As filed with the Securities and Exchange Commission on March 31, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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theglobe.com, inc.
(Exact name of registrant as specified in its charter)
Delaware 14-1781422
(State or other (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
31 West 21st Street
New York, New York 10010
(Address of registrant's
principal executive offices)
theglobe.com, inc. 1999 EMPLOYEE STOCK PURCHASE PLAN
factorymall.com 1998 STOCK OPTION PLAN
(Full title of the plans)
CERTAIN SHARES WHICH MAY BE ISSUED TO JAMES McGOODWIN, KEVIN McKEOWN AND
MARK TUCKER PURSUANT TO STOCK OPTION AGREEMENTS DATED FEBRUARY 1, 1999
Todd V. Krizelman
Stephan J. Paternot
theglobe.com, inc.
31 West 21st Street
New York, New York 10010
(212) 886-0800
(Name, address, and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Securities Amount to Maximum Maximum Amount of
to be Registered (6) be Offering Aggregate Registration
Registered Price Per Offering Fee
(1) Share Price
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Common Stock, par value 200,000 $51.875 $10,375,000 $3,060.63
$.001 per share (2) (2)
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Common Stock, par value 120,000 $60.125 (3) $7,215,000 $2,128.43
$.001 per share (3)
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Common Stock, par value 41,017 $22.648 (5) $928,953.01 $274.04
$.001 per share (4) (5)
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Total Registration fee $5,463.10
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(1) Plus such additional number of shares as may be required in the event
of a stock dividend, stock split, recapitalization or other similar
event in accordance with Rule 416 of the Securities Act of 1933, as
amended (the "Securities Act").
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) of the Securities Act of 1933 based upon the
average of the high and low prices of the Registrant's common stock,
par value $.001 per share ("Common Stock"), as reported by the NASOAQ
National Marketing System on March 30, 1999.
(3) Pursuant to Rule 457 (h) of the Securities Act, the amounts are
calculated based upon the maximum price at which stock options
covering the registered shares of Common Stock may be exercised.
(4) Represents the number of shares of Common Stock reserved for issuance
as a result of the conversion of options to purchase stock of
factorymall.com, inc., into options to purchase Common Stock pursuant
to an Agreement and Plan of Merger, dated as of February 1, 1999,
between theglobe.com, inc., factorymall.com, inc., Nirvana Acquisition
Corp. and certain shareholders thereof.
(5) Pursuant to Rule 457(h) of the Securities Act, the amounts are
calculated based upon the weighted average exercise price at which
stock options, as converted, covering the registered shares of Common
Stock may be exercised.
(6) The Common Stock referred to herein includes Preferred Stock Purchase
Rights (the "Rights"). The Rights will be associated and trade with
the Common Stock. The value, if any, of the Rights will be reflected
in the market price of the Common Stock.
<PAGE>
PART I
EXPLANATORY NOTE
This Form S-8 Registration Statement relates to
(a) 200,000 shares of common stock of theglobe.com, inc., par
value $.001 per share (the "Common Stock"), which may be
issued under our 1999 Employee Stock Purchase Plan (the
"ESPP"),
(b) 120,000 shares of Common Stock, 40,000 of which may be
issued to each of Messrs. James McGoodwin, Kevin McKeown and
Mark Tucker upon the exercise of non-qualified stock options
granted to each of them on February 1, 1999, and
(c) 41,017 shares of Common Stock which may be issued upon the
exercise of options granted under the factorymall.com, inc.
1998 Stock Option Plan (the "factorymall stock plan").
Pursuant to the Agreement and Plan of Merger by and among
theglobe.com, inc., factorymall.com, inc., Nirvana Acquisition Corp. and
certain shareholders thereof, the following events among others, occurred:
(a) factorymall was acquired by, and became a wholly-owned
subsidiary of, theglobe;
(b) outstanding options to purchase shares of factorymall common
stock granted under the factorymall stock plan were
converted into options to purchase shares of Common Stock;
and
(c) theglobe assumed the obligations of factorymall under the
factorymall stock plan.
In addition, when we acquired factorymall, we granted each of
Messrs. McGoodwin, McKeown and Tucker nonqualified stock options to acquire
40,000 shares of Common Stock.
The documents containing information specified by Part I of this
Registration Statement have been or will be sent or given to participants
in the "ESPP," holders of options granted under the factorymall stock plan,
and to Messrs. McGoodwin, McKeown and Tucker as specified in Rule 428(b)(1)
promulgated by the Securities and Exchange Commission under the Securities
Act. Such document(s) are not required to be filed with the SEC but
constitute (along with the documents incorporated by reference into this
Registration Statement pursuant to Item 3 of Part II hereof) a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
References to "the Company" shall mean theglobe.com, inc., a
Delaware corporation.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
We file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any document we
file at the SEC's public reference rooms in Washington, D.C., New York, NY
and Chicago, IL. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also
available to the public from the SEC's web site at http://www.sec.gov.
Reports, proxy and information statements and other information concerning
us can also be inspected at the offices of the New York Stock Exchange, 20
Broad Street, New York, NY 10005.
The SEC allows us to "incorporate by reference" information into
this Registration Statement, which means that we can disclose important
information to you by referring you to another document filed separately
with the SEC. The information incorporated by reference is considered to be
part of this Registration Statement, and later information that we file
with the SEC will automatically update this Registration Statement. We
incorporate by reference the following documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended, prior to the
termination of the offering:
(a) Our Registration Statement on Form S-1, filed with the SEC
on November 12, 1998, in which there are described the terms
of the Common Stock;
(b) Our Annual Report on Form 10-K, filed with the SEC on March
30, 1999 for the fiscal year ended December 31, 1998;
(c) Our Current Reports on Form 8-K filed with the SEC on
February 16, 1999, February 19, 1999, and April 1, 1999.
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 provides that
a corporation may indemnify directors, officers, employees and other
individuals against expenses, judgments, fines, and amounts paid in
settlement in connection with specified non-derivative actions, suits,
proceedings or investigations if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of
the corporation. In addition, with respect to any criminal action or
proceeding such director must have had no reasonable cause to believe that
his or her conduct was unlawful. In the case of derivative actions, a
similar standard is applicable except that indemnification only extends to
expenses incurred in connection with the defense or settlement of such
action. In addition, the statute requires court approval before there can
be any indemnification where the person seeking indemnification has been
found liable to the corporation. The DGCL provides that it is not exclusive
of other indemnification that may be granted by a corporation's charter,
by-laws, stockholder or director vote, agreement, or otherwise.
Our By-Laws require us to indemnify any person who was or is a
party or is threatened to be made a party to or is involved in any
threatened, pending or completed non-derivative action, suit, arbitration,
alternative dispute mechanism, investigation, administrative hearing or any
other proceeding, brought by reason of the fact that he or she is or was
our director or officer, or, while our director or officer is or was
serving at our request as a director or officer of another entity,
including service with respect to an employee benefits plan against
expenses, including attorneys' fees, judgments, fines, excise taxes under
ERISA, penalties and amounts paid in settlement, incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed
to our best interests. In addition, with respect to any criminal action or
proceeding such person shall have had no reasonable cause to believe his or
her conduct was unlawful.
Section 102(b)(7) of the DGCL permits a corporation to provide
that a director shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability for (i) any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) acts or omissions not
in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) payment of unlawful dividends or unlawful stock
purchases or redemptions, or (iv) any transaction from which the director
derived an improper personal benefit.
Our Charter provides that to the fullest extent that the DGCL
permits our directors will not be liable to us or our stockholders for
monetary damages for breach of fiduciary duty as a director. Any amendment
to or repeal of, our Charter inconsistent with these provisions will not
adversely affect any right of our director or with respect to any acts or
omissions occurring prior to such amendment or repeal.
We have entered into indemnification agreements with our
directors and officers. These agreements provide that we will indemnify
such directors and officers for any amounts paid in settlement or incurred
by, or assessed against, such directors and officers arising in connection
with the service of such directors and officers to the fullest extent
permitted by Delaware law.
We maintain directors' and officers' liability insurance. This
insurance provides for payment, on behalf of our and our subsidiaries'
directors and officers of certain losses of such persons arising from
claims, including claims arising under the Securities Act, for acts or
omissions by such persons while acting as directors or officers.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit No. Description of Exhibit
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4.1 Form of Fourth Amended and Restated Certificate of
Incorporation of the Company previously filed as
Exhibit 3.1 to the Company's Registration Statement
No. 333-59751 on Form S-1, and incorporated herein
by reference
4.2 Form of By-Laws of the Company previously filed as
Exhibit 3.2 to the Company's Registration Statement
No. 333-59751 on Form S-1, and incorporated herein
by reference
4.3 Form of Rights Agreement by and between the Company
and American Stock Transfer & Trust Company as
Rights Agent previously filed as Exhibit 4.6 to the
Company's Registration Statement No. 333-59751 on
Form S-1, and incorporated herein by reference
4.4 Agreement and Plan of Merger, dated as of February
1, 1999, by and among the Company, Nirvana
Acquisition Corp., factorymall.com, inc. and
certain shareholders thereof previously filed as
Exhibit 2.1 to the Company's Current Report on Form
8-K filed with the SEC on February 16, 1999, and
incorporated herein by reference
4.5 theglobe.com, inc. 1999 Employee Stock Purchase
Plan filed as Exhibit 10.16 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1998 filed with the SEC on March 30,
1999, and incorporated herein by reference
4.6 factorymall.com, inc. 1998 Stock Option Plan
4.7 Form of Nonqualified Stock Option Agreement with
James McGoodwin, Kevin McKeown and Mark Tucker
5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson
23.1 Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in Exhibit 5.1)
23.2 Consent of KPMG LLP (independent public accountants)
<PAGE>
Item 9. Undertakings
The Company hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Company pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference
in this Registration Statement.
(b) 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.
(c) 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.
(d) That, for the purpose of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to
Section 13(a) or 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described in Item 6 of
this Registration Statement, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company 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, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of New York, State of New York, on
March 26, 1999.
theglobe.com, inc.
/s/ Todd V. Krizelman
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By: Todd V. Krizelman
Co-Chief Executive Officer
and Co-President
/s/ Stephan J. Paternot
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By: Stephan J. Paternot
Co-Chief Executive Officer,
Co-President and Secretary
POWER OF ATTORNEY
KNOW BY ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of theglobe.com,
inc., a Delaware corporation, do hereby constitute and appoint Michael S.
Egan, Todd V. Krizelman and Stephan J. Paternot, and each of them, the
lawful attorneys-in-fact and agents with full power and authority to do any
and all acts and things and to execute any and all instruments which said
attorneys and agents, and any one of them, determine may be necessary or
advisable or required to enable said corporation to comply with the
Securities Act and any rules or regulations or requirements of the
Commission in connection with this Registration Statement. Without limiting
the generality of the foregoing power and authority, the powers granted
include the power and authority to sign the names of the undersigned
officers and directors in the capacities indicated below to this
Registration Statement, to any and all amendments, both pre-effective and
post-effective, and supplements to this Registration Statement, and to any
and all instruments or documents filed as part of or in conjunction with
this Registration Statement or amendments or supplements thereof, and each
of the undersigned hereby ratifies and confirms that all said attorneys and
agents, or any one of them, shall do or cause to be done by virtue hereof.
This Power of Attorney may be signed in several counterparts.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Michael S. Egan Chairman March 26, 1999
- ---------------------------
Michael S. Egan
/s/ Todd V. Krizelman Co-Chief Executive Officer, March 26, 1999
- --------------------------- Co-President and Director
Todd V. Krizelman
/s/ Stephan J. Paternot Co-Chief Executive March 26, 1999
- --------------------------- Officer, Co-President,
Stephan J. Paternot Secretary and Director
/s/ Francis T. Joyce Vice President and Chief March 26, 1999
- --------------------------- Financial Officer
Francis T. Joyce (Principal Accounting
Officer)
/s/ Edward A. Cespedes Director March 26, 1999
- ---------------------------
Edward A. Cespedes
Director March 26, 1999
- ---------------------------
Rosalie V. Arthur
/s/ Robert M. Halperin Director March 26, 1999
- ---------------------------
Robert M. Halperin
/s/ David H. Horowitz Director March 26, 1999
- ---------------------------
David H. Horowitz
Director March 26, 1999
- ---------------------------
H. Wayne Huizenga
Director March 26, 1999
- ---------------------------
Henry C. Duques
<PAGE>
Index to Exhibits
Exhibit No. Description of Exhibit
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4.1 Form of Fourth Amended and Restated Certificate of
Incorporation of the Company previously filed as
Exhibit 3.1 to the Company's Registration Statement
No. 333-59751 on Form S-1, and incorporated herein
by reference
4.2 Form of By-Laws of the Company previously filed as
Exhibit 3.2 to the Company's Registration Statement
No. 333-59751 on Form S-1, and incorporated herein
by reference
4.3 Form of Rights Agreement by and between the Company
and American Stock Transfer & Trust Company as
Rights Agent previously filed as Exhibit 4.6 to the
Company's Registration Statement No. 333-59751 on
Form S-1, and incorporated herein by reference
4.4 Agreement and Plan of Merger, dated as of February
1, 1999, by and among the Company, Nirvana
Acquisition Corp., factorymall.com, inc. and
certain shareholders thereof previously filed as
Exhibit 2.1 to the Company's Current Report on Form
8-K filed with the SEC or February 16, 1999, and
incorporated herein by reference
4.5 theglobe.com, inc. 1999 Employee Stock Purchase
Plan filed as Exhibit 10.16 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1998 filed with the SEC on March 30,
1999, and incorporated herein by reference
4.6 factorymall.com, inc. 1998 Stock Option Plan
4.7 Form of Nonqualified Stock Option Agreement with
James McGoodwin, Kevin McKeown and Mark Tucker
5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson
23.1 Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in Exhibit 5.1)
23.2 Consent of KPMG LLP (independent public accountants)
Exhibit 4.6
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FACTORYMALL.COM, INC.
1998 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the factorymall.com, inc. 1998 Stock Option Plan (the
"Plan") is to enhance the long-term shareholder value of factorymall.com,
inc., a Washington corporation (the "Company"), by offering opportunities
to employees, directors, officers, consultants, agents, advisors and
independent contractors of the Company and its Subsidiaries (as defined in
Section 2) to participate.in the Company's growth and success, and to
encourage them to remain in the service of the Company and its Subsidiaries
and to acquire and maintain stock ownership in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 BOARD
"Board" means the Board of Directors of the Company.
2.2 CAUSE
"Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each
case as determined by the Plan Administrator, and its determination shall
be conclusive and binding.
2.3 CODE
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.4 COMMON STOCK
"Common Stock" means the common stock, no par value per share, of the
Company.
2.5 CORPORATE TRANSACTION
"Corporate Transaction" means any of the following events:
(a) Consummation of any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation, or
pursuant to which shares of the Common Stock are converted into cash,
securities or other property, if following such merger or
consolidation the holders of the Company's outstanding voting
securities immediately prior to such merger or consolidation own less
than a majority of the outstanding voting securities of the surviving
corporation;
(b) Consununation of any sale, lease, exchange or other transfer
in one transaction or a series of related transactions of all or
substantially all of the Company's assets other than a transfer of the
Company's assets to a majority-owned subsidiary corporation (as the
term "subsidiary corporation" is defined in Section 8.3) of the
Company; or
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company.
Ownership of voting securities shall take into account and shall
include ownership as determined by applying Rule 13d-3(d)(1)(i) (as in
effect on the date of adoption of the Plan) under the Exchange Act.
2.6 Disability
"Disability" means "disability" as that term is defined for purposes
of Section 22(e)(3) of the Code.
2.7 EARLY RETIREMENT
"Early Retirement" means early retirement as that term is defined by
the Plan Administrator from time to time for purposes of the Plan.
2.8 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.9 FAIR MARKET VALUE
The "Fair Market Value" shall be as established in good faith by the
Plan Administrator or (a) if the Common Stock is listed on the Nasdaq
National Market, the average of the high and low per share sales prices for
the Common Stock as reported by the Nasdaq National Market for a single
trading day or (b) if the Common Stock is listed on the New York Stock
Exchange or the American Stock Exchange, the average of the high and low
per share sales prices for the Common Stock as such price is officially
quoted in the composite tape of transactions on such exchange for a single
trading day. lf there is no such reported price for the Common Stock for
the date in question, then such price on the last preceding date for which
such price exists shall be determinative of the Fair Market Value.
2.10 GOOD REASON
"Good Reason" means the occurrence of any of the following events or
conditions and the failure of the Successor Corporation to cure such event
or condition within 30 days after reccipt of written notice by the
Optionee:
(a) a change in the Optionee's status, title, position or
responsibilities (including reporting responsibilities) that, in the
Optionee's reasonable judgment, represents a substantial reduction in the
status, title, position or responsibilities as in effect immediately prior
thereto; the assignment to the Optionee of any duties or responsibilities
that, in the Optionee's reasonable judgment, are materially inconsistent
with such status, title, position or responsibilities; or any removal of
the Optionee from or failure to reappoint or reelect the Optionee to any of
such positions, except in connection with the termination of the Optionee's
employment for Cause, for Disability or as a result of his or her death, or
by the Optionee other than for Good Reason;
(b) a reduction in the Optionee's annual base salary;
(c) the Successor Corporation's requiring the Optionee (without
the Optionee's consent) to be based at any place outside a 35-mile radius
of his or her place of employment prior to a Corporate Transaction, except
for reasonably required travel on the Successor Corporation's business that
is not materially greater than such travel requirements prior to the
Corporate Transaction;
(d) the Successor Corporation's failure to (i) continue in effect
any material compensation or benefit plan (or the substantial equivalent
thereof in which the Optionee was participating at the time of a Corporate
Transaction, including, but not limited to, the Plan, or (il) provide the
Optionee with compensation and benefits substantially equivalent (in terms
of benefit levels and/or reward opportunities) to those provided for under
each material employee benefit plan, program and practice as in effect
immediately prior to the Corporate Transaction;
(e) any material breach by the Successor Corporation of its
obligations to the Optionee under the Plan or any substantiafly equivalent
plan of the Successor Corporation; or
(f) any purported termination of the Optionee's employment or
services for Cause by the Successor Corporation that does not comply with
the terms of the Plan or any substantially equivalent plan of the Successor
Corporation.
2.11 GRANT DATE
"Grant Date" means the date the Plan Administrator adopted the
granting resolution or a later date designated in a resolution of the Plan
Administrator as the date an Option is to be granted.
2.12 INCENTIVE STOCK OPTION
"Incentive Stock Option" means an Option to purchase Common Stock
granted under Section 7 with the intention that it qualify as an "incentive
stock option" as that term is defined in Section 422 of the Code.
2.13 NONQUALIFIED STOCK OPTION
"Nonqualified Stock Option" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.
2.14 OPTION
"Option" means the right to purchase Common Stock granted under
Section 7.
2.15 OPTIONEE
"Optionee" means (i) the person to whom an Option is granted; (ii) for
an Optionee who has died, the personal representative of the Optionee's
estate, the person(s) to whom the Optionee's rights under the Option have
passed by will or by the applicable laws of descent and distribution, or
the beneficiary designated in accordance with Section 9; or (iii) person(s)
to whom an Option has been transferred in accordance with Section 9.
2.16 PLAN ADMINISTRATOR
"Plan Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.
2.17 RETIREMENT
"Retirement" means retirement as of the individual's normal retirement
date, as that term is defined by the Plan Administrator from time to time
for purposes of the Plan.
2.18 SECURITIES ACT
"Securities Act" means the Securities Act of 1933, as amended.
2.19 SUBSIDIARY
"Subsidiary," except as provided in Section 8.3 in connection with
Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant
ownership interest, as determined by the Plan Administrator, and any entity
that may become a direct or indirect parent of the Company.
2.20 SUCCESSOR CORPORATION
"Successor Corporation" has the meaning set forth under Section 10.2.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board or a committee or
committees (which term includes subcommittees) appointed by, and consisting
of two or more members of, the Board. If and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, the Board
shall consider in selecting the Plan Administrator and the membership of
any committee acting as Plan Administrator, with respect to any persons
subject or likely to become subject to Section 16 of the Exchange Act, the
provisions regarding (a) "outside directors" as contemplated by Section
162(m) of the Code and (b) "nonemployee directors" as contemplated by Rule
l6b-3 under the Exchange Act. The Board may delegate the responsibility for
administering the Plan with respect to designated classes of eligible
persons to different committees consisting of two or more members of the
Board, subject to such limitations as the Board deems appropriate.
Committee members shall serve for such term as the Board may determine,
subject to removal by the Board at any time.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan,
the Plan Adrninistrator shall have exclusive authority, in its discretion,
to determine all matters relating to Options under the Plan, including the
selection of individuals to be granted Options, the type of Options, the
number of shares of Common Stock subject to an Option, all terms,
conditions, restrictions and limitations, if any, of an Option and the
terms of any instrument that evidences the Option. The Plan Administrator
shall also have exclusive authority to interpret the Plan and may from time
to time adopt, and change, rules and regulations of general application for
the Plan's administration. The Plan Administrator's interpretation of the
Plan and its rules and regulations, and all actions taken and
determinations made by the Plan Administrator pursuarit to the Plan, shall
be conclusive and binding on all parties involved or affected. The Plan
Administrator may delegate administrative duties to such of the Company's
officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 10.1,
a maximum of 1,500,000 shares of Common Stock shall be available for
issuance under the Plan. Shares issued under the Plan shall be drawn from
authorized and unissued shares or shares now held or subsequently acquired
by the Company.
4.2 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Option
that cease to be subject to the Option (other than by reason of exercise of
the Option to the extent it is exercised for shares) shall again be
available for issuance in connection with future grants of Options under
the Plan.
SECTION 5. ELIGIBILITY
Options may be granted under the Plan to those officers, directors and
employees of the Company and its Subsidiaries as the Plan Administrator
from time to time selects. Options may also be made to consultants, agents,
advisors and independent contractors who provide services to the Company
and its Subsidiaries.
SECTION 6. AWARDS
6.1 FORM AND GRANT OF OPTIONS
The Plan Administrator shall have the authority, in its sole
discretion, to determine the type or types of awards to be made under the
Plan. Such awards may consist of Incentive Stock Options and/or
Nonqualified Stock Options. Options may be granted singly or in
combination.
6.2 ACQUIRED COMPANY OPTION AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Options under the Plan in substitution for awards
issued under other plans, or assume under the Plan awards issued under
other plans, if the other plans are or were plans of other acquired
entities ("Acquired Entities") (or the parent of the Acquired Entity) and
the new Option is substituted, or the old award is assumed, by reason of a
merger, consolidation, acquisition of property or of stock, reorganization
or liquidation (the "Acquisition Transaction"). In the event that a written
agreement pursuant to which the Acquisition Transaction is completed is
approved by the Board and said agreement sets forth the terms and
conditions of the substitution for or assumption of outstanding awards of
the Acquired Entity, said terms and conditions shall be deemed to be the
action of the Plan Administrator without any further action by the Plan
Administrator, except as may be required for compliance with Rule 16b-3
under the Exchange Act, and the persons holding such awards shall be deemed
to be Optionees.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Opfions or as Nonqualified
Stock Options, which shah be appropriately designated.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of
the Fair Market Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options and not less than 90% of the Fair Market Value of
the Common Stock on the Grant Date with respect to Nonqualified Stock
Options.
7.3 TERM OF OPTIONS
The term of each Option shall be as established by the Plan
Administrator or, if not so established, shall be 10 years from the Grant
Date.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each
instrument that evidences an Option the time at which or the installments
in which the Option sha11 vest and become exercisable, which provisions
may be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will vest
and become exercisable according to the following schedule, which may be
waived or modified by the Plan Administrator at any time:
Period of Optionee's Continuous Employment or
Service With the Company or Its Subsidiaries Percent of Total Option
From the Grant Date That Is Vested and Exercisabe
------------------- -----------------------------
After 1 year 25%
After 2 years 50%
After 3 years 75%
After 4 years 100%
To the extent that the right to purchase shares has accrued
thereunder, an Option may be exercised from time to time by written notice
to the Company, in accordance with procedures established by the Plan
Administrator, setting forth the number of shares with respect to which the
Option is being exercised and accompanied by payment in full as described in
Section 7.5. The Plan Administrator may determine at any time that an
Option may not be exercised as to less than 100 shares at any one time (or
the lesser number of remaining shares covered by the Option).
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the product of
the Option exercise price and the number of shares purchased. Such
consideration must be paid in cash or by check or, unless the Plan
Administrator in its sole discretion determines otherwise, either at the
time the Option is granted or at any time before it is exercised, a
combination of cash and/or check (if any) and one or both of the following
alternative forms: (a) tendering (either actually or, if and so long as the
Common Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, by attestation) Common Stock already owned by the Optionee for at
least six months (or any shorter period necessary to avoid a charge to the
Company's earnings for financial reporting purposes) having a Fair Market
Value on the day prior to the exercise date equal to the aggregate Option
exercise price or (b) if and so long as the Common Stock is registered
under Section 12(b) or 12(g) of the Exchange Act, delivery of a properly
executed exercise notice, together with irrevocable instructions, to (i) a
brokerage firm designated by the Company to deliver promptly to the Company
the aggregate amount of sale or loan proceeds to pay the Option exercise
price and any withholding tax obligations that may arise in connection with
the exercise and (ii) the Company to deliver the certificates for such
purchased shares directly to such brokerage firm, all in accordance with the
regulations of the Federal Reserve Board. In addition, to the extent
permitted by the Plan Administrator in its sole discretion, the price for
shares purchased under an Option may be paid, either singly or in
combination with one or more of the alternative forms of payment authorized
by this Section 7.5, by (y) a full-recourse promissory note delivered
pursuant to Section 12 or (z) such other consideration as the Plan
Administrator may permit.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each
instrument that evidences an Option whether the Option will continue to be
exercisable, and the terms and conditions of such exercise, if a Optionee
ceases to be employed by, or to provide services to, the Company or its
Subsidiaries, which provisions may be waived or modified by the Plan
Administrator at any time. If not so established in the instrument
evidencing the Option, the Option will be exercisable according to The
following terms and conditions, which may be waived or modified by the Plan
Administrator at any time.
In case of termination of the Optionee's employment or services other
than by reason of death or Cause, the Option shall be exercisable, to the
extent of the number of shares purchasable by the Optionee at the date of
such termination, only (a) within one year if the termination of the
Optionee's employment or services is coincident with Retirement, Early
Retirement at the Company's request or Disability or (b) within three
months after the date the Optionee ceases to be an employee, director,
officer, consultant, agent, advisor or independent contractor of the
Company or a Subsidiary if termination of the Optionee's employment or
services is for any reason other than Retirement, Early Retirement at the
Company's request or Disability, but in no event later than the remaining
term of the Option. Any Option exercisable at the time of the Optionee's
death may be exercised, to the extent of the number of shares purchasable
by the Optionee at the date of the Optionee's death, by the personal
representative of the Optionee's estate, the person(s) to whom the
Optionee's rights under the Option have passed by will or the applicable
laws of descent and distribution or the beneficiary designated pursuant to
Section 9 at any time or from time to time within one year after the date
of death, but in no event later than the remaining term of the Option. Any
portion of an Option that is not exercisable on the date of termination of
the Optionee's employment or services shall terminate on such date, unless
the Plan Administrator determines otherwise. In case of termination of the
Optionee's employment or services for Cause, the Option shall automatically
terminate upon first notification to the Optionee of such termination,
unless the Plan Administrator determines otherwise. If an Optionee's
employment or services with the Company are suspended pending an
investigation of whether the Optionee shall be terminated for Cause, all
the Optionee's rights under any Option likewise shall be suspended during
the period of investigation.
A transfer of employment or services between or among the Company and
its Subsidiaries shall not be considered a termination of employment or
services. The effect of a Company-approved leave of absence on the terms
and conditions of an Option shall be determined by the Plan Administrator,
in its sole discretion.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock
Options shall be subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Common Stock with respect to which Incentive Stock Options
are exercisable for the first time during any calendar year (under the
Plan and all other stock option plans of the Company) exceeds $100,000,
such portion in excess of $100,000 shall be treated as a Nonqualified Stock
Option. In the event the Optionee holds two or more such Options that
become exercisable for the first time in the same calendar year, such
limitation shall be applied on the basis of the order in which such
Options are granted.
8.2 10% SHAREHOLDERS
If an individual owns more than 10% of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
Incentive Stock Option shall not be less than 110% of the Fair Market
Value of the Common Stock on the Grant Date and the Option term shall not
exceed five years. The determination of 10% ownership shall be made in
accordance with Section 422 of the Code.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, "parent corporation" and
"subsidiary corporation" shall have the meanings attributed to those terms
for purposes of Section 422 of the Code.
8.4 TERM
The term of an Incentive Stock Option shall not exceed 10 years.
8.5 EXERCISABILITY
To qualify for Incentive Stock Option tax treatment, an Option
designated as an Incentive Stock Option must be exercised within three
months after termination of employment for reasons other than death, except
that, in the case of termination of employment due to total disability,
such Option must be exercised within one year after such termination.
Employment shall not be deemed to continue beyond the first 90 days of a
leave of absence unless the Optionee's reemployment rights are guaranteed
by statute or contract. For purposes of this Section 8.5, "total
disability" shall mean a mental or physical impairment of the Optionee that
is expected to result in death or that has lasted or is expected to last
for a continuous period of 12 months or more and that causes the Optionee
to be unable, in the opinion of the Company and two independent physicians,
to perform his or her duties for the Company and to be engaged in any
substantial gainful activity. Total disability shall be deemed to have
occurred on the first day after the Company and the two independent
physicians have furnished their opinion of total disability to the Plan
Administrator.
8.6 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Optionee must hold the shares
issued upon the exercise of an Incentive Stock Option for two years after
the Grant Date of the Incentive Stock Option and one year from the date of
exercise. An Optionee may be subject to the alternative minimum tax at the
time of exercise of an Incentive Stock Option. The Plan Administrator may
require an Optionee to give the Company prompt notice of any disposition of
shares acquired by the exercise of an Incentive Stock Option prior to the
expiration of such holding periods.
8.7 PROMISSORY NOTES
The amount of any promissory note delivered pursuant to Section 12 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator but in no case less than the rate
required to avoid imputation of interest (taking into account any
exceptions to the imputed interest rules) for federal income tax purposes.
SECTION 9. ASSIGNABILITY
No Option granted under the Plan may be assigned, pledged or
transferred by the Optionee other than by will or by the applicable laws of
descent and distribution, and, during the Optionee's lifetime, such Option
may be exercised only by the Optionee or a permitted assignee or transferee
of the Optionee (as provided below). Notwithstanding the foregoing, and to
the extent permitted by Section 422 of the Code, the Plan Administrator, in
its sole discretion, may permit such assignment, transfer and
exercisability and may permit an Optionee to designate a beneficiay who
may exercise the Option after the Optionee's death; provided, however,
that any Option so assigned or transferred shall be subject to all the same
terms and conditions contained in the instrument evidencing the Option.
SECTION 10. ADJUSTMENTS
10.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal
cash dividend, or other change in the Company's corporate or capital
structure results in (a) the outstanding shares, or any securities
exchanged therefor or received in their place, being exchanged for a
different number or class of securities of the Company or of any other
corporation or (b) new, different or additional securities of the Company
or of any other corporation being received by the holders of shares of
Common Stock of the Company, then the Plan Administmtor shall make
proportional adjustments in (1) the maximum number and kind of securities
subject to the Plan as set forth in Section 4.1 and (ii) the number and
kind of securities that are subject to any outstanding Option and the per
share price of such securities, without any change in the aggregate price
to be paid therefor. The determination by the Plan Administrator as to the
terms of any of the foregoing adjustments shall be conclusive and binding.
Notwithstanding the foregoing, a Corporate Transaction shall not be
governed by this Section 10.1 but shall be governed by Section 10.2.
10.2 CORPORATE TRANSACTION
(a) Except as otherwise provided in the instrument that evidences the
Option, in the event of any Corporate Transaction, each Option that is at
the time outstanding shall automatically accelerate so that each such
Option shall, immediately prior to the specified effective date for the
Corporate Transaction, become 100% vested and exercisable.
(b) Such Option shall not so accelerate, however, if and to the extent
that such Option is, in connection with the Corporate Transaction, either
to be assumed by the successor corporation or parent thereof (the
"Successor Corporation") or to be replaced with a comparable award for the
purchase of shares of the capital stock of the Successor Corporation. The
determination of Option comparability shall be made by the Plan
Administrator, and its determination shall be conclusive and binding. Any
such Options granted to an "executive officer" (as that term is defined for
purposes of Section 16 of the Exchange Act) of the Company that are assumed
or replaced in the Corporate Transaction and do not otherwise accelerate at
that time shall be accelerated in the event that the Optionee's employment
or services should subsequently terminate within two years following such
Corporate Transaction, unless such employment or services are terminated by
the Successor Corporation for Cause or by the Optionee voluntarily without
Good Reason.
(c) All such Options shall terminate and cease to remain outstanding
immediately following the consummation of the Corporate Transaction, except
to the extent assumed by the Successor Corporation.
(d) The acceleration will not occur if, in the opinion of the
Company's outside accountants, it would render unavailable "pooling of
interest" accounting for a Corporate Transaction that would otherwise
qualify for such accounting treatment.
10.3 FURTHER ADJUSTMENT OF OPTIONS
Subject to Section 10.2, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined
by the Plan Administrator, to take such further action as it determines to
be necessary or advisable, and fair and equitable to Optionees, with
respect to Options. Such authorized action may include (but shall not be
limited to) establishing, amending or waiving the type, terms, conditions
or duration of, or restrictions on, Options so as to provide for earlier,
later, extended or additional time for exercise and other modifications,
and the Plan Administrator may take such actions with respect to all
Optionees, to certain categories of Optionees or only to individual
Optionees. The Plan Administrator may take such action before or after
granting Options to which the action relates and before or after any public
announcement with respect to such sale, merger, consolidation,
reorganization, liquidation or change in control that is the reason for
such action.
10.4 LIMITATIONS
The grant of Options will in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets.
SECTION 11 WITHHOLDING
The Company may require the Optionee to pay to the Company the amount
of any withholding taxes that the Company is required to withhold with
respect to the grant or exercise of any Option. Subject to the Plan and
applicable law, the Plan Administrator may, in its sole discretion, permit
the Optionee to satisfy withholding obligations, in whole or in part, by
paying cash, by electing to have the Company withhold shares of Common Stock
or by transferring shares of Common Stock to the Company, in such amounts
as are equivalent to the Fair Market Value of the withholding obligation.
The Company shall have the right to withhold from any shares of Common
Stock issuable pursuant to an Option or from any cash amounts otherwise due
or to become due from the Company to the Optionee an amount equal to such
taxes. The Company may also deduct from any Option any other amounts due
from the Optionee to the Company or a Subsidiary.
SECTION 12. LOANS, INSTALLMENT PAYMENTS AND LOAN
GUARANTEES
To assist an Optionee (including an Optionee who is an officer or a
director of the Company) in acquiring shares of Common Stock pursuant to an
Option granted under the Plan, the Plan Administrator, in its sole
discretion, may authorize, either at the Grant Date or at any time before
the acquisition of Common Stock pursuant to the Option, (a) the extension
of a full-recourse loan to the Optionee by the Company, (b) the payment by
the Optionee of the purchase price, if any, of the Common Stock in
installments, or (c) the guarantee by the Company of a loan obtained by the
Optionee from a third party. The terms of any loans, installment payments
or loan guarantees, including the interest rate and terms of repayment,
will be subject to the Plan Administrator's discretion. The maximum credit
available is the purchase price, if any, of the Cornmon Stock acquired,
plus the maximum federal and state income and employment tax liability
that may be incurred in connection with the acquisition.
SECTION 13. FIRST REFUSAL RIGHTS
Until the date on which the in~itial registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act first becomes effective,
the Company shall have the right of first refusal with respect to any
proposed sale or other disposition by the holder of any shares of Common
Stock issued pursuant to an Option granted under the Plan. Such right of
first refusal shall be exercisable in accordance with the terms and
conditions established by the Plan Administrator and set forth in the
agreement evidencing such right.
In the event of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
Company's outstanding Common Stock effected as a class without the
Company's receipt of consideration, then any new, substituted or additional
securities distributed with respect to the purchased shares shall be
immediately subject to the provisions of this Section 13, to the same
extent the purchased shares are at such time covered by such provisions
SECTION 14. MARKET STANDOFF
In connection with any underwritten public offering by the Company of
its equity securities pursuant to an effective registration statement filed
under the Securities Act, including the Company's initial public offering,
a person shall not sell, or make any short sale of, loan, hypothecate,
pledge, grant any option for the purchase of, or otherwise dispose or
transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to, any shares issued pursuant to an Option
granted under the Plan without the prior written consent of the Company or
its underwriters. Such limitations shall be in effect for such period of
time as may be requested by the Company or such underwriters and agreed to
by the Company's officers and directors with respect to their shares;
provided, however, that in no event shall such period exceed 180 days. The
limitations of this paragraph shall in all events terminate two years after
the effective date of the Company's initial public offering. Holders of
shares issued pursuant to an Option granted under the Plan shall be subject
to the market standoff provisions of this paragraph only if the officers
and directors of the Company are also subject to similar arrangements.
In the event of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
Company's outstanding Common Stock effected as a class without the
Company's receipt of consideration, then any new, substituted or additional
securities distributed with respect to the purchased shares shall be
immediately subject to the provisions of this Section 14, to the same
extent the purchased shares are at such time covered by such provisions.
In order to enforce the limitations of this Section 14, the Company
may impose stop-transfer instructions with respect to the purchased shares
until the end of the applicable standoff period.
SECTION 15. AMENDMENT AND TERMINATION OF PLAN
15.1 AMENDMENT OF PLAN
The Plan may be amended only by the Board in such respects as it shall
deem advisable; however, to the extent required for compliance with Section
422 of the Code or any applicable law or regulation, shareholder approval
will be required for any amendment that will (a) increase the total number
of shares as to which Options may be granted under the Plan, (b) modify the
class of persons eligible to receive Options, or (c) otherwise require
shareholder approval under any applicable law or regulation.
15.2 TERMINATION OF PLAN
The Board may suspend or terminate the Plan at any time. The Plan will
have no fixed expiration date; provided, however, that no Incentive Stock
Options may be granted more than 10 years after the earlier of the Plan's
adoption by the Board and approval by the shareholders.
15.3 CONSENT OF OPTIONEE
The amendment or termination of the Plan shall not, without the
consent of the Optionee, impair or diminish any rights or obligations under
any Option theretofore granted under the Plan.
Any change or adjustment to an outstanding Incentive Stock Option
shall not, without the consent of the Optionee, be made in a manner so as
to constitute a "modification" that would cause such Incentive Stock Option
to fail to continue to qualify as an Incentive Stock Option.
SECTION 16. GENERAL
16.1 OPTION AGREEMENTS
Options granted under the Plan shall be evidenced by a written
agreement that shall contain such terms, conditions, limitations and
restrictions as the Plan Administrator shall deem advisable and that are
not inconsistent with the Plan.
16.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN OPTIONS
None of the Plan, participation in the Plan or any action of the Plan
Administrator taken under the Plan shall be construed as giving any person
any right to be retained in the employ of the Company or limit the
Company's right to terminate the employment or services of any person.
16.3 REGISTRATION
The Company shall be under no obligation to any Optionee to register
for offering or resale or to qualify for exemption under the Securities
Act, or to register or qualify under state securities laws, any shares of
Common Stock, security or interest in a security paid or issued under, Or
created by, the Plan, or to continue in effect any such registrations or
qualifications if made. The Company may issue certificates for shares with
such legends and subject to such restrictions on transfer and stop-transfer
instructions as counsel for the Company deems necessary or desirable for
compliance by the Company with federal and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary
for the lawful issuance and sale of any shares hereunder or the
unavailability of an exemption from registration for the issuance and sale of
any shares hereunder shall relieve the Company of any liability in respect
of the nonissuance or sale of such shares as to which such requisite
authority shall not have been obtained.
As a condition to the exercise of an Option, the Company may require
the Optionee to represent and warrant at the time of any such exercise or
receipt that such shares are being purchased or received only for the
Optionee's own account and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such
a representation is required by any relevant provision of the
aforementioned laws. At the option of the Company, a stop-transfer order
against any such shares may be placed on the official stock books and
records of the Company, and a legend indicating that such shares may not be
pledged, sold or otherwise transferred, unless an opinion of counsel is
provided (concurred in by counsel for the Company) stating that such
transfer is not in violation of any applicable law or regulation, may be
stamped on stock certificates to ensure exemption from registration. The
Plan Administrator may also require such other action or agreement by the
Optionee as may from time to time be necessary to comply with the federal
and state securities laws.
16.4 NO RIGHTS AS A SHAREHOLDER
No Option shall entitle the Optionee to any dividend, voting or other
right of a shareholder unless and until the date of issuance under the Plan
of the shares that are the subject of such Option, free of all applicable
restrictions.
16.5 COMPLIANCE WITH LAWS AND REGULATIONS
Notwithstanding anything in the Plan to the contrary, the Board, in
its sole discretion, may bifurcate the Plan so as to restrict, limit or
condition the use of any provision of the Plan to Optionees who are
officers or directors subject to Section 16 of the Exchange Act without so
restricting, 1imiting or conditioning the Plan with respect to other
Optionees. Additionally, in interpreting and applying the provisions of the
Plan, any Option granted as an Incentive Stock Option pursuant to the Plan
shall, to the extent permitted by law, be construed as an "incentive stock
option" within the meaning of Section 422 of the Code.
16.6 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Conunon Stock, or to create any trusts, or to make
any special deposits for any immediate or deferred amounts payable to any
Optionee, and no Optionee shall have any rights that are greater than those
of a general unsecured creditor of the Company.
16.7 SEVERABILLITY
If any provision of the Plan or any Option is determined to be
invalid, illegal or unenforceable in any jurisdiction, or as to any person,
or would disqualify the Plan or any Option under any law deemed applicable
by the Plan Administrator, such provision shall be construed or deemed
amended to conform to applicable laws, or, if it cannot be so construed or
deemed amended without, in the Plan Administrator's determination,
materially altering the intent of the Plan or the Option, such provision
shall be stricken as to such jurisdiction, person or Option, and the
remainder of the Plan and any such Option shall remain in full force and
effect.
SECTION 17. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the
Board, so long as it is approved by the Company's shareholders at any time
within 12 months of such adoption.
Adopted by the Board on April 12, 1998, and approved by the Company's
shareholders on April 25, 1998.
Exhibit 4.7
-----------
THEGLOBE.COM, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
-----------------------------------
THIS AGREEMENT, made as of the 1st day of February, 1999 (the
"Grant Date"), by and between theglobe.com, inc. (the "Company"), and _____
___________ (the "Optionee").
WHEREAS, this Option is being granted pursuant to the Employment
Agreement, dated February 1st, 1999, between factorymall.com, inc.
("factorymall"), the Company and the Optionee (the "Employment Agreement")
and is not being granted pursuant to the theglobe.com, inc. 1998 Stock
Option Plan (the "Plan").
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option.
---------------
1.1 The Company hereby grants to the Optionee the right and
option (the "Option") to purchase all or any part of an aggregate of 40,000
whole Shares subject to, and in accordance with, the terms and conditions
set forth in this Agreement.
1.2 The Option is not intended to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code.
1.3 This Agreement is subject to the Employment Agreement (the
provisions of which are incorporated herein by reference) and, except as
otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the same definitions as set forth in the Employment
Agreement.
2. Purchase Price.
--------------
The price at which the Optionee shall be entitled to purchase
Shares upon the exercise of the Option shall be $60.125 per Share (the Fair
Market Value of a Share on the Grant Date).
3. Duration of Option.
------------------
The Option shall be exercisable to the extent and in the manner
provided herein for a period of ten (10) years from the Grant Date (the
"Exercise Term"); provided, however, that the Option may be earlier
terminated as provided in Section 6 hereof; provided, further, that the
Option may, upon the death of the Optionee, be later exercised for up to
one (1) year following the date of the Optionee's death if such death
occurs prior to the tenth anniversary of the Grant Date.
4. Exercisability of Option.
------------------------
Unless otherwise provided in this Agreement, the Option shall
entitle the Optionee to purchase, in whole at any time or in part from time
to time, subject to the Optionee's continued employment with factorymall,
the Company or a Subsidiary, (i) on and after the first anniversary of the
Grant Date and prior to the second anniversary of the Grant Date, one-third
(1/3) of the total number of Shares covered by the Option less the number
of Shares previously acquired upon exercise of any portion of the Option,
(ii) on and after the second anniversary of the Grant Date and prior to the
third anniversary of the Grant Date, two-thirds (2/3) of the total number
of Shares covered by the Option less the number of Shares previously
acquired upon exercise of any portion of the Option, and (iii) on and after
the third anniversary of the Grant Date, 100% of the total number of Shares
covered by the Option, less the number of Shares previously acquired upon
exercise of any portion of the Option. Any fractional number of Shares
resulting from the application of the foregoing provision shall be rounded
to the nearest whole number of Shares.
5. Manner of Exercise and Payment.
------------------------------
5.1 Subject to the terms and conditions of this Agreement, the
Option may be exercised by written notice delivered in person or by mail to
the Controller of the Company, at its principal executive offices, 31 West
21st Street, New York, NY 10010. Such notice shall be substantially in the
form attached hereto as Exhibit A, shall state that the Optionee is
electing to exercise the Option and the number of Shares in respect of
which the Option is being exercised and shall be signed by the person or
persons exercising the Option. If requested by the Committee, such person
or persons shall (i) deliver this Agreement to the Secretary of the Company
who shall endorse thereon a notation of such exercise and (ii) provide
satisfactory proof as to the right of such person or persons to exercise
the Option.
5.2 The notice of exercise described in Section 5.1 hereof shall
be accompanied by the full purchase price for the Shares in respect of
which the Option is being exercised, in cash, or, if permitted by the
Committee, by transferring Shares, either actually or by attestation, to
the Company having a Fair Market Value on the day preceding the date of
exercise equal to the cash amount for which such Shares are substituted. In
addition, Options may be exercised through a registered broker-dealer
pursuant to such cashless exercise procedures which, from time to time, are
deemed acceptable by the Committee.
5.3 Upon receipt of notice of exercise and full payment for the
Shares in respect of which the Option is being exercised, the Company
shall, subject to Section 16 hereof, take such action as may be necessary
to effect the transfer to the Optionee of the number of Shares as to which
such exercise was effective. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Shares that
may be purchased upon exercise shall be rounded to the nearest number of
whole Shares.
5.4 The Optionee shall not be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any Shares subject to
the Option until (i) the Option shall have been exercised pursuant to the
terms of this Agreement and the Optionee shall have paid the full purchase
price for the number of Shares in respect of which the Option was
exercised, (ii) the Company shall have issued and delivered the Shares to
the Optionee, and (iii) the Optionee's name shall have been entered as a
stockholder of record on the books of the Company, whereupon the Optionee
shall have full voting and other ownership rights with respect to such
Shares, subject to the terms of this Agreement.
6. Termination of Option. Subject to Section 7 hereof, the Option
shall terminate on the date which is the tenth anniversary of the Grant
Date (or if later, the first anniversary of the date of the Optionee's
death if such death occurs prior to such tenth anniversary), unless
terminated earlier as follows:
6.1 If the employment of the Optionee by factorymall, the Company
or a Subsidiary is terminated by mutual agreement of the parties hereto, by
factorymall , the Company or a Subsidiary for any reason other than
Disability, death or Cause, by the Optionee for any reason, or if
factorymall or the Subsidiary then employing the Optionee ceases to be a
Subsidiary, the Optionee may for a period of three (3) months after such
termination or cessation exercise his Option to the extent, and only to the
extent, that such Option or portion thereof was exercisable as of the date
of such termination or cessation, after which time the Option shall
automatically terminate in full; provided, however, that if at the time the
Optionee terminates his employment, the Optionee had engaged in conduct
constituting Cause, the Option shall immediately terminate in full and no
rights hereunder may be exercised.
6.2 If the employment of the Optionee by factorymall, the Company
or a Subsidiary is terminated by reason of Disability, the Optionee may,
for a period of twelve (12) months after such termination, exercise the
Option to the extent, and only to the extent, that such Option or portion
thereof was exercisable, as of the date of such termination, after which
time the Option shall automatically terminate in full.
6.3 If the employment of the Optionee by factorymall, the Company
or a Subsidiary is terminated for Cause before the third anniversary of the
date of the Employment Agreement, the Option shall immediately terminate in
full and no rights hereunder may be exercised.
6.4 If the employment of the Optionee by factorymall, the Company
or a Subsidiary is terminated by reason of his death, the Option may be
exercised at any time within twelve (12) months after the Optionee's death
by the person or persons to whom such rights under the Option shall pass by
will, or by the laws of descent or distribution, after which time the
Option shall terminate in full; provided, however, that an Option may be
exercised to the extent, and only to the extent, that the Option or portion
thereof was exercisable on the date of death. If the Optionee dies within
three (3) months after termination as described in Section 6.1 hereof or
within twelve (12) months after termination as described in Section 6.2
hereof, the Option granted to the Optionee may be exercised at any time
within twelve (12) months after the Optionee's death by the person or
persons to whom such rights under the Option shall pass by will, or by the
laws of descent or distribution, after which time the Option shall
terminate in full; provided, however, that an Option may be exercised to
the extent, and only to the extent, that the Option or portion thereof was
exercisable on the date of termination.
6.5 The Option, to the extent not exercisable, shall terminate
immediately upon the Optionee's termination of employment with factorymall
, the Company or a Subsidiary for any reason.
6.6 For purposes of this Section 6, the Optionee shall not be
treated as terminated for so long as he is an employee of factorymall, the
Company or a Subsidiary.
7. Effect of Change in Control.
---------------------------
Notwithstanding anything contained in this Agreement to the
contrary, in the event of a Change in Control, the Option shall become
immediately and fully exercisable. In the event an Optionee's employment
terminates following a Change in Control, the Option shall remain
exercisable until the earlier of the first anniversary of the termination
of the Optionee's employment or the expiration of the stated term of the
Option.
8. Non-Transferability.
-------------------
The Option shall not be transferable other than by will or by the
laws of descent and distribution or pursuant to a domestic relations order
(within the meaning of Rule 16a-12 promulgated under the Exchange Act), and
the Option shall be exercisable during the lifetime of the Optionee only by
the Optionee or his guardian or legal representative.
9. Limitation on Rights.
--------------------
Nothing in this Agreement shall be interpreted or construed to
confer upon the Optionee any right with respect to continuance of
employment by factorymall, the Company or any of its or their affiliates,
nor shall this Agreement interfere in any way with the right of
factorymall, the Company or any of its or their affiliates to terminate the
Optionee's employment at any time.
10. Adjustments.
-----------
10.1 In the event of a Change in Capitalization, the Committee
shall make appropriate adjustments, if any, to the number and class of
Shares or other stock or securities subject to the Option and the purchase
price for such Shares or other stock or securities. The Committee's
adjustment shall be effective and final, binding and conclusive for all
purposes of this Agreement.
10.2 If, by reason of a Change in Capitalization, the Optionee
shall be entitled to exercise the Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions and restrictions
which were applicable to the Shares subject to the Option prior to such
Change in Capitalization.
11. Effect of a Merger, Consolidation or Liquidation.
------------------------------------------------
Subject to Section 7 hereof, upon the effective date of (i) the
liquidation or dissolution of the Company or (ii) a merger or consolidation
of the Company (a "Transaction"), the Option shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of all Shares subject to the Option, upon exercise of the Option,
the same number and kind of stock, securities, cash, property or other
consideration that each holder of Shares was entitled to receive in the
Transaction in respect of a Share; provided, however, that such stock,
securities, cash, property, or other consideration shall remain subject to
all of the conditions and restrictions which were applicable to the Option
prior to such Transaction.
12. Withholding of Taxes.
--------------------
At such times as the Optionee recognizes taxable income in
connection with the receipt of Shares hereunder (a "Taxable Event"), the
Optionee shall pay to the Company an amount equal to the federal, state and
local income taxes and other amounts as may be required by law to be
withheld by the Company in connection with the Taxable Event (the
"Withholding Taxes") prior to the issuance of such Shares. The Company and
factorymall shall have the right to deduct from any distribution of cash to
the Optionee an amount equal to the Withholding Taxes with respect to the
Option.
13. Pooling Transactions.
--------------------
Notwithstanding anything contained in this Agreement to the
contrary, in the event of a Change in Control which is also intended to
constitute a Pooling Transaction, the Committee shall take such actions, if
any, as are specifically recommended by an independent accounting firm
retained by the Company to the extent reasonably necessary in order to
assure that the Pooling Transaction will qualify as such, including but not
limited to (a) deferring the vesting, exercise, payment, settlement or
lapsing of restrictions with respect to the Option, (b) providing that the
payment or settlement in respect of the Option be made in the form of cash,
Shares or securities of a successor or acquirer of the Company, or a
combination of the foregoing, and (c) providing for the extension of the
term of any Option to the extent necessary to accommodate the foregoing,
but not beyond the maximum term permitted for any Option.
14. Modification of Agreement.
-------------------------
This Agreement may be modified, amended, suspended or terminated,
and any terms or conditions may be waived, but only by a written instrument
executed by the parties hereto.
15. Severability.
------------
Should any provision of this Agreement be held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such
holding and shall continue in full force in accordance with their terms.
16. Registration of Shares.
----------------------
16.1 Prior to the time that any portion of the Option first
becomes exercisable in accordance with the terms of this Agreement, the
Company shall cause the Shares underlying the Option to be registered with
the Securities and Exchange Commission and listed on the National
Association of Securities Dealers Automated Quotation System if not already
listed. The Option is subject to the requirement that, if at any time the
Committee determines, in its discretion, that the listing, registration or
qualification of Shares issuable pursuant to this Agreement is required by
any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body is necessary or desirable
as a condition of, or in connection with, the issuance of Shares, no
payment shall be made or Shares issued, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected
or obtained free of any conditions as acceptable to the Committee. The
Board may make such changes to the Option as may be necessary or
appropriate to comply with the rules and regulations of any governmental
authority.
16.2 Notwithstanding anything contained in this Agreement to the
contrary, in the event that the disposition of Shares acquired pursuant
this Agreement is not covered by a then current registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), and is
not otherwise exempt from such registration, such Shares shall be
restricted against transfer to the extent required by the Securities Act
and Rule 144 or other regulations thereunder. The Committee may require the
Optionee, as a condition precedent to receipt of Shares hereunder, to
represent and warrant to the Company in writing that the Shares acquired by
him are acquired without a view to any distribution thereof and will not be
sold or transferred other than pursuant to an effective registration
thereof under said Act or pursuant to an exemption applicable under the
Securities Act or the rules and regulations promulgated thereunder. The
certificates evidencing any of such Shares shall be appropriately amended
to reflect their status as restricted securities as aforesaid.
17. Governing Law.
-------------
17.1 The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Delaware
without giving effect to the conflicts of laws principles thereof.
17.2 The obligation of the Company to sell or deliver Shares
covered by the Option shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws,
and the obtaining of all such approvals by governmental agencies as may be
deemed necessary or appropriate by the Committee.
18. Successors in Interest.
----------------------
This Agreement shall inure to the benefit of and be binding upon
any successor to the Company. This Agreement shall inure to the benefit of
the Optionee's legal representatives. All obligations imposed upon the
Optionee and all rights granted to the Company under this Agreement shall
be final, binding and conclusive upon the Optionee's heirs, executors,
administrators and successors.
19. Resolution of Disputes.
----------------------
Any dispute or disagreement which may arise under, or as a result
of, or in any way relate to, the interpretation, construction or
application of this Agreement shall be determined by the Committee. Any
determination made hereunder shall be final, binding and conclusive on the
Optionee and the Company for all purposes.
20. Interpretation.
--------------
20.1 The grant of the Option pursuant hereto is intended to
comply with Rule 16b-3 promulgated under the Exchange Act and the Committee
shall interpret and administer the provisions of this Agreement in a manner
consistent therewith. Any provisions inconsistent with such rule shall be
inoperative and shall not affect the validity of this Agreement.
20.2 The Option is intended to be Performance-Based Compensation.
The Committee shall not be entitled to exercise any discretion otherwise
authorized hereunder with respect to this Option if the ability to exercise
such discretion or the exercise of such discretion itself would cause the
compensation attributable to this Option to fail to qualify as
Performance-Based Compensation.
21. Administration.
--------------
21.1 This Agreement shall be administered by the Committee. The
Committee shall consist of at least two (2) Directors and may consist of
the entire Board; provided, however, that (A) if the Committee consists of
less than the entire Board, each member shall be a Nonemployee Director and
(B) to the extent necessary for any Option intended to qualify as
Performance-Based Compensation to so qualify, each member of the Committee,
whether or not it consists of the entire Board, shall be an Outside
Director. For purposes of the preceding sentence, if one or more members of
the Committee is not a Nonemployee Director and an Outside Director but
recuses himself or herself or abstains from voting with respect to a
particular action taken by the Committee, then the Committee, with respect
to that action, shall be deemed to consist only of the members of the
Committee who have not recused themselves or abstained from voting.
21.2 No member of the Committee shall be liable for any action,
failure to act, determination or interpretation made in good faith with
respect to this Agreement. The Company hereby agrees to indemnify each
member of the Committee for all costs and expenses and, to the extent
permitted by applicable law, any liability incurred in connection with
defending against, responding to, negotiating for the settlement of or
otherwise dealing with any claim, cause of action or dispute of any kind
arising in connection with any actions in administering this Agreement or
in authorizing or denying authorization to any transaction hereunder.
21.3 Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time:
(a) to construe and interpret this Agreement and to
establish, amend and revoke rules and regulations for the administration of
this Agreement, including, but not limited to, correcting any defect or
supplying any omission, or reconciling any inconsistency in this Agreement,
in the manner and to the extent it shall deem necessary or advisable,
including so that this Agreement complies with Rule 16b-3 under the
Exchange Act, the Code to the extent applicable and other applicable law,
and otherwise to make this Agreement fully effective. All decisions and
determinations by the Committee in the exercise of this power shall be
final, binding and conclusive upon the Company, its Subsidiaries, the
Optionee, and all other persons having any interest herein;
(b) to determine the duration and purposes for leaves of
absence which may be granted to the Optionee on an individual basis without
constituting a termination of employment or service for purposes of this
Agreement;
(c) to exercise its discretion with respect to the powers
and rights granted to it as set forth in this Agreement; and
(d) generally, to exercise such powers and to perform such
acts as are deemed necessary or advisable to promote the best interests of
the Company with respect to this Agreement.
22. Definitions.
-----------
For purposes of this Agreement:
22.1 "Board" means the Board of Directors of the Company.
22.2 "Cause" shall have the meaning ascribed to it in the
Employment Agreement.
22.3 "Change in Capitalization" means any increase or
reduction in the number of Shares, or any change (including, but not
limited to, in the case of a spin-off, dividend or other distribution in
respect of Shares, a change in value) in the Shares or exchange of Shares
for a different number or kind of shares or other securities of the Company
or another corporation, by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, spin-off, split-up, issuance of
warrants or rights or debentures, stock dividend, stock split or reverse
stock split, cash dividend, property dividend, combination or exchange of
shares, repurchase of shares, change in corporate structure or otherwise.
22.4 A "Change in Control" shall mean the occurrence of any of
the following:
(a) An acquisition (other than directly from the Company) of
any voting securities of the Company (the "Voting Securities") by any
"Person" (as the term person is used for purposes of Section 13(d) or 14(d)
of the Exchange Act), immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of thirty percent (30%) or more of the then outstanding Shares or the
combined voting power of the Company's then outstanding Voting Securities;
provided, however, in determining whether a Change in Control has occurred
pursuant to this Section 20.4(a), Shares or Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A
"Non-Control Acquisition" shall mean an acquisition by (i) an employee
benefit plan (or a trust forming a part thereof) maintained by (A) the
Company or (B) any corporation or other Person of which a majority of its
voting power or its voting equity securities or equity interest is owned,
directly or indirectly, by the Company (for purposes of this definition, a
"Majority-Owned Subsidiary"), (ii) the Company or its Majority-Owned
Subsidiaries, or (iii) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined);
(b) The individuals who, as of the date hereof are members
of the Board of Directors of the Company (the "Incumbent Board"), cease for
any reason to constitute at least two-thirds of the members of the Board;
provided, however, that if the election, or nomination for election by the
Company's common stockholders, of any new director was approved by a vote
of at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Agreement, be considered as a member of the Incumbent
Board; or
(c) The consummation of:
(i) A merger, consolidation or reorganization with or
into the Company or in which securities of the Company are issued, unless
such merger, consolidation or reorganization is a Non-Control Transaction.
A "Non-Control Transaction" shall mean a merger,
consolidation or reorganization with or into the Company or in which
securities of the Company are issued where:
(A) the stockholders of the Company, immediately
before such merger, consolidation or reorganization, own directly or
indirectly immediately following such merger, consolidation or
reorganization, at least sixty percent (60%) of the combined voting power
of the outstanding voting securities of the corporation resulting from such
merger or consolidation or reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of the Voting
Securities immediately before such merger, consolidation or reorganization,
(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement
providing for such merger, consolidation or reorganization constitute at
least two-thirds of the members of the board of directors of the Surviving
Corporation, or a corporation beneficially directly or indirectly owning a
majority of the Voting Securities of the Surviving Corporation, and
(C) no Person other than (1) the Company, (2) any
Majority-Owned Subsidiary, (3) any employee benefit plan (or any trust
forming a part thereof) that, immediately prior to such merger,
consolidation or reorganization, was maintained by the Company or any
Majority-Owned Subsidiary, or (4) any Person who, immediately prior to such
merger, consolidation or reorganization had Beneficial Ownership of thirty
percent (30%) or more of the then outstanding Voting Securities or Shares,
has Beneficial Ownership of thirty percent (30%) or more of the combined
voting power of the Surviving Corporation's then outstanding voting
securities or its common stock.
(ii) A complete liquidation or dissolution of the
Company; or
(iii) The sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Majority-Owned Subsidiary or the distribution to the
Company's stockholders of the stock of a Majority-Owned Subsidiary or any
other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Shares
or Voting Securities as a result of the acquisition of Shares or Voting
Securities by the Company which, by reducing the number of Shares or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of
the acquisition of Shares or Voting Securities by the Company, and after
such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Shares or Voting Securities which
increases the percentage of the then outstanding Shares or Voting
Securities Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
22.5 "Code" means the Internal Revenue Code of 1986, as
amended.
22.7 "Committee" means the committee, appointed by the Board
from time to time to administer the Plan and to perform the functions set
forth therein.
22.8 "Director" means a director of the Company.
22.9 "Disability" shall have the meaning ascribed to it in the
Employment Agreement.
22.10 "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
22.11 "Fair Market Value" on any date means the closing sales
prices of the Shares on such date on the principal national securities
exchange on which such Shares are listed or admitted to trading, or, if
such Shares are not so listed or admitted to trading, the average of the
per Share closing bid price and per Share closing asked price on such date
as quoted on the National Association of Securities Dealers Automated
Quotation System or such other market in which such prices are regularly
quoted, or, if there have been no published bid or asked quotations with
respect to Shares on such date, the value established by the Committee in
good faith.
22.12 "Nonemployee Director" means a director of the Company
who is a "nonemployee director" within the meaning of Rule 16b-3
promulgated under the Exchange Act.
22.13 "Outside Director" means a director of the Company who is
an "outside director" within the meaning of Section 162(m) of the Code and
the regulations promulgated thereunder.
22.14 "Performance-Based Compensation" means any Option that is
intended to constitute "performance-based compensation" within the meaning
of Section 162(m)(4)(C) of the Code, and the regulations promulgated
thereunder.
22.15 "Pooling Transaction" means an acquisition of the Company
in a transaction which is intended to be treated as a "pooling of
interests" under generally accepted accounting principles.
22.16 "Shares" means the common stock, par value $0.001 per
share, of the Company.
22.17 "Subsidiary" means any corporation which is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) with respect
to the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
theglobe.com, inc.
By:
-----------------------------------
Attest:
- ----------------------------------
Secretary
- ----------------------------------
Name of Optionee:
<PAGE>
Exhibit A
NOTICE OF EXERCISE
theglobe.com, inc.
31 W. 21st Street
New York, NY 10010 Date of Exercise:
- -------------------
Ladies and Gentlemen:
This constitutes notice under my Nonqualified Stock Option Agreement
(the "Option Agreement") that I elect to purchase the number of shares for
the price set forth below.
Stock option dated:
--------------------
Number of shares as to
which option is exercised:
--------------------
Certificates to be issued
in name of:
--------------------
Total exercise price: $
--------------------
Cash payment delivered
herewith: $
--------------------
By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms the Option Agreement, and (ii) to
provide for the payment by me to you (in the manner designated by you) of
your withholding obligation, if any, relating to the exercise of this
option.
Very truly yours,
[ ]
Address:
-------------------------
EXHIBIT 5.1
[LETTERHEAD of FRIED, FRANK, HARRIS, SHRIVER & JACOBSON]
March 31, 1999
theglobe.com, inc.
31 West 21st Street
New York, New York 10010
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We are acting as special counsel to theglobe.com, inc., a Delaware
corporation (the "Company"), in connection with the registration, pursuant
to a Registration Statement on Form S-8 (the "Registration Statement"), of
an aggregate of 361,017 shares (the "Shares") of Common Stock, par value
$.01 per share, of the Company, issuable pursuant to (1) the Company's 1999
Employee Stock Purchase Plan - (200,000 shares); (11) options granted under
the factorymall.com, inc. ("factorymall") 1998 Stock Option Plan which were
converted from options to purchase shares of common stock of factorymall
into options to purchase Shares of the Company pursuant to the Agreement
and Plan of Merger, dated as of February 1, 1999, by and among the Company,
factorymall, Nirvana Acquisition Corp. and certain shareholders thereof -
(41,017 shares); and (111) options granted to James McGoodwin, Kevin
McKeown and Mark Tucker on February 1, 1999 - (120,000 shares).
We have examined the originals, or certified, conformed or
reproduction copies, of all records, agreements, instruments and documents
as we have deemed relevant or necessary as the basis for the opinion
hereinafter expressed. In all such examinations, we have assumed the
genuineness of all signatures and the conformity to original or certified
copies of all copies submitted to us as conformed or reproduction copies.
As to various questions of fact relevant to such opinion, we have relied
upon certificate and statements of public officials, officers or
representatives of the Company and others.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the Shares, when issued and paid for
(with the consideration received by the Company being not less than the par
value thereof) in accordance with the Plans, will be validly issued, fully
paid and non-assessable.
The opinion expressed herein is limited to the federal laws of the
United States, and, to the extent required by the foregoing opinion, the
General Corporation Law of the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 relating to the registration of the
Shares. In giving this consent, we do not admit that we are in the category
of persons whose consent is required under Section 7 of the Securities Act
of 1933, as amended.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By: /s/ Stuart H. Gelfond
---------------------------------
Stuart H. Gelfond
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
theglobe.com, inc.
We consent to incorporation by reference in the registration statement on
Form S-8 of theglobe.com, inc. of our report dated February 20, 1999,
relating to the balance sheets of theglobe.com, inc. as of December 31,
1998 and 1997, and the related statements of operations, stockholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1998, and related financial statement schedule, which report
appears in the Form 10-K of theglobe.com, inc. dated March 30, 1999.
/s/ KPMG LLP
New York, New York
March 31, 1999
