<PAGE>
As filed with the Securities and Exchange Commission on September 13, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------
iVILLAGE INC.
(Exact Name of Registrant as Specified in Its Charter)
---------
Delaware 13-3845162
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
212 Fifth Avenue 10010
New York, New York (Zip Code)
(Address of Principal Executive
Offices)
---------
iVillage Inc.
1995 Amended and Restated Employee Stock Option Plan
1997 Amended and Restated Acquisition Stock Option Plan
1999 Employee Stock Option Plan
1999 Acquisition Stock Option Plan
1999 Director Option Plan
1999 Employee Stock Purchase Plan
(Full Title of the Plans)
---------
Candice Carpenter
Co-Chairperson of the Board and Chief Executive Officer
iVillage Inc.
212 Fifth Avenue
New York, New York 10010
(Name and Address of Agent for Service)
(212) 206-3100
(Telephone Number, Including Area Code, of Agent for Service)
Copy to:
Richard V. Smith, Esq.
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
(415) 392-1122
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================
Proposed
Amount Maximum Offering Proposed Amount of
Title of Securities to be To Be Price Per Share Maximum Aggregate Registration
Registered Registered (1) Offering Price (1) Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.01 per share....... 620,249 $ 32.375 20,080,562 $11,966
48,709 $ 3.00 146,127
745,143 $ 5.10 3,800,229
673,417 $ 6.00 4,040,502
283,250 $ 7.45 2,110,213
184,858 $ 9.45 1,746,908
1,151,317 $ 24.00 170,472
5,550 $ 28.06 155,733
5,000 $ 28.50 142,500
10,000 $ 29.50 295,000
144,883 $ 33.38 4,836,195
500 $ 34.125 17,062.50
300 $ 36.25 10,875
1,200 $ 40.125 48,150
500 $ 40.25 20,125
300 $ 41.68 12,504
12,300 $ 41.94 515,862
300 $ 42.125 12,637.50
300 $ 42.50 12,750
300 $ 42.63 12,789
300 $ 42.75 12,825
300 $ 43.13 12,939
600 $ 43.625 26,175
2,300 $ 43.75 100,625
9,900 $ 44.25 438,075
300 $ 44.31 344
500 $ 49.00 24,500
300 $ 49.25 14,775
54,545 $ 49.75 2,713,614
300 $ 50.75 15,225
1,400 $ 55.25 77,350
1,400 $ 55.94 78,316
600 $ 61.63 36,978
800 $ 62.63 50,104
7,000 $ 66.75 467,250
1,000 $ 66.88 66,880
300 $ 70.75 21,225
1,334 $ 72.94 97,302
200 $ 83.50 16,700
300 $ 94.94 28,482
400 $ 95.00 38,000
300 $ 95.88 28,764
2,000 $ 96.75 193,500
200 $104.63 20,926
2,400 $113.75 273,000
====================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(h)(1), the proposed maximum offering price per share
and the proposed maximum offering price have been calculated on the basis
of $32.375 per share, the average of the high and low prices of the
Common Stock on Nasdaq on September 8, 1999 with respect to 620,249 shares
and on the basis of the exercise prices of options previously granted
with respect to 3,357,106 shares.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information *
Item 2. Registrant Information and Employee Plan Annual Information *
* Information required by Part I to be contained in the Section
10(a) prospectus is omitted from this Registration Statement in accordance with
Rule 428 under the Securities Act of 1933, as amended (the "Securities Act"),
and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by iVillage Inc. (the "Registrant")
with the Securities and Exchange Commission (the "Commission") are hereby
incorporated by reference to this Registration Statement:
(a) The audited consolidated financial statements of the
Registrant and its Subsidiaries contained in the
prospectus dated March 18, 1999 filed by the Registrant
under Rule 424(b) (Registration No. 333-68749).
(b) The Registrant's Form 8-K Current Reports filed May 4,
1999, July 14, 1999 and July 23, 1999 and the Registrant's
Quarterly Reports on Form 10-Q for the Quarterly Periods
ended March 31, 1999 and June 30, 1999 (File No.
000-25469).
(c) The description of the Registrant's Common Stock
contained in Registrant's Registration Statement on Form
8-A (File No. 000-25469), including any subsequent
amendment or report filed for the purpose of updating
that description.
In addition, all documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment indicating that all of the securities offered
hereunder have been sold or deregistering all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration Statement
and to be part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this Registration Statement shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
The consolidated financial statements of the Registrant as of
December 31, 1998 and 1997 and for each of the years in the three-year period
ended December 31, 1998 have been incorporated by reference in this
Registration Statement in reliance upon the report of PricewaterhouseCoopers
LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing. To the extent that PricewaterhouseCoopers LLP audits and reports on
financial statements of the Registrant issued at future dates, and consents to
the use of their report thereon, such financial statements also will be
incorporated by reference in the registration statement in reliance upon their
report and said authority.
Item 4. Description of Securities
Inapplicable.
2
<PAGE>
Item 5. Interests of Named Experts and Counsel
The validity of the common stock offered hereby will be passed
upon for the Registrant by Orrick, Herrington & Sutcliffe LLP, San Francisco,
California. A partner of Orrick, Herrington & Sutcliffe LLP owns an aggregate of
4,408 shares of the Registrant's common stock.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides that
a corporation may indemnify directors and officers, as well as other employees
and individuals, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by any such
person in connection with any threatened, pending or completed actions, suits
or proceedings in which such person is made a party by reason of such person
being or having been a director, officer, employee or agent to the Registrant.
The Delaware General Corporation Law provides that Section 145 is not exclusive
of other rights to which those seeking indemnification may be entitled under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise. Article XII of the Registrant's Amended and Restated Certificate of
Incorporation and Article VI of the Registrant's Bylaws provides for
indemnification by the Registrant of its directors and officers to the fullest
extent permitted by the Delaware General Corporation Law.
Section 102(b)(7) of the Delaware General Corporation Law permits
a corporation to provide in its certificate of incorporation that a director of
the corporation 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 (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) for unlawful payments of dividends or unlawful stock repurchases,
redemptions or other distributions, or (iv) for any transaction from which the
director derived an improper personal benefit. The Registrant's Amended and
Restated Certificate of Incorporation provides for such limitation of
liability.
The Registrant has obtained directors' and officers' insurance
providing indemnification for certain of the Registrant's directors, officers
and employees for certain liabilities.
The Registrant has entered into indemnification agreements with
each director and executive officer which provide indemnification under certain
circumstances for acts and omissions which may not be covered by any directors'
and officers' liability insurance.
Item 7. Exemption From Registration Claimed
Inapplicable.
Item 8. Exhibits
Exhibit
Number Name
------ ----
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Orrick, Herrington & Sutcliffe LLP (included
in Exhibit 5.1 to this Registration Statement).
23.2 Consent of PricewaterhouseCoopers LLP (iVillage).
23.3 Consent of PricewaterhouseCoopers LLP (KnowledgeWeb).
24 Powers of Attorney (included on page 6).
99.1 1995 Employee Stock Option Plan, as amended
99.2 1999 Employee Stock Option Plan, as amended
99.3 1999 Acquisition Stock Option Plan, as amended
3
<PAGE>
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 the
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
a 20% 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 the 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 the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such
post-effective amendment shall be deemed to be a
new registration statement relating to the
securities offered therein, and the offering of
such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
(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 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.
4
<PAGE>
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of 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.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 the 13th of
September, 1999.
iVILLAGE INC.
(Registrant)
By: /s/ Candice Carpenter
---------------------------
Candice Carpenter
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose
signature appears below each severally constitutes and appoints Candice
Carpenter and Steven A. Elkes, and each of them, as true and lawful
attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for them in their 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 said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they might or could do in person, hereby ratifying and
confirming all which said attorneys-in-fact and agents, or any of them, or their
substitute or substitutes, 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 Capacity Date
--------- -------- ---
<S> <C> <C>
/s/ Candice Carpenter Co-Chairperson of the Board of Directors and
- -------------------------- Chief Executive Officer September 13, 1999
Candice Carpenter (Principal Executive Officer)
/s/ Nancy Evans Co-Chairperson of the Board of Directors and September 13, 1999
- -------------------------- Editor-in-Chief
Nancy Evans
/s/ Craig T. Monaghan Chief Financial Officer September 13, 1999
- -------------------------- (Principal Financial Officer)
Craig T. Monaghan Vice President, Controller and
/s/ Scott Levine Chief Accounting Officer September 13, 1999
- -------------------------- (Principal Accounting Officer)
Scott Levine
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Alan Colner Director September 13, 1999
- --------------------------
Alan Colner
Director September , 1999
- --------------------------
Jay C. Hoag
/s/ Habib Kairouz Director September 13, 1999
- --------------------------
Habib Kairouz
/s/ Lennert J. Leader Director September 13, 1999
- --------------------------
Lennert J. Leader
/s/ Michael Levy Director September 13, 1999
- --------------------------
Michael Levy
/s/ Douglas McCormick Director September 13, 1999
- --------------------------
Douglas McCormick
Director September , 1999
- --------------------------
Daniel Schulman
/s/ Martin Yudkovitz Director September 13, 1999
- --------------------------
Martin Yudkovitz
(a majority of the
Board of Directors)
</TABLE>
7
<PAGE>
EXHIBIT INDEX
Exhibit
Number Name
------ ----
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Orrick, Herrington & Sutcliffe LLP
(included in Exhibit 5.1 to this Registration Statement).
23.2 Consent of PricewaterhouseCoopers LLP (iVillage).
23.3 Consent of PricewaterhouseCoopers LLP (KnowledgeWeb).
24 Powers of Attorney (included on page 6 of this
Registration Statement).
99.1 1995 Employee Stock Option Plan, as amended
99.2 1999 Employee Stock Option Plan, as amended
99.3 1999 Acquisition Stock Option Plan, as amended
<PAGE>
EXHIBIT 5.1
September 13, 1999
iVillage Inc.
170 Fifth Avenue
New York, New York 10010
Re: Registration Statement on Form S-8 - iVillage Inc.
1995 Amended and Restated Employee Stock Option Plan
1997 Amended and Restated Acquisition Stock Option Plan
1999 Employee Stock Option Plan
1999 Acquisition Stock Option Plan
1999 Director Option Plan
1999 Employee Stock Purchase Plan
Ladies and Gentlemen:
At your request, we are rendering this opinion in connection with the
proposed issuance pursuant to the iVillage Inc. 1995 Amended and Restated
Employee Stock Option Plan, 1997 Amended and Restated Acquisition Stock Option
Plan, 1999 Employee Stock Option Plan, 1999 Acquisition Stock Option Plan, 1999
Director Option Plan and 1999 Employee Stock Purchase Plan, (each, a "Plan"),
of up to 1,801,466; 285,727; 1,340,163; 333,333; 133,333; and 83,333 shares,
respectively (the "Shares"), of common stock, $.01 par value ("Common Stock"),
of iVillage Inc., a Delaware corporation (the "Company").
We have examined instruments, documents, and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the following: (a) the authenticity of
original documents and the genuineness of all signatures; (b) the conformity to
the originals of all documents submitted to us as copies; and (c) the truth,
accuracy and completeness of the information, representations and warranties
contained in the records, documents, instruments and certificates we have
reviewed.
Based on such examination, we are of the opinion that the Shares of
Common Stock issuable by the Company pursuant to each Plan are duly authorized
shares of Common Stock, and, when issued in accordance with the provisions of
the applicable Plan, will be validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
above referenced Registration Statement on Form S-8. In giving such consent, we
do not consider that we are "experts" within the meaning of such term as used
in the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission issued thereunder with respect to any part
of the Registration Statement, including this opinion, as an exhibit or
otherwise.
Very truly yours,
/s/ Orrick, Herrington & Sutcliffe LLP
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of iVillage Inc. of our report dated February 4, 1999
relating to the consolidated financial statements of iVillage Inc. and
Subsidiaries as of December 31, 1998 and 1997 and for the three years in the
period ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
New York, New York
September 9, 1999
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of iVillage Inc. of our report dated January 29, 1999 on our audits of
the financial statements of KnowledgeWeb, Inc. as of and for the years ended
December 31, 1998 and 1997.
/s/ PricewaterhouseCoopers LLP
New York, New York
September 9, 1999
<PAGE>
Exhibit 99.1
iVILLAGE INC.
1995 AMENDED AND RESTATED EMPLOYEE STOCK OPTION PLAN,
AS AMENDED THROUGH SEPTEMBER 10, 1999
1. PURPOSE OF THE PLAN
The purpose of this iVILLAGE INC. 1995 AMENDED AND RESTATED EMPLOYEE
STOCK OPTION PLAN (the "Plan") is (i) to further the growth and success of
iVILLAGE INC., a Delaware corporation (the "Company"), and its Subsidiaries (as
hereinafter defined) by enabling directors who are employees, officers and other
employees of, and independent consultants to, the Company and any of its
Subsidiaries to acquire shares of the Common Stock, $0.01 par value (the "Common
Stock"), of the Company, thereby increasing their personal interest in such
growth and success, and (ii) to provide a means of rewarding outstanding
performance by such persons to the Company and/or its Subsidiaries. Options
granted under the Plan may be either "incentive stock options" ("ISOs"),
intended to qualify as such under the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified stock options
("NSOs"). For purposes of the Plan, the terms "Parent" and "Subsidiary" shall
mean "Parent Corporation" and "Subsidiary Corporation", respectively, as such
terms are defined in Sections 424(e) and (f) of the Code. Unless the context
otherwise requires, any ISO or NSO shall hereinafter be referred to as an
"Option."
2. ADMINISTRATION OF THE PLAN.
(a) Stock Option Committee. The Plan shall be administered by the Board
of Directors of the Company (the "Board") or a Compensation Committee (the
"Committee") consisting of three persons appointed to such Committee from time
to time by the Board; ever, that, so long as it shall be required
to comply with Rule 16b-3 ("Rule 16b-3") promulgated by the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), in order to permit officers and directors of the
Company to be exempt from the provisions of Section 16(b) of the 1934 Act with
respect to transactions pursuant to the Plan, each of person appointed to the
Committee, at the effective date of his or her appointment to the Committee,
shall be a "Non-Employee Director" within the meaning of Rule 16b-3. The members
of the Committee may be removed at any time either with or without cause by the
Board. Any vacancy on the Committee, whether due to action of the Board or any
other cause, shall be filled by the Board. The term "Committee" shall, for all
purposes of the Plan other than this Section 2, be deemed to refer to the Board
if the Board is administering the Plan.
(b) Procedures. If the Plan is administered by a Committee, the
Committee shall from time to time select a Chairman from among the members of
the Committee. The Committee shall adopt such rules and regulations as it shall
deem appropriate concerning the holding of meetings and the administration of
the Plan. A majority of the entire Committee shall constitute a quorum and the
actions of a majority of the members of the Committee present at a meeting at
which a quorum is present, or actions approved in writing by all of the members
of the Committee, shall be the actions of the Committee; provided, however, that
if the Committee
<PAGE>
consists of only two members, both shall be required to constitute a quorum and
to act at a meeting or to approve actions in writing.
(c) Interpretation. Except as otherwise expressly provided in the Plan,
the Committee shall have all powers with respect to the administration of the
Plan, including, without limitation, full power and authority to interpret the
provisions of the Plan and any Option Agreement (as defined in Section 5(b)),
and to resolve all questions arising under the Plan. All decisions of the Board
or the Committee, as the case may be, shall be conclusive and binding on all
participants in the Plan.
3. SHARES OF STOCK SUBJECT TO THE PLAN.
(a) Number of Shares. Subject to the provisions of Section 9 (relating
to adjustments upon changes in capital structure and other corporate
transactions), the number of shares of Common Stock subject at any one time to
Options granted under the Plan, shall not exceed 1,802,549(1) shares. If and to
the extent that Options granted under the Plan terminate, expire or are canceled
without having been fully exercised, new Options may be granted under the Plan
with respect to the shares of Common Stock constituting the unexercised portion
of such terminated, expired or canceled Options.
(b) Character of Shares. The shares of Common Stock issuable upon
exercise of an Option granted under the Plan shall be (i) authorized but
unissued shares of Common Stock, (ii) shares of Common Stock held in the
Company's treasury or (iii) a combination of the foregoing.
(c) Reservation of Shares. The number of shares of Common Stock
reserved for issuance under the Plan shall at no time be less than the maximum
number of shares which may be purchased at any time pursuant to outstanding
Options.
4. ELIGIBILITY.
(a) General. Options may be granted under the Plan only to persons who
are employees, directors, officers of, or independent consultants to, the
Company or any of its Subsidiaries.
Options granted to officers or employees (including directors who are
officers or employees) of the Company or any of its Subsidiaries shall be, in
the discretion of the Committee, either ISOs or NSOs, and Options granted to
independent consultants to or directors of the Company or any of its
Subsidiaries who are not officers or employees of the Company or any of its
Subsidiaries shall be NSOs. Notwithstanding the foregoing, Options may be
conditionally granted to persons who are prospective employees, officers or
directors of, or independent consultants to, the Company or any of its
Subsidiaries; provided, however, that any such conditional grant of an ISO to a
prospective employee shall, by its terms, become effective no earlier than the
date on which such person actually becomes an employee.
- --------
/1/ Reflects adjustment for one-for-three reverse stock split of the Company on
March 11, 1999.
2
<PAGE>
(b) Exceptions. Notwithstanding anything contained in Section 4(a) to
the contrary, no ISO may be granted under the Plan to an employee who owns,
directly or indirectly (within the meaning of Sections 422(b)(6) and 424(d) of
the Code), stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or of its Parent, if any, or any of its
Subsidiaries, unless (A) the Option Price (as defined in Section 6(a)) of the
shares of Common Stock subject to such ISO is fixed at not less than 110% of the
Fair Market Value on the date of grant (as determined in accordance with Section
6(b)) of such shares and (B) such ISO by its terms is not exercisable after the
expiration of five years from the date it is granted.
5. GRANT OF OPTIONS.
(a) General. Options may be granted under the Plan at any time and from
time to time on or prior to the tenth anniversary of the Effective Date (as
defined in Section 12). Subject to the provisions of the Plan, the Committee
shall have plenary authority, in its discretion, to determine:
(i) the persons (from among the class of persons eligible to
receive Options under the Plan) to whom Options shall be granted (the
"Optionees");
(ii) the time or times at which Options shall be granted;
(iii) the number of shares subject to each Option;
(iv) the Option Price (as hereinafter defined) of the shares
subject to each Option, which price, in the case of ISOs, shall not be less than
the minimum specified in Section 4(b)(i) or 6(a) (as applicable); and
(v) the time or times when each Option shall become exercisable and
the duration of the exercise period.
(b) Option Agreements. Each Option granted under the Plan shall be
designated as an ISO or an NSO and shall be subject to the terms and conditions
applicable to ISOs and/or NSOs (as the case may be) set forth in the Plan. In
addition, each Option shall be evidenced by a written agreement (an "Option
Agreement"), containing such terms and conditions and in such form, not
inconsistent with the Plan, as the Committee shall, in its discretion, provide.
Each Option Agreement shall be executed by the Company and the Optionee.
(c) No Evidence of Employment or Service. Nothing contained in the Plan
or in any Option Agreement shall confer upon any Optionee any right with respect
to the continuation of his or her employment by or service with the Company or
any of its Subsidiaries or interfere in any way with the right of the Company or
any such Subsidiary (subject to the terms of any separate agreement to the
contrary) at any time to terminate such employment or service or to increase or
decrease the compensation of the Optionee from the rate in existence at the time
of the grant of an Option.
3
<PAGE>
(d) Date of Grant. The date of grant of an Option under this Plan shall
be the date as of which the Committee approves the grant; provided, however,
that in the case of an ISO, the date of grant shall in no event be earlier than
the date as of which the Optionee becomes an employee of the Company or one of
its Subsidiaries.
6. OPTION PRICE.
(a) General. Subject to Section 9, the price (the "Option Price") at
which each share of Common Stock subject to an Option granted under the Plan may
be purchased shall be determined by the Committee at the time the Option is
granted; provided, however, that in the case of an ISO (subject to Section
4(b)(i)), or an NSO granted at any time after the initial public offering of the
Common Stock, such Option Price shall in no event be less than 100% (or 110% if
the provisions of Section 4(b) (i) hereof are applicable) of the Fair Market
Value on the date of grant (as determined in accordance with Section 6(b)) of
such share of Common Stock.
(b) Determination of Fair Market Value. Subject to the requirements of
Section 422 of the Code, for purposes of the Plan, the "Fair Market Value" of
shares of Common Stock shall be equal to:
(i) if such shares are publicly traded, (x) the closing price, if
applicable, or the average of the last bid and asked prices on the date of grant
or, if such date is not a business day on which shares are traded, the next
immediately preceding trading day, in the over-the-counter market as reported by
NASDAQ or, (y) if the Common Stock is then traded on a national securities
exchange, the closing price, if applicable, or the average of the high and low
prices on the date of grant or, if such date is not a business day on which
shares are traded, the next immediately preceding trading day, on the principal
national securities exchange on which it is so traded; or
(ii) if there is no public trading market for such shares, the fair
value of such shares on the date of grant as determined by the Committee after
taking into consideration all factors which it deems appropriate, including,
without limitation, recent sale and offer prices of the capital stock in private
transactions negotiated at arms' length.
Notwithstanding anything contained in the Plan to the contrary, all
determinations pursuant to Section 6(b)(ii) shall be made without regard to any
restriction other than a restriction which, by its terms, will never lapse.
(c) Repricing of NSOs. Subsequent to the date of grant of any NSO, the
Committee may, at its discretion and with the consent of the Optionee, establish
a new Option Price for such NSO so as to increase or decrease the Option Price
of such NSO.
7. EXERCISABILITY OF OPTIONS.
(a) Committee Determination.
(i) Each Option granted under the Plan shall be exercisable at such
time or times, or upon the occurrence of such event or events, and for such
number of shares subject to the Option, as shall be determined by the Committee
and set forth in the Option
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Agreement evidencing such Option; provided, however, that if the Company files a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), for the initial public offering of the Common Stock, or if
the Company engages in a similar offering, no Option granted under the Plan
shall be exercisable, as the case may be, during the 180-day period immediately
following the effective date of such registration statement or during any period
of up to 180 days during which applicable securities laws or an underwriter
requires suspension of trading in the Common Stock (any such period a "Lock-up
Period"); provided further, however, that if an Option by its terms is to expire
during a Lock-up Period, the Committee may extend the expiration date of such
Option for a period co-extensive with the period representing the period between
the commencement of a Lock-up Period and the expiration date of such Option.
Subject to the provisos of the immediately preceding sentence, if an Option is
not at the time of grant immediately exercisable, the Committee may (A) in the
Option Agreement evidencing such Option, provide for the acceleration of the
exercise date or dates of the subject Option upon the occurrence of specified
events and/or (B) at any time prior to the complete termination of an Option,
accelerate the exercise date or dates of such Option, provided that, except as
otherwise provided in the pertinent Option Agreement, the Committee shall not
accelerate the exercise date of any installment of any Option granted to any
employee as an ISO (and not previously converted into a NSO pursuant to Section
12) if such acceleration would violate the annual vesting limitation contained
in Section 422(d) of the Code as described in Section 7(c).
(ii) The Committee may, in its discretion, amend any term or
condition of an outstanding Option provided (A) such term or condition as
amended is permitted by the Plan, (B) any such amendment shall be made only with
the consent of the Optionee to whom the Option was granted, or in the event of
the death of the Optionee, the Optionee's survivors, if the amendment is
materially adverse to the Optionee, and (C) any such amendment of any ISO shall
be made only after the Committee, after consulting with counsel for the Company,
determines whether such amendment would constitute a "modification" of any
Option which is an ISO (as that term is defined in Section 424(h) of the Code).
(b) Automatic Termination of Option. Except as otherwise determined by
the Committee and set forth in the Option Agreement, the unexercised portion of
any Option granted under the Plan shall automatically terminate and shall become
null and void and be of no further force or effect upon the first to occur of
the following:
(i) the tenth anniversary of the date on which such Option is
granted or, in the case of any ISO granted to a person described in Section
4(b)(i), the fifth anniversary of the date on which such ISO is granted;
(ii) the expiration of three months from the date that the Optionee
ceases to be an employee, director or officer of, or consultant to, the Company
or any of its Subsidiaries (other than as a result of an Involuntary Termination
(as defined in subparagraph (iii) below)) or a Termination For Cause (as defined
in subparagraph (iv) below)); provided, however, that if the Optionee shall die
during such three-month period, the time of termination of the unexercised
portion of such Option shall be the expiration of 6 months from the date that
such Optionee ceased to be an employee, director or officer of, or consultant
to, the Company or any of its Subsidiaries;
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(iii) the expiration of 12 months from the date that the Optionee
ceases to be an employee, director or officer of, or consultant to, the Company
or any of its Subsidiaries, if such termination is due to such Optionee's death
or permanent and total disability (within the meaning of Section 22(e)(3) of the
Code) (an "Involuntary Termination");
(iv) immediately if the Optionee ceases to be an employee, director
or officer of, or consultant to, the Company or any of its Subsidiaries, if such
termination is for cause or is otherwise attributable to a breach by the
Optionee of an employment, consulting or other similar agreement with the
Company or any such Subsidiary (a "Termination For Cause");
(v) the expiration of such period of time or the occurrence of such
event as the Committee in its discretion may provide in the Option Agreement;
(vi) on the effective date of a Corporate Transaction (as defined
in Section 9(b)) to which Section 9(b)(ii) (relating to assumptions and
substitutions of Options) does not apply; provided, however, that an Optionee's
right to exercise any Option outstanding prior to such effective date shall in
all events be suspended during the period commencing 10 days prior to the
proposed effective date of such Corporate Transaction and ending on either the
actual effective date of such Corporate Transaction or upon receipt of notice
from the Company that such Corporate Transaction will not in fact occur; and
(vii) except to the extent permitted by Section 9(b)(ii), the date
on which an Option or any part thereof or right or privilege relating thereto is
transferred (other than by will or the laws of descent and distribution),
assigned, pledged, hypothecated, attached or otherwise disposed of by the
Optionee.
The Board shall have the power to determine what constitutes a
Termination For Cause, and the date upon which such Termination For Cause shall
occur. All such determinations shall be final and conclusive and binding upon
the Optionee.
Notwithstanding anything contained in the Plan to the contrary, unless
otherwise provided in an Option Agreement, no Option granted under the Plan
shall be affected by any change of duties or position of the Optionee (including
a transfer to or from the Company or one of its Subsidiaries), so long as such
Optionee continues to be an employee, director or officer of, or consultant to,
the Company or one of its Subsidiaries.
(c) Limitations on Exercise. To the extent that Options designated as
ISOs become exercisable by an Optionee for the first time during any calendar
year for stock having an aggregate Fair Market Value greater than one hundred
thousand dollars ($100,000), the portion of such options which exceeds such
amount shall be treated as NSOs. For purposes of this Section 7(c), options
designated as ISOs shall be taken into account in the order in which they were
granted, and the Fair Market Value of stock shall be determined as of the time
the option with respect to such stock is granted.
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8. PROCEDURE FOR EXERCISE.
(a) Payment. At the time an Option is granted under the Plan, the
Committee shall, in its discretion, specify one or more of the following forms
of payment which may be used by an Optionee upon exercise of his Option:
(i) cash or personal or certified check payable to the Company in
an amount equal to the aggregate Option Price of the shares with respect to
which the Option is being exercised;
(ii) stock certificates (in negotiable form) representing shares of
Common Stock having a Fair Market Value on the date of exercise (as determined
in accordance with Section 6(b)) equal to the aggregate cash Option Price of the
shares with respect to which the Option is being exercised;
(iii) a combination of the methods set forth in clauses (i) and
(ii); or
(iv) in the case of NSOs only, in compliance with any cashless
exercise program authorized by the Company for use in connection with the Plan
at the time of such exercise.
(b) Notice. An Optionee (or other person, as provided in Section 10(b))
may exercise an Option granted under the Plan in whole or in part, as provided
in the Option Agreement evidencing his or her Option, by delivering a written
notice (the "Notice") to the Secretary of the Company. The Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of shares with respect to which the Option is
being exercised (the "Optioned Shares");
(iii) state the method of payment for the Optioned Shares (which
method must be available to the Optionee under the terms of his or her Option
Agreement);
(iv) state the date upon which the Optionee desires to consummate
the purchase (which date must be prior to the termination of such Option and no
later than 30 days from delivery of such Notice);
(v) include any representations of the Optionee required pursuant
to Section 10(a);
(vi) if the Option is exercised pursuant to Section 10(b) by any
person other than the Optionee, include evidence to the satisfaction of the
Committee of the right of such person to exercise the Option; and
(vii) include such further provisions consistent with the Plan as
the Committee may from time to time require.
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The exercise date of an Option shall be the date on which the
Company receives the Notice from the Optionee.
(c) Issuance of Certificates. The Company shall issue a stock
certificate in the name of the Optionee (or such other person exercising the
Option in accordance with the provisions of Section 10(b)) for the Optioned
Shares as soon as practicable after receipt of the Notice and payment of the
aggregate Option Price for such shares. Neither the Optionee nor any person
exercising an Option in accordance with the provisions of Section 10(b) shall
have any privileges as a stockholder of the Company with respect to any shares
of stock subject to an Option granted under the Plan until the date of issuance
of a stock certificate pursuant to this Section 8(c).
9. ADJUSTMENTS.
(a) Changes in Capital Structure. Subject to Section 9(b), if the
Common Stock is changed by reason of a stock split, reverse stock split, stock
dividend or recapitalization, or converted into or exchanged for other
securities as a result of a merger, consolidation or reorganization, the
Committee shall make such adjustments in the number and class of shares of stock
with respect to which Options may be granted under the Plan as shall be
equitable and appropriate in order to make such Options, as nearly as may be
practicable, equivalent to such Options immediately prior to such change. A
corresponding adjustment changing the number and class of shares allocated to,
and the Option Price of, each Option or portion thereof outstanding at the time
of such change shall likewise be made. Notwithstanding anything contained in the
Plan to the contrary, in the case of ISOs, no adjustment under this Section 9(a)
shall be appropriate if such adjustment (i) would constitute a modification,
extension or renewal of such ISOs within the meaning of Sections 422 and 424 of
the Code, and the regulations promulgated by the Treasury Department thereunder,
or (ii) would, under Section 422 of the Code and the regulations promulgated by
the Treasury Department thereunder, be considered as the adoption of a new plan
requiring stockholder approval.
(b) Corporate Transactions. The following rules shall apply in
connection with the dissolution or liquidation of the Company, a reorganization,
merger or consolidation in which the Company is not the surviving corporation,
or a sale of all or substantially all of the capital stock or assets of the
Company to another person or entity (a "Corporate Transaction"):
(i) each holder of an Option outstanding at such time shall be
given (A) written notice of such Corporate Transaction at least 20 days prior to
its proposed effective date (as specified in such notice) and (B) an
opportunity, during the period commencing with delivery of such notice and
ending 10 days prior to such proposed effective date, to exercise the Option to
the full extent to which such Option would have been exercisable by the Optionee
at the expiration of such 20-day period; provided, however, that upon the
occurrence of a merger or consolidation in which the Company is not the
surviving corporation and the stockholders of the Company receive distributions
of cash, securities or other property of a third party in complete exchange for
their equity interests in the Company or a sale of all of the capital stock or
all or substantially all of the assets of the Company to another person or
entity (a "Sale Event"), under circumstances in which provision for assumption
or substitution of options in accordance with Section 9(b)(ii) is not made, the
exercise dates of all Options granted under the Plan shall
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accelerate and become fully exercisable with respect to the total number of
shares of stock to which such Options relate, and if and to the extent not so
exercised as provided in this Section 9(b)(i), such Options shall automatically
terminate; and
(ii) notwithstanding anything contained in the Plan to the
contrary, Section 9(b)(i) shall not be applicable if provision shall be made in
connection with such Corporate Transaction for the assumption of outstanding
Options by, or the substitution for such Options of new options covering the
stock of, the surviving, successor or purchasing corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number, kind and
option prices of shares subject to such options; provided, however, that in the
case of ISOs, the Board shall, to the extent not inconsistent with the best
interests of the Company or its Subsidiaries (such best interests to be
determined in good faith by the Board in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will not constitute a
modification, extension or renewal of the ISOs within the meaning of Section
424(h) of the Code and the regulations promulgated by the Treasury Department
thereunder.
(c) Special Rules. The following rules shall apply in connection with
Sections 9(a) and (b) above:
(i) no fractional shares shall be issued as a result of any such
adjustment, and any fractional shares resulting from the computations pursuant
to Sections 9(a) or (b) shall be eliminated without consideration from the
respective Options;
(ii) no adjustment shall be made for cash dividends or the issuance
to stockholders of rights to subscribe for additional shares of Common Stock or
other securities; and
(iii) any adjustments referred to in Sections 9(a) or (b) shall be
made by the Board or the Committee (as the case may be) in its sole discretion
and shall be conclusive and binding on all persons holding Options granted under
the Plan.
10. RESTRICTIONS ON OPTIONS AND OPTIONED SHARES.
(a) Compliance With Securities Laws. No Options shall be granted under
the Plan, and no shares of Common Stock shall be issued and delivered upon the
exercise of Options granted under the Plan, unless and until the Company and/or
the Optionee shall have complied with all applicable Federal or state
registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.
The Committee in its discretion may, as a condition to the exercise of
any Option granted under the Plan, require an Optionee (i) to represent in
writing that the shares of Common Stock to be received upon exercise of an
Option are being acquired for investment and not with a view to distribution and
(ii) to make such other representations and warranties as are deemed appropriate
by the Company. Stock certificates representing shares of Common Stock acquired
upon the exercise of Options that have not been registered under the Securities
Act shall, unless otherwise directed by the Committee, bear the following
legend:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
AN OPINION OF COUNSEL TO i VILLAGE INC. THAT REGISTRATION
IS NOT REQUIRED UNDER SUCH ACT."
(b) Nonassignability of Option Rights. Except as otherwise determined
by the Committee and set forth in the Option Agreement, no Option granted under
the Plan shall be assignable or otherwise transferable by the Optionee except by
will or by the laws of descent and distribution. Except as otherwise determined
by the Committee and set forth in the Option Agreement, an Option may be
exercised during the lifetime of the Optionee only by the Optionee. If an
Optionee dies, his or her Option shall thereafter be exercisable, except as
otherwise determined by the Committee and set forth on the Option Agreement,
during the period specified in Section 7(b)(ii) or (iii) (as the case may be),
by his or her executors or administrators to the full extent to which such
Option was exercisable by the Optionee at the time of his or her death.
(c) Right of First Refusal. Until the initial public offering of Common
Stock of the Company registered under the Securities Act, the Company shall be
entitled to a right of first refusal in the event that the Optionee proposes to
sell any of his, her or its shares of Common Stock issuable upon exercise of the
Option, on such terms as are set forth in the Option Agreement between the
Company and the Optionee. The Company may, in its sole discretion, assign such
right of first refusal.
11. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on the date (the "Effective Date") of
its adoption by the Board; provided, however, that no Option shall be
exercisable by an Optionee unless and until the Plan shall have been approved by
the stockholders of the Company in accordance with the provisions of its
Certificate of Incorporation and By-laws, which approval shall be obtained by a
simple majority vote of stockholders, voting either in person or by proxy, at a
duly held stockholders' meeting or by written action in lieu of a stockholder's
meeting as permitted by and in accordance with the Certificate of Incorporation
and By-laws of the Company within 12 months before after the adoption of the
Plan by the Board.
12. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS: TERMINATION OF ISOs.
The Committee, at the written request of any Optionee, may in its
discretion take such actions as may be necessary to convert such Optionee ISOs
(or any portions thereof) that have not been exercised on the date of conversion
into NSOs at any time prior to the
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expiration of such ISOs, regardless of whether the Optionee is an employee of
the Company at the time of such conversion. Such actions may include, but not be
limited to, extending the exercise period or reducing the exercise price of the
appropriate installments of such Options. At the time of such conversion, the
Committee (with the consent of the Optionee) may impose such conditions on the
exercise of the resulting NSOs as the Committee in its discretion may determine,
provided that such conditions shall not be inconsistent with this Plan. Nothing
in the Plan shall be deemed to give any Optionee the right to have such Optionee
ISOs converted into NSOs, and no such conversion shall occur until and unless
the Committee takes appropriate action. The Committee, with the consent of the
Optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
13. EXPIRATION AND TERMINATION OF THE PLAN.
Except with respect to Options then outstanding, the Plan shall expire
on the first to occur of (i) the tenth anniversary of the date on which the Plan
is adopted by the Board, (ii) the tenth anniversary of the date on which the
Plan is approved by the stockholders of the Company and (iii) the date as of
which the Board, in its sole discretion, determines that the Plan shall
terminate (the "Expiration Date"). Any Options outstanding as of the Expiration
Date shall remain in effect until they have been exercised or terminated or have
expired by their respective terms.
14. AMENDMENT OF PLAN.
The Board may at any time prior to the Expiration Date modify and amend
the Plan in any respect; provided, however, that the approval of the holders of
a majority of the votes that may be cast by all of the holders of shares of
Common Stock and preferred stock of the Company, if any, entitled to vote
(voting as a single class) shall be obtained prior to any such amendment
becoming effective if such approval is required by law or is necessary to comply
with regulations promulgated by the SEC under Section 16(b) of the 1934 Act or
with Section 422 of the Code or the regulations promulgated by the Treasury
Department thereunder.
15. CAPTIONS.
The use of captions in this Plan is for convenience. The captions are
not intended to provide substantive rights.
16. DISQUALIFYING DISPOSITIONS.
If Optioned Shares acquired by exercise of an ISO granted under this
Plan are disposed of within two years following the date of grant of the ISO or
one year following the transfer of the Optioned Shares to the Optionee (a
"Disqualifying Disposition"), the holder of the Optioned Shares shall,
immediately prior to such Disqualifying Disposition, notify the Company in
writing of the date and terms of such Disqualifying Disposition and provide such
other information regarding the Disqualifying Disposition as the Company may
reasonably require.
17. WITHHOLDING TAXES.
Whenever under the Plan shares of Common Stock are to be delivered by
an
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Optionee upon exercise of an NSO, the Company shall be entitled to require as
a condition of delivery that the Optionee remit or, in appropriate cases, agree
to remit when due, an amount sufficient to satisfy all current or estimated
future Federal, state and local withholding tax and employment tax requirements
relating thereto. At the time of a Disqualifying Disposition, the Optionee shall
remit to the Company in cash the amount of any applicable Federal, state and
local withholding taxes and employment taxes.
18. OTHER PROVISIONS.
Each Option granted under the Plan may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Committee,
in its sole discretion. Notwithstanding the foregoing, each ISO granted under
the Plan shall include those terms and conditions which are necessary to qualify
the ISO as an "incentive stock option" within the meaning of Section 422 of the
Code and the regulations thereunder and shall not include any terms or
conditions which are inconsistent therewith.
19. NUMBER AND GENDER.
With respect to words used in this Plan, the singular form shall
include the plural form, the masculine gender shall include the feminine gender,
and vice-versa, as the context requires.
20. GOVERNING LAW.
The validity and construction of this Plan and the instruments
evidencing the Options granted hereunder shall be governed by the laws of the
State of New York.
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Exhibit 99.2
iVILLAGE INC.
1999 EMPLOYEE STOCK OPTION PLAN,
AS AMENDED THROUGH SEPTEMBER 10, 1999
1. Purposes of the Plan.
The purposes of this Plan are:
(1) to attract and retain the best available personnel for
positions of substantial responsibility,
(2) to provide additional incentive to Employees, Directors
and Consultants, and
(3) to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions.
As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means iVillage, Inc., a Delaware corporation.
(h) "Consultant" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
<PAGE>
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
(p) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
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(q) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
(s) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(t) "Option Exchange Program" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.
(u) "Optioned Stock" means the Common Stock subject to an Option or
Stock Purchase Right.
(v) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
(w) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this 1999 Employee Stock Option Plan, as amended and
restated.
(y) "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 11 of the Plan.
(z) "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.
(bb) "Section 16(b)" means Section 16(b) of the Exchange Act.
(cc) "Service Provider" means an Employee, Director or Consultant.
(dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(ff) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
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3. Stock Subject to the Plan.
Subject to the provisions of Section 13 of the Plan, the maximum
aggregate number of Shares, which may be optioned and sold under the Plan shall
be 1,340,163.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iv) Other Administration. Other than as provided above, the
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
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(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;
(vi) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to modify or amend each Option or Stock Purchase Right
(subject to Section 15(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All elections by an Optionee
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.
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5. Eligibility.
Nonstatutory Stock Options and Stock Purchase Rights may be granted to
Service Providers. Incentive Stock Options may be granted only to Employees.
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year
of the Company, Options to purchase more than 500,000 Shares.
(ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 200,000 Shares,
which shall not count against the limit, set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.
(iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 15 of the Plan.
8. Term of Option.
The term of each Option shall be stated in the Option Agreement. In the
case of an Incentive Stock Option, the term shall be ten (10) years from the
date of grant or such shorter term as may be provided in the Option Agreement.
Moreover, in the case of an Incentive Stock Option granted to an Optionee who,
at the time the Incentive Stock Option is granted, owns stock
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representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
a. granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
b. granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and
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(B) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. Unless the Administrator provides otherwise, vesting of
Options granted hereunder shall be tolled during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her
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entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
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(b) Repurchase Option. Unless the Administrator determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights.
Unless determined otherwise by the Administrator, an Option or Stock
Purchase Right may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by
the Optionee. If the Administrator makes an Option or Stock Purchase Right
transferable, such Option or Stock Purchase Right shall contain such additional
terms and conditions as the Administrator deems appropriate.
13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
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(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option and Stock Purchase Right shall be assumed
or an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Option or Stock
Purchase Right, the Optionee shall fully vest in and have the right to exercise
the Option or Stock Purchase Right as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
or Stock Purchase Right becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
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14. Date of Grant.
The date of grant of an Option or Stock Purchase Right shall be, for
all purposes, the date on which the Administrator makes the determination
granting such Option or Stock Purchase Right, or such other later date as is
determined by the Administrator. Notice of the determination shall be provided
to each Optionee within a reasonable time after the date of such grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
16. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
17. Inability to Obtain Authority.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
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18. Reservation of Shares.
The Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
19. Shareholder Approval.
The Plan shall be subject to approval by the shareholders of the
Company within twelve (12) months after the date the Plan is adopted. Such
shareholder approval shall be obtained in the manner and to the degree required
under Applicable Laws.
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Exhibit 99.3
iVILLAGE INC.
1999 ACQUISITION STOCK OPTION PLAN,
AS AMENDED THROUGH SEPTEMBER 10, 1999
1. PURPOSE OF THE PLAN
The purpose of this iVILLAGE INC. 1999 ACQUISITION STOCK OPTION PLAN (the
"Plan") is (i) to further the growth and success of iVILLAGE INC., a Delaware
corporation (the "Company"), and its Subsidiaries (as hereinafter defined) in
connection with the acquisition of other businesses or assets directly or
indirectly by the Company by enabling directors who are employees, officers and
other employees of, and independent consultants to, the Company and any of its
Subsidiaries, or as part of one or more of such acquisitions, to acquire shares
of the common stock (the "Common Stock"), of the Company, thereby increasing
their personal interest in such growth and success, and (ii) to provide a means
of rewarding outstanding performance by such persons to the Company and/or its
Subsidiaries. Options granted under the Plan may be either "incentive stock
options" ("ISOs"), intended to qualify as such under the provisions of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
non-qualified stock options ("NSOs"). For purposes of the Plan, the terms
"Parent" and "Subsidiary" shall mean "Parent Corporation" and "Subsidiary
Corporation", respectively, as such terms are defined in Sections 424(e) and (f)
of the Code. Unless the context otherwise requires, any ISO or NSO shall
hereinafter be referred to as an "Option."
2. ADMINISTRATION OF THE PLAN.
(a) Stock Option Committee. The Plan shall be administered by
the Board of Directors of the Company (the "Board") or a Compensation Committee
(the "Committee") consisting of three persons appointed to such Committee from
time to time by the Board; provided, however, that, so long as it shall be
required to comply with Rule 16b-3 ("Rule 16b-3") promulgated by the Securities
and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), in order to permit officers and directors of the
Company to be exempt from the provisions of Section 16(b) of the 1934 Act with
respect to transactions pursuant to the Plan, each person appointed to the
Committee, at the effective date of his or her appointment to the Committee,
shall be a "Non-Employee Director" within the meaning of Rule 16b-3; provided,
further, that to the extent the Company deems it desirable to qualify Options
granted under the Plan as "performance-based compensation" within the meaning of
Section 162(m) of the Code, the Plan shall be administered by a Committee of two
or more "outside directors" within the meaning of Section 162(m) of Code. The
members of the Committee may be removed at any time either with or without cause
by the Board. Any vacancy on the Committee, whether due to action of the Board
or any other cause, shall be filled by the Board. The term "Committee" shall,
for all purposes of the Plan other than this Section 2, be deemed to refer to
the Board if the Board is administering the Plan.
(b) Procedures. If the Plan is administered by a Committee,
the Committee shall from time to time select a Chairman from among the members
of the Committee. The Committee shall adopt such rules and regulations as it
shall deem appropriate concerning the
<PAGE>
holding of meetings and the administration of the Plan. A majority of the entire
Committee shall constitute a quorum and the actions of a majority of the members
of the Committee present at a meeting at which a quorum is present, or actions
approved in writing by all of the members of the Committee, shall be the actions
of the Committee; provided, however, that if the Committee consists of only two
members, both shall be required to constitute a quorum and to act at a meeting
or to approve actions in writing.
(c) Interpretation. Except as otherwise expressly provided in
the Plan, the Committee shall have all powers with respect to the administration
of the Plan, including, without limitation, full power and authority to
interpret the provisions of the Plan and any Option Agreement (as defined in
Section 5(b)), and to resolve all questions arising under the Plan. All
decisions of the Board or the Committee, as the case may be, shall be conclusive
and binding on all participants in the Plan.
3. SHARES OF STOCK SUBJECT TO THE PLAN.
(a) Number of Shares. Subject to the provisions of Section 9
relating to adjustments upon changes in capital structure and other corporate
transactions), the number of shares of Common Stock subject at any one time to
Options granted under the Plan, shall not exceed 333,333 shares. If and to the
extent that Options granted under the Plan terminate, expire or are canceled
without having been fully exercised, new Options may be granted under the Plan
with respect to the shares of Common Stock constituting the unexercised portion
of such terminated, expired or canceled Options.
(b) Character of Shares. The shares of Common Stock issuable
upon exercise of an option granted under the Plan shall be (i) authorized but
unissued shares of Common Stock, (ii) shares of Common Stock held in the
Company's treasury or (iii) a combination of the foregoing.
(c) Reservation of Shares. The number of shares of Common
Stock reserved for issuance under the Plan shall at no time be less than the
maximum number of shares which may be purchased at any time pursuant to
outstanding Options.
4. ELIGIBILITY.
(a) General. Options may be granted under the Plan only to
persons who are employees, directors, officers of, or independent consultants
to, the Company or any of its Subsidiaries. No individual may be granted Options
to purchase more than 300,000 Shares in any fiscal year of the Company.
Options granted to officers or employees (including directors
who are officers or employees) of the Company or any of its Subsidiaries shall
be, in the discretion of the Committee, either ISOs or NSOs, and Options granted
to independent consultants to or directors of the Company or any of its
Subsidiaries who are not officers or employees of the Company or any of its
Subsidiaries shall be NSOs. Notwithstanding the foregoing, Options may be
conditionally granted to persons who are prospective employees, officers or
directors of, or independent consultants to, the Company or any of its
Subsidiaries; provided, however, that any
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such conditional grant of an ISO to a prospective employee shall, by its terms,
become effective no earlier than the date on which such person actually becomes
an employee.
(b) Exceptions. Notwithstanding anything contained in Section
4(a) to the contrary, no ISO may be granted under the Plan to an employee who
owns, directly or indirectly (within the meaning of Sections 422(b)(6) and
424(d) of the Code), stock possessing more than lot of the total combined voting
power of all classes of stock of the Company or of its Parent, if any, or any of
its Subsidiaries, unless (A) the Option Price (as defined in Section 6(a)) of
the shares of Common Stock subject to such ISO is fixed at not less than 110% of
the Fair Market Value on the date of grant (as determined in accordance with
Section 6(b)) of such shares and (B) such ISO by its terms is not exercisable
after the expiration of five years from the date it is granted.
5. GRANT OF OPTIONS.
(a) General. Options may be granted under the Plan at any time
and from time to time on or prior to the tenth anniversary of the Effective Date
(as defined in Section 12). Subject to the provisions of the Plan, the Committee
shall have plenary authority, in its discretion, to determine:
(i) the persons (from among the class of persons
eligible to receive Options under the Plan) to whom options shall be
granted (the "Optionees");
(ii) the time or times at which Options shall be
granted;
(iii) the number of shares subject to each Option;
(iv) the Option Price (as hereinafter defined) of the
shares subject to each Option, which price, in the case of ISOs, shall
not be less than the minimum specified in Section 4(b)(i) or 6(a) (as
applicable); and
(v) the time or times when each option shall become
exercisable and the duration of the exercise period.
(b) Option Agreements. Each Option granted under the Plan
shall be designated as an ISO or an NSO and shall be subject to the terms and
conditions applicable to ISOs and/or NSOs (as the case may be) set forth in the
Plan. In addition, each Option shall be evidenced by a written agreement (an
"Option Agreement"), containing such terms and conditions and in such form, not
inconsistent with the Plan, as the Committee shall, in its discretion, provide.
Each Option Agreement shall be executed by the Company and the Optionee.
(c) No Evidence of Employment or Service. Nothing contained in
the Plan or in any Option Agreement shall confer upon any Optionee any right
with respect to the continuation of his or her employment by or service with the
Company or any of its Subsidiaries or interfere in any way with the right of the
Company or any such Subsidiary (subject to the terms of any separate agreement
to the contrary) at any time to terminate such employment or
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service or to increase or decrease the compensation of the Optionee from the
rate in existence at the time of the grant of an Option.
(d) Date of Grant. The date of grant of an option under this
Plan shall be the date as of which the Committee approves the grant; provided,
however, that in the case of an ISO, the date of grant shall in no event be
earlier than the date as of which the Optionee becomes an employee of the
Company or one of its Subsidiaries.
6. OPTION PRICE.
(a) General. Subject to Section 9, the price (the "Option
Price") at which each share of Common Stock subject to an Option granted under
the Plan may be purchased shall be determined by the Committee at the time the
option is granted; provided, however, that in the case of an ISO (subject to
Section 4(b)(i)), or an NSO granted at any time after the initial public
offering of the Common Stock, such Option Price shall in no event be less than
100% (or 110% if the provisions of Section 4(b)(i) hereof are applicable) of the
Fair Market Value on the date of grant (as determined in accordance with Section
6(b)) of such share of Common Stock.
(b) Determination of Fair Market Value. Subject to the
requirements of Section 422 of the Code, for purposes of the Plan, the "Fair
Market Value" of shares of Common Stock shall be equal to:
(i) if such shares are publicly traded, (x) the
closing price, if applicable, or the average of the last bid and asked
prices on the date of grant or, if such date is not a business day
on-which shares are traded, the next immediately preceding trading day,
in the over-the-counter market as reported by NASDAQ or, (y) if the
Common Stock is then traded on a national securities exchange, the
closing price, if applicable, or the average of the high and low prices
on the date of grant or, if such date is not a business day on which
shares are traded, the next immediately preceding trading day, on the
principal national securities exchange on which it is so traded; or
(ii) if there is no public trading market for such
shares, the fair value of such shares on the date of grant as
determined by the Committee after taking into consideration all factors
which it deems appropriate, including, without limitation, recent sale
and offer prices of the capital stock in private transactions
negotiated at arms' length.
Notwithstanding anything contained in the Plan to the
contrary, all determinations pursuant to Section 6(b)(ii) shall be made without
regard to any restriction other than a restriction which, by its terms, will
never lapse.
(c) Repricing of NSOs. Subsequent to the date of grant of any
NSO, the Committee may, at its discretion and with the consent of the Optionee,
establish a new Option Price for such NSO so as to increase or decrease the
Option Price of such NSO.
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7. EXERCISABILITY OF OPTIONS.
(a) Committee Determination.
(i) Each Option granted under the Plan shall be
exercisable at such time or times, or upon the occurrence of such event
or events, and for such number of shares subject to the Option, as
shall be determined by the Committee and set forth in the Option
Agreement evidencing such Option. If an option is not at the time of
grant immediately exercisable, the Committee may (A) in the Option
Agreement evidencing such Option, provide for the acceleration of the
exercise date or dates of the subject option upon the occurrence of
specified events and/or (B) at any time prior to the complete
termination of an option, accelerate the exercise date or dates of such
Option, provided that, except as otherwise provided in the pertinent
Option Agreement, the Committee shall not accelerate the exercise date
of any installment of any Option granted to any employee as an ISO (and
not previously converted into a NSO pursuant to Section 12) if such
acceleration would violate the annual vesting limitation contained in
Section 422(d) of the Code as described in Section 7(c).
(ii) The Committee may, in its discretion, amend any
term or condition of an outstanding option provided (A) such term or
condition as amended is permitted by the Plan, (B) any such amendment
shall be made only with the consent of the Optionee to whom the Option
was granted, or in the event of the death of the Optionee, the
Optionee's survivors, if the amendment is materially adverse to the
Optionee, and (C) any such amendment of any ISO shall be made only
after the Committee, after consulting with counsel for the Company,
determines whether such amendment would constitute a "modification" of
any option which is an ISO (as that term is defined in Section 424(h)
of the Code).
(b) Automatic Termination of Option. Except as otherwise
determined by the Committee and set forth in the Option Agreement, the
unexercised portion of any option granted under the Plan shall automatically
terminate and shall become null and void and be of no further force or effect
upon the first to occur of the following:
(i) the tenth anniversary of the date on which such
Option is granted or, in the case of any ISO granted to a person
described in Section 4(b)(i), the fifth anniversary of the date on
which such ISO is granted;
(ii) the expiration of three months from the date
that the Optionee ceases to be an employee, director or officer of, or
consultant to, the Company or any of its Subsidiaries (other than as a
result of an Involuntary Termination (as defined in subparagraph (iii)
below)) or a Termination For Cause (as defined in subparagraph (iv)
below)); provided, however, that if the optionee shall die during such
three-month period, the time of termination of the unexercised portion
of such Option shall be the expiration of 12 months from the date that
such Optionee ceased to be an employee, director or officer of, or
consultant to, the Company or any of its Subsidiaries;
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(iii) the expiration of 12 months from the date that
the Optionee ceases to be an employee, director or officer of, or
consultant to, the Company or any of its Subsidiaries, if such
termination is due to such Optionee's death or permanent and total
disability (within the meaning of Section 22(e)(3) of the Code) (an
"Involuntary Termination");
(iv) immediately if the Optionee ceases to be an
employee, director or officer of, or consultant to, the Company or any
of its Subsidiaries, if such termination is for cause or is otherwise
attributable to a breach by the Optionee of an employment, consulting
or other similar agreement with the Company or any such Subsidiary (a
"Termination For Cause");
(v) the expiration of such period of time or the
occurrence of such event as the Committee in its discretion may provide
in the Option Agreement;
(vi) on the effective date of a Corporate Transaction
(as defined in Section 9(b)) to which Section 9(b)(ii) (relating to
assumptions and substitutions of Options) does not apply; provided,
however, that an Optionee's right to exercise any Option outstanding
prior to such effective date shall in all events be suspended during
the period commencing 10 days prior to the proposed effective date of
such Corporate Transaction and ending on either the actual effective
date of such Corporate Transaction or upon receipt of notice from the
Company that such Corporate Transaction will not in fact occur; and
(vii) except to the extent permitted by Section
9(b)(ii), the date on which an option or any part thereof or right or
privilege relating thereto is transferred (other than by will or the
laws of descent and distribution), assigned, pledged, hypothecated,
attached or otherwise disposed of by the Optionee.
The Board shall have the power to determine what constitutes a
Termination For Cause, and the date upon which such Termination For Cause shall
occur. All such determinations shall be final and conclusive and binding upon
the Optionee.
Notwithstanding anything contained in the Plan to the
contrary, unless otherwise provided in an Option Agreement, no Option granted
under the Plan shall be affected by any change of duties or position of the
Optionee (including a transfer to or from the Company or one of its
Subsidiaries), so long as such Optionee continues to be an employee, director or
officer of, or consultant to, the Company or one of its Subsidiaries.
(c) Limitations on Exercise. To the extent that Options
designated as ISOs become exercisable by an Optionee for the first time during
any calendar year for stock having an aggregate Fair Market Value greater than
one hundred thousand dollars ($100,000), the portion of such options which
exceeds such amount shall be treated as NSOs. For purposes of this Section 7(c),
options designated as ISOs shall be taken into account in the order in which
they were granted, and the Fair Market Value of stock shall be determined as of
the time the option with respect to such stock is granted.
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8. PROCEDURE FOR EXERCISE.
(a) Payment. At the time an option is granted under the Plan,
the Committee shall, in its discretion, specify one or more of the following
forms of payment which may be used by an Optionee upon exercise of his Option:
(i) cash or personal or certified check payable to
the Company in an amount equal to the aggregate Option Price of the
shares with respect to which the Option is being exercised;
(ii) stock certificates (in negotiable form)
representing shares of Common Stock having a Fair Market Value on the
date of exercise (as determined in accordance with Section 6(b)) equal
to the aggregate cash Option Price of the shares with respect to which
the option is being exercised;
(iii) a combination of the methods set forth in
clauses (i) and (ii); or
(iv) in the case of NSOs only, in compliance with any
cashless exercise program authorized by the Company for use in
connection with the Plan at the time of such exercise.
(b) Notice. An Optionee (or other person, as provided in
Section 10(b)) may exercise an Option granted under the Plan in whole or in
part, as provided in the Option Agreement evidencing his or her Option, by
delivering a written notice (the "Notice") to the Secretary of the Company. The
Notice shall:
(i) state that the Optionee elects to exercise the
option;
(ii) state the number of shares with respect to which
the Option is being exercised (the "Optioned Shares");
(iii) state the method of payment for the Optioned
Shares (which method must be available to the Optionee under the terms
of his or her Option Agreement);
(iv) state the date upon which the Optionee desires
to consummate the purchase (which date must be prior to the termination
of such Option and no later than 30 days from delivery of such Notice);
(v) include any representations of the optionee
required pursuant to Section 10(a);
(vi) if the Option is exercised pursuant to Section
10(b) by any person other than the optionee, include evidence to the
satisfaction of the Committee of the right of such person to exercise
the option; and
(vii) include such further provisions consistent with
the Plan as the Committee may from time to time require.
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The exercise date of an Option shall be the date on which the
Company receives the Notice from the Optionee.
(c) Issuance of Certificates. The Company shall issue a stock
certificate in the name of the optionee (or such other person exercising the
option in accordance with the provisions of Section 10(b)) for the Optioned
Shares as soon as practicable after receipt of the Notice and payment of the
aggregate Option Price for such shares. Neither the Optionee nor any person
exercising an option in accordance with the provisions of Section 10(b) shall
have any privileges as a stockholder of the Company with respect to any shares
of stock subject to an Option granted under the Plan until the date of issuance
of a stock certificate pursuant to this Section 8(c).
9. ADJUSTMENTS.
(a) Changes in Capital Structure. Subject to Section 9(b), if
the Common Stock is changed by reason of a stock split, reverse stock split,
stock dividend or recapitalization, or converted into or exchanged for other
securities as a result of a merger, consolidation or reorganization, the
Committee shall make such adjustments in the number and class of shares of stock
with respect to which Options may be granted under the Plan as shall be
equitable and appropriate in order to make such Options, as nearly as may be
practicable, equivalent to such Options immediately prior to such change. A
corresponding adjustment changing the number and class of shares allocated to,
and the Option Price of, each option or portion thereof outstanding at the time
of such change shall likewise be made. Notwithstanding anything contained in the
Plan to the contrary, in the case of ISOs, no adjustment under this Section 9(a)
shall be appropriate if such adjustment (i) would constitute a modification,
extension or renewal of such ISOs within the meaning of Sections 422 and 424 of
the Code, and the regulations promulgated by the Treasury Department thereunder,
or (ii) would, under Section 422 of the Code and the regulations promulgated by
the Treasury Department thereunder, be considered as the adoption of a new plan
requiring stockholder approval.
(b) Corporate Transactions. The following rules shall apply in
connection with the dissolution or liquidation of the Company, a reorganization,
merger or consolidation in which the Company is not the surviving corporation,
or a sale of all or substantially all of the capital stock or assets of the
Company to another person or entity (a "Corporate Transaction"):
(i) each holder of an Option outstanding at such time
shall be given (A) written notice of such Corporate Transaction at
least 20 days prior to its proposed effective date (as specified in
such notice) and (B) an opportunity, during the period commencing with
delivery of such notice and ending 10 days prior to such proposed
effective date, to exercise the Option to the full extent to which such
option would have been exercisable by the Optionee at the expiration of
such 20-day period; provided, however, that upon the occurrence of a
merger or consolidation in which the Company is not the surviving
corporation and the stockholders of the Company receive distributions
of cash, securities or other property of a third party in complete
exchange for their equity interests in the Company or a sale of all of
the capital stock or all or substantially all of the assets of the
Company to another person or entity (a "Sale Event"), under
circumstances in which provision for assumption or substitution of
options in accordance
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with Section 9(b)(ii) is not made, the exercise dates of all Options
granted under the Plan shall accelerate and become fully exercisable
with respect to the total number of shares of stock to which such
Options relate, and if and to the extent not so exercised as provided
in this Section 9(b)(i), such Options shall automatically terminate;
and
(ii) notwithstanding anything contained in the Plan
to the contrary, Section 9(b)(i) shall not be applicable if provision
shall be made in connection with such Corporate Transaction for the
assumption of outstanding Options by, or the substitution for such
Options of new options covering the stock of, the surviving, successor
or purchasing corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number, kind and option prices of
shares subject to such options; provided, however, that in the case of
ISOs, the Board shall, to the extent not inconsistent with the best
interests of the Company or its Subsidiaries (such best interests to be
determined in good faith by the Board in its sole discretion), use its
best efforts to ensure that any such assumption or substitution will
not constitute a modification, extension or renewal of the ISOs within
the meaning of Section 424(h) of the Code and the regulations
promulgated by the Treasury Department thereunder.
(c) Special Rules. The following rules shall apply in
connection with Sections 9(a) and (b) above:
(i) no fractional shares shall be issued as a result
of any such adjustment, and any fractional shares resulting from the
computations pursuant to Sections 9(a) or (b) shall be eliminated
without consideration from the respective Options;
(ii) no adjustment shall be made for cash dividends
or the issuance to stockholders of rights to subscribe for additional
shares of Common Stock or other securities; and
(iii) any adjustments referred to in Sections 9(a) or
(b) shall be made by the Board or the Committee (as the case may be) in
its sole discretion and shall be conclusive and binding on all persons
holding options granted under the Plan.
10. RESTRICTIONS ON OPTIONS AND OPTIONED SHARES.
(a) Compliance With Securities Laws. No Options shall be
granted under the Plan, and no shares of Common Stock shall be issued and
delivered upon the exercise of Options granted under the Plan, unless and until
the Company and/or the optionee shall have complied with all applicable Federal
or state registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.
The Committee in its discretion may, as a condition to the
exercise of any Option granted under the Plan, require an optionee (i) to
represent in writing that the shares of Common Stock to be received upon
exercise of an option are being acquired for investment and not with a view to
distribution and (ii) to make such other representations and warranties as are
deemed appropriate by the Company. Stock certificates representing shares of
Common Stock acquired
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upon the exercise of Options that have not been registered under the Securities
Act shall, unless otherwise directed by the Committee, bear the following
legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE
PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR AN OPINION OF
COUNSEL TO iVILLAGE INC. THAT REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT."
(b) Nonassignability of Option Rights. Except as otherwise
determined by the Committee and set forth in the option Agreement, no Option
granted under the Plan shall be assignable or otherwise transferable by the
optionee except by will or by the laws of descent and distribution. Except as
otherwise determined by the Committee and set forth in the option Agreement, an
Option may be exercised during the lifetime of the Optionee only by the
Optionee. If an Optionee dies, his or her Option shall thereafter be
exercisable, except as otherwise determined by the Committee and set forth on
the Option Agreement, during the period specified in Section 7(b)(ii) or (iii)
(as the case may be), by his or her executors or administrators to the full
extent to which such option was exercisable by the Optionee at the time of his
or her death.
(c) Right of First Refusal. Until the initial public offering
of Common Stock of the Company registered under the Securities Act, the Company
shall be entitled to a right of first refusal in the event that the Optionee
proposes to sell any of his, her or its shares of Common Stock issuable upon
exercise of the option, on such terms as are set forth in the Option Agreement
between the Company and the Optionee. The Company may, in its sole discretion,
assign such right of first refusal.
11. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on the date (the "Effective
Date") of its adoption by the Board; provided, however, that no Option shall be
exercisable by an optionee unless and until the Plan shall have been approved by
the stockholders of the Company in accordance with the provisions of its
Certificate of Incorporation and By-laws, which approval shall be obtained by a
simple majority vote of stockholders, voting either in person or by proxy, at a
duly held stockholders, meeting or by written action in lieu of a stockholder's
meeting as permitted by and in accordance with the Certificate of Incorporation
and By-laws of the Company within 12 months before after the adoption of the
Plan by the Board.
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12. CONVERSION OF ISOs INTO NON-OUALIFIED OPTIONS:
TERMINATION OF ISOs.
The Committee, at the written request of any Optionee, may in
its discretion take such actions as may be necessary to convert such Optionee
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into NSOs at any time prior to the expiration of such ISOs,
regardless of whether the Optionee is an employee of the Company at the time of
such conversion. Such actions may include, but not be limited to, extending the
exercise period or reducing the exercise price of the appropriate installments
of such Options. At the time of such conversion, the Committee (with the consent
of the optionee) may impose such conditions on the exercise of the resulting
NSOs as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any optionee the right to have such Optionee ISOs converted
into NSOs, and no such conversion shall occur until and unless the Committee
takes appropriate action. The Committee, with the consent of the optionee, may
also terminate any portion of any ISO that has not been exercised at the time of
such termination.
13. EXPIRATION AND TERMINATION OF THE PLAN.
Except with respect to Options then outstanding, the Plan
shall expire on the first to occur of (i) the tenth anniversary of the date on
which the Plan is adopted by the Board, (ii) the tenth anniversary of the date
on which the Plan is approved by the stockholders of the Company and (iii) the
date as of which the Board, in its sole discretion, determines that the Plan
shall terminate (the "Expiration Date"). Any Options outstanding as of the
Expiration Date shall remain in effect until they have been exercised or
terminated or have expired by their respective terms.
14. AMENDMENT OF PLAN.
The Board may at any time prior to the Expiration Date modify
and amend the Plan in any respect; provided, however, that the approval of the
holders of a majority of the votes that may be cast by all of the holders of
shares of Common Stock and preferred stock of the Company, if any, entitled to
vote (voting as a single class) shall be obtained prior to any such amendment
becoming effective if such approval is required by law or is necessary to comply
with regulations promulgated by the SEC under Section 16(b) of the 1934 Act or
with Section 422 of the Code or the regulations promulgated by the Treasury
Department thereunder.
15. CAPTIONS.
The use of captions in this Plan is for convenience. The
captions are not intended to provide substantive rights.
16. DISQUALIFYING DISPOSITIONS.
If Optioned Shares acquired by exercise of an ISO granted
under this Plan are disposed of within two years following the date of grant of
the ISO or one year following the transfer of the Optioned Shares to the
Optionee (a "Disqualifying Disposition"), the holder of the Optioned Shares
shall, immediately prior to such Disqualifying Disposition, notify the Company
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in writing of the date and terms of such Disqualifying Disposition and provide
such other information regarding the Disqualifying Disposition as the Company
may reasonably require.
17. WITHHOLDING TAXES.
Whenever under the Plan shares of Common Stock are to be
delivered by an Optionee upon exercise of an NSO, the Company shall be entitled
to require as a condition of delivery that the Optionee remit or, in appropriate
cases, agree to remit when due, an amount sufficient to satisfy all current or
estimated future Federal, state and local withholding tax and employment tax
requirements relating thereto. At the time of a Disqualifying Disposition, the
Optionee shall remit to the Company in cash the amount of any applicable
Federal, state and local withholding taxes and employment taxes.
18. OTHER PROVISIONS.
Each Option granted under the Plan may contain such other
terms and conditions not inconsistent with the Plan as may be determined by the
Committee, in its sole discretion. Notwithstanding the foregoing, each ISO
granted under the Plan shall include those terms and conditions which are
necessary to qualify the ISO as an "incentive stock option" within the meaning
of Section 422 of the Code and the regulations thereunder and shall not include
any terms or conditions which are inconsistent therewith.
19. NUMBER AND GENDER.
With respect to words used in this Plan, the singular form
shall include the plural form, the masculine gender shall include the feminine
gender, and vice-versa, as the context requires.
20. GOVERNING LAW.
The validity and construction of this Plan and the instruments
evidencing the Options granted hereunder shall be governed by the laws of the
State of New York.
