or that have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination,
recapitalization or reclassification of the Common Stock, or any other increase
or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided however that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administration shall notify the
Optionee at least 15 days prior to such proposed action. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.
(c) Change in Control. In the event of a Change in Control,
each outstanding Option shall be assumed or an equivalent option shall be
substituted by the successor corporation (or a Parent or Subsidiary of such
successor corporation), unless the successor corporation does not agree to
assume the outstanding Options or substitute equivalent options, in which case
prior to consummation of the transaction the outstanding Options shall fully
vest and become exercisable as to all of the Optioned Stock, including Shares as
to which it would not otherwise be vested or exercisable. If an Option becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a Change of Control, the Administrator shall notify the
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<PAGE>
Optionee in writing that the Option shall be fully exercisable for a period of
15 days from the date of such notice, and the Option shall terminate upon the
expiration of such period.
For purposes of this Section 11(c), an Option shall be
considered assumed, without limitation, if, at the time of issuance of the stock
or other consideration upon such Change in Control, each Optionee would be
entitled to receive upon exercise of an Option the same number and kind of
shares of stock or the same amount of property, cash or securities as the
Optionee would have been entitled to receive upon the occurrence of such
transaction if the Optionee had been, immediately prior to the transaction, the
holder of the number of Shares of Common Stock covered by the Option at such
time (after giving effect to any adjustments in the number of Shares covered by
the Option as provided for in this Section 11); provided however that if such
consideration received in the Change in Control was not solely common stock of
the successor corporation or its Parent, the Administrator may, with the consent
of the successor corporation, provide for the consideration to be received upon
exercise of the Option to be solely common stock of the successor corporation or
its Parent equal to the Fair Market Value to the per Share consideration
received by holders of Common Stock in the transaction.
(d) Certain Distributions. In the event of any distribution to
the Company's stockholders of securities of any other entity or other assets
(other than dividends payable in cash or stock of the Company) without receipt
of consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per Share of Common Stock covered by each
outstanding Option to reflect the effect of such distribution.
12. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised or purchased
during the lifetime of the Optionee only by the Optionee; provided however that,
after the date, if any, upon which the Common Stock becomes a Listed Security,
the Administrator may in its discretion grant transferable Nonstatutory Stock
Options pursuant to option agreements specifying (i) the manner in which such
Nonstatutory Stock Options are transferable and (ii) that any such transfer
shall be subject to the Applicable Laws. The designation of a beneficiary by an
Optionee will not constitute a transfer. An Option may be exercised, during the
lifetime of the Optionee, only by the Optionee or a transferee permitted by this
Section 12.
13. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board; provided
however that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee's employment relationship with the Company. Notice of the determination
shall be given to each Employee or Consultant to whom an Option is so granted
within a reasonable time after the date of such grant.
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<PAGE>
14. Amendment and Termination of the Plan.
(a) Authority to Amend or Terminate. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made that would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 or
with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of any Stock Exchange), the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.
(b) Effect of Amendment or Termination. No amendment or
termination of the Plan shall adversely affect Options already granted, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any Stock Exchange.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by law.
16. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
17. Option Agreements. Options shall be evidenced by Option Agreements
in such form(s) as the Administrator shall approve from time to time.
18. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve months before or after
the date the Plan is adopted. Such stockholder approval shall be obtained in the
degree and manner required under applicable state and federal law and the rules
of any Stock Exchange upon which the Common Stock is listed. All Options issued
under the Plan shall become void in the event such approval is not obtained.
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<PAGE>
19. Information and Documents to Optionees. The Company shall provide
financial statements at least annually to each Optionee during the period such
Optionee has one or more Options outstanding, and in the case of an individual
who acquired Shares pursuant to the Plan, during the period such individual owns
such Shares. The Company shall not be required to provide such information if
the issuance of Options under the Plan is limited to key employees whose duties
in connection with the Company assure their access to equivalent information. In
addition, at the time of issuance of any securities under the Plan, the Company
shall provide to the Optionee a copy of the Plan and any agreement(s) pursuant
to which securities granted under the Plan are issued.
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[Letterhead of Shearman & Sterling]
April 14, 1999
Beyond.com Corporation
1195 West Fremont Ave.
Sunnyvale, CA 94087
Ladies and Gentlemen:
We have acted as counsel to Beyond.com Corporation., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") of the Company to be filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the 281,757 shares of common stock, par
value $0.001 per share, of the Company (the "Shares"), to be issued from time to
time pursuant to the BuyDirect.com, Inc. 1998 Stock Option Plan (the "Plan").
The Company assumed the Plan pursuant to an Agreement and Plan of Merger, dated
as of February 19, 1999, as amended March 15, 1999, by and among the Company,
BuyDirect.com, Inc., a Delaware corporation, BD Acquisition, Inc., a Delaware
corporation and wholly owned subsidiary of the Company, and certain holders of
shares of capital stock of BuyDirect.com, Inc.
In so acting, we have examined the Registration Statement and we
have also examined and relied as to factual matters upon the representations and
warranties contained in originals, or copies certified or otherwise identified
to our satisfaction, of such documents, records, certificates and other
instruments as in our judgment are necessary or appropriate to enable us to
render the opinion expressed below. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents, certificates
and instruments submitted to us as originals and the conformity with originals
of all documents submitted to us as copies.
The opinion expressed below is limited to the General Corporation
Law of the State of Delaware, and we do not express any opinion herein
concerning any other law.
<PAGE>
Based upon the foregoing and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the Shares
have been duly authorized by the Company and, when (a) issued and delivered by
the Company in accordance with the terms of the Plan and (b) paid for in full in
accordance with the terms of the Plan, the Shares will be validly issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Shearman & Sterling
-------------------------------------
SHEARMAN & STERLING
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the BuyDirect.com, 1998 Stock Option Plan of
Beyond.com Corporation of our report dated January 11, 1999, with respect to
the consolidated financial statements of Beyond.com Corporation included in
its Annual Report (Form 10-K) for the year ended December 31, 1998 filed with
the Securities and Exchange Commission.
San Jose, California
April 14, 1999
