Registration No. 333-______
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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MORTGAGE.COM, INC.
(Exact name of registrant as specified in its charter)
Florida 65-0435281
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1643 North Harrison Parkway 33323
Sunrise, Florida (Zip Code)
(Address of principal executive offices)
Amended and Restated Mortgage.com, Inc. Stock Option Plan
(Full title of the plan)
Copies to:
Seth S. Werner Luther F. Sadler, Jr.
Chief Executive Officer Foley & Lardner Michael Brenner
Mortgage.com, Inc. The Greenleaf Building Executive Vice President
1643 North Harrison Parkway 200 Laura Street Mortgage.com, Inc.
Sunrise, Florida 33324 Jacksonville, Florida 32202 1643 North Harrison Parkway
(954) 838-5000 (904) 359-7205 Sunrise, Florida 33324
(Name, address and telephone (954) 838-5000
number, including area code,
of agent for service)
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CALCULATION OF REGISTRATION FEE
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Title of Amount Proposed Proposed Maximum Amount of
Securities to to be Maximum Offering Aggregate Registration
be Registered Registered Price Per Share Offering Price Fee
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Common Stock, 19,899,128
$.01 par value shares $2.46(1) $48,970,208(1) $12,928
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(1) Estimated pursuant to Rules 457(c) and (h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee based on the exercise
prices of outstanding options for 12,302,236 shares of Common Stock and the
average of the high and low prices of Common Stock on The Nasdaq Stock Market on
March 27, 2000 for 7,596,892 shares of Common Stock.
This registration statement also relates to an indeterminate number of shares of
Common Stock that may be issued upon stock splits, stock dividends or similar
transactions in accordance with Rule 416 under the Securities Act of 1933.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I
will be sent or given to employees as specified by Rule 428(b)(1) under the
Securities Act of 1933. Such documents are not required to be filed with the
Securities and Exchange Commission ("Commission") as part of this Form S-8
Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
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The following documents have been previously filed by
Mortgage.com, Inc. (the "Company") with the Commission and are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, which includes audited financial statements as of and
for the year ended December 31, 1998.
(b) All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since December 31, 1999.
(c) The description of the Company's Common Stock contained in
Item 1 of the Company's Registration Statement on Form 8-A, dated August 11,
1999, filed with the Commission pursuant to Section 12 of the Exchange Act, and
any amendments or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of filing
of this Registration Statement and prior to such time as the Company files a
post-effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
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Not applicable.
Item 5. Interests of Named Experts and Counsel.
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The validity of the shares of Common Stock being offered will be
passed upon for the Company by Foley & Lardner, Jacksonville, Florida. An
individual attorney at Foley & Lardner beneficially owns 30,429 shares of Common
Stock.
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Item 6. Indemnification of Directors and Officers.
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Section 607.0850 of the Florida Business Corporation Act
authorizes a court to award, or permits a Florida corporation to grant,
indemnity to present or former directors and officers, as well as certain other
persons serving at the request of the corporation in related capacities. This
permitted indemnity is sufficiently broad to permit indemnification for
liabilities arising under the Securities Act of 1933, including reimbursement
for expenses incurred.
The indemnification authorized under Florida law is not exclusive
and is in addition to any other rights granted to officers and directors under
the Articles of Incorporation or Bylaws of the Company or any agreement between
officers and directors and the Company. The Company's Bylaws provide for the
indemnification of directors, former directors and officers to the maximum
extent permitted by Florida law. The registrant's Bylaws also provide that it
may purchase and maintain insurance on behalf of a director or officer against
liability asserted against the director or officer in such capacity. In
addition, the Company has entered into Indemnification Agreements with each
officer and director, other than John Buscema.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against such public policy as
expressed in the 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 and 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 Act, and
will be governed by the final adjudication of such issues.
Item 7. Exemption from Registration Claimed.
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Not Applicable.
Item 8. Exhibits.
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The following exhibits have been filed (except where otherwise
indicated) as part of this Registration Statement:
Exhibit No. Exhibit
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(4) Amended and Restated Mortgage.Com, Inc. Stock Option Plan
(5) Opinion of Foley & Lardner
(23.1) Consent of KPMG LLP
(23.2) Consent of Foley & Lardner (contained in Exhibit 5 hereto)
(24) Power of Attorney relating to subsequent amendments
(included on the signature page to this Registration Statement)
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Item 9. Undertakings.
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(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 to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, 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 of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Sunrise, and State of Florida, on this
7th day of February, 2000.
MORTGAGE.COM, INC.
By: /s/ Seth S. Werner
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Seth S. Werner
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Seth S. Werner, John J. Hogan and Edwin D. Johnson, and
each of them individually, his or her true and lawful attorney-in-fact and
agent, with full power of substitution and revocation, for him or her and in his
or her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, may lawfully do or cause to be
done by virtue hereof.
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Signature Title Date
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/s/ Seth S. Werner President, Chief Executive Officer
- ------------------------- (Principal Executive Officer) and
Seth S. Werner Chairman of the Board February 7, 2000
/s/ Edwin D. Johnson Senior Vice President and Chief
- ------------------------- Financial Officer (Principal
Edwin D. Johnson Financial and Accounting Officer) February 7, 2000
/s/ John J. Hogan
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John J. Hogan Director February 7, 2000
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David W. Larson Director February _, 2000
/s/ Stephen L. Green
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Stephen L. Green Director February 9, 2000
/s/ Michael K. Lee
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Michael K. Lee Director February 9, 2000
/s/ George A. Naddaff
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George A. Naddaff Vice Chairman of the Board February 7, 2000
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EXHIBIT INDEX
AMENDED AND RESTATED MORTGAGE.COM, INC. STOCK OPTION PLAN
Exhibit No. Exhibit
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(4) Amended and Restated Mortgage.com, Inc. Stock Option Plan
(5) Opinion of Foley & Lardner
(23.1) Consent of KPMG LLP
(23.2) Consent of Foley & Lardner (contained in Exhibit 5
hereto)
(24) Power of Attorney relating to subsequent amendments
(included on the signature page to this Registration
Statement)
Plan as amended and restated by Board
on May 20, 1998; October 18, 1998;
February 13, 1999; and March 24, 1999
AMENDED AND RESTATED
MORTGAGE.COM, INC.
STOCK OPTION PLAN
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AMENDED AND RESTATED
MORTGAGE.COM, INC.
STOCK OPTION PLAN
Table of Contents
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Page
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ARTICLE 1 PURPOSE.............................................................1
ARTICLE 2 DEFINITIONS.........................................................1
2.1 Affiliate........................................................1
2.2 Award............................................................1
2.3 Award Agreement..................................................1
2.4 Board............................................................1
2.5 Code.............................................................1
2.6 Committee........................................................1
2.7 Director.........................................................2
2.8 Employee.........................................................2
2.9 Exchange Act.....................................................2
2.10 Fair Market Value...............................................2
2.11 Incentive Stock Option..........................................2
2.12 IPO.............................................................2
2.13 Non-Employee Director...........................................2
2.14 Non-Employee Advisor............................................2
2.15 Non-Qualified Stock Option......................................3
2.16 Option..........................................................3
2.17 Participant.....................................................3
2.18 Performance Target..............................................3
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2.19 Plan............................................................3
2.20 Shares..........................................................3
2.21 Ten Percent Shareholder.........................................3
ARTICLE 3 ADMINISTRATION......................................................4
3.1 Board of Directors...............................................4
3.2 Committee........................................................4
3.3 Administration Following the IPO.................................4
3.4 Indemnification..................................................5
ARTICLE 4 SHARES..............................................................5
4.1 Number of Shares Available.......................................5
4.2 Shares Subject to Terminated Awards..............................5
4.3 Adjustments......................................................5
ARTICLE 5 STOCK OPTIONS.......................................................6
5.1 Grant of Option..................................................6
5.2 Exercise Price...................................................6
5.3 Exercisability...................................................6
5.4 Method of Exercise...............................................7
5.5 Incentive Stock Options..........................................7
5.6 Incentive Stock Option Limitations...............................7
5.7 Delivery of Financial Statements.................................8
ARTICLE 6 OTHER SHARE-BASED AWARDS............................................8
6.1 Grant of Other Awards............................................8
ARTICLE 7 TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN...............8
7.1 Award Agreement..................................................8
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7.2 Awards May Be Granted Separately or Together;
No Limitations on Other Awards...................................8
7.3 Acceleration.....................................................9
7.4 Limitations on Transfer of Awards................................9
7.5 Taxes............................................................9
7.6 Rights and Status of Recipients..................................9
7.7 Awards Not Includable for Benefit Purposes......................10
7.8 Share Certificates; Representation by Participants;
Registration Requirements.......................................10
ARTICLE 8 AMENDMENT AND TERMINATION; SHAREHOLDER APPROVAL....................10
8.1 Amendment.......................................................10
8.2 Termination.....................................................11
8.3 Shareholder Approval............................................11
ARTICLE 9 GENERAL PROVISIONS.................................................11
9.1 Effective Date of the Plan......................................11
9.2 Unfunded Status of Plan.........................................11
9.3 Miscellaneous...................................................11
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AMENDED AND RESTATED
MORTGAGE.COM, INC.
STOCK OPTION PLAN
Article 1 Purpose
The purpose of the Amended and Restated Mortgage.com, Inc. Stock Option
Plan ("Plan") is to assist Mortgage.com, Inc. (the "Company"), together with any
successor thereto, and its Affiliates in attracting and retaining highly
competent individuals to serve as Employees, Directors and Non-Employee Advisors
who will contribute to the Company's success, and in motivating such persons to
achieve long-term objectives which will inure to the benefit of all shareholders
of the Company.
Article 2 Definitions
2.1 Affiliate means (a) any corporation that is defined as a subsidiary
corporation in Section 424(f) of the Code (or any successor provision), or (b)
any corporation that is defined as a parent corporation in Section 424(e) of the
Code (or any successor provision).
2.2 Award means any award made under the Plan.
2.3 Award Agreement means a written agreement or other document
specifically setting forth the terms and conditions of an Award.
2.4 Board means the Board of Directors of the Company.
2.5 Code means the Internal Revenue Code of 1986, as amended from time to
time. Any reference to a particular section of the Code shall include any
subsequently enacted successor provision thereto.
2.6 Committee means a committee composed of not less than two Directors
appointed by the Board. On and after the IPO, the Committee means the
Compensation Committee of the Board, each member of which shall qualify as a
"non-employee director" within the meaning of Rule 16b-3 under the Exchange Act
and as an "outside director" under Section 162(m) of the Code.
2.7 Director means a member of the Board.
2.8 Employee means any officer or other employee of the Company or of any
Affiliate.
2.9 Exchange Act means the Securities Exchange Act of 1934, as amended.
2.10 Fair Market Value means, with respect to any property (including,
without limitation, any Shares or other securities), the fair market value of
such property determined by such methods as shall be established from time to
time by the Board; provided, however, that after the IPO, the Fair Market Value
of a Share on the date in question shall mean the
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average of the high and low prices of a Share on such date on the principal
exchange on which the Shares are then traded or, if no such sale shall have been
made on that date, then on the last preceding day on which there was such a
sale.
2.11 Incentive Stock Option means an Option designated as an incentive
stock option as defined in Code Section 422.
2.12 IPO means the date on which the Shares of the Company's voting common
stock are first sold to the public pursuant to an effective registration
statement filed by the Company under the Securities Act of 1933, as amended.
2.13 Non-Employee Director means a Director who is not an Employee but is
in a position to make a significant contribution to the management, growth, or
profitability of the business of the Company or any Affiliate, as determined by
the Board.
2.14 Non-Employee Advisor means any consultant or independent contractor or
principal of a consultant or independent contractor who is not an Employee but
is in a position to make a significant contribution to the management, growth,
or profitability of the business of the Company or any Affiliate, as determined
by the Board.
2.15 Non-Qualified Stock Option means an Option that is not an Incentive
Stock Option.
2.16 Option means any option to purchase Shares granted pursuant to the
Plan.
2.17 Participant means any Employee, any Non-Employee Director, or any
Non-Employee Advisor designated by the Board as receiving an Award.
2.18 Performance Target means a target established by the Committee with
respect to an Award granted on and after the IPO, which target may relate to
revenues, earnings per share, return on shareholder equity, return on average
total capital employed, return on net assets employed before interest and taxes,
economic value added and/or, in the case of Participants who are not subject to
Section 16 of the Exchange Act, such other targets as may be established by the
Committee in its discretion.
2.19 Plan means the Mortgage.com, Inc. Stock Option Plan as set forth
herein, and as the same may be amended from time to time.
2.20 Shares mean the shares of common stock of the Company, and such other
securities or property as may become subject to Awards pursuant to an adjustment
made under Section 4.3 of the Plan.
2.21 Ten Percent Shareholder means a person owning (or deemed to own)
common stock of the Company or an Affiliate possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or an Affiliate as defined in Section 422 of the Code.
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Article 3 Administration
3.1 Board of Directors. Subject to Section 3.3, the Plan shall be
administered by the Board. Subject to the terms of the Plan and applicable law,
the Board shall have full power and sole authority to: (i) designate persons to
be Participants; (ii) determine the type, amount, duration, and other terms and
conditions of Awards to be granted to each Participant (including whether, to
what extent, and under what circumstances Awards may be exercised in cash,
Shares, or other property); (iii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan; (iv) waive
any conditions or other restrictions with respect to any Award (including,
without limitation, conditions regarding the vesting or exercise of an Option);
(v) amend, alter, suspend, discontinue, or terminate any Award, prospectively or
retroactively, provided that no such action shall impair the rights of any
Participant without his or her consent except as provided in Section 4.3, and
correct any defect, supply any omission, or reconcile any inconsistency in any
Award or Award Agreement in the manner and to the extent it shall deem desirable
to carry the Plan into effect; (vi) establish, amend, suspend, or waive such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (vii) make any other determination
and take any other action that the Board deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Board, may be
made at any time, and shall be final, conclusive, and binding upon all persons.
Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered to
disqualify any outstanding Incentive Stock Options under Section 422 of the Code
without the consent of the Participant(s) affected.
3.2 Committee. Subject to Section 3.3, the Committee shall review and make
recommendations to the Board as to all matters in respect of the administration
of the Plan, including those matters set forth in Section 3.1 above.
3.3 Administration Following the IPO. Following the IPO, the Plan shall be
administered by the Committee which shall have all the responsibilities and
powers granted to the Board pursuant to Section 3.1, and any reference herein to
the Board shall include the Committee. If at any time the Committee shall not be
in existence after the IPO, the Board shall administer the Plan. Except to the
extent prohibited by applicable law or the applicable rules of a stock exchange,
the Committee may allocate all or any portion of its responsibilities and powers
to any one or more of its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by it, other than
with respect to Participants who are subject to Section 16 of the Exchange Act.
To the extent the Committee has delegated any of its authority and
responsibility, references to the Committee herein shall include such other
person or persons as appropriate.
3.4 Indemnification. No member or former member of the Board or the
Committee shall be liable for any action or inaction or determination made in
good faith with respect to the Plan or any Award. To the maximum extent
permitted by applicable law and by the Company's Articles of Incorporation and
Bylaws, each such person shall be indemnified and held harmless by the Company
against any cost or expense and liability (including any sum
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paid in settlement of a claim with the approval of the Company), arising out of
any act or omission to act in connection with the Plan. Costs and expenses to be
indemnified hereunder shall include reasonable attorney's fees and expenses as
incurred, provided that the person being indemnified agrees to repay in full
amounts advanced hereunder in the event of a final determination by a court that
such person is not entitled to indemnification hereunder.
Article 4 Shares
4.1 Number of Shares Available. Subject to Section 4.3, the maximum number
of Shares as to which Awards may be granted is 21,000,000 Shares; provided,
however, that in no event may Incentive Stock Options be granted for the
purchase of more than 20,580,000 Shares; and provided further that no Employee
may be granted Awards following the IPO for more than 2,100,000 Shares during
any three year period. At no time prior to the IPO shall the total number of
Shares issuable upon exercise of all outstanding Options and the total number of
shares provided for under any stock bonus or similar plan of the Company, if
any, exceed 30% of the then outstanding Shares of the Company (including
convertible preferred stock on an as if converted basis), unless a higher
percentage is approved by at least two thirds of the outstanding shares entitled
to vote. The Shares to be delivered under the Plan may consist, in whole or in
part, of authorized but unissued common stock or treasury stock.
4.2 Shares Subject to Terminated Awards. The Shares covered by any
unexercised portions of expired Options may again be subject to new Awards. In
the event the exercise price of an Option is paid in whole or in part through
the delivery of Shares, the gross number of Shares issuable in connection with
the exercise of the Option shall not again be available for the grant of Awards
under the Plan.
4.3 Adjustments. In the event that the Board shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), stock split, reverse stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, reclassification, repurchase, or exchange of securities
of the Company, or other similar corporate transaction or event affects the
Shares such that an adjustment is, in the judgment of the Board, appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Board shall, in such
manner as it may deem equitable, adjust any or all of (i) the number and type of
shares subject to the Plan and which thereafter may be made the subject of
Awards, (ii) the number and type of shares subject to outstanding Awards, and
(iii) the grant, purchase, or exercise price with respect to any Award, or, if
deemed appropriate, make provisions for a cash payment to the holder of an
outstanding Award; provided, however, in each case, that with respect to Awards
of Incentive Stock Options no such adjustment shall be authorized to the extent
that such authority would cause the Plan to violate Section 422(b)(1) of the
Code. In addition, in the event the Company or any Affiliate shall assume
outstanding awards or the right or obligation to make future awards in
connection with the acquisition of another business or another corporation or
business entity, the Board may make such adjustments, not inconsistent with the
terms of the Plan, in the terms of Awards granted to Participants as it shall
deem appropriate in order to achieve reasonable comparability or other equitable
relationship between the assumed awards and the Awards granted to Participants.
The Board also may make such other adjustments as it deems necessary to take
into
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consideration any other event (including accounting changes) if the Board
determines that such adjustment is appropriate to avoid distortion in the
operation of the Plan.
Article 5 Stock Options
5.1 Grant of Option. The Board is hereby authorized to grant (i) Incentive
Stock Options and Non-Qualified Stock Options to Employees, (ii) Non-Qualified
Stock Options to Non-Employee Directors, and (iii) Non-Qualified Stock Options
to Non-Employee Advisors, in each case with such terms and conditions not
inconsistent with the provisions of the Plan, as the Board shall determine.
5.2 Exercise Price. The exercise price per Share purchasable under an
Option shall be determined by the Board at the time of grant; provided that the
exercise price of an Incentive Stock Option shall be not less than 100% of the
Fair Market Value of the Share on the date of grant; and provided further that
the exercise price of an Incentive Stock Option granted to a Ten Percent
Shareholder, shall be not less than 110% of the Fair Market Value of a Share on
the date of grant. On and after the IPO, the exercise price of any Option that
is intended to qualify as performance-based compensation pursuant to Code
Section 162(m), as determined by the Committee, shall be not less than 100% of
the Fair Market Value of a Share on the date of grant, unless the exercise of
such Option is subject to a Performance Target. To the extent permitted by
applicable law, grants of nonqualified stock options made by the Board in
connection with the initial public offering of Shares may have an exercise price
equal to the initial price to the public per Share on the IPO, without regard to
whether that price differs from the Fair Market Value on the date of grant.
5.3 Exercisability.
(a) Except as provided in subsection (b) hereof, an Option Award may
contain such Performance Targets and waiting periods, and shall become
exercisable in such manner and within such period or periods and in such
installments or otherwise, as shall be determined by the Board of Directors.
(b) With respect to Options granted prior to the IPO to Participants who
are residents of California:
(1) Options shall become exercisable at a rate of at least 20%
per year over five years from the date the Option is
granted, subject to reasonable conditions such as continued
employment with the Company.
(2) Unless employment is terminated for cause as defined by
applicable law or the Option Award or a contract of
employment, the right to exercise in the event of
termination of employment, to the extent that the
Participant is otherwise entitled to exercise on the date
employment terminates, shall be (i) at least six months from
the date of termination if termination was caused by
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death or disability, and (ii) at least thirty days from the
date of termination if termination was caused by some reason
other than death or disability;
(3) An exercise period of not more than 120 months from the date
the Option is granted shall be provided.
This provision is intended to comply with Rule 260.140.41(f) promulgated
under the California Corporate Securities Law of 1968, and that if such Rule be
repealed, this provision shall be of no more effect. Options granted on or after
the IPO shall not be subject to the provisions of this subsection (b).
5.4 Method of Exercise. The Board shall determine the method by which, and
the form (including, without limitation, cash, Shares, or other property, or any
combination thereof, having a Fair Market Value on the exercise date equal to
the relevant exercise price), in which payment of the Option exercise price may
be made including, on and after the IPO, payment in accordance with a cashless
exercise program under which the Participant may deliver to the Company or its
designated broker an executed irrevocable option exercise form together with
instructions to a broker-dealer to sell or margin a sufficient portion of the
Shares and deliver the sale or margin proceeds directly to the Company to pay
the exercise price.
5.5 Incentive Stock Options. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions of Code
Section 422 and any regulations promulgated thereunder.
5.6 Incentive Stock Option Limitations. To the extent that the aggregate
Fair Market Value (determined as of the time of grant) of the Shares with
respect to which Incentive Stock Options are exercisable for the first time by
the Participant during any calendar year under the Plan and/or any other stock
option plan of the Company or any Affiliate exceeds $100,000, such Options shall
be treated as Non-Qualified Stock Options. Should any of the foregoing
provisions not be necessary in order for the Options to quality as Incentive
Stock Options, or should any additional provisions be required, the Board may
amend the Plan accordingly, without the necessity of obtaining the approval of
the shareholders of the Company, except as otherwise required by law.
5.7 Delivery of Financial Statements. Prior to the IPO, the Company shall
deliver annually to each Participant such financial statements of the Company as
may be required under applicable federal and state securities laws.
Article 6 Other Share-Based Awards
6.1 Grant of Other Awards. Other Awards, in the form of, valued in whole or
in part by reference to, or otherwise based on, Shares, including but not
limited to stock appreciation rights and restricted stock, may be granted either
alone or in addition to or in conjunction with other Awards in such amounts and
having such terms and conditions as the Board may determine. Notwithstanding the
foregoing, if the Committee determines that any Award granted on and after the
IPO shall qualify as performance-based compensation under
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Section 162(m) of the Code, the vesting, exercise or lapse of restrictions of
such Award shall be contingent upon the Participant's achievement of a
Performance Target or Targets, and the grant of such Award and the establishment
of the Performance Targets by the Committee shall be made during the period
required under Section 162(m) of the Code.
Article 7 Terms Applicable to All Awards Granted Under the Plan
7.1 Award Agreement. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Board
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award. If there is any conflict between the provisions of
an Award Agreement and the terms of the Plan, the terms of the Plan shall
control.
7.2 Awards May Be Granted Separately or Together; No Limitations on Other
Awards. Awards may be granted either alone or in addition to, in tandem with, or
in substitution for any other Award or any award granted under any other plan of
the Company or any Affiliate, and the terms and conditions of an Award need not
be the same with respect to each Participant.
7.3 Acceleration. The Board is authorized to accelerate the exercisability
of any Option or the vesting of any Award in its discretion, including, without
limitation, upon a change of control of the Company (as determined by the
Board), the sale by the Company of all or substantially all its assets to an
unrelated party, or the liquidation and dissolution of the Company.
7.4 Limitations on Transfer of Awards. Except as determined otherwise by
the Board, the rights and interest of a Participant under the Plan may not be
assigned, alienated, sold, or transferred other than by will or the laws of
descent and distribution; provided, however, that a Participant may, at the
discretion of the Board, subject to compliance with applicable securities laws,
and only to the extent permitted by state or federal securities laws, be
entitled (i) to designate a beneficiary or beneficiaries to exercise his or her
rights, and to receive any property distributable, with respect to any Award
upon the death of the Participant, and (ii) to transfer without consideration an
Award other than an Incentive Stock Option to such Participant's children,
grandchildren and/or spouse (or to one or more trusts for the principal benefit
of any such family members or to one or more partnerships in which any such
family members are the only partners). Except as determined otherwise by the
Board or except to the extent that a transfer of an Award has been permitted by
the Board hereunder, during the lifetime of a Participant, only the Participant
personally, or if permissible under applicable law, such individual's guardian
or legal representative, may exercise rights under the Plan. No Award, and no
right under any such Award, may be pledged, alienated, attached, or otherwise
encumbered, and any purported pledge, alienation, attachment, or encumbrance
thereof shall be void and unenforceable against the Company or any Affiliate.
7.5 Taxes. The Company shall be entitled, if the Board deems it necessary
or desirable, to withhold (or secure payment from the Participant in lieu of
withholding) the
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amount of any withholding or other tax required by law to be withheld or paid by
the Company in connection with such Participant's Award, and the Company may
defer issuance of the Shares upon the exercise of an Award unless indemnified to
its satisfaction against any liability for any such tax. The Board may prescribe
in each Award Agreement one or more methods by which the Participant will be
permitted or required to satisfy his or her tax withholding obligation, which
methods may include, without limitation, the payment of cash by the Participant
to the Company and the withholding from the Award, at the appropriate time, of a
number of Shares sufficient, based upon the Fair Market Value of such Shares, to
satisfy such tax withholding requirements.
7.6 Rights and Status of Recipients. No person shall have any right to be
granted an Award. Neither the Plan nor any action taken hereunder shall be
construed as giving any Employee any right to be retained in the employ of the
Company or any Affiliate, the grant of an Award to a Director shall not confer
any right on such Director to continue as a director of the Company, and the
grant of an Award to a Non-Employee Advisor shall not confer any right on such
Non-Employee Advisor or a business entity of which such Non-Employee Advisor is
a principal to continue as a Non-Employee Advisor.
7.7 Awards Not Includable for Benefit Purposes. Income recognized by a
Participant pursuant to the Plan shall not be included in the determination of
benefits under any employee pension benefit plan (as such term is defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended)
or group insurance or other benefit plans applicable to the Participant which
are maintained by the Company or any Affiliate, except as may be provided under
the terms of such plans or determined by resolution of the Board.
7.8 Share Certificates; Representation by Participants; Registration
Requirements. All certificates for Shares delivered pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Board may deem advisable under the Plan or the rules,
regulations, and other requirements of the Securities and Exchange Commission
and any applicable federal or state securities laws, and legends may be put on
any such certificates to make appropriate reference to such restrictions. The
Board may require each Participant to represent to the Company in writing that
such Participant is acquiring Shares without a view to the distribution thereof.
Each Award shall be subject to the requirement that, if at any time (i) the
registration or qualification of Shares relating to such Award on any securities
exchange or under any state or federal securities laws, or (ii) the approval of
any securities exchange or regulatory body is necessary or desirable as a
precondition thereto, the Award or the issuance of Shares in connection
therewith may not be consummated unless such listing, registration,
qualification or approval shall have been effected.
Article 8 Amendment and Termination; Shareholder Approval
8.1 Amendment. The Board may amend, alter, suspend, discontinue, or
terminate the Plan at any time; provided, however, that no amendment,
alteration, suspension, discontinuation or termination of the Plan shall in any
manner (except as otherwise provided in this Article VIII) adversely affect any
Award, without the consent of the Participant; and
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<PAGE>
further provided, however, that shareholder approval of any amendment shall be
obtained if determined by the Board and if otherwise required (i) by the Code
and any rules promulgated thereunder in order to allow Incentive Stock Options
to be granted under the Plan; (ii) to enable the Company to comply with the
provisions of Code Section 162(m) on and after the IPO; or (iii) by the listing
requirement of the principal securities exchange or market on which the Shares
are then traded, if applicable.
8.2 Termination. The Plan shall terminate at the close of business on the
tenth anniversary of the earlier of the date on which the Plan is adopted or the
date on which the Plan is approved by the shareholders; provided, however, the
Board shall have the right and the power to terminate the Plan at any time prior
thereto. No Award shall be granted under the Plan after such termination, but
such termination shall not have any other effect, and any Award outstanding at
the time of such termination may be exercised after termination at any time
prior to the expiration date of such Award to the same extent such Award would
have been exercisable had the Plan not terminated.
8.3 Shareholder Approval. If determined to be appropriate by the Committee
in order for the Plan to comply with the provisions of Section 162(m) of the
Code, the Plan shall be submitted for shareholder approval no later than the
first shareholders meeting at which Directors are to be elected that occurs in
the year containing the fourth anniversary of the IPO.
Article 9 General Provisions
9.1 Effective Date of the Plan. The Plan shall be effective as of the date
of its adoption by the Board.
9.2 Unfunded Status of Plan. The Plan shall be unfunded and shall not
create (or be construed to create) a trust or a separate fund or funds. The Plan
shall not establish any fiduciary relationship between the Company and any
Participant or other person. To the extent any person holds any right by virtue
of a grant under the Plan, such right shall be no greater than the right of an
unsecured general creditor of the Company.
9.3 Miscellaneous. The Plan and all determinations made and actions taken
pursuant to the Plan shall be governed by the laws of the state of Florida and
applicable federal laws. Section headings are used in the Plan for convenience
only, do not constitute a part of the Plan, and shall not be deemed in any way
to be relevant to the interpretation of the Plan or any provision thereof.
Whenever possible, each provision in the Plan and every Award shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Plan or any Award shall be held to be prohibited by
or invalid under applicable law, then (i) such provision shall be deemed amended
to accomplish the objectives of the provision as originally written to the
fullest extent permitted by law and (ii) all other provisions of the Plan and
every other Award shall remain in full force and effect.
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Exhibit 5
FOLEY & LARDNER
ATTORNEYS AT LAW
CHICAGO FIRSTAR CENTER SAN DIEGO
JACKSONVILLE 777 EAST WISCONSIN AVENUE SAN FRANCISCO
LOS ANGELES MILWAUKEE, WISCONSIN 53202-5367 TALLAHASSEE
MADISON TELEPHONE (414) 271-2400 TAMPA
MILWAUKEE FACSIMILE (414) 297-4900 WASHINGTON, D.C.
ORLANDO WEST PALM BEACH
SACRAMENTO
March 27, 2000
Mortgage.com, Inc.
8751 Broward Boulevard, Fifth Floor
Plantation, FL 33324
Ladies & Gentlemen:
We have acted as counsel for Mortgage.com, Inc., a Florida
corporation (the "Company"), in connection with the preparation of a Form S-8
Registration Statement (the "Registration Statement") to be filed by the Company
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), relating to 19,899,128 shares of the Company's
Common Stock, $.01 par value per share (the "Common Stock"), which may be issued
or acquired pursuant to the Amended and Restated Mortgage.com, Inc. Stock Option
Plan (the "Plan").
In this regard, we have examined: (a) the Plan; (b) signed copies
of the Registration Statement; (c) the Company's Articles of Incorporation and
Bylaws, as amended to date; (d) resolutions of the Company's Board of Directors
relating to the Plan; and (e) such other documents and records as we have deemed
necessary to enable us to render this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation in good standing under the laws
of the State of Florida.
2. The shares of Common Stock, when issued pursuant to the terms
and conditions of the Plan, and as contemplated in the Registration Statement,
will be validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
"experts" within the meaning of Section 11 of the Securities Act or within the
category of persons whose consent is required by Section 7 of the Securities
Act.
Very truly yours,
/s/ FOLEY & LARDNER
FOLEY & LARDNER
Exhibit 23.1
Consent of Independent Auditors
The Board of Directors and Shareholders
Mortgage.com, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-8 dated March 28, 2000 of Mortgage.com, Inc. of our report, dated
February 11, 2000, except for note 17, which is as of March 27, 2000, related to
the consolidated balance sheets of Mortgage.com, Inc. as of December 31, 1999
and 1998 and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1999, which report appears in the December 31, 1999,
annual report on Form 10-K of Mortgage.com, Inc.
/s/KPMG LLP
Ft. Lauderdale, FL
March 28, 2000
