AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 10, 2000
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
EXCHANGE APPLICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 04-3338916
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
89 SOUTH STREET, BOSTON, MASSACHUSETTS 02111
(Address of Principal Executive Offices) (ZIP Code)
1999 Knowledge Stream Partners, Inc. Stock Option Plan
(Full title of the Plan)
ANDREW J. FRAWLEY
Chairman of the Board, President
and Chief Executive Officer
EXCHANGE APPLICATIONS, INC.
89 South Street
Boston, MA 02111
(Name and Address of Agent for Service)
(617) 737-2244
Telephone Number, Including Area Code, of Agent for Service
Copies to:
NEIL W. TOWNSEND, ESQ.
BINGHAM DANA LLP
150 Federal Street
Boston, Massachusetts 02110-1726
(617) 951-8000
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
=============================== ============== ================ ============== ================
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE PRICE (1) FEE
=============================== ============== ================ ============== ================
Common Stock,
$.001 par value............ 164,355 $48.56 $7,981,078.80 $2,107.00
=============================== ============== ================ ============== ================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(h) under the Securities Act of 1933, as amended, based on the
average of the high and low prices of the Registrant's Common Stock, $.001 par
value per share, as reported on the Nasdaq National Market on April 3, 2000. It
is not known how many options will be exercised under the plan or at what price
such shares will be purchased.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Exchange Applications, Inc. (the
"Registrant") with the Securities and Exchange Commission (the "SEC") are
hereby incorporated by reference into this Registration Statement: (1) the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31,
1999; (2) all reports filed by the Registrant pursuant to Sections 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since the end of the Registrant's 1999 fiscal year; and (3) the description of
the Common Stock contained in the Registrant's registration statement on Form
8-A filed with the SEC on July 23, 1998 under Section 12(g) of the Exchange
Act, including any amendment or report filed for the purpose of updating such
description.
In addition, all documents subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing
of a post-effective amendment that indicate that all securities offered hereby
have been sold or that deregisters all of such securities then remaining
unsold, shall be deemed to be incorporated by reference into this Registration
Statement and to be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify its officers and directors and certain other persons
to the extent and under the circumstances set forth therein.
The Amended and Restated Certificate of Incorporation and the Amended and
Restated By-Laws of the Registrant, copies of which are filed herein as
exhibits, provide for indemnification of officers and directors of the
Registrant and certain other persons against liabilities and expenses incurred
by any of them in certain stated proceedings and under certain stated
conditions.
The Registrant intends to maintain insurance for the benefit of its
directors and officers, insuring such persons against certain liabilities,
including liabilities under the securities laws.
The above discussion of the Registrant's Amended and Restated Certificate
of Incorporation and Amended and Restated By-Laws and Section 145 of the
Delaware General Corporation Law is not exhaustive, and is qualified in its
entirety by the full text of those documents and law.
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as part of this Registration Statement:
4.1 Form of Amended and Restated Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1, dated July 22, 1998, File No.
333-59613)
4.2 Form of Amended and Restated By-laws of the Registrant (incorporated by
reference to Exhibit 3.2 to the Registrant's Registration Statement on
Form S-1, dated July 22, 1998, File No. 333-59613)
4.3 1999 Knowledge Stream Partners, Inc. Stock Option Plan
5.1 Opinion and Consent of Bingham Dana LLP with respect to the legality of
the shares being registered.
23.1 Consent of Bingham Dana LLP (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included in signature page).
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such information in
this Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering;
(4) That, for purposes of determining any liability under the Securities Act of
1933, as amended, each filing of the Registrant's annual report pursuant to
Sections 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
<PAGE>
(5) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston, Commonwealth of Massachusetts, on this
10th day of April, 2000.
EXCHANGE APPLICATIONS, INC.
By: /s/ Andrew J. Frawley
_______________________________
Andrew J. Frawley
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby appoints Andrew J. Frawley and John G. O'Brien and each of them
severally, acting alone and without the other, his true and lawful
attorney-in-fact with the authority to execute in the name of each such person,
and to file with the Securities and Exchange Commission, together with any
exhibits thereto and other documents therewith, any and all amendments
(including without limitation post-effective amendments) to this Registration
Statement on Form S-8 necessary or advisable to enable the Registrant to comply
with the Securities Act of 1933, as amended, and any rules, regulations, and
requirements of the Securities and Exchange Commission in respect thereof,
which amendments may make such other changes in the Registration Statement as
the aforesaid attorney-in-fact executing the same deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURE TITLE DATE
/s/ Andrew J. Frawley Chairman of the Board, President, April 10, 2000
- ------------------------- Chief Executive Officer and Director
Andrew J. Frawley (Principal Executive Officer)
/s/ Dean F. Goodermote Director April 10, 2000
- -------------------------
Dean F. Goodermote
/s/ Jeffrey Horing Director April 10, 2000
- -------------------------
Jeffrey Horing
/s/ Ramanan Raghavendran Director April 10, 2000
- -------------------------
Ramanan Raghavendran
/s/ William Bryant Director April 10, 2000
- --------------------------
William Bryant
/s/ John G. O'Brien Vice President, Chief Financial Officer, April 10, 2000
- -------------------------- Treasurer and Secretary (Principal
John G. O'Brien Financial and Accounting Officer)
</TABLE>
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
4.1 Form of Amended and Restated Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1, dated July 22, 1998, File No.
333-59613)
4.2 Form of Amended and Restated By-laws of the Registrant (incorporated by
reference to Exhibit 3.2 to the Registrant's Registration Statement on
Form S-1, dated July 22, 1998, File No. 333-59613)
4.3 1999 Knowledge Stream Partners, Inc. Stock Option Plan
5.1 Opinion and Consent of Bingham Dana LLP with respect to the legality of
the shares being registered.
23.1 Consent of Bingham Dana LLP (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included in signature page to Registration Statement).
KNOWLEDGE STREAM PARTNERS, INC.,
1999 STOCK OPTION PLAN
ADOPTED ON JANUARY 1, 1999
<PAGE>
TABLE OF CONTENTS
PAGE NO.
SECTION 1. ESTABLISHMENT AND PURPOSE.......................................1
SECTION 2. ADMINISTRATION..................................................1
SECTION 3. ELIGIBILITY.....................................................1
(a) General Rule................................................1
(b) Ten-Percent Stockholders....................................1
SECTION 4. STOCK SUBJECT TO PLAN...........................................1
(a) Basic Limitation............................................1
(b) Additional Shares...........................................2
SECTION 5. TERMS AND CONDITIONS OF OPTIONS.................................2
(a) Stock Option Agreement......................................2
(b) Number of Shares............................................2
(c) Exercise Price..............................................2
(d) Withholding Taxes...........................................2
(e) Exercisability..............................................2
(f) Accelerated Exercisability..................................3
(g) Basic Term..................................................3
(h) Nontransferability..........................................3
(i) No Rights as a Stockholder..................................3
(j) Modification, Extension and Assumption
of Options................................................3
(k) Restrictions on Transfer of Shares..........................3
SECTION 6. PAYMENT FOR SHARES..............................................4
(a) General Rule................................................4
(b) Surrender of Stock..........................................4
(c) Promissory Note.............................................4
(d) Exercise/Sale...............................................4
(e) Exercise/Pledge.............................................4
SECTION 7. ADJUSTMENT OF SHARES............................................5
(a) General.....................................................5
(b) Mergers and Consolidations..................................5
(c) Reservation of Rights.......................................5
<PAGE>
SECTION 8. SECURITIES LAWS REQUIREMENTS....................................5
SECTION 9. NO RETENTION RIGHTS.............................................6
SECTION 10. DURATION AND AMENDMENTS........................................6
(a) Term of the Plan............................................6
(b) Right to Amend or Terminate the Plan........................6
(c) Effect of Amendment or Termination..........................6
SECTION 11. DEFINITIONS....................................................6
SECTION 12. EXECUTION......................................................8
<PAGE>
KNOWLEDGE STREAM PARTNERS, INC.
1999 STOCK OPTION PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE.
The purpose of the Plan is to offer selected individuals an opportunity to
acquire a proprietary interest in the success of the Company. The Plan provides
for the grant of Options to purchase Shares. Options granted under the Plan may
include Nonstatutory Options as well as ISOs intended to qualify under Section
422 of the Code.
Capitalized terms are defined in Section 11.
SECTION 2. ADMINISTRATION.
Subject to the provisions of the Plan, the Board of Directors shall have
full authority and discretion to take any actions it deems necessary or
advisable for the administration of the Plan. All decisions, interpretations
and other actions of the Board of Directors shall be final and binding on all
Optionees and all persons deriving their rights from an Optionee.
SECTION 3. ELIGIBILITY.
(a) GENERAL RULE. Only Employees shall be eligible for the grant of
Options.
(b) TEN-PERCENT STOCKHOLDERS. An individual who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the Company
or any of its Subsidiaries shall not be eligible for the grant of an ISO unless
(i) the Exercise Price is at least 110% of the Fair Market Value of a Share on
the date of grant and (ii) such ISO by its terms is not exercisable after the
expiration of five years from the date of grant. For purposes of this
Subsection (b), in determining stock ownership, the attribution rules of
Section 424(d) of the Code shall be applied.
SECTION 4. STOCK SUBJECT TO PLAN.
(a) BASIC LIMITATION. Shares offered under the Plan may be authorized but
unissued Shares or treasury Shares. The aggregate number of Shares that may be
issued under the Plan (upon exercise of Options) shall not exceed 200,000
Shares of the Company's common stock, subject to adjustment pursuant to Section
7. The number of Shares that are subject to Options outstanding at any time
under the Plan shall not exceed the number of Shares that then remain available
for issuance under the Plan. The Company, during the term of the Plan, shall at
all times reserve and keep available sufficient Shares to satisfy the
requirements of the Plan.
<PAGE>
(b) ADDITIONAL SHARES. In the event that any outstanding Option for any
reason expires or is canceled or otherwise terminated, the Shares allocable to
the unexercised portion of such Option or other right shall again be available
for the purposes of the Plan. In the event that Shares issued under the Plan
are reacquired by the Company pursuant to any forfeiture provision, right of
repurchase or right of first refusal, such Shares shall again be available for
the purposes of the Plan, except that the aggregate number of Shares which may
be issued upon the exercise of ISOs shall in no event exceed exceed 200,000
Shares of the Company's common stock (subject to adjustment pursuant to Section
7).
SECTION 5. TERMS AND CONDITIONS OF OPTIONS.
(a) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Board of Directors deems appropriate for inclusion
in a Stock Option Agreement. The provisions of the various Stock Option
Agreements entered into under the Plan need not be identical.
(b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the number
of Shares that are subject to the Option and shall provide for the adjustment
of such number in accordance with Section 7. The Stock Option Agreement shall
also specify whether the Option is an ISO or a Nonstatutory Option.
(c) EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise
Price. The Exercise Price of an ISO shall not be less than 100% of the Fair
Market Value of a Share on the date of grant, and a higher percentage may be
required by Section 3(b). The Exercise Price of a Nonstatutory Option shall not
be less than 85% of the Fair Market Value of such Shares on the date of grant.
Subject to the preceding two sentences, the Exercise Price under an Option
shall be determined by the Board of Directors at its sole discretion. The
Exercise Price shall be payable in a form described in Section 6.
(d) WITHHOLDING TAXES. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Board of Directors may require for
the satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such exercise. The Optionee shall
also make such arrangements as the Board of Directors may require for the
satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with the disposition of Shares
acquired by exercising an Option.
(e) EXERCISABILITY. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. In general,
the Company intends to grant Options that become exercisable over three years,
with 331/3% of such Options vesting per year. The exercisability provisions of
a Stock Option Agreement shall be determined by the Board of Directors at its
sole discretion.
<PAGE>
(f) ACCELERATED EXERCISABILITY. Unless the applicable Stock Option
Agreement provides otherwise, all of an Optionee's Options shall become
exercisable in full if:
(i) The Company is subject to a Change in Control before the
Optionee's Service terminates;
(ii) Such Options do not remain outstanding;
(iii) Such Options are not assumed by the surviving corporation or
its parent; and
(iv) The surviving corporation or its parent does not substitute
options with substantially the same terms for such Options.
(g) BASIC TERM. The Stock Option Agreement shall specify the term of the
Option. The term shall not exceed 10 years from the date of grant, and in the
case of an ISO a shorter term may be required by Section 3(b). Subject to the
preceding sentence, the Board of Directors at its sole discretion shall
determine when an Option is to expire. A Stock Option Agreement may provide for
expiration prior to the end of its term in the event of the termination of the
Optionee's Service or death.
(h) NONTRANSFERABILITY. No Option shall be transferable by the Optionee
other than by beneficiary designation, will or the laws of descent and
distribution. An Option may be exercised during the lifetime of the Optionee
only by the Optionee or by the Optionee's guardian or legal representative. No
Option or interest therein may be transferred, assigned, pledged or
hypothecated by the Optionee during the Optionee's lifetime, whether by
operation of law or otherwise, or be made subject to execution, attachment or
similar process.
(i) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by the Optionee's Option until such person becomes entitled to receive
such Shares by filing a notice of exercise and paying the Exercise Price
pursuant to the terms of such Option.
(j) MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. Within the
limitations of the Plan, the Board of Directors may modify, extend or assume
outstanding Options or may accept the cancellation of outstanding Options
(whether granted by the Company or another issuer) in return for the grant of
new Options for the same or a different number of Shares and at the same or a
different Exercise Price. The foregoing notwithstanding, no modification of an
Option shall, without the consent of the Optionee, impair the Optionee's rights
or increase the Optionee's obligations under such Option.
(k) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise of
an Option shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Board of Directors may determine. Such restrictions shall be set forth in the
<PAGE>
applicable Stock Option Agreement and shall apply in addition to any
restrictions that may apply to holders of Shares generally.
SECTION 6. PAYMENT FOR SHARES.
(a) GENERAL RULE. The entire Exercise Price of Options issued under the
Plan shall be payable in cash or cash equivalents at the time when such Shares
are purchased, except as otherwise provided in this Section 6.
(b) SURRENDER OF STOCK. To the extent that a Stock Option Agreement so
provides, all or any part of the Exercise Price may be paid by surrendering, or
attesting to the ownership of, Shares that are already owned by the Optionee.
For example, by attesting to the ownership of old Shares without actually
surrendering them, the Optionee then receives only the net number of new Shares
(i.e. the number of Shares for which the Option has been exercised minus the
number of Shares required to pay the Exercise Price). Such Shares shall be
surrendered to the Company in good form for transfer and shall be valued at
their Fair Market Value on the date when the Option is exercised. The Optionee
shall not surrender, or attest to the ownership of, Shares in payment of the
Exercise Price if such action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect to the Option for
financial reporting purposes.
(c) PROMISSORY NOTE. To the extent that a Stock Option Agreement so
provides, all or a portion of the Exercise Price of Options issued under the
Plan may be paid with a full-recourse promissory note. However, the par value
of the Shares, if newly issued, shall be paid in cash or cash equivalents. The
Shares shall be pledged as security for payment of the principal amount of the
promissory note and interest thereon. The interest rate payable under the terms
of the promissory note shall not be less than the minimum rate (if any)
required to avoid the imputation of additional interest under the Code. Subject
to the foregoing, the Board of Directors (at its sole discretion) shall specify
the term, interest rate, amortization requirements (if any) and other
provisions of such note.
(d) EXERCISE/SALE. To the extent that a Stock Option Agreement so
provides, and if Stock is publicly traded, payment may be made all or in part
by the delivery (on a form prescribed by the Company) of an irrevocable
direction to a securities broker approved by the Company to sell Shares and to
deliver all or part of the sales proceeds to the Company in payment of all or
part of the Exercise Price and any withholding taxes.
(e) EXERCISE/PLEDGE. To the extent that a Stock Option Agreement so
provides, and if Stock is publicly traded, payment may be made all or in part
by the delivery (on a form prescribed by the Company) of an irrevocable
direction to pledge Shares to a securities broker or lender approved by the
Company, as security for a loan, and to deliver all or part of the loan
proceeds to the Company in payment of all or part of the Exercise Price and any
withholding taxes.
<PAGE>
SECTION 7. ADJUSTMENT OF SHARES.
(a) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of an extraordinary
dividend payable in a form other than Shares in an amount that has a material
effect on the Fair Market Value of the Stock, a combination or consolidation of
the outstanding Stock into a lesser number of Shares, a recapitalization, a
spin-off, a reclassification or a similar occurrence, the Board of Directors
shall make appropriate adjustments in one or more of (i) the number of Shares
available for future grants under Section 4, (ii) the number of Shares covered
by each outstanding Option or (iii) the Exercise Price under each outstanding
Option.
(b) MERGERS AND CONSOLIDATIONS. In the event that the Company is a party
to a merger or consolidation, outstanding Options shall be subject to the
agreement of merger or consolidation. Such agreement, without the Optionees'
consent, may provide for:
(i) The continuation of such outstanding Options by the Company (if
the Company is the surviving corporation);
(ii) The assumption of the Plan and such outstanding Options by the
surviving corporation or its parent;
(iii) The substitution by the surviving corporation or its parent of
options with substantially the same terms for such outstanding Options; or
(iv) The cancellation of each outstanding Option after payment to the
Optionee of an amount in cash or cash equivalents equal to (A) the Fair
Market Value of the Shares subject to such Option at the time of the
merger or consolidation minus (B) the Exercise Price of the Shares subject
to such Option.
(c) RESERVATION OF RIGHTS. Except as provided in this Section 7, an
Optionee or Purchaser shall have no rights by reason of (i) any subdivision or
consolidation of shares of stock of any class, (ii) the payment of any dividend
or (iii) any other increase or decrease in the number of shares of stock of any
class. Any issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
SECTION 8. SECURITIES LAW REQUIREMENTS.
Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares comply with (or are exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
<PAGE>
regulations, and the regulations of any stock exchange or other securities
market on which the Company's securities may then be traded.
SECTION 9. NO RETENTION RIGHTS.
Nothing in the Plan or in any Option granted under the Plan shall confer
upon the Optionee any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Company (or any Subsidiary employing or retaining the Optionee) or of the
Optionee, which rights are hereby expressly reserved by each, to terminate his
or her Service at any time and for any reason, with or without cause.
SECTION 10. DURATION AND AMENDMENTS.
(a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors, subject to the
approval of the Company's stockholders. The Plan shall terminate automatically
10 years after its adoption by the Board of Directors and may be terminated on
any earlier date pursuant to Subsection (b) below.
(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may
amend, suspend or terminate the Plan at any time and for any reason; provided,
however, that any amendment of the Plan which increases the number of Shares
available for issuance under the Plan (except as provided in Section 7), or
which materially changes the class of persons who are eligible for the grant of
ISOs, shall be subject to the approval of the Company's stockholders.
Stockholder approval shall not be required for any other amendment of the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan.
SECTION 11. DEFINITIONS.
(a) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company,
as constituted from time to time.
(b) "CHANGE IN CONTROL" shall mean:
(i) The consummation of a merger or consolidation of the Company with
or into another entity or any other corporate reorganization, if more than
50% of the combined voting power of the continuing or surviving entity's
securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not stockholders of the
Company immediately prior to such merger, consolidation or other
reorganization; or
(ii) The sale, transfer or other disposition of all or substantially
all of the Company's assets.
<PAGE>
A transaction shall not constitute a Change in Control if its sole purpose is
to change the state of the Company's incorporation or to create a holding
company that will be owned in substantially the same proportions by the persons
who held the Company's securities immediately before such transaction.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(d) "COMPANY" shall mean Knowledge Stream Partners, Inc., a Delaware
corporation.
(e) "EMPLOYEE" shall mean any individual who is a common-law employee of
the Company or a Subsidiary.
(f) "EXERCISE PRICE" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Board of Directors in
the applicable Stock Option Agreement.
(g) "FAIR MARKET VALUE" shall mean the fair market value of a Share, as
determined by the Board of Directors in good faith. Such determination shall be
conclusive and binding on all persons.
(h) "ISO" shall mean an employee incentive stock option described in
Section 422(b) of the Code.
(i) "NONSTATUTORY OPTION" shall mean a stock option not described in
Sections 422(b) or 423(b) of the Code.
(j) "OPTION" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.
(k) "OPTIONEE" shall mean an individual who holds an Option.
(l) "PLAN" shall mean this Knowledge Stream Partners, Inc., 1999 Stock
Option Plan.
(m) "SERVICE" shall mean service as an Employee.
(n) "SHARE" shall mean one share of Stock, as adjusted in accordance with
Section 7 (if applicable).
(o) "STOCK" shall mean the Common Stock of the Company, with a par value
of $.01 per Share.
(p) "STOCK OPTION AGREEMENT" shall mean the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions
pertaining to the Optionee's Option.
(q) "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
<PAGE>
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that
attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.
SECTION 12. EXECUTION.
To record the adoption of the Plan by the Board of Directors, the Company
has caused its authorized officer to execute the same.
KNOWLEDGE STREAM PARTNERS, INC.
By: /s/ Richard G. van der Hooning
-----------------------------------
Name: Robert G. van der Hooning
Title: Chief Executive Officer
Exhibit 5.1
April 10, 2000
Exchange Applications, Inc.
89 South Street
Boston, MA 02111
Re: FORM S-8 REGISTRATION STATEMENT
Ladies and Gentlemen:
We have acted as counsel for Exchange Applications, Inc., a Delaware
corporation (the "Company"), in connection with the Company's Registration
Statement on Form S8, to be filed with the Securities and Exchange Commission
on April 10, 2000 (the "Registration Statement").
The Registration Statement effects the registration of 164,355 shares of
the common stock, $0.001 par value per share, of the Company (the "Shares"),
which are to be issued by the Company pursuant to the 1999 Knowledge Stream
Partners, Inc. Stock Option Plan.
We have reviewed the corporate proceedings of the Company with respect to
the authorization of the Plan and the issuance of the Shares thereunder. We
have also examined and relied upon originals or copies of such agreements,
instruments, corporate records, certificates and other documents as we have
deemed necessary or appropriate as a basis for the opinions hereinafter
expressed. In our examination, we have assumed the genuineness of all
signatures, the conformity to the originals of all documents reviewed by us as
copies, the authenticity and completeness of all original documents reviewed by
us in original or copy form, and the legal competence of each individual
executing any document.
We further assume, without investigation, that all Shares issued pursuant
to the Plan will be issued in accordance with the terms of such Plan and that
the purchase price of each of the Shares will be at least equal to the par
value of such Shares. Without prejudice to the generality of the foregoing, we
assume that in connection with each award of shares of restricted stock under
the Plan, the Company will require the recipient of the award upon issuance of
such shares to pay a cash purchase price at least equal to the par value of
such shares.
Subject to the limitations set forth below, we have made such examination
of law as we have deemed necessary for the purposes of this opinion. This
opinion is limited solely to the Delaware General Corporation Law as applied by
courts located in Delaware.
<PAGE>
Based upon and subject to the foregoing, we are of the opinion that the
Shares, when issued and delivered upon the exercise of options or grant of
restricted stock awards pursuant to the Plan and against the payment of the
purchase price therefor, will be validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
BINGHAM DANA LLP
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 28, 2000
(except with respect to the matters discussed in Note 12(a), as to which the
date is February 29, 2000), included in Exchange Applications, Inc.'s Form 10-K
for the year ended December 31, 1999 and to all references to our Firm included
in this registration statement.
Arthur Andersen LLP
Boston, Massachusetts
April 10, 2000
