SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
24/7 Media, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
________________________________________________________________________________
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
[_] Fee paid previously with preliminary materials:
________________________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
(SC14A-07/98)
<PAGE>
24/7 Media, Inc.
1250 Broadway
New York, New York 10001
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------
The annual meeting of stockholders of 24/7 Media, Inc. will be held at the
offices of Proskauer Rose LLP, 1585 Broadway, 26th floor, New York, New York
10036 on Tuesday, June 8, 1999, at 10:00 a.m., local time, for the following
purposes:
o to elect three nominees as our Class I directors to serve until the 2002
annual meeting of stockholders or until their respective successors shall
have been duly elected and qualified;
o to approve the proposal to amend and restate our 1998 Stock Incentive
Plan to increase the number of shares available for grant pursuant to
options under the plan from 3,000,000 to 5,750,000 and to make certain
other technical amendments;
o to ratify the appointment of KPMG LLP as our independent certified public
accountants for the fiscal year ending December 31, 1999; and
o to transact any such other business as may properly come before the
meeting and at any adjournment thereof.
Our Board of Directors has fixed the close of business on May 4, 1999 as
the record date for determining stockholders entitled to notice of, and to vote
at, the meeting. Only stockholders of record at the close of business on May 4,
1999 will be entitled to notice of, and to vote at, the annual meeting. A list
of stockholders eligible to vote at the meeting will be available for
inspection at the meeting and for a period of ten days prior to the meeting
during regular business hours at our corporate headquarters at the address
above.
All of our stockholders are cordially invited to attend the meeting in
person. Whether or not you expect to attend the annual meeting, your proxy vote
is important. To assure your representation at the meeting, please sign and
date the enclosed proxy card and return it promptly in the enclosed envelope,
which requires no additional postage if mailed in the United States or Canada.
Should you receive more than one proxy because your shares are registered in
different names and addresses, each proxy should be signed and returned to
assure that all your shares will be voted. You may revoke your proxy at any
time prior to the annual meeting. If you attend the meeting and vote by ballot,
your proxy will be revoked automatically and only your vote at the meeting will
be counted.
YOUR VOTE IS IMPORTANT
IF YOU ARE UNABLE TO BE PRESENT PERSONALLY, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE.
By order of the Board of Directors,
/s/DAVID J. MOORE
DAVID J. MOORE
President and Chief Executive Officer
May 10, 1999
<PAGE>
24/7 Media, Inc.
1250 Broadway
New York, New York 10001
----------
PROXY STATEMENT
----------
General
This Proxy Statement is furnished to the stockholders of 24/7 Media, Inc.,
a Delaware corporation, in connection with the solicitation of proxies by our
Board of Directors for use at our annual meeting of stockholders to be held at
10:00 a.m. (New York time) on June 8, 1999, and at any adjournment thereof. A
copy of the notice of meeting accompanies this Proxy Statement. It is
anticipated that the mailing of this Proxy Statement will commence on or about
May 11, 1999.
Only stockholders of record at the close of business on May 4, 1999, the
record date for the meeting, will be entitled to notice of and to vote at the
meeting. On the record date, we had outstanding 20,169,776 shares of common
stock, par value $.01 per share, which are our securities entitled to vote at
the stockholders meeting, each share being entitled to one vote.
Proposals for Consideration
Our Board of Directors does not know of any matter that is expected to be
presented for consideration at the meeting, other than:
o the election of three Class I directors to serve until the 2002 annual
meeting of stockholders or until their respective successors shall have
been duly elected and qualified;
o the approval of the amendments to our 1998 Stock Incentive Plan to
increase the number of shares available for grant pursuant to options
under the plan from 3,000,000 to 5,750,000 and to make certain other
technical amendments; and
o the ratification of the appointment of our independent certified public
accountants for the fiscal year ending December 31, 1999.
However, if other matters properly come before the meeting, the persons
named in the accompanying proxy intend to vote thereon in accordance with their
judgment.
Costs of Proxies
We will incur the cost of the annual meeting and the cost of soliciting
proxies. In addition to solicitation by mail, our directors, officers, and
regular employees (who will not be specifically compensated for such services)
may solicit proxies by telephone or otherwise. Arrangements will be made with
brokerage houses and other custodians, nominees, and fiduciaries to forward
proxies and proxy material to their principals, and we will reimburse them for
their expenses.
Voting Rights and Proxies
Stockholders who execute proxies may revoke them by giving written notice
to our Chief Executive Officer at any time before such proxies are voted.
Attendance at the meeting shall not have the effect of revoking a proxy unless
the stockholder so attending shall, in writing, so notify the Secretary of the
meeting at any time prior to the voting of the proxy at the annual meeting.
All proxies received pursuant to this solicitation will be voted except as
to matters where authority to vote is specifically withheld and, where a choice
is specified as to the proposal, they will be voted in accordance with such
specification. If no instructions are given, the persons named in the proxy
solicited by our Board of Directors intend to vote:
o FOR the nominees for election as Class I directors listed herein,
o FOR the approval of the amendments to our 1998 Stock Incentive Plan, and
o FOR the ratification of the appointment of KPMG LLP as our independent
certified public accountants for the fiscal year ending December 31,
1999.
<PAGE>
With regard to the election of directors, votes cast may be withheld from
each nominee; votes that are withheld will be excluded entirely from the vote
and will have no effect. Abstentions may be specified on all proposals except
the election of directors, and will be counted as present for purposes of
determining the existence of a quorum regarding the item on which the
abstention is noted.
Pursuant to the NASD Rules of Fair Practice, brokers who hold shares in
street name have the authority, in limited circumstances, to vote on certain
items when they have not received instructions from beneficial owners. A broker
will only have such authority if (i) the broker holds the shares as executor,
administrator, guardian, trustee, or in similar representative or fiduciary
capacity with authority to vote or (ii) the broker is acting pursuant to the
rules of any national securities exchange of which the broker is also a member.
Under applicable Delaware law, a broker abstention or non-vote will have no
effect on the outcome of the election of directors or ratification of auditors
but will be considered present for purposes of determining a quorum, and will
be the equivalent of a vote against the amendment of the 1998 Stock Incentive
Plan.
2
<PAGE>
PROPOSAL ONE:
ELECTION OF DIRECTORS
In accordance with the terms of our Certificate of Incorporation, our
Board of Directors has been divided into three classes, denominated Class I,
Class II and Class III, with members of each class holding office for staggered
three-year terms. At each annual meeting of our stockholders, the successors to
the Directors whose terms expire are elected to serve from the time of their
election and qualification until the third annual meeting of stockholders
following their election or until a successor has been duly elected and
qualified. The affirmative vote of a plurality of the shares of Common Stock
present in person or represented by proxy and entitled to vote on the election
of directors at our annual meeting is required to elect the Class I Directors
named herein.
The Board of Directors currently has seven members. R. Theodore Ammon,
Jacob I. Friesel, and David J. Moore are Class I Directors whose terms expire
at the annual meeting and each of whom is a nominee for election. John F.
Barry, and Jack L. Rivkin are Class II Directors whose terms expire at the 2000
annual meeting. Arnie Semsky and Charles W. Stryker are Class III Directors
whose terms expire at the 2001 annual meeting (in all cases subject to the
election and qualification of their successors or to their earlier death,
resignation or removal).
If any nominee is unable or unwilling to serve, the shares to be voted for
such nominee that are represented by proxies will be voted for any substitute
nominee designated by our Board of Directors; if none, the size of the Board of
Directors will be reduced. We have no reason to believe that the nominees will
be unable or unwilling to serve if elected. There are no family relationships
between any of the directors and executive officers of 24/7 Media.
OUR BOARD RECOMMENDS THAT YOU, AS STOCKHOLDERS, VOTE "FOR" THE ELECTION OF
MESSRS. AMMON, FRIESEL AND MOORE AS DIRECTORS UNTIL THE 2002 ANNUAL MEETING.
Director Information
The following provides information about each nominee and continuing
director, including data on their business backgrounds and the names of public
companies and other selected entities for which they also serve as directors.
The persons named below have served as directors during the fiscal year ended
December 31, 1998. The information concerning the directors and their security
holdings has been furnished to us by each director.
Class I Directors--To Be Elected for a Term of Three Years Expiring in 2002
David J. Moore has been our President and Chief Executive Officer and a
Director since February 1998. Mr. Moore was Chief Executive Officer of Petry
Interactive, Inc. from December 1995 to February 1998. From 1993 to 1994, Mr.
Moore was President of Geomedica, an online service for physicians, which he
sold to Reuters. From 1982 to 1992, Mr. Moore was a Group Vice President at
Hearst/ABC-Viacom Entertainment Services, where he participated in the launch
of Cable Health Network, Lifetime Television, Lifetime Medical Television, a
service targeted to physicians, and HealthLink Television, a physician waiting
room television service. From 1979 to 1982, Mr. Moore had a television
advertising sales position with Turner Broadcasting. Mr. Moore received a B.A.
degree in Communications from Northern Illinois University.
R. Theodore Ammon, our Chairman of the Board, has been Chairman of the
Board of Big Flower Holdings, Inc. and its predecessor company, Big Flower
Press Holdings, Inc. since 1993. From 1990 to 1992, Mr. Ammon was a General
Partner of Kohlberg Kravis Roberts & Co., a New York and San Francisco-based
investment firm, and he was an executive of such firm prior to 1990. Mr. Ammon
also serves on the board of directors of each of Host Marriott Corporation,
Culligan Water Technologies, Inc. and Samsonite Corporation. Mr. Ammon received
a B.A. degree in Economics from Bucknell University.
Jacob I. Friesel has been our Executive Vice President--Sales and
Marketing and a Director since February 1998. From 1997 to 1998, Mr. Friesel
was President of Katz Millennium Marketing, the Internet media sales division
of Katz Media Group, Inc. He was Vice President, Strategic Planning for the
Katz Television Group from 1994 to 1997. From 1993 to 1994, he was a Vice
President and General Sales Manager of Katz American Television, a leading
advertising representative of major market television stations. He was Vice
President, General Sales Manager of Katz Continental Television from 1991
through 1993, and was employed in various media advertising sales and
management positions with the Katz Agency from 1976 to 1991. Mr. Friesel
received a B.A. degree in Mass Communications from the City University of New
York.
Class II Directors--To Continue in Office Until 2000
John F. Barry III, a Director, is presently the Managing General Partner
of Prospect Street Ventures, a private equity and venture capital firm, which
he joined in 1990. From 1988 to 1989, he was the head of investment banking at
L.F. Rothschild & Co. From 1983 to 1988, he was a corporate finance specialist
at Merrill Lynch and from 1979
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<PAGE>
to 1983, he was a securities attorney with Davis Polk & Wardwell. Mr. Barry
serves on the boards of directors of nine information technology companies,
including Skyline Multimedia, Inc. Mr. Barry is also the chairman of Bondnet
Trading Systems, Inc. Mr. Barry received a J.D. degree from Harvard Law School
and a B.A. degree in History from Princeton University.
Jack L. Rivkin, a Director, has been a Senior Vice President of Travelers
Investment Group Inc. since January 1997, where he is responsible for the
management of venture capital and private equity partnerships for various
Travelers insurance companies. He is also a director and member of the
investment committee of Greenwich Street Capital Partners, L.P., a $460 million
merchant banking fund affiliated with Travelers, and an adjunct professor at
Columbia University Business School. From October 1995 to December 1996, he was
a Senior Vice President of the Investment Group of Travelers Group Inc. From
March 1993 to October 1995, Mr. Rivkin was vice chairman and director of Global
Research at Smith Barney. From 1987 to 1992, Mr. Rivkin was director of the
Equities Division and Director of Research of Lehman Brothers. From 1984 to
1987, Mr. Rivkin was President of PaineWebber Capital, Inc., the merchant
banking arm of PaineWebber Group, and Chairman of Mitchell Hutchins Asset
Management. Mr. Rivkin is also a director of HumaScan Inc., a medical device
company, and PRT Group, Inc., an information technology company. Mr. Rivkin
received a M.B.A. degree from Harvard Business School and a B.A. degree in
Metallurgical Engineering from the Colorado School of Mines.
Class III Directors--To Continue in Office Until 2001
Arnie Semsky, a Director, has been self-employed as a media advisor since
January 1999. He previously served as the Executive Vice President, Worldwide
Media Director of the BBDO Worldwide unit of Omnicom Group from 1982 until
December 1998. Mr. Semsky joined BBDO Worldwide in 1979 as Vice President and
Associate Director of Network Programming and he has served as a member of the
board of directors of BBDO Worldwide since 1991. Mr. Semsky received a B.A.
degree in English from Pace University.
Charles W. Stryker, Ph.D., a Director, has been President of IntelliQuest
Marketing Information Solutions, Inc. and President of Zona/Research since
1998. Dr. Stryker served as a Director of IntelliQuest Information Group Inc.
from October 1997 to March 1998. From 1991 to 1997, he was President of each of
MkIS User Forum and Information Technology Forum, companies providing marketing
information, consulting and service products to executives and technology
companies. Dr. Stryker received a B.S. degree and a M.S. degree in Electrical
Engineering and a Ph.D. in Computer Science from New York University.
Committees of the Board of Directors
Audit Committee. The Audit Committee, composed of Messrs. Ammon, Rivkin
and Barry, who qualify as outside directors under Section 162(m) of the Code
and as non-employee directors under Rule 16b-3(c) of the Exchange Act, does the
following:
o makes recommendations concerning the engagement of independent public
accountants;
o reviews with the independent public accountants the plans and results of
the audit engagement;
o approves professional services provided by the independent public
accountants;
o reviews the independence of the independent public accountants;
o considers the range of audit and non-audit fees; and
o reviews the adequacy of our internal accounting controls.
Compensation Committee. The compensation committee, composed of Messrs.
Moore, Rivkin and Stryker, does the following:
o approves the salaries and other benefits of our executive officers and
administers any of our non-stock based bonus or incentive compensation
plans, excluding any cash awards intended to qualify for the exception
for performance-based compensation under Section 162(m) of the Code; and
o consults with management regarding our pension and other benefit plans,
and compensation policies and practices.
Stock Option Committee. The stock option committee, composed of Messrs.
Ammon, Rivkin and Barry, directors who qualify as outside directors under
Section 162(m) of the Code and as non-employee directors under Rule 16b-3(c) of
the Exchange Act, does the following:
o administers our stock-based incentive plans, including the 1998 Stock
Incentive Plan; and
4
<PAGE>
o grants any cash awards intended to qualify for the exception for
performance-based compensation under Section 162(m) of the Code.
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation Committee are Jack L. Rivkin,
David J. Moore and Charles W. Stryker. Each of Messrs. Rivkin and Stryker are
independent, outside directors of 24/7 Media. None of our executive officers
serves as a member of the board of directors or compensation committee of any
entity that has one or more executive officers serving as a member of our Board
of Directors or Compensation Committee.
Compensation of Directors
Directors do not receive salaries or cash fees for serving as directors or
for serving on committees. All members of the Board of Directors who are not
employees or consultants are reimbursed for their expenses for each meeting
attended and are eligible to receive stock options pursuant to our 1998 Stock
Incentive Plan. Under our 1998 Stock Incentive Plan, each existing non-employee
director has been granted a non-qualified option to purchase 18,750 shares of
common stock at the fair market value on the date of grant, and each new
non-employee director will be granted a non-qualified option to purchase 18,750
shares of common stock at the fair market value on the date of grant. Upon the
date of each annual stockholders' meeting, each existing non-employee director
shall be granted a non-qualified option to purchase 4,688 shares of common
stock, or a pro rata portion thereof if the director did not serve the entire
year since the date of the last annual meeting. All options granted to
non-employee directors will vest at the rate of 25% on each of the first four
anniversaries of the date of grant, assuming the non-employee director is a
director on those dates, and all such options generally will be exercisable for
a period of ten years from the date of grant. Upon a change of control, all
unvested options which have not yet expired will automatically become 100%
vested.
Management
The following table provides information concerning our executive
officers:
Name Age Position and Offices
- ------------------ ----- ----------------------------------------------
David J. Moore 46 President and Chief Executive Officer
and a Director
Jacob I. Friesel 49 Executive Vice President--Sales and Marketing
and a Director
C. Andrew Johns 39 Executive Vice President, Treasurer and
Chief Financial Officer
Executive Officers Who Are Not Directors
C. Andrew Johns has been our Executive Vice President, Treasurer and Chief
Financial Officer since April 1998. From 1996 to 1998, he was co-founder and
Managing Director of Manufacturers Renaissance Network, Inc., which provides
strategic consulting and investment banking services to small and medium-sized
businesses. From 1990 to 1996, Mr. Johns was President and owner of Strathmore
Hill Associates, Inc., an investment banking and strategic consulting firm. Mr.
Johns received a M.B.A. degree from Stanford University Graduate School of
Business and a B.S. degree in Commerce from The University of Virginia. Mr.
Johns is a Chartered Financial Analyst.
Executive Compensation and Employment Agreements
We have entered into employment agreements with our executive officers
providing for annual compensation in excess of $100,000. The material terms of
such employment agreements generally are as follows:
o the employment term runs through December 31, 1999, except as stated
below and is automatically renewable for successive one-year terms unless
either party gives written notice to the other at least six months prior
to the expiration of the then employment term;
o during the employment term and thereafter, we will indemnify the
executive to the fullest extent permitted by law, in connection with any
claim against such executive as a result of such executive serving as one
of our officers or directors or in any capacity at our request in or with
regard to any other entity, employee benefit plan or enterprise;
o any dispute or controversy arising under or in connection with the
employment agreement (other than injunctive relief) shall be settled
exclusively by arbitration;
o we may terminate the agreement at any time with or without cause (as
defined in the agreement) and, if an executive is terminated without
cause (including our giving notice of non-renewal), he will receive sev-
5
<PAGE>
erance pay in an amount generally equal to six months' base salary and
bonus, plus continued medical benefits for a period equal to the
severance period as well as acceleration of outstanding options; and
o if termination is the result of the executive's death or disability, we
will pay to the executive or his estate an amount generally equal to six
months' base salary at his then current rate of pay (reduced in the case
of disability by his long-term disability policy payments).
The agreement of David J. Moore extends through January 1, 2001. Mr.
Moore's agreement provides for an annual base salary of $225,000 and a target
bonus of $300,000 and $325,000 for 1999, and 2000, respectively. Mr. Moore was
also awarded 56,250 shares of restricted stock that vest over three years. If
we terminate Mr. Moore without cause, he is entitled to receive severance pay
in an amount equal to two times base salary, plus the maximum bonus for which
he is eligible during the fiscal year of termination.
The agreements of our other executive officers provide for base salaries
between $150,000 and $180,250 and target incentives, based on attainment of
corporate goals, between $90,000 and $131,250.
On December 11, 1998, we entered into a severance agreement with Yale R.
Brown, our former director and Executive Vice President, under which Mr. Brown
resigned as an officer and director. We agreed to pay Mr. Brown the sum of
$140,000 as severance, including attorneys' fees, and we exchanged mutual
releases of substantially all claims arising out of his employment.
Summary of Cash and Certain Other Compensation
The following table provides information about the compensation paid or
payable by us for services rendered in all capacities to our Chief Executive
Officer and our other executive officers who earned more than $100,000 for
1998.
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation
----------------------------------------------- ---------------------------
Other Restricted Securities All
Name and Annual Stock Underlying Other
Principal Position Salary Bonus Compensation Award(s) Options Compensation
- -------------------- ---------------- ----------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
David J. Moore $259,137 $343,750 $0 56,250 0 $0
President and
Chief Executive
Officer
C. Andrew Johns 105,192(1) 66,706 0 0 62,500 0
Chief Financial
Officer
Jacob I. Friesel 153,125(2) 150,391 0 0 0 0
Executive Vice
President
Yale R. Brown 255,202(3) 13,923 0 0 0 0
Former Executive
Vice President
</TABLE>
- ----------
(1) Mr. Johns commenced his employment with us on April 17, 1998.
(2) Mr. Friesel commenced his employment with us on February 24, 1998.
(3) Mr. Brown commenced his employment with us on April 13, 1998 and terminated
his employment on December 11, 1998. Amounts include all payments,
totaling approximately $140,000, to be made pursuant to a severance
agreement.
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<PAGE>
Stock Options
The following table contains information concerning the grant of options
under our 1998 Stock Incentive Plan to each of our executive officers during
the year ended December 31, 1998. We did not grant any stock appreciation
rights in 1998.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
----------------------------------
Percent of
Number of Total Potential Realizable
Securities Options Value at Assumed
Underlying Granted to Annual Rates of
Options Employees in Exercise Price Expiration Stock Appreciation
Name Granted(#)(1) Fiscal Year(2) ($/Share) Date(3) for Option Term
- ----------------- --------------- ---------------- ---------------- ------------ -------------------------
5% 10%
----------- -----------
<S> <C> <C> <C> <C> <C> <C>
C. Andrew Johns 62,500 4.3% $ 4.00 3/25/08 $157,224 $398,436
</TABLE>
- ----------
(1) All options granted in 1998 were granted pursuant to the 1998 stock
incentive plan. The grant to Mr. Johns is exercisable in annual increments
of 25% of the total grant, beginning on the first anniversary of the date
of grant. All options were granted at the fair market value of common
stock on the effective date of grant.
(2) The total number of options granted to directors and employees in 1998 was
1,455,645.
(3) Each option may be subject to earlier termination if the officer's
employment with us is terminated.
The following table provides information for each of our executive
officers with respect to the value of options exercised during the year ended
December 31, 1998 and the value of outstanding and unexercised options held as
of December 31, 1998. There were no stock appreciation rights exercised during
1998 and none were outstanding as of December 31, 1998.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-end Option Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at December 31, 1998 at December 31, 1998(1)
------------------------------- ------------------------------
Shares
Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------------- ------------- ---------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
C. Andrew Johns -- $ -- 0 62,500 $0 $1,500,000
</TABLE>
- ----------
(1) Represents the difference between the closing market price of the common
stock as reported by Nasdaq on December 31, 1998 of $28.00 per share and
the exercise price per share of in-the-money options multiplied by the
number of shares underlying the in-the-money options.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Under the securities laws of the United States, our directors, executive
officers, and any persons holding more than 10 percent of our common stock are
required to report their ownership of common stock and any changes in that
ownership, on a timely basis, to the Securities and Exchange Commission. Based
on material provided to us, all such required reports were filed on a timely
basis in 1998.
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<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The table below sets forth the beneficial ownership of our Common Stock as
of May 4, 1999 by (i) each director, (ii) each of our named executive officers
(iii) all directors and executive officers as a group, and (iv) all persons
known by the Board of Directors to be beneficial owners of more than five
percent of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
Beneficial Owner Number of Shares Percentage(1)
- ---------------------------------- ------------------ --------------
Executive Officers and Directors:
<S> <C> <C>
David J. Moore(2)(3) 904,843 4.5%
R. Theodore Ammon(4) 1,756,391 8.3
Jacob I. Friesel(2)(5) 708,371 3.5
C. Andrew Johns(2)(6) 27,000 *
John F. Barry III(7) 1,755,391 8.3
Jack I. Rivkin(8) 2,581,228 12.3
Arnie Semsky(2) 0 *
Charles W. Stryker(9) 0 *
All directors and officers as a
group (8 persons) 7,733,224 33.9
</TABLE>
- ----------
*Represents less than 1% of the outstanding common stock.
(1) Applicable percentage ownership is based on 20,169,776 shares of Common
Stock outstanding as of May 4, 1999. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission and
generally includes voting or investment power with respect to securities,
subject to community property laws, where applicable. Shares of Common
Stock subject to options or warrants that are exercisable within 60 days
of May 4, 1999 and beneficially owned by the person holding such options
and warrants are treated as outstanding for the purpose of computing the
percentage ownership for such person, but are not treated as outstanding
for the purpose of computing the percentage ownership of any other person.
(2) The address of Messrs. Moore, Friesel, Johns and Semsky is c/o 24/7 Media,
Inc., 1250 Broadway, New York, New York 10001.
(3) Includes 37,500 unvested shares of Common Stock issued pursuant to the 1998
Stock Incentive Plan and subject to forfeiture pursuant thereto. Includes
244,505 shares held by a family trust and other trusts held for the
benefit of family members, beneficial ownership of which is disclaimed by
Mr. Moore. Mr. Moore's wife is the trustee of each such trust.
(4) Represents 875,351 shares, 4,688 vested stock options, Class A warrants to
purchase 437,676 shares and Class B warrants to purchase 437,676 shares
held by Big Flower Digital Services, Inc., an indirect subsidiary of Big
Flower Holdings, Inc. Mr. Ammon is the Chairman of the board of directors
of Big Flower Holdings, Inc. Mr. Ammon owns 1,000 shares of our common
stock in his individual capacity and expressly disclaims beneficial
ownership of the shares held by Big Flower Digital Services, Inc. The
address of each of these entities is c/o Big Flower Holdings, Inc., 3 East
54th Street, New York, New York 10022.
(5) Includes 262,360 shares held by a family trust, beneficial ownership of
which is disclaimed by Mr. Friesel.
(6) Includes 2,000 shares held by family members, options to acquire 15,625
shares and Class C warrants to purchase 9,375 shares.
(7) Represents 656,513 shares, Class A warrants to purchase 328,257 shares and
Class B warrants to purchase 328,257 shares held by Prospect Street NYC
Discovery Fund, L.P. and 218,838 shares, Class A warrants to purchase
109,419 shares and Class B warrants to purchase 109,419 shares held by
Prospect Street NYC Co-Investment Fund, L.P. and 4,688 vested stock options
held by Mr. Barrry individually. Mr. Barry is one of our directors and is
the Managing General Partner of Prospect Street NYC Discovery Fund, L.P. Mr.
Barry does not own any shares of our common stock in his individual capacity
and expressly disclaims beneficial ownership of the shares held by Prospect
Street NYC Discovery Fund, L.P. and Prospect Street NYC Co-Investment Fund,
L.P. The address of each of these entities is c/o Prospect Street Ventures,
10 East 40th St., 44th floor, New York, New York 10016.
(8) Represents 1,666,829 shares, 4,688 vested stock options, Class A warrants to
purchase 437,676 shares and Class B warrants to purchase 437,676 shares held
by The Travelers Insurance Company, and 34,359 shares held by The Travelers
Indemnity Company. Mr. Rivkin is one of our directors and is Senior Vice
President of Travelers Investment Group Inc., an affiliate of The Travelers
Insurance Company and The Travelers Indemnity Company. Mr. Rivkin does not
own any shares of our common stock in his individual capacity and expressly
disclaims beneficial ownership of the shares held by The Travelers Insurance
Company and The Travelers Indemnity
8
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Company. The address of each of these entities is c/o Travelers Group Inc.,
388 Greenwich Street, 36th floor, New York, New York 10013. None of
Travelers Investment Group Inc., The Travelers Insurance Company, The
Travelers Indemnity Company or their respective affiliates has assumed or
has any responsibility for our management, business or operations, or for
the statements contained in this proxy, other than the limited information
regarding securities ownership contained in this table.
(9) The address of Mr. Stryker is c/o IntelliQuest Information Systems, Inc.,
380 Interstate North Parkway, Suite 310, Atlanta, Georgia 30339.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee determines our executive compensation policies.
The Compensation Committee determines the compensation of our executive
officers and other individuals compensated by us. The Compensation Committee
also approves and oversees the administration of our incentive compensation
programs for all employees including executive officers. The Compensation
Committee has reviewed and is in accord with the compensation paid to our
executive officers in 1998.
Compensation Policies and Programs
The Company's compensation program is part of a company-wide program
covering all employees. The program's goals are to attract, retain, and
motivate employees, and we utilize incentives such that employees and
stockholders share the same risks. The compensation program is designed to link
each employee's compensation to the performance of 24/7 Media. A portion of
each employee's compensation relates to the grant of stock options, and such
grants are based on the successful attainment of strategic corporate, business
unit, and individual goals.
Grants of stock options are of great importance to executives as well as
all employees. Any long-term value to be derived from such grants will be
consistent with stockholder gains.
Executive and employee compensation includes salary, employment-related
benefits, and long-term incentive compensation:
Salary. Salaries are set competitively relative to comparable positions
within and without the Internet advertising industry. Individual experience and
performance is considered when setting salaries within the range for each
position. Annual reviews are held and adjustments are made based on attainment
of individual and company goals.
Benefits. All employees are eligible for similar benefits, such as health
and life insurance.
Long-Term Incentive Compensation. An incentive compensation program is
established annually. The purpose of this program is to provide financial
incentives to executives and employees to achieve annual corporate, business
unit, and individual goals. The incentive program also aligns executive and
employee interests with those of stockholders by using grants of stock options.
Such grants vest over time thereby encouraging continued employment with 24/7
Media.
Members of the Compensation Committee:
Jack L. Rivkin, Chairman
David J. Moore
Charles W. Stryker
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PERFORMANCE GRAPH
Set forth below is a graph comparing the four-month percentage change in
our cumulative stockholder return on our Common Stock from August 13, 1998 (the
date of the initial public offering) to the last day of our last completed
fiscal year. The cumulative stockholder return is measured by dividing:
o the sum of (A) the cumulative amount of dividends for the measurement
period, assuming dividend reinvestment, and (B) the excess of our share
price as of the end of the measurement period over the price at the
beginning of the measurement period, by
o the share price at the beginning of the measurement period.
The cumulative total return on our Common Stock is compared with the Nasdaq
Stock Market (U.S.) Index and a self-constructed peer group index.
COMPARISON OF FOUR-MONTH CUMULATIVE TOTAL RETURN*
AMONG 24/7 MEDIA, INC., THE NASDAQ STOCK MARKET (U.S.)
INDEX AND A PEER GROUP(1)
8/13/95 12/31/98
------- --------
247 Media $100 $200.00
Nasdaq Stock Market (U.S.) Index 100 121.64
Peer Group 100 127.05
- ----------
* Assumes $100 invested on 8/13/98 (including reinvestment of dividends).
(1) Peer Group includes the following companies: DoubleClick Inc., CNet, Inc.,
Infoseek Corp., Lycos, Inc., NetGravity, Inc. and Sportsline USA, Inc.
10
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PROPOSAL TWO:
AMENDMENT OF THE
1998 STOCK INCENTIVE PLAN
The stockholders of 24/7 Media are asked to approve amendments to our 1998
Stock Incentive Plan. The amendments will make certain technical alterations
and will:
o increase the aggregate number of shares of Common Stock subject to awards
under the Plan from 3,000,000 shares to 5,750,000;
o increase the maximum number of shares of Common Stock subject to any
option which may be granted under the Plan to any participant from
187,500 shares to 250,000 shares, and increase the maximum number of
shares of Common Stock subject to any stock appreciation right which may
be granted under the Plan to any participant from 187,500 shares to
250,000 shares;
o permit us to grant awards, in our sole discretion, to individuals who
become employed by us or any of our affiliates as a result of a merger or
consolidation, as a conversion from, and replacement of, comparable
awards held by such individuals from the prior employer, and to the
extent of such substitution, to increase the maximum number of shares of
Common Stock which may be issued or used for reference under the Plan,
except with respect to incentive stock options ("ISOs").
The affirmative vote of the holders of at least a majority of the
outstanding shares of our Common Stock present and entitled to vote at the
annual meeting is required to approve the amendments to the Plan.
OUR BOARD RECOMMENDS THAT YOU, AS STOCKHOLDERS, VOTE "FOR" THE APPROVAL OF
THE AMENDMENTS TO THE 1998 STOCK INCENTIVE PLAN.
Background of the Proposal to Amend the 1998 Stock Incentive Plan
The Plan was adopted by the Board of Directors on March 10, 1998. The
Incentive Plan was amended on May 28, 1998 and June 30, 1998 with the approval
of our Board of Directors and stockholders. The Plan was originally established
for the benefit of our stockholders by enabling us (i) to offer stock based
incentives to our employees, our affiliates (as defined in the Plan) and our
consultants, thereby creating a means to raise the level of ownership in our
common stock by such individuals in order to attract, retain and reward such
individuals and strengthen the mutuality of interests between such individuals
and stockholders and (ii) to grant nondiscretionary, nonqualified stock options
to non-employee directors thereby attracting, retaining and rewarding such
non-employee directors and strengthening the mutuality of interests between
non-employee directors and stockholders. Our Board has approved and recommends
the approval of the said amendments to the Plan.
Summary of the 1998 Stock Incentive Plan (including the proposed amendments)
The following is a brief summary of the principal provisions of the Plan.
This summary does not purport to be complete and is qualified in its entirety
by reference to the text of the Amended and Restated 1998 Stock Incentive Plan
set forth in Exhibit A hereto.
Background; Purpose; Eligibility. The Plan is intended to foster stock
ownership by employees and directors and thereby attract, retain and reward
such employees and directors. All of our employees, consultants and non-employee
directors that satisfy requirements are eligible to be granted awards under the
Plan.
Administration. The Plan may be administered and interpreted by a
committee or subcommittee of the Board appointed from time to time by the
Board, which may consist of two or more non-employee directors, each of whom is
intended to be a non-employee director as defined in Rule 16b-3 under the
Exchange Act ("Rule 16b-3") and an outside director as defined under Section
162(m) of the Code (the "Committee"). If no Committee exists which has the
authority to administer the Plan, the functions of the Committee will be
exercised by the Board.
The Committee has full authority to administer and interpret the Plan
(except that with respect to awards to non-employee directors, the Plan will be
administered by the Board), to grant discretionary awards under the Plan, to
determine the persons to whom awards will be granted, to determine the types of
awards to be granted, to determine the terms and conditions of each award, to
determine the number of shares of Common Stock to be covered by each award, to
prescribe the form or forms of instruments evidencing awards and to make all
other determinations in connection with the Plan and the awards thereunder as
the Committee (or the Board, in the case of non-employee directors' awards), in
its sole discretion, deems necessary or desirable.
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The terms and conditions of individual awards are set forth in written
agreements which are consistent with the terms of the Plan. Awards under the
Plan may not be made on or after February 13, 2008.
Eligibility and Types of Awards. All of our employees, directors,
affiliates and consultants are eligible to be granted nonqualified stock
options, stock appreciation rights and restricted stock. In addition, our
employees and our affiliates that qualify as subsidiaries or parent
corporations (within the meaning of Section 424 of the Code) are eligible to be
granted ISOs under the Plan. Our non-employee directors are eligible to receive
nondiscretionary grants of nonqualified stock options.
Available Shares. The aggregate number of shares of Common Stock which
may be issued or used for reference purposes under the Plan or with respect to
which awards other than ISOs may be granted may not exceed 5,750,000 shares,
which may be either authorized and unissued Common Stock or Common Stock held
in or acquired for the treasury of 24/7 Media.
The maximum number of shares of Common Stock with respect to which any
option may be granted under the Plan during any fiscal year to any individual
will be 250,000 shares. The maximum number of shares of Common Stock with
respect to which any stock appreciation right may be granted under the Plan
during any fiscal year to any individual will be 250,000 shares.
The number of shares of Common Stock available for the grant of awards and
the exercise price of an award may be adjusted to reflect any change in our
capital structure or business by reason of certain corporate transactions or
events.
Awards Under the Plan. The following types of awards are available under
the Plan:
Stock Options. The Committee may grant nonqualified stock options and ISOs
to purchase shares of Common Stock. The Committee will determine the number of
shares of Common Stock subject to each option, the term of each option (which
may not exceed 10 years (or five years in the case of an ISO granted to a 10%
shareholder)), the exercise price, the vesting schedule (if any), and the other
material terms of each option. No ISO or nonqualified stock option may have an
exercise price less than the fair market value of the Common Stock at the time
of grant (or, in the case of an ISO granted to a 10% shareholder, 110% of fair
market value).
Options will be exercisable at such time or times and subject to such
terms and conditions as determined by the Committee at grant and the
exercisability of such options may be accelerated by the Committee in its sole
discretion.
Stock Appreciation Rights. The Committee may grant stock appreciation
rights ("SARs") either with a stock option which may be exercised only at such
times and to the extent the related option is exercisable ("Tandem SAR") or
independent of a stock option ("Non-Tandem SARs"). A SAR is a right to receive
a payment either in cash or common stock, as the Committee may determine, equal
in value to the excess of the fair market value of one share of Common Stock on
the date of exercise over the exercise price per share established in
connection with the grant of the SAR. The exercise price per share covered by a
SAR will be the exercise price per share of the related option in the case of a
Tandem SAR and will be the fair market value of the Common Stock on the date of
grant in the case of a Non-Tandem SAR.
Restricted Stock. The Committee may award shares of restricted stock. Upon
the award of restricted stock, the recipient has all rights of a stockholder
with respect to the shares, including the right to receive dividends, the right
to vote the shares of restricted stock and, conditioned upon full vesting of
shares of restricted stock, the right to tender such shares, subject to the
conditions and restrictions generally applicable to restricted stock or
specifically set forth in the recipient's restricted stock agreement. The
payment of dividends, if any, shall, unless the Committee specifies otherwise
at the time of the award, be deferred until the expiration of the applicable
restriction period.
Recipients of restricted stock are required to enter into a restricted
stock agreement with us which states the restrictions to which the shares are
subject and the criteria or date or dates on which such restrictions will
lapse. Within these limits, based on service and such other factors as the
Committee may determine in its sole discretion, the Committee may provide for
the lapse of such restrictions or may accelerate or waive such restrictions at
any time.
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Change in Control. Unless determined otherwise by the Committee at the
time of grant, accelerated vesting and lapsing of any restrictions will occur
and any unvested awards will automatically become 100% vested upon a change in
control (as defined in the Plan) of 24/7 Media. The Committee may, in its sole
discretion, provide for accelerated vesting of an award at any time. The
Committee may also, in its sole discretion, provide for accelerated vesting of
an award upon a termination during the 180 day period prior to a Change in
Control.
Non-Employee Director Stock Option Grants. The Plan authorizes the
automatic grant of nonqualified stock options to each non-employee director,
without further action by the Board or the stockholders, as follows: (i)
options to purchase 18,750 shares of Common Stock will be granted to each
non-employee director as of the date he or she begins service as a non-employee
director on the Board (an "Initial Grant"); and (ii) options to purchase 4,688
shares of Common Stock (or a pro rata portion for less than a full year of
service) will be granted to each non-employee director upon the date of each
annual meeting of stockholders (an "Annual Grant"). The exercise price per
share of such options will be the fair market value of the Common Stock at the
time of grant or the par value of the Common Stock, whichever is greater. The
term of each such option will be 10 years. Options granted to non-employee
directors pursuant to an Initial Grant will vest and become exercisable at the
rate of 25% of the options granted, as of each anniversary of the date of
grant. Options granted pursuant to an Annual Grant will become vested in full
on the date of the fourth Annual Meeting of Stockholders held following the
date of the grant, provided that the non-employer director is a director on the
Board on that date. All options granted to non-employee directors and not
previously exercisable will become fully exercisable immediately upon a change
in control.
Amendment and Termination. Notwithstanding any other provision of the
Plan, the Board may at any time amend any or all of the provisions of the Plan,
or suspend or terminate it entirely, retroactively or otherwise; provided,
however, that, unless otherwise required by law or specifically provided in the
Plan, the rights of a participant with respect to awards granted prior to such
amendment, suspension or termination may not be impaired without the consent of
such participant and, provided further, without the approval of our
stockholders in accordance with the laws of the State of Delaware, to the
extent required under Section 162(m) of the Code, or to the extent applicable
to ISOs, Section 422 of the Code, no amendment may be made which would: (i)
increase the aggregate number of shares of Common Stock that may be issued;
(ii) increase the maximum individual participant share limitations for a fiscal
year; (iii) change the classification of employees or consultants eligible to
receive awards; (iv) decrease the minimum exercise price of any stock option or
SAR; (v) extend the maximum option term; (vi) change rights under the Plan with
regard to non-employee directors; or (vii) require stockholder approval in
order for the Plan to continue to comply with the applicable provisions of
Section 162(m) of the Code or, to the extent applicable to ISOs, Section 422 of
the Code.
Miscellaneous. Awards granted under the Plan are generally
nontransferable, except that the Committee may provide for the transferability
of nonqualified stock options (other than those granted to non-employee
directors) at the time of grant or thereafter. Stock options granted to
non-employee directors are transferable solely to such non-employee director's
principal employer (other than us or our affiliate if the director should
become employed by us or our affiliate) at the time of grant if the terms of
such non-employee director's employment so require.
Certain U.S. Federal Income Tax Consequences. The rules concerning the
Federal income tax consequences with respect to options granted and to be
granted pursuant to the Plan are quite technical. Moreover, the applicable
statutory provisions are subject to change, as are their interpretations and
applications which may vary in individual circumstances. Therefore, the
following is designed to provide a general understanding of the Federal income
tax consequences. In addition, the following discussion does not set forth any
gift, estate, social security or state or local tax consequences that may be
applicable and is limited to the U.S. federal income tax consequences to
individuals who are citizens or residents of the U.S., other than those
individuals who are taxed on a residence basis in a foreign country.
Incentive Stock Options. In general, an employee will not realize taxable
income upon either the grant or the exercise of an ISO and we will not realize
an income tax deduction at either such time. In general, however, for purposes
of the alternative minimum tax, the excess of the fair market value of the
shares of Common Stock acquired upon exercise of an ISO (determined at the time
of exercise) over the exercise price of the ISO will be considered income. If
the recipient does not sell the Common Stock received pursuant to the exercise
of the ISO within either (i) two years after the date of the grant of the ISO
or (ii) one year after the date of exercise, a subsequent sale of the Common
Stock will result in long-term capital gain or loss to the recipient and will
not result in a tax deduction to 24/7 Media. Capital gains rates may be reduced
in the case of a longer holding period.
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If the recipient disposes of the Common Stock acquired upon exercise of
the ISO within either of the above mentioned time periods, the recipient will
generally realize as ordinary income an amount equal to the lesser of (i) the
fair market value of the Common Stock on the date of exercise over the exercise
price, or (ii) the amount realized upon disposition over the exercise price. In
such event, we generally will be entitled to an income tax deduction equal to
the amount recognized as ordinary income. Any gain in excess of such amount
realized by the recipient as ordinary income would be taxed at the rates
applicable to short-term or long-term capital gains (depending on the holding
period).
Nonqualified Stock Options. A recipient will not realize any taxable
income upon the grant of a nonqualified stock option and we will not receive a
deduction at the time of such grant unless such option has a readily
ascertainable fair market value (as determined under applicable tax law) at the
time of grant. Upon exercise of a nonqualified stock option, the recipient
generally will realize ordinary income in an amount equal to the excess of the
fair market value of the Common Stock on the date of exercise over the exercise
price. Upon a subsequent sale of the Common Stock by the recipient, the
recipient will recognize short-term or long-term capital gain or loss depending
upon his or her holding period for the Common Stock. The Company will generally
be allowed a deduction equal to the amount recognized by the recipient as
ordinary income.
All Options. With regard to both ISOs and nonqualified stock options, the
following also apply: (i) any of our officers and directors subject to Section
16(b) of the Exchange Act may be subject to special tax rules regarding the
income tax consequences concerning their nonqualified stock options, (ii) any
entitlement to a tax deduction on the part of 24/7 Media is subject to the
applicable tax rules (including, without limitation, Section 162(m) of the Code
regarding a $1,000,000 limitation on deductible compensation), and (iii) in the
event that the exercisability or vesting of any award is accelerated because of
a change of control, payments relating to the awards (or a portion thereof),
either alone or together with certain other payments, may constitute parachute
payments under Section 280G of the Code, which excess amounts may be subject to
excise taxes.
In general, Section 162(m) of the Code denies a publicly held corporation
a deduction for Federal income tax purposes for compensation in excess of
$1,000,000 per year per person to its chief executive officer and four other
executive officers whose compensation is disclosed in its proxy statement,
subject to certain exceptions. Options will generally qualify under one of
these exceptions if they are granted under a plan that states the maximum
number of shares with respect to which options may be granted to any recipient
during a specified period of the plan under which the options are granted is
approved by shareholders and is administered by a compensation committee
comprised of outside directors. The Plan is intended to satisfy these
requirements with respect to options.
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PROPOSAL THREE:
INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, our Board of Directors has
appointed KPMG LLP, independent certified public accountants, to audit the
books and records of 24/7 Media for the fiscal year ending December 31, 1999. A
majority of the votes of the outstanding shares of our Common Stock is required
to ratify the appointment of the independent auditors.
Representatives of KPMG LLP are expected to be present at the meeting of
stockholders and will be given an opportunity to make a statement if they so
desire. They are expected to be available to respond to appropriate questions.
OUR BOARD RECOMMENDS THAT YOU, AS STOCKHOLDERS, VOTE "FOR" THE
RATIFICATION OF KPMG LLP AS INDEPENDENT CERTIFIED ACCOUNTANTS FOR THE YEAR
ENDING DECEMBER 31, 1999.
STOCKHOLDER PROPOSALS
Stockholders of 24/7 Media wishing to include proposals in the proxy
material in relation to our annual meeting to be held in 2000 must submit the
same in writing so as to be received by the Secretary of 24/7 Media at the
executive office of 24/7 Media on or before April 9, 2000. However, if we
determine to change the date of the 2000 annual meeting more than 30 days from
June 8, 2000, we will provide you with a reasonable time before we begin to
print and mail our proxy materials for the 2000 annual meeting in order to
allow our stockholders an opportunity to make proposals in accordance with the
rules and regulations of the Securities and Exchange Commission. Such proposals
must also meet the other requirements of the rules of the Securities and
Exchange Commission relating to stockholders' proposals.
OTHER MATTERS
We know of no other matters that are to be presented for action at the
annual meeting other than those set forth above. If any other matters properly
come before the annual meeting, the persons named in the enclosed proxy form
will vote the shares represented by proxies in accordance with their best
judgment on such matters.
By order of the Board of Directors,
/s/ DAVID J. MOORE
DAVID J. MOORE
President and Chief Executive Officer
May 10, 1999
STOCKHOLDERS ARE REQUESTED TO MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. YOUR PROMPT RESPONSE
WILL BE HELPFUL, AND YOUR COOPERATION WILL BE APPRECIATED.
15
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EXHIBIT A
24/7 MEDIA, INC.
1998 STOCK INCENTIVE PLAN
As Amended and Restated as of July 20, 1998
and as further
Amended and Restated as of June 8, 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I PURPOSE ............................................ 1
ARTICLE II DEFINITIONS ........................................ 1
ARTICLE III ADMINISTRATION ..................................... 4
ARTICLE IV SHARE AND OTHER LIMITATIONS ........................ 6
ARTICLE V ELIGIBILITY ........................................ 8
ARTICLE VI STOCK OPTION GRANTS ................................ 8
ARTICLE VII RESTRICTED STOCK AWARDS ............................ 10
ARTICLE VIII STOCK APPRECIATION RIGHTS .......................... 11
ARTICLE IX NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS .......... 14
ARTICLE X NON-TRANSFERABILITY ................................ 15
ARTICLE XI CHANGE IN CONTROL PROVISIONS ....................... 15
ARTICLE XII TERMINATION OR AMENDMENT OF THE PLAN ............... 16
ARTICLE XIII UNFUNDED PLAN ...................................... 17
ARTICLE XIV GENERAL PROVISIONS ................................. 17
ARTICLE XV TERM OF PLAN ....................................... 18
ARTICLE XVI NAME OF PLAN ....................................... 19
<PAGE>
24/7 MEDIA, INC.
1998 STOCK INCENTIVE PLAN
As Amended and Restated as of July 20, 1998
and as further
Amended and Restated as of June 8, 1999
ARTICLE I
PURPOSE
The purpose of this 24/7 Media, Inc. 1998 Stock Incentive Plan (the
"Plan") is to enhance the profitability and value of 24/7 Media, Inc. (the
"Company") for the benefit of its stockholders by enabling the Company (i) to
offer employees and consultants of the Company and its Affiliates stock based
incentives and other equity interests in the Company, thereby creating a means
to raise the level of stock ownership by employees and consultants in order to
attract, retain and reward such employees and consultants and strengthen the
mutuality of interests between employees or consultants and the Company's
stockholders and (ii) to offer equity based awards to non-employee directors
thereby attracting, retaining and rewarding such non-employee directors and
strengthening the mutuality of interests between non-employee directors and the
Company's stockholders. This Plan subsumed and replaced in its entirety the
Amended and Restated 1995 Stock Option Plan (the "1995 Plan") adopted by the
Company's Board of Directors, and subsequently adopted by the Company's
stockholders at the Company's Annual Meeting of Stockholders on March 8, 1996,
and all Options granted under the 1995 Plan continued to be outstanding Options
under the Plan. The Plan was originally effective February 13, 1998. It was
amended and restated effective July 20, 1998. The Plan is now again amended and
restated in the form set forth herein to be effective upon approval by the
Company's Board of Directors subject to the approval of the Company's
stockholders within twelve (12) months of the effective date.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Affiliate" shall mean, other than the Company, each of the following:
(i) any Subsidiary; (ii) any Parent; (iii) any corporation, trade or business
(including, without limitation, a partnership or limited liability company)
which is directly or indirectly controlled fifty percent (50%) or more (whether
by ownership of stock, assets or an equivalent ownership interest or voting
interest) by the Company or one of its Affiliates; and (iv) any other entity,
approved by the Committee as an Affiliate under the Plan, in which the Company
or any of its Affiliates has a material equity interest.
2.2 "Award" shall mean any award under this Plan of any Stock Option,
Stock Appreciation Right or Restricted Stock. All Awards shall be confirmed by,
and subject to the terms of, a written agreement executed by the Company and
the Participant.
2.3 "Board" shall mean the Board of Directors of the Company.
2.4 "Cause" shall mean, with respect to a Participant's Termination of
Employment or Termination of Consultancy, unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced,
thereafter: (i) in the case where there is no employment agreement, consulting
agreement, change in control agreement or similar agreement in effect between
the Company or an Affiliate and the Participant at the time of the grant of the
Award (or where there is such an agreement but it does not define "cause" (or
words of like import)), termination due to a Participant's dishonesty, fraud,
insubordination, willful misconduct, refusal to perform services (for any
reason other than illness or incapacity) or materially unsatisfactory
performance of his or her duties for the Company as determined by the Committee
in its sole discretion; or (ii) in the case where there is an employment
agreement, consulting agreement, change in control agreement or similar
agreement in effect between the Company or an Affiliate and the Participant at
the time of the grant of the Award that defines "cause" (or words of like
import), as defined under such agreement; provided, however, that with regard
to any agreement that conditions "cause" on occurrence of a change in control,
such definition of "cause" shall not apply until a change in control actually
takes place and then only with regard to a termination thereafter. With respect
to a Participant's Termination of Directorship, Cause shall mean an act or
failure to act that constitutes "cause" for removal of a director under
applicable state corporate law.
2.5 "Change in Control" shall have the meaning set forth in Article XI.
<PAGE>
2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any successor
provision and any Treasury regulation thereunder.
2.7 "Committee" shall mean a committee of the Board that may be appointed
from time to time by the Board. To the extent determined appropriate by the
Board, or to the extent required under Rule 16b-3 and Section 162(m) of the
Code, such committee shall consist of two or more non-employee directors, each
of whom shall be a non-employee director as defined in Rule 16b-3 and an
outside director as defined under Section 162(m) of the Code. To the extent
that no Committee exists which has the authority to administer the Plan, the
functions of the Committee shall be exercised by the Board. If for any reason
the appointed Committee does not meet the requirements of Rule 16b-3 or Section
162(m) of the Code, such noncompliance with the requirements of Rule 16b-3 or
Section 162(m) of the Code shall not affect the validity of the awards, grants,
interpretations or other actions of the Committee. Notwithstanding the
foregoing, with respect to the application of the Plan to non-employee
directors, Committee shall mean the Board.
2.8 "Common Stock" shall mean the Company's common stock, $.01 par value
per share, of the Company.
2.9 "Company" shall mean 24/7 Media, Inc., a Delaware corporation.
2.10 "Consultant" shall mean any advisor or consultant to the Company or
an Affiliate who is eligible pursuant to Article V to be granted Awards under
this Plan.
2.11 "Disability" shall mean total and permanent disability, as defined in
Section 22(e)(3) of the Code.
2.12 "Effective Date" shall mean February 13, 1998. The amendments
contained herein shall become effective upon approval by the Company's Board,
subject to approval by the Company's stockholders, to the extent and in the
manner provided by applicable law, within twelve (12) months of the effective
date.
2.13 "Eligible Employees" shall mean the employees of the Company and its
Affiliates who are eligible pursuant to Article V to be granted Awards under
this Plan. Notwithstanding the foregoing, with respect to the grant of
Incentive Stock Options, Eligible Employees shall mean the employees of the
Company, its Subsidiaries and its Parents who are eligible pursuant to Article
V to be granted Stock Options under the Plan.
2.14 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.15 "Fair Market Value" for purposes of this Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, the last sales price reported for the
Common Stock on the applicable date, or in the absence of reported sales on
such date, the last reported sales price reported for the Common Stock prior to
such date (on which there is a sale): (i) as reported by the principal national
securities exchange in the United States on which it is then traded or the
Nasdaq Stock Market, Inc., or (ii) if not traded on any such national
securities exchange or the Nasdaq Stock Market, Inc., as quoted on an automated
quotation system sponsored by the National Association of Securities Dealers.
If the Common Stock is not readily tradable on a national securities exchange,
the Nasdaq Stock Market, Inc. or any system sponsored by the National
Association of Securities Dealers, its Fair Market Value shall be set in good
faith by the Committee based on reasonable methods set forth under Section 422
of the Code and the regulations thereunder including, without limitation, a
method utilizing the average of prices of the Common Stock reported on the
principal national securities exchange on which it is then traded during a
reasonable period designated by the Committee. For purposes of the grant of any
Award, the applicable date shall be the date on which the Award is granted or,
in the case of a Stock Appreciation Right, the date a notice of exercise is
received by the Committee or, if the sale of Common Stock shall not have been
reported or quoted on such date, the first day prior thereto on which the sale
of Common Stock was reported or quoted.
2.16 "Good Reason" with respect to a Participant's Termination of
Employment or Termination of Consultancy shall mean (i) in the case where there
is no employment agreement, consulting agreement, change in control agreement
or similar agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award (or where there is such an
agreement but it does not define "Good Reason" (or words of like import)), or
where "Good Reason" is not otherwise determined by the Committee at grant, or,
if no rights of the Participant are reduced, thereafter, a voluntary
termination due to "good reason," as the Committee, in its sole discretion,
decides to treat as a Good Reason termination, or (ii) in the case where there
is an employment agreement, consulting agreement, change in control agreement
or similar agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award that defines "good reason"
(or words of like import), as defined under such agreement; provided, however,
that with regard to any agreement that conditions "good reason" on occurrence
of a change in control, such definition of "good reason" shall not apply until
a change in control actually takes place and then only with regard to a
termination thereafter.
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2.17 "Incentive Stock Option" shall mean any Stock Option awarded under
this Plan intended to be and designated as an "Incentive Stock Option" within
the meaning of Section 422 of the Code.
2.18 "Limited Stock Appreciation Right" shall mean an Award of a limited
Tandem Stock Appreciation Right or a Non-Tandem Stock Appreciation Right made
pursuant to Section 8.5 of this Plan.
2.19 "Non-Qualified Stock Option" shall mean any Stock Option awarded
under this Plan that is not an Incentive Stock Option.
2.20 "Non-Tandem Stock Appreciation Right" shall mean a Stock Appreciation
Right entitling a Participant to receive an amount in cash or Common Stock (as
determined by the Committee in its sole discretion) equal to the excess of: (i)
the Fair Market Value of a share of Common Stock as of the date such right is
exercised, over (ii) the aggregate exercise price of such right.
2.21 "Parent" shall mean any parent corporation of the Company within the
meaning of Section 424(e) of the Code.
2.22 "Participant" shall mean the following persons to whom an Award has
been made pursuant to this Plan: Eligible Employees of, and Consultants to, the
Company and its Affiliates and non-employee directors of the Company; provided,
however, that non-employee directors shall be Participants for purposes of the
Plan solely with respect to Awards of Stock Options pursuant to Article IX.
2.23 "Restricted Stock" shall mean an award of shares of Common Stock
under the Plan that is subject to restrictions under Article VII.
2.24 "Restriction Period" shall have the meaning set forth in Subsection
7.3(a) with respect to Restricted Stock for Eligible Employees.
2.25 "Retirement" with respect to a Participant's Termination of
Employment or Termination of Consultancy, shall mean a Termination of
Employment or Termination of Consultancy without Cause from the Company by a
Participant who has attained (i) at least age sixty-five (65); or (ii) such
earlier date after age fifty-five (55) as may be approved by the Committee with
regard to such Participant. With respect to a Participant's Termination of
Directorship, Retirement shall mean the failure to stand for reelection or the
failure to be reelected after a Participant has attained age sixty-five (65).
2.26 "Rule 16b-3" shall mean Rule 16b-3 under Section 16(b) of the
Exchange Act as then in effect or any successor provisions.
2.27 "Section 162(m) of the Code" shall mean the exception for
performance-based compensation under Section 162(m) of the Code and any
Treasury regulations thereunder.
2.28 "Stock Appreciation Right" shall mean the right pursuant to an Award
granted under Article VIII. A Tandem Stock Appreciation Right shall mean the
right to surrender to the Company all (or a portion) of a Stock Option in
exchange for an amount in cash or stock equal to the excess of (i) the Fair
Market Value, on the date such Stock Option (or such portion thereof) is
surrendered, of the Common Stock covered by such Stock Option (or such portion
thereof), over (ii) the aggregate exercise price of such Stock Option (or such
portion thereof). A Non-Tandem Stock Appreciation Right shall mean the right to
receive an amount in cash or stock equal to the excess of (x) the Fair Market
Value of a share of Common Stock on the date such right is exercised, over (y)
the aggregate exercise price of such right, other than on surrender of a Stock
Option.
2.29 "Stock Option" or "Option" shall mean any Option to purchase shares
of Common Stock granted to Eligible Employees or Consultants pursuant to
Article VI or non-employee directors pursuant to Article IX.
2.30 "Subsidiary" shall mean any corporation that is defined as a
subsidiary corporation in Section 424(f) of the Code.
2.31 "Ten Percent Stockholder" shall mean a person owning Common Stock of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, its Subsidiaries and/or its
Parents in the manner provided under Section 422 of the Code.
2.32 "Termination of Consultancy" shall mean, with respect to an
individual, that the individual is no longer acting as a Consultant to the
Company or an Affiliate. In the event an entity shall cease to be an Affiliate,
there shall be deemed a Termination of Consultancy of any individual who is not
otherwise a Consultant of the Company or another Affiliate at the time the
entity ceases to be an Affiliate. In the event that a Consultant becomes an
Eligible Employee upon the termination of his consultancy, the Committee, in
its sole and absolute discretion, may determine
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that no Termination of Consultancy shall be deemed to occur until such time as
such Consultant is no longer a Consultant or an Eligible Employee.
2.33 "Termination of Directorship" shall mean, with respect to a
non-employee director, that the non-employee director has ceased to be a
director of the Company.
2.34 "Termination of Employment," except as provided in the next sentence,
shall mean (i) a termination of service (for reasons other than a military or
personal leave of absence granted by the Company) of a Participant from the
Company and its Affiliates; or (ii) when an entity which is employing a
Participant ceases to be an Affiliate, unless the Participant thereupon becomes
employed by the Company or another Affiliate. In the event that an Eligible
Employee becomes a Consultant upon the termination of his employment, the
Committee, in its sole and absolute discretion, may determine that no
Termination of Employment shall be deemed to occur until such time as such
Eligible Employee is no longer an Eligible Employee or a Consultant. The
Committee may otherwise define Termination of Employment in the Option grant
or, if no rights of the Participant are reduced, may otherwise define
Termination of Employment thereafter, including, but not limited to, defining
Termination of Employment with regard to entities controlling, under common
control with or controlled by the Company rather than just the Company and its
Affiliates and/or entities that provide substantial services to the Company or
its Affiliates to which the Participant has transferred directly from the
Company or its Affiliates at the request of the Company.
2.35 "Transfer" or "Transferred" shall mean anticipate, alienate, attach,
sell, assign, pledge, encumber, charge or otherwise transfer.
ARTICLE III
ADMINISTRATION
3.1 The Committee. The Plan shall be administered and interpreted by the
Committee.
3.2 Awards. The Committee shall have full authority to grant, pursuant to
the terms of this Plan, (i) Stock Options, (ii) Stock Appreciation Rights, both
Tandem and Non-Tandem and (iii) Restricted Stock to Eligible Employees and
Consultants. Stock Options may be granted to non-employee directors of the
Company pursuant to Article IX. In particular, the Committee shall have the
authority:
(a) to select the Eligible Employees and Consultants to whom Stock
Options, Stock Appreciation Rights and Restricted Stock may from time to
time be granted hereunder;
(b) to determine whether and to what extent Stock Options, Stock
Appreciation Rights and Restricted Stock or any combination thereof are to
be granted hereunder to one or more Eligible Employees or Consultants;
(c) to determine, in accordance with the terms of this Plan, the number
of shares of Common Stock to be covered by each Award to an Eligible
Employee or Consultant granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the
terms of this Plan, of any Award granted hereunder to an Eligible Employee
or Consultant (including, but not limited to, the exercise or purchase
price (if any), any restriction or limitation, any vesting schedule or
acceleration thereof, or any forfeiture restrictions or waiver thereof,
regarding any Stock Option or other Award, and the shares of Common Stock
relating thereto, based on such factors, if any, as the Committee shall
determine, in its sole discretion);
(e) to determine whether and under what circumstances a Stock Option may
be settled in cash, Common Stock and/or Restricted Stock under Subsection
6.3(d) or, with respect to Stock Options granted to non-employee
directors, Section 9.4(c);
(f) to determine whether, to what extent and under what circumstances to
provide loans (which shall be on a recourse basis and shall bear a
reasonable rate of interest) to Eligible Employees and Consultants in
order to exercise Options under the Plan;
(g) to modify, extend or renew a Stock Option, subject to Article XII
hereof, provided, however, that if a Stock Option is modified, extended or
renewed and thereby deemed to be the issuance of a new Stock Option under
the Code or the applicable accounting rules, the exercise price of such
Stock Option may continue to be the original exercise price even if less
than the Fair Market Value of the Common Stock at the time of such
modification, extension or renewal;
(h) to determine whether a Stock Option is an Incentive Stock Option or
NonQualified Stock Option, whether a Stock Appreciation Right is a Tandem
Stock Appreciation Right or Non-Tandem Stock Appreciation Right or whether
an Award is intended to satisfy Section 162(m) of the Code;
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(i) to determine whether to require an Eligible Employee or Consultant,
as a condition of the granting of any Award, to not sell or otherwise
dispose of shares acquired pursuant to the exercise of an Option or as an
Award for a period of time as determined by the Committee, in its sole
discretion, following the date of the acquisition of such Option or Award;
(j) to determine whether a Stock Appreciation Right is Tandem or Non-
Tandem;
(k) to determine whether to require an Eligible Employee or Consultant,
as a condition of the granting of any Award, to not sell or otherwise
dispose of shares acquired pursuant to the exercise of an Option or as an
Award for a period of time as determined by the Committee, in its sole
discretion, following the date of the acquisition of such Option or Award;
and
(l) to grant Awards under the Plan as a conversion from, and replacement
of, comparable stock options, stock appreciation rights or restricted
stock held by employees of another entity who become Eligible Employees
of, or Consultants to, the Company or an Affiliate as the result of a
merger or consolidation of the employing entity with the Company or an
Affiliate, or as the result of the acquisition by the Company of property
or stock of the employing corporation. The Company may direct that
replacement Awards be granted on such terms and conditions as the
Committee considers appropriate in the circumstances, including, without
limitation, that Non-Qualified Stock Options shall be granted in lieu of
Incentive Stock Options.
3.3 Guidelines. Subject to Article XII hereof, the Committee shall have
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan and perform all acts, including the
delegation of its administrative responsibilities, as it shall, from time to
time, deem advisable; to construe and interpret the terms and provisions of
this Plan and any Award issued under this Plan (and any agreements relating
thereto); and to otherwise supervise the administration of this Plan. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in this Plan or in any agreement relating thereto in the manner
and to the extent it shall deem necessary to carry this Plan into effect, but
only to the extent any such action would be permitted under the applicable
provisions of Rule 16b-3 (if any) and the applicable provisions of Section
162(m) of the Code (if any). The Committee may adopt special guidelines and
provisions for persons who are residing in, or subject to the taxes of,
countries other than the United States to comply with applicable tax and
securities laws. If ,or to the extent applicable, this Plan is intended to
comply with Section 162(m) of the Code and the applicable requirements of Rule
16b-3 and shall be limited, construed and interpreted in a manner so as to
comply therewith.
3.4 Decisions Final. Any decision, interpretation or other action made or
taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its members) arising out of or in connection with the Plan
shall be within the absolute discretion of all and each of them, as the case
may be, and shall be final, binding and conclusive on the Company and all
employees and Participants and their respective heirs, executors,
administrators, successors and assigns. The Committee shall not be bound to any
standards of uniformity or similarity of action, interpretation or conduct in
the discharge of its duties hereunder, regardless of the apparent similarity of
the matters coming before it.
3.5 Reliance on Counsel. The Company, the Board or the Committee may
consult with legal counsel, who may be counsel for the Company or other
counsel, with respect to its obligations or duties hereunder, or with respect
to any action or proceeding or any question of law, and shall not be liable
with respect to any action taken or omitted by it in good faith pursuant to the
advice of such counsel.
3.6 Procedures. If the Committee is appointed, the Board may designate one
of the members of the Committee as chairman and the Committee shall hold
meetings, subject to the By-Laws of the Company, at such times and places as it
shall deem advisable. A majority of the Committee members shall constitute a
quorum. All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by all
Committee members in accordance with the By-Laws of the Company shall be fully
effective as if it had been made by a vote at a meeting duly called and held.
The Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
3.7 Designation of Consultants--Liability.
(a) The Committee may designate employees of the Company and
professional advisors to assist the Committee in the administration of the
Plan and may grant authority to employees to execute agreements or other
documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants and agents
as it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred
by the Committee or
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Board in the engagement of any such counsel, consultant or agent shall be
paid by the Company. The Committee, its members and any person designated
pursuant to paragraph (a) above shall not be liable for any action or
determination made in good faith with respect to the Plan. To the maximum
extent permitted by applicable law, no officer of the Company or member or
former member of the Committee or of the Board shall be liable for any
action or determination made in good faith with respect to the Plan or any
Award granted under it. To the maximum extent permitted by applicable law
and the Certificate of Incorporation and By-Laws of the Company and to the
extent not covered by insurance, each employee of the Company and member
or former member of the Committee or of the Board shall be indemnified and
held harmless by the Company against any cost or expense (including
reasonable fees of counsel reasonably acceptable to the Company) or
liability (including any sum paid in settlement of a claim with the
approval of the Company), and advanced amounts necessary to pay the
foregoing at the earliest time and to the fullest extent permitted,
arising out of any act or omission to act in connection with the Plan,
except to the extent arising out of such officer's, member's or former
member's own fraud or bad faith. Such indemnification shall be in addition
to any rights of indemnification the employees, officers, directors or
members or former officers, directors or members may have under applicable
law or under the Certificate of Incorporation or By-Laws of the Company or
Affiliate. Notwithstanding anything else herein, this indemnification will
not apply to the actions or determinations made by an individual with
regard to Awards granted to him or her under this Plan.
ARTICLE IV
SHARE AND OTHER LIMITATIONS
4.1 Shares.
(a) General Limitation. The aggregate number of shares of Common Stock
which may be issued or used for reference purposes under this Plan or with
respect to which other Awards may be granted shall not exceed 5,750,000
shares (subject to any increase or decrease pursuant to Section 4.2) which
may be either authorized and unissued Common Stock or Common Stock held in
or acquired for the treasury of the Company. If any Option or Stock
Appreciation Right granted under this Plan expires, terminates or is
canceled for any reason without having been exercised in full or, with
respect to Options, the Company repurchases any Option pursuant to Section
6.3(f), the number of shares of Common Stock underlying the repurchased
Option, and/or the number of shares of Common Stock underlying any
unexercised Stock Appreciation Right or Option shall again be available
for the purposes of Awards under the Plan. If a Tandem Stock Appreciation
Right or a Limited Stock Appreciation Right is granted in tandem with an
Option, such grant shall only apply once against the maximum number of
shares of Common Stock which may be issued under this Plan. In determining
the number of shares of Common Stock available for Awards other than
Awards of Incentive Stock Options, if Common Stock has been delivered or
exchanged by a Participant as full or partial payment to the Company for
the exercise price or for withholding taxes, in connection with the
exercise of a Stock Option or the number shares of Common Stock otherwise
deliverable has been reduced for full or partial payment for the exercise
price or for withholding taxes, the number of shares of Common Stock
delivered, exchanged or reduced shall again be available for purposes of
Awards under this Plan.
In the event Awards are granted to employees or Consultants pursuant to
Section 3.2(l), the aggregate number of shares of Common Stock available
under the Plan for Awards other than Incentive Stock Options shall be
increased by the number of shares of Common Stock which may be issued or
used for reference with respect to those Awards granted pursuant to
Section 3.2(l). The maximum number of shares of Common Stock which may be
issued under this Plan with respect to Incentive Stock Options shall not
be increased (subject to any increase or decrease pursuant to Section
4.2).
(b) Individual Participant Limitations.
(i) The maximum number of shares of Common Stock subject to any
Option which may be granted under this Plan to each Participant
shall not exceed 250,000 shares (subject to any increase or
decrease pursuant to Section 4.2) during each fiscal year of the
Company.
(ii) There are no annual individual Participant limitations on
Restricted Stock.
(iii)The maximum number of shares of Common Stock subject to any
Stock Appreciation Right which may be granted under this Plan to
each Participant shall not exceed 250,000 shares (subject to any
increase or decrease pursuant to Section 4.2) during each fiscal
year of the Company. If a Tandem Stock Appreciation Right or
Limited Stock Appreciation Right is granted in tandem with an
Option it shall apply against the Participant's individual share
limitations for both Stock Appreciation Rights and Options.
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(iv) The individual Participant limitations set forth in this
Section 4.1(b) shall be cumulative; that is, to the extent that
shares of Common Stock for which Awards are permitted to be
granted to an Eligible Employee or a Consultant during a fiscal
year are not covered by an Award to such Eligible Employee or
Consultant in a fiscal year, the number of shares of Common
Stock available for Awards to such Eligible Employee or
Consultant shall automatically increase in the subsequent fiscal
years during the term of the Plan until used.
4.2 Changes.
(a) The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of
the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company or its Affiliates,
any issue of bonds, debentures, preferred or prior preference stock ahead
of or affecting Common Stock, the dissolution or liquidation of the
Company or its Affiliates, any sale or transfer of all or part of its
assets or business or any other corporate act or proceeding.
(b) In the event of any such change in the capital structure or business
of the Company by reason of any stock dividend or distribution, stock
split or reverse stock split, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, distribution
with respect to its outstanding Common Stock or capital stock other than
Common Stock, sale or transfer of all or part of its assets or business,
reclassification of its capital stock, or any similar change affecting the
Company's capital structure or business and the Committee determines an
adjustment is appropriate under the Plan, then the aggregate number and
kind of shares which thereafter may be issued under this Plan, the number
and kind of shares or other property (including cash) to be issued upon
exercise of an outstanding Option or other Awards granted under this Plan
and the purchase price thereof shall be appropriately adjusted consistent
with such change in such manner as the Committee may deem equitable to
prevent substantial dilution or enlargement of the rights granted to, or
available for, Participants under this Plan or as otherwise necessary to
reflect the change, and any such adjustment determined by the Committee
shall be binding and conclusive on the Company and all Participants and
employees and their respective heirs, executors, administrators,
successors and assigns.
(c) Fractional shares of Common Stock resulting from any adjustment in
Options or Awards pursuant to Section 4.2(a) or (b) shall be aggregated
until, and eliminated at, the time of exercise by rounding-down for
fractions less than one-half (1/2) and rounding-up for fractions equal to
or greater than one-half (1/2). No cash settlements shall be made with
respect to fractional shares eliminated by rounding. Notice of any
adjustment shall be given by the Committee to each Participant whose
Option or Award has been adjusted and such adjustment (whether or not such
notice is given) shall be effective and binding for all purposes of the
Plan.
(d) In the event of a merger or consolidation in which the Company is
not the surviving entity or in the event of any transaction that results
in the acquisition of substantially all of the Company's outstanding
Common Stock by a single person or entity or by a group of persons and/or
entities acting in concert, or in the event of the sale or transfer of all
of the Company's assets (all of the foregoing being referred to as
"Acquisition Events"), then the Committee may, in its sole discretion,
terminate all outstanding Options and Stock Appreciation Rights of
Eligible Employees and Consultants, effective as of the date of the
Acquisition Event, by delivering notice of termination to each such
Participant at least twenty (20) days prior to the date of consummation of
the Acquisition Event; provided, that during the period from the date on
which such notice of termination is delivered to the consummation of the
Acquisition Event, each such Participant shall have the right to exercise
in full all of his or her Options and Stock Appreciation Rights that are
then outstanding (without regard to any limitations on exercisability
otherwise contained in the Option or Award Agreements) but contingent on
occurrence of the Acquisition Event, and, provided that, if the
Acquisition Event does not take place within a specified period after
giving such notice for any reason whatsoever, the notice and exercise
shall be null and void.
(e) If an Acquisition Event occurs, to the extent the Committee does not
terminate the outstanding Options and Stock Appreciation Rights pursuant
to this Section 4.2(d), then the provisions of Section 4.2(b) shall apply.
4.3 Purchase Price. Notwithstanding any provision of this Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.
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ARTICLE V
ELIGIBILITY
5.1 All employees of and Consultants to the Company and its Affiliates are
eligible to be granted Non-Qualified Stock Options, Stock Appreciation Rights
and Restricted Stock under this Plan. All employees of the Company, its
Subsidiaries and its Parents are eligible to be granted Incentive Stock Options
under the Plan. Eligibility under this Plan shall be determined by the
Committee.
5.2 Non-employee directors of the Company are only eligible to receive an
Award of Stock Options in accordance with Article IX of the Plan.
ARTICLE VI
STOCK OPTION GRANTS
6.1 Options. Each Stock Option granted hereunder shall be one of two
types: (i) an Incentive Stock Option intended to satisfy the requirements of
Section 422 of the Code or (ii) a Non-Qualified Stock Option.
6.2 Grants. The Committee shall have the authority to grant to any
Eligible Employee one or more Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options (in each case with or without Stock
Appreciation Rights). The Committee shall have the authority to grant to any
Consultant one or more Non-Qualified Stock Options (with or without Stock
Appreciation Rights). To the extent that any Stock Option does not qualify as
an Incentive Stock Option (whether because of its provisions or the time or
manner of its exercise or otherwise), such Stock Option or the portion thereof
which does not qualify, shall constitute a separate NonQualified Stock Option.
Notwithstanding any other provision of this Plan to the contrary or any
provision in an agreement evidencing the grant of a Stock Option to the
contrary, any Stock Option granted to an Eligible Employee of an Affiliate
(other than an Affiliate which is a Parent or a Subsidiary) or to any
Consultant shall be a Non-Qualified Stock Option.
6.3 Terms of Options. Options granted under this Plan shall be subject to
the following terms and conditions, shall be subject to Section 3.2 hereof and
the other provisions of this Plan, and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock
purchasable under an Incentive Stock Option shall be determined by the
Committee at the time of grant but shall not be less than 100% of the Fair
Market Value of the share of Common Stock at the time of grant; provided,
however, if an Incentive Stock Option is granted to a Ten Percent
Stockholder, the purchase price shall be no less than 110% of the Fair
Market Value of the Common Stock. The purchase price of shares of Common
Stock subject to a Non-Qualified Stock Option shall be determined by the
Committee but shall not be less than 100% of the Fair Market Value of the
Common Stock at the time of grant. Notwithstanding the foregoing, if an
Option is modified, extended or renewed and, thereby, deemed to be the
issuance of a new Option under the Code, the exercise price of an Option
may continue to be the original exercise price even if less than the Fair
Market Value of the Common Stock at the time of such modification,
extension or renewal.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10)
years after the date the Option is granted, provided, however, the term of
an Incentive Stock Option granted to a Ten Percent Stockholder may not
exceed five (5) years.
(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by
the Committee at grant. If the Committee provides, in its discretion, that
any Stock Option is exercisable subject to certain limitations (including,
without limitation, that it is exercisable only in installments or within
certain time periods), the Committee may waive such limitations on the
exercisability at any time at or after grant in whole or in part
(including, without limitation, that the Committee may waive the
installment exercise provisions or accelerate the time at which Options may
be exercised), based on such factors, if any, as the Committee shall
determine, in its sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (c) above, Stock Options
may be exercised in whole or in part at any time during the Option term, by
giving written notice of exercise to the Company specifying the number of
shares of Common Stock to be purchased. Such notice shall be accompanied by
payment in full of the purchase price in such form, or such other
arrangement for the satisfaction of the purchase price, as the Committee
may accept. To the extent determined by the Committee in its sole
discretion at or after grant, payment in full or in part may be made as
follows: (i) in cash or by check, bank draft or money order payable to the
order of the Company;
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(ii) if the Common Stock is traded on a national securities exchange, the
Nasdaq Stock Market, Inc. or quoted on a national quotation system
sponsored by the National Association of Securities Dealers, through a
"cashless exercise" procedure whereby the Participant delivers irrevocable
instructions to a broker to deliver promptly to the Company an amount equal
to the purchase price, (iii) in the form of Common Stock owned by the
Participant for at least 6 months (and for which the Participant has good
title free and clear of any liens and encumbrances) or (iv) in the form of
Restricted Stock; provided, however, that in each case, such payment is
based on the Fair Market Value of the Common Stock on the payment date as
determined by the Committee (without regard to any forfeiture restrictions
applicable to such Restricted Stock). No shares of Common Stock shall be
issued until payment, as provided herein, therefor has been made or
provided for. If payment in full or in part has been made in the form of
Restricted Stock, an equivalent number of shares of Common Stock issued on
exercise of the Option shall be subject to the same restrictions and
conditions, during the remainder of the Restriction Period, applicable to
the Restricted Stock surrendered therefor.
(e) Incentive Stock Option Limitations. To the extent that the
aggregate Fair Market Value (determined as of the time of grant) of the
Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by an Eligible Employee during any calendar year under
the Plan and/or any other stock option plan of the Company or any
Subsidiary or Parent exceeds $100,000, such Options shall be treated as
Options which are not Incentive Stock Options. In addition, if an Eligible
Employee does not remain employed by the Company, any Subsidiary or Parent
at all times from the time the Option is granted until three (3) months
prior to the date of exercise (or such other period as required by
applicable law), such Option shall be treated as an Option which is not a
Non-Qualified Stock Option.
Should the foregoing provision not be necessary in order for the Stock
Options to qualify as Incentive Stock Options, or should any additional
provisions be required, the Committee may amend the Plan accordingly,
without the necessity of obtaining the approval of the stockholders of the
Company.
(f) Buy Out and Settlement Provisions. The Committee may at any time on
behalf of the Company offer to buy out an Option previously granted, based
on such terms and conditions as the Committee shall establish and
communicate to the Participant at the time that such offer is made.
(g) Form, Modification, Extension and Renewal of Options. Subject to
the terms and conditions and within the limitations of the Plan, an Option
shall be evidenced by such form of agreement or grant as is approved by the
Committee, and the Committee may modify, extend or renew outstanding
Options granted under the Plan (provided that the rights of a Participant
are not reduced without his consent), or accept the surrender of
outstanding Options (up to the extent not theretofore exercised) and
authorize the granting of new Options in substitution therefor (to the
extent not theretofore exercised).
(h) Deferred Delivery of Common Shares. The Committee may in its
discretion permit Participants to defer delivery of Common Stock acquired
pursuant to a Participant's exercise of an Option in accordance with the
terms and conditions established by the Committee.
(i) Other Terms and Conditions. Options may contain such other
provisions, which shall not be inconsistent with any of the foregoing terms
of the Plan, as the Committee shall deem appropriate including, without
limitation, permitting "reloads" such that the same number of Options are
granted as the number of Options exercised, shares used to pay for the
exercise price of Options or shares used to pay withholding taxes
("Reloads"). With respect to Reloads, the exercise price of the new Stock
Option shall be the Fair Market Value on the date of the "reload" and the
term of the Stock Option shall be the same as the remaining term of the
Options that are exercised, if applicable, or such other exercise price and
term as determined by the Committee.
6.4 Termination of Employment. The following rules apply with regard to
Options upon the Termination of Employment or Termination of Consultancy of a
Participant:
(a) Termination by Reason of Death. If a Participant's Termination of
Employment or Termination of Consultancy is by reason of death, any Stock
Option held by such Participant, unless otherwise determined by the
Committee at grant or, if no rights of the Participant's estate are
reduced, thereafter, may be exercised, to the extent exercisable at the
Participant's death, by the legal representative of the estate, at any time
within a period of one (1) year from the date of such death, but in no
event beyond the expiration of the stated term of such Stock Option.
(b) Termination by Reason of Disability. If a Participant's Termination
of Employment or Termination of Consultancy is by reason of Disability, any
Stock Option held by such Participant, unless otherwise determined by the
Committee at grant or, if no rights of the Participant are reduced,
thereafter, may be exercised,
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to the extent exercisable at the Participant's termination, by the
Participant (or the legal representative of the Participant's estate if the
Participant dies after termination) at any time within a period of one (1)
year from the date of such termination, but in no event beyond the
expiration of the stated term of such Stock Option.
(c) Termination by Reason of Retirement. If a Participant's Termination
of Employment or Termination of Consultancy is by reason of Retirement, any
Stock Option held by such Participant, unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced,
thereafter, shall be fully vested and may thereafter be exercised by the
Participant at any time within a period of one (1) year from the date of
such termination, but in no event beyond the expiration of the stated term
of such Stock Option; provided, however, that, if the Participant dies
within such exercise period, any unexercised Stock Option held by such
Participant shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of one (1) year (or such
other period as the Committee may specify at grant or, if no rights of the
Participant's estate are reduced, thereafter) from the date of such death,
but in no event beyond the expiration of the stated term of such Stock
Option.
(d) Involuntary Termination Without Cause or Termination for Good
Reason. If a Participant's Termination of Employment or Termination of
Consultancy is by involuntary termination without Cause or for Good Reason,
any Stock Option held by such Participant, unless otherwise determined by
the Committee at grant or, if no rights of the Participant are reduced,
thereafter, may be exercised, to the extent exercisable at termination, by
the Participant at any time within a period of ninety (90) days from the
date of such termination, but in no event beyond the expiration of the
stated term of such Stock Option.
(e) Termination Without Good Reason. If a Participant's Termination of
Employment or Termination of Consultancy is voluntary but without Good
Reason and occurs prior to, or more than ninety (90) days after, the
occurrence of an event which would be grounds for Termination of Employment
or Termination of Consultancy by the Company for Cause (without regard to
any notice or cure period requirements), any Stock Option held by such
Participant, unless otherwise determined by the Committee at grant or, if
no rights of the Participant are reduced, thereafter, may be exercised, to
the extent exercisable at termination, by the Participant at any time
within a period of thirty (30) days from the date of such termination, but
in no event beyond the expiration of the stated term of such Stock Option.
(f) Other Termination. Unless otherwise determined by the Committee at
grant or, if no rights of the Participant are reduced, thereafter, if a
Participant's Termination of Employment or Termination of Consultancy is
for any reason other than death, Disability, Retirement, Good Reason,
involuntary termination without Cause or voluntary termination as provided
in subsection (e) above, any Stock Option held by such Participant shall
thereupon terminate and expire as of the date of termination, provided that
(unless the Committee determines a different period upon grant or, if no
rights of the Participant are reduced, thereafter) in the event the
termination is for Cause or is a voluntary termination without Good Reason
within ninety (90) days after occurrence of an event which would be grounds
for Termination of Employment or Termination of Consultancy by the Company
for Cause (without regard to any notice or cure period requirement), any
Stock Option held by the Participant at the time of occurrence of the event
which would be grounds for Termination of Employment or Termination of
Consultancy by the Company for Cause shall be deemed to have terminated and
expired upon occurrence of the event which would be grounds for Termination
of Employment or Termination of Consultancy by the Company for Cause.
ARTICLE VII
RESTRICTED STOCK AWARDS
7.1 Awards of Restricted Stock. Shares of Restricted Stock may be issued
to Eligible Employees or Consultants either alone or in addition to other
Awards granted under the Plan. The Committee shall determine the eligible
persons to whom, and the time or times at which, grants of Restricted Stock
will be made, the number of shares to be awarded, the price (if any) to be paid
by the recipient (subject to Section 7.2), the time or times within which such
Awards may be subject to forfeiture, the vesting schedule and rights to
acceleration thereof, and all other terms and conditions of the Awards.
7.2 Awards and Certificates. The prospective Participant selected to
receive a Restricted Stock Award shall not have any rights with respect to such
Award, unless and until such Participant has delivered a fully executed copy of
the applicable agreement evidencing the Award (the "Restricted Stock Award
Agreement") to the Company and has otherwise complied with the applicable terms
and conditions of such Award. Further, such Award shall be subject to the
following conditions:
(a) Purchase Price. The purchase price of Restricted Stock shall be
fixed by the Committee. Subject to Section 4.3, the purchase price for
shares of Restricted Stock may be zero to the extent permitted by
applicable law, and, to the extent not so permitted, such purchase price
may not be less than par value.
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(b) Acceptance. Awards of Restricted Stock must be accepted within a
period of sixty (60) days (or such shorter period as the Committee may
specify at grant) after the Award date, by executing a Restricted Stock
Award Agreement and by paying whatever price (if any) the Committee has
designated thereunder.
(c) Legend. Each Participant receiving a Restricted Stock Award shall
be issued a stock certificate in respect of such shares of Restricted
Stock, unless the Committee elects to use another system, such as book
entries by the transfer agent, as evidencing ownership of a Restricted
Stock Award. Such certificate shall be registered in the name of such
Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:
"The anticipation, alienation, attachment, sale, transfer,
assignment, pledge, encumbrance or charge of the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the 24/7 Media, Inc. (the "Company") 1998 Stock
Incentive Plan, as Amended and Restated, and an Agreement entered into
between the registered owner and the Company, dated , 19 . Copies
of such Plan and Agreement are on file at the principal office of the
Company."
(d) Custody. The Committee may require that any stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock Award, the Participant shall have delivered a duly signed
stock power, endorsed in blank, relating to the Common Stock covered by
such Award.
7.3 Restrictions and Conditions on Restricted Stock Awards. The shares of
Restricted Stock awarded pursuant to this Plan shall be subject to Article X
and the following restrictions and conditions:
(a) Restriction Period; Vesting and Acceleration of Vesting. The
Participant shall not be permitted to Transfer shares of Restricted Stock
awarded under this Plan during a period set by the Committee (the
"Restriction Period") commencing with the date of such Award, as set forth
in the Restricted Stock Award agreement and such agreement shall set forth
a vesting schedule and any events which would accelerate vesting of the
shares of Restricted Stock. Within these limits, based on service, or other
criteria determined by the Committee, the Committee may provide for the
lapse of such restrictions in installments in whole or in part, or may
accelerate the vesting of all or any part of any Restricted Stock Award.
(b) Rights as Stockholder. Except as provided in this subsection (b)
and subsection (a) above and as otherwise determined by the Committee, the
Participant shall have, with respect to the shares of Restricted Stock, all
of the rights of a holder of shares of Common Stock of the Company
including, without limitation, the right to receive any dividends, the
right to vote such shares and, subject to and conditioned upon the full
vesting of shares of Restricted Stock, the right to tender such shares.
Notwithstanding the foregoing, the payment of dividends shall be deferred
until, and conditioned upon, the expiration of the applicable Restriction
Period, unless the Committee, in its sole discretion, specifies otherwise
at the time of the Award.
(c) Lapse of Restrictions. If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock subject to such
Restriction Period, the certificates for such shares shall be delivered to
the Participant. All legends shall be removed from said certificates at the
time of delivery to the Participant except as otherwise required by
applicable law.
7.4 Termination of Employment or Termination of Consultancy for Restricted
Stock. Subject to the applicable provisions of the Restricted Stock Award
agreement and this Plan, upon a Participant's Termination of Employment or
Termination of Consultancy for any reason during the relevant Restriction
Period, all Restricted Stock still subject to restriction will vest or be
forfeited in accordance with the terms and conditions established by the
Committee at grant or thereafter.
ARTICLE VIII
STOCK APPRECIATION RIGHTS
8.1 Tandem Stock Appreciation Rights. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option (a "Reference Stock
Option") granted under this Plan ("Tandem Stock Appreciation Rights"). In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Reference Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time of the
grant of such Reference Stock Option.
8.2 Terms and Conditions of Tandem Stock Appreciation Rights. Tandem Stock
Appreciation Rights shall be subject to such terms and conditions, not
inconsistent with the provisions of this Plan, as shall be determined from time
to time by the Committee, including Article X and the following:
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(a) Term. A Tandem Stock Appreciation Right or applicable portion
thereof granted with respect to a Reference Stock Option shall terminate
and no longer be exercisable upon the termination or exercise of the
Reference Stock Option, except that, unless otherwise determined by the
Committee, in its sole discretion, at the time of grant, a Tandem Stock
Appreciation Right granted with respect to less than the full number of
shares covered by the Reference Stock Option shall not be reduced until and
then only to the extent the exercise or termination of the Reference Stock
Option causes the number of shares covered by the Tandem Stock Appreciation
Right to exceed the number of shares remaining available and unexercised
under the Reference Stock Option.
(b) Exercisability. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the Reference
Stock Options to which they relate shall be exercisable in accordance with
the provisions of Article VI and this Article VIII.
(c) Method of Exercise. A Tandem Stock Appreciation Right may be
exercised by an optionee by surrendering the applicable portion of the
Reference Stock Option. Upon such exercise and surrender, the Participant
shall be entitled to receive an amount determined in the manner prescribed
in this Section 8.2. Stock Options which have been so surrendered, in whole
or in part, shall no longer be exercisable to the extent the related Tandem
Stock Appreciation Rights have been exercised.
(d) Payment. Upon the exercise of a Tandem Stock Appreciation Right a
Participant shall be entitled to receive up to, but no more than, an amount
in cash and/or Common Stock (as chosen by the Committee in its sole
discretion) equal in value to the excess of the Fair Market Value of one
share of Common Stock over the option price per share specified in the
Reference Stock Option multiplied by the number of shares in respect of
which the Tandem Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of payment.
(e) Deemed Exercise of Reference Stock Option. Upon the exercise of a
Tandem Stock Appreciation Right, the Reference Stock Option or part thereof
to which such Stock Appreciation Right is related shall be deemed to have
been exercised for the purpose of the limitation set forth in Article IV of
the Plan on the number of shares of Common Stock to be issued under the
Plan.
8.3 Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation
Rights may also be granted without reference to any Stock Options granted under
this Plan.
8.4 Terms and Conditions of Non-Tandem Stock Appreciation Rights.
Non-Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including Article X and the
following:
(a) Term. The term of each Non-Tandem Stock Appreciation Right shall be
fixed by the Committee, but shall not be greater than ten (10) years after
the date the right is granted.
(b) Exercisability. Non-Tandem Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee at grant. If the Committee
provides, in its discretion, that any such right is exercisable subject to
certain limitations (including, without limitation, that it is exercisable
only in installments or within certain time periods), the Committee may
waive such limitation on the exercisability at any time at or after grant
in whole or in part (including, without limitation, that the Committee may
waive the installment exercise provisions or accelerate the time at which
rights may be exercised), based on such factors, if any, as the Committee
shall determine, in its sole discretion.
(c) Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (b) above, Non-Tandem
Stock Appreciation Rights may be exercised in whole or in part at any time
during the option term, by giving written notice of exercise to the Company
specifying the number of Non-Tandem Stock Appreciation Rights to be
exercised.
(d) Payment. Upon the exercise of a Non-Tandem Stock Appreciation Right
a Participant shall be entitled to receive, for each right exercised, up
to, but no more than, an amount in cash and/or Common Stock (as chosen by
the Committee in its sole discretion) equal in value to the excess of the
Fair Market Value of one share of Common Stock on the date the right is
exercised over the Fair Market Value of one (1) share of Common Stock on
the date the right was awarded to the Participant.
8.5 Limited Stock Appreciation Rights. The Committee may, in its sole
discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a
general Stock Appreciation Right or as a Limited Stock Appreciation Right.
Limited Stock Appreciation Rights may be exercised only upon a Change in
Control (to the extent provided in an Award agreement granting such Limited
Stock Appreciation Rights) or the occurrence of such other event
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as the Committee may, in its sole discretion, designate at the time of grant or
thereafter. Upon the exercise of Limited Stock Appreciation Rights, except as
otherwise provided in an Award agreement, the Participant shall receive in cash
or Common Stock, as determined by the Committee, an amount equal to the amount
(1) set forth in Section 8.2(d) with respect to Tandem Stock Appreciation
Rights or (2) set forth in Section 8.4(d) with respect to Non-Tandem Stock
Appreciation Rights.
8.6 Termination of Employment or Termination of Consultancy. The following
rules apply with regard to Stock Appreciation Rights upon the Termination of
Employment or Termination of Consultancy of a Participant:
(a) Termination by Death. If a Participant's Termination of Employment
or Termination of Consultancy is by reason of death, any Stock Appreciation
Right held by such Participant, unless otherwise determined by the
Committee at grant or if no rights of the Participant's estate are reduced,
thereafter, may be exercised, to the extent exercisable at the
Participant's death, by the legal representative of the estate, at any time
within a period of one (1) year from the date of such death or until the
expiration of the stated term of such Stock Appreciation Right, whichever
period is the shorter.
(b) Termination by Reason of Disability. If a Participant's Termination
of Employment or Termination of Consultancy is by reason of Disability, any
Stock Appreciation Right held by such participant, unless otherwise
determined by the Committee at grant or, if no rights of the Participant
are reduced, thereafter, may be exercised, to the extent exercisable at the
Participant's termination, by the Participant (or the legal representative
of the Participant's estate if the Participant dies after termination) at
any time within a period of one (1) year from the date of such termination
or until the expiration of the stated term of such Stock Appreciation
Right, whichever period is the shorter.
(c) Termination by Reason of Retirement. If a Participant's Termination
of Employment or Termination of Consultancy is by reason of Retirement, any
Stock Appreciation Right held by such Participant, unless otherwise
determined by the Committee at grant or, if no rights of the Participant
are reduced, thereafter, shall be fully vested and may thereafter be
exercised by the Participant at any time within a period of one (1) year
from the date of such termination or until the expiration of the stated
term of such right, whichever period is the shorter; provided, however,
that, if the Participant dies within such one (1) year period, any
unexercised Non-Tandem Stock Appreciation Right held by such Participant
shall thereafter be exercisable, to the extent to which it was exercisable
at the time of death, for a period of one (1) year (or such other period as
the Committee may specify at grant or if no rights of the Participant are
reduced, thereafter) from the date of such death or until the expiration of
the stated term of such right, whichever period is the shorter.
(d) Involuntary Termination Without Cause or Termination for Good
Reason. If a Participant's Termination of Employment or Termination of
Consultancy is by involuntary termination without Cause or for Good Reason,
any Stock Appreciation Right held by such participant, unless otherwise
determined by the Committee at grant or if no rights of the participant are
reduced, thereafter, may be exercised, to the extent exercisable at
termination, by the Participant at any time within a period of ninety (90)
days from the date of such termination or until the expiration of the
stated term of such right, whichever period is shorter.
(e) Termination Without Good Reason. If a Participant's Termination of
Employment or Termination of Consultancy is voluntary but without Good
Reason and occurs prior to, or more than ninety (90) days after, the
occurrence of an event which would be grounds for Termination of Employment
or Termination of Consultancy by the Company for Cause (without regard to
any notice or cure period requirements), any Stock Appreciation Right held
by such Participant, unless greater or lesser exercise rights are provided
by the Committee at the time of grant or, if no rights of the participant
are reduced, thereafter, may be exercised, to the extent exercisable at
termination, by the Participant at any time within a period of thirty (30)
days from the date of such termination, but in no event beyond the
expiration of the stated term of such Stock Appreciation Right.
(f) Other Termination. Unless otherwise determined by the Committee at
grant, or, if no rights of the Participant are reduced thereafter, if a
Participant's Termination of Employment or Termination of Consultancy is
for any reason other than death, Disability, Retirement, Good Reason,
involuntary termination without Cause or voluntary termination as provided
in subsection (e) above, any Stock Appreciation Right held by such
Participant shall thereupon terminate or expire as of the date of
termination, provided, that (unless the Committee determines a different
period upon grant, or, if no rights of the Participant are reduced,
thereafter) in the event the termination is for Cause or is a voluntary
termination as provided in subsection (e) above, within ninety (90) days
after occurrence of an event which would be grounds for Termination of
Employment or Termination of Consultancy by the Company for Cause (without
regard to any notice or cure period requirement), any Stock Appreciation
Right held by the Participant at the time of the occurrence of the event
which
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would be grounds for Termination of Employment or Termination of
Consultancy by the Company for Cause shall be deemed to have terminated and
expired upon occurrence of the event which would be grounds for Termination
of Employment or Termination of Consultancy by the Company for Cause.
ARTICLE IX
NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS
9.1 Options. The terms of this Article IX shall apply only to Options
granted to non-employee directors.
9.2 Grants.
(a) Initial Grant. Subject to the terms of the Plan, each non-employee
director of the Company who, as of June 30, 1998, has not previously been
granted Options under the Plan shall be granted Non-Qualified Stock Options
to purchase 18,750 shares of Common Stock as of June 30, 1998, or, if
later, as of the date the non-employee director begins service as a
director on the Board.
(b) Subsequent Grants. Upon the date of each Annual Meeting of
Stockholders, each non-employee director shall be granted Non-Qualified
Stock Options to purchase 4,688 shares of Common Stock (or a pro rata
portion thereof if the director did not serve the entire year since the
date of the last annual meeting). These options shall vest in full on the
date of the fourth Annual Meeting of Stockholders held following the date
of the grant, provided that the non-employer director is a director on the
Board on that date.
9.3 Non-Qualified Stock Options. Stock Options granted under this Article
IX shall be Non-Qualified Stock Options.
9.4 Terms of Options. Options granted under this Article shall be subject
to the following terms and conditions and shall be in such form and contain
such additional terms and conditions, not inconsistent with terms of this Plan,
as the Committee shall deem desirable:
(a) Option Price. The purchase price per share of Common Stock
deliverable upon the exercise of an Option granted pursuant to Section 9.2
shall be 100% of the Fair Market Value of such Common Stock at the time of
the grant of the Option (the "Purchase Price"), or the par value of the
Common Stock, whichever is greater.
(b) Exercisability. Except as otherwise provided herein, twenty-five
percent (25%) of any Option granted under Section 9.2(a) shall be
exercisable on or after each of the four anniversaries following the date
of grant.
(c) Method for Exercise. A non-employee director electing to exercise
one or more Options shall give written notice of exercise to the Company
specifying the number of shares to be purchased. Common Stock purchased
pursuant to the exercise of Options shall be paid for at the time of
exercise in cash or by delivery of unencumbered Common Stock owned by the
non-employee director or a combination thereof or by such other method as
approved by the Board.
(d) Option Term. Except as otherwise provided herein, if not previously
exercised each Option shall expire upon the tenth anniversary of the date
of the grant thereof.
9.5 Termination of Directorship. The following rules apply with regard to
Options upon the Termination of Directorship:
(a) Death, Disability or Otherwise Ceasing to be a Director Other than
for Cause. Except as otherwise provided herein, upon the Termination of
Directorship, on account of Disability, death, Retirement, resignation,
failure to stand for reelection or failure to be reelected or otherwise
other than as set forth in (b) below, all outstanding Options then
exercisable and not exercised by the Participant prior to such Termination
of Directorship shall remain exercisable, to the extent exercisable at the
Termination of Directorship, by the Participant or, in the case of death,
by the Participant's estate or by the person given authority to exercise
such Options by his or her will or by operation of law, for the remainder
of the stated term of such Options.
(b) Cause. Upon removal, failure to stand for reelection or failure to
be renominated for Cause, or if the Company obtains or discovers
information after Termination of Directorship that such Participant had
engaged in conduct that would have justified a removal for Cause during
such directorship, all outstanding Options of such Participant shall
immediately terminate and shall be null and void.
(c) Cancellation of Options. No Options that were not exercisable
during the period such person serves as a director shall thereafter become
exercisable upon a Termination of Directorship for any reason or no
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reason whatsoever, and such Options shall terminate and become null and
void upon a Termination of Directorship.
9.6 Changes. The Awards to a non-employee director shall be subject to
Sections 4.2(a), (b) and (c) of the Plan and this Section 9.6, but shall not be
subject to Section 4.2(d).
9.7 If the Company shall not be the surviving corporation in any merger or
consolidation, or if the Company is to be dissolved or liquidated, then, unless
the surviving corporation assumes the Options or substitutes new Options which
are determined by the Board in its sole discretion to be substantially similar
in nature and equivalent in terms and value for Options then outstanding, upon
the effective date of such merger, consolidation, liquidation or dissolution,
any unexercised Options shall expire without additional compensation to the
holder thereof; provided, that, the Committee shall deliver notice to each
non-employee director at least twenty (20) days prior to the date of
consummation of such merger, consolidation, dissolution or liquidation which
would result in the expiration of the Options and during the period from the
date on which such notice of termination is delivered to the consummation of
the merger, consolidation, dissolution or liquidation, such Participant shall
have the right to exercise in full effective as of such consummation all
Options that are then outstanding (without regard to limitations on exercise
otherwise contained in the Options) but contingent on occurrence of the merger,
consolidation, dissolution or liquidation, and, provided that, if the
contemplated transaction does not take place within a ninety (90) day period
after giving such notice for any reason whatsoever, the notice, accelerated
vesting and exercise shall be null and void and, if and when appropriate, new
notice shall be given as aforesaid.
ARTICLE X
NON-TRANSFERABILITY
Except as provided in the last sentence of this Article X, no Stock Option
or Stock Appreciation Right granted to an Employee or Consultant shall be
Transferable by the Participant otherwise than by will or by the laws of
descent and distribution. All Stock Options and all Stock Appreciation Rights
granted to an Employee or Consultant shall be exercisable, during the
Participant's lifetime, only by the Participant. Tandem Stock Appreciation
Rights shall be Transferable, to the extent permitted above, only with the
underlying Stock Option. Shares of Restricted Stock under Article VII may not
be Transferred prior to the date on which shares are issued, or, if later, the
date on which any applicable restriction lapses. No Award shall, except as
otherwise specifically provided by law or herein, be Transferable in any
manner, and any attempt to Transfer any such Award shall be void, and no such
Award shall in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person who shall be entitled to such
Award, nor shall it be subject to attachment or legal process for or against
such person. All Stock Options granted to non-employee directors shall be
Transferable solely to such non-employee director's principal employer (other
than the Company or an Affiliate) at the time of grant if the terms of such
non-employee director's employment so require. Notwithstanding the foregoing,
the Committee may determine at the time of grant or thereafter, that a
Non-Qualified Stock Option that is otherwise not transferable pursuant to this
Article X is transferable in whole or part and in such circumstances, and under
such conditions, as specified by the Committee.
ARTICLE XI
CHANGE IN CONTROL PROVISIONS
11.1 Benefits. In the event of a Change in Control of the Company (as
defined below), except as otherwise provided by the Committee upon the grant of
an Award, each Participant shall have the following benefits:
(a) Unless otherwise provided in the applicable award agreement, all
outstanding Options and the related Tandem Stock Appreciation Rights and
Non-Tandem Stock Appreciation Rights of such Participant granted prior to
the Change in Control shall be fully vested and immediately exercisable in
their entirety. The Committee, in its sole discretion, may provide for the
purchase of any such Stock Options by the Company for an amount of cash
equal to the excess of the Change in Control Price (as defined below) of
the shares of Common Stock covered by such Stock Options, over the
aggregate exercise price of such Stock Options. For purposes of this
Section 11.1, "Change in Control Price" shall mean the higher of (i) the
highest price per share of Common Stock paid in any transaction related to
a Change in Control of the Company, or (ii) the highest Fair Market Value
per share of Common Stock at any time during the sixty (60) day period
preceding a Change in Control.
(b) Unless otherwise provided in the applicable award agreement, the
restrictions to which any shares of Restricted Stock of such Participant
granted prior to the Change in Control are subject shall lapse as if the
applicable Restriction Period had ended upon such Change in Control.
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(c) Notwithstanding anything else herein, the Committee may, in its
sole discretion, provide for accelerated vesting of an Award (other than a
grant to a non-employee director pursuant to Article IX hereof), upon a
Termination of Employment during the Pre-Change in Control Period. Unless
otherwise determined by the Committee, the "Pre-Change in Control Period"
shall mean the one hundred eighty (180) day period prior to a Change in
Control.
11.2 Change in Control. A "Change in Control" shall be deemed to have
occurred:
(a) upon any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Company, any trustee or other fiduciary
holding securities under any employee benefit plan of the Company, or any
company owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of Common Stock of
the Company, becoming the owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing forty percent (40%) or more of the combined voting power of
the Company's then outstanding securities (including, without limitation,
securities owned at the time of any increase in ownership);
(b) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors, and any new
director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in
paragraph (a), (c), or (d) of this section) or a director whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than
the Board of Directors of the Company whose election by the Board of
Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the two-year period or
whose election or nomination for election was previously so approved, cease
for any reason to constitute at least a majority of the Board of Directors;
(c) upon the merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger
or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar
transaction) in which no person (other than those covered by the exceptions
in (a) above) acquires more than forty percent (40%) of the combined voting
power of the Company's then outstanding securities shall not constitute a
Change in Control of the Company; or
(d) upon the stockholder's of the Company approval of a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets other than the sale of all or substantially all of the assets of the
Company to a person or persons who beneficially own, directly or
indirectly, at least fifty percent (50%) or more of the combined voting
power of the outstanding voting securities of the Company at the time of
the sale.
ARTICLE XII
TERMINATION OR AMENDMENT OF THE PLAN
12.1 Termination or Amendment. Notwithstanding any other provision of this
Plan, the Board may at any time, and from time to time, amend, in whole or in
part, any or all of the provisions of the Plan, or suspend or terminate it
entirely, retroactively or otherwise; provided, however, that, unless otherwise
required by law or specifically provided herein, the rights of a Participant
with respect to Awards granted prior to such amendment, suspension or
termination, may not be impaired without the consent of such Participant and,
provided further, without the approval of the stockholders of the Company, if
and to the extent required by the applicable provisions of Rule 16b-3 or, if
and to the extent required, under the applicable provisions of Section 162(m)
of the Code, or with regard to Incentive Stock Options, Section 422 of the
Code, no amendment may be made which would (i) except as permitted in Section
4.1(a), increase the aggregate number of shares of Common Stock that may be
issued under this Plan; (ii) increase the maximum individual Participant
limitations for a fiscal year under Section 4.1(b); (iii) change the
classification of employees, Consultants, and non-employee directors eligible
to receive Awards under this Plan; (iv) decrease the minimum option price of
any Stock Option; (v) extend the maximum option period under Section 6.3; (vi)
change any rights under the Plan with regard to non-employee directors; or
(vii) require stockholder approval in order for the Plan to continue to comply
with the applicable provisions, if any, of Rule 16b-3, Section 162(m) of the
Code, any applicable state law, or, with regard to Incentive Stock Options,
Section 422 of the Code.
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In no event may the Plan be amended without the approval of the stockholders of
the Company in accordance with the applicable laws or other requirements to
increase the aggregate number of shares of Common Stock that may be issued
under the Plan, decrease the minimum option price of any Stock Option, or to
make any other amendment that would require stockholder approval under the
rules of any exchange or system on which the Company's securities are listed or
traded at the request of the Company.
The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Article IV above or as
otherwise specifically provided herein, no such amendment or other action by
the Committee shall impair the rights of any holder without the holder's
consent.
ARTICLE XIII
UNFUNDED PLAN
This Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments as to which a Participant has a
fixed and vested interest but which are not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Legend. The Committee may require each person receiving shares
pursuant to an Award under the Plan to represent to and agree with the Company
in writing that the Participant is acquiring the shares without a view to
distribution thereof. In addition to any legend required by this Plan, the
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on Transfer.
All certificates for shares of Common Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed or any national securities association
system upon whose system the Common Stock is then quoted, any applicable
Federal or state securities law, and any applicable corporate law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
14.2 Other Plans. Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
14.3 No Right to Employment/Directorshi. Neither this Plan nor the grant
of any Award hereunder shall give any Participant or other employee any right
with respect to continuance of employment by the Company or any Affiliate, nor
shall they be a limitation in any way on the right of the Company or any
Affiliate by which an employee is employed to terminate his employment at any
time. Neither this Plan nor the grant of any Award hereunder shall impose any
obligations on the Company to retain any Participant as a director nor shall it
impose on the part of any Participant any obligation to remain as a director of
the Company.
14.4 Withholding of Taxes. The Company shall have the right to deduct from
any payment to be made to a Participant, or to otherwise require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld. Upon the vesting of Restricted Stock, or upon
making an election under Code Section 83(b), a Participant shall pay all
required withholding to the Company.
The Committee may permit any such withholding obligation with regard to
any Participant to be satisfied by reducing the number of shares of Common
Stock otherwise deliverable or by delivering shares of Common Stock already
owned. Any fraction of a share of Common Stock required to satisfy such tax
obligations shall be disregarded and the amount due shall be paid instead in
cash by the Participant.
14.5 Listing and Other Conditions.
(a) As long as the Common Stock is listed on a national securities
exchange or system sponsored by a national securities association, the
issue of any shares of Common Stock pursuant to an Award shall be
conditioned upon such shares being listed on such exchange or system. The
Company shall have no obligation to issue such shares unless and until such
shares are so listed, and the right to exercise any Option with respect to
such shares shall be suspended until such listing has been effected.
17
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(b) If at any time counsel to the Company shall be of the opinion that
any sale or delivery of shares of Common Stock pursuant to an Award is or
may in the circumstances be unlawful or result in the imposition of excise
taxes on the Company under the statutes, rules or regulations of any
applicable jurisdiction, the Company shall have no obligation to make such
sale or delivery, or to make any application or to effect or to maintain
any qualification or registration under the Securities Act of 1933, as
amended, or otherwise with respect to shares of Common Stock or Awards, and
the right to exercise any Option shall be suspended until, in the opinion
of said counsel, such sale or delivery shall be lawful or will not result
in the imposition of excise taxes on the Company.
(c) Upon termination of any period of suspension under this Section
14.5, any Award affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before
such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension
shall extend the term of any Option.
14.6 Governing Law. This Plan shall be governed and construed in
accordance with the laws of the state of incorporation of the Company
(regardless of the law that might otherwise govern under applicable principles
of conflict of laws).
14.7 Construction. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they
were also used in the plural form in all cases where they would so apply. To
the extent applicable, the Plan shall be limited, construed and interpreted in
a manner so as to comply with the applicable requirements of Rule 16b-3 and
Section 162(m) of the Code; however, noncompliance with Rule 16b-3 or Section
162(m) of the Code shall have no impact on the effectiveness of a Stock Option
granted under the Plan.
14.8 Other Benefits. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of
the Company or its subsidiaries nor affect any benefits under any other benefit
plan now or subsequently in effect under which the availability or amount of
benefits is related to the level of compensation.
14.9 Costs. The Company shall bear all expenses included in administering
this Plan, including expenses of issuing Common Stock pursuant to any Awards
hereunder.
14.10 No Right to Same Benefits. The provisions of Awards need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.
14.11 Death/Disability. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will (in
the case of the Participant's death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Award. The
Committee may also require the agreement of the transferee to be bound by all
of the terms and conditions of the Plan.
14.12 Section 16(b) of the Exchange Act. All elections and transactions
under the Plan by persons subject to Section 16 of the Exchange Act involving
shares of Common Stock are intended to comply with any applicable condition
under Rule 16b-3. The Committee may establish and adopt written administrative
guidelines, designed to facilitate compliance with Section 16(b) of the
Exchange Act, as it may deem necessary or proper for the administration and
operation of the Plan and the transaction of business thereunder.
14.13 Severability of Provisions. If any provision of the Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and
enforced as if such provisions had not been included.
14.14 Headings and Captions. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.
ARTICLE XV
TERM OF PLAN
No Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the earlier of the date the Plan is adopted or the date of
stockholder approval, but Awards granted prior to such tenth anniversary may
extend beyond that date.
18
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ARTICLE XVI
NAME OF PLAN
This Plan shall be known as the 24/7 Media, Inc. 1998 Stock Incentive Plan.
19
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[FORM OF PROXY]
24/7 MEDIA, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of 24/7 Media, Inc. hereby appoints David J.
Moore, C. Andrew Johns and Mark E. Moran, and each of them, with full power of
substitution, to represent and to vote on behalf of the undersigned all of the
shares of 24/7 Media, Inc. which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held at the offices of Proskauer Rose LLP,
26th floor, 1585 Broadway, New York, New York 10036 on Tuesday, June 8, 1999, at
10:00 a.m., local time, and at any adjournment or adjournments thereof, hereby
revoking all proxies heretofore given with respect to such stock, upon the
following proposals more fully described in the notice of and proxy statement
for the meeting (receipt of which is hereby acknowledged).
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3.
(To be Signed on Reverse Side)
24/7 MEDIA, INC.
P.O. BOX 11401
NEW YORK, NEW YORK 10203-0401
See Reverse
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR (1), (2), AND (3).
1. ELECTION OF DIRECTORS
FOR all nominees listed below [_]
WITHHOLD AUTHORITY to vote for all nominees listed below [_]
EXCEPTIONS [_]
Nominees: David J. Moore, R. Theodore Ammon, Jacob I. Friesel
(INSTRUCTION: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name on the space
provided below.)
-----------------------------
2. PROPOSAL TO APPROVE THE AMENDMENTS TO THE 24/7 MEDIA, INC. 1998 STOCK
INCENTIVE PLAN.
[_] FOR [_] AGAINST [_] ABSTAIN
3. PROPOSAL TO APPROVE THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS OF 24/7 MEDIA, INC.
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion upon such other matters as may properly come before
the meeting.
I will attend the meeting. [_] I will not attend the meeting. [_]
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee, or guardian, please give
full title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Date
--------------------------------------- --------------
Signature
Date
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Signature if held jointly
Votes must be indicated in Black or Blue ink.
Please return promptly in the enclosed postage-paid envelope.
