<PAGE>
As filed with the Securities and Exchange Commission on May 5, 1999
Registration No. 333-_________________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-----------------------
COMPS.COM, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0645337
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
9888 CARROLL CENTRE ROAD, SUITE 100, SAN DIEGO, CALIFORNIA 92126-4581
(Address of principal executive offices) (Zip Code)
------------------------
COMPS.COM, INC.
1999 STOCK INCENTIVE PLAN
1999 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plans)
-----------------------
Christopher A. Crane
PRESIDENT AND CHIEF EXECUTIVE OFFICER
COMPS.COM, INC.
9888 CARROLL CENTRE ROAD, SUITE 100
SAN DIEGO, CALIFORNIA 92126-4581
(Name and address of agent for service)
(619) 578-3000
(Telephone number, including area code, of agent for service)
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
Amount Proposed Proposed Amount of
Title of Securities to be Maximum Offering Maximum Aggregate Registration
to Be Registered Registered(1) Price per Share Offering Price Fee
- ------------------------------------- -------------------- ------------------- ------------------- --------------
<S> <C> <C> <C> <C>
1999 Stock Incentive Plan 2,800,000 shares $ 15.00(2) $ 42,000,000(2) $ 11,676
- -------------------------------------
Common Stock
1999 Employee Stock Purchase Plan 300,000 shares $ 15.00(2) $ 4,500,000(2) $ 1,251
- -------------------------------------
Common Stock
AGGREGATE AMOUNT OF $ 12,927
REGISTRATION FEE
=============================================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Registrant's common stock which become issuable under the 1999 Stock
Incentive Plan and the 1999 Employee Stock Purchase Plan with respect to
the securities registered hereunder by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
Registrant's receipt of consideration which results in an increase in the
number of the Registrant's outstanding shares of common stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the fair market value
per share of Registrant's common stock on May 4, 1999, as determined by the
Registrant's Board of Directors.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------
COMPS.COM, INC. incorporates by reference into this Registration
Statement the following documents previously filed with the SEC:
(a) Our Registration Statement No. 333-72901 on Form S-1 filed with the
SEC on February 25, 1999, together with the amendments filed with the
SEC on April 5, 1999, April 14, 1999, April 30, 1999 and May 4, 1999.
(b) Our prospectus filed with the SEC on May 5, 1999, under Rule 424(b)
promulgated under the Securities Act of 1933, in connection with our
Registration Statement No. 333-72901, which includes the audited
financial statements for the year ended December 31, 1998.
(c) Our Registration Statement No. 000-25913 on Form 8-A filed with the SEC
on April 30, 1999, in which we describe the terms, rights and
provisions applicable to our outstanding common stock.
All reports and definitive proxy or information statements filed under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, after
the date of this Registration Statement and prior to the filing of a post-
effective amendment which indicates that all securities offered under this
Registration Statement have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part of this Registration Statement 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 in this
Registration Statement or in any subsequently filed document which also is
deemed to be incorporated by reference in this Registration Statement modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
-------------------------
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
--------------------------------------
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
Our certificate provides that, except to the extent prohibited by
Delaware law, our directors shall not be personally liable to us or our
stockholders for monetary damages for any breach of their fiduciary duty as
directors. Under Delaware law, the directors have a fiduciary duty to us which
is not eliminated by this provision of our certificate and, in appropriate
circumstances, equitable remedies such as injunctive or other forms of non-
monetary relief will remain available. In addition, each director will continue
to be subject to liability under Delaware law for breach of their duty of
loyalty to us for acts or omissions which are found by a court of competent
jurisdiction to be not in good faith or which involve intentional misconduct, or
knowing violations of law, for actions leading to improper personal benefit to
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are prohibited by Delaware law. This provision also does not
affect the directors' responsibilities under any other laws, such as the federal
securities laws or state or federal environmental laws.
II-1
<PAGE>
Section 145 of the Delaware General Corporation Law allows a corporation to
indemnify its directors and officers and to purchase insurance with respect to
liability arising out of their capacity or status as directors and officers,
provided that the indemnification does not eliminate or limit the liability of a
director for the following:
. any breach of the director's duty of loyalty to us or our stockholders;
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. unlawful payments of dividends or unlawful stock purchases or
redemptions; and
. any transaction from which the director derived an improper personal
benefit.
Delaware law further provides that the permitted indemnification shall not
be deemed exclusive of any other rights to which the directors and officers may
be entitled under our bylaws, any agreement, a vote of stockholders or
otherwise. Our certificate eliminates the personal liability of directors to
the fullest extent permitted by Delaware law. In addition, our certificate
provides that we may fully indemnify any person who was or is a party, or is
threatened to be made a party to, any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was one of our directors or officers
or is or was serving at our request as a director or officer of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses, including attorney's fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding.
We have also entered into agreements to indemnify our directors and
executive officers, in addition to the indemnification provided for in our
bylaws. We believe that these provisions and agreements are necessary to
attract and retain qualified directors and executive officers. Our bylaws also
permit us to secure insurance on behalf of any officer, director, employee or
other agent for any liability arising out of his or her actions, regardless of
whether Delaware law would permit indemnification. We have applied for
liability insurance for our officers and directors.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
-----------------------------------
Not Applicable.
ITEM 8. EXHIBITS
--------
Exhibit Number Exhibit
- -------------- -------
4 Instruments Defining the Rights of Stockholders. Reference is
made to the Registration Statement on Form 8-A, filed on April
30, 1999, incorporated by reference under Item 3(c).
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1999 Stock Incentive Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Addendum to Stock Option Agreement.
99.5 1999 Employee Stock Purchase Plan
99.6 Form of Enrollment/Change Form
99.7 Form of Stock Purchase Agreement
ITEM 9. UNDERTAKINGS
------------
II-2
<PAGE>
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 this Registration Statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
this Registration Statement and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall
not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the Securities Act each such post-
effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof; and (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
COMPS.COM, INC. 1999 Stock Incentive Plan and 1999 Employee Stock Purchase Plan.
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 into this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the indemnification provisions summarized in Item 6
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 1933 Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8, and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Diego, State of California on this
5th day of May, 1999.
COMPS.COM, INC.
By: /s/ CHRISTOPHER A. CRANE
------------------------------------------
Christopher A. Crane
President and Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Christopher A. Crane, President and Chief
Executive Officer, and Karen Goodrum, Vice President of Finance and
Administration and Chief Financial Officer, and each of them, as such person's
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for such person and in such person's name, place and stead,
in any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to file 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 connection therewith,
as fully to all intents and purposes as such person might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his or her substitutes, may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ CHRISTOPHER A. CRANE Chairman of the Board, President May 5, 1999
- --------------------------- and Chief Executive Officer
Christopher A. Crane (Principal Executive Officer)
/s/ KAREN GOODRUM Vice President of Finance and May 5, 1999
- --------------------------- Administration and Chief Financial
Karen Goodrum Officer (Principal Financial and
Accounting Officer) and Secretary
/s/ GREGORY M. AVIS Director May 5, 1999
- ---------------------------
Gregory M. Avis
/s/ ROBERT C. BEASLEY Director May 5, 1999
- ---------------------------
Robert C. Beasley
/s/ KENNETH F. POTASHNER Director May 5, 1999
- ---------------------------
Kenneth F. Potashner
</TABLE>
II-4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
COMPS.COM, INC.
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit
- -------------- -------
4 Instruments Defining the Rights of Stockholders.
Reference is made to the Registration Statement on Form
8-A, filed on April 30, 1999, incorporated by reference
under Item 3(c).
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained
in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of
this Registration Statement.
99.1 1999 Stock Incentive Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Addendum to Stock Option Agreement.
99.5 1999 Employee Stock Purchase Plan
99.6 Form of Enrollment/Change Form
99.7 Form of Stock Purchase Agreement
<PAGE>
EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
May 5, 1999
COMPS.COM, INC.
9888 Carroll Centre Road, Suite 100
San Diego, California 92126-4581
Re: COMPS.COM, INC. Registration Statement on Form S-8 for (i)
2,800,000 Shares of Common Stock Issuable Under the 1999 Stock
Incentive Plan and (ii) 300,000 Shares of Common Stock Issuable
Under the 1999 Employee Stock Purchase Plan
Ladies and Gentlemen:
We have acted as counsel to COMPS.COM, INC., a Delaware corporation
(the "Company"), in connection with the registration on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended, of
2,800,000 shares of common stock and related stock options issuable under the
COMPS.COM, INC. 1999 Stock Incentive Plan (the "Option Plan") and 300,000 shares
of common stock issuable under the COMPS.COM, INC. 1999 Employee Stock Purchase
Plan (the "Purchase Plan"). All of such shares of common stock are
collectively referred to herein as the "Shares."
This opinion is being furnished in accordance with the requirements of
Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the establishment and
administration of the Option Plan and the Purchase Plan. Based on such review,
we are of the opinion that if, as and when the 3,100,000 Shares reserved in the
aggregate under the Option Plan and the Purchase Plan have been issued and sold
(and the consideration therefor received) pursuant to (a) the provisions of
option agreements duly authorized under the Option Plan and in accordance with
the Registration Statement, or (b) duly authorized direct stock issuances in
accordance with the Option Plan and the Purchase Plan and in accordance with the
Registration Statement, those Shares will be legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement.
This opinion letter is rendered as of the date first written above and
we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Option Plan, the Purchase Plan or the Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
/s/ Brobeck, Phleger & Harrison LLP
<PAGE>
EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1999 Stock Incentive Plan and the 1999 Employee
Stock Purchase Plan of COMPS.COM, Inc. of our report dated February 5, 1999
(except for Note 15, as to which the date is April 12, 1999), with respect to
the financial statements and schedule of COMPS.COM, Inc., in its Registration
Statement No. 333-72901 on Form S-1, filed with the Securities and Exchange
Commission.
Ernst & Young LLP
/s/ Ernst & Young LLP
San Diego, California
May 3, 1999
<PAGE>
EXHIBIT 99.1
COMPS.COM, INC.
1999 STOCK INCENTIVE PLAN
-------------------------
ARTICLE ONE
GENERAL PROVISIONS
------------------
I. PURPOSE OF THE PLAN
This 1999 Stock Incentive Plan is intended to promote the interests of
COMPS InfoSystems, Inc., a Delaware corporation, by providing eligible persons
in the Corporation's service with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Corporation
as an incentive for them to remain in such service.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into five separate equity programs:
- the Discretionary Option Grant Program under which eligible
persons may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock,
- the Salary Investment Option Grant Program under which eligible
employees may elect to have a portion of their base salary invested each year in
special option grants,
- the Stock Issuance Program under which eligible persons may, at
the discretion of the Plan Administrator, be issued shares of Common Stock
directly, either through the immediate purchase of such shares or as a bonus for
services rendered the Corporation (or any Parent or Subsidiary),
- the Automatic Option Grant Program under which eligible non-
employee Board members shall automatically receive option grants at designated
intervals over their period of continued Board service, and
- the Director Fee Option Grant Program under which non-employee
Board members may elect to have all or any portion of their annual retainer fee
otherwise payable in cash applied to a special stock option grant.
B. The provisions of Articles One and Seven shall apply to all equity
programs under the Plan and shall govern the interests of all persons under the
Plan.
III. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to Section 16 Insiders. Administration of the Discretionary Option Grant
and Stock Issuance Programs with respect to all other persons eligible to
participate in those programs may, at the Board's discretion, be vested in the
Primary Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to all such persons. However, any
discretionary option grants or stock issuances for members of the Primary
Committee shall be made by a disinterested majority of the Board.
<PAGE>
B. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time. The Board may also at any time terminate the functions
of any Secondary Committee and reassume all powers and authority previously
delegated to such committee.
C. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Discretionary Option Grant and
Stock Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of those programs and any outstanding options
or stock issuances thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant and Stock Issuance Programs under its jurisdiction or
any option or stock issuance thereunder.
D. The Primary Committee shall have the sole and exclusive authority
to determine which Section 16 Insiders and other highly compensated Employees
shall be eligible for participation in the Salary Investment Option Grant
Program for one or more calendar years. However, all option grants under the
Salary Investment Option Grant Program shall be made in accordance with the
express terms of that program, and the Primary Committee shall not exercise any
discretionary functions with respect to the option grants made under that
program.
E. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.
F. Administration of the Automatic Option Grant and Director Fee
Option Grant Programs shall be self-executing in accordance with the terms of
those programs, and no Plan Administrator shall exercise any discretionary
functions with respect to any option grants or stock issuances made under those
programs.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option
Grant and Stock Issuance Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of directors
of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. Only Employees who are Section 16 Insiders or other highly
compensated individuals shall be eligible to participate in the Salary
Investment Option Grant Program.
C. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority to determine,
(i) with respect to the option grants under the Discretionary Option Grant
Program, which eligible persons are to receive such grants, the time or times
when those grants are to be made, the number of shares to be covered by each
such grant, the status of the granted option as either an Incentive Option or a
Non-Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the option shares and
the maximum term for which the option is to remain outstanding and (ii) with
respect to stock issuances under the Stock Issuance Program, which eligible
persons are to receive such issuances,
2
<PAGE>
the time or times when the issuances are to be made, the number of shares to be
issued to each Participant, the vesting schedule (if any) applicable to the
issued shares and the consideration for such shares.
D. The Plan Administrator shall have the absolute discretion either
to grant options in accordance with the Discretionary Option Grant Program or to
effect stock issuances in accordance with the Stock Issuance Program.
E. The individuals who shall be eligible to participate in the
Automatic Option Grant Program shall be limited to (i) those individuals who
first become non-employee Board members on or after the Underwriting Date,
whether through appointment by the Board or election by the Corporation's
stockholders, and (ii) those individuals who continue to serve as non-employee
Board members at one or more Annual Stockholders Meetings held after the
Underwriting Date. A non-employee Board member who has previously been in the
employ of the Corporation (or any Parent or Subsidiary) shall not be eligible to
receive an option grant under the Automatic Option Grant Program at the time he
or she first becomes a non-employee Board member, but shall be eligible to
receive periodic option grants under the Automatic Option Grant Program while he
or she continues to serve as a non-employee Board member.
F. All non-employee Board members shall be eligible to participate in
the Director Fee Option Grant Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The number of shares of Common Stock initially
reserved for issuance over the term of the Plan shall not two million eight
hundred thousand (2,800,000) shares. Such reserve shall consist of (i) the
number of shares estimated to remain available for issuance, as of the Plan
Effective Date, under the Predecessor Plans as last approved by the
Corporation's stockholders, including the shares subject to outstanding options
under that Predecessor Plans, (ii) plus an additional increase of approximately
fifty-one thousand four hundred seventeen (51,417) shares to be approved by the
Corporation's stockholders prior to the Underwriting Date.
B. The number of shares of Common Stock available for issuance under
the Plan shall automatically increase on the first trading day of January each
calendar year during the term of the Plan, beginning with calendar year 2000, by
an amount equal to two and one half percent (2.5%) of the total number of shares
of Common Stock outstanding on the last trading day in December of the
immediately preceding calendar year, but in no event shall any such annual
increase exceed five hundred thousand (500,000) shares.
C. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than seven hundred thousand (700,000) shares of Common Stock in the
aggregate per calendar year.
D. Shares of Common Stock subject to outstanding options (including
options incorporated into this Plan from the Predecessor Plans) shall be
available for subsequent issuance under the Plan to the extent (i) those options
expire or terminate for any reason prior to exercise in full or (ii) the options
are cancelled in accordance with the cancellation-regrant provisions of Article
Two. Unvested shares issued under the Plan and subsequently cancelled or
repurchased by the Corporation at the original issue price paid per share,
pursuant to the Corporation's repurchase rights under the Plan shall be added
back to the number of shares of Common Stock reserved for issuance under the
Plan and shall accordingly be available for reissuance through one or more
subsequent option grants or direct stock issuances under the Plan. However,
should the exercise price of an option under the Plan be paid with shares of
Common Stock or should shares of Common Stock otherwise issuable under the Plan
be withheld by the Corporation in satisfaction of the withholding taxes incurred
in connection with the exercise of an option or the vesting of a stock issuance
under the Plan, then the number of shares of Common Stock available for issuance
under the Plan shall be reduced by the gross number of shares for which the
option is exercised or which vest under the stock issuance, and not by the net
number of shares of Common Stock issued to the holder of such option or stock
issuance. Shares of Common Stock underlying one or more stock appreciation
3
<PAGE>
rights exercised under Section IV of Article Two, Section III of Article Three,
Section II of Article Five or Section III of Article Six of the Plan shall NOT
be available for subsequent issuance under the Plan.
E. If any change is made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made by the Plan Administrator to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the number and/or class of securities
for which any one person may be granted stock options, separately exercisable
stock appreciation rights and direct stock issuances under the Plan per calendar
year, (iii) the number and/or class of securities for which grants are
subsequently to be made under the Automatic Option Grant Program to new and
continuing non-employee Board members, (iv) the number and/or class of
securities and the exercise price per share in effect under each outstanding
option under the Plan, (v) the number and/or class of securities and price per
share in effect under each outstanding option incorporated into this Plan from
the Predecessor Plans and (vi) the maximum number and/or class of securities by
which the share reserve is to increase automatically each calendar year pursuant
to the provisions of Section V.B of this Article One. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
--------
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. EXERCISE PRICE.
--------------
1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.
(i) The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Seven and the documents evidencing the option, be payable in one or
more of the forms specified below:
(ii) cash or check made payable to the Corporation,
(iii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date, or
(iv) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to which
the Optionee shall concurrently provide irrevocable instructions to (a) a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (b) the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
4
<PAGE>
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at
----------------------------
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
C. EFFECT OF TERMINATION OF SERVICE.
--------------------------------
1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option, but no such option
shall be exercisable after the expiration of the option term.
(ii) Any option held by the Optionee at the time of death
and exercisable in whole or in part at that time may be subsequently
exercised by the personal representative of the Optionee's estate or by the
person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and distribution
or by the Optionee's designated beneficiary or beneficiaries of that
option.
(iii) Should the Optionee's Service be terminated for
Misconduct, then all outstanding options held by the Optionee shall
terminate immediately and cease to be outstanding.
(iv) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding to the extent the option is not otherwise at that time
exercisable for vested shares.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service from the
limited exercise period otherwise in effect for that option to such greater
period of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested
shares of Common Stock for which such option is exercisable at the time of
the Optionee's cessation of Service but also with respect to one or more
additional installments in which the Optionee would have vested had the
Optionee continued in Service.
D. STOCKHOLDER RIGHTS. The holder of an option shall have no
------------------
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
5
<PAGE>
E. REPURCHASE RIGHTS. The Plan Administrator shall have the
-----------------
discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee cease Service while holding such unvested shares,
the Corporation shall have the right to repurchase, at the exercise price paid
per share, any or all of those unvested shares. The terms upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in the document evidencing
such repurchase right.
F. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
----------------------------------
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death. However, a Non-Statutory
Option may, in connection with the Optionee's estate plan, be assigned in whole
or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. Notwithstanding the foregoing, the Optionee may also
designate one or more persons as the beneficiary or beneficiaries of his or her
outstanding options under this Article Two, and those options shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while holding those
options. Such beneficiary or beneficiaries shall take the transferred options
subject to all the terms and conditions of the applicable agreement evidencing
each such transferred option, including (without limitation) the limited time
period during which the option may be exercised following the Optionee's death.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Seven shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall not be subject to the terms of this Section II.
---
A. ELIGIBILITY. Incentive Options may only be granted to Employees.
-----------
B. DOLLAR LIMITATION. The aggregate Fair Market Value of the shares
-----------------
of Common Stock (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent
the Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
C. 10% STOCKHOLDER. If any Employee to whom an Incentive Option is
---------------
granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each outstanding option
shall automatically accelerate so that each such option shall, immediately prior
to the effective date of the Corporate Transaction, become fully exercisable for
the total number of shares of Common Stock at the time subject to such option
and may be exercised for any or all of those shares as fully vested shares of
Common Stock. However, an outstanding option shall NOT become exercisable on
such an accelerated basis if and to the extent: (i) such option is, in
connection with the Corporate Transaction, to be assumed by the successor
corporation (or parent thereof) or (ii) such option is to be replaced with a
cash incentive program of the successor corporation which preserves the spread
existing at the time of the Corporate Transaction on any shares for which the
option is not otherwise at that time exercisable and provides for subsequent
payout in accordance with the same exercise/vesting schedule applicable to those
option
6
<PAGE>
shares or (iii) the acceleration of such option is subject to other limitations
imposed by the Plan Administrator at the time of the option grant.
B. All outstanding repurchase rights shall automatically terminate,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent: (i) those repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator at the time the repurchase right is issued.
C. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments to reflect such Corporate Transaction shall also be made
to (i) the exercise price payable per share under each outstanding option,
provided the aggregate exercise price payable for such securities shall remain
- --------
the same, (ii) the maximum number and/or class of securities available for
issuance over the remaining term of the Plan and (iii) the maximum number and/or
class of securities for which any one person may be granted stock options,
separately exercisable stock appreciation rights and direct stock issuances
under the Plan per calendar year and (iv) the maximum number and/or class of
securities by which the share reserve is to increase automatically each calendar
year.
E. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding options under the Discretionary Option Grant
Program so that those options shall, immediately prior to the effect date of
such Corporate Transaction, become fully exercisable for the total number of
shares of Common Stock at the time subject to those options and may be exercised
for any or all of those shares as fully vested shares of Common Stock, whether
or not those options are to be assumed in the Corporate Transaction. In
addition, the Plan Administrator shall have the discretionary authority to
structure one or more of the Corporation's repurchase rights under the
Discretionary Option Grant Program so that those rights shall not be assignable
in connection with such Corporate Transaction and shall accordingly terminate
upon the consummation of such Corporate Transaction, and the shares subject to
those terminated rights shall thereupon vest in full.
F. The Plan Administrator shall have full power and authority to
structure one or more outstanding options under the Discretionary Option Grant
Program so that those options shall become fully exercisable for the total
number of shares of Common Stock at the time subject to those options in the
event the Optionee's Service is subsequently terminated by reason of an
Involuntary Termination within a designated period (not to exceed eighteen (18)
months) following the effective date of any Corporate Transaction in which those
options are assumed and do not otherwise accelerate. Any options so accelerated
shall remain exercisable for fully vested shares until the earlier of (i) the
-------
expiration of the option term or (ii) the expiration of the one (1) year period
measured from the effective date of the Involuntary Termination. In addition,
the Plan Administrator may structure one or more of the Corporation's repurchase
rights so that those rights shall immediately terminate with respect to any
shares held by the Optionee at the time of his or her Involuntary Termination,
and the shares subject to those terminated repurchase rights shall accordingly
vest in full at that time.
G. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding options under the Discretionary Option Grant
Program so that those options shall, immediately prior to the effect date of a
Change in Control, become fully exercisable for the total number of shares of
Common Stock at the time subject to those options and may be exercised for any
or all of those shares as fully vested shares of Common Stock. In addition, the
Plan Administrator shall have the discretionary authority to structure one or
more of the Corporation's repurchase rights under the Discretionary Option Grant
Program so that those rights shall terminate automatically upon the consummation
of such Change in Control, and the shares subject to those terminated rights
shall thereupon vest in full. Alternatively, the Plan Administrator may
condition the automatic acceleration of one or more outstanding options under
the Discretionary Option Grant Program and the termination of one or more of the
Corporation's outstanding repurchase rights under such program upon the
subsequent
7
<PAGE>
termination of the Optionee's Service by reason of an Involuntary Termination
within a designated period (not to exceed eighteen (18) months) following the
effective date of such Change in Control. Each option so accelerated shall
remain exercisable for fully vested shares until the earlier of (i) the
-------
expiration of the option term or (ii) the expiration of the one (1) year period
measured from the effective date of Optionee's cessation of Service.
H. The portion of any Incentive Option accelerated in connection with
a Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
($100,000) limitation is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be exercisable as a
Nonstatutory Option under the Federal tax laws.
I. The outstanding options shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option
Grant Program (including outstanding options incorporated from the Predecessor
Plans) and to grant in substitution new options covering the same or different
number of shares of Common Stock but with an exercise price per share based on
the Fair Market Value per share of Common Stock on the new grant date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority to
grant to selected Optionees tandem stock appreciation rights and/or limited
stock appreciation rights.
B. The following terms shall govern the grant and exercise of tandem
stock appreciation rights:
(i) One or more Optionees may be granted the right, exercisable
upon such terms as the Plan Administrator may establish, to elect between
the exercise of the underlying option for shares of Common Stock and the
surrender of that option in exchange for a distribution from the
Corporation in an amount equal to the excess of (a) the Fair Market Value
(on the option surrender date) of the number of shares in which the
Optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (b) the aggregate exercise price payable for such
shares.
(ii) No such option surrender shall be effective unless it is
approved by the Plan Administrator, either at the time of the actual option
surrender or at any earlier time. If the surrender is so approved, then
the distribution to which the Optionee shall be entitled may be made in
shares of Common Stock valued at Fair Market Value on the option surrender
date, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.
(iii) If the surrender of an option is not approved by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee
had under the surrendered option (or surrendered portion thereof) on the
option surrender date and may exercise such rights at any time prior to the
later of (a) five (5) business days after the receipt of the rejection
-----
notice or (b) the last day on which the option is otherwise exercisable in
accordance with the terms of the documents evidencing such option, but in
no event may such rights be exercised more than ten (10) years after the
option grant date.
8
<PAGE>
C. The following terms shall govern the grant and exercise of limited
stock appreciation rights:
(i) One or more Section 16 Insiders may be granted limited
stock appreciation rights with respect to their outstanding options.
(ii) Upon the occurrence of a Hostile Take-Over, each individual
holding one or more options with such a limited stock appreciation right
shall have the unconditional right (exercisable for a thirty (30)-day
period following such Hostile Take-Over) to surrender each such option to
the Corporation. In return for the surrendered option, the Optionee shall
receive a cash distribution from the Corporation in an amount equal to the
excess of (A) the Take-Over Price of the shares of Common Stock at the time
subject to such option (whether or not the Optionee is otherwise vested in
those shares) over (B) the aggregate exercise price payable for those
shares. Such cash distribution shall be paid within five (5) days
following the option surrender date.
(iii) At the time such limited stock appreciation right is
granted, the Plan Administrator shall pre-approve any subsequent exercise
of that right in accordance with the terms of this Paragraph C.
Accordingly, no further approval of the Plan Administrator or the Board
shall be required at the time of the actual option surrender and cash
distribution.
ARTICLE THREE
SALARY INVESTMENT OPTION GRANT PROGRAM
--------------------------------------
I. OPTION GRANTS
The Primary Committee shall have the sole and exclusive authority to
determine the calendar year or years (if any) for which the Salary Investment
Option Grant Program is to be in effect and to select the Section 16 Insiders
and other highly compensated Employees eligible to participate in the Salary
Investment Option Grant Program for such calendar year or years. Each selected
individual who elects to participate in the Salary Investment Option Grant
Program must, prior to the start of each calendar year of participation, file
with the Plan Administrator (or its designate) an irrevocable authorization
directing the Corporation to reduce his or her base salary for that calendar
year by an amount not less than Ten Thousand Dollars ($10,000.00) nor more than
Fifty Thousand Dollars ($50,000.00). Each individual who files such a timely
authorization shall automatically be granted an option under the Salary
Investment Grant Program on the first trading day in January of the calendar
year for which the salary reduction is to be in effect.
II. OPTION TERMS
Each option shall be a Non-Statutory Option evidenced by one or more
documents in the form approved by the Plan Administrator; provided, however,
--------
that each such document shall comply with the terms specified below.
A. EXERCISE PRICE.
--------------
1. The exercise price per share shall be thirty-three and one-
third percent (33-1/3%) of the Fair Market Value per share of Common Stock on
the option grant date.
2. The exercise price shall become immediately due upon exercise
of the option and shall be payable in one or more of the alternative forms
authorized under the Discretionary Option Grant Program. Except to the extent
the sale and remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.
9
<PAGE>
B. NUMBER OF OPTION SHARES. The number of shares of Common Stock
-----------------------
subject to the option shall be determined pursuant to the following formula
(rounded down to the nearest whole number):
X = A / (B x 66-2/3%), where
X is the number of option shares,
A is the dollar amount of the reduction in the Optionee's base
salary for the calendar year to be in effect pursuant to this program,
and
B is the Fair Market Value per share of Common Stock on the
option grant date.
C. EXERCISE AND TERM OF OPTIONS. The option shall become exercisable
----------------------------
in a series of twelve (12) successive equal monthly installments upon the
Optionee's completion of each calendar month of Service in the calendar year for
which the salary reduction is in effect. Each option shall have a maximum term
of ten (10) years measured from the option grant date.
D. EFFECT OF TERMINATION OF SERVICE. Should the Optionee cease
--------------------------------
Service for any reason while holding one or more options under this Article
Three, then each such option shall remain exercisable, for any or all of the
shares for which the option is exercisable at the time of such cessation of
Service, until the earlier of (i) the expiration of the ten (10)-year option
-------
term or (ii) the expiration of the three (3)-year period measured from the date
of such cessation of Service. Should the Optionee die while holding one or more
options under this Article Three, then each such option may be exercised, for
any or all of the shares for which the option is exercisable at the time of the
Optionee's cessation of Service (less any shares subsequently purchased by
Optionee prior to death), by the personal representative of the Optionee's
estate or by the person or persons to whom the option is transferred pursuant to
the Optionee's will or in accordance with the laws of descent and distribution
or by the designated beneficiary or beneficiaries of such option. Such right of
exercise shall lapse, and the option shall terminate, upon the earlier of (i)
-------
the expiration of the ten (10)-year option term or (ii) the three (3)-year
period measured from the date of the Optionee's cessation of Service. However,
the option shall, immediately upon the Optionee's cessation of Service for any
reason, terminate and cease to remain outstanding with respect to any and all
shares of Common Stock for which the option is not otherwise at that time
exercisable.
III. CORPORATE TRANSACTION/ CHANGE IN CONTROL/ HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction while the Optionee
remains in Service, each outstanding option held by such Optionee under this
Salary Investment Option Grant Program shall automatically accelerate so that
each such option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable for the total number of shares of Common
Stock at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. Each such outstanding
option shall terminate immediately following the Corporate Transaction, except
to the extent assumed by the successor corporation (or parent thereof) in such
Corporate Transaction. Any option so assumed and shall remain exercisable for
the fully-vested shares until the earlier of (i) the expiration of the ten (10)-
-------
year option term or (ii) the expiration of the three (3)-year period measured
from the date of the Optionee's cessation of Service.
B. In the event of a Change in Control while the Optionee remains in
Service, each outstanding option held by such Optionee under this Salary
Investment Option Grant Program shall automatically accelerate so that each such
option shall immediately become fully exercisable for the total number of shares
of Common Stock at the time subject to such option and may be exercised for any
or all of those shares as fully-vested shares of Common Stock. The option shall
remain so exercisable until the earliest to occur of (i) the expiration of the
--------
ten (10)-year option term, (ii) the expiration of the three (3)-year period
measured from the date of the Optionee's cessation of Service, (iii) the
termination of the option in connection with a Corporate Transaction or (iv)
the surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each
outstanding option granted him or her under the Salary
10
<PAGE>
Investment Option Grant Program. The Optionee shall in return be entitled to a
cash distribution from the Corporation in an amount equal to the excess of (i)
the Take-Over Price of the shares of Common Stock at the time subject to the
surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such shares.
Such cash distribution shall be paid within five (5) days following the
surrender of the option to the Corporation. The Primary Committee shall, at the
time the option with such limited stock appreciation right is granted under the
Salary Investment Option Grant Program, pre-approve any subsequent exercise of
that right in accordance with the terms of this Paragraph C. Accordingly, no
further approval of the Primary Committee or the Board shall be required at the
time of the actual option surrender and cash distribution.
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the exercise price payable per
share under each outstanding option, provided the aggregate exercise price
--------
payable for such securities shall remain the same.
E. The grant of options under the Salary Investment Option Grant
Program shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
III. REMAINING TERMS
The remaining terms of each option granted under the Salary Investment
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Option Grant Program.
ARTICLE FOUR
STOCK ISSUANCE PROGRAM
----------------------
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants.
Each such stock issuance shall be evidenced by a Stock Issuance Agreement which
complies with the terms specified below. Shares of Common Stock may also be
issued under the Stock Issuance Program pursuant to share right awards which
entitle the recipients to receive those shares upon the attainment of designated
performance goals.
A. PURCHASE PRICE.
--------------
1. The purchase price per share shall be fixed by the Plan
Administrator, but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the issuance date.
2. Subject to the provisions of Section I of Article Seven,
shares of Common Stock may be issued under the Stock Issuance Program for any of
the following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any Parent
or Subsidiary).
11
<PAGE>
B. VESTING PROVISIONS.
------------------
1. Shares of Common Stock issued under the Stock Issuance Program
may, in the discretion of the Plan Administrator, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program shall be
determined by the Plan Administrator and incorporated into the Stock Issuance
Agreement. Shares of Common Stock may also be issued under the Stock Issuance
Program pursuant to share right awards which entitle the recipients to receive
those shares upon the attainment of designated performance goals.
2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
3. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to the surrendered shares.
5. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of Common Stock which
would otherwise occur upon the cessation of the Participant's Service or the
non-attainment of the performance objectives applicable to those shares. Such
waiver shall result in the immediate vesting of the Participant's interest in
the shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.
6. Outstanding share right awards under the Stock Issuance
Program shall automatically terminate, and no shares of Common Stock shall
actually be issued in satisfaction of those awards, if the performance goals
established for such awards are not attained. The Plan Administrator, however,
shall have the discretionary authority to issue shares of Common Stock under one
or more outstanding share right awards as to which the designated performance
goals have not been attained.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the Corporation's outstanding repurchase rights under the
Stock Issuance Program shall terminate automatically, and all the shares of
Common Stock subject to those terminated rights shall immediately vest in full,
in the event of any Corporate Transaction, except to the extent (i) those
repurchase rights are to be assigned to the successor corporation (or parent
thereof) in connection with such Corporate Transaction or (ii) such accelerated
vesting is precluded by other limitations imposed in the Stock Issuance
Agreement.
12
<PAGE>
B. The Plan Administrator shall have the discretionary authority to
structure one or more of the Corporation's repurchase rights under the Stock
Issuance Program so that those rights shall automatically terminate in whole or
in part, and the shares of Common Stock subject to those terminated rights shall
immediately vest, in the event the Participant's Service should subsequently
terminate by reason of an Involuntary Termination within a designated period
(not to exceed eighteen (18) months) following the effective date of any
Corporate Transaction in which those repurchase rights are assigned to the
successor corporation (or parent thereof).
C. The Plan Administrator shall also have the discretionary authority
to structure one or more of the Corporation's repurchase rights under the Stock
Issuance Program so that those rights shall automatically terminate in whole or
in part, and the shares of Common Stock subject to those terminated rights shall
immediately vest, in the event the Participant's Service should subsequently
terminate by reason of an Involuntary Termination within a designated period
(not to exceed eighteen (18) months) following the effective date of any Change
in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.
ARTICLE FIVE
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
I. OPTION TERMS
A. GRANT DATES. Option grants shall be made on the dates specified
-----------
below:
1. Each individual who is first elected or appointed as a non-
employee Board member at any time on or after the Underwriting Date shall
automatically be granted, on the date of such initial election or appointment, a
Non-Statutory Option to purchase twelve thousand (12,000) shares of Common
Stock, provided that individual has not previously been in the employ of the
Corporation or any Parent or Subsidiary.
2. On the date of each Annual Stockholders Meeting held after the
Underwriting Date, each individual who is to continue to serve as an Eligible
Director, whether or not that individual is standing for re-election to the
Board at that particular Annual Meeting, shall automatically be granted a Non-
Statutory Option to purchase two thousand (2,000) shares of Common Stock,
provided such individual has served as a non-employee Board member for at least
six (6) months. There shall be no limit on the number of such two thousand
(2,000) share option grants any one Eligible Director may receive over his or
her period of Board service, and non-employee Board members who have previously
been in the employ of the Corporation (or any Parent or Subsidiary) or who have
otherwise received one or more stock option grants from the Corporation prior to
the Underwriting Date shall be eligible to receive one or more such annual
option grants over their period of continued Board service.
B. EXERCISE PRICE.
--------------
1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
13
<PAGE>
C. OPTION TERM. Each option shall have a term of ten (10) years
-----------
measured from the option grant date.
D. EXERCISE AND VESTING OF OPTIONS. Each option shall be immediately
-------------------------------
exercisable for any or all of the option shares. However, any shares purchased
under the option shall be subject to repurchase by the Corporation, at the
exercise price paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares. Each initial twelve thousand (12,000) share
grant shall vest, and the Corporation's repurchase right shall lapse, in a
series of nine (9) successive equal semi-annual installments upon the Optionee's
completion of each six (6)-month period of service as a Board member over the
thirty-six (36)-month period measured from the option grant date. Each annual
two thousand (2,000) share automatic option shall vest, and the Corporation's
repurchase right shall lapse, in two (2) successive equal semi-annual
installments upon the Optionee's completion of each six (6)-month period of
Board service measured from the option grant date.
E. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this
----------------------------------
Article Five may, in connection with the Optionee's estate plan, be assigned in
whole or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. The Optionee may also designate one or more persons as
the beneficiary or beneficiaries of his or her outstanding options under this
Article Three, and those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding those options. Such beneficiary or beneficiaries
shall take the transferred options subject to all the terms and conditions of
the applicable agreement evidencing each such transferred option, including
(without limitation) the limited time period during which the option may be
exercised following the Optionee's death.
F. TERMINATION OF BOARD SERVICE. The following provisions shall
----------------------------
govern the exercise of any options held by the Optionee at the time the Optionee
ceases to serve as a Board member:
(i) The Optionee (or, in the event of Optionee's death, the
personal representative of the Optionee's estate or the person or persons
to whom the option is transferred pursuant to the Optionee's will or in
accordance with the laws of descent and distribution or by the designated
beneficiary or beneficiaries of such option) shall have a twelve (12)-month
period following the date of such cessation of Board service in which to
exercise each such option.
(ii) During the twelve (12)-month exercise period, the option
may not be exercised in the aggregate for more than the number of vested
shares of Common Stock for which the option is exercisable at the time of
the Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve as a Board member
by reason of death or Permanent Disability, then all shares at the time
subject to the option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following such cessation of
Board service, be exercised for all or any portion of those shares as
fully-vested shares of Common Stock.
(iv) In no event shall the option remain exercisable after the
expiration of the option term. Upon the expiration of the twelve (12)-
month exercise period or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be outstanding for any vested
shares for which the option has not been exercised. However, the option
shall, immediately upon the Optionee's cessation of Board service for any
reason other than death or Permanent Disability, terminate and cease to be
outstanding to the extent the option is not otherwise at that time
exercisable for vested shares.
14
<PAGE>
II. CORPORATE TRANSACTION/ CHANGE IN CONTROL/ HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the shares of Common
Stock at the time subject to each outstanding option but not otherwise vested
shall automatically vest in full so that each such option shall, immediately
prior to the effective date of the Corporate Transaction, become fully
exercisable for all of the shares of Common Stock at the time subject to such
option and may be exercised for all or any portion of those shares as fully-
vested shares of Common Stock. Immediately following the consummation of the
Corporate Transaction, each automatic option grant shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
B. In connection with any Change in Control, the shares of Common
Stock at the time subject to each outstanding option but not otherwise vested
shall automatically vest in full so that each such option shall, immediately
prior to the effective date of the Change in Control, become fully exercisable
for all of the shares of Common Stock at the time subject to such option and may
be exercised for all or any portion of those shares as fully-vested shares of
Common Stock. Each such option shall remain exercisable for such fully-vested
option shares until the expiration or sooner termination of the option term or
the surrender of the option in connection with a Hostile Take-Over.
C. All outstanding repurchase rights shall automatically terminate,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction or Change in
Control.
D. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each of
his or her outstanding automatic option grants. The Optionee shall in return be
entitled to a cash distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock at the time
subject to each surrendered option (whether or not the Optionee is otherwise at
the time vested in those shares) over (ii) the aggregate exercise price payable
for such shares. Such cash distribution shall be paid within five (5) days
following the surrender of the option to the Corporation. Stockholder approval
of the Plan shall constitute pre-approval of the grant of each such limited
cash-out right and the subsequent exercise of that right in accordance with the
terms of this Paragraph D. Accordingly, no approval or consent of the Board or
any Plan Administrator shall be required at the time of the actual option
surrender and cash distribution.
E. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the exercise price payable per
share under each outstanding option, provided the aggregate exercise price
--------
payable for such securities shall remain the same.
F. The grant of options under the Automatic Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for option grants made
under the Discretionary Option Grant Program.
15
<PAGE>
ARTICLE SIX
DIRECTOR FEE OPTION GRANT PROGRAM
---------------------------------
I. OPTION GRANTS
The Primary Committee shall have the sole and exclusive authority to
determine the calendar year or years for which the Director Fee Option Grant
Program is to be in effect. For each such calendar year the program is in
effect, each non-employee Board member may elect to apply all or any portion of
the annual retainer fee otherwise payable in cash for his or her service on the
Board for that year to the acquisition of a special option grant under this
Director Fee Option Grant Program. Such election must be filed with the
Corporation's Chief Financial Officer prior to first day of the calendar year
for which the annual retainer fee which is the subject of that election is
otherwise payable. Each non-employee Board member who files such a timely
election shall automatically be granted an option under this Director Fee Option
Grant Program on the first trading day in January in the calendar year for which
the annual retainer fee which is the subject of that election would otherwise be
payable in cash.
II. OPTION TERMS
Each option shall be a Non-Statutory Option governed by the terms and
conditions specified below.
A. EXERCISE PRICE.
--------------
1. The exercise price per share shall be thirty-three and one-
third percent (33-1/3%) of the Fair Market Value per share of Common Stock on
the option grant date.
2. The exercise price shall become immediately due upon exercise
of the option and shall be payable in one or more of the alternative forms
authorized under the Discretionary Option Grant Program. Except to the extent
the sale and remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.
B. NUMBER OF OPTION SHARES. The number of shares of Common Stock
-----------------------
subject to the option shall be determined pursuant to the following formula
(rounded down to the nearest whole number):
X = A / (B x 66-2/3%), where
X is the number of option shares,
A is the portion of the annual retainer fee subject to the non-
employee Board member's election, and
B is the Fair Market Value per share of Common Stock on the
option grant date.
C. EXERCISE AND TERM OF OPTIONS. The option shall become exercisable
----------------------------
in a series of twelve (12) equal monthly installments upon the Optionee's
completion of each month of Board service over the twelve (12)-month period
measured from the grant date. Each option shall have a maximum term of ten (10)
years measured from the option grant date.
D. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this
----------------------------------
Article Six may, in connection with the Optionee's estate plan, be assigned in
whole or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. The Optionee may also designate one or more persons as
the beneficiary or beneficiaries of his or her outstanding options under this
Article Three, and those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding those options. Such beneficiary or beneficiaries
shall take the transferred options
16
<PAGE>
subject to all the terms and conditions of the applicable agreement evidencing
each such transferred option, including (without limitation) the limited time
period during which the option may be exercised following the Optionee's death.
E. TERMINATION OF BOARD SERVICE. Should the Optionee cease Board
----------------------------
service for any reason (other than death or Permanent Disability) while holding
one or more options under this Director Fee Option Grant Program, then each such
option shall remain exercisable, for any or all of the shares for which the
option is exercisable at the time of such cessation of Board service, until the
earlier of (i) the expiration of the ten (10)-year option term or (ii) the
- -------
expiration of the three (3)-year period measured from the date of such cessation
of Board service. However, each option held by the Optionee under this Director
Fee Option Grant Program at the time of his or her cessation of Board service
shall immediately terminate and cease to remain outstanding with respect to any
and all shares of Common Stock for which the option is not otherwise at that
time exercisable.
F. DEATH OR PERMANENT DISABILITY. Should the Optionee's service as a
-----------------------------
Board member cease by reason of death or Permanent Disability, then each option
held by such Optionee under this Director Fee Option Grant Program shall
immediately become exercisable for all the shares of Common Stock at the time
subject to that option, and the option may be exercised for any or all of those
shares as fully-vested shares until the earlier of (i) the expiration of the ten
-------
(10)-year option term or (ii) the expiration of the three (3)-year period
measured from the date of such cessation of Board service.
Should the Optionee die after cessation of Board service but while
holding one or more options under this Director Fee Option Grant Program, then
each such option may be exercised, for any or all of the shares for which the
option is exercisable at the time of the Optionee's cessation of Board service
(less any shares subsequently purchased by Optionee prior to death), by the
personal representative of the Optionee's estate or by the person or persons to
whom the option is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution or by the designated beneficiary or
beneficiaries of such option. Such right of exercise shall lapse, and the
option shall terminate, upon the earlier of (i) the expiration of the ten (10)-
-------
year option term or (ii) the three (3)-year period measured from the date of the
Optionee's cessation of Board service.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction while the Optionee
remains a Board member, each outstanding option held by such Optionee under this
Director Fee Option Grant Program shall automatically accelerate so that each
such option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable for the total number of shares of Common
Stock at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. Each such outstanding
option shall terminate immediately following the Corporate Transaction, except
to the extent assumed by the successor corporation (or parent thereof) in such
Corporate Transaction. Any option so assumed and shall remain exercisable for
the fully-vested shares until the earlier of (i) the expiration of the ten (10)-
-------
year option term or (ii) the expiration of the three (3)-year period measured
from the date of the Optionee's cessation of Board service.
B. In the event of a Change in Control while the Optionee remains in
Service, each outstanding option held by such Optionee under this Director Fee
Option Grant Program shall automatically accelerate so that each such option
shall immediately become fully exercisable for the total number of shares of
Common Stock at the time subject to such option and may be exercised for any or
all of those shares as fully-vested shares of Common Stock. The option shall
remain so exercisable until the earliest to occur of (i) the expiration of the
--------
ten (10)-year option term, (ii) the expiration of the three (3)-year period
measured from the date of the Optionee's cessation of Board service, (iii) the
termination of the option in connection with a Corporate Transaction or (iv)
the surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each
outstanding option granted him or her under the Director Fee Option Grant
Program. The Optionee shall in return be entitled to a cash distribution from
the Corporation in an amount equal to the excess of (i) the Take-Over Price of
the shares of Common Stock at the time subject to each surrendered option
(whether or not the Optionee is otherwise at the time vested in those shares)
over (ii) the aggregate exercise price payable for such shares. Such cash
distribution shall be paid within five (5) days following
17
<PAGE>
the surrender of the option to the Corporation. Stockholder approval of the Plan
shall constitute pre-approval of the grant of each such limited cash-out right
and the subsequent exercise of that right in accordance with the terms of this
Paragraph C. Accordingly, no approval or consent of the Board or any Plan
Administrator shall be required at the time of the actual option surrender and
cash distribution.
D. The grant of options under the Director Fee Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
IV. REMAINING TERMS
The remaining terms of each option granted under this Director Fee
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Option Grant Program.
ARTICLE SEVEN
MISCELLANEOUS
-------------
I. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest
rate and the terms of repayment) shall be established by the Plan Administrator
in its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee or
the Participant in connection with the option exercise or share purchase.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options or the issuance or vesting of such shares under the
Plan shall be subject to the satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan (other than the options granted or the shares issued under the Automatic
Option Grant or Director Fee Option Grant Program) with the right to use shares
of Common Stock in satisfaction of all or part of the Taxes incurred by such
holders in connection with the exercise of their options or the vesting of their
shares. Such right may be provided to any such holder in either or both of the
following formats:
Stock Withholding: The election to have the Corporation
-----------------
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such Non-Statutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the Taxes
(not to exceed one hundred percent (100%)) designated by the holder.
Stock Delivery: The election to deliver to the Corporation, at
--------------
the time the Non-Statutory Option is exercised or the shares vest, one or more
shares of Common Stock previously acquired by such holder (other than in
connection with the option exercise or share vesting triggering the Taxes) with
an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.
18
<PAGE>
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective immediately on the Plan Effective
Date. However, the Salary Investment Option Grant Program and the Director Fee
Option Grant Program shall not be implemented until such time as the Primary
Committee may deem appropriate. Options may be granted under the Discretionary
Option Grant at any time on or after the Plan Effective Date. However, no
options granted under the Plan may be exercised, and no shares shall be issued
under the Plan, until the Plan is approved by the Corporation's stockholders.
If such stockholder approval is not obtained within twelve (12) months after the
Plan Effective Date, then all options previously granted under this Plan shall
terminate and cease to be outstanding, and no further options shall be granted
and no shares shall be issued under the Plan.
B. The Plan shall serve as the successor to the Predecessor Plans,
and no further option grants or direct stock issuances shall be made under the
Predecessor Plans after the Plan Effective Date. All options outstanding under
the Predecessor Plans on the Plan Effective Date shall be incorporated into the
Plan at that time and shall be treated as outstanding options under the Plan.
However, each outstanding option so incorporated shall continue to be governed
solely by the terms of the documents evidencing such option, and no provision of
the Plan shall be deemed to affect or otherwise modify the rights or obligations
of the holders of such incorporated options with respect to their acquisition of
shares of Common Stock.
C. One or more provisions of the Plan, including (without limitation)
the option/vesting acceleration provisions of Article Two relating to Corporate
Transactions and Changes in Control, may, in the Plan Administrator's
discretion, be extended to one or more options incorporated from the Predecessor
Plans which do not otherwise contain such provisions.
D. The Plan shall terminate upon the earliest to occur of (i)
--------
February 18, 2009, (ii) the date on which all shares available for issuance
under the Plan shall have been issued as fully-vested shares or (iii) the
termination of all outstanding options in connection with a Corporate
Transaction. Should the Plan terminate on February 18, 2009, then all option
grants and unvested stock issuances outstanding at that time shall continue to
have force and effect in accordance with the provisions of the documents
evidencing such grants or issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options or unvested stock issuances at the time outstanding under the Plan
unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require stockholder approval
pursuant to applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted under
the Discretionary Option Grant and Salary Investment Option Grant Programs and
shares of Common Stock may be issued under the Stock Issuance Program that are
in each instance in excess of the number of shares then available for issuance
under the Plan, provided any excess shares actually issued under those programs
shall be held in escrow until there is obtained stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan. If such stockholder approval is not obtained
within twelve (12) months after the date the first such excess issuances are
made, then (i) any unexercised options granted on the basis of such excess
shares shall terminate and cease to be outstanding and (ii) the Corporation
shall promptly refund to the Optionees and the Participants the exercise or
purchase price paid for any excess shares issued under the Plan and held in
escrow, together with interest (at the applicable Short Term Federal Rate) for
the period the shares were held in escrow, and such shares shall thereupon be
automatically cancelled and cease to be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.
19
<PAGE>
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option
under the Plan and the issuance of any shares of Common Stock (i) upon the
exercise of any granted option or (ii) under the Stock Issuance Program shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.
20
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option
------------------------------
grant program in effect under the Plan.
B. BOARD shall mean the Corporation's Board of Directors.
-----
C. CHANGE IN CONTROL shall mean a change in ownership or control of
-----------------
the Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
----
E. COMMON STOCK shall mean the Corporation's common stock.
------------
F. CORPORATE TRANSACTION shall mean either of the following
---------------------
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
G. CORPORATION shall mean COMPS.COM, INC., a Delaware corporation,
-----------
and any corporate successor to all or substantially all of the assets or voting
stock of COMPS.COM, INC. which shall by appropriate action adopt the Plan.
H. DIRECTOR FEE OPTION GRANT PROGRAM shall mean the special stock
---------------------------------
option grant in effect for non-employee Board members under Article Six of the
Plan.
I. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary
----------------------------------
option grant program in effect under the Plan.
21
<PAGE>
J. ELIGIBLE DIRECTOR shall mean a non-employee Board member eligible
-----------------
to participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Articles One and Five.
K. EMPLOYEE shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
L. EXERCISE DATE shall mean the date on which the Corporation shall
-------------
have received written notice of the option exercise.
M. FAIR MARKET VALUE per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market. If there is no closing selling price for the Common Stock
on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(iii) For purposes of any option grants made on the Underwriting
Date, the Fair Market Value shall be deemed to be equal to the price per
share at which the Common Stock is to be sold in the initial public
offering pursuant to the Underwriting Agreement.
N. HOSTILE TAKE-OVER shall mean the acquisition, directly or
-----------------
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept.
O. INCENTIVE OPTION shall mean an option which satisfies the
----------------
requirements of Code Section 422.
P. INVOLUNTARY TERMINATION shall mean the termination of the Service
-----------------------
of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a
reduction in his or her level of compensation (including base salary,
fringe benefits and target bonus under any corporate-performance based
bonus or incentive programs) by more than ten percent (10%) or (C) a
relocation of such individual's place of employment by more than twenty
five (25) miles, provided and only if such change, reduction or relocation
is effected by the Corporation without the individual's consent.
22
<PAGE>
Q. MISCONDUCT shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
R. 1934 ACT shall mean the Securities Exchange Act of 1934, as
--------
amended.
S. NON-STATUTORY OPTION shall mean an option not intended to satisfy
--------------------
the requirements of Code Section 422.
T. OPTIONEE shall mean any person to whom an option is granted under
--------
the Discretionary Option Grant, Salary Investment Option Grant, Automatic Option
Grant or Director Fee Option Grant Program.
U. PARENT shall mean any corporation (other than the Corporation) in
------
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
V. PARTICIPANT shall mean any person who is issued shares of Common
-----------
Stock under the Stock Issuance Program.
W. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
--------------------------------------------
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for purposes of the Automatic Option Grant
and Director Fee Option Grant Programs, Permanent Disability or Permanently
Disabled shall mean the inability of the non-employee Board member to perform
his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
X. PLAN shall mean the Corporation's 1999 Stock Incentive Plan, as
----
set forth in this document.
Y. PLAN ADMINISTRATOR shall mean the particular entity, whether the
------------------
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction.
Z. PLAN EFFECTIVE DATE shall mean the date the Plan shall become
-------------------
effective and shall be coincident with the Underwriting Date.
AA. PREDECESSOR PLANS shall mean the Corporation's Amended and
-----------------
Restated Stock Option Plan, the 1998 Supplemental Option Plan and the 1998
Equity Participation Plan, as in effect immediately prior to the Plan Effective
Date hereunder.
BB. PRIMARY COMMITTEE shall mean the committee of two (2) or more
-----------------
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders and to administer the Salary Investment Option Grant Program solely
with respect to the selection of the eligible individuals who may participate in
such program.
CC. SALARY INVESTMENT OPTION GRANT PROGRAM shall mean the salary
--------------------------------------
investment option grant program in effect under the Plan.
23
<PAGE>
DD. SECONDARY COMMITTEE shall mean a committee of one or more Board
-------------------
members appointed by the Board to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to eligible persons other than Section 16
Insiders.
EE. SECTION 16 INSIDER shall mean an officer or director of the
------------------
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
FF. SERVICE shall mean the performance of services for the
-------
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in the
documents evidencing the option grant or stock issuance.
GG. STOCK EXCHANGE shall mean either the American Stock Exchange or
--------------
the New York Stock Exchange.
HH. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by
------------------------
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.
II. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
----------------------
effect under the Plan.
JJ. SUBSIDIARY shall mean any corporation (other than the
----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
KK. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market
--------------- -------
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.
LL. TAXES shall mean the Federal, state and local income and
-----
employment tax liabilities incurred by the holder of Non-Statutory Options or
unvested shares of Common Stock in connection with the exercise of those options
or the vesting of those shares.
MM. 10% STOCKHOLDER shall mean the owner of stock (as determined
---------------
under Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
NN. UNDERWRITING AGREEMENT shall mean the agreement between the
----------------------
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
OO. UNDERWRITING DATE shall mean the date on which the Underwriting
-----------------
Agreement is executed and priced in connection with an initial public offering
of the Common Stock.
24
<PAGE>
EXHIBIT 99.2
FORM OF NOTICE OF GRANT OF STOCK OPTION
COMPS.COM, INC.
NOTICE OF GRANT OF STOCK OPTION
-------------------------------
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of COMPS.COM, INC. (the "Corporation"):
Optionee: ____________________________________________________________
--------
Grant Date: __________________________________________________________
----------
Vesting Commencement Date: ___________________________________________
-------------------------
Exercise Price: $ _______________________________________per share
--------------
Number of Option Shares: _______________________________________shares
-----------------------
Expiration Date: _____________________________________________________
---------------
Type of Option: __________ Incentive Stock Option
--------------
__________ Non-Statutory Stock Option
Exercise Schedule: The Option shall become exercisable for twenty-
-----------------
five percent (25%) of the Option Shares upon Optionee's completion of
one (1) year of Service measured from the Vesting Commencement Date
and shall become exercisable for the balance of the Option Shares in
thirty-six (36) successive equal monthly installments upon Optionee's
completion of each additional month of Service over the thirty-six
(36) month period measured from the first anniversary of the Vesting
Commencement Date. In no event shall the Option become exercisable
for any additional Option Shares after Optionee's cessation of
Service.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the COMPS.COM, INC. 1999 Stock Incentive
Plan (the "Plan"). Optionee further agrees to be bound by the terms of the Plan
and the terms of the Option as set forth in the Stock Option Agreement attached
hereto as Exhibit A. Optionee hereby acknowledges the receipt of a copy of the
---------
official prospectus for the Plan in the form attached hereto as Exhibit B. A
---------
copy of the Plan is available upon request made to the Corporate Secretary at
the Corporation's principal offices.
Employment at Will. Nothing in this Notice or in the attached Stock
------------------
Option Agreement or in the Plan shall confer upon Optionee any right to continue
in Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the
-----------
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
DATED: ___________________________________
<PAGE>
COMPS.COM, INC.
By: ___________________________________________
Title: ________________________________________
_______________________________________________
OPTIONEE
Address: ______________________________________
_______________________________________________
ATTACHMENTS
- -----------
EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - PLAN SUMMARY AND PROSPECTUS
<PAGE>
EXHIBIT A
---------
STOCK OPTION AGREEMENT
----------------------
<PAGE>
EXHIBIT B
---------
PLAN SUMMARY AND PROSPECTUS
---------------------------
<PAGE>
EXHIBIT 99.3
FORM OF STOCK OPTION AGREEMENT
COMPS.COM, INC.
STOCK OPTION AGREEMENT
----------------------
RECITALS
- --------
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or of the
board of directors of any Parent or Subsidiary and consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. The corporation hereby grants to optionee, as of the
---------------
grant date, an option to purchase up to the number of option shares
specified in the grant notice. The option shares shall be purchasable from
time to time during the option term specified in paragraph 2 at the
exercise price.
2. Option Term. This option shall have a maximum term of ten (10) years
-----------
measured from the grant date and shall accordingly expire at the close of
business on the expiration date, unless sooner terminated in accordance
with paragraph 5 or 6.
3. Limited Transferability.
-----------------------
a. This option shall be neither transferable nor assignable by Optionee
other than by will or by the laws of descent and distribution
following Optionee's death and may be exercised, during Optionee's
lifetime, only by Optionee. However, Optionee may designate one or
more persons as the beneficiary or beneficiaries of this option, and
this option shall, in accordance with such designation, automatically
be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding such option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the
terms and conditions of this Agreement, including (without limitation)
the limited time period during which this option may, pursuant to
Paragraph 5, be exercised following Optionee's death.
b. If this option is designated a Non-Statutory Option in the Grant
Notice, then this option may, in connection with the Optionee's estate
plan, be assigned in whole or in part during Optionee's lifetime to
one or more members of Optionee's immediate family or to a trust
established for the exclusive benefit of one or more such family
members. The assigned portion shall be exercisable only by the person
or persons who acquire a proprietary interest in the option pursuant
to such assignment. The terms applicable to the assigned portion
shall be the same as those in effect for this option immediately prior
to such assignment.
4. Dates of Exercise. This option shall become exercisable for the option
-----------------
shares in one or more installments as specified in the grant notice. As
the option becomes exercisable for such installments, those installments
<PAGE>
shall accumulate, and the option shall remain exercisable for the
accumulated installments until the expiration date or sooner termination of
the option term under paragraph 5 or 6.
5. Cessation of Service. The option term specified in paragraph 2 shall
--------------------
terminate (and this option shall cease to be outstanding) prior to the
expiration date should any of the following provisions become applicable:
a. Should Optionee cease to remain in Service for any reason (other than
death, Permanent Disability or Misconduct) while holding this option,
then Optionee shall have a period of three (3) months (commencing with
the date of such cessation of Service) during which to exercise this
option, but in no event shall this option be exercisable at any time
after the Expiration Date.
b. Should Optionee die while holding this option, then the personal
representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or in accordance
with the laws of inheritance shall have the right to exercise this
option. However, if Optionee has designated one or more beneficiaries
of this option, then those persons shall have the exclusive right to
exercise this option following Optionee's death. Any such right to
exercise this option pursuant to this Paragraph 5(b) shall lapse, and
this option shall cease to be outstanding, upon the earlier of (i) the
-------
expiration of the twelve (12)-month period measured from the date of
Optionee's death or (ii) the Expiration Date.
c. Should Optionee cease Service by reason of Permanent Disability while
holding this option, then Optionee shall have a period of twelve (12)
months (commencing with the date of such cessation of Service) during
which to exercise this option. In no event shall this option be
exercisable at any time after the Expiration Date.
d. During the limited period of post-Service exercisability, this option
may not be exercised in the aggregate for more than the number of
Option Shares for which the option is exercisable at the time of
Optionee's cessation of Service. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this option
shall terminate and cease to be outstanding for any exercisable Option
Shares for which the option has not been exercised. However, this
option shall, immediately upon Optionee's cessation of Service for any
reason, terminate and cease to be outstanding with respect to any
Option Shares for which this option is not otherwise at that time
exercisable.
e. Should Optionee's Service be terminated for Misconduct, then this
option shall terminate immediately and cease to remain outstanding.
6. Special Acceleration Of Option.
------------------------------
a. This option, to the extent outstanding at the time of a Corporate
Transaction but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the
effective date of such Corporate Transaction, become exercisable for
all of the Option Shares at the time subject to this option and may be
exercised for any or all of those Option Shares as fully vested shares
of Common Stock. No such acceleration of this option shall occur,
however, if and to the extent: (i) this option is, in connection with
the Corporate Transaction, to be assumed by the successor corporation
(or parent thereof) or (ii) this option is to be replaced with a cash
incentive program of the successor corporation which preserves the
spread existing at the time of the Corporate Transaction on the Option
Shares for which this option is not otherwise at that time exercisable
(the excess of the Fair Market Value of those Option Shares over the
aggregate Exercise Price payable for such shares) and provides for
subsequent payout in accordance with the same option exercise/vesting
schedule set forth in the Grant Notice.
b. Immediately following the Corporate Transaction, this option shall
terminate and cease to be outstanding, except to the extent assumed by
the successor corporation (or parent thereof) in connection with the
Corporate Transaction.
2.
<PAGE>
c. If this option is assumed in connection with a Corporate Transaction,
then this option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of
securities which would have been issuable to Optionee in consummation
of such Corporate Transaction had the option been exercised immediately
prior to such Corporate Transaction, and appropriate adjustments shall
also be made to the Exercise Price, provided the aggregate Exercise
--------
Price shall remain the same.
d. This Agreement shall not in any way affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. Adjustment in Option Shares. Should any change be made to the common stock
---------------------------
by reason of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the outstanding
common stock as a class without the corporation's receipt of consideration,
appropriate adjustments shall be made to (i) the total number and/or class
of securities subject to this option and (ii) the exercise price in order
to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. Stockholder Rights. The holder of this option shall not have any
------------------
stockholder rights with respect to the option shares until such person
shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
9. Manner of Exercising Option.
---------------------------
a. In order to exercise this option with respect to all or any part of the
Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must
take the following actions:
i. Execute and deliver to the Corporation a Notice of Exercise for
the Option Shares for which the option is exercised.
ii. Pay the aggregate Exercise Price for the purchased shares in one
or more of the following forms:
A. cash or check made payable to the Corporation;
B. a promissory note payable to the Corporation, but only to
the extent authorized by the Plan Administrator in
accordance with Paragraph 13;
C. shares of Common Stock held by Optionee (or any other person
or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation's earnings
for financial reporting purposes and valued at Fair Market
Value on the Exercise Date; or
D. through a special sale and remittance procedure pursuant to
which Optionee (or any other person or persons exercising
the option) shall concurrently provide irrevocable
instructions (i) to a Corporation-designated brokerage firm
to effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds available
on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares
plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Corporation
by reason of such exercise and (ii) to the Corporation to
deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
3.
<PAGE>
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to the
Corporation in connection with the option exercise.
iii. Furnish to the Corporation appropriate documentation that the
person or persons exercising the option (if other than Optionee)
have the right to exercise this option.
iv. Make appropriate arrangements with the Corporation (or Parent or
Subsidiary employing or retaining Optionee) for the satisfaction
of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.
b. As soon as practical after the Exercise Date, the Corporation shall
issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
c. In no event may this option be exercised for any fractional shares.
10. Compliance With Laws And Regulations.
------------------------------------
a. The exercise of this option and the issuance of the Option Shares upon
such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and
with all applicable regulations of any stock exchange (or the Nasdaq
National Market, if applicable) on which the Common Stock may be listed
for trading at the time of such exercise and issuance.
b. The inability of the Corporation to obtain approval from any regulatory
body having authority deemed by the Corporation to be necessary to the
lawful issuance and sale of any Common Stock pursuant to this option
shall relieve the Corporation of any liability with respect to the non-
issuance or sale of the Common Stock as to which such approval shall
not have been obtained. The Corporation, however, shall use its best
efforts to obtain all such approvals.
11. Successors and Assigns. Except to the extent otherwise provided in
----------------------
paragraphs 3 and 6, the provisions of this agreement shall inure to the
benefit of, and be binding upon, the corporation and its successors and
assigns and optionee, optionee's assigns, the legal representatives, heirs
and legatees of optionee's estate and any beneficiaries of this option
designated by optionee.
12. Notices. Any notice required to be given or delivered to the corporation
-------
under the terms of this agreement shall be in writing and addressed to the
corporation at its principal corporate offices. Any notice required to be
given or delivered to optionee shall be in writing and addressed to
optionee at the address indicated below optionee's signature line on the
grant notice. All notices shall be deemed effective upon personal delivery
or upon deposit in the u.s. mail, postage prepaid and properly addressed to
the party to be notified.
13. Financing. The plan administrator may, in its absolute discretion and
---------
without any obligation to do so, permit optionee to pay the exercise price
for the purchased option shares by delivering a full-recourse promissory
note payable to the corporation. The terms of any such promissory note
(including the interest rate, the requirements for collateral and the terms
of repayment) shall be established by the plan administrator in its sole
discretion.
14. Construction. This agreement and the option evidenced hereby are made and
------------
granted pursuant to the plan and are in all respects limited by and subject
to the terms of the plan. All decisions of the plan administrator with
respect to any question or issue arising under the plan or this agreement
shall be conclusive and binding on all persons having an interest in this
option.
15. Governing law. The interpretation, performance and enforcement of this
-------------
agreement shall be governed by the laws of the state of California without
resort to that state's conflict-of-laws rules.
4.
<PAGE>
16. Excess shares. If the option shares covered by this agreement exceed, as
-------------
of the grant date, the number of shares of common stock which may without
stockholder approval be issued under the plan, then this option shall be
void with respect to those excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of common stock
issuable under the plan is obtained in accordance with the provisions of
the plan.
17. Additional Terms Applicable To An Incentive Option. In the event this
--------------------------------------------------
option is designated an incentive option in the grant notice, the following
terms and conditions shall also apply to the grant:
a. This option shall cease to qualify for favorable tax treatment as an
Incentive Option if (and to the extent) this option is exercised for
one or more Option Shares: (A) more than three (3) months after the
date Optionee ceases to be an Employee for any reason other than death
or Permanent Disability or (B) more than twelve (12) months after the
date Optionee ceases to be an Employee by reason of Permanent
Disability.
b. No installment under this option shall qualify for favorable tax
treatment as an Incentive Option if (and to the extent) the aggregate
Fair Market Value (determined at the Grant Date) of the Common Stock
for which such installment first becomes exercisable hereunder would,
when added to the aggregate value (determined as of the respective date
or dates of grant) of the Common Stock or other securities for which
this option or any other Incentive Options granted to Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars
($100,000) in the aggregate. Should such One Hundred Thousand Dollar
($100,000) limitation be exceeded in any calendar year, this option
shall nevertheless become exercisable for the excess shares in such
calendar year as a Non-Statutory Option.
c. Should the exercisability of this option be accelerated upon a
Corporate Transaction, then this option shall qualify for favorable tax
treatment as an Incentive Option only to the extent the aggregate Fair
Market Value (determined at the Grant Date) of the Common Stock for
which this option first becomes exercisable in the calendar year in
which the Corporate Transaction occurs does not, when added to the
aggregate value (determined as of the respective date or dates of
grant) of the Common Stock or other securities for which this option or
one or more other Incentive Options granted to Optionee prior to the
Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars
($100,000) in the aggregate. Should the applicable One Hundred
Thousand Dollar ($100,000) limitation be exceeded in the calendar year
of such Corporate Transaction, the option may nevertheless be exercised
for the excess shares in such calendar year as a Non-Statutory Option.
d. Should Optionee hold, in addition to this option, one or more other
options to purchase Common Stock which become exercisable for the first
time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as Incentive Options
shall be applied on the basis of the order in which such options are
granted.
5.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify COMPS.COM, INC. (the "Corporation") that I elect to
purchase _________________________________________ shares of the Corporation's
Common Stock (the "Purchased Shares") at the option exercise price of $________
per share (the "Exercise Price") pursuant to that certain option (the "Option")
granted to me under the Corporation's 1999 Stock Incentive Plan on ___________,
_______.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
____________________, ________
Date
________________________________________
Optionee
Address: _______________________________
________________________________________
Print name in exact manner it is to
appear on the stock certificate: ________________________________________
Address to which certificate is to be
sent, if different from address above: ________________________________________
________________________________________
Social Security Number: ________________________________________
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Agreement:
(i) AGREEMENT shall mean this Stock Option Agreement.
---------
(ii) BOARD shall mean the Corporation's Board of Directors.
-----
(iii) CODE shall mean the Internal Revenue Code of 1986, as
----
amended.
(iv) COMMON STOCK shall mean shares of the Corporation's common
------------
stock.
(v) CORPORATE TRANSACTION shall mean either of the following
---------------------
stockholder-approved transactions to which the Corporation
is a party:
(a) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's
outstanding securities are transferred to a person or
persons different from the persons holding those
securities immediately prior to such transaction, or
(b) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in
complete liquidation or dissolution of the
Corporation.
(vi) CORPORATION shall mean COMPS.COM, INC., a Delaware
-----------
corporation, and any successor corporation to all or
substantially all of the assets or voting stock of
COMPS.COM, INC. which shall by appropriate action adopt the
Plan.
(vii) EMPLOYEE shall mean an individual who is in the employ of
--------
the Corporation (or any Parent or Subsidiary), subject to
the control and direction of the employer entity as to both
the work to be performed and the manner and method of
performance.
(viii) EXERCISE DATE shall mean the date on which the option shall
-------------
have been exercised in accordance with Paragraph 9 of the
Agreement.
(ix) EXERCISE PRICE shall mean the exercise price per Option
--------------
Share as specified in the Grant Notice.
(x) EXPIRATION DATE shall mean the date on which the option
---------------
expires as specified in the Grant Notice.
(xi) FAIR MARKET VALUE per share of Common Stock on any relevant
-----------------
date shall be determined in accordance with the following
provisions:
(a) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be
the closing selling price per share of Common Stock on
the date in question, as such price is reported by the
National Association of Securities Dealers on the
Nasdaq National Market. If there is no closing selling
price for the Common Stock on the date
<PAGE>
in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for
which such quotation exists, or
(b) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be
the closing selling price per share of Common Stock
on the date in question on the Stock Exchange
determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is
officially quoted in the composite tape of
transactions on such exchange. If there is no closing
selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the
closing selling price on the last preceding date for
which such quotation exists.
(xii) GRANT DATE shall mean the date of grant of the option as
----------
specified in the Grant Notice.
(xiii) GRANT NOTICE shall mean the Notice of Grant of Stock
------------
Option accompanying the Agreement, pursuant to which
Optionee has been informed of the basic terms of the
option evidenced hereby.
(xiv) INCENTIVE OPTION shall mean an option which satisfies the
----------------
requirements of Code Section 422.
(xv) MISCONDUCT shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by Optionee, any unauthorized
use or disclosure by Optionee of confidential information
or trade secrets of the Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by
Optionee adversely affecting the business or affairs of
the Corporation (or any Parent or Subsidiary) in a
material manner. The foregoing definition shall not be
deemed to be inclusive of all the acts or omissions which
the Corporation (or any Parent or Subsidiary) may consider
as grounds for the dismissal or discharge of Optionee or
any other individual in the Service of the Corporation (or
any Parent or Subsidiary).
(xvi) NON-STATUTORY OPTION shall mean an option not intended to
--------------------
satisfy the requirements of Code Section 422.
(xvii) NOTICE OF EXERCISE shall mean the notice of exercise in
------------------
the form attached hereto as Exhibit I.
(xviii) OPTION SHARES shall mean the number of shares of Common
-------------
Stock subject to the option as specified in the Grant
Notice.
(xix) OPTIONEE shall mean the person to whom the option is
--------
granted as specified in the Grant Notice.
(xx) PARENT shall mean any corporation (other than the
------
Corporation) in an unbroken chain of corporations ending
with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such
chain.
2.
<PAGE>
(xxi) PERMANENT DISABILITY shall mean the inability of Optionee
--------------------
to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment
which is expected to result in death or has lasted or can
be expected to last for a continuous period of twelve (12)
months or more.
(xxii) PLAN shall mean the Corporation's 1999 Stock Incentive
----
Plan.
(xxiii) PLAN ADMINISTRATOR shall mean either the Board or a
------------------
committee of the Board acting in its capacity as
administrator of the Plan.
(xxiv) SERVICE shall mean the Optionee's performance of services
-------
for the Corporation (or any Parent or Subsidiary) in the
capacity of an Employee, a non-employee member of the
board of directors or a consultant or independent advisor.
(xxv) STOCK EXCHANGE shall mean the American Stock Exchange or
--------------
the New York Stock Exchange.
(xxvi) SUBSIDIARY shall mean any corporation (other than the
----------
Corporation) in an unbroken chain of corporations
beginning with the Corporation, provided each corporation
(other than the last corporation) in the unbroken chain
owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other
corporations in such chain.
3.
<PAGE>
EXHIBIT 99.4
FORM OF ADDENDUM TO STOCK OPTION AGREEMENT
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby
made a part of, that certain Stock Option Agreement (the "Option Agreement") by
and between COMPS.COM, INC. (the "Corporation") and ___________________________
("Optionee") evidencing the stock option (the "Option") granted this day to
Optionee under the terms of the Corporation's 1999 Stock Incentive Plan, and
such provisions are effective immediately. All capitalized terms in this
Addendum, to the extent not otherwise defined herein, shall have the meanings
assigned to them in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION/CHANGE IN CONTROL
1. To the extent the Option is, in connection with a Corporate
Transaction, to be assumed in accordance with Paragraph 6 of the Option
Agreement, the Option shall not accelerate upon the occurrence of that Corporate
Transaction, and the Option shall accordingly continue, over Optionee's period
of Service after the Corporate Transaction, to become exercisable for the Option
Shares in one or more installments in accordance with the provisions of the
Option Agreement. However, immediately upon an Involuntary Termination of
Optionee's Service within eighteen (18) months following such Corporate
Transaction, the assumed Option, to the extent outstanding at the time but not
otherwise fully exercisable, shall automatically accelerate so that the Option
shall become immediately exercisable for all the Option Shares at the time
subject to the Option and may be exercised for any or all of those Option Shares
as fully vested shares.
2. The Option shall not accelerate upon the occurrence of a Change in
Control, and the Option shall, over Optionee's period of Service following such
Change in Control, continue to become exercisable for the Option Shares in one
or more installments in accordance with the provisions of the Option Agreement.
However, immediately upon an Involuntary Termination of Optionee's Service
within eighteen (18) months following the Change in Control, the Option, to the
extent outstanding at the time but not otherwise fully exercisable, shall
automatically accelerate so that the Option shall become immediately exercisable
for all the Option Shares at the time subject to the Option and may be exercised
for any or all of those Option Shares as fully vested shares.
3. The Option as accelerated pursuant to this Addendum shall remain
so exercisable until the earlier of (i) the Expiration Date or (ii) the
-------
expiration of the one (1)-year period measured from the date of the Optionee's
Involuntary Termination.
<PAGE>
4. For purposes of this Addendum the following definitions shall be
in effect:
(i) An INVOLUNTARY TERMINATION shall mean the termination of
Optionee's Service by reason of:
(A) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(B) Optionee's voluntary resignation following (A) a change
in Optionee's position with the Corporation (or Parent or Subsidiary
employing Optionee) which materially reduces Optionee's duties and
responsibilities or the level of management to which Optionee reports,
(B) a reduction in Optionee's level of compensation (including base salary,
fringe benefits and target bonus under any corporate performance based
bonus or incentive programs) by more than fifteen percent (15%) or
(C) a relocation of Optionee's place of employment by more than fifty (50)
miles, provided and only if such change, reduction or relocation is
effected by the Corporation without Optionee's consent.
(ii) A CHANGE IN CONTROL shall be deemed to occur in the event of
a change in ownership or control of the Corporation effected through either
of the following transactions:
(A) the acquisition, directly or indirectly, by any person
or related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders,
or
(B) a change in the composition of the Board over a period
of thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (i) have been
Board members continuously since the beginning of such period or (ii) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (i) who
were still in office at the time the Board approved such election or
nomination.
5. The provisions of Paragraph 1 of this Addendum shall govern the
period for which the Option is to remain exercisable following the Involuntary
Termination of Optionee's Service within eighteen (18) months after the
Corporate Transaction or Change in Control and shall supersede any provisions to
the contrary in Paragraph 5 of the Option Agreement.
<PAGE>
IN WITNESS WHEREOF, COMPS.COM, INC. has caused this Addendum to be
executed by its duly-authorized officer as of the Effective Date specified
below.
COMPS.COM, INC.
By:
-----------------------------------
Title:
--------------------------------
EFFECTIVE DATE:
---------------------------
<PAGE>
EXHIBIT 99.5
COMPS.COM, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
---------------------------------
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the
interests of COMPS.COM, INC., a Delaware Corporation, by providing eligible
employees with the opportunity to acquire a proprietary interest in the
Corporation through participation in a payroll-deduction based employee stock
purchase plan designed to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including
shares of Common Stock purchased on the open market. The number
of shares of Common Stock initially reserved for issuance over
the term of the Plan shall be limited to three hundred thousand
(300,000) shares.
B. The number of shares of Common Stock available for issuance under
the Plan shall automatically increase on the first trading day in
January each calendar year during the term of the Plan, beginning
with calendar year 2000, by an amount equal to two percent (2%)
of the total number of shares of Common Stock outstanding on the
last trading day in December of the immediately preceding
calendar year, but in no event shall any such annual increase
exceed three hundred thousand (300,000) shares.
C. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's
receipt of consideration, appropriate adjustments shall be made
to (i) the maximum number and class of securities issuable under
the Plan, (ii) the maximum number and class of securities
purchasable per Participant on any one Purchase Date, (iii) the
maximum number and class of securities purchasable by all
Participants in the aggregate on any one Purchase Date, (iv) the
maximum number and/or class of securities by which the share
reserve is to increase automatically each calendar year pursuant
to the provisions of Section III.B of this Article One and (v)
the number and class of securities and the price per share in
effect under each outstanding purchase right in order to prevent
the dilution or enlargement of benefits thereunder.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the
Plan through a series of successive offering periods until such
time as (i) the maximum number of shares of Common Stock
available for issuance under the Plan shall have been purchased
or (ii) the Plan shall have been sooner terminated.
<PAGE>
B. Each offering period shall be of such duration (not to exceed
twenty-four (24) months) as determined by the Plan Administrator
prior to the start date of such offering period. However, the
initial offering period shall commence at the Effective Time and
terminate on the last business day in July 2001. The next
offering period shall commence on the first business day in
August 2001, and subsequent offering periods shall commence as
designated by the Plan Administrator.
C. Each offering period shall be comprised of a series of one or
more successive Purchase Intervals. Purchase Intervals shall run
from the first business day in February each year to the last
business day in July of the same year and from the first business
day in August each year to the last business day in January of
the following year. However, the first Purchase Interval in
effect under the initial offering period shall commence at the
Effective Time and terminate on the last business day in July
1999.
D. Should the Fair Market Value per share of Common Stock on any
Purchase Date within an offering period be less than the Fair
Market Value per share of Common Stock on the start date of that
offering period, then that offering period shall automatically
terminate immediately after the purchase of shares of Common
Stock on such Purchase Date, and a new offering period shall
commence on the next business day following such Purchase Date.
The new offering period shall have a duration of twenty (24)
months, unless a shorter duration is established by the Plan
Administrator within five (5) business days following the start
date of that offering period.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date of
any offering period under the Plan may enter that offering period
on such start date or on any subsequent Semi-Annual Entry Date
within that offering period, provided he or she remains an
Eligible Employee.
B. Each individual who first becomes an Eligible Employee after the
start date of an offering period may enter that offering period
on any subsequent Semi-Annual Entry Date within that offering
period on which he or she is an Eligible Employee.
C. The date an individual enters an offering period shall be
designated his or her Entry Date for purposes of that offering
period.
D. To participate in the Plan for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed
by the Plan Administrator (including a stock purchase agreement
and a payroll deduction authorization) and file such forms with
the Plan Administrator (or its designate) on or before his or her
scheduled Entry Date.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes
of acquiring shares of Common Stock during an offering period may
be any multiple of one percent (1%) of the Cash Earnings paid to
the Participant during each Purchase Interval within that
offering period, up to a maximum of ten percent (10%). The
deduction rate so authorized shall continue in effect throughout
the offering period, except to the extent such rate is changed in
accordance with the following guidelines:
(i) The Participant may, at any time during the offering period,
reduce his or her rate of payroll deduction to become
effective as soon as possible after filing the appropriate
form with the Plan Administrator. The Participant may not,
however, effect more than one (1) such reduction per
Purchase Interval.
2.
<PAGE>
(ii) The Participant may, prior to the commencement of any new
Purchase Interval within the offering period, increase the
rate of his or her payroll deduction by filing the
appropriate form with the Plan Administrator. The new rate
(which may not exceed the ten percent (10%) maximum) shall
become effective on the start date of the first Purchase
Interval following the filing of such form.
B. Payroll deductions shall begin on the first pay day
administratively feasible following the Participant's Entry Date
into the offering period and shall (unless sooner terminated by
the Participant) continue through the pay day ending with or
immediately prior to the last day of that offering period. The
amounts so collected shall be credited to the Participant's book
account under the Plan, but no interest shall be paid on the
balance from time to time outstanding in such account. The
amounts collected from the Participant shall not be required to
be held in any segregated account or trust fund and may be
commingled with the general assets of the Corporation and used
for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination
of the Participant's purchase right in accordance with the
provisions of the Plan.
D. The Participant's acquisition of Common Stock under the Plan on
any Purchase Date shall neither limit nor require the
Participant's acquisition of Common Stock on any subsequent
Purchase Date, whether within the same or a different offering
period.
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a
-----------------------
separate purchase right for each offering period in which he or
she participates. The purchase right shall be granted on the
Participant's Entry Date into the offering period and shall
provide the Participant with the right to purchase shares of
Common Stock, in a series of successive installments over the
remainder of such offering period, upon the terms set forth
below. The Participant shall execute a stock purchase agreement
embodying such terms and such other provisions (not inconsistent
with the Plan) as the Plan Administrator may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
------------------------------
automatically exercised in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant on each such Purchase Date. The purchase shall be
effected by applying the Participant's payroll deductions for the Purchase
Interval ending on such Purchase Date to the purchase of whole shares of Common
Stock at the purchase price in effect for the Participant for that Purchase
Date.
C. PURCHASE PRICE. The purchase price per share at which Common
--------------
Stock will be purchased on the Participant's behalf on each Purchase Date within
the offering period shall be equal to eighty-five percent (85%) of the lower of
-----
(i) the Fair Market Value per share of Common Stock on the Participant's Entry
Date into that offering period or (ii) the Fair Market Value per share of Common
Stock on that Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common
----------------------------
Stock purchasable by a Participant on each Purchase Date during the offering
period shall be the number of whole shares obtained by dividing the amount
collected from the Participant through payroll deductions during the Purchase
Interval ending with that Purchase Date by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed one thousand five hundred (1,500) shares, subject to periodic adjustments
in the event of certain changes in
3.
<PAGE>
the Corporation's capitalization. In addition, the maximum aggregate number of
shares of Common Stock purchasable by all Participants on any one Purchase Date
shall not exceed seventy five thousand (75,000) shares, subject to periodic
adjustments in the event of certain changes in the Corporation's capitalization.
However, the Plan Administrator shall have the discretionary authority,
exercisable prior to the start of any offering period under the Plan, to
increase or decrease the limitations to be in effect for the number of shares
purchasable per Participant and in the aggregate by all Participants on each
Purchase Date during that offering period.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to
-------------------------
the purchase of shares of Common Stock on any Purchase Date because they are
not sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable per Participant or in the
aggregate on the Purchase Date shall be promptly refunded.
(i) TERMINATION OF PURCHASE RIGHT. The following provisions
-----------------------------
shall govern the termination of outstanding purchase
rights:
(ii) A Participant may, at any time prior to the next scheduled
Purchase Date in the offering period, terminate his or her
outstanding purchase right by filing the appropriate form
with the Plan Administrator (or its designate), and no
further payroll deductions shall be collected from the
Participant with respect to the terminated purchase right.
Any payroll deductions collected during the Purchase
Interval in which such termination occurs shall, at the
Participant's election, be immediately refunded or held
for the purchase of shares on the next Purchase Date. If
no such election is made at the time such purchase right
is terminated, then the payroll deductions collected with
respect to the terminated right shall be refunded as soon
as possible.
(iii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently
rejoin the offering period for which the terminated
purchase right was granted. In order to resume
participation in any subsequent offering period, such
individual must re-enroll in the Plan (by making a timely
filing of the prescribed enrollment forms) on or before
his or her scheduled Entry Date into that offering period.
(iv) Should the Participant cease to remain an Eligible
Employee for any reason (including death, disability or
change in status) while his or her purchase right remains
outstanding, then that purchase right shall immediately
terminate, and all of the Participant's payroll deductions
for the Purchase Interval in which the purchase right so
terminates shall be immediately refunded. However, should
the Participant cease to remain in active service by
reason of an approved unpaid leave of absence, then the
Participant shall have the right, exercisable up until the
last business day of the Purchase Interval in which such
leave commences, to (a) withdraw all the payroll
deductions collected to date on his or her behalf for that
Purchase Interval or (b) have such funds held for the
purchase of shares on his or her behalf on the next
scheduled Purchase Date. In no event, however, shall any
further payroll deductions be collected on the
Participant's behalf during such leave. Upon the
Participant's return to active service (x) within ninety
(90) days following the commencement of such leave or (y)
the expiration of any longer period for which such
Participant's right to reemployment with the Corporation
is guaranteed by either statute or contract, his or her
payroll deductions under the Plan shall automatically
resume at the rate in effect at the time the leave began,
unless the Participant withdraws from the Plan prior to
his or her return. An individual who returns to active
employment following a leave of absence which exceeds in
duration the applicable (x) or (y) time period will be
treated as a new Employee for purposes of subsequent
participation in the Plan and must accordingly re-enroll
in the
4.
<PAGE>
Plan (by making a timely filing of the prescribed
enrollment forms) on or before his or her scheduled Entry
Date into the offering period.
F. CHANGE IN CONTROL. Each outstanding purchase right shall
-----------------
automatically be exercised, immediately prior to the effective date of any
Change in Control, by applying the payroll deductions of each Participant for
the Purchase Interval in which such Change in Control occurs to the purchase of
whole shares of Common Stock at a purchase price per share equal to eighty-five
percent (85%) of the lower of (i) the Fair Market Value per share of Common
-----
Stock on the Participant's Entry Date into the offering period in which such
Change in Control occurs or (ii) the Fair Market Value per share of Common Stock
immediately prior to the effective date of such Change in Control. However, the
applicable limitation on the number of shares of Common Stock purchasable per
Participant shall continue to apply to any such purchase, but not the limitation
applicable to the maximum number of shares of Common Stock purchasable in the
aggregate.
The Corporation shall use its best efforts to provide at least ten
(10)-days prior written notice of the occurrence of any Change in Control, and
Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Change in Control.
G. PRORATION OF PURCHASE RIGHTS. Should the total number of shares
----------------------------
of Common Stock to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.
H. ASSIGNABILITY. The purchase right shall be exercisable only by
-------------
the Participant and shall not be assignable or transferable by the Participant.
I. STOCKHOLDER RIGHTS. A Participant shall have no stockholder
------------------
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under
this Plan if and to the extent such accrual, when aggregated with
(i) rights to purchase Common Stock accrued under any other
purchase right granted under this Plan and (ii) similar rights
accrued under other employee stock purchase plans (within the
meaning of Code Section 423) of the Corporation or any Corporate
Affiliate, would otherwise permit such Participant to purchase
more than Twenty-Five Thousand Dollars ($25,000.00) worth of
stock of the Corporation or any Corporate Affiliate (determined
on the basis of the Fair Market Value per share on the date or
dates such rights are granted) for each calendar year such rights
are at any time outstanding.
B. For purposes of applying such accrual limitations to the purchase
rights granted under the Plan, the following provisions shall be
in effect:
(i) The right to acquire Common Stock under each outstanding
purchase right shall accrue in a series of installments on
each successive Purchase Date during the offering period on
which such right remains outstanding.
(ii) No right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the Participant
has already accrued in the same calendar year the right to
acquire Common Stock under one or more other purchase
rights at a rate equal to Twenty-Five Thousand Dollars
($25,000.00) worth of Common
5.
<PAGE>
Stock (determined on the basis of the Fair Market Value per
share on the date or dates of grant) for each calendar year
such rights were at any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Interval,
then the payroll deductions which the Participant made during
that Purchase Interval with respect to such purchase right shall
be promptly refunded.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument
issued thereunder, the provisions of this Article shall be
controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on February 19, 1999, and shall
become effective at the Effective Time, provided no purchase
--------
rights granted under the Plan shall be exercised, and no shares
of Common Stock shall be issued hereunder, until (i) the Plan
shall have been approved by the stockholders of the Corporation
and (ii) the Corporation shall have complied with all applicable
requirements of the 1933 Act (including the registration of the
shares of Common Stock issuable under the Plan on a Form S-8
registration statement filed with the Securities and Exchange
Commission), all applicable listing requirements of any stock
exchange (or the Nasdaq National Market, if applicable) on which
the Common Stock is listed for trading and all other applicable
requirements established by law or regulation. In the event such
stockholder approval is not obtained, or such compliance is not
effected, within twelve (12) months after the date on which the
Plan is adopted by the Board, the Plan shall terminate and have
no further force or effect, and all sums collected from
Participants during the initial offering period hereunder shall
be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate
upon the earliest of (i) the last business day in July, 2009,
--------
(ii) the date on which all shares available for issuance under
the Plan shall have been sold pursuant to purchase rights
exercised under the Plan or (iii) the date on which all purchase
rights are exercised in connection with a Corporate Transaction.
No further purchase rights shall be granted or exercised, and no
further payroll deductions shall be collected, under the Plan
following such termination.
X. AMENDMENT OF THE PLAN
A. The Board may alter, amend, suspend or terminate the Plan at any
time to become effective immediately following the close of any
Purchase Interval. However, the Plan may be amended or
terminated immediately upon Board action, if and to the extent
necessary to assure that the Corporation will not recognize, for
financial reporting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase
under the Plan, should the financial accounting rules applicable
to the Plan at the Effective Time be subsequently revised so as
to require the recognition of compensation expense in the absence
of such amendment or termination.
B. In no event may the Board effect any of the following amendments
or revisions to the Plan without the approval of the
Corporation's stockholders: (i) increase the number of shares of
Common Stock issuable under the Plan, except for permissible
adjustments in the event of certain changes in the Corporation's
capitalization, (ii) alter the purchase price formula so as to
reduce the purchase price payable for the shares of Common Stock
purchasable under the Plan or (iii) modify the eligibility
requirements for participation in the Plan.
6.
<PAGE>
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation; however, each Plan Participant
shall bear all costs and expenses incurred by such individual in
the sale or other disposition of any shares purchased under the
Plan.
B. Nothing in the Plan shall confer upon the Participant any right
to continue in the employ of the Corporation or any Corporate
Affiliate for any period of specific duration or interfere with
or otherwise restrict in any way the rights of the Corporation
(or any Corporate Affiliate employing such person) or of the
Participant, which rights are hereby expressly reserved by each,
to terminate such person's employment at any time for any
reason, with or without cause.
C. The provisions of the Plan shall be governed by the laws of the
State of California without resort to that State's conflict-of-
laws rules.
7.
<PAGE>
SCHEDULE A
----------
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE TIME
------------------------
COMPS.COM, INC.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
-----
B. CASH EARNINGS shall mean the (i) regular base salary paid to a
-------------
Participant by one or more Participating Companies during such individual's
period of participation in one or more offering periods under the Plan plus (ii)
all overtime payments, bonuses, commissions, profit-sharing distributions and
other incentive-type payments. Such Cash Earnings shall be calculated before
deduction of (A) any income or employment tax withholdings or (B) any and all
contributions made by the Participant to any Code Section 401(k) salary deferral
plan or Code Section 125 cafeteria benefit program now or hereafter established
by the Corporation or any Corporate Affiliate. However, Cash Earnings shall
NOT include any contributions made on the Participant's behalf by the
Corporation or any Corporate Affiliate to any employee benefit or welfare plan
now or hereafter established (other than Code Section 401(k) or Code Section 125
contributions).
C. CHANGE IN CONTROL shall mean a change in ownership of the
-----------------
Corporation pursuant to any of the following transactions:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation, or
(iii) the acquisition, directly or indirectly by an person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by or is under common
control with the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
----
D. COMMON STOCK shall mean the Corporation's common stock.
------------
E. CORPORATE AFFILIATE shall mean any parent or subsidiary
-------------------
corporation of the Corporation (as determined in accordance with Code Section
424), whether now existing or subsequently established.
G. CORPORATION shall mean COMPS.COM, INC., a Delaware corporation,
-----------
and any corporate successor to all or substantially all of the assets or voting
stock of COMPS.COM, INC., which shall by appropriate action adopt the Plan.
H. EFFECTIVE TIME shall mean the time at which the Underwriting
--------------
Agreement is executed and the Common Stock priced for the initial public
offering. Any Corporate Affiliate which becomes a Participating Corporation
after such Effective Time shall designate a subsequent Effective Time with
respect to its employee-Participants.
I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
-----------------
Participating Corporation on a basis under which he or she is regularly expected
to render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).
<PAGE>
J. ENTRY DATE shall mean the date an Eligible Employee first
----------
commences participation in the offering period in effect under the Plan. The
earliest Entry Date under the Plan shall be the Effective Time.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
b. If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date
in question, as such price is reported by the National
Association of Securities Dealers on the Nasdaq National
Market. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding
date for which such quotation exists.
c. If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in
question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock,
as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing
selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation
exists.
d. For purposes of the initial offering period which begins at
the Effective Time, the Fair Market Value shall be deemed to
be equal to the price per share at which the Common Stock is
sold in the initial public offering pursuant to the
Underwriting Agreement.
L. 1933 ACT shall mean the Securities Act of 1933, as amended.
--------
M. PARTICIPANT shall mean any Eligible Employee of a Participating
-----------
Corporation who is actively participating in the Plan.
N. PARTICIPATING CORPORATION shall mean the Corporation and such
-------------------------
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan are listed in attached Schedule A.
O. PLAN shall mean the Corporation's 1999 Employee Stock Purchase
----
Plan, as set forth in this document.
P. PLAN ADMINISTRATOR shall mean the committee of two (2) or more
------------------
Board members appointed by the Board to administer the Plan.
Q. PURCHASE DATE shall mean the last business day of each Purchase
-------------
Interval. The initial Purchase Date shall be July 30, 1999.
R. PURCHASE INTERVAL shall mean each successive six (6)-month period
-----------------
within the offering period at the end of which there shall be purchased shares
of Common Stock on behalf of each Participant.
S. SEMI-ANNUAL ENTRY DATE shall mean the first business day in
----------------------
February and August each year on which an Eligible Employee may first enter an
offering period.
T. STOCK EXCHANGE shall mean either the American Stock Exchange or
--------------
the New York Stock Exchange.
2.
<PAGE>
U. UNDERWRITING AGREEMENT shall mean the agreement between the
----------------------
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
3.
<PAGE>
EXHIBIT 99.6
FORM OF ENROLLMENT/CHANGE FORM
<PAGE>
<TABLE>
<CAPTION>
COMPS.COM, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN ("ESPP")
ENROLLMENT/CHANGE FORM
SECTION 1: Action Complete Sections:
------ -----------------
<S> <C> <C> <C> <C> <C> <C>
ACTIONS [_] New Enrollment 2, 3, 7 and sign attached Stock Purchase Agreement
---
[_] Payroll Deduction Change 2, 4, 7
[_] Terminate Payroll Deductions 2, 5, 7
[_] Leave of Absence 2, 6, 7
========================================================================================================================
SECTION 2: Name
------------------------------------------------------------------------------------------------------
PERSONNEL Last First MI Dept.
DATA
Home Address
----------------------------------------------------------------------------------------------
Street
----------------------------------------------------------------------------------------------
City State Zip Code
Social Security #
---------------- -------- ---------------
========================================================================================================================
SECTION 3: Effective with the Purchase Payroll Deduction Amount: ___________% of cash earnings*
Interval Beginning:
NEW [_] First Business Day of February, ______ * Must be a multiple of 1% up to a maximum of 10% of cash
ENROLLMENT [_] First Business Day of August, ______ earnings
[_] Initial Offering Period
========================================================================================================================
SECTION 4: Effective with the I authorize the following new level of payroll deduction:
PAYROLL Pay Period Beginning: ___________% of cash earnings*
DEDUCTION --------------------------- * Must be a multiple of 1% up to a maximum of 10% of
CHANGE Month, Day and Year cash earnings
NOTE: You may reduce your rate of payroll deductions once per 6-month purchase interval to become
effective as soon as possible following the filing of the change form. You may also increase your
rate of payroll deductions to become effective as of the start date of the next 6-month interval
(first business day of February or August).
========================================================================================================================
SECTION 5: Effective with the Your election to terminate your payroll deductions for
TERMINATE Pay Period Beginning: the balance of the offering period cannot be changed,
PAYROLL --------------------------- and you may not rejoin the offering period at a later
DEDUCTIONS Month, Day and Year date. You will not be able to resume participation in
the ESPP until the start of the next offering period.
In connection with my voluntary termination of payroll deductions, I elect the following action
regarding my ESPP payroll deductions to date in the current purchase interval:
[_] Purchase shares of COMPS.COM, INC. at the end of the purchase interval
OR
[_] Refund ESPP payroll deductions collected
NOTE: If your employment terminates for any reason or your eligibility status changes (greater than
20 hrs/week or greater than 5 months/year), you will immediately cease to participate in the ESPP,
and your ESPP payroll deductions collected in that purchase interval will automatically be refunded
to you.
========================================================================================================================
SECTION 6: In connection with my leave of absence, I elect the following action with respect to my ESPP payroll
deductions to date in the current purchase interval:
LEAVE OF
ABSENCE [_] Purchase shares of COMPS.COM, INC. at the end of the purchase interval
OR
[_] Refund ESPP payroll deductions collected
NOTE: If you take an unpaid leave of absence, your payroll deductions will immediately cease. If you
return to active status within 90 days after the start of your leave, your payroll deductions
will at that time automatically resume at the rate in effect for you when your leave began.
========================================================================================================================
SECTION 7:
AUTHORIZATION I hereby authorize the specific action or actions indicated above.
- -------------------------- --------------------------------------------------------
Date Signature of Employee
</TABLE>
<PAGE>
EXHIBIT 99.7
FORM OF STOCK PURCHASE AGREEMENT
--------------------------------
<PAGE>
COMPS.COM, INC.
STOCK PURCHASE AGREEMENT
------------------------
I hereby elect to participate in the 1999 Employee Stock Purchase Plan
(the "ESPP") for the offering period specified below, and I hereby subscribe to
purchase shares of Common Stock of COMPS.COM, INC. (the "Corporation") in
accordance with the provisions of this Agreement and the ESPP. I hereby
authorize payroll deductions from each of my paychecks following my entry into
the ESPP in the 1% multiple of my cash compensation (not to exceed a maximum of
10%) specified in my attached Enrollment Form.
The offering period is divided into a series of consecutive purchase
intervals. With the exception of the initial purchase interval which begins at
the time of the initial public offering of the Common Stock and ends on July 30,
1999, those purchase intervals will each be of six months duration and will run
from the first business day of August each year to last business day of January
in the following year and from the first business day of February to the last
business day of July each year. My participation will automatically remain in
effect from one purchase interval to the next in accordance with my payroll
deduction authorization, unless I withdraw from the ESPP or change the rate of
my payroll deduction or unless my employment status changes. I may reduce the
rate of my payroll deductions on one occasion per purchase interval, and I may
increase my rate of payroll deductions to become effective at the beginning of
any subsequent purchase interval.
My payroll deductions will be accumulated for the purchase of shares
of common stock on the last business day of each purchase interval within the
offering period. The purchase price per share will be equal to 85% of the lower
-----
of (i) the fair market value per share of common stock on my Entry Date into the
offering period or (ii) the fair market value per share on the purchase date. I
will also be subject to ESPP restrictions (i) limiting the maximum number of
shares which I may purchase per purchase interval, (ii) limiting the maximum
number of shares which may be purchased in total by all participants per
purchase interval and (iii) prohibiting me from purchasing more than $25,000
worth of Common Stock for each calendar year my purchase right remains
outstanding.
I may withdraw from the ESPP at any time prior to the last business
day of the purchase interval and elect either to have the Corporation refund all
my payroll deductions for that interval or to have such payroll deductions
applied to the purchase of common stock at the end of such interval. However, I
may not rejoin that particular offering period at any later date. Upon the
termination of my employment for any reason, including death or disability, or
my loss of eligible employee status, my participation in the ESPP will
immediately cease, and all my payroll deductions for the purchase interval in
which my employment terminates or my loss of eligibility occurs will immediately
be refunded.
If I take an unpaid leave of absence, my payroll deductions will
immediately cease, and any payroll deductions for the purchase interval in which
my leave begins will, at my election, either be refunded or applied to the
purchase of shares of common stock at the end of that purchase interval. If my
re-employment is guaranteed by either law or contract, or if I return to active
service within ninety (90) days, then upon my return my payroll deductions will
automatically resume at the rate in effect when my leave began.
The Corporation will issue a stock certificate for the shares
purchased on my behalf after the end of each purchase interval. The certificate
will be issued in street name and will be deposited directly in my Corporation-
designated brokerage account. I will notify the Corporation of any disposition
of shares purchased under the ESPP, and I will satisfy all applicable income and
employment tax withholding requirements at the time of such disposition.
The Corporation has the right, exercisable in its sole discretion, to
amend or terminate all outstanding purchase rights under the ESPP at any time,
with such amendment or termination to become effective immediately following the
end of any purchase interval. However, such purchase rights may be amended or
terminated with an immediate effective date to the extent necessary to avoid the
Corporation's recognition of compensation expense for financial reporting
purposes, should the accounting principles applicable to the ESPP change. Upon
any such termination, I will cease to have any further rights to purchase shares
of common stock under this Agreement.
I have read this Agreement and hereby agree to be bound by the terms
of both this Agreement and the ESPP. The effectiveness of this Agreement is
dependent upon my eligibility to participate in the ESPP.
Date: ________________________
Signature of Employee ________________________
___________
Printed Name: ________________________________
__________________
Start Date of Offering Period: _______________
Entry Date: ___________________
