AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON April 21, 2000
REGISTRATION NO. 333-
===============================================================================
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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PHONE.COM, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware 94-3219054
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
800 CHESAPEAKE DRIVE
REDWOOD CITY, CALIFORNIA 94063
(650) 562-0200
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Principal Executive Offices)
ARABESQUE COMMUNICATIONS, INC. 1998 STOCK PLAN
ONEBOX.COM, INC. 1999 STOCK PLAN
(Full Titles of the Plans)
Alain Rossmann
Chairman and Chief Executive Officer
Phone.com, Inc.
800 Chesapeake Drive
Redwood City, California 94063
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPY TO:
Kenton J. King
Skadden, Arps, Slate, Meagher & Flom LLP
Suite 220
525 University Avenue
Palo Alto, California 94301
(650) 470-4500
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE (1) PRICE (2) FEE (2)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arabesque Communications, Inc. 50,122 $7.6897 $295,620 $78.04
1998 Stock Plan
common stock,
par value $0.001 per share
- -------------------------------------------------------------------------------------------------
Onebox.com, Inc. 261,520 $38.27 $1,252,156 $330.57
1999 Stock Plan
common stock,
par value $0.001 per share
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Shares of Phone.com, Inc. common stock par value $0.001 per share are
issuable pursuant to the plans at various exercise prices. The prices
listed in this column are the highest per share exercise prices and
therefore is not the sole basis for determining Proposed Maximum
Aggregate Offering Price.
(2) Estimated solely for purposes of calculating the registration fee
Pursuant to Rule 457(h)(1), under the Securities Act of 1933, as
amended (the "Securities Act").
------------------
In addition pursuant to pursuant to Rule 416(c) under the
Securities Act, this registration statement also covers and indeterminate
amount of interests to be offered or sold pursuant to the employee benefit
plan(s) described herein.
The registration statement will become effective upon filing in
accordance with Rule 462(a) under the Securities Act.
PART I
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
* The document(s) containing the information specified in Part I of Form
S-8 have been or will be sent or given to employees as specified by Rule
428(b)(1) under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The Securities and Exchange Commission ("the SEC") requires us to
incorporate by reference" certain of our publicly-filed documents into this
prospectus, which means that information included in those documents is
considered part of the prospectus. Information that we file with the SEC
after the effective date of this prospectus will automatically update and
supersede this information. We incorporate by reference the documents
listed below and future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
("the Exchange Act"), until we terminate the effectiveness of this
registration statement.
The following documents filed with the SEC are hereby incorporated
by reference:
(a) The Company's registration statement on Form S-1 filed
with the SEC on October 28, 1999 (No. 333-89879), which contains audited
consolidated financial statements as of June 30, 1998 and 1999, and for
each of the years in three-year period ended June 30, 1999.
(b) The Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1999 and the Company's Quarterly
Report on Form 10-Q for the quarterly period ended December 31, 1999;
Current Report on Form 8-K filed on November 3, 1999, Current Report on
Form 8-K filed on February 24, 2000 and Current Report on Form 8-K filed on
March 17, 2000.
(c) The description of our Common Stock is in our
registration statement on Form S-1 filed with the SEC on March 29,1999
(File No. 333-75219), including any amendments or reports filed for the
purpose of updating such description.
Item 4. Description of the Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Our Certificate of Incorporation reduces the liability of a
director to the corporation or its stockholders for monetary damages for
breaches of his or her fiduciary duty of care to the fullest extent
permissible under Delaware law. Our By-laws further provide for
indemnification of corporate agents to the maximum extent permitted by the
Delaware General Corporation Law. In addition, we have entered into
indemnification agreements with our officers and directors.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See Index to Exhibits.
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
Registration Statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in 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, 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. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Redwood City, State of California, on April 21,
2000.
PHONE.COM, INC.
By: \s\ Alan Black
________________________________
Name: Alan Black
Title: Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on April 21, 2000.
SIGNATURE TITLE
\s\ Alain Rossmann Chief Executive Officer and Chairman
------------------------ (principal executive officer)
Alain Rossmann
\s\ Alan Black Vice President, Finance and
------------------------ Administration, Chief Financial
Alan Black Officer and Treasurer
(principal financial and
accounting officer)
\s\ Roger Evans Director
-----------------------
Roger Evans
\s\ Charles Parrish Executive Vice President and Director
------------------------
Charles Parrish
\s\ David Kronfeld Director
------------------------
David Kronfeld
\s\ Andrew Verhalen Director
------------------------
Andrew Verhalen
\s\ Reed Hundt Director
------------------------
Reed Hundt
EXHIBIT INDEX
EXHIBIT
NUMBER
5.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
23.1* Consent of Skadden, Arps, Slate Meagher & Flom LLP
(included in Exhibit 5.1)
23.2* Consent of KPMG LLP, independent auditors
24.1* Power of Attorney
99.1* Arabesque Communications, Inc., 1998 Stock Plan
99.2* Onebox.com, Inc., 1999 Stock Plan
- -----------------------
* Filed herewith.
Exhibit 5.1
April 21, 2000
Phone.com, Inc.
800 Chesapeake Drive
Redwood City, California 94063
Re: Registration Statement on Form S-8 of Phone.com, Inc.
-----------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Phone.com, Inc., a Delaware
corporation (the "Company"), in connection with the proposed issuance by
the Company of up to 311,642 shares of common stock, par value $0.001 per
share of the Company (the "Shares"), pursuant to the AtMotion.com Inc.
(formerly Arabesque Communications, Inc.) 1998 Stock Plan and the
Onebox.com, Inc. 1999 Stock Plan (collectively the "Plans").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Securities Act").
In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Company's Registration Statement on Form S-8,
relating to the Shares, filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act on April 21, 2000 (together
with all exhibits thereto the "Registration Statement"), (ii) the Amended
and Restated Certificate of Incorporation of the Company, as currently in
effect, (iii) the Amended and Restated By-Laws of the Company, as currently
in effect, (iv) the form of common stock certificate as filed with the
Securities Exchange Commission as an exhibit to Form S-1A, on May 24, 1999
(the "Form of Common Stock Certificate"), (v) the Plans; and (vi) the form
of option agreement between the Company and the employees, directors and
officers receiving options (the "Option Agreements"). We have also examined
originals or copies, certified or otherwise identified to our satisfaction,
of such records of the Company and such agreements, certificates of
officers or other representatives of the Company and others, and such other
documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. In
making our examination of documents executed or to be executed by parties
other than the Company, we have assumed that such parties had the power,
corporate or other, to enter into and perform all obligations thereunder
and have also assumed the due authorization by all requisite action,
corporate or other, and execution and delivery by such parties of such
documents and the validity and binding effect thereof. We have further
assumed (i) that each of the Option Agreements to be entered into between
the Company and the employees, directors and officers receiving options
under the Plans will conform to the form of agreement examined by us, (ii)
that no options will be granted under the Plans with exercise prices below
the then par value of the Shares and (iii) that no adjustment to the
exercise price of any option will result in a reduction of the price per
Share issuable upon the exercise of any option below the then par value of
the Shares. As to any facts material to the opinions expressed herein which
we have not independently established or verified, we have relied upon oral
or written statements and representations of officers and other
representatives of the Company and others.
Members of our firm are admitted to the Bar in the State of
California, and we do not express any opinion as to the laws of any other
jurisdiction other than the General Corporation Law of the State of
Delaware and the laws of the United States of America to the extent
specifically referred to herein.
Based upon and subject to the foregoing, we are of the opinion that
the Shares to be issued under the Plans have been duly authorized, and,
when the Shares have been issued, delivered and paid for upon exercise of
options duly granted pursuant to the terms of the Plans and the Option
Agreements, and the Form of Common Stock Certificate representing Shares
that, if manually signed by an authorized officer of the transfer agent and
registrar for the Shares and registered by such transfer agent and
registrar, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission
as Exhibit 5.1 to the Registration Statement. In giving such consent, we do
not thereby admit that we are included in the category of persons whose
consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Exhibit 23.2
CONSENT OF KPMG LLP, INDEPENDENT AUDITORS
We consent to incorporation herein by reference of our report dated July
19, 1999, except as to Note 8 which is as of October 29, 1999, relating to
the consolidated balance sheets of Phone.com, Inc. and subsidiaries as of
June 30, 1998 and 1999, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in
the three-year period ended June 30, 1999, which report appears in the
registration statement (No. 333-89879) on Form S-1 of Phone.com, Inc.
/s/ KPMG LLP
Mountain View, California
April 20, 2000
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Alan Black and Linda
Speer, jointly and severally, his or her attorneys-in-fact and agents,
each with the power of substitution and resubstitution, for him or her and
in his or her name, place or stead, in any and all capacities, to sign any
amendments to this Registration Statement on Form S-8, and to file such
amendments, together with exhibits and other documents in connection
therewith, with the Securities and Exchange Commission, granting to each
attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully as he or she might or could do in person, and ratifying
and confirming all that the attorneys-in-fact and agents, or his or her
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirement of the Securities Act of 1933, the
undersigned has herein-to subscribed this power of attorney this 21st
day of April, 2000.
/s/ Alain Rossmann
____________________________________________
Alain Rossmann
/s/ Alan Black
____________________________________________
Alan Black
/s/ Roger Evans
____________________________________________
Roger Evans
/s/ Charles Parrish
____________________________________________
Charles Parrish
/s/ David Kronfeld
____________________________________________
David Kronfeld
/s/ Andrew Verhalen
____________________________________________
Andrew Verhalen
/s/ Reed Hundt
____________________________________________
Reed Hundt
Exhibit 99.1
ARABESQUE COMMUNICATIONS, INC.
1998 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are to
attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees,
Directors and Consultants and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time
of grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Administrator" means the Board or any of its Committees
as shall be administering the Plan in accordance with Section 4 hereof.
(b) "Applicable Law" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986,
as amended.
(e) "Committee" means a committee of Directors appointed by
the Board in accordance with section 4 hereof.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Arabesque Communications, Inc., a
California corporation.
(h) "Consultant" means any person who is engaged by the
Company or any Parent or Subsidiary to render consulting or advisory
services to such entity.
(i) "Director" means a member of the Board of Directors of
the Company.
(j) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider shall not cease to be an Employee in the case
of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no
such leave may exceed ninety days, unless reemployment upon expiration of
such leave is guaranteed by statute or contract. If reemployment upon
expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held
by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director's fee by the Company shall
be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation
the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system for the last market trading day prior to the time
of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices
for the Common Stock on the last market trading day prior to the day of
determination; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator.
(n) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code.
(o) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
(p) "Officer" means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the
Plan.
(r) "Option Agreement" means a written or electronic
agreement between the Company and an optionee evidencing the terms and
conditions of an individual Option grant. The Option Agreement is subject
to the terms and conditions of the Plan
(s) "Option Exchange Program" means a program whereby
outstanding Options are exchanged for Options with a lower exercise price.
(t) "Optioned Stock" means the Common Stock subject to an
Option or a Stock Purchase Right.
(u) "Optionee" means the holder of an outstanding Option or
Stock Purchase Right granted under the Plan.
(v) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(w) "Plan" means this 1998 Stock Plan.
(x) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11 below.
(y) "Section 16(b)" means Section 16(b) of the Securities
Exchange Act of 1934, as amended.
(z) "Service Provider" means an Employee, Director or
Consultant.
(aa) "Share" means a share of the Common Stock, as adjusted
in accordance with Section 12 below.
(bb) "Stock Purchase Right" means a right to purchase Common
Stock pursuant to Section 11 below.
(cc) "Subsidiary" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section
12 of the Plan, the maximum aggregate number of Shares which may be subject
to option and sold under the Plan is 1,500,000 Shares. The Shares may be
authorized but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered
pursuant to an Option Exchange Program, the unpurchased Shares which were
subject thereto shall become available for future gant or sale under the
Plan (unless the Plan has terminated). However, Shares that have actually
been issued under the Plan, upon exercise of either an Option or Stock
Purchase Right, shall not be returned to the Plan and shall not become
available for future distribution under the Plan, except that if Shares of
Restricted Stock are repurchased by the Company at their original purchase
price, such Shares shall become available for future grant under the Plan.
4. Administration of the Plan.
(a) Administrator. The Plan shall be administered by the
Board or a Committee appointed by the Board, which Committee shall be
constituted to comply with Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions
of the Plan and, in the case of a Committee, the specific duties delegated
by the Board to such Committee, and subject to the approval of any relevant
authorities, the Administrator shall have the authority in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options
and Stock Purchase Rights may from time be granted hereunder;
(iii) to determine the number of Shares to be covered
by each such award granted hereunder;
(iv) to approve forms of agreement for use under the
Plan;
(v) to determine the terms and conditions, of any
Option or Stock Purchase Right granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options or Stock Purchase Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or
Stock Purchase Right or the Common Stock relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall
determine;
(vi) to determine whether and under what
circumstances an Option may be settled in cash under subsection 9(e)
instead of Common Stock;
(vii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common
Stock covered by such Option has declined since the date the Option was
granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;
(x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of
Shares having a Fair Market Value equal to the amount required to be
withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined. All elections by Optionees to have Shares withheld for this
purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and
(xi) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.
5. Eligibility.
(a) Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Service Providers. Incentive Stock Options may be granted
only to Employees. Designation as an Incentive Stock Option is subject to
the $100,000 per year limitation detailed in the following paragraph (b):
(b) Each Option shall be designated in the Option Agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate
Fair Market Value of the Shares (determined as of the time the Option with
respect to such Shares is granted) with respect to which Incentive Stock
Options are exercisable for the first time by the Optionee during any
calendar year (under all plans of the Company and any Parent or Subsidiary)
exceeds $100,000, such Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5(b), Incentive Stock Options shall
be taken into account in the order in which they were granted. The Fair
Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.
(c) Neither the Plan nor any Option or Stock Purchase Right
shall confer upon any Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor shall
it interfere in any way with his or her right or the Company's right to
terminate such relationship at any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon its adoption
by the Board. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 14 of the Plan.
7. Term of Option. The term of each Option shall be stated in the
Option Agreement, provided, however, that the term shall be no more than
ten (10) years from the date of grant thereof. In the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted,
owns stock representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term
of the Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued
upon exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of
grant of such Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any other Employee, the per
Share exercise price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a Service Provider who, at the
time of grant of such Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of the Grant.
(B) granted to any other Service Provider, the
per Share exercise price shall be no less than 85% of the Fair Market Value
per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price other than as required above
pursuant to a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant). Such consideration may
consist of (1) cash, (2) check, (3) promissory note (for Employees and
Directors only), (4) other Shares which (x) in the case of Shares acquired
upon exercise of an Option, have been owned by the Optionee for more than
six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares
as to which such Option shall be exercised, (5) consideration received by
the Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (6) any combination of the foregoing methods
of payment. In making its determination as to the type of consideration to
accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise: Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms hereof
at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Except in the case of Options
granted to Officers, Directors and Consultants, Options shall become
exercisable at a rate of no less than 20% per year over five (5) years from
the date the Options are granted. All options granted hereunder shall be
eligible for early exercise, if the Option Agreement so provides. Unless
the Administrator provides otherwise, vesting of Options granted hereunder
shall be tolled during any unpaid leave of absence. An Option may not be
exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with
the Option Agreement) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Option
Agreement and the Plan. Shares issued upon exercise of an Option shall be
issued in the name of the Optionee or, if requested by the Optionee, in the
name of the Optionee and his or her spouse. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to
the Shares, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares thereafter available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, such Optionee may exercise his or
her Option within such period of time as is specified in the Option
Agreement (of at least thirty (30) days) to the extent that the Option is
vested on the date of termination (but in no event later than the
expiration of the term of the Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for three (3) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as
to his or her entire Option, the Shares covered by the unvested portion of
the Option shall revert to the Plan. If, after termination, the Optionee
does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in
the Option Agreement (of at least six (6) months) to the extent the Option
is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the
Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (of at least six (6) months) to the
extent that the Option is vested on the date of death (but in no event
later than the expiration of the term of such Option as set forth in the
Option Agreement) by the Optionee's estate or by a person who acquires the
right to exercise the Option by bequest or inheritance. In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable
for twelve (12) months following the Optionee's termination. If, at the
time of death, the Optionee is not vested as to the entire Option, the
Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time that such offer is
made.
10. Non-Transferability of Options and Stock Purchase Rights. The
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will
or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under
the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing or electronically of the
terms, conditions and restrictions related to the offer, including the
number of Shares that such person shall be entitled to purchase, the price
to be paid, and the time within which such person must accept such offer.
The terms of the offer shall comply in all respects with Section 260.140.42
of Title 10 of the California Code of Regulations. The offer shall be
accepted by execution of a Restricted Stock purchase agreement in the form
determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company
a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's service with the Company for any reason
(including death or disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock purchase agreement shall be the original
price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall
lapse at such rate as the Administrator may determine. Except with respect
to Shares purchased by Officers, Directors and Consultants, the repurchase
option shall in no case lapse at a rate of less than 20% per year over five
(5) years from the date of purchase.
(c) Other Provisions. The Restricted Stock purchase
agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its
sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right
is exercised, the purchaser shall have the rights equivalent to those of a
shareholder and shall be a shareholder when his or her purchase is entered
upon the records of the duly authorized transfer agent of the Company. No
adjustment shall be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as
provided in Section 12 of the Plan.
12. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common
Stock covered by each outstanding Option or Stock Purchase Right, and the
number of shares of Common Stock which have been authorized for issuance
under the Plan but as to which no Options or Stock Purchase Rights have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option or Stock Purchase Right, as well as the price per
share of Common Stock covered by each such outstanding Option of Stock
Purchase Right, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any convertible securities
of the Company shall not be deemed to have ben "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to
an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify
each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for
an Optionee to have the right to exercise his or her Option or Stock
Purchase Right until fifteen (15) days prior to such transaction as to all
of the Optioned Stock covered thereby, including Shares as to which the
Option or Stock Purchase Right would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option of Stock
Purchase Right shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option
or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all
of the assets of the Company, each outstanding Option and Stock Purchase
Right shall be assumed or an equivalent option or right substituted by the
successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to assume
or substitute for the Option or Stock Purchase Right, the Optionee shall
fully vest in and have the right to exercise the Option or Stock Purchase
Right as to all of the Optioned Stock, including Shares as to which it
would not otherwise be vested or exercisable. If an Option or Stock
Purchase Right becomes fully vested and exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that
the Option or Stock Purchase Right shall be fully exercisable for a period
of fifteen (15) days from the date of such notice, and the Option or Stock
Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase right shall be
considered assumed if, following the merger or sale of assets, the option
or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately
prior to the merger or sale of assets, the consideration (whether stock,
cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date
of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the
outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon
the exercise of the Option or Stock Purchase Right, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.
13. Time of Granting Options and Stock Purchase Rights. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the
date on which the Administrator makes the determination granting such
Option or Stock Purchase Right, or such other date as is determined by the
Administrator. Notice of the determination shall be given to each Service
Provider to whom an Option or Stock Purchase Right is so granted within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Board shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to
comply with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights
of any Optionee, unless mutually agreed otherwise between the Optionee and
the Administrator, which agreement must be in writing and signed by the
Optionee and the Company. Termination of the Plan shall not affect the
Administrator's ability to exercise the powers granted to it hereunder with
respect to Options granted under the Plan prior to the date of such
termination.
15. Conditions Upon Issuance of Shares:
(a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares shall comply with Applicable Laws and
shall be further subject to the approval of counsel for the Company with
respect to such compliance.
(b) Investment Representations. As a condition to the
exercise of an Option, the Administrator may require the person exercising
such Option to represent and warrant at the time of any such exercise that
the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel
for the Company, such a representation is required.
16. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.
17. Reservation of Shares. The Company, during the term of this
Plan, shall at all times reserve and keep available such number of Shares
as shall be sufficient to satisfy the requirements of the Plan.
18. Shareholder Approval. The Plan shall be subject to approval by
the shareholders of the Company within twelve (12) months after the date
the Plan is adopted. Such shareholder approval shall be obtained in the
degree and manner required under Applicable Laws.
19. Information to Optionees and Purchasers. The Company shall
provide to each Optionee and to each individual who acquires Shares
pursuant to the Plan, not less frequently than annually during the period
such Optionee or purchaser has one or more Options or Stock Purchase Rights
outstanding, and, in the case of an individual who acquires Shares pursuant
to the Plan, during the period such individual owns such Shares, copies of
annual financial statements. The Company shall not be required to provide
such statements to key employees whose duties in connection with the
Company assure their access to equivalent information.
EXHIBIT C-6
PROMISSORY NOTE
$___________________ ______________________, CA
____________________, 19___
FOR VALUE RECEIVED, _________________________________ promises to
pay to AtMotion Inc. (formerly Arabesque Communications, Inc.) (the
"Company"), or order, the principal sum of
_________________________________ ($____________), together with interest
on the unpaid principal hereof from the date hereof at the rate of
__________________ percent (____%) per annum, compounded semiannually.
Principal and interest shall be due and payable on the fourth
anniversary of the date of this Note. Should the undersigned fail to make
full payment of principal or interest for a period of 10 days or more after
the due date thereof, the whole unpaid balance on this Note of principal
and interest shall become immediately due at the option of the holder of
this Note. Payments of principal and interest shall be made in lawful money
of the United States of America. The undersigned may at any time prepay all
or any portion of the principal or interest owing hereunder.
This Note is subject to the terms of the Option, dated as of
______________. This Note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith
and is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event the undersigned shall cease to be an employee of the
Company for any reason, this note shall, at the option of the Company, be
accelerated, and the whole unpaid balance on this Note of principal and
accrued interest shall be immediately due and payable.
If the undersigned shall default in the payment of amounts
hereunder when due, the holder of this Note shall be entitled to payment by
the undersigned of all costs of collection, including, without limitation,
reasonable attorneys' fees and costs incurred in connection with such
collection efforts, whether or not suit on this note is filed. The make
waives presentment for payment, protest, notice of protest and notice of
non- payment of this Note. This Note shall be governed by the laws of the
State of California as they apply to contracts entered into and wholly to
be performed within such state.
----------------------------------
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Print Name
EXHIBIT C-7
SECURITY AGREEMENT
This Security Agreement is made as of ______________________,
19____ between AtMotion Inc. (formerly Arabesque Communications, Inc.)
("Pledgee"), and _______________________________________ ("Pledgor").
Recitals
Pursuant to Pledgor's election to purchase Shares under the Option
Agreement dated ______________________, 19____ (the "Option"), between
Pledgor and Pledgee under Pledgee's 1998 Stock Plan, and Pledgor's election
under the terms of the Option to pay for such shares with his promissory
note (the "Note"), Pledgor has purchased ____________ shares of Pledgee's
Common Stock (the "Shares") at a price of $_______ per share, for a total
purchase price of $_______. The Note and the obligations thereunder are as
set forth in Exhibit C-6 to the Options.
NOW, THEREFORE, it is agreed as follows:
I0. Creation and Description of Security Interest. In consideration
of the transfer of the Shares to Pledgor under the Option Agreement,
Pledgor, pursuant to the California Commercial Code, hereby pledges all of
such Shares (herein sometimes referred to as the "Collateral") represented
by certificate number _______, duly endorsed in blank or with executed
stock powers, and herewith delivers said certificate to the Secretary of
Pledgee ("Pledgeholder"), who shall hold said certificate subject to the
terms and conditions of this Security Agreement.
The pledged stock (together with an executed blank stock assignment
for use in transferring all or a portion of the Shares to Pledgee if, as
and when required pursuant to this Security Agreement) shall be held by the
Pledgeholder as security for the repayment of the Note, and any extensions
or renewals thereof, to be executed by Pledgor pursuant to the terms of the
Option, and the Pledgeholder shall not encumber or dispose of such Shares
except in accordance with the provisions of this Security Agreement.
II0. Pledgor's Representations and Covenants. To induce Pledgee to
enter into this Security Agreement, Pledgor represents and covenants to
Pledgee, its successors and assigns as follows:
1. Payment of Indebtedness. Pledgor will pay the principal
sum of the Note secured hereby, together with interest thereon, at the time
and in the manner provided in the Note.
2. Encumbrances. The Shares are free of all other
encumbrances, defenses and liens, and Pledgor will not further encumber the
shares without the prior written consent of Pledgee.
3. Margin Regulations. In the event that Pledgee's Common
Stock is now or later becomes margin-listed by the Federal Reserve Board
and Pledgee is classified as "lender" within the meaning of the regulations
under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation
G"), Pledgor agrees to cooperate with Pledgee in making any amendments to
the Note or providing any additional collateral as may be necessary to
comply with such regulations.
III0 Voting Rights. During the term of this pledge and so long as
all payments of principal and interest are made as they become due under
the terms of the Note, Pledgor shall have the right to vote all of the
Shares pledged hereunder.
IV0 Stock Adjustments. In the event that during the term of the
pledge any stock dividend, reclassification, readjustment or other changes
are declared or made in the capital structure of Pledgee, all new,
substituted and additional shares or other securities issued by reason of
any such change shall be delivered to and held by the Pledgee under the
terms of this Security Agreement in the same manner as the Shares
originally pledged hereunder. In the event of substitution of such
securities, Pledgor, Pledgee and Pledgeholder shall cooperate and execute
such documents as are reasonable so as to provide for the substitution of
such Collateral and, upon such substitution, references to "Shares" in ths
Security Agreement shall include the substituted shares of capital stock of
Pledgor as a result thereof.
V0 Options and Rights. In the event that, during the term of this
pledge, subscription Options or other rights or options shall be issued in
connection with the pledged Shares, such rights, Options and options shall
be the property of Pledgor and, if exercised by Pledgor, all new stock or
other securities so acquired by Pledgor as it relates to the pledged Shares
then held by Pledgeholder shall be immediately delivered to Pledgeholder,
to be held under the terms of this Security Agreement in the same manner as
the Shares pledged.
V10 Default. Pledgor shall be deemed to be in default of the Note
and of this Security Agreement in the event:
1. Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
2. Pledgor fails to perform any of the covenants set forth
in the Option or contained in this Security Agreement for a period of 10
days after written notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee
shall have the right to accelerate payment of the Note upon notice to
Pledgor, and Pledgee shall thereafter be entitled to pursue its remedies
under the California Commercial Code.
VII. Release of Collateral. Subject to any applicable contrary
rules under Regulation G, there shall be released from this pledge a
portion of the pledged Shares held by Pledgeholder hereunder upon payments
of the principal of the note. The number of the pledged Shares which shall
be released shall be that number of full Shares which bears the same
proportion to the initial number of Shares pledged hereunder as the payment
of principal bears to the initial full principal amount of the Note.
VIII. Withdrawal or Substitution of Collateral. Pledgor shall not
sell, withdraw, pledge, substitute or otherwise dispose of all or any part
of the Collateral without the prior written consent of Pledgee.
IX. Term. The within pledge of Shares shall continue until the
payment of all indebtedness secured hereby, at which time the remaining
pledged stock shall be promptly delivered to Pledgor, subject to the
provisions for prior release of a portion of the collateral as provided in
paragraph 7 above.
X0. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed
for the property of Pledgor, or if Pledgor makes an assignment for the
benefit of creditors, the entire amount unpaid on the Note shall become
immediately due and payable, and Pledgee may proceed as provided in the
case of default.
XI0 Pledgeholder Liability. In the absence of willful or gross
negligence, pledgeholder shall not be liable to any party for any of his
acts, or omissions to act, as Pledgeholder.
XII0 Invalidity of Particular Provisions. Pledgor and Pledgee agree
that the enforceability or invalidity of any provision or provisions of
this Security Agreement shall not render any other provision or provisions
herein contained unenforceable or invalid.
XIIII0 Successors or Assigns. Pledgor and Pledgee agree that all of
the terms of this Security Agreement shall be binding on their respective
successors and assigns, and that the term "Pledgor' and the term "Pledgee"
as used herein shall be deemed to include, for all purposes, the respective
designees, successors, assigns, heirs, executors and administrators.
XIV0 Governing Law. This Security Agreement shall be interpreted
and governed under the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the date first above written.
"PLEDGOR" By: _______________________________________
Print Name _____________________________
Address: _____________________________
"PLEDGEE" ATMOTION INC. (FORMERLY ARABESQUE
COMMUNICATIONS, INC.)
By: _______________________________________
Title: _____________________________________
"PLEDGEHOLDER" ____________________________________________
Secretary
ATMOTION INC. (FORMERLY ARABESQUE
COMMUNICATIONS, INC.)
EXHIBIT A
1998 STOCK PLAN
EXERCISE NOTICE
AtMotion Inc. (formerly Arabesque Communications, Inc.)
303 Twin Dolphin Dr., Suite 410
Redwood Shores, CA 94065
Attention: Stock Option Administration
1. Exercise of Option. Effective as of today, ____________________,
199__, the undersigned ("Optionee") hereby elects to exercise Optionee's
option to purchase ____________ shares of the Common Stock (the "Shares")
of AtMotion Inc. (formerly Arabesque Communications, Inc.) (the "Company")
under and pursuant to the 1998 Stock Plan, as amended (the "Plan") and the
[ ] Incentive [ ] Nonstatutory Stock Option Agreement dated _____________,
199___, (the "Option Agreement").
2. Representations of Optionee. Optionee acknowledges that Optionee
has received, read and understood the Plan and the Option Agreement and
agrees to abide by and be bound by their terms and conditions.
3. Rights as Shareholder. Until the stock certificate evidencing
such Shares is issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a shareholder
shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued)
such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as
provided in Section 11 of the Plan.
Optionee shall enjoy rights as a shareholder until such time as
Optionee disposes of the Shares or the Company and/or its assignee(s)
exercises the Right of First Refusal hereunder. Upon such exercise,
Optionee shall have no further rights as a holder of the Shares so
purchased except the right to receive payment for the Shares so purchased
in accordance with the provisions of this Agreement, and Optionee shall
forthwith cause the certificate(s) evidencing the Shares so purchased to be
surrendered to the Company for transfer or cancellation.
4. Company's Right of First Refusal. Before any Shares held by
Optionee or any transferee (either being sometimes referred to herein as
the "Holder") may be sold or otherwise transferred (including transfer by
gift or operation of law), the Company or its assignee(s) shall have
a right of first refusal to purchase the Shares on the terms and conditions
set forth in this Section (the "Right of First Refusal").
(a) Notice of Proposed Transfer. The Holder of the Shares
shall deliver to the Company a written notice (the "Notice") stating: (i)
the Holder's bona fide intention to sell or otherwise transfer such Shares;
(ii) the name of each proposed purchaser or other transferee ("Proposed
Transferee"); (iii) the number of Shares to be transferred to each Proposed
Transferee; and (iv) the bona fide cash price or other consideration for
which the Holder proposes to transfer the Shares (the "Offered Price"), and
the Holder shall offer the Shares at the Offered Price to the Company or
its assignee(s).
(b) Exercise of Right of First Refusal. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder, elect to purchase
all, but not less than all, of the Shares proposed to be transferred to any
one or more of the Proposed Transferees, at the purchase price determined
in accordance with subsection (c) below.
(c) Purchase Price. The purchase price ("Purchase Price")
for the Shares purchased by the Company or its assignee(s) under this
Section shall be the Offered Price. If the Offered Price includes
consideration other than cash, the case equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company
in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at
the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the
Holder to the Company (or, in the case of repurchase by an assignee, to the
assignee), or by any combination thereof within 30 days after receipt of
the Notice or in the manner and at the times set forth in the Notice.
(e) Holder's Right to Transfer. If all of the Shares
proposed in the Notice to be transferred to a given Proposed Transferee are
not purchased by the Company and/or its assignee(s) as provided in this
Section, then the Holder may sell or otherwise transfer such Shares to the
Proposed Transferee at the Offered Price or at a higher price, provided
that such sale or other transfer is consummated within 120 days after the
date of the Notice and provided further that any such sale or other
transfer is effected in accordance with any applicable securities laws and
the Proposed Transferee agrees in writing that the provisions of this
Section shall continue to apply to the Shares in the hands of such Proposed
Transferee. If the Shares described in the Notice are not transferred to
the Proposed Transferee within such period, a new Notice shall be given to
the Company, and the Company and/or its assignees shall again be offered
the Right of First Refusal before any Shares held by the Holder may be sold
or otherwise transferred.
(f) Exception for Certain Family Transfers. Anything to the
contrary contained in this Section notwithstanding, the transfer of any or
all of the Shares during the Optionee's lifetime or on the Optionee's death
by will or intestacy to the Optionee's immediate family or a trust for the
benefit of the Optionee's immediate family shall be exempt from the
provisions of this Section. "Immediate Family" as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister.
In such case, the transferee or other recipient shall receive and hold the
Shares so transferred subject to the provisions of this Section, and there
shall be no further transfer of such Shares except in accordance with the
terms of this Section.
(g) Termination of Right of First Refusal. The Right of
First Refusal shall terminate as to any Shares 90 days after the first sale
of Common Stock of the Company to the general public pursuant to a
registration statement filed with and declared effective by the Securities
and Exchange Commission under the Securities Act of 1933, as amended.
5. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition
of the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company
for any tax advice.
6. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Optionee understands and agrees that the
Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing
ownership of the Shares together with any other legends that may be
required by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH. THIS CERTIFICATE MUST BE SURRENDERED TO THE
CORPORATION OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT
TO THE SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN ANY
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST REFUSAL
OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH
IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.
(b) Stop-Transfer Notices. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required
(i) to transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Agreement or (ii)
to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall
have been so transferred.
7. Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement
shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Agreement
shall be binding upon Optionee and his or her heirs, executors,
administrators, successors and assigns.
8. Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or by the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the
Plan, which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Board or committee shall be final and
binding on the Company and on Optionee.
9. Governing Law; Severability. This Agreement shall be governed by
and construed in accordance with the laws of the State of California
excluding that body of law pertaining to conflicts of law. Should any
provision of this Agreement be determined by a court of law to be illegal
or unenforceable, the other provisions shall nevertheless remain effective
and shall remain enforceable.
10. Notices. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the United States mail by certified mail, with
postage and fees prepaid, addressed to the other party at its address as
shown below beneath its signature, or to such other address as such party
may designate in writing from time to time to the other party.
11. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary
to carry out the purposes and intent of this Agreement.
12. Delivery of Payment. Optionee herewith delivers to the Company
the full Exercise Price for the Shares.
13. Entire Agreement. The plan and Notice of Grant/Option Agreement
are incorporated herein by reference. This Agreement, the Plan, the Option
Agreement, the Restricted Stock Purchase Agreement, and the Investment
Representation Statement constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof.
Submitted by: Accepted by:
OPTIONEE: ATMOTION INC. (FORMERLY
ARABESQUE COMMUNICATIONS, INC.).
_______________________________ By__________________________________
Signature
_______________________________ __________________________________
Print name Print Name
Residence Address
Its:________________________________
_______________________________
_______________________________
EXHIBIT B
----------
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE : _______________________
COMPANY : ATMOTION INC. (FORMERLY ARABESQUE
COMMUNICATIONS, INC.)
SECURITY : COMMON STOCK
AMOUNT : _______________________
DATE : _______________________
In connection with the purchase of the above-listed Securities, the
undersigned Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
Securities. Optionee is acquiring these Securities for investment for
Optionee's own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act").
(b) Optionee acknowledges and understands that the
Securities constitute "restricted securities" under the Securities Act and
have not been registered under the Securities Act in reliance upon a
specific exemption therefrom, which exemption depends upon, among other
things, the bona fide nature of Optionee's investment intent as expressed
herein. In this connection, Optionee understands that, in the view of the
Securities and Exchange Commission, the statutory basis for such exemption
may be unavailable if Optionee's representation was predicated solely upon
a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period
of one year or any other fixed period in the future. Optionee further
understands that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands
that the Company is under no obligation to register the Securities.
Optionee understands that the certificate evidencing the Securities will be
imprinted with a legend which prohibits the transfer of the Securities
unless they are registered or such registration is not required in the
opinion of counsel satisfactory to the Company, a legend prohibiting their
transfer without the consent of the Commissioner of Corporations of the
State of California and any other legend required under applicable state
securities law.
(c) Optionee is familiar with the provisions of Rule 701 and
Rule 144, each promulgated under the Securities Act, which, in substance,
permit limited public resale of "restricted securities" acquired, directly
or indirectly from the issuer thereof, in a non-public offering subject to
the satisfaction of certain conditions. Rule 701 provides that if the
issuer qualifies under Rule 701 at the time of the grant of the Option to
the Optionee, the exercise will be exempt from registration under the
Securities Act. In the event the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
ninety (90) days thereafter (or such longer period as any market stand-off
agreement may require) the Securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by Rule
144, including: (1) the resale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a
market maker (as said term is defined under the Securities Exchange Act of
1934); and, in the case of an affiliate, (2) the availability of certain
public information about the Company, (3) the amount of Securities being
sold during any three month period not exceeding the limitations specified
in Rule 144(e), and (4) the timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at
the time of grant of the Option, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one year after the later of the
date the Securities were sold by the Company or the date the Securities
were sold by an affiliate of the Company, within the meaning of Rule 144;
and, in the case of acquisition of the Securities by an affiliate, or by a
non-affiliate who subsequently holds the Securities less than two years,
the satisfaction of the conditions set forth in sections (1),(2),(3) and
(4) of the paragraph immediately above.
(d) Optionee further understands that in the event of all of
the applicable requirements of Rule 701 or 144 are not satisfied,
registration under the Securities Act, compliance with Regulation A, or
some other registration exemption will be required; and that,
notwithstanding the fact that Rules 144 and 701 are not exclusive, the
Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
restricted offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons
and their respective brokers who participate in such transactions do so at
their own risk. Optionee understands that no assurances can be given that
any such other registration exemption will be available in such event.
(e) Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of
the Securities without the consent of the Commissioner of Corporations of
California. Optionee has read the applicable Commissioner's Rules with
respect to such restriction, a copy of which is attached.
Signature of Optionee:
Date:____________________, 199___
EXHIBIT C-2
CONSENT OF SPOUSE
The undersigned spouse of Purchaser has read and hereby approves
the foregoing agreement. In consideration of the Company granting any
spouse the right to purchase the Shares as set forth in the agreement, the
undersigned hereby agrees to be irrevocably bound by the agreement and
further agrees that any community property interest shall be similarly
bound by the agreement. I hereby irrevocably appoint my spouse as my
attorney-in-fact with respect to any amendment or exercise of any rights
under the agreement.
______________________________
Spouse of Purchaser
EXHIBIT C-3
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, ______________________, hereby sell, assign
and transfer unto ____________________________________________ (_________)
shares of the Common Stock of ATMOTION INC. (FORMERLY ARABESQUE
COMMUNICATIONS, INC.) standing in my name of the books of said corporation
represented by Certificate No. ____ herewith and do hereby irrevocably
constitute and appoint _______________________ to transfer the said stock
on the books of the within named corporation with full power or
substitution in the premises.
This Stock Assignment may be used only in accordance with the
Restricted Stock Purchase Agreement between _________________ and the
undersigned dated _______________, 199__.
Dated: ______________, 199___
Signature:_______________________________
INSTRUCTIONS: Please do not fill in any blanks other than the signature
line. The purpose of this assignment is to enable the Company to exercise
its "repurchase option," as set forth in the Agreement, without requiring
additional signatures on the part of the Purchaser.
EXHIBIT C-4
JOINT ESCROW INSTRUCTIONS
_______________________, 199__
Chief Financial Officer
AtMotion Inc. (formerly Arabesque Communications, Inc.)
303 Twin Dolphin Dr., Suite 410
Redwood Shores, CA 94065
Dear ________________:
As Escrow Agent for both AtMotion Inc.(formerly Arabesque
Communications, Inc.) (the "Company"), and the undersigned purchaser of
stock of the Company (the "Purchaser"), you are hereby authorized and
directed to hold the documents delivered to you pursuant to the terms of
that certain Restricted Stock Purchase Agreement ("Agreement") between the
Company and the undersigned, in accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "Company")
exercises the Company's repurchase option set forth in the Agreement, the
Company shall give to Purchaser and you a written notice specifying the
number of shares of stock to be purchased, the purchase price, and the time
for a closing hereunder at the principal office of the Company. Purchaser
and the Company hereby irrevocably authorize and direct you to close the
transaction contemplated by such notice in accordance with the terms of
said notice.
2. At the closing, you are directed (a) to date the stock
assignments necessary for the transfer in question, (b) to fill in the
number of shares being transferred, and (c) to deliver same, together with
the certificate evidencing the shares of stock to be transferred, to the
Company or its assignee, against the simultaneous delivery to you of the
purchase price (by cash, a check, or some combination thereof) for the
number of shares of stock being purchased pursuant to the exercise of the
Company's repurchase option.
3. Purchaser irrevocably authorizes the Company to deposit with you
any certificates evidencing shares of stock to be held by you hereunder and
any additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with
respect to such securities all documents necessary or appropriate to make
such securities negotiable and to complete any transaction herein
contemplated, including but not limited to the filing with any applicable
state blue sky authority of any required applications for consent to, or
notice of transfer of, the securities. Subject to the provisions of this
paragraph 3, Purchaser shall exercise all rights and privileges of a
shareholder of the Company while the stock is held by you.
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised,
you will deliver to Purchaser a certificate or certificates representing so
many shares of stock as are not then subject to the Company's repurchase
option. Within 120 days after cessation of Purchaser's continuous
employment by or services to the Company, or any parent or subsidiary of
the Company, you will deliver to Purchaser a certificate or certificates
representing the aggregate number of shares held or issued pursuant to the
Agreement and not purchased by the Company or its assignees pursuant to
exercise of the Company's repurchase option.
5. If at the time of termination of this escrow you should have in
your possession any documents, securities, or other property belonging to
Purchaser, you shall deliver all of the same to Purchaser and shall be
discharged of all further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or
revoked only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties
as are specifically set forth herein and may rely and shall be protected in
relying or refraining from acting on any instrument reasonably believed by
you to be genuine and to have been signed or presented by the proper party
or parties. You shall not be personally liable for any act you may do or
omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser
while acting in good faith, and any act done or omitted by you pursuant to
the advice of your own attorneys shall be conclusive evidence of such good
faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and are
hereby expressly authorized to comply with and obey orders, judgments or
decrees of any court. In case you obey or comply with any such order,
judgment or decree, you shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such compliance,
notwithstanding any such order, judgment or decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been
entered without jurisdiction.
9. You shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
10. You shall not be liable for the outlawing of any rights under
the Statute of Limitations with respect to these Joint Escrow Instructions
or any documents deposited with you.
11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with
your obligations hereunder, may rely upon the advice of such counsel, and
may pay such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate
if you shall cease to be an officer or agent of the Company or if you shall
resign by written notice to each party. In the event of any such
termination, the Company shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such
instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain
in your possession without liability to anyone all or any part of said
securities until such disputes shall have been settled either by mutual
written agreement of the parties concerned or by a final order, decree or
judgment of a court of competent jurisdiction after the time for appeal has
expired and no appeal has been perfected, but you shall be under no duty
whatsoever to institute or defend any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or
upon deposit in the United States Post Office, by registered or certified
mail with postage and fees prepaid, addressed to each of the other parties
thereunto entitled at the following addresses or at such other addresses as
a party may designate by ten days' advance written notice to each of the
other parties hereto.
COMPANY: AtMotion Inc. (formerly Arabesque Communications, Inc.)
303 Twin Dolphin Dr., Suite 410
Redwood Shores, CA 94065
Attention: Stock Option Administration
PURCHASER: _______________________________________
_______________________________________
_______________________________________
ESCROW AGENT: Chief Financial Officer
AtMotion Inc. (formerly Arabesque Communications, Inc.)
303 Twin Dolphin Dr., Suite 410
Redwood Shores, CA 94065
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not
become a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and permitted
assigns.
18. These Joint Escrow Instructions shall be governed by, and
construed and enforced in accordance with, the laws of the State of
California.
ATMOTION INC. (FORMERLY ARABESQUE
COMMUNICATIONS, INC.)
By:___________________________________
Print Name:___________________________
Title:________________________________
Purchaser:________________________________
(Signature)
(Print Name)
Escrow Agent:
_____________________________________
Chief Financial Officer
ATMOTION INC. (FORMERLY ARABESQUE
COMMUNICATIONS, INC.)
EXHIBIT C-5
ELECTION UNDER SECTION 83(B)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 55 and/or 83(b)
of the Internal Revenue Code of 1986, as amended, to include in taxpayer's
gross income and/or alternative minimum taxable income, as the case may be,
for the current taxable year the amount of any compensation taxable to
taxpayer in connection with taxpayer's receipt of the property described
below:
1. The name, address, taxpayer identification number and taxable year of
the undersigned are as follows:
NAME OF TAXPAYER:
NAME OF SPOUSE:
ADDRESS:
IDENTIFICATION NO. OF TAXPAYER:
IDENTIFICATION NUMBER OF SPOUSE:
TAXABLE YEAR:
2. The property with respect to which the election is made is described
as follows: _____ shares (the "Shares") of the Common Stock of
AtMotion Inc. (formerly Arabesque Communications, Inc.) (the
"Company").
3. The date on which the property was transferred is: __________, 19__.
4. The property is subject to the following restrictions:
The shares may not be transferred and are subject to forfeiture under
the terms of an agreement between the taxpayer and the Company. These
restrictions lapse upon the satisfaction of certain conditions
contained in such agreement.
5. The fair market value at the time of transfer, determined without
regard to any restriction other than a restriction which by its terms
will never lapse, of such property is: $____________________.
6. The amount (if any) paid for such property is: $_____________________.
The undesigned has submitted a copy of this statement to the person for
whom the services were performed in connection with the undersigned's
receipt of the above-described property. The transferee of such property is
the person performing the services in connection with the transfer of said
property.
The undersigned understands that the foregoing election may not be revoked
- --------------------------------------------------------------------------
except with the consent of the Commissioner.
- -------------------------------------------
Dated: __________, 199___ _________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: __________, 199___ _________________________
Spouse of Taxpayer
Exhibit 99.2
ONEBOX.COM, INC.
1999 STOCK PLAN
1. PURPOSES OF THE PLAN. The purposes of this 1999 Stock Plan are
to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees
and Consultants of the Company and its Subsidiaries and to promote the
success of the Company's business. Options granted under the Plan may be
Incentive Stock Options (as defined under Section 422 of the Code) or
Nonstatutory Stock Options, as determined by the Administrator at the time
of grant of an Option and subject to the applicable provisions of Section
422 of the Code, as amended, and the regulations promulgated thereunder.
Stock Purchase Rights may also be granted under the Plan.
2. DEFINITIONS. As used herein, the following definitions
shall apply:
(a) "ADMINISTRATOR" means the Board or any of its
Committees appointed pursuant to Section 4 of the Plan.
(b) "AFFILIATE" means an entity other than a Subsidiary
(as defined below) in which the Company owns an equity interest or which,
together with the Company, is under common control of a third person or
entity.
(c) "APPLICABLE LAWS" means the legal requirements
relating to the administration of stock option plans under applicable U.S.
state corporate laws, U.S. federal and state securities laws, the Code, any
Stock Exchange rules or regulations and the applicable laws of any other
country or jurisdiction where Options are granted under the Plan, as such
laws, rules, regulations and requirements shall be in place from time to
time.
(d) "BOARD" means the Board of Directors of the
Company.
(e) "CAUSE" for termination of a Participant's Continuous
Service Status will exist if the Participant is terminated for any of the
following reasons: (i) Participant's willful failure substantially to
perform his or her duties and responsibilities to the Company or any
Subsidiary, Parent, Affiliate or successor thereto, as appropriate; (ii)
Participant's repeated unexplained or unjustified absence from the Company
or any Subsidiary, Parent, Affiliate or successor thereto, as appropriate;
(iii) Participant's commission of any act of fraud, embezzlement,
dishonesty or any other willful and serious misconduct that has caused or
is reasonably expected to result in material injury to the Company or to
any Subsidiary, Parent, Affiliate or successor thereto; (iv) unauthorized
use or disclosure by Participant of any proprietary information or trade
secrets of the Company or any other party to whom the Participant owes an
obligation of nondisclosure as a result of his or her relationship with the
Company or a Subsidiary, Parent, Affiliate or successor thereto; or (iv)
Participant's willful breach of any of his or her obligations under any
written agreement or covenant with the Company or with any Subsidiary,
Parent, Affiliate or successor to the Company. The determination as to
whether a Participant is being terminated for Cause shall be made in good
faith by the Company or a Subsidiary, Parent, Affiliate or successor
thereto, as appropriate, and shall be final and binding on the Participant.
The foregoing definition does not in any way limit the ability of the
Company or a Subsidiary, Parent, Affiliate or successor thereto to
terminate a Participant's employment or consulting relationship at any time
as provided in Section 5(c) below.
(f) "CHANGE OF CONTROL" means a sale of all or
substantially all of the Company's assets, or any merger or consolidation
of the Company with or into another corporation other than a merger or
consolidation in which the holders of more than 50% of the shares of
capital stock of the Company outstanding immediately prior to such
transaction continue to hold (either by the voting securities remaining
outstanding or by their being converted into voting securities of the
surviving entity) more than 50% of the total voting power represented by
the voting securities of the Company, or such surviving entity, outstanding
immediately after such transaction.
(g) "CODE" means the Internal Revenue Code of 1986,
as amended.
(h) "COMMITTEE" means the Committee appointed by the
Board of Directors to administer the Plan in accordance with Section 4 below.
(i) "COMMON STOCK" means the Common Stock of the
Company.
(j) "COMPANY" means Onebox.com, Inc., a Delaware
corporation.
(k) "CONSULTANT" means any person, including an advisor,
who renders services to the Company, or any Parent, Subsidiary or
Affiliate, and is compensated for such services, and any director of the
Company whether compensated for such services or not.
(l) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT"
means the absence of any interruption or termination of service as an
Employee or Consultant. Continuous Status as an Employee or Consultant
shall not be considered interrupted in the case of: (i) sick leave; (ii)
military leave; (iii) any other leave of absence approved by the
Administrator, provided that such leave is for a period of not more than 90
days, unless reemployment upon the expiration of such leave is guaranteed
by contract or statute, or unless provided otherwise pursuant to Company
policy adopted from time to time; or (iv) in the case of transfers between
locations of the Company or between the Company, its Parent(s), Affiliates,
Subsidiaries or their respective successors. For purposes of this Plan, a
change in status from an Employee to a Consultant or from a Consultant to
an Employee will not constitute an interruption of Continuous Status as an
Employee or Consultant.
(m) "CORPORATE TRANSACTION" means a sale of all or
substantially all of the Company's assets, or a merger, consolidation or
other capital reorganization of the Company with or into another
corporation.
(n) "DIRECTOR" means a member of the Board.
(o) "EMPLOYEE" means any person, including officers and
Directors, employed by the Company or any Parent, Subsidiary or Affiliate
of the Company, with the status of employment determined based upon such
minimum number of hours or periods worked as shall be determined by the
Administrator in its discretion, subject to any requirements of the Code.
The payment by the Company of a director's fee to a Director shall not be
sufficient to constitute "employment" of such Director by the Company.
(p) "EXCHANGE ACT" means the Securities Exchange Act
of 1934, as amended.
(q) "FAIR MARKET VALUE" means, as of any date, the
fair market value of Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national market system including without
limitation the National Market of the National Association of Securities
Dealers, Inc. Automated Quotation ("Nasdaq") System, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no
sales were reported), as quoted on such system or exchange, or the exchange
with the greatest volume of trading in Common Stock for the last market
trading day prior to the time of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the
Nasdaq System (but not on the National Market thereof) or regularly quoted
by a recognized securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock for the last market trading day prior to the
time of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or
(iii) In the absence of an established market
for the Common Stock, the Fair Market Value thereof shall be determined in
good faith by the Administrator.
(r) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code, as designated in the applicable written Option Agreement.
(s) "INVOLUNTARY TERMINATION" means termination of a
Participant's Continuous Service Status under the following circumstances:
(i) termination without Cause by the Company or a Subsidiary, Parent,
Affiliate or successor thereto, as appropriate; or (ii) voluntary
termination by the Participant following (A) a material reduction in the
Participant's job responsibilities, provided that neither a mere change in
title alone nor reassignment following a Change of Control to a position
that is substantially similar to the position held prior to the Change of
Control shall constitute a material reduction in job responsibilities; (B)
without Participant's prior written approval, the Company or a Subsidiary,
Parent, Affiliate or successor thereto, as appropriate, requires
Participant to relocate to a facility or location more than 50 miles from
the Company's location at the time of the Change of Control, provided that
required travel on corporate business to an extent consistent with
Participant's job responsibilities does not constitute such a forced
relocation; or (C) a reduction in Participant's then-current base salary,
provided that an across-the-board reduction in the salary level of all
other employees or consultants in positions similar to the Participant's by
the same percentage amount as part of a general salary level reduction
shall not constitute such a salary reduction.
(t) "LISTED SECURITY" means any security of the Company
that is listed or approved for listing on a national securities exchange or
designated or approved for designation as a national market system security
on an interdealer quotation system by the National Association of
Securities Dealers, Inc.
(u) "NONSTATUTORY STOCK OPTION" means an Option not
intended to qualify as an Incentive Stock Option, as designated in the
applicable written Option Agreement.
(v) "OPTION" means a stock option granted pursuant to
the Plan.
(w) "OPTION AGREEMENT" means a written agreement between
an Optionee and the Company reflecting the terms of an Option granted under
the Plan and includes any documents attached to such Option Agreement,
including, but not limited to, a notice of stock option grant and a form of
exercise notice.
(x) "OPTION EXCHANGE PROGRAM" means a program whereby
outstanding Options are exchanged for Options with a lower exercise price.
(y) "OPTIONED STOCK" means the Common Stock subject to
an Option or a Stock Purchase Right.
(z) "OPTIONEE" means an Employee or Consultant who
receives an Option or a Stock Purchase Right.
(aa) "PARENT" means a "parent corporation," whether now
or hereafter existing, as defined in Section 424(e) of the Code, or any
successor provision.
(bb) "PARTICIPANT" means any holder of one or more
Options or Stock Purchase Rights, or of the Shares issuable or issued upon
exercise of such awards, under the Plan.
(cc) "PLAN" means this 1999 Stock Plan.
(dd) "REPORTING PERSON" means an officer, Director, or
greater than 10% stockholder of the Company within the meaning of Rule
16a-2 under the Exchange Act, who is required to file reports pursuant to
Rule 16a-3 under the Exchange Act.
(ee) "RESTRICTED STOCK" means shares of Common Stock
acquired pursuant to a grant of a Stock Purchase Right under Section 10
below.
(ff) "RESTRICTED STOCK PURCHASE AGREEMENT" means a
written agreement between a holder of a Stock Purchase Right and the
Company reflecting the terms of a Stock Purchase Right granted under the
Plan and includes any documents attached to such agreement.
(gg) "RULE 16B-3" means Rule 16b-3 promulgated under the
Exchange Act, as the same may be amended from time to time, or any
successor provision.
(hh) "SHARE" means a share of the Common Stock, as
adjusted in accordance with Section 12 of the Plan.
(ii) "STOCK EXCHANGE" means any stock exchange or
consolidated stock price reporting system on which prices for the Common
Stock are quoted at any given time.
(jj) "STOCK PURCHASE RIGHT" means the right to
purchase Common Stock pursuant to Section 10 below.
(kk) "SUBSIDIARY" means a "subsidiary corporation,"
whether now or hereafter existing, as defined in Section 424(f) of the
Code, or any successor provision.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section
12 of the Plan, the maximum aggregate number of Shares that may be sold
under the Plan is 2,984,6491 Shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock. If an Option expires
or becomes unexercisable for any reason without having been exercised in
full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares that were subject thereto shall, unless the Plan shall
have been terminated, become available for future grant under the Plan. In
addition, any Shares of Common Stock that are retained by the Company upon
exercise of an Option or Stock Purchase Right in order to satisfy the
exercise or purchase price for such Option or Stock Purchase Right or any
withholding taxes due with respect to such exercise shall be treated as not
issued and shall continue to be available under the Plan. Shares
repurchased by the Company pursuant to any repurchase right that the
Company may have shall not be available for future grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) INITIAL PLAN PROCEDURE. Prior to the date, if any,
upon which the Company becomes subject to the Exchange Act, the Plan shall
be administered by the Board or a Committee appointed by the Board.
(b) PLAN PROCEDURE AFTER THE DATE, IF ANY, UPON WHICH
THE COMPANY BECOMES SUBJECT TO THE EXCHANGE ACT.
(i) MULTIPLE ADMINISTRATIVE BODIES.
If permitted by Rule 16b-3, grants under the Plan may be made by different
bodies with respect to Directors, non-Director officers and Employees or
Consultants who are not Reporting Persons.
(ii) ADMINISTRATION WITH RESPECT TO REPORTING
PERSONS. With respect to grants of Options or Stock Purchase Rights to
Employees who are Reporting Persons, such grants shall be made by (A) the
Board if the Board may make grants to Reporting Persons under the Plan in
compliance with Rule 16b-3, or (B) a Committee designated by the Board to
make grants to Reporting Persons under the Plan, which Committee shall be
constituted in such a manner as to permit grants under the Plan to comply
with Rule 16b-3. Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From time to
time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however
caused, and remove all members of the Committee and thereafter directly
make grants to Reporting Persons under the Plan, all to the extent
permitted by Rule 16b-3.
(iii) ADMINISTRATION WITH RESPECT TO CONSULTANTS
AND OTHER EMPLOYEES. With respect to grants of Options or Stock Purchase
Rights to Employees or Consultants who are not Reporting Persons, the Plan
shall be administered by (A) the Board or (B) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to satisfy
the Applicable Laws. Once appointed, such Committee shall continue to serve
in its designated capacity until otherwise directed by the Board. From time
to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however
caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable Laws.
(c) POWERS OF THE ADMINISTRATOR. Subject to the
provisions of the Plan and in the case of a Committee, the specific duties
delegated by the Board to such Committee, and subject to the approval of
any relevant authorities, including the approval, if required, of any Stock
Exchange, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the
Common Stock, in accordance with Section 2(o) of the Plan;
(ii) to select the Consultants and Employees
to whom Options and Stock Purchase Rights or any combination thereof may
from time to time be granted hereunder;
(iii) to determine whether and to what extent
Options and Stock Purchase Rights or any combination thereof are granted
hereunder;
(iv) to determine the number of shares of
Common Stock to be covered by each such award granted hereunder;
(v) to approve forms of agreement for use
under the Plan;
(vi) to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any award granted
hereunder, which terms and conditions include but are not limited to the
exercise or purchase price, the time or times when Options or Stock
Purchase Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions,
and any restriction or limitation regarding any Option, Optioned Stock,
Stock Purchase Right or Restricted Stock, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;
(vii) to determine whether and under what
circumstances an Option may be settled in cash under Section 9(g) instead
of Common Stock;
(viii) to reduce the exercise price of any
Option to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option shall have declined since the date
the Option was granted and to make any other amendments or adjustments to
any Option that the Administrator determines, in its discretion and under
the authority granted to it under the Plan, to be necessary or advisable,
provided however that no amendment or adjustment to an Option that would
materially and adversely affect the rights of any Optionee shall be made
without the prior written consent of the Optionee;
(ix) to determine the terms and restrictions
applicable to Stock Purchase Rights and the Restricted Stock purchased by
exercising such Stock Purchase Rights;
(x) to initiate an Option Exchange Program;
(xi) to construe and interpret the terms of
the Plan and awards granted under the Plan; and
(xii) in order to fulfill the purposes of the
Plan and without amending the Plan, to modify grants of Options or Stock
Purchase Rights to participants who are foreign nationals or employed
outside of the United States in order to recognize differences in local
law, tax policies or customs.
(d) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all holders of Options or Stock Purchase Rights.
5. ELIGIBILITY.
(a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options and
Stock Purchase Rights may be granted to Employees and Consultants.
Incentive Stock Options may be granted only to Employees; provided however
that Employees of Affiliates shall not be eligible to receive Incentive
Stock Options. An Employee or Consultant who has been granted an Option or
Stock Purchase Right may, if he or she is otherwise eligible, be granted
additional Options or Stock Purchase Rights.
(b) TYPE OF OPTION. Each Option shall be designated in
the Option Agreement as either an Incentive Stock Option or a Nonstatutory
Stock Option. However, notwithstanding such designations, to the extent
that the aggregate Fair Market Value of Shares with respect to which
Options designated as Incentive Stock Options are exercisable for the first
time by any Optionee during any calendar year (under all plans of the
Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the
order in which they were granted, and the Fair Market Value of the Shares
subject to an Incentive Stock Option shall be determined as of the date of
the grant of such Option.
(c) AT-WILL RELATIONSHIP. The Plan shall not confer upon
the holder of any Option or Stock Purchase Right any right with respect to
continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with such holder's right or the Company's
right to terminate his or her employment or consulting relationship at any
time, with or without cause.
6. TERM OF PLAN. The Plan shall become effective upon its
adoption by the Board. It shall continue in effect for a term of ten years
unless sooner terminated under Section 15 of the Plan.
7. TERM OF OPTION. The term of each Option shall be the term
stated in the Option Agreement; provided, however, that the term shall be
no more than ten years from the date of grant thereof or such shorter term
as may be provided in the Option Agreement. However, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Option
is granted, owns stock representing more than 10% of the total combined
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Option shall be five years from the date of
grant thereof or such shorter term as may be provided in the Option
Agreement.
8. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is
determined by the Board and set forth in the Option Agreement, but shall be
subject to the following:
(i) In the case of an Incentive Stock Option
that is:
(A) granted to an Employee who, at
the time of the grant of such Incentive Stock Option, owns stock
representing more than 10% of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.
(B) granted to any other Employee,
the per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock
Option that is:
(A) granted to a person who, at the
time of the grant of such Option, owns stock representing more than 10% of
the total combined voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no less
than 110% of the Fair Market Value per Share on the date of the grant if
required by the Applicable Laws and, if not so required, shall be such
price as is determined by the Administrator.
(B) granted to any other eligible
person, the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant if required by the Applicable
Laws and, if not so required, shall be such price as is determined by the
Administrator.
(iii) Notwithstanding the foregoing, Options
may be granted with a per Share exercise price other than as required above
pursuant to a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall
be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely
of (1) cash, (2) check, (3) promissory note (subject to the provisions of
Section 153 of the Delaware General Corporation Law), (4) cancellation of
indebtedness, (5) other Shares that (x) in the case of Shares acquired upon
exercise of an Option, have been owned by the Optionee for more than six
months on the date of surrender or such other period as may be required to
avoid a charge to the Company's earnings, and (y) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option shall be exercised, (6) authorization for
the Company to retain from the total number of Shares as to which the
Option is exercised that number of Shares having a Fair Market Value on the
date of exercise equal to the exercise price for the total number of Shares
as to which the Option is exercised, (7) delivery of a properly executed
exercise notice together with such other documentation as the Administrator
and the broker, if applicable, shall require to effect an exercise of the
Option and delivery to the Company of the sale or loan proceeds required to
pay the exercise price and any applicable income or employment taxes, (8)
delivery of an irrevocable subscription agreement for the Shares that
irrevocably obligates the Optionee to take and pay for the Shares not more
than twelve months after the date of delivery of the subscription
agreement, (9) any combination of the foregoing methods of payment, or (10)
such other consideration and method of payment for the issuance of Shares
to the extent permitted under the Applicable Laws. In making its
determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably
expected to benefit the Company.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any
Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator and reflected in the Option
Agreement, which may include vesting requirements and/or performance
criteria with respect to the Company and/or the Optionee; provided however,
that, if required by the Applicable Laws, any Option granted prior to the
date, if any, upon which the Common Stock becomes a Listed Security shall
become exercisable at the rate of at least 20% per year over five years
from the date the Option is granted. In the event that any of the Shares
issued upon exercise of an Option (which exercise occurs prior to the date,
if any, upon which the Common Stock becomes a Listed Security) should be
subject to a right of repurchase in the Company's favor, such repurchase
right shall, if required by the Applicable Laws, lapse at the rate of at
least 20% per year over five years from the date the Option is granted.
Notwithstanding the above, in the case of an Option granted to an officer,
Director or Consultant of the Company or any Parent or Subsidiary of the
Company, the Option may become fully exercisable, or a repurchase right, if
any, in favor of the Company shall lapse, at any time or during any period
established by the Administrator. The Administrator shall have the
discretion to determine whether and to what extent the vesting of Options
shall be tolled during any unpaid leave of absence; provided however that
in the absence of such determination, vesting of options shall be tolled
during any such leave.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Administrator, consist of
any consideration and method of payment allowable under Section 8(b) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company)
of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, not withstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate
promptly upon exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares that thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
(b) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP.
Subject to Section 9(c) below, in the event of termination of an Optionee's
Continuous Status as an Employee or Consultant with the Company, such
Optionee may, but only within three months (or such other period of time
not less than 30 days as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option being made at the
time of grant of the Option and not exceeding three months) after the date
of such termination (but in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise his or
her Option to the extent that the Optionee was entitled to exercise it at
the date of such termination. To the extent that the Optionee was not
entitled to exercise the Option at the date of such termination, or if the
Optionee does not exercise such Option to the extent so entitled within the
time specified herein, the Option shall terminate and the Optioned Stock
underlying the unexercised portion of the Option shall revert to the Plan.
No termination shall be deemed to occur and this Section 9(b) shall not
apply if (i) the Optionee is a Consultant who becomes an Employee, or (ii)
the Optionee is an Employee who becomes a Consultant.
(c) DISABILITY OF OPTIONEE.
(i) Notwithstanding Section 9(b) above,
in the event of termination of an Optionee's Continuous Status as an
Employee or Consultant as a result of his or her total and permanent
disability (within the meaning of Section 22(e)(3) of the Code), such
Optionee may, but only within twelve months from the date of such
termination (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to
the extent otherwise entitled to exercise it at the date of such
termination. To the extent that the Optionee was not entitled to exercise
the Option at the date of termination, or if the Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate and the Optioned Stock underlying the unexercised
portion of the Option shall revert to the Plan.
(ii) In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of a
disability which does not fall within the meaning of total and permanent
disability (as set forth in Section 22(e)(3) of the Code), such Optionee
may, but only within six months from the date of such termination (but in
no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent otherwise
entitled to exercise it at the date of such termination. However, to the
extent that such Optionee fails to exercise an Option that is an Incentive
Stock Option (within the meaning of Section 422 of the Code) within three
months of the date of such termination, the Option will not qualify for
Incentive Stock Option treatment under the Code. To the extent that the
Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent
so entitled within six months from the date of termination, the Option
shall terminate and the Optioned Stock underlying the unexercised portion
of the Option shall revert to the Plan.
(d) DEATH OF OPTIONEE. In the event of the death of an
Optionee during the period of Continuous Status as an Employee or
Consultant since the date of grant of the Option, or within 30 days
following termination of the Optionee's Continuous Status as an Employee or
Consultant, the Option may be exercised, at any time within six months
following the date of death (but in no event later than the expiration date
of the term of such Option as set forth in the Option Agreement), by such
Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that had accrued at the date of death or, if earlier, the date of
termination of the Optionee's Continuous Status as an Employee or
Consultant. To the extent that the Optionee was not entitled to exercise
the Option at the date of death or termination, as the case may be, or if
the Optionee does not exercise such Option to the extent so entitled within
the time specified herein, the Option shall terminate and the Optioned
Stock underlying the unexercised portion of the Option shall revert to the
Plan.
(e) EXTENSION OF EXERCISE PERIOD. The Administrator shall
have full power and authority to extend the period of time for which an
Option is to remain exercisable following termination of an Optionee's
Continuous Status as an Employee or Consultant from the periods set forth
in Sections 10(b), 10(c) and 10(d) above or in the Option Agreement to such
greater time as the Board shall deem appropriate, provided, that in no
event shall such option be exercisable later than the date of expiration of
the term of such Option as set forth in the Option Agreement.
(f) RULE 16B-3. Options granted to Reporting Persons
shall comply with Rule 16b-3 and shall contain such additional conditions
or restrictions as may be required thereunder to qualify for the maximum
exemption for Plan transactions.
(g) BUY-OUT PROVISIONS. The Administrator may at any time
offer to buy out for a payment in cash or Shares an Option previously
granted based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time such offer is made.
10. STOCK PURCHASE RIGHTS.
(a) RIGHTS TO PURCHASE. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid, and the time
within which such person must accept such offer, which shall in no event
exceed 30 days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. If required by the
Applicable Laws, the purchase price of shares subject to Stock Purchase
Rights shall not be less than 85% of the Fair Market Value of the Shares as
of the date of the offer, or, in the case of a person owning stock
representing more than 10% of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, the price
shall not be less than 100% of the Fair Market Value of the Shares as of
the date of the offer. If the Applicable Laws do not impose restrictions on
the purchase price, the purchase price of Shares subject to Stock Purchase
Rights shall be as determined by the Administrator. The offer to purchase
Shares subject to Stock Purchase Rights. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined
by the Administrator.
(b) REPURCHASE OPTION. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant
the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's employment with the Company for
any reason (including death or disability). The purchase price for Shares
repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original purchase price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may
determine; provided, however, that with respect to a purchaser who is not
an officer, Director or Consultant of the Company or of any Parent or
Subsidiary of the Company, it shall lapse at a minimum rate of 20% per year
if required by Applicable Laws.
(c) OTHER PROVISIONS. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its
sole discretion. In addition, the provisions of Restricted Stock Purchase
Agreements need not be the same with respect to each purchaser.
(d) RIGHTS AS A STOCKHOLDER. Once the Stock Purchase
Right is exercised, the purchaser shall have the rights equivalent to those
of a stockholder, and shall be a stockholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Stock Purchase Right is exercised,
except as provided in Section 12 of the Plan.
11. TAX WITHOLDING; STOCK WITHHOLDING TO SATISFY
WITHHOLDING TAX OBLIGATIONS.
(a) TAX WITHHOLDING. To the extent required by the
Applicable Laws, transactions under the Plan shall be subject to tax
withholding by the Company, and the Administrator may condition the
delivery of any Shares under the Plan on satisfaction of applicable
withholding tax obligations. The Administrator, in its discretion and
subject to such requirements as the Administrator may impose prior to the
occurrence of such withholding, may permit tax withholding obligations
under the Plan to be satisfied by one or some combination of the following
methods: (i) by cash or check payment, (ii) out of the Participant's
current compensation, (iii) if permitted by the Administrator, in its
discretion, by surrendering to the Company Shares that (A) in the case of
Shares previously acquired from the Company, have been owned by the
Participant for more than six months on the date of surrender, and (B) have
a Fair Market Value determined as of the applicable Tax Date (as defined in
Section 11(c) below) on the date of surrender equal to or less than the
amount required to be withheld, or (iv) by electing to have the Company
withhold from the Shares to be issued upon exercise of the Option, or the
Shares to be issued in connection with the Stock Purchase Right, if any,
that number of Shares having a Fair Market Value determined on the
applicable Tax Date equal to the amount required to be withheld.
(b) STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX
OBLIGATIONS. In the event an Administrator allows a Participant to satisfy
his or her tax withholding obligations as provided for in Section
11(a)(iii) or (iv) above, such satisfaction must comply with the
requirements of this Section 11(b) and the Applicable Laws. Any surrender
by a Reporting Person of previously owned Shares to satisfy tax withholding
obligations arising upon exercise of this Option must comply with the
applicable provisions of Rule 16b-3.
All elections by a Participant to have Shares withheld to satisfy
tax withholding obligations shall be made in writing in a form acceptable
to the Administrator and shall be subject to the following restrictions:
(i) the election must be made on or prior to
the applicable Tax Date (as defined in Section 11(c) below);
(ii) once made, the election shall be
irrevocable as to the particular Shares of the Option or Stock Purchase
Right as to which the election is made; and
(iii) all elections shall be subject to the
consent or disapproval of the Administrator.
In the event the election to have Shares withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code
because no election is filed under Section 83(b) of the Code, the
Participant shall receive the full number of Shares with respect to which
the Option or Stock Purchase Right is exercised but such Participant shall
be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.
(c) DEFINITIONS. For purposes of this Section 11, the
Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is determined under the
Applicable Laws (the "Tax Date").
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, CORPORATE
TRANSACTION AND CERTAIN OTHER TRANSACTIONS.
(a) CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders of the Company, the number of shares of Common
Stock covered by each outstanding Option or Stock Purchase Right, and the
number of shares of Common Stock that have been authorized for issuance
under the Plan but as to which no Options or Stock Purchase Rights have yet
been granted or that have been returned to the Plan upon cancellation or
expiration of an Option or Stock Purchase Right, as well as the price per
share of Common Stock covered by each such outstanding Option or Stock
Purchase Right, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination,
recapitalization or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall
not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Administrator, whose determination in
that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
(b) DISSOLUTION OR LIQUIDATION. In the event of the
proposed dissolution or liquidation of the Company, the Board shall notify
the Optionee or the holder of any Stock Purchase Right at least 15 days
prior to such proposed action. To the extent it has not been previously
exercised, the Option or Stock Purchase Right will terminate immediately
prior to the consummation of such proposed action.
(c) CORPORATE TRANSACTION; CHANGE OF CONTROL. In the
event of a Corporate Transaction, each outstanding Option and Stock
Purchase Right shall be assumed or an equivalent option or right shall be
substituted by the successor corporation or a Parent or Subsidiary of such
successor corporation, unless such successor corporation does not agree to
assume the outstanding Options or Stock Purchase Rights or to substitute
equivalent options or rights, in which case such Options or Stock Purchase
Rights shall terminate upon the consummation of the transaction.
In the event Plan awards are assumed or substituted in
connection with a Change of Control and a Participant holding such an
assumed or substituted award experiences an Involuntary Termination, at any
time within twelve (12) months following the Change of Control, the number
of unvested assumed or substituted Options held by the terminated
Participant which would vest over the next eighteen (18) months had the
Participant remained in Continuous Service Status for such eighteen-(18)
month period (not to exceed the total number of assumed or substituted
Options held by the terminated participant) shall accelerate and become
exercisable, and any repurchase right in favor of the Company or the
Successor Corporation with respect to any Shares (or any shares of stock
issued in exchange for such Shares) purchased upon exercise of an Option or
Stock Purchase Right shall lapse with respect to the number of shares which
would be released from the Company's repurchase option over the following
eighteen (18) months had the Participant remained in Continuous Service
Status for such eighteen-month period (not to exceed the number of shares
remaining subject to the Company's repurchase option), immediately prior to
the effective date of the Involuntary Termination.
For purposes of this Section 12(c), an Option or a Stock
Purchase Right shall be considered assumed, without limitation, if, at the
time of issuance of the stock or other consideration upon a Corporate
Transaction, each holder of an Option or Stock Purchase Right would be
entitled to receive upon exercise of the Option or Stock Purchase Right the
same number and kind of shares of stock or the same amount of property,
cash or securities as such holder would have been entitled to receive upon
the occurrence of the transaction if the holder had been, immediately prior
to such transaction, the holder of the number of Shares of Common Stock
covered by the Option or the Stock Purchase Right at such time (after
giving effect to any adjustments in the number of Shares covered by the
Option or Stock Purchase Right as provided for in this Section 12);
provided however that if such consideration received in the transaction was
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon exercise of the Option or Stock
Purchase Right to be solely common stock of the successor corporation or
its Parent equal to the Fair Market Value of the per Share consideration
received by holders of Common Stock in the transaction.
(d) ACCOUNTING AND TAX TREATMENT.
(i) POOLING ISSUES. Notwithstanding Section
12(c) above, no vesting acceleration or lapse of a repurchase right
pursuant to such section shall occur if such acceleration or lapse would
cause a contemplated Change of Control transaction that was intended to be
accounted for as a "pooling of interests" transaction to be ineligible for
such treatment under generally accepted accounting principles, as
determined by the Company's independent accountants prior to the Change of
Control.
(ii) LIMITATION ON PAYMENTS. In the event
that the vesting acceleration or lapse of a repurchase right provided for
in Section 12(c) above (x) constitutes "parachute payments" within the
meaning of Section 280G of the Code, and (y) but for this Section 12(d)(ii)
would be subject to the excise tax imposed by Section 4999 of the Code (or
any corresponding provisions of state income tax law), then such vesting
acceleration or lapse of a repurchase right shall be either
(A) delivered in full, or
(B) delivered as to such lesser extent
which would result in no portion of such severance benefits being subject
to excise tax under Code Section 4999,
whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Code
Section 4999, results in the receipt by the Participant on an after-tax
basis of the greater amount of acceleration or lapse of repurchase rights
benefits, notwithstanding that all or some portion of such benefits may be
taxable under Code Section 4999. Any determination required under this
Section 12(d) shall be made in writing by the Company's independent
accountants, whose determination shall be conclusive and binding for all
purposes on the Company and any affected Participant. In the event that
(ii)(A) above applies, then the Participant shall be responsible for any
excise taxes imposed with respect to such benefits. In the event that
(ii)(B) above applies, then each benefit provided hereunder shall be
proportionately reduced to the extent necessary to avoid imposition of such
excise taxes.
(e) CERTAIN DISTRIBUTIONS. In the event of any
distribution to the Company's stockholders of securities of any other
entity or other assets (other than dividends payable in cash or stock of
the Company) without receipt of consideration by the Company, the
Administrator may, in its discretion, appropriately adjust the price per
Share of Common Stock covered by each outstanding Option or Stock Purchase
Right to reflect the effect of such distribution.
13. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS.
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will
or by the laws of descent or distribution and may be exercised or purchased
during the lifetime of the Optionee or the holder of Stock Purchase Rights
only by the Optionee or holder of Stock Purchase Rights; provided however
that, after the date, if any, upon which the Common Stock becomes a Listed
Security, the Administrator may in its discretion grant transferable
Nonstatutory Stock Options pursuant to Option Agreements specifying (i) the
manner in which such Nonstatutory Stock Options are transferable and (ii)
that any such transfer shall be subject to the Applicable Laws. The
designation of a beneficiary by an Optionee will not constitute a transfer.
An Option or Stock Purchase Right may be exercised, during the lifetime of
the holder of the Option or Stock Purchase Right, only by such holder or a
transferee permitted by this Section 13.
14. TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date
of grant of an Option or Stock Purchase Right shall, for all purposes, be
the date on which the Administrator makes the determination granting such
Option or Stock Purchase Right, or such other date as is determined by the
Board; provided, however, that in the case of any Incentive Stock Option,
the grant date shall be the later of the date on which the Administrator
makes the determination granting such Incentive Stock Option or the date of
commencement of the Optionee's employment relationship with the Company.
Notice of the determination shall be given to each Employee or Consultant
to whom an Option or Stock Purchase Right is so granted within a reasonable
time after the date of such grant.
15. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AUTHORITY TO AMEND OR TERMINATE. The Board may at any
time amend, alter, suspend or discontinue the Plan, but no amendment,
alteration, suspension or discontinuation shall be made that would
materially and adversely affect the rights of any Optionee or holder of any
Stock Purchase Right under any outstanding grant, without his or her
consent. In addition, to the extent necessary and desirable to comply with
the Applicable Laws, the Company shall obtain stockholder approval of any
Plan amendment in such a manner and to such a degree as required.
(b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or
termination of the Plan shall adversely affect Options already granted,
unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the
Optionee and the Company.
16. CONDITIONS UPON ISSUANCE OF SHARES. Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant
to the Plan, the Company shall not be obligated, and shall have no
liability for, failure to issue or deliver any Shares under the Plan unless
such issuance or delivery would comply with the Applicable Laws, with such
compliance determined by the Company in consultation with its legal
counsel.
As a condition to the exercise of an Option or Stock Purchase
Right, the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the
Company, such a representation is required by law.
17. RESERVATION OF SHARES. The Company, during the term of
this Plan, will at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.
18. AGREEMENTS. Options and Stock Purchase Rights shall be
evidenced by written Option Agreements and Restricted Stock Purchase
Agreements, respectively, in such form(s) as the Administrator shall
approve from time to time.
19. STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject
to approval by the stockholders of the Company within twelve months before
or after the date the Plan is adopted, if required by the Applicable Laws.
Such stockholder approval shall be obtained in the degree and manner
required under the Applicable Laws. To the extent stockholder approval is
required by the Applicable Laws and not obtained, all Options and Stock
Purchase Rights issued under the Plan shall become void in the event such
approval is not obtained.
20. INFORMATION AND DOCUMENTS TO OPTIONEES AND PURCHASERS. The
Company shall provide financial statements at least annually to each
Optionee and to each individual who acquired Shares pursuant to the Plan,
during the period such Optionee or purchaser has one or more Options or
Stock Purchase Rights outstanding, and in the case of an individual who
acquired Shares pursuant to the Plan, during the period such individual
owns such Shares. The Company shall not be required to provide such
information if the issuance of Options or Stock Purchase Rights under the
Plan is limited to key employees whose duties in connection with the
Company assure their access to equivalent information. In addition, at the
time of issuance of any securities under the Plan, the Company shall
provide to the Optionee or the purchaser a copy of the Plan and any
agreement(s) pursuant to which securities granted under the Plan are
issued.
1 Reflects 1,887,309 share increase approved by the Board of Directors on
May 28, 1999.
