<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 10, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
SHOPNOW.COM INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
WASHINGTON 91-1628103
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
411 FIRST AVENUE SOUTH
SUITE 200 NORTH
SEATTLE, WASHINGTON 98104
(Address of principal executive offices, including zip code)
SHOPNOW.COM INC. 1999 NONOFFICER EMPLOYEE STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION GRANT NOTICE
SPEEDYCLICK, CORP. 1999 STOCK INCENTIVE PLAN
(Full title of the plans)
DWAYNE M. WALKER
CHIEF EXECUTIVE OFFICER
SHOPNOW.COM INC.
411 FIRST AVENUE SOUTH
SUITE 200 NORTH
SEATTLE, WASHINGTON 98104
(206) 223-1996
(Name, address and telephone number, including area code, of agent for service)
----------------------
COPIES TO:
STEPHEN M. GRAHAM
ALAN C. SMITH
PERKINS COIE LLP
1201 THIRD AVENUE, 48TH FLOOR
SEATTLE, WASHINGTON 98101-3099
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED(1) PER SHARE OFFERING PRICE FEE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value per share
under the:
- -----------------------------------------------------------------------------------------------------------
ShopNow.com Inc. 1999 Nonofficer
Employee Stock Option Plan 4,000,000 $21.44(2) $85,760,000.00 $22,640.64
- -----------------------------------------------------------------------------------------------------------
Nonqualified Stock Option Grant Notice 500,000 $12.00(3) $6,000,000.00 $1,584.00
- -----------------------------------------------------------------------------------------------------------
SpeedyClick, Corp. 1999 Stock Incentive 157,536(4) $0.14(3) $22,055.04 $6.00
Plan
- -----------------------------------------------------------------------------------------------------------
TOTAL 4,657,536 $91,782,055.04 $24,230.64
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant
to the plans as the result of any future stock split, stock dividend or
similar adjustment to the Registrant's outstanding Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
based on the average of the high ($22.50) and low ($20.378) sales
prices for the Common Stock on December 6, 1999 as reported for such
date on the Nasdaq National Market.
<PAGE>
(3) Shares are issuable upon exercise of outstanding options with fixed
exercise prices. Pursuant to Rule 457(h) under the Securities Act of
1933, as amended, the proposed maximum aggregate offering price and the
registration fee have been computed upon the basis at which the options
may be exercised.
(4) Pursuant to an Agreement and Plan of Merger dated as of November 10,
1999 (the "Merger Agreement"), by and among the Registrant, Racer
Acquisition, Inc. and SpeedyClick, Corp., the Registrant assumed
outstanding options to purchase capital stock of SpeedyClick, Corp.
under the SpeedyClick, Corp. 1999 Stock Incentive Plan (the
"SpeedyClick Assumed Options), with appropriate adjustments to the
number of shares and the exercise price per share of each SpeedyClick
Assumed Option to reflect the ratio at which outstanding options to
purchase SpeedyClick, Corp.'s capital stock were converted into options
to purchase Common Stock of the Registrant under the Merger Agreement.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's prospectus filed on September 29, 1999,
pursuant to Rule 424(b) under the Securities Act of 1993, as amended (the
"Securities Act");
(b) The Registrant's prospectus supplement filed on October
15, 1999, pursuant to Rule 424(b) and Rule 424(c) under the Securities Act;
(c) The Registrant's Current Reports on Form 8-K and Form
8-K/A filed on November 24, 1999 and December 3, 1999, respectively;
(d) The Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999;
(e) The description of the Registrant's Common Stock contained
in the Registration Statement on Form 8-A filed on July 14, 1999, under Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including any amendments or reports filed for the purpose of updating such
description; and
(f) All other reports filed by the Registrant pursuant to
pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the
fiscal year covered by the prospectus and prospectus supplement referred to
above.
All documents filed by the Registrant pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date hereof, and prior to the filing
of a post-effective amendment which indicates that the securities offered hereby
have been sold or which deregisters the securities covered hereby then remaining
unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act. Article 5 of the Registrant's
Amended and Restated Bylaws provides for indemnification of the Registrant's
directors, officers, employees and agents to the maximum extent permitted by
Washington law. The directors and officers of the registrant also may be
indemnified against liability they may incur for serving in that capacity
pursuant to a liability insurance policy maintained by the registrant for such
purpose.
Section 23B.08.320 of the Washington Business Corporation Act
authorizes a corporation to limit a director's liability to the corporation or
its shareholders for monetary damages for acts or omissions as a director,
except in certain circumstances involving intentional misconduct, self-dealing
or illegal corporate loans or distributions, or any transactions from which the
director personally receives a benefit in money, property or services to which
the director is not entitled. Article 10 of the Registrant's Amended and
Restated Articles of Incorporation contains provisions implementing, to the
fullest extent permitted by Washington law, such limitations on a director's
liability to the Registrant and its shareholders.
II-1
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ----------------- -----------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP regarding legality of the
Common Stock being registered
23.1 Consent of Ernst & Young LLP (Independent Accountants)
23.2 Consent of Arthur Andersen LLP (Independent Accountants)
23.4 Consent of Perkins Coie LLP (included in opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 ShopNow.com Inc. 1999 Nonofficer Employee Stock Option Plan
99.2 Nonqualified Stock Option Grant Notice
99.3 SpeedyClick, Corp. 1999 Stock Incentive Plan
</TABLE>
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Seattle, State of Washington, on the 8th day of
December, 1999.
SHOPNOW.COM INC.
/s/ DWAYNE M. WALKER
-------------------------------------------------------
By: Dwayne M. Walker
Chairman, President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below authorizes Dwayne M. Walker
and Alan D. Koslow, or either of them, as attorneys-in-fact with full power of
substitution, to execute in the name and on the behalf of each person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on the 8th day of December, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ DWAYNE M. WALKER Chairman of the Board, President and Chief Executive Officer
- ----------------------------- (Principal Executive Officer)
Dwayne M. Walker
/s/ ALAN D. KOSLOW Executive Vice President, Chief Financial Officer, General
- ----------------------------- Counsel and Secretary (Principal Financial and Accounting
Alan D. Koslow Officer)
Director
- -----------------------------
Jacob I. Friesel
/s/ DAVID M. LONSDALE Director
- -----------------------------
David M. Lonsdale
/s/ BRET R. MAXWELL Director
- -----------------------------
Bret R. Maxwell
/s/ MARK C. MCCLURE Director
- -----------------------------
Mark C. McClure
Director
- -----------------------------
John R. Snedegar
/s/ MARK H. TERBEEK Director
- -----------------------------
Mark H. Terbeek
/s/ EYTAN J. LOMBROSO Director
- -----------------------------
Eytan J. Lombroso
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------------ -----------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP regarding legality of the
Common Stock being registered
23.1 Consent of Ernst & Young LLP (Independent Accountants)
23.2 Consent of Arthur Andersen LLP (Independent Accountants)
23.4 Consent of Perkins Coie LLP (included in opinion filed as
Exhibit 5.1)
99.1 ShopNow.com Inc. 1999 Nonofficer Employee Stock Option Plan
99.2 Nonqualified Stock Option Grant Notice
99.3 SpeedyClick, Corp. 1999 Stock Incentive Plan
</TABLE>
<PAGE>
EXHIBIT 5.1
PERKINS COIE LLP
A LAW PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
1201 THIRD AVENUE, 48TH FLOOR, SEATTLE, WASHINGTON 98101-3099
TELEPHONE: 206 583-8888 FACSIMILE: 206 583-8500
December 10, 1999
ShopNow.com Inc.
411 First Avenue South
Suite 200 North
Seattle, Washington 98104
Re: Registration Statement on Form S-8 of Shares of Common Stock,
$0.001 Par Value, of ShopNow.com Inc.
Ladies and Gentlemen:
We have acted as counsel to ShopNow.com Inc. (the "Company") in
connection with the preparation of a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), which the Company is filing with the Securities and Exchange Commission
with respect to up to 4,657,536 shares of Common Stock, $0.001 par value, which
may be issued as follows: (1) up to 4,000,000 shares under the ShopNow.com Inc.
1999 Nonofficer Employee Stock Option Plan; (2) up to 500,000 shares under a
Nonqualified Stock Option Grant Notice and (3) up to 157,536 shares under the
SpeedyClick, Corp. 1999 Stock Incentive Plan (collectively, the "Plans").
We have examined the Registration Statement and such documents and
records of the Company and other documents as we have deemed relevant and
necessary for the purpose of this opinion. In giving this opinion, we are
assuming the authenticity of all instruments presented to us as originals, the
conformity with originals of all instruments presented to us as copies and the
genuineness of all signatures.
Based on and subject to the foregoing, we are of the opinion that any
original issuance shares that may be issued pursuant to the Plans have been duly
authorized and that, upon the due execution by the Company and the registration
by its registrar of such shares, issuance thereof by the Company in accordance
with the terms of each Plan and the receipt of consideration therefor in
accordance with the terms of each Plan, such shares will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Perkins Coie LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of ShopNow.com Inc., pertaining to the registration of 4,000,000 shares of
Common Stock to be issued pursuant to the ShopNow.com Inc. 1999 Nonofficer
Employee Stock Option Plan, 500,000 shares of Common Stock to be issued pursuant
to the Nonqualified Stock Option Grant Notice, and 157,536 shares of Common
Stock to be issued puruant to the SpeedyClick, Corp. 1999 Stock Incentive Plan,
of our report dated June 11, 1999, with respect to the 1998 and 1997 financial
statements of GO Software, Inc. included in the Registration Statement (Form S-1
No. 333-80981) and related prospectus of ShopNow.com Inc. filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Jacksonville, Florida
December 7, 1999
<PAGE>
EXHIBIT 23.2
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 24, 1999
included in ShopNow.com Inc.'s Form S-1 (File No. 333-80981), and our report
dated November 24, 1999 included in the Form 8-K/A of ShopNow.com, and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Seattle, Washington
December 7, 1999
-1-
<PAGE>
EXHIBIT 99.1
SHOPNOW.COM INC.
1999 NONOFFICER EMPLOYEE
STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this 1999 Nonofficer Employee
Stock Option Plan are:
- to attract and retain the best available personnel for
positions of substantial responsibility,
- to provide additional incentive to certain Employees and
Consultants, and
- to promote the success of the Company's business.
Options granted under the Plan may be Nonstatutory Stock Options
only.
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 or one or more senior executive officers
authorized by the Board to grant Options, in accordance with Section 4 of the
Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws
of any foreign country or jurisdiction where Options are, or will be, granted
under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means ShopNow.com Inc., a Washington corporation.
(h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(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
<PAGE>
between the Company, its Parent, any Subsidiary, or any successor. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system
for the last market trading day prior to the time of determination, as
reported in THE WALL STREET JOURNAL or such other source as the Administrator
deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value
of a Share of Common Stock shall be the mean between the high bid and low
asked prices for the Common Stock on the last market trading day prior to the
day of determination, as reported in THE WALL STREET JOURNAL or such other
source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "INCENTIVE STOCK OPTION" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code
and the regulations promulgated thereunder.
(o) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "NOTICE OF GRANT" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.
(q) "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(r) "OPTION" means a Nonstatutory Stock Option granted pursuant
to the Plan.
(s) "OPTION AGREEMENT" means an agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the
Plan.
(t) "OPTIONED STOCK" means the Common Stock subject to an Option.
(u) "OPTIONEE" means the holder of an outstanding Option 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 1999 Nonofficer Employee Stock Option Plan.
(x) "SERVICE PROVIDER" means an Employee or Consultant.
(y) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
-2-
<PAGE>
(z) "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 number of Shares which may be optioned and sold
under the Plan is (a) 1,000,000 Shares plus (b) an automatic increase to be
added on the first day of each fiscal quarter beginning on or after January
1, 2000 equal to 10,000 Shares multiplied by the number of individuals who
began employment or services at the Company, a Parent or a Subsidiary in the
preceding fiscal quarter in connection with the Company's acquisition of any
corporation or business entity in such quarter; provided, however, that the
maximum number of Shares which may be optioned and sold under the Plan may
not exceed 4,000,000 Shares. The Shares may be authorized, but unissued, or
reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); PROVIDED, however, that Shares that have actually been issued
under the Plan shall not be returned to the Plan and shall not become
available for future distribution under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) Procedure.
(i) MULTIPLE ADMINISTRATIVE BODIES. The Plan may be
administered by different Committees with respect to different groups of
Service Providers. In addition, to the extent consistent with applicable law,
the Board may authorize one or more senior executive officers to grant
Options to specified classes of Service Providers, within the limits
specifically prescribed by the Board.
(ii) OTHER ADMINISTRATION. Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan, and in the case of a Committee or executive officer, subject to the
specific duties delegated by the Board to such Committee or officer, the
Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value;
(i) to select the Service Providers to whom Options may be
granted hereunder;
(iii) to determine the number of shares of Common Stock to
be covered by each Option granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options 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 the shares of Common
Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vi) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
-3-
<PAGE>
(vii) 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;
(viii) to modify or amend each Option (subject to Section
14(b) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;
(ix) 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 that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of
the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by an Optionee to have
Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable;
(x) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;
(xi) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's
decisions, determinations and interpretations shall be final and binding on
all Optionees and any other holders of Options.
5. ELIGIBILITY. Options may be granted to Service Providers selected
by the Administrator who are not, at the time the Option is granted, Officers
or Directors of the Company.
6. LIMITATIONS.
(a) Neither the Plan nor any Option shall confer upon an Optionee
any right with respect to continuing the Optionee's relationship as a Service
Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.
7. TERM OF PLAN. The Plan shall become effective upon its adoption
by the Board. The Plan shall have no fixed expiration date.
8. TERM OF OPTION. The term of each Option shall be stated in the
Option Agreement or, if not stated in the Option Agreement, shall be ten (10)
years from the date of grant.
9. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator.
(b) WAITING PERIOD AND EXERCISE DATES. At the time an Option is
granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions that must be satisfied before
the Option may be exercised.
(c) FORM OF CONSIDERATION. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the
method of payment. Such consideration may consist entirely of:
(i) cash;
-4-
<PAGE>
(ii) check;
(iii) to the extent permitted by the Plan Administrator in
the Option Agreement, other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date
of surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised;
(iv) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(v) any combination of the foregoing methods of payment; or
(vi) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
10. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by
the Administrator and permitted by the Option Agreement and the Plan. Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued)
such Shares promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the Shares are issued, except as provided in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the number
of Shares thereafter available, both for purposes of the Plan and for sale
under the Option, by the number of Shares as to which the Option is exercised.
(b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's
death or Disability, the Optionee may exercise his or her Option within such
period of time as is specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his
or her Option within the time specified by the Administrator, the Option
shall terminate, and the Shares covered by such Option shall revert to the
Plan.
(c) DISABILITY OF OPTIONEE. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise
his or her Option within such period of time as is specified in the Option
Agreement to the extent the Option is vested on the date of termination (but
in no event later than the expiration of the term of such Option as set forth
in the Option Agreement). In the absence of a specified time in
-5-
<PAGE>
the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee's termination. If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered
by the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(d) DEATH OF OPTIONEE. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the expiration
of the term of such Option as set forth in the Option Agreement), by the
Optionee's estate or by a person who acquires the right to exercise the
Option by bequest or inheritance, but only to the extent that the Option is
vested on the date of death. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months
following the Optionee's termination. If, at the time of death, the Optionee
is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall immediately revert to the Plan. The
Option may be exercised by the executor or administrator of the Optionee's
estate or, if none, by the person(s) entitled to exercise the Option under
the Optionee's will or the laws of descent or distribution. If the Option is
not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) BUYOUT PROVISIONS. The Administrator may at any time offer to
buy out for a payment in cash or Shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
11. NON-TRANSFERABILITY OF OPTIONS. Unless determined otherwise by
the Administrator, an Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or
by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. If the Administrator makes an
Option transferable, such Option shall contain such additional terms and
conditions as the Administrator deems appropriate.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER
OR ASSET SALE.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and the number of shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options
have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be
deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify
each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option until ten (10) days
prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be exercisable.
In addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option 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 will terminate immediately prior to the
consummation of such proposed action.
-6-
<PAGE>
(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 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, the
Optionee shall fully vest in and have the right to exercise the Option as to
all of the Optioned Stock, including Shares as to which it would not
otherwise be vested or exercisable. If an Option 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 shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option
shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option 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 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, for each Share of Optioned Stock subject to the Option, 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. DATE OF GRANT. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination
granting such Option, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.
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) 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 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.
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.
-7-
<PAGE>
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.
ADOPTED BY THE BOARD ON DECEMBER 8, 1999.
-8-
<PAGE>
PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
SUMMARY PAGE
<TABLE>
<CAPTION>
SECTION/EFFECT OF DATE OF SHAREHOLDER
DATE OF BOARD ACTION ACTION AMENDMENT APPROVAL
<S> <C> <C> <C>
December 8, 1999 Initial Plan Adoption Not Applicable
</TABLE>
-1-
<PAGE>
EXHIBIT 99.2
Name of Optionee: DWAYNE WALKER
-------------
OPTION GRANT
OF
SHOPNOW.COM INC.
This is an option grant dated the date set forth on Schedule A hereto
(hereinafter, together with this Agreement, called this "Agreement") by
ShopNow.com Inc., a Washington corporation (the "Company"), to Dwayne Walker
(the "Optionee").
1. GRANT OF OPTION. The Company hereby grants to the Optionee, as a
matter of separate agreement and not in lieu of salary or of any other
compensation for services, the right and option (the "Option") to purchase all
or any part of an aggregate number of full shares of the Company's common stock
("Common Stock") set forth in Schedule A on the terms and conditions set forth
(i) herein and (ii) on Schedule A. The date of grant of the Option is the date
set forth in Schedule A.
2. NON-TRANSFERABLE. The Option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution, and
the Option is exercisable, during his lifetime, only by him. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this Option or any
right or privilege conferred hereby, contrary to the provisions hereof, or upon
the sale or levy or any attachment or similar process, the Option thereupon
shall terminate and become null and void. During an Optionee's lifetime, the
Option granted is personal to him and is exercisable solely by Optionee.
3. WITHHOLDING. Prior to delivery of any shares purchased upon exercise
of this Option, the Company shall determine the amount of any federal or state
income tax, if any, which is required to be withheld under Applicable Law (as
defined herein) and shall collect from Optionee in accordance with Section 12
hereof the amount of any such tax to the extent not previously withheld.
4. RIGHTS AS SHAREHOLDER. Optionee shall not have any rights as a
shareholder with respect to any shares of Common Stock subject to this Option
(the "Optioned Stock") until the date that a stock certificate for such shares
as to which Optionee has exercised this Option has been issued to Optionee. The
Company shall issue such certificate as expeditiously as possible.
5. SECURITIES REGULATION.
(a) COMPLIANCE; CONDITION TO EXERCISE. Shares of Common Stock
(collectively, "Shares") shall not be issued with respect to this Option unless
the exercise of the Option and the issuance and delivery of such Shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation any applicable state securities laws, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Shares may then be listed, and shall further be
subject to the approval of counsel for the Company with respect to such
compliance. Inability of the Company to obtain from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any Shares hereunder, shall relieve the Company
of any liability in respect of the non-issuance or sale of Shares as to which
such requisite authority shall not have been obtained.
(b) REPRESENTATIONS BY OPTIONEE. As a condition to the
exercise of this option, the Company may not require the Optionee 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 mutually agreed, such representation is required by any relevant
provisions of the laws referred to in Section 5(a).
-1-
<PAGE>
At the option of the Company, a stop transfer order against any Shares may be
placed on the official stock books and records of the Company, and two
legends may be stamped on the stock certificate, one of which indicating that
the Shares may not be pledged, sold or otherwise transferred unless an
opinion of counsel is provided (concurred in by counsel for the Company)
stating that such transfer is not in violation of any applicable law or
regulation. The Board of Directors of the Company (the "Board") may also
require such other action or agreement by the optionees as may from time to
time be necessary to comply with the federal and state securities laws.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, NEITHER THIS
PROVISION NOR ANY OTHER PROVISION SHALL OBLIGATE THE COMPANY TO UNDERTAKE
REGISTRATION OF OPTIONS OR STOCK HEREUNDER.
6. FORM OF CONSIDERATION. The Administrator (as defined below) shall
determine the acceptable form of consideration for exercising the Option,
including the method of payment. Such consideration may consist entirely of:
a. cash;
b. check;
c. promissory note;
d. other Shares which (i) 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 (ii) have a Fair Market Value (as defined below)
on the date of surrender equal to the aggregate exercise price of the Shares as
to which the Option shall be exercised;
e. consideration received by the Company under a cashless
exercise program implemented by the Company;
f. a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
g. any combination of the foregoing methods of payment; or
h. such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Law.
7. EXERCISE OF OPTION.
a. PROCEDURE FOR EXERCISE. The Option granted hereunder shall
be exercisable at such times and under such conditions as set forth in this
Agreement. Unless the Administrator provides otherwise, vesting of the Option
granted hereunder shall be tolled during any unpaid leave of absence. The Option
may not be exercised for a fraction of a Share.
The Option shall be deemed exercised when the Company
receives: (i) an executed Notice of Exercise of Stock Option (in the form
attached hereto) from the Optionee, 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 this Agreement. 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 spouse. 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 8 of this Agreement.
b. TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an
Optionee ceases to be a Service Provider (as defined below), other than upon the
Optionee's death or Disability (as defined below), the
-2-
<PAGE>
Optionee may exercise his Option within three (3) months following the
Optionee's termination (but in no event later than the expiration of the term
of such Option as set forth in Schedule A). If, on the date of termination,
the Optionee is not vested as to his entire Option, the Shares covered by the
unvested portion of the Option shall be cancelled unless Optionee is still
being paid salary by company in which case vesting period shall continue for
salary paid period. If, after termination, the Optionee does not exercise his
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall be cancelled.
c. DISABILITY OF OPTIONEE. If the Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his Option within twelve (12) months following the Optionee's
termination (but in no event later than the expiration of the term of such
Option as set forth in Schedule A). If, on the date of termination, the Optionee
is not vested as to his entire Option, the Shares covered by the unvested
portion of the Option shall be cancelled. If, after termination, the Optionee
does not exercise his Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall be cancelled.
d. DEATH OF OPTIONEE. If the Optionee dies while a Service
Provider, the Option may be exercised within twelve (12) months following the
Optionee's termination or death by Optionee's family or (but in no event later
than the expiration of the term of such Option as set forth in Schedule A) by
the Optionee's estate or by a person who acquires the right to exercise the
Option by bequest or inheritance, but only to the extent that the Option is
vested on the date of death. If, at the time of death, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall immediately be cancelled. The Option may be
exercised by the executor or administrator of the Optionee's estate or, if none,
by the person(s) entitled to exercise the Option under the Optionee's will or
the laws of descent or distribution. If the Option is not so exercised within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall be cancelled.
e. BUYOUT PROVISIONS. The Administrator may at any time offer
to buy out for a payment in cash or Shares the Option based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee
at the time that such offer is made. The Optionee is not obligated or required
to take or accept buy out unless mutually agreed.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.
a. CHANGES IN CAPITALIZATION. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by the Option, as well as the price per share of Common Stock covered by the
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to the Option.
b. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
as soon as practicable prior to the effective date of such proposed transaction.
The Administrator in its discretion may provide for the Optionee to have the
right to exercise his Option until ten (10) days prior to such transaction as to
all of the shares of Optioned Stock, including Shares as to which the Option
would not otherwise be exercisable. In addition, the Administrator may provide
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
-3-
<PAGE>
contemplated. To the extent it has not been previously exercised, an Option
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, the Option shall vest completely upon merger unless
Optionee continues CEO for at least 1 year 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, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If the
Option 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 shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option 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 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, for each
Share of Optioned Stock subject to the Option, 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.
9. 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.
10. RESERVATION OF SHARES. The Company, during the term of this
Agreement, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of this Agreement and the
Option.
11. AMENDMENT AND TERMINATION OF THIS AGREEMENT.
a. AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or terminate this Agreement.
b. EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration, suspension or termination of this Agreement shall impair the rights
of the 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 this Agreement shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to the
Option granted under this Agreement prior to the date of such termination.
12. ADMINISTRATION OF THIS AGREEMENT.
a. PROCEDURE.
(i) SECTION 162(m). To the extent that the
Administrator determines it to be desirable to qualify the Option granted
hereunder as "performance-based compensation" within the meaning of Section
162(m) of the Code, this Agreement shall be administered by a Committee of two
or more "outside directors" which are acceptable directors by Optionee within
the meaning of Section 162(m) of the Code.
-4-
<PAGE>
(ii) RULE 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iii) OTHER ADMINISTRATION. Other than as provided
above, this Agreement shall be administered by (A) the Compensation Committee of
the Board, (B) the Board or (C) another Committee, which Committee shall be
constituted to satisfy Applicable Laws.
b. POWERS OF THE ADMINISTRATOR. Subject to the provisions of
this Agreement, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to reduce the exercise price of the 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;
(iii) to institute a program whereby the Option may
be surrendered in exchange for other options to purchase Common Stock with a
lower exercise price;
(iv) to construe and interpret the terms of this
Agreement and awards granted pursuant to this Agreement;
(v) to prescribe, amend and rescind rules and
regulations relating to this Agreement;
(vi) to modify or amend the Option (subject to
Section 11(b) hereof), including the discretionary authority to extend the
post-termination exercisability period of the Option longer than is otherwise
provided for in this Agreement;
(vii) to allow the Optionee to satisfy withholding
tax obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of the Option 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 the Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; and
(viii) to make all other determinations deemed
necessary or advisable for administering this Agreement.
c. EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's
decisions, determinations and interpretations shall be final and binding on the
Optionee and any other holders of the Option.
13. NOTICES. Any notice or demand which either party may give to the
other hereunder shall be in writing and shall be effective when delivered
personally or sent by registered mail, postage prepaid, addressed, if to
Optionee, as set forth on Schedule A and if to Company, as follows:
ShopNow.com Inc.
411 First Avenue South
Suite 200
Seattle, Washington 98104
Attention: Stock Option Administrator
-5-
<PAGE>
Either party may, by notice in writing, direct that future notices or
demands be sent to a different address.
14. DEFINITIONS. As used in this Agreement, the following definitions
shall apply:
a. "Administrator" means the Compensation Committee of the
Board or any other Committee as shall be administering the Plan, in accordance
with Section 12 hereof;
b "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where the Option is granted.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.
e. "Committee" means a committee of Directors appointed by the
Board in accordance with Section 12 of this Agreement.
f. "Director" means a member of the Board.
g. "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
h. "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 (A) any leave
of absence approved by the Company or (B) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
i. "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in THE WALL STREET JOURNAL or such
other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
j. "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.
k. "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
-6-
<PAGE>
l. "Service Provider" means an Employee, Director or
Consultant.
m. "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
15. INTERPRETATION. All matters of interpretation of this Agreement,
including the terms and conditions hereof and the definitions of the words used
herein, shall be in the sole and final discretion of the Board or authorized
Committee.
16. GOVERNING LAW. This Option and Agreement shall be governed by the
laws of the State of Washington.
SHOPNOW.COM INC.
By: /s/ ALAN D. KOSLOW
----------------------------------
Its: CFO/GENERAL COUNSEL
----------------------------------
-7-
<PAGE>
ACCEPTANCE AND ACKNOWLEDGEMENT
I accept the stock option dated September 27, 1999 granted by
ShopNow.com, Inc., and understand its terms and conditions.
Signature of /s/ DWAYNE M. WALKER
Optionee: ----------------------------
Dated: 11/12/99
----------------------------
-8-
<PAGE>
OPTION GRANT
SHOPNOW.COM INC.
SCHEDULE A
1. Name and Address of Optionee:
Dwayne Walker
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
2. Date of grant of this Option: September 27, 1999
------------------------
3. This Option is: / / an Incentive Stock Option, or
/X/ a Nonqualified Stock Option.
4. Number of shares of Common Stock covered by this Option:
500,000 shares.
--------
5. Purchase price per share: $12.00.
-------
6. This Option expires on: September 27, 2009.
-------------------
7. Except as set forth in Paragraph 8 below, this Option shall become
exercisable in increments with respect to the following numbers of
shares as set forth below:
<TABLE>
<CAPTION>
Date on and after Portion of total
which Option Option which
is exercisable is exercisable
-------------- --------------
<S> <C>
4-4-2000 125,000 shares
----------------------------- --------------------------------
10-4-2000 125,000 shares
----------------------------- --------------------------------
4-4-2001 125,000 shares
----------------------------- --------------------------------
10-4-2001 125,000 shares
----------------------------- --------------------------------
</TABLE>
8. Acceleration of Options: Notwithstanding anything to the contrary
contained herein, (a) this entire set of Options may vest earlier than
provided in Paragraph 7 above as set forth in Section 5 of that certain
-9-
<PAGE>
Employment Agreement between the Company and the Optionee, dated July
23, 1999, and (b) this Option shall immediately and fully vest all
options, and the Optionee shall immediately have the right to exercise
all Options as to all of the Optioned Stock, on the first business day
following the 30 calendar day period that the closing sales price for
the Common Stock (or the closing bid, if no sales were reported) as
quoted on the Nasdaq Stock Market for each trading day during such
period is equal to or greater than $20 per share.
NOTICE OF EXERCISE OF STOCK OPTION
TO: SHOPNOW.COM INC.
I hereby exercise my stock option granted by ShopNow.com Inc. (the
"Company"), subject to all the terms and provisions thereof and notify the
Company of my desire to purchase ______________ shares of Common Stock of the
Company at the exercise price of $_______ per share which were offered to me
pursuant to said option.
I hereby represent that the _________________ shares of Common Stock to
be delivered to me pursuant to this exercise are being acquired by me for my own
account, for investment and not with a view to resale or distribution.
Dated:
-----------------------------
--------------------------------------
-10-
<PAGE>
EXHIBIT 99.3
SPEEDYCLICK, CORP.
1999 STOCK INCENTIVE PLAN
1. PURPOSES OF THE PLAN. The purposes of this Stock Incentive Plan are
to attract and retain the best available personnel, to provide additional
incentive to Employees, Directors and Consultants and to promote the success of
the Company's business.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or any of the Committees
appointed to administer the Plan.
(b) "APPLICABLE LAWS" means the legal requirements relating to
the administration of stock incentive plans, if any, under applicable provisions
of federal and state securities laws, the corporate laws of California and, to
the extent other than California, the corporate law of the state of the
Company's incorporation, the Code, the rules of any applicable stock exchange or
national market system, and the rules of any foreign jurisdiction applicable to
Awards granted to residents therein.
(c) "AWARD" means the grant of an Option, Restricted Stock, or
other right or benefit under the Plan.
(d) "AWARD AGREEMENT" means the written agreement evidencing
the grant of an Award executed by the Company and the Grantee, including any
amendments thereto.
(e) "BOARD" means the Board of Directors of the Company.
(f) "CAUSE" means, with respect to the termination by the
Company or a Related Entity of the Grantee's Continuous Service, that such
termination is for "Cause" as such term is expressly defined in a then-effective
written agreement between the Grantee and the Company or such Related Entity, or
in the absence of such then-effective written agreement and definition, is based
on, in the determination of the Administrator, the Grantee's: (i) refusal or
failure to act in accordance with any specific, lawful direction or order of the
Company or a Related Entity; (ii) unfitness or unavailability for service or
unsatisfactory performance (other than as a result of Disability); (iii)
performance of any act or failure to perform any act in bad faith and to the
detriment of the Company or a Related Entity; (iv) dishonesty, intentional
misconduct or material breach of any agreement with the Company or a Related
Entity; or (v) commission of a crime involving dishonesty, breach of trust, or
physical or emotional harm to any person. At least 30 days prior to the
termination of the Grantee's Continuous Service pursuant to (i) or (ii) above,
the Company shall provide the Grantee with notice of the Company's or such
Related Entity's intent to terminate, the reason therefor, and an opportunity
for the Grantee to cure such defects in his or her service to the Company's or
such Related Entity's satisfaction. During this 30 day (or longer) period, no
Award issued to the Grantee under the Plan may be exercised or purchased.
(g) "CODE" means the Internal Revenue Code of 1986, as
amended.
(h) "COMMITTEE" means any committee appointed by the Board to
administer the Plan.
(i) "COMMON STOCK" means the common stock of the Company.
(j) "COMPANY" means SpeedyClick, Corp.
-1-
<PAGE>
(k) "CONSULTANT" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's capacity as
a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.
(l) "CONTINUOUS SERVICE" means that the provision of services
to the Company or a Related Entity in any capacity of Employee, Director or
Consultant, is not interrupted or terminated. Continuous Service shall not be
considered interrupted in the case of (i) any approved leave of absence, (ii)
transfers between locations of the Company or among the Company, any Related
Entity, or any successor, in any capacity of Employee, Director or Consultant,
or (iii) any change in status as long as the individual remains in the service
of the Company or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Award Agreement). An approved
leave of absence shall include sick leave, military leave, or any other
authorized personal leave. For purposes of Incentive Stock Options, no such
leave may exceed ninety (90) days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract.
(m) "CORPORATE TRANSACTION" means any of the following
transactions to which the Company is a party:
(i) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated;
(ii) the sale, transfer or other disposition of all
or substantially all of the assets of the Company (including the capital stock
of the Company's subsidiary corporations) in connection with the complete
liquidation or dissolution of the Company;
(iii) any reverse merger in which the Company is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding securities
are transferred to a person or persons different from those who held such
securities immediately prior to such merger; or
(iv) acquisition by any person or related group of
persons (other than the Company or by a Company-sponsored employee benefit plan)
of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act)
of securities possessing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities, but excluding any such
transaction that the Administrator determines shall not be a Corporate
Transaction.
(n) "DIRECTOR" means a member of the Board or the board of
directors of any Related Entity.
(o) "DISABILITY" means that a Grantee is permanently unable to
carry out the responsibilities and functions of the position held by the Grantee
by reason of any medically determinable physical or mental impairment. A Grantee
will not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator in its
discretion.
(p) "EMPLOYEE" means any person, including an Officer or
Director, who is an employee of the Company or any Related Entity. The payment
of a director's fee by the Company or a Related Entity shall not be sufficient
to constitute "employment" by the Company.
(q) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(r) "FAIR MARKET VALUE" means, as of any date, the value of
Common Stock determined as follows:
(i) Where there exists a public market for the
Common Stock, the Fair Market Value shall be (A) the closing price for a
Share for the last market trading day prior to the time of the determination
(or, if no closing price was reported on that date, on the last trading date
on which a closing price was reported) on
-2-
<PAGE>
the stock exchange determined by the Administrator to be the primary market
for the Common Stock or the Nasdaq National Market, whichever is applicable
or (B) if the Common Stock is not traded on any such exchange or national
market system, the average of the closing bid and asked prices of a Share on
the Nasdaq Small Cap Market for the day prior to the time of the
determination (or, if no such prices were reported on that date, on the last
date on which such prices were reported), in each case, as reported in THE
WALL STREET JOURNAL or such other source as the Administrator deems reliable;
or
(ii) In the absence of an established market for the
Common Stock of the type described in (i), above, the Fair Market Value thereof
shall be determined by the Administrator in good faith and in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations.
(s) "GRANTEE" means an Employee, Director or Consultant who
receives an Award under the Plan.
(t) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(u) "NON-QUALIFIED STOCK OPTION" means an Option not intended
to qualify as an Incentive Stock Option.
(v) "OFFICER" means a person who is an officer of the Company
or a Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.
(w) "OPTION" means an option to purchase Shares pursuant to an
Award Agreement granted under the Plan.
(x) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(y) "PLAN" means this 1999 Stock Incentive Plan.
(z) "POST-TERMINATION EXERCISE PERIOD" means the period
specified in the Award Agreement of not less than three (3) months commencing on
the date of termination (other than termination by the Company or any Related
Entity for Cause) of the Grantee's Continuous Service, or such longer period as
may be applicable upon death or Disability.
(aa) "REGISTRATION DATE" means the first to occur of (i) the
closing of the first sale to the general public of (A) the Common Stock or (B)
the same class of securities of a successor corporation (or its Parent) issued
pursuant to a Corporate Transaction in exchange for or in substitution of the
Common Stock, pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended; and (ii) in the event of a Corporate Transaction, the date of
the consummation of the Corporate Transaction if the same class of securities of
the successor corporation (or its Parent) issuable in such Corporate Transaction
shall have been sold 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, on or prior to the date of
consummation of such Corporate Transaction.
(bb) "RELATED ENTITY" means any Parent, Subsidiary and any
business, corporation, partnership, limited liability company or other entity in
which the Company, a Parent or a Subsidiary holds a substantial ownership
interest, directly or indirectly.
(cc) "RESTRICTED STOCK" means Shares issued under the Plan to
the Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture provisions,
and other terms and conditions as established by the Administrator.
-3-
<PAGE>
(dd) "SHARE" means a share of the Common Stock.
(ee) "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.
(a) Subject to the provisions of Section 11(a) below, the
maximum aggregate number of Shares which may be issued pursuant to all Awards
(including Incentive Stock Options) is three hundred seventy-five thousand
(375,000) Shares. The Shares may be authorized, but unissued, or reacquired
Common Stock.
(b) Any Shares covered by an Award (or portion of an Award)
which is forfeited or canceled, expires or is settled in cash, shall be deemed
not to have been issued for purposes of determining the maximum aggregate number
of Shares which may be issued under the Plan. If any unissued Shares are
retained by the Company upon exercise of an Award in order to satisfy the
exercise price for such Award or any withholding taxes due with respect to such
Award, such retained Shares subject to such Award shall become available for
future issuance under the Plan (unless the Plan has terminated). Shares that
actually have been issued under the Plan pursuant to an Award shall not be
returned to the Plan and shall not become available for future issuance under
the Plan, except that if unvested Shares are forfeited, or 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) PLAN ADMINISTRATOR. With respect to grants of Awards to
Employees, Directors, or Consultants, the Plan shall be administered by (A) the
Board or (B) a Committee (or a subcommittee of the Committee) designated by the
Board, which Committee shall be constituted in such a manner as to satisfy
Applicable Laws. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.
(b) POWERS OF THE ADMINISTRATOR. Subject to Applicable Laws
and the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the Board, the
Administrator shall have the authority, in its discretion:
(i) to select the Employees, Directors and
Consultants to whom Awards may be granted from time to time hereunder;
(ii) to determine whether and to what extent Awards
are granted hereunder;
(iii) to determine the number of Shares or the amount
of other consideration to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use
under the Plan;
(v) to determine the terms and conditions of any
Award granted hereunder;
(vi) to establish additional terms, conditions, rules
or procedures to accommodate the rules or laws of applicable foreign
jurisdictions and to afford Grantees favorable treatment under such rules or
laws; provided, however, that no Award shall be granted under any such
additional terms, conditions, rules or procedures with terms or conditions which
are inconsistent with the provisions of the Plan;
(vii) to amend the terms of any outstanding Award
granted under the Plan, provided that any amendment that would adversely affect
the Grantee's rights under an outstanding Award shall not be made without the
Grantee's written consent;
-4-
<PAGE>
(viii) to construe and interpret the terms of the
Plan and Awards, including without limitation, any notice of award or Award
Agreement, granted pursuant to the Plan; and
(ix) to take such other action, not inconsistent with
the terms of the Plan, as the Administrator deems appropriate.
(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be conclusive and
binding on all persons.
5. ELIGIBILITY. Awards other than Incentive Stock Options may be
granted to Employees, Directors and Consultants. Incentive Stock Options may be
granted only to Employees of the Company, a Parent or a Subsidiary. An Employee,
Director or Consultant who has been granted an Award may, if otherwise eligible,
be granted additional Awards. Awards may be granted to such Employees, Directors
or Consultants who are residing in foreign jurisdictions as the Administrator
may determine from time to time.
6. TERMS AND CONDITIONS OF AWARDS.
(a) TYPE OF AWARDS. The Administrator is authorized under the
Plan to award any type of arrangement to an Employee, Director or Consultant
that is not inconsistent with the provisions of the Plan and that by its terms
involves or might involve the issuance of (i) Shares, (ii) an Option, or similar
right with a fixed or variable price related to the Fair Market Value of the
Shares and with an exercise or conversion privilege related to the passage of
time, the occurrence of one or more events, or the satisfaction of performance
criteria or other conditions, or (iii) any other security with the value derived
from the value of the Shares. Such awards include, without limitation, Options,
or sales or bonuses of Restricted Stock, and an Award may consist of one such
security or benefit, or two (2) or more of them in any combination or
alternative.
(b) DESIGNATION OF AWARD. Each Award shall be designated in
the Award Agreement. In the case of an Option, the Option shall be designated as
either an Incentive Stock Option or a Non-Qualified Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of Shares subject to Options designated as Incentive Stock Options which
become exercisable for the first time by a Grantee during any calendar year
(under all plans of the Company or any Parent or Subsidiary) exceeds $100,000,
such excess Options, to the extent of the Shares covered thereby in excess of
the foregoing limitation, shall be treated as Non-Qualified Stock Options. For
this purpose, Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of the Shares shall be
determined as of the grant date of the relevant Option.
(c) CONDITIONS OF AWARD. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, increase in share price, earnings per share, total shareholder
return, return on equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator.
Partial achievement of the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award Agreement.
(d) ACQUISITIONS AND OTHER TRANSACTIONS. The Administrator may
issue Awards under the Plan in settlement, assumption or substitution for,
outstanding awards or obligations to grant future awards in connection with the
Company or a Related Entity acquiring another entity, an interest in another
entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.
-5-
<PAGE>
(e) AWARD EXCHANGE PROGRAMS. The Administrator may establish
one or more programs under the Plan to permit selected Grantees to exchange an
Award under the Plan for one or more other types of Awards under the Plan on
such terms and conditions as determined by the Administrator from time to time.
(f) SEPARATE PROGRAMS. The Administrator may establish one or
more separate programs under the Plan for the purpose of issuing particular
forms of Awards to one or more classes of Grantees on such terms and conditions
as determined by the Administrator from time to time.
(g) EARLY EXERCISE. The Award Agreement may, but need not,
include a provision whereby the Grantee may elect at any time while an Employee,
Director or Consultant to exercise any part or all of the Award prior to full
vesting of the Award. Any unvested Shares received pursuant to such exercise may
be subject to a repurchase right in favor of the Company or a Related Entity or
to any other restriction the Administrator determines to be appropriate.
(h) TERM OF AWARD. The term of each Award shall be the term
stated in the Award Agreement, provided, however, that the term shall be no more
than ten (10) years from the date of grant thereof. However, in the case of an
Incentive Stock Option granted to a Grantee 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 Incentive Stock Option shall be five (5) years from the date of grant
thereof or such shorter term as may be provided in the Award Agreement.
(i) TRANSFERABILITY OF AWARDS. Non-Qualified Stock Options
shall be transferable (i) to the extent provided in the Award Agreement and in a
manner consistent with Section 260.140.41 of Title 10 of the California Code of
Regulations and (ii) by will, and by the laws of descent and distribution.
Incentive Stock Options and other Awards 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 Grantee, only by the Grantee.
(j) TIME OF GRANTING AWARDS. The date of grant of an Award
shall for all purposes be the date on which the Administrator makes the
determination to grant such Award, or such other date as is determined by the
Administrator. Notice of the grant determination shall be given to each
Employee, Director or Consultant to whom an Award is so granted within a
reasonable time after the date of such grant.
7. AWARD EXERCISE OR PURCHASE PRICE, CONSIDERATION, TAXES AND RELOAD
OPTIONS.
(a) EXERCISE OR PURCHASE PRICE. The exercise or purchase
price, if any, for an Award shall be as follows:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time
of the grant of such Incentive Stock 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 per Share exercise price shall be not less than
one hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant; or
(B) granted to any Employee other than an
Employee described in the preceding paragraph, the per Share exercise price
shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.
(ii) In the case of a Non-Qualified Stock Option:
(A) granted to a person who, at the time of
the 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
-6-
<PAGE>
Parent or Subsidiary, the per Share exercise price shall be not less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant; or
(B) granted to any person other than a
person described in the preceding paragraph, the per Share exercise price shall
be not less than eighty-five percent (85%) of the Fair Market Value per Share on
the date of grant.
(iii) In the case of the sale of Shares:
(A) granted to a person who, at the time of
the grant of such Award, or at the time the purchase is consummated, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share purchase price
shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant; or
(B) granted to any person other than a
person described in the preceding paragraph, the per Share purchase price shall
be not less than eighty-five percent (85%) of the Fair Market Value per Share on
the date of grant.
(iv) In the case of other Awards, such price as is
determined by the Administrator.
(v) Notwithstanding the foregoing provisions of this
Section 7(a), in the case of an Award issued pursuant to Section 6(d), above,
the exercise or purchase price for the Award shall be determined in accordance
with the principles of Section 424(a) of the Code.
(b) CONSIDERATION. Subject to Applicable Laws, the
consideration to be paid for the Shares to be issued upon exercise or purchase
of an Award 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). In addition to any other types of
consideration the Administrator may determine, the Administrator is authorized
to accept as consideration for Shares issued under the Plan the following:
(i) cash;
(ii) check;
(iii) delivery of Grantee's promissory note with
such recourse, interest, security, and redemption provisions as the
Administrator determines as appropriate;
(iv) if the exercise or purchase occurs on or after
the Registration Date, surrender of Shares or delivery of a properly executed
form of attestation of ownership of Shares as the Administrator may require
(including withholding of Shares otherwise deliverable upon exercise of the
Award) which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate exercise price of the Shares as to which said Award shall
be exercised (but only to the extent that such exercise of the Award would not
result in an accounting compensation charge with respect to the Shares used to
pay the exercise price unless otherwise determined by the Administrator);
(v) with respect to Options, if the exercise occurs
on or after the Registration Date, payment through a broker-dealer sale and
remittance procedure pursuant to which the Grantee (A) shall provide written
instructions to a Company designated brokerage firm to effect the immediate sale
of some or all of the purchased Shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased Shares and (B) shall provide
written directives to the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale
transaction; or
(vi) any combination of the foregoing methods of
payment.
-7-
<PAGE>
(c) TAXES. No Shares shall be delivered under the Plan to any
Grantee or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign, federal,
state, or local income and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive Stock
Option. Upon exercise of an Award the Company shall withhold or collect from
Grantee an amount sufficient to satisfy such tax obligations.
(d) RELOAD OPTIONS. In the event the exercise price or tax
withholding of an Option is satisfied by the Company or the Grantee's employer
withholding Shares otherwise deliverable to the Grantee, the Administrator may
issue the Grantee an additional Option, with terms identical to the Award
Agreement under which the Option was exercised, but at an exercise price as
determined by the Administrator in accordance with the Plan.
8. EXERCISE OF AWARD.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER.
(i) Any Award granted hereunder shall be exercisable
at such times and under such conditions as determined by the Administrator under
the terms of the Plan and specified in the Award Agreement but in the case of an
Option, in no case at a rate of less than twenty percent (20%) per year over
five (5) years from the date the Option is granted, subject to reasonable
conditions such as continued employment. Notwithstanding the foregoing, in the
case of an Option granted to an Officer, Director or Consultant, the Award
Agreement may provide that the Option may become exercisable, subject to
reasonable conditions such as such Officer's, Director's or Consultant's
Continuous Service, at any time or during any period established in the Award
Agreement.
(ii) An Award shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Award by the person entitled to exercise the Award and full
payment for the Shares with respect to which the Award is exercised, including,
to the extent selected, use of the broker-dealer sale and remittance procedure
to pay the purchase price as provided in Section 7(b)(v). 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
shareholder shall exist with respect to Shares subject to an Award,
notwithstanding the exercise of an Option or other Award. 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 the Award Agreement
or Section 11(a), below.
(b) EXERCISE OF AWARD FOLLOWING TERMINATION OF CONTINUOUS
SERVICE. In the event of termination of a Grantee's Continuous Service for any
reason other than Disability or death (but not in the event of a Grantee's
change of status from Employee to Consultant or from Consultant to Employee),
such Grantee may, but only during the Post-Termination Exercise Period (but in
no event later than the expiration date of the term of such Award as set forth
in the Award Agreement), exercise the Award to the extent that the Grantee was
entitled to exercise it at the date of such termination or to such other extent
as may be determined by the Administrator. The Grantee's Award Agreement may
provide that upon the termination of the Grantee's Continuous Service for Cause,
the Grantee's right to exercise the Award shall terminate concurrently with the
termination of Grantee's Continuous Service. In the event of a Grantee's change
of status from Employee to Consultant, an Employee's Incentive Stock Option
shall convert automatically to a Non-Qualified Stock Option on the day three (3)
months and one day following such change of status. To the extent that the
Grantee is not entitled to exercise the Award at the date of termination, or if
the Grantee does not exercise such Award to the extent so entitled within the
Post-Termination Exercise Period, the Award shall terminate.
(c) DISABILITY OF GRANTEE. In the event of termination of a
Grantee's Continuous Service as a result of his or her Disability, Grantee may,
but only within twelve (12) months from the date of such termination (and in no
event later than the expiration date of the term of such Award as set forth in
the Award Agreement), exercise the Award to the extent that the Grantee was
otherwise entitled to exercise it at the date of such
-8-
<PAGE>
termination; provided, however, that if such Disability is not a "disability"
as such term is defined in Section 22(e)(3) of the Code, in the case of an
Incentive Stock Option such Incentive Stock Option shall automatically
convert to a Non-Qualified Stock Option on the day three (3) months and one
day following such termination. To the extent that the Grantee is not
entitled to exercise the Award at the date of termination, or if Grantee does
not exercise such Award to the extent so entitled within the time specified
herein, the Award shall terminate.
(d) DEATH OF GRANTEE. In the event of a termination of the
Grantee's Continuous Service as a result of his or her death, or in the event of
the death of the Grantee during the Post-Termination Exercise Period or during
the twelve (12) month period following the Grantee's Termination of Continuous
Service as a result of his or her Disability, the Grantee's estate or a person
who acquired the right to exercise the Award by bequest or inheritance may
exercise the Award, but only to the extent that the Grantee was entitled to
exercise the Award as of the date of termination, within twelve (12) months from
the date of death (but in no event later than the expiration of the term of such
Award as set forth in the Award Agreement). To the extent that, at the time of
death, the Grantee was not entitled to exercise the Award, or if the Grantee's
estate or a person who acquired the right to exercise the Award by bequest or
inheritance does not exercise such Award to the extent so entitled within the
time specified herein, the Award shall terminate.
(e) BUYOUT PROVISIONS. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Award previously granted, based
on such terms and conditions as the Administrator shall establish and
communicate to the Grantee at the time that such offer is made.
9. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Shares shall not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of such
Shares pursuant thereto shall comply with all Applicable Laws, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
(b) As a condition to the exercise of an Award, the Company
may require the person exercising such Award 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 any Applicable Laws.
10. REPURCHASE RIGHTS. If the provisions of an Award Agreement grant to
the Company the right to repurchase Shares upon termination of the Grantee's
Continuous Service, the Award Agreement shall (or may, with respect to Awards
granted or issued to Officers, Directors or Consultants) provide that:
(a) the right to repurchase must be exercised, if at all,
within ninety (90) days of the termination of the Grantee's Continuous Service
(or in the case of Shares issued upon exercise of Awards after the date of
termination of the Grantee's Continuous Service, within ninety (90) days after
the date of the Award exercise);
(b) the consideration payable for the Shares upon exercise of
such repurchase right shall be made in cash or by cancellation of purchase money
indebtedness within the ninety (90) day periods specified in Section 10(a);
(c) the amount of such consideration shall (i) be equal to the
original purchase price paid by Grantee for each such Share; provided, that the
right to repurchase such Shares at the original purchase price shall lapse at
the rate of at least twenty percent (20%) of the Shares subject to the Award per
year over five (5) years from the date the Award is granted (without respect to
the date the Award was exercised or became exercisable), and (ii) with respect
to Shares, other than Shares subject to repurchase at the original purchase
price pursuant to clause (i) above, not less than the Fair Market Value of the
Shares to be repurchased on the date of termination of Grantee's Continuous
Service; and
-9-
<PAGE>
(d) the right to repurchase Shares, other than the right to
repurchase Shares at the original purchase price pursuant to clause (i) of
Section 10(c), shall terminate on the Registration Date.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CORPORATE
TRANSACTION.
(a) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any
required action by the shareholders of the Company, the number of Shares covered
by each outstanding Award, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan, the exercise or purchase price of each
such outstanding Award, as well as any other terms that the Administrator
determines require adjustment shall be proportionately adjusted for (i) any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Shares, or similar transaction affecting the Shares, (ii) any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company, or (iii) as the Administrator may determine in its
discretion, any other transaction with respect to Common Stock to which Section
424(a) of the Code applies or a similar transaction; 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 and its determination shall be final, binding and
conclusive. Except as the Administrator determines, 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 hereof shall be made
with respect to, the number or price of Shares subject to an Award.
(b) CORPORATE TRANSACTION. Except as provided otherwise in an
individual Award Agreement, in the event of a Corporate Transaction, one-half
(1/2) of the unvested portion of each Award which is at the time outstanding
under the Plan shall automatically become fully vested and exercisable and be
released from any restrictions on transfer (other than transfer restrictions
applicable to Options) and repurchase or forfeiture rights, immediately prior to
the specified effective date of such Corporate Transaction, for all of the
Shares at the time represented by such Award unless the Award is assumed by the
successor corporation or the Parent thereof in connection with the Corporate
Transaction. Effective upon the consummation of the Corporate Transaction, each
outstanding Award under the Plan shall terminate unless the Award is assumed by
the successor corporation or the Parent thereof in connection with the Corporate
Transaction. For the purposes of accelerating the vesting and the release of
restrictions applicable to Awards pursuant to this subsection (but not for
purposes of termination of such Awards), the Award shall be considered assumed
if, in connection with the Corporate Transaction, the Award is replaced with a
comparable Award with respect to shares of capital stock of the successor
corporation or Parent thereof or is replaced with a cash incentive program of
the successor corporation or Parent thereof which preserves the compensation
element of such Award existing at the time of the Corporate Transaction and
provides for subsequent payout in accordance with the same vesting schedule
applicable to such Award. The determination of Award comparability above shall
be made by the Administrator and its determination shall be final, binding and
conclusive.
12. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective
upon the earlier to occur of its adoption by the Board or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated. Subject to Section 16, below, and Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.
13. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
(a) The Board may at any time amend, suspend or terminate the
Plan. To the extent necessary to comply with Applicable Laws, the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required.
(b) No Award may be granted during any suspension of the Plan
or after termination of the Plan.
-10-
<PAGE>
(c) Any amendment, suspension or termination of the Plan
(including termination of the Plan under Section 12, above) shall not affect
Awards already granted, and such Awards shall remain in full force and effect as
if the Plan had not been amended, suspended or terminated, unless mutually
agreed otherwise between the Grantee and the Administrator, which agreement must
be in writing and signed by the Grantee and the Company.
14. RESERVATION OF SHARES.
(a) The Company, during the term of the Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
(b) 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.
15. NO EFFECT ON TERMS OF EMPLOYMENT/CONSULTING RELATIONSHIP. The Plan
shall not confer upon any Grantee any right with respect to the Grantee's
Continuous Service, nor shall it interfere in any way with his or her right or
the Company's right to terminate the Grantee's Continuous Service at any time,
with or without cause.
16. NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The Plan
is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement
Income Security Act of 1974, as amended.
17. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws. Any Award exercised
before shareholder approval is obtained shall be rescinded if shareholder
approval is not obtained within the time prescribed, and Shares issued on the
exercise of any such Award shall not be counted in determining whether
shareholder approval is obtained.
18. INFORMATION TO GRANTEES. The Company shall provide to each Grantee,
during the period for which such Grantee has one or more Awards outstanding,
copies of financial statements at least annually.
-11-
