<PAGE>
As filed with the Securities and Exchange Commission on July 1, 1999
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------------------------------
XOOM.COM, INC.
(Exact name of Registrant as Specified in Its Charter)
-------------------------------------------------
Delaware 88-0361536
------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
300 Montgomery Street, Suite 300
San Francisco, California 94104
(Address of Principal Executive Offices)
Paralogic Software Corporation 1998 Stock Incentive Plan
(Full Title of the Plan)
-------------------------------------------------
Chris Kitze
Chairman
XOOM.com, Inc.
300 Montgomery Street, Suite 300
San Francisco, California 94104
(Name and Address of Agent for Service)
(415) 288-2500
(Telephone Number, Including Area Code, of Agent For Service)
Copies to:
Bruce Alan Mann, Esq. Raj Aji
Morrison & Foerster LLP XOOM.com, Inc.
425 Market Street 300 Montgomery Street, Suite 300
San Francisco, California 94105 San Francisco, California 94104
(415) 268-7000 (415) 288-2500
--------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
Proposed Proposed
Title of Securities Amount Maximum Maximum Amount of
to be Registered to be Offering Price Aggregate Offering Registration
Registered(1) Per Share(2) Price(3) Fee
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 82,733 $ 0.56 $ 46,330.48 $ 12.88
par value per share
Common Stock, $.0001 12,001 $34.47 $413,674.47 $115.00
par value per share
==============================================================================================================================
</TABLE>
(1) Represents the shares originally issued under the Paralogic Software
Corporation 1998 Stock Incentive Plan, as amended (the "Assumed Options"),
which were assumed in connection with the Registrant's acquisition of
Paralogic Software Corporation (the "Merger").
(2) Represents the maximum exercise price per share as converted pursuant to the
terms of the Merger.
(3) Estimated in accordance with Rule 457(h) under the Securities Act of 1933,
as amended. Computation based upon the exercise price of the options, all
of which were previously granted and as converted pursuant to the terms of
the Merger.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10 (a) PROSPECTUS
The documents containing the information specified in Part 1 of Form S-8 (plan
information and registrant information and employee plan annual information)
will be sent or given to employees as specified by Securities and Exchange
Commission Rule 428(b)(1). Such documents need not be filed with the Securities
and Exchange Commission either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424. These documents
and the documents incorporated by reference in this Registration Statement
pursuant to Item 3 of Form S-8 (Part II hereof), taken together, constitute a
prospectus that meets the requirements of Section 10(a) of the Securities Act of
1933.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by XOOM.com, Inc. (the "Registrant") with the
Securities and Exchange Commission (the "Commission") are incorporated by
reference herein:
(a) The Registrant's Current Report on Form 8-K, filed on June 16, 1999.
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1999, filed on May 25, 1999, pursuant to Section 13(a) of the
Exchange Act.
(c) The Registrant's Current Report on Form 8-K, filed on May 21, 1999.
(d) The Registrant's Current Report on Form 8-K, filed on May 6, 1999.
(e) The Registrant's Current Report on Form 8-K, filed on May 5, 1999.
(f) The Registrant's latest Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, filed on March 30, 1999, pursuant to Section 13(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(g) The description of the Registrant's Common Stock which is contained in its
Registration Statement on Form 8-A filed under the Exchange Act on December 7,
1998, including any amendment or report filed for the purpose of updating such
description.
All reports and definitive proxy or information statements filed pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have
II-1
<PAGE>
been sold or which deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the General Corporation Law of the State of Delaware, the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act. Article VI of the Registrant's Bylaws also provides for
mandatory indemnification of its directors and executive officers, and
permissive indemnification of its employees and agents, to the fullest extent
permissible under Delaware law.
Article Seven of the Registrant's Amended and Restated Certificate of
Incorporation provides that the liability of its directors for monetary damages
shall be eliminated to the fullest extent permissible under Delaware law.
Pursuant to Delaware law, this includes elimination of liability for monetary
damages for breach of the directors' fiduciary duty of care to the Registrant
and its stockholders. These provisions do not eliminate the directors' duty of
care and, in appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Registrant, for acts or omissions not in
good faith or involving intentional misconduct, for knowing violations of law,
for any transaction from which the director derived an improper personal
benefit, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other laws, such as the federal
securities laws or state or federal environmental laws.
The Registrant has entered into agreements with its directors and certain of
its executive officers that require the Registrant to indemnify such persons
against expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred (including expenses of a derivative action) in connection
with any proceeding, whether actual or threatened, to which any
II-2
<PAGE>
such person may be made a party by reason of the fact that such person is or was
a director or officer of the Registrant or any of its affiliated enterprises,
provided such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Registrant and,
with respect to any criminal proceeding, had no reasonable cause to believe his
or her conduct was unlawful. The indemnification agreements also set forth
certain procedures that will apply in the event of a claim for indemnification
thereunder.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The Registrant has obtained a policy of directors' and officers' liability
insurance that insures the Company's directors and officers against the cost of
defense, settlement or payment of a judgment under certain circumstances.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Restated Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrant's Registration Statement on
Form S-1 (Commission File No. 333-62395) which became effective on
December 8, 1998 (the "Registration Statement on Form S-1")).
4.2 Amended and Restated Bylaws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Registration Statement on Form S-1).
5.1 Opinion of Morrison & Foerster LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Morrison & Foerster LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (see signature page of this Registration Statement).
99.1 Paralogic Software Corporation 1998 Stock Incentive Plan, as amended,
including forms of agreements thereunder.
II-3
<PAGE>
99.1 Paralogic Software Corporation 1998 Stock Incentive Plan, as amended,
including forms of agreements thereunder.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(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 the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if t he total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective 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 the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(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 Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold upon the termination of
the Paralogic Software Corporation 1998 Stock Incentive Plan, as amended.
II-4
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnity provisions summarized in Item 6 above or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, State of California, on July 1, 1999.
XOOM.COM, INC.
By: /s/ Laurent Massa
-----------------
Laurent Massa
Chief Executive Officer
and President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints, severally and not jointly, Chris Kitze, Laurent
Massa, and John Harbottle, with full power to act alone, as his or her true and
lawful attorney-in-fact, with the power of substitution, for and in such
person's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
each said attorney-in-fact full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he or she might or could do in person, hereby ratifying and
confirming all that each said attorney-in-fact may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Laurent Massa Principal Executive Officer and July 1, 1999
- ---------------------------------- Director
Laurent Massa
/s/ John Harbottle Principal Financial and Accounting July 1, 1999
- ---------------------------------- Officer
John Harbottle
/s/ Chris Kitze Chairman of the Board July 1, 1999
- ----------------------------------
Chris Kitze
</TABLE>
II-6
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Bob Ellis Director July 1, 1999
- ----------------------------------
Bob Ellis
/s/ James J. Heffernan Director July 1, 1999
- ----------------------------------
James J. Heffernan
/s/ Jeffrey Ballowe Director July 1, 1999
- ----------------------------------
Jeffrey Ballowe
/s/ Philip Schlein Director July 1, 1999
- ----------------------------------
Philip Schlein
/s/ Robert C. Harris, Jr. Director July 1, 1999
- ----------------------------------
Robert C. Harris, Jr.
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
4.1 Restated Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrant's Registration Statement on
Form S-1 (Commission File No. 333-62395) which became effective on
December 8, 1998 (the "Registration Statement on Form S-1")).
4.2 Amended and Restated Bylaws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Registration Statement on Form S-1).
5.1 Opinion of Morrison & Foerster LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Morrison & Foerster LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (see signature page of this Registration Statement).
99.1 Paralogic Software Corporation 1998 Stock Incentive Plan, as amended,
including forms of agreements thereunder.
<PAGE>
Exhibit 5.1
MORRISON & FOERSTER LLP
San Francisco, California
July 1, 1999
XOOM.com, Inc.
300 Montgomery Street, Suite 300
San Francisco, California 94104
Gentlemen:
At your request, we have examined the Registration Statement on Form S-8
executed by you on July 1, 1999, and to be filed with the Securities and
Exchange Commission (the "SEC") in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 94,734 shares of your
common stock, $.0001 par value (the "Common Stock") which will be issuable under
the Paralogic Software Corporation 1998 Stock Incentive Plan, as amended (the
"Plan").
As your counsel in connection with the Registration Statement, we have
examined the proceedings taken by you in connection with the assumption of the
Plan, of options previously granted pursuant to the Plan (the "Plan Shares"),
and such documents as we have deemed necessary to render this opinion, in
connection with the acquisition of Paralogic Software Corporation by XOOM.com,
Inc.
Based upon the foregoing, it is our opinion that the Plan Shares, when issued
and outstanding pursuant to the terms of the Plan, will be validly issued, fully
paid and non-assessable shares of Common Stock.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Morrison & Foerster LLP
<PAGE>
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of XOOM.com, Inc. pertaining to the Paralogic Software Corporation 1998
Stock Incentive Plan, as amended, of our report dated January 25, 1999 (except
for the fourth paragraph of Note 9, as to which the date is April 5, 1999) with
respect to the consolidated financial statements of XOOM.com, Inc., included in
its Annual Report (Form 10-K) for the year ended December 31, 1998, filed with
the Securities and Exchange Commission and of our report dated June 22, 1999
with respect to the financial statements of Paralogic Software Corporation,
included in XOOM.com, Inc.'s Form 8-K, dated July 1, 1999.
/s/ ERNST & YOUNG LLP
Palo Alto, California
July 1, 1999
<PAGE>
EXHIBIT 99.1
PARALOGIC SOFTWARE CORPORATION
1998 STOCK INCENTIVE PLAN
(Effective October 25, 1998, as amended June 10, 1999)
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. PURPOSE............................................ 1
SECTION 2. DEFINITIONS........................................ 1
(a) "Board"............................................ 1
(b) "Code"............................................. 1
(c) "Committee"........................................ 1
(d) "Common Stock"..................................... 1
(e) "Company".......................................... 1
(f) "Consultant"....................................... 1
(g) "Employee"......................................... 1
(h) "Exercise Price"................................... 1
(i) "Fair Market Value"................................ 2
(j) "Incentive Stock Option" or "ISO".................. 2
(k) "Non-Employee Director"............................ 2
(l) "Nonstatutory Option" or "NSO"..................... 2
(m) "Offeree".......................................... 2
(n) "Option"........................................... 2
(o) "Optionee"......................................... 2
(q) "Plan"............................................. 2
(r) "Purchase Price"................................... 2
(s) "Service".......................................... 2
(t) "Stock Option Agreement"........................... 2
(u) "Stock Purchase Agreement"......................... 2
(v) "Subsidiary"....................................... 2
(w) "Ten Percent Shareholder".......................... 2
SECTION 3. ADMINISTRATION..................................... 3
(a) Committees of the Board............................ 3
(b) Authority of the Board............................. 3
SECTION 4. ELIGIBILITY........................................ 3
SECTION 5. STOCK SUBJECT TO PLAN.............................. 3
(a) Basic Limitation................................... 3
(b) Additional Shares.................................. 3
SECTION 6. TERMS AND CONDITIONS OF GRANTS OR SALES............ 4
(a) Stock Purchase Agreement........................... 4
(b) Duration of Offers and Nontransferability of Rights 4
(c) Purchase Price..................................... 4
(d) Withholding Taxes.................................. 4
(e) Restrictions on Transfer of Common Stock........... 4
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
SECTION 7. TERMS AND CONDITIONS OF OPTIONS.................... 4
(a) Stock Option Agreement............................. 4
(b) Number of Shares................................... 5
(c) Exercise Price..................................... 5
(d) Withholding Taxes.................................. 5
(e) Exercisability..................................... 5
(f) Term............................................... 5
(g) Nontransferability................................. 5
(h) Exercise of Options on Termination of Service...... 6
(i) No Rights as a Shareholder......................... 6
(j) Modification, Extension and Assumption of Options.. 6
(k) Restrictions on Transfer........................... 6
SECTION 8. FORMS OF PAYMENT................................... 6
(a) General Rule....................................... 6
(b) Surrender of Stock................................. 7
(c) Promissory Notes................................... 7
(d) Cashless Exercise.................................. 7
SECTION 9. ADJUSTMENTS UPON CHANGES IN COMMON STOCK........... 7
(a) General............................................ 7
(b) Mergers and Consolidations......................... 7
(c) Reservation of Rights.............................. 8
SECTION 10. LEGAL REQUIREMENTS................................. 8
(a) Restrictions on Issuance........................... 8
(b) Financial Reports.................................. 8
SECTION 11. NO EMPLOYMENT RIGHTS............................... 8
SECTION 12. DURATION AND AMENDMENTS............................ 9
(a) Term of the Plan................................... 9
(b) Right to Amend or Terminate the Plan............... 9
(c) Effect of Amendment or Termination................. 9
SECTION 13. EXECUTION.......................................... 9
</TABLE>
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<PAGE>
PARALOGIC SOFTWARE CORPORATION
1998 STOCK INCENTIVE PLAN
Adopted By the Board October 25, 1998
Approved By Shareholders October 25, 1998
SECTION 1. PURPOSE.
The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, to encourage such persons to remain
in the employ of the Company and to attract new employees with outstanding
qualifications.
The Plan provides for the direct grant or sale of Common Stock and for the
grant of Options to purchase Common Stock. Options granted under the Plan may
include Nonstatutory Options as well as Incentive Stock Options intended to
qualify under section 422 of the Internal Revenue Code.
SECTION 2. DEFINITIONS.
(a) "Board" shall mean the Board of Directors of the Company, as
constituted from time to time.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean a committee consisting of one or more members of
the Board that is appointed by the Board to administer the Plan.
(d) "Common Stock" means the Company's common stock.
(e) "Company" shall mean Paralogic Software Corporation, a California
corporation.
(f) "Consultant" shall mean an individual who performs bona fide services
to the Company, a Parent or a Subsidiary other than as an Employee or a member
of the Board.
(g) "Employee" shall mean any individual who is a common-law employee of
the Company, a Parent or a Subsidiary.
(h) "Exercise Price" shall mean the amount for which one share of Common
Stock may be purchased upon exercise of an Option, as specified by the Board in
the applicable Stock Option Agreement.
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<PAGE>
(i) "Fair Market Value" shall mean the fair market value of a share of
Common Stock, as determined by the Board in good faith. Such determination
shall be conclusive and binding on all persons.
(j) "Incentive Stock Option" or "ISO" shall mean an incentive stock option
described in Code section 422(b).
(k) "Non-Employee Director" shall mean a member of the Board who is not an
Employee.
(l) "Nonstatutory Option" or "NSO" shall mean a stock option that is not an
ISO.
(m) "Offeree" shall mean an individual to whom the Board has offered the
right to acquire Common Stock other than upon exercise of an Option.
(n) "Option" shall mean an ISO or NSO granted under the Plan entitling the
holder to purchase Common Stock.
(o) "Optionee" shall mean an individual who holds an Option.
(p) "Parent" shall have the meaning set forth in Section 424(e) of the
Code.
(q) "Plan" shall mean this 1998 Stock Incentive Plan.
(r) "Purchase Price" shall mean the consideration for which one share of
Common Stock may be acquired under the Plan pursuant to a grant or sale under
Section 6, as specified by the Board.
(s) "Service" shall mean service as an Employee, Non-Employee Director or
Consultant.
(t) "Stock Option Agreement" shall mean the agreement between the Company
and an Optionee that contains the terms, conditions and restrictions pertaining
to an Option.
(u) "Stock Purchase Agreement" shall mean the agreement between the Company
and an Offeree who acquires Common Stock under the Plan (other than pursuant to
an Option) that contains the terms, conditions and restrictions pertaining to
the acquisition of such Common Stock.
(v) "Subsidiary" shall have the meaning set forth in Section 424(f) of the
Code. A corporation that attains the status of a Subsidiary on a date after the
adoption of the Plan shall be considered a Subsidiary commencing as of such
date.
(w) "Ten Percent Shareholder" means an individual who owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company, its Parent or any of its Subsidiaries. In determining
stock ownership, the attribution rules of Section 424(d) of the Code shall be
applied.
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<PAGE>
SECTION 3. ADMINISTRATION.
(a) Committees of the Board. The Plan shall be administered by the Board.
However, any or all administrative functions otherwise exercisable by the Board
may be delegated to a Committee. Members of the Committee shall serve for such
period of time as the Board may determine and shall be subject to removal by the
Board at any time. The Board may also at any time terminate the functions of
the Committee and reassume all powers and authority previously delegated to the
Committee. Any reference to the Board in the Plan shall be construed as a
reference to the Committee (if any) to whom the Board has assigned a particular
function.
(b) Authority of the Board. Subject to the provisions of the Plan, the
Board shall have full authority and discretion to take any actions it deems
necessary or advisable for the administration of the Plan. All decisions,
interpretations and other actions of the Board shall be final and binding on all
parties who have an interest in the Plan or any option or shares issued
thereunder.
SECTION 4. ELIGIBILITY.
Only Employees, Non-Employee Directors and Consultants shall be eligible for
the grant of Options or the direct grant or sale of Common Stock. Only
Employees shall be eligible for the grant of ISOs.
SECTION 5. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. The maximum number of
shares of Common Stock which may be issued under the Plan shall not exceed one
million five hundred thousand (1,500,000) shares, subject to adjustment pursuant
to Section 9.
(b) Additional Shares. If any outstanding Option or other right to acquire
Common Stock for any reason expires or is canceled, forfeited or otherwise
terminated, the Common Stock allocable to the unexercised portion of such Option
or other right shall again be available for the purposes of the Plan. If
shares of Common Stock issued under the Plan are reacquired by the Company
pursuant to any right of repurchase or right of first refusal, such shares of
Common Stock shall again be available for the purposes of the Plan, except such
shares shall not be available for ISOs.
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<PAGE>
SECTION 6. TERMS AND CONDITIONS OF GRANTS OR SALES.
(a) Stock Purchase Agreement. Each grant or sale of Common Stock under the
Plan other than upon exercise of an Option shall be evidenced by a Stock
Purchase Agreement between the Offeree and the Company. Such grant or sale
shall be subject to all applicable terms and conditions of the Plan and may be
subject to any other terms and conditions that are not inconsistent with the
Plan and that the Board deems appropriate for inclusion in a Stock Purchase
Agreement. The provisions of the various Stock Purchase Agreements entered into
under the Plan need not be identical.
(b) Duration of Offers and Nontransferability of Rights. Any right to
acquire Common Stock under the Plan other than an Option shall automatically
expire if not exercised by the Offeree within the number of days specified by
the Board and communicated to the Offeree. Such right shall not be transferable
and shall be exercisable only by the Offeree to whom such right was granted.
(c) Purchase Price. The Purchase Price shall be established by the Board
and set forth in the Stock Purchase Agreement and, to the extent required to
comply with the California Corporations Code or the regulations thereunder,
shall not be less than eighty-five percent (85%) of Fair Market Value (one
hundred percent (100%) for Ten Percent Shareholders). The Purchase Price shall
be payable in a form described in Section 8 or, in the discretion of the Board,
in consideration for past services rendered to the Company or for its benefit.
(d) Withholding Taxes. As a condition to the purchase of Common Stock, the
Offeree shall make such arrangements as the Board may require for the
satisfaction of any federal, state or local withholding tax obligations that may
arise in connection with such purchase.
(e) Restrictions on Transfer of Common Stock. No Common Stock granted or
sold under the Plan may be sold, made the subject of any short sale or loan,
hypothecated, pledged, optioned or otherwise transferred or disposed of by the
Offeree for such period of time (not to exceed one hundred eighty (180) days)
following the effective date of a registration statement covering securities of
the Company filed under the Securities Act of 1933, as amended, unless such
restriction is consented to or waived by the managing underwriter. Subject to
the preceding sentence, any Common Stock granted or sold under the Plan shall be
subject to such special conditions, rights of repurchase, rights of first
refusal and other transfer restrictions as the Board may determine. Such
restrictions shall apply in addition to any general restrictions that may apply
to all holders of Common Stock.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions that are not inconsistent
with the Plan and that the Board deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock
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Option Agreements entered into under the Plan need not be identical.
(b) Number of Shares. Each Stock Option Agreement shall specify the number
of shares of Common Stock that are subject to the Option and shall provide for
the adjustment of such number in accordance with Section 9. The Stock Option
Agreement shall also specify whether the Option is an ISO or a NSO.
(c) Exercise Price. An Option's Exercise Price shall be established by the
Board and set forth in a Stock Option Agreement. The Exercise Price of an ISO
shall not be less than one hundred percent (100%) of the Fair Market Value (one
hundred ten percent (110%) for Ten Percent Shareholders) on the date of grant.
The Exercise Price of a NSO shall not be less than eight-five percent (85%) of
the Fair Market Value (one hundred ten percent (110%) for Ten Percent
Shareholders) on the date of grant. The Exercise Price shall be payable in a
form described in Section 8. Notwithstanding the foregoing, an Option may be
granted with an exercise price lower than that set prescribed in this paragraph
if the Option grant is attributable to the issuance or assumption of an option
in a transaction to which Code section 424(a) applies.
(d) Withholding Taxes. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Board may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with such exercise. The Optionee shall also make
such arrangements as the Board may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection
with the disposition of Common Stock acquired by exercising an Option.
(e) Exercisability. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to vest or become exercisable. To
the extent required to comply with the California Corporations Code or the
regulations thereunder, an Option granted to Employees who are not officers
shall vest and become exercisable no less rapidly than the rate of twenty
percent (20%) per year for each of the first five (5) years from the date of
grant. Subject to the preceding sentence, the vesting of any Option shall be
determined by the Board in its sole discretion. A Stock Option Agreement may
permit an Optionee to exercise an Option before it is vested, subject to the
Company's right of repurchase over any shares acquired under the unvested
portion of the Option (an "early exercise"), which right of repurchase shall
lapse at the same rate the Option would have vested had there been no early
exercise.
(f) Term. The Stock Option Agreement shall specify the term of the Option.
The term shall not exceed ten (10) years from the date of grant (five (5) years
in the case of an ISO granted to a Ten Percent Shareholder). Subject to the
preceding sentence, the Board at its sole discretion shall determine when an
Option is to expire.
(g) Nontransferability. No Option shall be transferable by the Optionee
other than by will or by the laws of descent and distribution. An Option may be
exercised during the lifetime of the Optionee only or by the guardian or legal
representative of the Optionee. No Option or interest therein may be
transferred, assigned, pledged or hypothecated by the Optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attach-
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ment or similar process.
(h) Exercise of Options on Termination of Service. To the extent required
to comply with the California Corporations Code or the regulations thereunder,
each Stock Option Agreement shall provide that the Optionee shall have the right
to exercise the Option following termination of the Optionee's Service, during
the Option's term, for at least thirty (30) days following termination of
Service for any reason except cause, death or disability, and for at least six
(6) months following termination of Service due to death or disability.
(i) No Rights as a Shareholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a shareholder with respect to any Common Stock
covered by an Option until such person becomes entitled to receive such Common
Stock by filing a notice of exercise and paying the Exercise Price pursuant to
the terms of such Option.
(j) Modification, Extension and Assumption of Options. Within the
limitations of the Plan, the Board may modify, extend or assume outstanding
Options or may accept the cancellation of outstanding Options (whether granted
by the Company or another issuer) in return for the grant of new Options for the
same or a different number of shares of Common Stock and at the same or a
different Exercise Price. Notwithstanding the foregoing, no modification of an
Option shall, without the consent of the Optionee, impair the Optionee's rights
or increase the Optionee's obligations under such Option.
(k) Restrictions on Transfer. No shares of Common Stock issued upon
exercise of an Option may be sold or otherwise transferred or disposed of by the
Optionee during the one hundred eighty (180) day period following the effective
date of a registration statement covering securities of the Company filed under
the Securities Act of 1933 (unless such restriction is consented to or waived by
the managing underwriter). Subject to the preceding sentence, any Common Stock
issued upon exercise of an Option shall be subject to such rights of repurchase,
rights of first refusal and other transfer restrictions as the Board may
determine. Such restrictions shall apply in addition to any restrictions that
may apply to holders of Common Stock generally. Any right to repurchase an
Optionee's Common Stock at the original Exercise Price upon termination of the
Optionee's Service shall lapse at least as rapidly as the schedule set forth in
Subsection (e) above. Any such repurchase right may be exercised only within
ninety (90) days after the termination of the Optionee's Service for cash or for
cancellation of indebtedness incurred in purchasing the Common Stock.
SECTION 8. FORMS OF PAYMENT.
(a) General Rule. The entire Purchase Price or Exercise Price shall be
payable in cash or cash equivalents acceptable to the Company at the time of
exercise or purchase, except as otherwise provided in this Section 8.
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(b) Surrender of Stock. To the extent that a Stock Option Agreement or
Stock Purchase Agreement so provides, payment may be made all or in part with
Common Stock that has already been owned by the Optionee or the Optionee's
representative for any time period specified by the Board and that are
surrendered to the Company in good form for transfer. Such Common Stock shall
be valued at Fair Market Value on the date when the new Common Stock is
purchased under the Plan.
(c) Promissory Notes. To the extent that a Stock Option Agreement or Stock
Purchase agreement so provides, payment may be made all or in part with a full
recourse promissory note executed by the Optionee. The interest rate and other
terms and conditions of such note shall be determined by the Board. The Board
may require that the Optionee pledge his or her Common Stock to the Company for
the purpose of securing the payment of such note. In no event shall the stock
certificate(s) representing such Common Stock be released to the Optionee until
such note is paid in full, unless otherwise provided in the Stock Option
Agreement or Stock Purchase Agreement.
(d) Cashless Exercise. To the extent that a Stock Option Agreement so
provides and a public market for the Common Stock exists, payment may be made
all or in part by delivery (on a form acceptable to the Board) of an irrevocable
direction to a securities broker to sell Common Stock and to deliver all or part
of the sale proceeds to the Company in payment of the aggregate Exercise Price.
SECTION 9. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
(a) General. In the event of a subdivision of the outstanding Common
Stock, a declaration of a dividend payable in Common Stock, a declaration of an
extraordinary dividend payable in a form other than Common Stock in an amount
that has a material effect on the value of Common Stock, a combination or
consolidation of the outstanding Common Stock into a lesser number of shares, a
recapitalization, a reclassification or a similar occurrence, the Board shall
make appropriate adjustments in one or more of (i) the number of shares of
Common Stock available for future grants of Options or other rights to acquire
Common Stock under Section 5, (ii) the number of shares of Common Stock covered
by each outstanding Option or other right to acquire Common Stock or (iii) the
Exercise Price of each outstanding Option or the Purchase Price of each other
right to acquire Common Stock.
(b) Mergers and Consolidations. In the event that the Company is a party
to a merger or consolidation, outstanding Options or other rights to acquire
Common Stock shall be subject to the agreement of merger or reorganization.
Such agreement, without an Optionee's consent, may provide for:
(i) The continuation of such outstanding Options by the Company (if
the Company is the surviving corporation);
(ii) The assumption of the Plan and such outstanding Options by the
surviving corporation or its parent;
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(iii) The substitution by the surviving corporation or its parent of
options with substantially the same terms for such outstanding Options; or
(iv) The cancellation of such outstanding Options, provided that the
Company shall permit an Optionee to exercise vested Options either at or before
the merger or consolidation.
In connection with any transaction in which those options granted to
employees of Xoom.com (or any successor entity) to purchase shares of Xoom.com
(or any successor entity) ("Xoom.com options") are assumed or otherwise
continued by a successor entity, either (i) each outstanding Option granted
under the Plan shall be assumed or otherwise continued by the successor entity
(which shall in no event include any impairment of the rights of the holder of
the Option granted under the Plan without the consent of the Optionee) or (ii)
each Option not so assumed or continued shall be fully vested.
(c) Reservation of Rights. Except as provided in this Section 9, an
Optionee or Offeree shall have no rights by reason of (i) any subdivision or
consolidation of shares of stock of any class, (ii) the payment of any dividend,
or (iii) any other increase or decrease in the number of shares of stock of any
class. Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Common Stock subject to an Option, or the number of shares subject to any
other right to acquire Common Stock and/or the Exercise Price or Purchase Price.
The grant of an Option or other right to acquire Common Stock pursuant to the
Plan shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure, to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.
SECTION 10. LEGAL REQUIREMENTS.
(a) Restrictions on Issuance. Common Stock shall not be issued under the
Plan unless the issuance and delivery of such Common Stock complies with (or is
exempt from) all applicable requirements of law, including (without limitation)
the Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, state securities laws and regulations, and the regulations of any
stock exchange on which the Company's securities may then be listed, and the
Company has obtained the approval or favorable ruling from any governmental
agency that the Company determines is necessary or advisable.
(b) Financial Reports. To the extent required to comply with the
California Corporations Code or the regulations thereunder, not less often than
annually the Company shall furnish to Optionees and Offerees Company summary
financial information including a balance sheet regarding the Company's
financial condition and results of operations, unless such Optionees or Offerees
have duties with the Company that assure them access to equivalent information.
Such financial statements need not be audited.
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SECTION 11. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any Option granted or other right to acquire
Common Stock granted under the Plan, shall be construed to give any person any
right to become, to be treated as, or to remain an Employee, Consultant or Non-
Employee Director. The Company and its Subsidiaries reserve the right to
terminate any person's Service at any time and for any reason.
SECTION 12. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board, subject to the approval of
the Company's shareholders. In the event that the shareholders fail to approve
the Plan within twelve (12) months after its adoption by the Board, any Option
grants or other right to acquire Common Stock already made shall be null and
void, and no additional Option grants or other right to acquire Common Stock
shall be made after such date. The Plan shall terminate automatically ten (10)
years after its adoption by the Board and may be terminated on any earlier date
pursuant to Subsection (b) below.
(b) Right to Amend or Terminate the Plan. The Board may amend or terminate
the Plan at any time. Rights under any Option granted or other right to acquire
Common Stock granted before amendment of the Plan shall not be materially
altered, or impaired adversely, by such amendment, except with consent of the
Optionee or Offeree. An amendment of the Plan shall be subject to the approval
of the Company's shareholders only to the extent required by applicable laws,
regulations or rules.
(c) Effect of Amendment or Termination. No Common Stock shall be issued or
sold under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Common Stock previously issued or Option
previously granted under the Plan.
SECTION 13. EXECUTION.
To record the adoption of the Plan, the Company has caused its authorized
officer to execute the same.
PARALOGIC SOFTWARE CORPORATION
By: /s/ VIJAY VAIDYANATHAN
Title: President and Chariman
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