<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON May 15, 2000
REGISTRATION NO. 333-_____
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------------------
NBC INTERNET, INC.
(Exact name of Registrant as Specified in Its Charter)
----------------------------------------------
DELAWARE 94-3333463
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
225 BUSH STREET
SAN FRANCISCO, CALIFORNIA 94104
(Address of Principal Executive Offices)
NBC INTERNET, INC. 1999 EMPLOYEE STOCK PURCHASE PLAN
NBC INTERNET, INC. 2000 NON-QUALIFIED STOCK OPTION PLAN
ALLBUSINESS.COM, INC. 1998 STOCK OPTION AND INCENTIVE PLAN
ALLBUSINESS.COM, INC. 1999 STOCK PLAN
HUSDAWG COMMUNICATIONS, INC. 2000 STOCK PLAN
(Full Title of the Plan)
----------------------------------------------
WILLIAM J. LANSING
CHIEF EXECUTIVE OFFICER
NBC INTERNET, INC.
225 BUSH STREET
SAN FRANCISCO, CALIFORNIA 94104
(Name and Address of Agent for Service)
(415) 375-5000
(Telephone Number, Including Area Code, of Agent For Service)
Copies to:
BRUCE ALAN MANN, ESQ. JACK LEVIN, ESQ.
MORRISON & FOERSTER LLP NBC INTERNET, INC.
425 MARKET STREET 225 BUSH STREET
SAN FRANCISCO, CALIFORNIA 94105 SAN FRANCISCO, CALIFORNIA 94104
(415) 268-7000 (415) 375-5000
--------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Securities to be Offering Price Aggregate Offering Registration
to be Registered Registered Per Share Price Fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par
value per share 300,000 $18.625(1) $5,587,500(1) $1475.10
Common Stock, $.0001 par
value per share 2,000,000 $18.625(1) $37,250,000(1) $9834.00
Common Stock, $.0001 par
value per share 419,627 $2.49(2) $1,044,871.23(3) $275.85
Common Stock, $.0001 par
value per share 377,750 $18.65(2) $7,045,037.50(3) $1859.89
=======================================================================================================================
Common Stock, $.0001 par
value per share 9,015 $0.07(4) $631.05(5) $0.17
=======================================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457(h) under the Securities Act of 1933,
as amended, solely for the purpose of calculating the registration fee.
Computation based upon the average of the high and low prices of the
Registrant's Common Stock as reported on the Nasdaq National Market on
May 10, 2000.
(2) Represents the maximum exercise price per share as converted pursuant
Registrant's acquisition of AllBusiness.com, Inc.
(3) Estimated in accordance with Rule 457(h) under Securities Act of 1933,
as amended. Computation based upon the exercise price of the options,
all of which were previously granted and as converted pursuant to the
terms of the Registrant's acquisition of AllBusiness.com, Inc.
(4) Represents the maximum exercise price per share as converted pursuant to
the Registrant's acquisition of Husdawg Communications, Inc.
(5) Estimated in accordance with Rule 457(h) under Securities Act of 1933,
as amended. Computation based upon the exercise price of the options,
all of which were previously granted and as converted pursuant to the
terms of the Registrant's acquisition of Husdawg Communications, Inc.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part 1 of Form S-8
(plan information and registrant information and employee plan annual
information) will be sent or given to employees as specified by Securities and
Exchange Commission Rule 428(b)(1). Such documents need not be filed with the
Securities and Exchange Commission either as part of this Registration Statement
or as prospectuses or prospectus supplements pursuant to Rule 424. These
documents and the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Form S-8 (Part II hereof), taken together,
constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act of 1933.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by NBC Internet, Inc. (the "Registrant")
with the Commission are incorporated by reference herein:
(a) The Registrant's Annual Report as filed on Form 10-K filed on March
28, 2000, which includes audited financial statements of the
Registrant.
(b) The description of the Registrant's Class A common stock which is
contained in its Registration Statement on Form 8-A filed under the
Securities Exchange Act of 1934 (the "Exchange Act") on November 2,
1999, including any amendment or report filed for the purpose of
updating such description.
(c) The Registrant's Quarterly Report for the period ended March 31,
2000 as filed on Form 10-Q on May 11, 2000.
(d) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since the end of the fiscal year covered by the audited
financial statements described in (a) above.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the General Corporation Law of the State of
Delaware, the Registrant has broad powers to indemnify its directors and
officers against liabilities they may incur in such capacities, including
liabilities under the Securities Act. Article IX of the Registrant's Amended and
Restated Bylaws also provides for mandatory indemnification of its directors and
executive officers, and permissive indemnification of its employees and agents,
to the fullest extent permissible under Delaware law.
Article Ninth of the Registrant's Restated Certificate of Incorporation provides
that the liability of its directors for monetary damages shall be eliminated to
the fullest extent permissible under Delaware law. Pursuant to Delaware law,
this includes elimination of liability for monetary damages for breach of the
directors' fiduciary duty of care to the Registrant and its stockholders. These
provisions do not eliminate the directors' duty of care and, in appropriate
circumstances, equitable remedies such as injunctive or other forms of
non-monetary relief will remain available under Delaware law. In addition, each
director will continue to be subject to liability for breach of the director's
duty of loyalty to the Registrant, for acts or omissions not in good faith or
involving intentional misconduct, for knowing violations of law, for any
transaction from which the director derived an improper personal benefit, and
for payment of dividends or approval of stock repurchases or redemptions that
are unlawful under Delaware law. The provision also does not affect a director's
responsibilities under any other laws, such as the federal securities laws or
state or federal environmental laws.
The Registrant has entered into agreements with its directors and
certain of its executive officers that require the Registrant to indemnify such
persons against expenses, judgments, fines, settlements and other amounts
actually and reasonably incurred (including expenses of a derivative action) in
connection with any proceeding, whether actual or threatened, to which any such
person may be made a party by reason of the fact that such person is or was a
director or officer of the Registrant or any of its affiliated enterprises,
provided such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Registrant and,
with respect to any criminal proceeding, had no reasonable cause to believe his
or her conduct was unlawful. The indemnification agreements also set forth
certain procedures that will apply in the event of a claim for indemnification
thereunder.
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
<PAGE>
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.
The Registrant has obtained a policy of directors' and officers'
liability insurance that insures the Registrant's directors and officers against
the cost of defense, settlement or payment of a judgment under certain
circumstances.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Restated Certificate of Incorporation of the Registrant
(Incorporated by reference to the Registrant's Registration
Statement on Form S-8 (Registration No. 333-91715) on
November 29, 1999).
4.2 Amended and Restated Bylaws of the Registrant (Incorporated by
reference to the Registrant's Registration Statement on
Form S-8 (Registration No. 333-91715) on November 29, 1999).
5.1 Opinion of MORRISON & FOERSTER LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of MORRISON & FOERSTER LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (See signature page of this Registration
Statement).
99.1 Registrant's 1999 Employee Stock Purchase Plan.
99.2 Registrant's 2000 Non-Qualified Stock Option Plan.
99.3 AllBusiness.com, Inc. 1998 Stock Option and Incentive Plan.
99.4 AllBusiness.com, Inc. 1999 Stock Plan
99.5 Husdawg Communications, Inc. 2000 Stock Plan
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;
<PAGE>
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in 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 upon the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act (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 the Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
(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 indemnity provisions
summarized in Item 6 above 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
<PAGE>
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Francisco, State of California, on May 15,
2000.
NBC INTERNET, INC.
By: /s/ William J. Lansing
----------------------
William J. Lansing
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, severally and not jointly, William J.
Lansing and Anthony Altig, with full power to act alone, as his or her true and
lawful attorney-in-fact, with the power of substitution, for and in such
person's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
each said attorney-in-fact full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he or she might or could do in person, hereby ratifying and
confirming all that each said attorney-in-fact may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William J. Lansing Chief Executive Officer and Class May 15, 2000
- ----------------------- A Director
William J. Lansing
<PAGE>
/s/ Anthony Altig Principal Financial and May 15, 2000
- ------------------------ Accounting Officer
Anthony Altig
/s/ Chris Kitze Vice Chairman of the Board of May 15, 2000
- ------------------------ Directors and Class A Director
Chris Kitze
/s/ James J. Heffernan
- ------------------------ Class A Director May 15, 2000
James J. Heffernan
/s/ Jeffrey Ballowe
- ------------------------ Class A Director May 15, 2000
Jeffrey Ballowe
/s/ Philip Schlein
- ------------------------ Class A Director May 15, 2000
Philip Schlein
/s/ Robert C. Harris, Jr.
- ------------------------- Class A Director May 15, 2000
Robert C. Harris, Jr.
/s/ L. Lowry Mays
- ------------------------ Class A Director May 15, 2000
L. Lowry Mays
/s/ Mark W. Begor
- ------------------------ Class B Director May 15, 2000
Mark W. Begor
<PAGE>
/s/ Robert C. Wright Chairman of the Board of
- ------------------------ Directors and Class B Director May 15, 2000
Robert C. Wright
/s/ Gary M. Reiner
- ------------------------ Class B Director May 15, 2000
Gary M. Reiner
/s/ John F. Welch
- ------------------------ Class B Director May 15, 2000
John F. Welch
/s/ Martin J. Yudkovitz
- ------------------------ Class B Director May 15, 2000
Martin J. Yudkovitz
/s/ Scott M. Sassa
- ------------------------ Class B Director May 15, 2000
Scott M. Sassa
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
4.1 Restated Certificate of Incorporation of the Registrant
(Incorporated by reference to the Registrant's Registration
Statement on Form S-8 (Registration No. 333-91715) on November
29, 1999).
4.2 Amended and Restated Bylaws of the Registrant (Incorporated by
reference to the Registrant's Registration Statement on Form
S-8 (Registration No. 333-91715) on November 29, 1999).
5.1 Opinion of MORRISON & FOERSTER LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of MORRISON & FOERSTER LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (See signature page of this Registration
Statement).
99.1 Registrant's 1999 Employee Stock Purchase Plan.
99.2 Registrant's 2000 Non-Qualified Stock Option Plan.
99.3 AllBusiness.com, Inc. 1998 Stock Option and Incentive Plan.
99.4 AllBusiness.com, Inc. 1999 Stock Plan
99.5 Husdawg Communications, Inc. 2000 Stock Plan
<PAGE>
[Letterhead of Morrison & Foerster LLP]
EXHIBIT 5.1
May 15, 2000
Writer's Direct Contact
(415) 268-7000
NBC Internet, Inc.
225 Bush Street
San Francisco, California 94104
Re: Employee Stock Purchase Plan
At your request, we have examined the Registration Statement on Form
S-8 executed by you on May 15, 2000, and to be filed with the Securities and
Exchange Commission (the "SEC") in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 3,106,423 shares of
your Class A common stock, $.0001 par value (the "Common Stock") which will
be issuable under the NBC Internet, Inc. 1999 Employee Stock Purchase Plan,
the NBC Internet, Inc. 2000 Non-Qualified Stock Option Plan, the
AllBusiness.com, Inc. 1998 Stock Option and Incentive Plan, the
AllBusiness.com, Inc. 1999 Stock Plan, and the Husdawg Communications, Inc.
2000 Stock Plan (collectively the "Plans").
As your counsel in connection with the Registration Statement, we have
examined the proceedings taken by you in connection with the adoption of the
Plans and authorization of the issuance of 3,106,423 shares of Common Stock
under the Plans (the "Plans' Shares"), and such documents as we have deemed
necessary to render this opinion.
Based upon the foregoing, it is our opinion that the Plans' Shares, when
issued and outstanding pursuant to the terms of the Plans, will be validly
issued, fully paid and non-assessable shares of Common Stock.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Morrison & Foerster LLP.
<PAGE>
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the NBC Internet, Inc. 1999 Employee Stock Purchase
Plan, the NBC Internet, Inc. 2000 Non-Qualified Stock Option Plan, the
AllBusiness.com, Inc. 1998 Stock Option and Incentive Plan, the AllBusiness.com,
Inc. 1999 Stock Plan, and the Husdawg Communications, Inc. 2000 Stock Plan of
our report dated January 26, 2000, with respect to the consolidated financial
statements and schedule of NBC Internet, Inc. included in its Annual Report
(Form 10-K) for the year ended December 31, 1999, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Palo Alto, California
May 12, 2000
<PAGE>
Exhibit 99.1
NBC INTERNET, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1999 Employee
Stock Purchase Plan of NBC Internet, Inc.
1.PURPOSE. The purpose of the Plan is to provide employees of the
Company and its Designated Parents or Subsidiaries with an opportunity to
purchase Common Stock of the Company through accumulated payroll deductions. It
is the intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Code. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of the Code.
2.DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means either the Board or a committee of
the Board that is responsible for the administration of the Plan as is
designated from time to time by resolution of the Board.
(b) "APPLICABLE LAWS" means the legal requirements relating to
the administration of employee stock purchase plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws, the
Code, the rules of any applicable stock exchange or national market system, and
the rules of any foreign jurisdiction applicable to participation in the Plan by
residents therein.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CHANGE IN CONTROL" means a change in ownership or control
of the Company effected through any of the following transactions:
(i) a merger, consolidation or other form of business
combination, unless the business of the Company is continued following any such
transaction by a resulting company (which may be, but need not be, the Company)
and the stockholders of the Company immediately prior to such transaction (the
"Prior Stockholders") hold, directly or indirectly, at least fifty percent (50%)
of the total combined voting power of the resulting company (there being
excluded from the voting power held by the Prior Stockholders, but not from the
total voting power of the resulting company, any voting power received by
affiliates of a party to the transaction, other than the Company) in their
capacities as stockholders of the Company, but excluding any such transaction
that the Administrator determines shall not be a Change in Control; or
(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
2
<PAGE>
corporations), but excluding any such transaction that the Administrator
determines shall not be a Change in Control; or
(iii) 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 Change in Control; or
(iv) a change in the composition of the Board over a
period of thirty-six (36) months or less such that a majority of the Board
members (rounded up to the next whole number) ceases, by reason of one or more
contested elections for Board membership, to be comprised of individuals who are
Continuing Directors;
PROVIDED, HOWEVER, that a Change in Control shall not occur as a result of an
increase in the securities ownership of National Broadcasting Company, Inc. or
its successor in interest.
(e) "CODE" means the Internal Revenue Code of 1986, as
amended.
(f) "COMMON STOCK" means the common stock of the Company.
(g) "COMPANY" means NBC Internet, Inc., a Delaware
corporation.
(h) "COMPENSATION" means an Employee's compensation from the
Company or one or more Designated Parents or Subsidiaries, as reported on Form
W-2, including base salary, overtime, bonuses, annual awards and other incentive
payments, together with amounts that would be so included except for the fact
that they are deferred by the Employee (i) under a qualified cash or deferred
arrangement described in Section 401(k) of the Code, or (ii) to a plan qualified
under Section 125 of the Code. Compensation does not include reimbursements or
other expense allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, contributions (other than contributions described in the
first sentence) made on the Employee's behalf by the Company or one or more
Designated Parents or Subsidiaries under any employee benefit or welfare plan
now or hereafter established, and any other payments not specifically referenced
in the first sentence.
(i) "CONTINUING DIRECTORS" means members of the Board who
either (i) have been Board members continuously for a period of at least
thirty-six (36) months or (ii) have been Board members for less than thirty-six
(36) months and were elected or nominated for election as Board members by at
least a majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board.
(j) "DESIGNATED PARENTS OR SUBSIDIARIES" means the Parents or
Subsidiaries which have been designated by the Administrator from time to time
as eligible to participate in the Plan.
(k) "EFFECTIVE DATE" means the effective date of the
Reorganization Transaction. However, should any Designated Parent or
Subsidiary become a participating
3
<PAGE>
company in the Plan after such date, then such entity shall designate a
separate Effective Date with respect to its employee-participants.
(l) "EMPLOYEE" means any individual, including an officer or
director, who is an employee of the Company or a Designated Parent or Subsidiary
for purposes of Section 423 of the Code. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the
individual's employer. Where the period of leave exceeds ninety (90) days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated on the
ninety-first (91st) day of such leave, for purposes of determining eligibility
to participate in the Plan.
(m) "ENROLLMENT DATE" means the first day of each Offer
Period.
(n) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(o) "EXERCISE DATE" means the last day of each Purchase
Period.
(p) "FAIR MARKET VALUE" means, as of any date, the value of
Common Stock determined as follows:
(1) Where there exists a public market for the Common Stock, the Fair Market
Value shall be equal to (A) the closing price for a share of Common Stock 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 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 of Common Stock 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;
(2) In the absence of an established market of the type described in (1), above,
for the Common Stock, and subject to (3), below, the Fair Market Value thereof
shall be determined by the Administrator in good faith; or
(q) "OFFER PERIOD" means an Offer Period established pursuant
to Section 4 hereof.
(r) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(s) "PARTICIPANT" means an Employee of the Company or
Designated Parent or Subsidiary who is actively participating in the Plan.
(t) "PLAN" means this Employee Stock Purchase Plan.
(u) "PURCHASE PERIOD" means a period of approximately six
months, commencing on January 1 and July 1 of each year and terminating on the
next following June 30 or December 31, respectively; provided, however, that the
final Purchase Period of each Offering Period shall be a period of approximately
three months.
4
<PAGE>
(v) "PURCHASE PRICE" shall mean an amount equal to 85% of the
Fair Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
(w) "REORGANIZATION TRANSACTION" means the series of
transactions contemplated by the Company's registration statement on Form S-4
pursuant to which the Company will become the owner of the businesses previously
conducted by Xoom.com, Inc., SNAP! LLC and the internet-related activities of
National Broadcasting Company, Inc.
(x) "RESERVES" means the sum of the number of shares of Common
Stock covered by each option under the Plan which have not yet been exercised
and the number of shares of Common Stock which have been authorized for issuance
under the Plan but not yet placed under option.
(y) "SUBSIDIARY" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3.ELIGIBILITY.
(a) GENERAL. Any individual who is an Employee on a given
Enrollment Date shall be eligible to participate in the Plan for the Offer
Period commencing with such Enrollment Date.
(b) LIMITATIONS ON GRANT AND ACCRUAL. Any provisions of the
Plan to the contrary notwithstanding, no Employee shall be granted an option
under the Plan (i) if, immediately after the grant, such Employee (taking into
account stock owned by any other person whose stock would be attributed to such
Employee pursuant to Section 424(d) of the Code) would own stock and/or hold
outstanding options to purchase stock possessing five percent (5%) or more of
the total combined voting power or value of all classes of stock of the Company
or of any Parent or Subsidiary, or (ii) which permits the Employee's rights to
purchase stock under all employee stock purchase plans of the Company and its
Parents or Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) worth of stock (determined at the Fair Market Value of the
shares at the time such option is granted) for each calendar year in which such
option is outstanding at any time. The determination of the accrual of the right
to purchase stock shall be made in accordance with Section 423(b)(8) of the Code
and the regulations thereunder.
(c) OTHER LIMITS ON ELIGIBILITY. Notwithstanding Subsection
(a), above, the following Employees shall not be eligible to participate in the
Plan for any relevant Offer Period: (i) Employees whose customary employment is
20 hours or less per week; (ii) Employees whose customary employment is for not
more than 5 months in any calendar year; and (iii) Employees who are subject to
rules or laws of a foreign jurisdiction that prohibit or make impractical the
participation of such Employees in the Plan.
4.OFFER PERIODS.
(a) The Plan shall be implemented through overlapping or
consecutive Offer Periods until such time as (i) the maximum number of shares
of Common Stock available for
5
<PAGE>
issuance under the Plan shall have been purchased or (ii) the Plan shall have
been sooner terminated in accordance with Section 19 hereof. The maximum
duration of an Offer Period shall be twenty-seven (27) months. Initially, the
Plan shall be implemented through overlapping Offer Periods of twenty-seven
(27) months' duration commencing each January 1 and July 1 following the
Effective Date.
(b) A Participant shall be granted a separate option for each
Offer Period in which he or she participates. The option shall be granted on the
Enrollment Date and shall be automatically exercised in successive installments
on the Exercise Dates ending within the Offer Period.
(c) An Employee may participate in only one Offer Period at a
time. Accordingly, except as provided in Section 4(d), an Employee who wishes to
join a new Offer Period must withdraw from the current Offer Period in which the
Employee is participating and must also enroll in the new Offer Period prior to
the Enrollment Date for that Offer Period.
(d) If on the first day of any Purchase Period in an Offer
Period in which a Participant is participating, the Fair Market Value of the
Common Stock is less than the Fair Market Value of the Common Stock on the
Enrollment Date of the Offer Period (after taking into account any adjustment
during the Offer Period pursuant to Section 18(a)), the Offer Period shall be
terminated automatically and the Participant shall be enrolled automatically in
the new Offer Period which has its first Purchase Period commencing on that
date, provided the Participant is eligible to participate in the Plan on that
date and has not elected to terminate participation in the Plan.
(e) Except as specifically provided herein, the acquisition of
Common Stock through participation in the Plan for any Offer Period shall
neither limit nor require the acquisition of Common Stock by a Participant in
any subsequent Offer Period.
5.PARTICIPATION.
(a) An eligible Employee may become a Participant in the Plan
by completing a subscription agreement authorizing payroll deductions in the
form of Exhibit A to this Plan and filing it with the designated payroll office
of the Company at least ten (10) business days prior to the Enrollment Date for
the Offer Period in which such participation will commence, unless a later time
for filing the subscription agreement is set by the Administrator for all
eligible Employees with respect to a given Offer Period.
(b) Payroll deductions for a Participant shall commence with
the first partial or full payroll period beginning on the Enrollment Date and
shall end on the last complete payroll period during the Offer Period, unless
sooner terminated by the Participant as provided in Section 10.
6.PAYROLL DEDUCTIONS.
(a) At the time a Participant files a subscription
agreement, the Participant shall elect to have payroll deductions made during
the Offer Period in amounts between one
6
<PAGE>
percent (1%) and not exceeding ten percent (10%) of the Compensation which
the Participant receives during the Offer Period.
(b) All payroll deductions made for a Participant shall be
credited to the Participant's account under the Plan and will be withheld in
whole percentages only. A Participant may not make any additional payments into
such account.
(c) A Participant may discontinue participation in the Plan as
provided in Section 10, or may increase or decrease the rate of payroll
deductions during the Offer Period by completing and filing with the Company a
change of status notice in the form of Exhibit B to this Plan authorizing an
increase or decrease in the payroll deduction rate. Any increase or decrease in
the rate of a Participant's payroll deductions shall be effective with the first
full payroll period commencing ten (10) business days after the Company's
receipt of the change of status notice unless the Company elects to process a
given change in participation more quickly. A Participant's subscription
agreement (as modified by any change of status notice) shall remain in effect
for successive Offer Periods unless terminated as provided in Section 10. The
Administrator shall be authorized to limit the number of payroll deduction rate
changes during any Offer Period.
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) herein, a
Participant's payroll deductions may be decreased to 0% at such time during any
Purchase Period which is scheduled to end during the current calendar year (the
"Current Purchase Period") that the aggregate of all payroll deductions which
were previously used to purchase stock under the Plan in a prior Purchase Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Purchase Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such Participant's subscription
agreement, as amended, at the beginning of the first Purchase Period which is
scheduled to end in the following calendar year, unless terminated by the
Participant as provided in Section 10.
7.GRANT OF OPTION. On the Enrollment Date, each Participant shall be
granted an option to purchase (at the applicable Purchase Price) 200 (two
hundred) shares of the Common Stock, subject to adjustment as provided in
Section 18 hereof; provided (i) that such option shall be subject to the
limitations set forth in Sections 3(b), 6 and 12 hereof, and (ii) the maximum
number of shares of Common Stock a Participant shall be permitted to purchase in
any Purchase Period shall be 200 (two hundred) shares, subject to adjustment as
provided in Section 18 hereof. Exercise of the option shall occur as provided in
Section 8, unless the Participant has withdrawn pursuant to Section 10, and the
option, to the extent not exercised, shall expire on the last day of the Offer
Period.
8.EXERCISE OF OPTION. Unless a Participant withdraws from the Plan as
provided in Section 10, below, the Participant's option for the purchase of
shares will be exercised automatically on each Exercise Date, by applying the
accumulated payroll deductions in the Participant's account to purchase the
number of full shares subject to the option by dividing such Participant's
payroll deductions accumulated prior to such Exercise Date and retained in the
Participant's account as of the Exercise Date by the applicable Purchase Price.
No fractional shares will be purchased; any payroll deductions accumulated in a
Participant's account which
7
<PAGE>
are not sufficient to purchase a full share shall be carried over to the next
Purchase Period or Offer Period, whichever applies, or returned to the
Participant, if the Participant withdraws from the Plan. Notwithstanding the
foregoing, any amount remaining in a Participant's account following the
purchase of shares on the Exercise Date due to the application of Section
423(b)(8) of the Code or Section 7, above, shall be returned to the
Participant and shall not be carried over to the next Offer Period. During a
Participant's lifetime, a Participant's option to purchase shares hereunder
is exercisable only by the Participant.
9.DELIVERY. Upon receipt of a request from a Participant after each
Exercise Date on which a purchase of shares occurs, the Company shall arrange
the delivery to such Participant, as promptly as practicable, of a certificate
representing the shares purchased upon exercise of the Participant's option.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A Participant may either (i) withdraw all but not less
than all the payroll deductions credited to the Participant's account and not
yet used to exercise the Participant's option under the Plan or (ii) terminate
future payroll deductions, but allow accumulated payroll deductions to be used
to exercise the Participant's option under the Plan at any time by giving
written notice to the Company in the form of Exhibit B to this Plan. If the
Participant elects withdrawal alternative (i) described above, all of the
Participant's payroll deductions credited to the Participant's account will be
paid to such Participant as promptly as practicable after receipt of notice of
withdrawal, such Participant's option for the Offer Period will be automatically
terminated, and no further payroll deductions for the purchase of shares will be
made during the Offer Period. If the Participant elects withdrawal alternative
(ii) described above, no further payroll deductions for the purchase of shares
will be made during the Offer Period, all of the Participant's payroll
deductions credited to the Participant's account will be applied to the exercise
of the Participant's option on the next Exercise Date, and after such Exercise
Date, such Participant's option for the Offer Period will be automatically
terminated. If a Participant withdraws from an Offer Period, payroll deductions
will not resume at the beginning of the succeeding Offer Period unless the
Participant delivers to the Company a new subscription agreement.
(b) Upon termination of a Participant's employment
relationship (as described in Section 2(k)) at a time more than three (3) months
from the next scheduled Exercise Date, the payroll deductions credited to such
Participant's account during the Offer Period but not yet used to exercise the
option will be returned to such Participant or, in the case of his/her death, to
the person or persons entitled thereto under Section 14, and such Participant's
option will be automatically terminated. Upon termination of a Participant's
employment relationship (as described in Section 2(k)) within three (3) months
of the next scheduled Exercise Date, the payroll deductions credited to such
Participant's account during the Offer Period but not yet used to exercise the
option will be applied to the purchase of Common Stock on the next Exercise
Date, unless the Participant (or in the case of the Participant's death, the
person or persons entitled to the Participant's account balance under Section
14) withdraws from the Plan by submitting a change of status notice in
accordance with subsection (a) of this Section 10. In such a case, no further
payroll deductions will be credited to the Participant's account following the
Participant's termination of employment and the Participant's option under the
Plan will be
8
<PAGE>
automatically terminated after the purchase of Common Stock on the next
scheduled Exercise Date.
11. INTEREST. No interest shall accrue on the payroll deductions
credited to a Participant's account under the Plan.
12. STOCK.
(a) Subject to adjustment upon changes in capitalization of
the Company as provided in Section 18, the maximum number of shares of Common
Stock which shall be made available for sale under the Plan shall be 300,000
(three-hundred thousand) shares, plus an annual increase to be added on January
1 of each calendar year beginning in 2001 of 100,000 (one hundred thousand)
shares or a lesser number of shares as determined by the Administrator. If on a
given Exercise Date the number of shares with respect to which options are to be
exercised exceeds the number of shares then available under the Plan, the
Administrator shall make a pro rata allocation of the shares remaining available
for purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.
(b) A Participant will have no interest or voting right in
shares covered by the Participant's option until such shares are actually
purchased on the Participant's behalf in accordance with the applicable
provisions of the Plan. No adjustment shall be made for dividends, distributions
or other rights for which the record date is prior to the date of such purchase.
(c) Shares to be delivered to a Participant under the Plan
will be registered in the name of the Participant or in the name of the
Participant and his or her spouse.
13. ADMINISTRATION. The Plan shall be administered by the Administrator
which shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Administrator shall, to the full extent permitted by
Applicable Law, be final and binding upon all persons.
14. DESIGNATION OF BENEFICIARY.
(a) Each Participant will file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
Participant's account under the Plan in the event of such Participant's death.
If a Participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the
Participant (and the Participant's spouse, if any) at any time by written
notice. In the event of the death of a Participant and in the absence of a
beneficiary validly designated under the Plan who is living (or in existence) at
the time of such Participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the Participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Administrator), the Administrator shall deliver such shares and/or cash to
the spouse (or domestic partner, as determined by the Administrator) of the
Participant, or if no spouse (or domestic partner) is known to the
9
<PAGE>
Administrator, then to the issue of the Participant, such distribution to be
made per stirpes (by right of representation), or if no issue are known to the
Administrator, then to the heirs at law of the Participant determined under in
accordance with Section 27.
15. TRANSFERABILITY. Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Administrator may treat such act as an election to
withdraw funds from an Offer Period in accordance with Section 10.
16. USE OF FUNDS. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
17. REPORTS. Individual accounts will be maintained for each
Participant in the Plan. Statements of account will be given to Participants at
least annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CHANGE IN CONTROL.
(a) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any
required action by the stockholders of the Company, the Reserves, the Purchase
Price, 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 of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, (ii) any other increase or decrease in the number of issued shares
of Common Stock 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; 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
Reserves and the Purchase Price.
(b) CHANGE IN CONTROL. In the event of a Change in Control,
each option under the Plan shall be assumed by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Administrator
determines, in the exercise of its sole discretion and in lieu of such
assumption, to shorten the Offer Period then in progress by setting a new
Exercise Date (the "New Exercise Date"). If the Administrator shortens the Offer
Period then in progress in lieu of assumption in the event of a Change in
Control, the Administrator shall notify each Participant in writing, at least
ten (10) days prior to the New Exercise Date, that the Exercise Date for the
Participant's option has been changed to the New Exercise Date and that
10
<PAGE>
the Participant's option will be exercised automatically on the New Exercise
Date, unless prior to such date the Participant has withdrawn from the Offer
Period as provided in Section 10. For purposes of this Subsection, an option
granted under the Plan shall be deemed to be assumed if, in connection with
the Change in Control, the option is replaced with a comparable option with
respect to shares of capital stock of the successor corporation or Parent
thereof. The determination of option comparability shall be made by the
Administrator prior to the Change in Control and its determination shall be
final, binding and conclusive on all persons.
19. AMENDMENT OR TERMINATION.
(a) The Administrator may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 18, no such
termination can affect options previously granted, provided that an Offer Period
may be terminated by the Administrator on any Exercise Date if the Administrator
determines that the termination of the Offer Period is in the best interests of
the Company and its stockholders. Except as provided in Section 18, no amendment
may make any change in any option theretofore granted which adversely affects
the rights of any Participant without the consent of affected Participants. To
the extent necessary to comply with Section 423 of the Code (or any successor
rule or provision or any other Applicable Law), the Company shall obtain
stockholder approval in such a manner and to such a degree as required.
(b) Without stockholder consent and without regard to whether
any Participant rights may be considered to have been "adversely affected," the
Administrator shall be entitled to limit the frequency and/or number of changes
in the amount withheld during Offer Periods, change the length of Purchase
Periods within any Offer Period, determine the length of any future Offer
Period, whether future Offer Periods shall be consecutive or overlapping,
establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, establish additional terms, conditions, rules or procedures
to accommodate the rules or laws of applicable foreign jurisdictions, permit
payroll withholding in excess of the amount designated by a Participant in order
to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each Participant properly
correspond with amounts withheld from the Participant's Compensation, and
establish such other limitations or procedures as the Administrator determines
in its sole discretion advisable and which are consistent with the Plan.
20. NOTICES. All notices or other communications by a Participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Administrator at the
location, or by the person, designated by the Administrator for the receipt
thereof.
21. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an option unless the exercise of such option 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. As a condition to the exercise of an option, the
Company may require the Participant 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
11
<PAGE>
representation is required by any of the aforementioned Applicable Laws. In
addition, no options shall be exercised or shares issued hereunder before the
Plan shall have been approved by stockholders of the Company as provided in
Section 23.
22. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the stockholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 19.
23. STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under Applicable Laws.
24. NO EMPLOYMENT RIGHTS. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company or
a Designated Parent or Subsidiary, and it shall not be deemed to interfere in
any way with such employer's right to terminate, or otherwise modify, an
employee's employment at any time.
25. NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Designated Parent or Subsidiary, participation in the Plan shall not be deemed
compensation for purposes of computing benefits or contributions under any
retirement plan of the Company or a Designated Parent or Subsidiary, 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.
26. EFFECT OF PLAN. The provisions of the Plan shall, in accordance
with its terms, be binding upon, and inure to the benefit of, all successors of
each Participant, including, without limitation, such Participant's estate and
the executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
Participant.
27. GOVERNING LAW. The Plan is to be construed in accordance with and
governed by the internal laws of the State of California (as permitted by
Section 1646.5 of the California Civil Code, or any similar successor provision)
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties, except to the extent the
internal laws of the State of California are superseded by the laws of the
United States. Should any provision of the Plan be determined by a court of law
to be illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.
12
<PAGE>
Exhibit A
NBC Internet, Inc. 1999 Employee Stock Purchase Plan
SUBSCRIPTION AGREEMENT
Effective with the Offer Period beginning on:
/ / January 1, 20___ or / / July 1, 20___
1. Personal Information
<TABLE>
<S> <C>
Legal Name (Please Print) _________________________________________________________ __________________ _____________
(Last) (First) (MI) Location Department
Street Address_____________________________________________________________________ _________________________________
Daytime Telephone
City, State/Country, Zip___________________________________________________________ _________________________________
E-Mail Address
Social Security No. __ __ __ - __ __ - __ __ __ __ Employee I.D. No. ____________ _________________________________
Manager Mgr. Location
</TABLE>
2. Eligibility Any Employee whose customary employment is more than 20 hours
per week and more than 5 months per calendar year and who does not hold
(directly or indirectly) five percent (5%) or more of the combined voting
power of the Company, a parent or a subsidiary, whether in stock or options
to acquire stock is eligible to participate in the NBC Internet, Inc. 1999
Employee Stock Purchase Plan (the "ESPP"); provided, however, that
Employees who are subject to the rules or laws of a foreign jurisdiction
that prohibit or make impractical the participation of such Employees in
the ESPP are not eligible to participate.
3. Definitions Each capitalized term in this Subscription Agreement shall have
the meaning set forth in the ESPP.
4. Subscription I hereby elect to participate in the ESPP and subscribe to
purchase shares of the Company's Common Stock in accordance with this
Subscription Agreement and the ESPP. I have received a complete copy of the
ESPP and a prospectus describing the ESPP and understand that my
participation in the ESPP is in all respects subject to the terms of the
ESPP. The effectiveness of this Subscription Agreement is dependent on my
eligibility to participate in the ESPP.
5. Payroll Deduction Authorization I hereby authorize payroll deductions from
my Compensation during the Offer Period in the percentage specified below
(payroll reductions may not exceed 10% of Compensation nor $21,250 per
calendar year):
Percentage to be deducted (circle one) 1% 2% 3% 4% 5% 6% 7% 8% 9%
6. ESPP Accounts and Purchase Price I understand that all payroll deductions
will be credited to my account under the ESPP. No additional payments may
be made to my account. No interest will be credited on funds held in the
account at any time including any refund of the account caused by
withdrawal from the ESPP. All payroll deductions shall be accumulated for
the purchase of Company Common Stock at the applicable Purchase Price
determined in accordance with the ESPP.
7. Withdrawal and Changes in Payroll Deduction I understand that I may
discontinue my participation in the ESPP at any time prior to an Exercise
Date as provided in Section 10 of the ESPP, but if I do not withdraw from
the ESPP, any accumulated payroll deductions will be applied
A-1
<PAGE>
automatically to purchase Company Common Stock. I may increase or decrease
the rate of my payroll deductions in whole percentage increments to not
less than one percent (1%) on one occasion during any Purchase Period
by completing and timely filing a Change of Status Notice. Any increase
or decrease will be effective for the full payroll period occurring
after ten (10) business days from the Company's receipt of the Change
of Status Notice.
8. Perpetual Subscription I understand that this Subscription Agreement shall
remain in effect for successive Offer Periods until I withdraw from
participation in the ESPP, or termination of the ESPP.
9. Taxes I have reviewed the ESPP prospectus discussion of the federal tax
consequences of participation in the ESPP and consulted with tax
consultants as I deemed advisable prior to my participation in the ESPP. I
hereby agree to notify the Company in writing within thirty (30) days of
any disposition (transfer or sale) of any shares purchased under the ESPP
if such disposition occurs within two (2) years of the Enrollment Date (the
first day of the Offer Period during which the shares were purchased) or
within one (1) year of the Exercise Date (the date I purchased such
shares), and I will make adequate provision to the Company for foreign,
federal, state or other tax withholding obligations, if any, which arise
upon the disposition of the shares. In addition, the Company may withhold
from my Compensation any amount necessary to meet applicable tax
withholding obligations incident to my participation in the ESPP, including
any withholding necessary to make available to the Company any tax
deductions or benefits contingent on such withholding.
10. Designation of Beneficiary In the event of my death, I hereby designate the
following person or trust as my beneficiary to receive all payments and
shares due to me under the ESPP: / / I am single / / I am married
<TABLE>
<S> <C>
Beneficiary (please print) ________________________________________________________ Relationship to Beneficiary (if any)
(Last) (First) (MI)
Street Address ____________________________________________________________________ _________________________________
City, State/Country, Zip __________________________________________________________
</TABLE>
11. Termination of ESPP I understand that the Company has the right,
exercisable in its sole discretion, to amend or terminate the ESPP at any
time, and a termination may be effective as early as an Exercise Date
(after purchase of shares on such date) within each outstanding Offer
Period.
<TABLE>
<S> <C>
Date: _________________________________ Employee Signature:
-----------------------------------------------------
-----------------------------------------------------
spouse's signature (if beneficiary is other than spouse)
</TABLE>
A-2
<PAGE>
Exhibit B
NBC Internet, Inc. 1999 Employee Stock Purchase Plan
CHANGE OF STATUS NOTICE
- --------------------------------------------------------------
Participant Name (Please Print)
- --------------------------------------------------------------
Social Security Number
Withdrawal From ESPP
I hereby withdraw from the NBC Internet, Inc. 1999 Employee Stock
Purchase Plan (the "ESPP") and agree that my option under the
applicable Offer Period will be automatically terminated and all
accumulated payroll deductions credited to my account will be refunded
to me or applied to the purchase of Common Stock depending on the
alternative indicated below. No further payroll deductions will be made
for the purchase of shares in the applicable Offer Period and I shall
be eligible to participate in a future Offer Period only by timely
delivery to the Company of a new Subscription Agreement.
/ / Withdrawal and Purchase of Common Stock
Payroll deductions will terminate, but your account balance will be
applied to purchase Common Stock on the next Exercise Date. Any
remaining balance will be refunded.
/ / Withdrawal Without Purchase of Common Stock
Entire account balance will be refunded to me and no Common Stock will
be purchased on the next Exercise Date provided this notice is
submitted to the Company ten (10) business days prior to the next
Exercise Date.
/ / Change in Payroll Deduction
I hereby elect to change my rate of payroll deduction under the ESPP as
follows (select one):
------------------------------------------------------------------------------
Percentage to be Deducted (circle one) 1% 2% 3% 4% 5% 6% 7% 8% 9%
------------------------------------------------------------------------------
An increase or a decrease in payroll deduction will be effective for
the first full payroll period commencing no fewer than ten (10)
business days following the Company's receipt of this notice, unless
this change is processed more quickly.
B-1
<PAGE>
/ / Change of Beneficiary / / I am single / / I am married
This change of beneficiary shall terminate my previous beneficiary
designation under the ESPP. In the event of my death, I hereby
designate the following person or trust as my beneficiary to receive
all payments and shares due to me under the ESPP:
<TABLE>
<S> <C>
Beneficiary (please print) ____________________________________________________ Relationship to Beneficiary (if any)
(Last) (First) (MI)
</TABLE>
<TABLE>
<S> <C>
Street Address ________________________________________________________________ _____________________________________
City, State/Country, Zip ______________________________________________________
Date: _________________________________ Employee Signature:_______________________________________________________
-----------------------------------------------------
spouse's signature (if beneficiary is other than spouse)
</TABLE>
<PAGE>
Exhibit 99.2
NBC INTERNET, INC.
2000 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this Non-Qualified Stock
Option Plan are to attract and retain the best available personnel, to provide
additional incentive to Employees 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) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act.
(c) "APPLICABLE LAWS" means the legal requirements relating to
the administration of stock incentive plans, if any, under applicable provisions
of federal securities laws, state corporate and securities laws, 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.
(d) "AWARD" means the grant of an Option under the Plan.
(e) "AWARD AGREEMENT" means the written agreement evidencing
the grant of an Award executed by the Company and the Grantee, including any
amendments thereto.
(f) "BOARD" means the Board of Directors of the Company.
(g) "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 Administrator 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.
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(h) "CHANGE IN CONTROL" means a change in ownership or control
of the Company effected through any of the following transactions:
(i) a merger, consolidation or other form of business
combination, unless the business of the Company is continued following any such
transaction by a resulting company (which may be, but need not be, the Company)
and the stockholders of the Company immediately prior to such transaction (the
"Prior Stockholders") hold, directly or indirectly, at least fifty percent (50%)
of the total combined voting power of the resulting company (there being
excluded from the voting power held by the Prior Stockholders, but not from the
total voting power of the resulting company, any voting power received by
affiliates of a party to the transaction, other than the Company) in their
capacities as stockholders of the Company, but excluding any such transaction
that the Administrator determines shall not be a Change in Control; or
(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), but excluding any such transaction
that the Administrator determines shall not be a Change in Control; or
(iii) 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 Change in Control;
or
(iv) a change in the composition of the Board over a
period of thirty-six (36) months or less such that a majority of the Board
members (rounded up to the next whole number) ceases, by reason of one or more
contested elections for Board membership, to be comprised of individuals who are
Continuing Directors;
PROVIDED, HOWEVER, that a Change in Control shall not occur as a result of an
increase in the securities ownership of National Broadcasting Company, Inc. or
its successor in interest.
(i) "CODE" means the Internal Revenue Code of 1986, as
amended.
(j) "COMMITTEE" means any committee appointed by the Board to
administer the Plan.
(k) "COMMON STOCK" means the Class A Common Stock of the
Company, except where other classes of stock are expressly referenced.
(l) "COMPANY" means NBC Internet, Inc., a Delaware
corporation.
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(m) "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 renders consulting or advisory services to the Company or such
Related Entity.
(n) "CONTINUING DIRECTORS" means members of the Board who
either (i) have been Board members continuously for a period of at least
thirty-six (36) months or (ii) have been Board members for less than thirty-six
(36) months and were elected or nominated for election as Board members by at
least a majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board.
(o) "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 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.
(p) "DIRECTOR" means a member of the Board or the board of
directors of any Related Entity.
(q) "DISABILITY" means that a Grantee would qualify for
benefit payments under the long-term disability policy of the Company or the
Related Entity to which the Grantee provides services regardless of whether the
Grantee is covered by such policy.
(r) "ELIGIBLE EMPLOYEE" means any Employee, other than an
Officer or Director.
(s) "EMPLOYEE" means any person 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.
(t) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(u) "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 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
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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.
(v) "GOOD REASON" means the occurrence after a Change in
Control or a Related Entity Disposition of any of the following events or
conditions unless consented to by the Grantee:
(i) (A) a change in the Grantee's status, title,
position or responsibilities which represents a materially adverse change from
the Grantee's status, title, position or responsibilities as in effect at any
time within six (6) months preceding the date of a Change in Control or Related
Entity Disposition or at any time thereafter or (B) the assignment to the
Grantee of any duties or responsibilities which are materially and adversely
inconsistent with the Optionee's status, title, position or responsibilities as
in effect at any time within six (6) months preceding the date of a Change in
Control or Related Entity Disposition or at any time thereafter;
(ii) reduction in the Grantee's base salary to a
level below that in effect at any time within six (6) months preceding the date
of a Change in Control or Related Entity Disposition or at any time thereafter,
other than as part of a Company-wide reduction in salaries of employees
generally; or
(iii) requiring the Grantee to be based at any place
outside a 50-mile radius from the Grantee's job location or residence prior to
the Change in Control or Related Entity Disposition, except for reasonably
required travel on business which is not materially greater than such travel
requirements prior to the Change in Control or Related Entity Disposition;
PROVIDED, HOWEVER, that reasons (i) and (ii) shall be applicable only with
respect to a Grantee who is an Employee, and not to a Grantee who is a
non-employee Director or a Consultant; and PROVIDED FURTHER, that an event or
condition described in (i) or (ii) shall not constitute "Good Reason" unless the
Grantee shall have given notice to the Company stating in writing that the
Grantee believes that event or condition is one described in this definition,
and the Company shall not have cured the same within 60 days after receipt of
the notice.
(w) "GRANTEE" means an Employee or Consultant who receives an
Award pursuant to an Award Agreement under the Plan.
(x) "IMMEDIATE FAMILY" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Grantee's household (other than a tenant or employee), a trust in which these
persons have more than fifty percent (50%) of the beneficial interest, a
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foundation in which these persons (or the Grantee) control the management of
assets, and any other entity in which these persons (or the Grantee) own more
than fifty percent (50%) of the voting interests.
(y) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(z) "NON-QUALIFIED STOCK OPTION" means an Option not intended
to qualify as an Incentive Stock Option.
(aa)"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.
(bb)"OPTION" means an option to purchase Shares pursuant to an
Award Agreement granted under the Plan.
(cc)"PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(dd)"PLAN" means this 2000 Non-Qualified Stock Option Plan.
(ee)"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.
(ff)"RELATED ENTITY DISPOSITION" means the sale, distribution
or other disposition by the Company, a Parent or a Subsidiary of all or
substantially all of the interests of the Company, a Parent or a Subsidiary in
any Related Entity effected by a sale, merger or consolidation or other
transaction involving that Related Entity or the sale of all or substantially
all of the assets of that Related Entity, other than any Related Entity
Disposition to the Company, a Parent or a Subsidiary.
(gg)"RULE 16b-3" means Rule 16b-3 promulgated under the
Exchange Act or any successor thereto.
(hh)"SHARE" means a share of the Common Stock or any security
into which the Common Stock shall have been converted.
(ii)"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 10, below, the
maximum aggregate number of Shares which may be issued pursuant to Awards
initially shall be 2,000,000 Shares.
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(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.
(i) ADMINISTRATION BY BOARD OR COMMITTEE. The Plan
shall be administered by (A) the Board or (B) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to satisfy the
Applicable Laws. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. The Board may
authorize one or more Officers to grant such Awards and may limit such authority
as the Board determines from time to time.
(ii) ADMINISTRATION ERRORS. In the event an Award is
granted in a manner inconsistent with the provisions of this subsection (a),
such Award shall be presumptively valid as of its grant date to the extent
permitted by the Applicable Laws.
(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 Eligible Employees 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 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;
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(vi) 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;
(vii) to construe and interpret the terms of the Plan
and Awards granted pursuant to the Plan, including without limitation, any
notice of Award or Award Agreement, granted pursuant to the Plan;
(viii) 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 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; and
(ix) to take such other action, not inconsistent with
the terms of the Plan, as the Administrator deems appropriate.
5. ELIGIBILITY. Awards may be granted to Eligible Employees and
Consultants. An Eligible Employee or Consultant who has been granted an Award
may, if otherwise eligible, be granted additional Awards. Awards may be granted
to such Eligible Employees 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. All Awards shall be of Non-Qualified Stock
Options.
(b) 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 stockholder
return, return on equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added and sales, in each case as
applied to an individual, the Company or a subsidiary, division, business unit,
or department thereof. 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.
(c) 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.
(d) DEFERRAL OF AWARD PAYMENT. The Administrator may establish
one or more programs under the Plan to permit selected Grantees the opportunity
to elect to defer receipt of
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consideration upon exercise of an Award, satisfaction of performance
criteria, or other event that absent the election would entitle the Grantee
to payment or receipt of Shares or other consideration under an Award. The
Administrator may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, Shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Administrator
deems advisable for the administration of any such deferral program.
(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
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
(i) TRANSFERABILITY OF AWARDS. Awards may be transferred (i)
by gift or through a domestic relations order to members of the Grantee's
Immediate Family to the extent provided in the Award Agreement or (ii) in the
manner and to the extent determined by the Administrator.
(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
or Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.
7. AWARD EXERCISE PRICE, CONSIDERATION, AND TAXES.
(a) EXERCISE PRICE. The per Share exercise price for an Option
shall be not less than eighty-five percent (85%) of the Fair Market Value per
Share on the date of grant unless otherwise determined by the Administrator. In
the case of an Award issued pursuant to Section 6(c), above, the exercise or
purchase price for the Award shall be determined in accordance with the
principles of Section 424(a) of the Code.
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(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. 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, provided that the portion of the
consideration equal to the par value of the Shares must be paid in cash or other
legal consideration permitted by the Delaware General Corporation Law:
(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) 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) 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.
(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. Upon exercise
of an Award, the Company shall withhold or collect from Grantee an amount
sufficient to satisfy such tax obligations.
8. EXERCISE OF AWARD.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.
(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.
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(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
stockholder shall exist with respect to Shares subject to an Award,
notwithstanding the exercise of an Option or other Award. The Company shall
issue (or cause to be issued) such stock certificate promptly upon exercise of
the 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 10, below.
(b) EXERCISE OF AWARD FOLLOWING TERMINATION OF CONTINUOUS
SERVICE.
(i) An Award may not be exercised after the
termination date of such Award set forth in the Award Agreement and may be
exercised following the termination of a Grantee's Continuous Service only to
the extent provided in the Award Agreement.
(ii) Where the Award Agreement permits a Grantee to
exercise an Award following the termination of the Grantee's Continuous Service
for a specified period, the Award shall terminate to the extent not exercised on
the last day of the specified period or the last day of the original term of the
Award, whichever occurs first.
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. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders 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 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 event
affecting the Shares, (ii) any other increase or decrease in the number of
issued Shares effected without receipt of consideration by the
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Company, or (iii) as the Administrator may determine in its discretion, any
other transaction with respect to Common Stock of a type described in Section
424(a) of the Code or any 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.
11. CHANGES IN CONTROL/RELATED ENTITY DISPOSITIONS. Except as may be
provided in an Award Agreement:
(a) In the event of any Change in Control, each Award which is
at the time outstanding under the Plan automatically shall have its vesting
accelerated by 12 months (such that (1) any Award that is not yet vested but was
otherwise scheduled to become vested within 12 months instead becomes vested and
exercisable on the effective date of the Change in Control, and (2) any Award
that is not yet vested and was otherwise scheduled to become vested on a date
that is more than 12 months after the Change in Control instead become fully
vested and exercisable on a date that is 12 months earlier than the date
provided for in by the terms of the Award). Each such Award that becomes vested
and exercisable on the effective date of the Change in Control shall also be
released from any restrictions on transfer and repurchase or forfeiture rights,
immediately prior to the specified effective date of such Change in Control, for
all of the Shares at the time represented by the vested portion of such Award.
Effective upon the consummation of the Change in Control, all outstanding Awards
under the Plan shall terminate. However, an outstanding Award under the Plan
shall not so terminate if and to the extent: (i) such Award is, in connection
with the Change in Control, either assumed by the successor corporation or
Parent thereof or replaced with a comparable Award with respect to shares of the
capital stock of the successor corporation or Parent thereof, or (ii) such Award
is to be replaced with a cash incentive program of the successor corporation
which preserves the compensation element of such Award existing at the time of
the Change in Control and provides for subsequent payout in accordance with the
same vesting schedule applicable to such Award, or (iii) such Award is purchased
for cash in an amount equal to the fair value of the Award, as reasonably
determined by the Administrator, as of the date of the Change in Control. The
determination of Award comparability above shall be made by the Administrator.
(b) Following a Change in Control and upon the termination of
the Continuous Service of a Grantee if such Continuous Service is terminated by
the Company or Related Entity or the successor employer corporation without
Cause or voluntarily by the Grantee with Good Reason within twelve (12) months
of a Change in Control, each Award of such Grantee which is at the time
outstanding under the Plan (or the replacement Award or cash incentive program,
if applicable) automatically shall become fully vested and exercisable and be
released from any restrictions on transfer and repurchase or forfeiture rights,
immediately upon the termination of such Continuous Service.
(c) Effective upon the consummation of a Related Entity
Disposition, for purposes of the Plan and all Awards, the Continuous Service of
each Grantee who is at the time
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engaged primarily in service to the Related Entity involved in such Related
Entity Disposition shall be deemed to terminate and each Award of such
Grantee which is at the time outstanding under the Plan automatically shall
become fully vested and exercisable and be released from any restrictions on
transfer and repurchase or forfeiture rights for all of the Shares at the
time represented by such Award and be exercisable in accordance with the
terms of the Award Agreement evidencing such Award. However, such Continuous
Service shall be not be deemed to terminate if such Award is, in connection
with the Related Entity Disposition, assumed by the successor entity or its
Parent. In addition, such Continuous Service shall not be deemed to terminate
and an outstanding Award under the Plan shall not so fully vest and be
exercisable and released from such limitations if and to the extent: (i) such
Award is, in connection with the Related Entity Disposition, either to be
assumed by the successor entity or its parent or to be replaced with a
comparable Award with respect to interests in the successor entity or its
parent or (ii) such Award is to be replaced with a cash incentive program of
the successor entity which preserves the compensation element of such Award
existing at the time of the Related Entity Disposition and provides for
subsequent payout in accordance with the same vesting schedule applicable to
such Award; provided, however, that such Award (if assumed), the replacement
Award (if replaced), or the cash incentive program automatically shall become
fully vested, exercisable and payable and be released from any restrictions
on transfer (other than transfer restrictions applicable to Incentive Stock
Options) and repurchase or forfeiture rights immediately upon termination of
the Grantee's Continuous Service (substituting the successor employer entity
for "Company or Related Entity" for the definition of "Continuous Service")
if such Continuous Service is terminated by the successor entity without
Cause or voluntarily by the Grantee with Good Reason within twelve (12)
months of the Related Entity Disposition. The determination of Award
comparability above shall be made by the Administrator.
12. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on
the date of its adoption by the Board. It shall continue in effect for a term of
ten (10) years unless sooner terminated.
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 stockholder 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.
(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.
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<PAGE>
(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.
13
<PAGE>
99.3
E-SMALLBUSINESS, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
1. Purposes of this Plan.................................................1
2. Definitions...........................................................1
3. Stock Subject to this Plan............................................4
4. Administration of this Plan...........................................4
5. Eligibility...........................................................5
6. Term of Plan..........................................................6
7. Exercise Price and Consideration......................................6
8. Options...............................................................8
9. Stock Purchase Rights.................................................9
10. Stock Appreciation Rights............................................10
11. Restricted Shares....................................................11
12. Performance Units and Performance Shares.............................12
13. Non-Transferability of Options and Stock Purchase Rights.............13
14. Adjustments Upon Changes in Capitalization, Merger or Other Events...13
15. Time of Grant........................................................14
<PAGE>
16. Amendment and Termination............................................14
17. Conditions Upon Issuance of Shares...................................15
18. Reservation of Shares................................................15
19. Option, Stock Purchase and Stock Bonus Agreements....................15
20. Shareholder Approval.................................................16
21. Information to Optionees and Purchasers..............................16
22. Right of Company to Terminate Employment or Consulting Services......16
23. Rights of First Refusal and Repurchase...............................16
24. Withholding..........................................................17
25. Separability.........................................................17
26. Non-Exclusivity of this Plan.........................................18
27. Governing Law........................................................19
28. Cancellation of and Substitution for Nonstatutory Options............19
29. Market Standoff......................................................19
Exhibit 1 - Form of Stock Option Agreement
</TABLE>
<PAGE>
E-SMALLBUSINESS, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
1. PURPOSES OF THIS PLAN. The general purpose of this 1998 Stock Option
and Incentive Plan is to promote the interests of the Company and its
shareholders by (i) providing certain Employees of and Consultants to the
Company with additional incentives to continue and increase their efforts with
respect to achieving success in the business of the Company, its Affiliates and
its Subsidiaries, and (ii) attracting and retaining the best available personnel
to participate in the ongoing business operations of the Company and its
Subsidiaries.
Options granted under this Plan may be either Incentive Stock Options
or Nonstatutory Stock Options, as determined at the discretion of the Board and
as reflected in the terms of the written option agreements. The Board may also
grant Stock Purchase Rights hereunder.
2. DEFINITIONS. As used in this Plan, the following definitions shall
apply:
"AFFILIATES" means any other entity directly or indirectly controlling,
controlled by, or under common control, with the Company.
"AFFILIATED SAR" means a SAR that is granted in connection with a
related Option, and which will be deemed to automatically be exercised
simultaneous with the exercise of the related Option.
"AWARD" means, individually or collectively, a grant under this Plan,
including any Nonqualified Stock Options, Incentive Stock Options, SARs,
Restricted Stock, Performance Units, or Performance Shares.
"AWARD AGREEMENT" means an agreement entered into by each Participant
and the Company, setting forth the terms and provisions applicable to Awards
granted to Participants under the Plan.
"BOARD" shall mean the Committee, if one has been appointed, or the
Board of Directors of the Company, if no Committee is appointed.
"BOARD OF DIRECTORS" means the full Board of Directors of the Company.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute or statutes thereto. Reference to any
particular Code section shall include any successor section.
<PAGE>
"COMMITTEE" shall mean the Committee appointed by the Board of
Directors in accordance with Section 4(a) of this Plan, if one is appointed, or
if no Committee is appointed, the Board of Directors.
"COMMON STOCK" shall mean the Common Stock of the Company.
"COMPANY" shall mean E-SmallBusiness, Inc., a California corporation.
"CONSULTANT" shall mean any person who is engaged by the Company or by
any Parent or Subsidiary to render consulting services and is compensated for
such consulting services, and any director of the Company whether compensated
for such services or not.
"CONTINUOUS STATUS AS AN EMPLOYEE" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of sick leave, military
leave, or any other leave of absence approved by the Board; provided that such
leave is for a period of not more than 90 days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.
"DISINTERESTED PERSON" shall mean a member of the Board of Directors of
the Company: (i) who was not during the one year prior to service as an
administrator of this Plan granted or awarded equity securities pursuant to this
Plan, or any other plan of the Company or any of its affiliates entitling the
participants therein to acquire equity securities of the Company or any of its
affiliates except as permitted by Rule 16b-3(c)(2)(i) promulgated under the
Exchange Act ("Rule 16b-3(c)(2)(i)"); or (ii) who is otherwise considered to be
a "disinterested person" in accordance with Rule 16b-3(c)(2)(i), or any other
applicable rules, regulations or interpretations of the Securities and Exchange
Commission.
"EMPLOYEE" shall mean any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company as a
common-law employee. The payment of a director's fee by the Company shall not be
sufficient to constitute "employment" by the Company.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FREESTANDING SAR" means a SAR that is granted independently of any
Options.
"INCENTIVE STOCK OPTION" shall mean an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
"MAJOR EVENT" shall be deemed to have occurred if (i) there shall be
consummated any consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares of the
Company's common stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's common stock immediately prior to the merger generally have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger; (ii) there shall be consummated any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the
2
<PAGE>
Company; (iii) proceedings or actions for the liquidation or dissolution of the
Company are initiated by the Company; or (iv) any "person" (as defined in
Sections 13(d) and 14(d) of the Exchange Act) (other than persons who
beneficially own more than 30% of the capital stock of the Company on a fully
diluted and as converted basis outstanding as of the date of adoption of this
Plan by the Board of Directors) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 30% or more of
the Company's outstanding capital stock on a fully diluted and as converted
basis at such time; provided, however, that a "Major Event" shall not be deemed
to have occurred solely by reason of the consummation of a public offering by
the Company of common stock registered under the Securities Act.
"NONSTATUTORY STOCK OPTION" shall mean an Option which is not intended
to qualify as an Incentive Stock Option.
"OPTION" shall mean a stock option granted pursuant to this Plan.
"OPTIONED STOCK" shall mean the Common Stock subject to an Option.
"OPTIONEE" shall mean an Employee or Consultant who receives an Option.
"PARENT" shall mean a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
"PARTICIPANT" means an Employee of the Company who has outstanding an
Award granted under the Plan.
"PERFORMANCE UNIT" means an Award granted to an Employee pursuant to
Section 12.
"PERFORMANCE SHARE" means an Award granted to an Employee, pursuant to
Section 12 herein.
"PERIOD OF RESTRICTION" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, in its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Section 11.
"PLAN" shall mean this 1998 Stock Option and Incentive Plan.
"PURCHASER" shall mean an Employee or Consultant who exercises a Stock
Purchase Right.
"RESTRICTED STOCK" means an Award granted to a Participant pursuant to
Section 11.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHARE" shall mean a share of Common Stock, as adjusted in accordance
with Section 14 of this Plan.
3
<PAGE>
"STOCK APPRECIATION RIGHT" or "SAR" means an Award, granted alone or in
connection with a related Option, designated as a SAR, pursuant to the terms of
Section 10.
"STOCK PURCHASE RIGHT" shall mean a right to purchase Common Stock
pursuant to this Plan or the right to receive a bonus of Common Stock for past
services.
"SUBSIDIARY" shall mean a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
"TANDEM SAR" means a SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
a Share under the related Option (and when a Share is purchased under the
Option, a SAR shall similarly be cancelled).
3. STOCK SUBJECT TO THIS PLAN. Subject to the provisions of Section 14
of this Plan, the maximum aggregate number of Shares under this Plan is
5,039,500. The Shares may be authorized but unissued, or reacquired Common
Stock, or both. If an Option or Stock Purchase Right should expire, terminate,
be cancelled or become unexercisable for any reason without having been
exercised in full, then the unpurchased Shares which were subject thereto shall,
unless this Plan shall have been terminated, become available for future grant
or sale under this Plan. In addition, Shares issued under this Plan and later
repurchased or otherwise reacquired by the Company shall, unless this Plan shall
have been terminated, become available for future grant or sale under this Plan.
4. ADMINISTRATION OF THIS PLAN.
(a) PROCEDURE. This Plan shall be administered by the Board of
Directors of the Company unless and until the Board of
Directors delegates administration to a Committee, as provided
in this Section 4(a).
(i) Subject to Section 4(a)(ii), the Board of Directors may
appoint a Committee consisting of not less than two persons
(who need not be members of the Board of Directors) to
administer this Plan on behalf of the Board of Directors,
subject to such terms and conditions not inconsistent with
this Plan as the Board of Directors may prescribe. Once
appointed, the Committee shall continue to serve until
otherwise directed by the Board of Directors. Members of the
Board who are either eligible for Options and/or Stock
Purchase Rights or have been granted Options and/or Stock
Purchase Rights may vote on any matters affecting the
administration of this Plan or the grant of any Options and/or
Stock Purchase Rights pursuant to this Plan, except that no
such member shall act upon the granting of an option to such
member, but any such member may be counted in determining the
existence of a quorum at any meeting of the Board during which
action is taken with respect to the granting of Options and/or
Stock Purchase Rights to such member.
(ii) Notwithstanding the foregoing Section 4(a)(i), if the Company
registers any class of any equity security pursuant to Section
12 of the Exchange Act, from the effective date of such
registration until six months after the termination of such
4
<PAGE>
registration, any grants of Options and/or Stock Purchase
Rights to directors or officers who are subject to Section 16
of the Exchange Act shall be made only by a Committee
consisting of two or more persons, each of whom shall be a
Disinterested Person (if necessary to meet the requirements of
Rule 16b-3 promulgated under the Exchange Act). The Board
shall otherwise comply with the requirements of Rule 16b-3
promulgated under the Exchange Act, as from time to time in
effect, unless the Board expressly declares that any such
requirement shall not apply.
(iii) Subject to the foregoing Sections 4(a)(i) and 4(a)(ii), from
time to time the Board of Directors may increase the size of
the Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in
substitution therefor, fill vacancies however caused, or
remove all members of the Committee and thereafter directly
administer this Plan. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board of
Directors.
(b) POWERS OF THE BOARD. Subject to the provisions of this Plan,
the Board shall have plenary authority, in its discretion and
without limitation, to do the following: (i) to grant
Incentive Stock Options, Nonstatutory Stock Options or Stock
Purchase Rights; (ii) to determine, upon review of relevant
information and in accordance with Section 7 of this Plan, the
fair market value of the Common Stock; (iii) to determine the
exercise price per share of Options or Stock Purchase Rights
to be granted, which exercise price shall be determined in
accordance with Section 7 hereof; (iv) to determine the
Employees or Consultants to whom, and the time or times at
which, Options or Stock Purchase Rights shall be granted and
the number of Shares to be represented by each Option or Stock
Purchase Right; (v) to interpret this Plan; (vi) to prescribe,
amend and rescind rules and regulations relating to this Plan,
and in the exercise of this power, to correct any defect,
omission or inconsistency in this Plan or in any agreement
relating to an Option or Stock Purchase Right, in a manner and
to the extent the Board shall deem necessary or expedient to
make this Plan fully effective; (vii) to determine the terms
and provisions of each Option or Stock Purchase Right granted
(which need not be identical) and, with the consent of the
holder thereof, modify or amend each Option or Stock Purchase
Right; (viii) to authorize any person to execute on behalf of
the Company any instrument required to effectuate the grant of
an Option or Stock Purchase Right previously granted by the
Board; and (ix) to make all other determinations deemed
necessary or advisable for the administration of this Plan.
(c) BOARD DETERMINATIONS. In making determinations under this
Plan, the Board may take into account the nature of the
services rendered by the respective Employees and Consultants,
their present and potential contributions to the success of
the Company, or its Subsidiaries, as the case may be, and such
other factors as the Board in its discretion shall deem
relevant. All decisions, determinations and interpretations of
the Board shall be final and binding on all Optionees,
5
<PAGE>
Purchasers and any other holders of any Options and/or Stock
Purchase Rights granted under this Plan.
5. ELIGIBILITY.
(a) Options and Stock Purchase Rights may be granted to Employees
and Consultants, provided that Incentive Stock Options may
only be granted to Employees. An Employee or Consultant who
has been granted an Option or Stock Purchase Right may, if
such Employee or Consultant is otherwise eligible, be granted
additional Option(s) or Stock Purchase Right(s).
(b) No Incentive Stock Option may be granted to an Employee which,
when aggregated with all other Incentive Stock Options granted
to such Employee by the Company or by any Parent or
Subsidiary, would result in Shares having an aggregate fair
market value (determined for each Share as of the date of
grant of the Option covering such Share) in excess of $100,000
(or such different amount as provided for under the Code
requirements for Incentive Stock Options) becoming first
available for purchase upon exercise of one or more incentive
stock options during any calendar year.
(c) Section 5(b) of this Plan shall apply only to an Incentive
Stock Option evidenced by a stock option agreement which sets
forth the intention of the Company and the Optionee that such
Option shall qualify as an Incentive Stock Option. Section
5(b) of this Plan shall not apply to any Option evidenced by a
stock option agreement which sets forth the intention of the
Company and the Optionee that such Option shall be a
Nonstatutory Stock Option.
(d) On and after the effective date of the registration of any
class of equity security of the Company pursuant to Section 12
of the Exchange Act, a member of the Board of Directors who is
not an Employee shall not be eligible for the benefits of this
Plan unless at the time an Option or Stock Purchase Right is
granted to such member, the Board expressly declares that such
exclusion will not apply.
6. TERM OF PLAN. This Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by vote of the
holders of a majority of the outstanding shares of the Company entitled to vote
on the adoption of this Plan. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 16 of this Plan.
7. EXERCISE PRICE AND CONSIDERATION.
(a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option or Stock Purchase Right
shall be such price as is determined by the Board, but shall
be subject to the following provisions:
(i) In the case of an Incentive Stock Option:
6
<PAGE>
(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 no less than 110% of
the fair market value per share on the date of grant.
(B) granted to any Employee other than an Employee
described in Section 7(a)(i)(A), the per share exercise price shall be no less
than 100% of the fair market value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option:
(A) granted to an Employee or Consultant 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 Parent
or Subsidiary, the per share exercise price shall be no less than 110% of the
fair market value per share on the date of the grant.
(B) granted to any Employee or Consultant, other than
an Employee or Consultant described in Section 7(a)(ii)(A), the per share
exercise price shall be no less than 85% of the fair market value per share on
the date of grant.
(iii) In the case of a Stock Purchase Right granted to any person,
the per share exercise price shall be no less than 85% of the
fair market value per share on the date of grant; provided,
however, that if such person at the time of the grant of such
Stock Purchase Right, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the per share
exercise price shall be no less than 100% of the fair market
value per share on the date of the grant.
(b) Fair market value shall be determined by the Board in its
discretion; provided, however, that where there is an active
public market for the Common Stock, the fair market value per
share shall be determined as follows:
(i) If the Company's Common Stock is traded on an exchange or is
quoted on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") National Market System, then
the closing or last sale price, respectively, on the date of
grant, as reported in the Wall Street Journal (or, if not so
reported, as otherwise reported by the NASDAQ System).
(ii) If the Company's Common Stock is not traded on an exchange or
on the NASDAQ National Market System but is traded in the
over-the-counter market, then the mean of the closing bid and
asked prices on the date of grant as reported in the Wall
Street Journal (or, if not so reported, as otherwise reported
by the NASDAQ System).
(c) The consideration to be paid for the Shares to be issued upon
exercise of an Option or Stock Purchase Right, including the
method of payment, shall be determined by the Board and may
consist entirely of cash, check, promissory note
7
<PAGE>
or other deferred payment arrangement, other Shares of Common
Stock having a fair market value on the date of surrender
equal to the aggregate exercise price of the Shares as to
which said Option or Stock Purchase Right shall be exercised,
or any combination of such methods of payment, or such other
consideration and method of payment for the issuance of Shares
to the extent permitted under applicable law. In making its
determination as to the type of consideration to accept, the
Board shall consider if acceptance of such consideration may
be reasonably expected to benefit the Company.
8. OPTIONS.
(a) TERM OF OPTION. The term of each Option shall be five (5)
years from the date of grant thereof or such longer term (up
to 10 years) as may be provided in the stock option agreement
relating to such Option; provided that the term of a
Nonstatutory Stock Option may, as provided in Section
8(b)(iv), be extended for a period of up to six (6) months.
However, in the case of an Option granted to an Employee who,
at the time the Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes
of stock of the Company or any Parent or Subsidiary, the term
of the Option shall be five (5) years from the date of grant
thereof or such shorter time as may be provided in the stock
option agreement relating to such Option.
(b) EXERCISE OF OPTION.
(i) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted under this Plan shall be exercisable at such times and
under such conditions as determined by the Board, such as
vesting conditions and/or performance criteria with respect to
the Company and/or the Optionee, and as shall be permissible
under the terms of this Plan. Notwithstanding anything herein
to the contrary, no Option granted hereunder shall have a
vesting period in excess of five (5) years.
An Option may, but need not, include a provision
whereby at any time prior to termination of the Optionee's Continuous Status as
an Employee, the Optionee may elect to exercise the Option as to all or any part
of the Shares subject to the Option prior to the stated vesting date of the
Option or of any vesting installment or installments specified in the Option.
Any shares so purchased from any unvested installment or Option may be subject
to a repurchase right in favor of the Company or to any restriction the Board
determines to be appropriate.
An Option 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 Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. An Option may not be exercised for a fraction of a
Share. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 7 of this Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive
8
<PAGE>
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly upon exercise of
the Option. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in Section 11 of this Plan.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of this Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.
(ii) TERMINATION OF STATUS AS AN EMPLOYEE. In the event of
termination of an Optionee's Continuous Status as an Employee,
such Optionee may, but only within thirty (30) days after the
date of such termination (but in no event later than the date
of expiration of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent that such
Employee was entitled to exercise it at the date of such
termination. To the extent that such Employee was not entitled
to exercise the Option at the date of such termination, or if
such Employee does not exercise such Option (which such
Employee was entitled to exercise) within such thirty (30) day
time period, the Option shall terminate.
(iii) DISABILITY OF OPTIONEE. Notwithstanding the provisions of
Section 8(b)(ii) above, in the event of termination of an
Optionee's Continuous Status as an Employee as a result of
such Employee's disability, such Employee may, but only within
six (6) months from the date of such termination (but in no
event later than the date of expiration of the term of such
option as set forth in the Option Agreement), exercise the
Option to the extent such Employee was entitled to exercise it
at the date of such termination; PROVIDED HOWEVER, that if the
Option is an Incentive Stock Option and the disability is not
a total and permanent disability (as defined in Section
422(c)(6) of the Code), then if the Optionee does not exercise
the Option within three months after such termination, such
Option shall automatically convert into a Nonstatutory Stock
Option; and PROVIDED, FURTHER, that if the termination is as a
result of a total and permanent disability (as defined in
Section 422(c)(6) of the Code), such Employee may within one
(1) year from the date of such termination, but in no event
later than the date of expiration of the term of such option
as set forth in the Option Agreement), exercise the Option to
the extent such Employee was entitled to exercise it at the
date of such termination. To the extent that such Employee was
not entitled to exercise the Option at the date of
termination, or if such Employee does not exercise such Option
(which such Employee was entitled to exercise) within the time
periods specified above, as the case may be, the Option shall
terminate.
(iv) DEATH OF OPTIONEE. In the event of the death of an Optionee:
(A) while the Optionee is an Employee or Consultant, (B)
during the thirty (30) day period described in Section
8(b)(ii), or (C) during the one (1) year period described in
Section 8(b)(iii), the Option may be exercised, at any time
within one (1) year following the date of death (but, in the
case of an Incentive Stock Option, in no
0 9
<PAGE>
event later than the date of expiration of the term of such
Incentive Stock Option as set forth in the Option Agreement),
by the Optionee's estate or by a person who acquired the right
to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the
time of death of the Optionee. To the extent that such
Employee or Consultant was not entitled to exercise the Option
at the date of death, or if such Employee, Consultant, estate
or other person does not exercise such Option (which such
Employee, Consultant, estate or person was entitled to
exercise) within the one (1) year time period specified in
this Plan, the Option shall terminate.
9. STOCK PURCHASE RIGHTS.
(a) RIGHTS TO PURCHASE. After the Board determines that it will
offer an Employee or Consultant a Stock Purchase Right, it
shall deliver to the offeree a stock purchase agreement or
stock bonus agreement, as the case may be, setting forth the
terms, conditions and restrictions relating to the offer,
including the number of Shares which such person shall be
entitled to purchase, and the time within which such person
must accept such offer, which shall in no event exceed six (6)
months from the date upon which the Board made the
determination to grant the Stock Purchase Right. The offer
shall be accepted by execution of a stock purchase agreement
or stock bonus agreement in the form approved by the Board.
(b) ISSUANCE OF SHARES. Forthwith after payment therefor, the
Shares purchased shall be duly issued; provided, however, that
the Board may require that the Purchaser make adequate
provision for any federal and state withholding obligations of
the Company as a condition to the Purchaser purchasing such
Shares.
(c) OTHER PROVISIONS. The stock purchase agreement or stock bonus
agreement shall contain such other terms, provisions and
conditions not inconsistent with this Plan as may be
determined by the Board, including rights of first refusal as
set forth in Section 23 hereof.
10. STOCK APPRECIATION RIGHTS.
(a) GRANTS OF SARS. Tandem SARs may be awarded by the Committee in
connection with any Option granted under the Plan, either on
the Date of Grant of the Option or thereafter at any time
prior to the exercise, termination or expiration of the Option
Nontandem SARs may also be granted by the Committee at any
time. On the Date of Grant of a Nontandem SAR, the Committee
shall specify the number of shares of Common Stock covered by
such right and the base price of shares of Common Stock to be
used in connection with the calculation described in Section
10(c) below. SARs shall be subject to such terms and
conditions not inconsistent with the other provisions of this
Plan as the Committee shall determine.
(b) EXERCISE OF TANDEM SARS. A Tandem SAR shall be exercisable
only to the extent that the related Option is exercisable and
shall be exercisable only for such
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<PAGE>
period as the Committee may determine (which period may expire
prior to the expiration date of the related Option). Upon the
exercise of all or a portion of a Tandem SAR, the related
Option shall be canceled with respect to an equal number of
shares of Common Stock. A Tandem SAR shall entitle the Grantee
to surrender to the Company unexercised the related Option, or
any portion thereof, and to receive from the Company in
exchange therefor that number of shares of Common Stock having
an aggregate fair market value equal to (A) the excess of (i)
the fair market value of one (1) share of Common Stock as of
the date the Tandem SAR is exercised over (ii) the Option
price per share specified in such Option, multiplied by (B)
the number of shares of Common Stock subject to the Option, or
portion thereof, which is surrendered. Cash shall be delivered
in lieu of any fractional shares.
(c) EXERCISE OF NONTANDEM SARS. A Nontandem SAR shall be
exercisable during such period as the Committee shall
determine prior to the Date of Grant. The exercise of a
Nontandem SAR shall entitle the Grantee to receive from the
Company that number of shares of Common Stock having an
aggregate fair market value equal to (A) the excess of (i) the
fair market value of one (1) share of Common Stock as of the
date on which the Nontandem SAR is exercised over (ii) the
base price of the shares covered by the Nontandem SAR,
multiplied by (B) the number of shares of Common Stock covered
by the Nontandem SAR, or the portion thereof being exercised.
Cash shall be delivered in lieu of any fractional shares.
(d) SETTLEMENT OF SARS. As soon as is reasonably practicable after
the exercise of a SAR, the Company shall (i) issue, in the
name of the Grantee, stock certificates representing the total
number of full shares of Common Stock to which the Grantee is
entitled pursuant to Section 10(b) or 10(c) hereof and cash in
an amount equal to the fair market value, as of the date of
exercise, of any resulting fractional shares, and (ii) if the
Committee causes the Company to elect to settle all or part of
its obligations arising out of the exercise of the SAR in cash
pursuant to Section 10(e), deliver to the Grantee an amount in
cash equal to the fair market value, as of the date of
exercise, of the shares of Common Stock it would otherwise be
obligated to deliver.
(e) CASH SETTLEMENT. The Committee, in its discretion, may cause
the Company to settle all or any part of its obligation
arising out of the exercise of a SAR by the payment of cash in
lieu of all or part of the shares of Common Stock it would
otherwise be obligated to deliver in an amount equal to the
fair market value of such shares on the date of exercise.
11. RESTRICTED SHARES.
(a) GRANT OF RESTRICTED SHARES. The Committee may from time to
time cause the Company to issue Restricted Shares under the
Plan, subject to such restrictions,
11
<PAGE>
conditions and other terms as the Committee may determine in
addition to those set forth herein.
(b) RESTRICTIONS. At the time a grant of Restricted Shares is
made, the Committee shall establish a period of time (the
"Restricted Period") applicable to such Restricted Shares.
Each grant of Restricted Shares may be subject to a different
Restricted Period. The Committee may, in its sole discretion,
at the time a grant is made, prescribe restrictions in
addition to or other than the expiration of the Restricted
Period, including the satisfaction of corporate or individual
performance objectives, which shall be applicable to all or
any portion of the Restricted Shares. Except with respect to
grants of Restricted Shares intended to qualify as performance
based compensation for purposes of Section 162(m) of the Code,
the Committee may also, in its sole discretion, shorten or
terminate the Restricted Period or waive any other
restrictions applicable to all or a portion of such Restricted
Shares. None of the Restricted Shares may be sold,
transferred, assigned, pledged or otherwise encumbered or
disposed of prior to the date on which such Restricted Shares
vest in accordance with Section 11(c).
(c) RESTRICTED STOCK CERTIFICATES. The Company shall issue, in the
name of each Grantee, stock certificates with proper legends
representing the total number of Restricted Shares granted to
the Grantee, as soon as reasonably practicable after the Date
of Grant. The Secretary of the Company shall hold such
certificates, properly endorsed for transfer, after the
Grantee's benefit until such time as the Restricted Shares are
forfeited to the Company or until the Restricted Shares vest.
In lieu of the foregoing, Restricted Shares awarded to a
Grantee may be held under the Grantee's name in a book entry
account maintained by or on behalf of the Company.
(d) RIGHTS OF HOLDERS OF RESTRICTED SHARES. Except as otherwise
determined by the Committee either at the time Restricted
Shares are awarded or at any time thereafter prior to the
lapse of the restrictions, holders of Restricted Shares shall
not have the right to vote such shares or the right to receive
any dividends with respect to such shares. All distributions,
if any, received by an employee or consultant with respect to
Restricted Shares as a result of any stock split-up, stock
distribution, combination of shares, or other similar
transaction shall be subject to the restrictions of this
Section 11.
(e) TERMINATION OF EMPLOYMENT RELATIONSHIP. Any Restricted Shares
granted pursuant to the Plan shall be forfeited if the Grantee
terminates employment with the Company or its subsidiaries for
reasons other than death or disability prior to the expiration
or termination of the Restricted Period and the satisfaction
of any other conditions applicable to such Restricted Shares.
Upon such forfeiture, the Secretary of the Company shall
either cancel or retain in its treasury the Restricted Shares
that are forfeited to the Company. Upon the death of a Grantee
prior to his termination of employment, or upon a Grantee's
termination of employment as a result of disability, all
Restricted Shares previously awarded to
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<PAGE>
such Grantee which have not previously vested shall be
forfeited unless the Committee in its sole discretion shall
determine otherwise.
(f) DELIVERY OF RESTRICTED SHARES. Subject to the provisions of
this Section, at such time as the Grantee shall become vested
in his Restricted Shares, the restrictions applicable to the
Restricted Shares shall lapse and a stock certificate for the
number of Restricted Shares with respect to which the
restrictions have lapsed shall be delivered, free of all such
restrictions, to the Grantee or the Grantee's beneficiary or
estate, as the case may be.
12. PERFORMANCE UNITS AND PERFORMANCE SHARES.
(a) GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms of the
Plan, Performance Units and Performance Shares may be granted
to eligible Employees and Consultants at any time and from
time to time, as shall be determined by the Committee, in its
sole discretion. The Committee shall have complete discretion
in determining the number of Performance Units and Performance
Shares granted to each Participant.
(b) VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall
have an initial value that is established by the Committee at
the time of the grant. Each Performance Share shall have an
initial value equal to the Fair Market Value of a Share on the
date of grant. The Committee shall set performance goals in
its discretion which, depending on the extent to which they
are met, will determine the number and/or value of Performance
Units/Shares that will be paid out to the Participants. The
time period during which the performance goals must be met
shall be called a "Performance Period." Performance Periods of
Awards granted to Insiders shall, in all cases, exceed six (6)
months in length.
(c) EARNING OF PERFORMANCE UNITS/SHARES. After the applicable
Performance Period has ended, the holder of Performance
Units/Shares shall be entitled to receive a payout of the
number of Performance Unit/Shares earned by the Participant
over the Performance Period, to be determined as a function of
the extent to which the corresponding performance goals have
been achieved. Notwithstanding the preceding sentence, after
the grant of a Performance Unit/Share, the Committee, in its
sole discretion, may waive the achievement of any performance
goals for such Performance Unit/Share.
(d) FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES.
Payment of earned Performance Units/Shares shall be made in a
single lump sum, within forty-five (45) calendar days
following the close of the applicable Performance Period. The
Committee, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an
aggregate Fair Market Value equal to the value of the earned
Performance Units/Shares at the close of the applicable
Performance Period) or in combination thereof.
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<PAGE>
Prior to the beginning of each Performance Period,
Participants may, in the discretion of the Committee, elect to defer the receipt
of any Performance Unit/Share payout upon such terms as the Committee shall
determine.
(e) CANCELLATION OF PERFORMANCE UNITS/SHARES. Subject to the
applicable Award Agreement, upon the earlier of (a) the
Participant's termination of employment, or (b) the date set
forth in the Award Agreement, all remaining Performance
Units/Shares shall be forfeited by the Participant to the
Company, the Shares subject thereto shall again be available
for grant under the Plan.
(f) NONTRANSFERABILITY. Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further a Participant's rights under the Plan
shall be exercisable during the Participant's lifetime only by
the Participant or the Participant's legal representative.
13. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Options
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee or Purchaser, only by the Optionee or Purchaser.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR OTHER EVENTS.
Subject to any required action by the shareholders of the Company, the number of
shares of Common Stock covered by each outstanding Option and Stock Purchase
Right, and the number of shares of Common Stock which have been authorized for
issuance under this Plan but as to which no Options or Stock Purchase Rights
have yet been granted or which have been returned to this Plan upon cancellation
or expiration of an Option or Stock Purchase Right, or repurchase of Shares from
a Purchaser or Optionee upon termination of employment or otherwise, as well as
the price per share of Common Stock covered by each such outstanding Option or
Stock Purchase Right, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock of the Company or the payment of a stock dividend with respect
to the Common Stock. Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Option or Stock Purchase
Rights.
In the event of the dissolution or liquidation of the Company, all
Options and Stock Purchase Rights will terminate immediately prior to the
consummation of such proposed action if not previously exercised. The Board, at
its option, may provide for one or more of the following from time to time or in
any stock option agreement or stock purchase agreement that, in the event of a
Major Event, then (A) all Options and Stock Purchase Rights will be assumed or
equivalent options or stock purchase rights will be substituted by such
surviving corporation (or other entity) or a parent or subsidiary of such
surviving corporation (or other entity), (B) all
14
<PAGE>
Options and Stock Purchase Rights will continue in full force and effect, or (C)
all Options and Stock Purchase Rights will terminate if not exercised prior to
the consummation of the transaction.
The foregoing adjustments shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
The grant of an Option or Stock Purchase Right pursuant to this Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
15. TIME OF GRANT. The date of grant of an Option or Stock
Purchase Right shall, for all purposes, be the date on which the Board makes the
determination granting such Option or Stock Purchase Right. Notice of the
determination shall be given to each Employee or Consultant to whom an Option or
Stock Purchase Right is so granted within a reasonable time after the date of
such grant.
16. AMENDMENT AND TERMINATION.
(a) AMENDMENT. The Board may amend this Plan from time to time in
such respects as the Board may deem advisable; provided that
the shareholders of the Company must approve the following
amendments or revisions within 12 months before or after the
adoption of such revision or amendment:
(i) any increase in the number of Shares subject to this Plan,
other than in connection with an adjustment under Section 14
of this Plan;
(ii) any change in the designation of the class of persons eligible
to be granted Options (to the extent such modification
requires shareholder approval in order for the Plan to satisfy
the requirements of Section 422(b) of the Code or to comply
with the requirements of Rule 16b-3 promulgated under the
Exchange Act); or
(iii) any other revision or amendment if such revision or amendment
requires shareholder approval in order for this Plan to
satisfy the requirements of Section 422(b) of the Code or to
comply with the requirements of Rule 16b-3 promulgated under
the Exchange Act if applicable to the Company.
(b) SHAREHOLDER APPROVAL. If any amendment requiring shareholder
approval under Section 16(a) of this Plan is made subsequent
to the first registration of any class of equity securities by
the Company under Section 12 of the Exchange Act, such
shareholder approval shall be solicited as described in
Section 20 of this Plan.
(c) SUSPENSION AND TERMINATION. The Board may suspend or terminate
this Plan at any time. No Options or Stock Purchase Rights may
be granted while this Plan is suspended or after it is
terminated.
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<PAGE>
(d) EFFECT OF AMENDMENT; TERMINATION OR SUSPENSION. Any such
amendment, termination or suspension of this Plan shall not
affect Options or Stock Purchase Rights already granted and
such Options or Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended,
terminated or suspended, unless mutually agreed otherwise
between the Optionee or Purchaser (as the case may be) and the
Company, which agreement must be in writing and signed by the
Optionee or Purchaser (as the case may be) and the Company.
17. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange or other stock trading system upon which the Shares may then be listed.
As a condition to the exercise of an Option or Stock Purchase Right,
the Company may require the person exercising such Option or Stock Purchase
Right to make such representations and warranties at the time of any such
exercise as the Company may at that time determine, including without
limitation, representations and warranties that (i) the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares in violation of applicable federal or state securities
laws, and (ii) such person is knowledgeable and experienced in financial and
business matters and is capable of evaluating the merits and the risks
associated with purchasing the Shares.
18. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of this Plan. 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 under this Plan, 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.
19. OPTION, STOCK PURCHASE AND STOCK BONUS AGREEMENTS. Options shall be
evidenced by written stock option agreements in such form as the Board shall
approve. Upon the exercise of Stock Purchase Rights, the Purchaser shall sign a
stock purchase agreement or stock bonus agreement in such form as the Board
shall approve.
20. SHAREHOLDER APPROVAL.
(a) The shareholders of the Company shall have approved this Plan
within 12 months before or after this Plan is adopted. Any
shares purchased before shareholder approval is obtained shall
be rescinded if shareholder approval is not obtained within 12
months before or after this Plan is adopted. Such shares shall
not be counted in determining whether such approval is
obtained.
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<PAGE>
(b) If the Company registers any class of equity securities
pursuant to Section 12 of the Exchange Act, any required
approval of the shareholders of the Company obtained after
such registration shall be solicited substantially in
accordance with Section 14(a) of the Exchange Act and the
rules and regulations promulgated thereunder.
(c) If the Company registers any class of equity securities
pursuant to Section 12 of the Exchange Act and if prior to
such time either (x) the shareholders of the Company did not
approve this Plan or (y) the Company did not solicit
shareholder approval substantially in accordance with Section
14(a) of the Exchange Act and the rules and regulations
promulgated thereunder, then the Company shall take all
necessary actions to qualify the Plan under Rule 16(b)(3)
promulgated under the Exchange Act at or prior to the later of
(A) the first annual meeting of shareholders held subsequent
to the first registration of any class of equity securities of
the Company under Section 12 of the Exchange Act or (B) the
granting of an Option hereunder to an officer or director
after such registration.
21. INFORMATION TO OPTIONEES AND PURCHASERS. The Company shall provide
annually to each Optionee and Purchaser, during the period that such Optionee or
Purchaser has one or more Options or Stock Purchase Rights outstanding, copies
of the annual financial statements of the Company.
22. RIGHT OF COMPANY TO TERMINATE EMPLOYMENT OR CONSULTING SERVICES.
This Plan shall not confer upon any Optionee or holder of a Stock Purchase Right
any right with respect to continuation of employment by or the rendition of
consulting services to the Company, any of its Subsidiaries or its Parent, nor
shall it interfere in any way with his or her right or the Company's, any of its
Subsidiaries' or its Parent's right to terminate his or her employment or
services at any time, with or without cause.
23. RIGHTS OF FIRST REFUSAL AND REPURCHASE.
(a) The written agreements evidencing Options or Stock Purchase
Rights may contain such provisions as the Board shall
determine (or pursuant to a separate agreement) to the effect
that if an Optionee or Purchaser elects to sell all or any
Shares that the Optionee or Purchaser acquired upon the
exercise of an Option or Stock Purchase Right, then any
proposed sale of such Shares by such Optionee or Purchaser
shall be subject to a right of first refusal in favor of the
Company.
(b) The Board may require, at its option, that a stock purchase
agreement, stock option agreement, stock bonus agreement, or
other agreement pursuant to this Plan grant the Company a
repurchase option exercisable upon the voluntary or
involuntary termination of the Purchaser's employment with the
Company for any reason (including death or disability). The
repurchase price shall be at the higher of the original
purchase price or fair value of the Shares on the date of
termination of employment. If the Board so determines, the
purchase price for shares repurchased may be paid by
cancellation of any indebtedness of the Purchaser to
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<PAGE>
the Company. The repurchase option must be exercised by the
Company within 90 days of termination of employment for cash
or cancellation of money indebtedness for the Shares and the
right shall terminate when the Company's Common Stock becomes
publicly traded. The Board may require such a repurchase right
in other events.
(c) Certificates representing shares issued upon exercise of
Options or Stock Purchase Rights shall bear a restrictive legend to the effect
that the transferability of such shares is subject to the restrictions contained
in this Plan and the applicable written agreement between the Optionee or
Purchaser and the Company.
24. WITHHOLDING. The Company's obligation to deliver shares of Common
Stock under this Plan shall be subject to applicable federal, state and local
tax withholding requirements. To the extent provided by the terms of the stock
option agreement relating to an Option, the Optionee may satisfy any federal,
state or local tax withholding obligation relating to the exercise of such
Option by any or a combination of the following means: (i) cash payment or wage
withholding; (ii) authorizing the Company to withhold from the Shares otherwise
issuable to the Optionee upon exercise of the Option the number of Shares having
a fair market value less than or equal to the amount of the withholding tax
obligation; or (iii) delivering to the Company unencumbered shares of Common
Stock owned by the Optionee having a fair market value less than or equal to the
amount of the withholding tax obligation; provided, however, that with respect
to clauses (ii) and (iii) above the Board in its sole discretion may disapprove
such payment and require that such taxes be paid in cash.
25. SEPARABILITY. At a time when the Company has a class of equity
securities registered pursuant to Section 12 of the Exchange Act, if any of the
terms or provisions of this Plan conflict with the requirements of Rule 16b-3
promulgated under the Exchange Act and/or Section 422 of the Code, then such
terms or provisions shall be deemed inoperative to the extent they so conflict
with the requirements of Rule 16b-3 promulgated under the Exchange Act, and/or
with respect to Incentive Stock Options, Section 422 of the Code. The foregoing
sentence shall not apply with respect to the requirements of Rule 16b-3
promulgated under the Exchange Act if the Board has expressly declared that such
requirements shall not apply. With respect to Incentive Stock Options, if this
Plan does not contain any provision required to be included herein under Section
422 of the Code, such provision shall be deemed to be incorporated herein with
the same force and effect as if such provision had been set out at length
herein. To the extent any Option that is intended to qualify as an Incentive
Stock Option cannot so qualify, such Option, to that extent, shall be deemed to
be a Nonstatutory Stock Option for all purposes of this Plan.
26. NON-EXCLUSIVITY OF THIS PLAN. The adoption of this Plan by the
Board shall not be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options and the awarding of
stock and cash otherwise than under this Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.
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<PAGE>
27. GOVERNING LAW. This Plan shall be governed by, and construed in
accordance with the laws of the State of California.
28. CANCELLATION OF AND SUBSTITUTION FOR NONSTATUTORY OPTIONS. The
Company shall have the right to cancel any Nonstatutory Stock Option at any time
before it otherwise would have expired by its terms and to grant to the same
Optionee in substitution therefor a new Nonstatutory Stock Option stating an
option price which is lower (but not higher) than the option price stated in the
cancelled Option. Any such substituted option shall contain all the terms and
conditions of the cancelled Option; provided, however, that such substituted
Option shall not be exercisable after the expiration of ten (10) years and one
day from the date of grant of the cancelled Option.
29. MARKET STANDOFF. Unless the Board determines otherwise, each
Optionee or Purchaser shall not sell or otherwise transfer any Shares or other
securities of the Company during the 180-day period following the effective date
of a registration statement of the Company filed under the Securities Act;
provided, however, that such restriction shall apply only to the first two
registration statements of the Company to become effective under the Securities
Act which includes securities to be sold on behalf of the Company to the public
in an underwritten public offering under the Securities Act. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such 180-day period.
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Exhibit 1
Form of Stock Option Agreement
<PAGE>
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made and entered into as
of the date of grant set forth below (the "DATE OF GRANT") by and between
E-SmallBusiness, Inc., a California corporation (the "COMPANY"), and the
optionee named below ("OPTIONEE"). Capitalized terms not defined herein shall
have the meaning ascribed to them in the Company's 1998 Stock Option and
Incentive Plan (the "PLAN").
Optionee:
------------------------------------
Social Security Number:
------------------------------------
Address:
------------------------------------
------------------------------------
Total Option Shares:
------------------------------------
Exercise Price Per Share:
------------------------------------
Date of Grant:
------------------------------------
First Vesting Date:
------------------------------------
Expiration Date for Exercise of Options:
----------------------------
Type of Stock Option:
(Check one): [ ] Incentive Stock Option
[ ] Statutory Stock Option
1. GRANT OF OPTION. The Company hereby grants to Optionee an option
(the "OPTION") to purchase the total number of shares of Common Stock of the
Company set forth above (the "SHARES") at the Exercise Price Per Share set forth
above (the "EXERCISE PRICE"), subject to all of the terms and conditions of this
Agreement and the Plan. If designated as an Incentive Stock Option above, the
Option is intended to qualify as an "incentive stock option" ("ISO") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"CODE"). Only Employees of the Company shall receive ISOs.
<PAGE>
2. EXERCISE PRICE. The Exercise Price, is not less than the fair market
value per share of Common Stock on the date of grant, as determined by the
Board; provided, however, in the event Optionee is an Employee and owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of its Parent or Subsidiary corporations
immediately before this Option is granted, said exercise price is not less than
one hundred ten percent (110%) of the fair market value per share of Common
Stock on the date of grant as determined by the Board.
3. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the provisions of Section 8 of the Plan as follows:
(i) VESTING
(a) This Option shall not become exercisable as to
any of the number of the Shares as follows (check one):
[ ] FOUR YEAR VESTING: Until the date that is one (1) year from the date
of grant of the Option (the "Anniversary Date"). On the Anniversary
Date, this Option may be exercised to the extent of 25% of the Shares.
Upon the expiration of each calendar month from the Anniversary Date,
this Option may be exercised to the extent of the product of (a) the
total number of Shares set forth at the beginning of this Agreement and
(b) the fraction the numerator of which is one (1) and the denominator
of which is forty-eight (48) (the "Monthly Vesting Amount"), plus the
shares as to which the right to exercise the Option has previously
accrued but has not been exercised; provided, however, that
notwithstanding any of the above, the 25% exercisable on the
Anniversary Date and the Monthly Vesting Amount with respect to any
calendar month shall become exercisable only if the Employee was an
employee of the Company or any Subsidiary of the Company as of the
Anniversary Date and the last day of such month, respectively. Any time
that the Optionee is on leave or is absent from performing services for
the Company shall not be counted towards the vesting provided herein.
[ ] ALTERNATE VESTING SCHEDULE: As follows:
-----------------------------
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(b) This Option may not be exercised for a fraction
of a Share.
(c) In the event of Optionee's death, disability or
other termination of employment, the exercisability of the Option is governed by
Sections 7, 8 and 9 below, subject to the limitations contained in subsection
3(i)(d).
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(d) In no event may this Option be exercised after
the date of expiration of the term of this Option as set forth in Section 11
below.
(ii) METHOD OF EXERCISE. This Option shall be exercisable by written
notice which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by Optionee and
shall be delivered in person or by certified mail to the President, Secretary or
Chief Financial Officer of the Company. The written notice shall be accompanied
by payment of the exercise price.
No Shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
(iii) ADJUSTMENTS, MERGER, ETC. The number and class of the Shares
and/or the exercise price specified above are subject to appropriate adjustment
in the event of changes in the capital stock of the Company by reason of stock
dividends, split-ups or combinations of shares, reclassifications, mergers,
consolidations, reorganizations or liquidations. Subject to any required action
of the shareholders of the Company, if the Company shall be the surviving
corporation in any merger or consolidation, this Option (to the extent that it
is still outstanding) shall pertain to and apply to the securities to which a
holder of the same number of shares of Common Stock that are then subject to
this Option would have been entitled. A dissolution or liquidation of the
Company, or a merger or consolidation in which the Company is not the surviving
corporation, will cause this Option to terminate, unless the agreement or merger
or consolidation shall otherwise provide, provided that the Optionee shall, if
the Board expressly authorizes, in such event have the right immediately prior
to such dissolution or liquidation, or merger or consolidation, to exercise this
Option in whole or part. To the extent that the foregoing adjustments relate to
stock or securities of the Company, such adjustments shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
4. OPTIONEE'S REPRESENTATIONS. By receipt of this Option, by its
execution, and by its exercise in whole or in part, Optionee represents to the
Company that Optionee understands that:
(i) both this Option and any Shares purchased upon its
exercise are securities, the issuance by the Company of which requires
compliance with federal and state securities laws;
(ii) these securities are made available to Optionee only on
the condition that Optionee makes the representations contained in this Section
4 to the Company;
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<PAGE>
(iii) Optionee has made a reasonable investigation of the
affairs of the Company sufficient to be well informed as to the rights and the
value of these securities;
(iv) Optionee understands that the securities have not been
registered under the Securities Act of 1933, as amended (the "Act") in reliance
upon one or more specific exemptions contained in the Act, which may include
reliance on Rule 701 promulgated under the Act, if available, or which may
depend upon (a) Optionee's bona fide investment intention in acquiring these
securities; (b) Optionee's intention to hold these securities in compliance with
federal and state securities laws; (c) Optionee having no present intention of
selling or transferring any part thereof (recognizing that the Option is not
transferable) in violation of applicable federal and state securities laws; and
(d) there being certain restrictions on transfer of the Shares subject to the
Option;
(v) Optionee understands that the Shares subject to this
Option, in addition to other restrictions on transfer, must be held indefinitely
unless subsequently registered under the Act, or unless an exemption from
registration is available; that Rule 144, the usual exemption from registration,
is only available after the satisfaction of certain holding periods and in the
presence of a public market for the Shares; that there is no certainty that a
public market for the Shares will exist, and that otherwise it will be necessary
that the Shares be sold pursuant to another exemption from registration which
may be difficult to satisfy; and
(vi) Optionee understands that the certificate representing
the Shares will bear a legend prohibiting their transfer in the absence of their
registration or the opinion of counsel for the Company that registration is not
required, and a legend prohibiting their transfer in compliance with applicable
state securities laws unless otherwise exempted.
5. METHOD OF PAYMENT. Payment of the purchase price shall be made by
cash, check or, in the sole discretion of the Board at the time of exercise,
promissory notes or other Shares of Common Stock having a fair market value on
the date of surrender equal to the aggregate purchase price of the Shares being
purchased.
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
federal or state securities or other law or regulation. As a condition to the
exercise of this Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.
7. TERMINATION OF STATUS AS AN EMPLOYEE. In the event of termination of
Optionee's Continuous Status as an Employee for any reason other than death or
disability, Optionee may, but only within thirty (30) days after the date of
such termination (but in no event later than the date of expiration of the term
of this Option as set forth in Section 11 below), exercise this Option to the
extent that Optionee was entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise this
Option at the date of such termination,
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<PAGE>
or if Optionee does not exercise this Option within the time specified herein,
this Option shall terminate.
8. DISABILITY OF OPTIONEE. In the event of termination of Optionee's
Continuous Status as an Employee as a result of Optionee's disability, Optionee
may, but only within six (6) months from the date of termination of employment
(but in no event later than the date of expiration of the term of this Option as
set forth in Section 11 below), exercise this Option to the extent Optionee was
entitled to exercise it at the date of such termination; PROVIDED, HOWEVER that
if the disability is not total and permanent (as defined in Section 22(e)(3) of
the Code) and the Optionee exercises the option within the period provided above
but more than three months after the date of termination, this Option shall
automatically be deemed to be a Nonstatutory Stock Option and not an Incentive
Stock Option; and PROVIDED, FURTHER, that if the disability is total and
permanent (as defined in Section 22(e)(3) of the Code), then the Optionee may,
but only within one (1) year from the date of termination of employment (but in
no event later than the date of expiration of the term of this Option as set
forth in Section 11 below), exercise this Option to the extent Optionee was
entitled to exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise this Option at the date of termination, or
if Optionee does not exercise such Option (which Optionee was entitled to
exercise) within the time periods specified herein, this Option shall terminate.
9. DEATH OF OPTIONEE. In the event of the death of Optionee:
(i) during the term of this Option while an Employee of the
Company and having been in Continuous Status as an Employee since the date of
grant of this Option, this Option may be exercised, at any time within one (1)
year following the date of death (but, in the case of an Incentive Stock Option,
in no event later than the date of expiration of the term of this Option as set
forth in Section 11 below), by Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
of the right to exercise that had accrued at the time of death of the Optionee.
To the extent that such Employee was not entitled to exercise the Option at the
date of death, or if such Employee, estate or other person does not exercise
such Option (which such Employee, estate or person was entitled to exercise)
within the one (1) year time period specified herein, the Option shall
terminate; or
(ii) during the thirty (30) day period specified in Section 7
or the one (1) year period specified in Section 8, after the termination of
Optionee's Continuous Status as an Employee, this Option may be exercised, at
any time within one (1) year following the date of death (but, in the case of an
Incentive Stock Option, in no event later than the date of expiration of the
term of this Option as set forth in Section 11 below), by Optionee's estate or
by a person who acquired the right to exercise this Option by bequest or
inheritance, but only to the extent of the right to exercise that had accrued at
the date of termination. To the extent that such Employee was not entitled to
exercise this Option at the date of death, or if such Employee, estate or other
person does not exercise such Option (which such Employee, estate or person was
entitled to exercise) within the one (1) year time period specified herein, this
Option shall terminate.
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10. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee, only by Optionee. The
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.
11. TERM OF OPTION. Subject to the other terms of this Agreement, this
Option may not be exercised more than five (5) years from the date of grant of
this Option, and may be exercised during such term only in accordance with the
Plan and terms of this Option; provided, however, that the term of this option,
if it is a Nonstatutory Stock Option, may be extended for the period set forth
in Section 9(i) or Section 9(ii) in the circumstances set forth in such
Sections.
12. EARLY DISPOSITION OF STOCK; TAXATION UPON EXERCISE OF OPTION. If
Optionee is an Employee and the Option qualifies as an ISO, Optionee understands
that, if Optionee disposes of any Shares received under this Option within two
(2) years after the date of this Agreement or within one (1) year after such
Shares were transferred to Optionee, Optionee will be treated for federal income
tax purposes as having received ordinary income at the time of such disposition
in any amount generally measured as the difference between the price paid for
the Shares and the lower of the fair market value of the Shares at the date of
exercise or the fair market value of the Shares at the of disposition. Any gain
recognized on such premature sale of the Shares in excess of the amount treated
as ordinary income will be characterized as capital gain. OPTIONEE HEREBY AGREES
TO NOTIFY THE COMPANY IN WRITING WITHIN THIRTY (30) DAYS AFTER THE DATE OF ANY
SUCH DISPOSITION. Optionee understands that if Optionee disposes of such Shares
at any time after the expiration of such two-year and one-year holding periods,
any gain on such sale will be treated as long-term capital gain laws subject to
meeting various qualifications. If Optionee is a Consultant or this is a
Nonstatutory Stock Option, Optionee understands that, upon exercise of this
Option, Optionee will recognize income for tax purposes in an amount equal to
the excess of the then fair market value of the Shares over the exercise price.
Upon a resale of such shares by the Optionee, any difference between the sale
price and the fair market value of the Shares on the date of exercise of the
Option will be treated as capital gain or loss. Optionee understands that the
Company will be required to withhold tax from Optionee's current compensation in
some of the circumstances described above; to the extent that Optionee's current
compensation is insufficient to satisfy the withholding tax liability, the
Company may require the Optionee to make a cash payment to cover such liability
as a condition to exercise of this Option.
13. TAX CONSEQUENCES. The Optionee understands that any of the
foregoing references to taxation are based on federal income tax laws and
regulations now in effect, and may not be applicable to the Optionee under
certain circumstances. The Optionee may also have adverse tax consequences under
state or local law. The Optionee has reviewed with the Optionee's own tax
advisors the federal, state, local and foreign tax consequences of the
transactions contemplated by this Agreement. The Optionee is relying solely on
such advisors and not on any statements or representations of the Company or any
of its agents. The Optionee understands that the Optionee (and not the Company)
shall be responsible for the Optionee's own tax liability that may arise as a
result of the transactions contemplated by this Agreement.
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<PAGE>
14. SEVERABILITY; CONSTRUCTION. In the event that any provision in this
Option shall be invalid or unenforceable, such provision shall be severable
from, and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this Option. This Option shall be
construed as to its fair meaning and not for or against either party.
15. DAMAGES. The parties agree that any violation of this Option (other
than a default in the payment of money) cannot be compensated for by damages,
and any aggrieved party shall have the right, and is hereby granted the
privilege, of obtaining specific performance of this Option in any court of
competent jurisdiction in the event of any breach hereunder.
16. GOVERNING LAW. This Option shall be deemed to be made under and
governed by and construed in accordance with the laws of the State of
California. Jurisdiction for any disputes hereunder shall be solely in San
Francisco, California.
17. DELAY. No delay or failure on the part of the Company or the
Optionee in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any of them of any right,
power or remedy preclude other or further exercise thereof, or the exercise of
any other right, power or remedy.
18. RESTRICTIONS. Notwithstanding anything herein to the contrary,
Optionee understands and agrees that Optionee shall not dispose of any of the
Shares, whether by sale, exchange, assignment, transfer, gift, devise, bequest,
mortgage, pledge, encumbrance or otherwise, except in accordance with the terms
and conditions of this Section 18, and Optionee shall not take or omit any
action which will impair the absolute and unrestricted right, power, authority
and capacity of Optionee to sell Shares in accordance with the terms and
conditions hereof.
Any purported transfer of Shares by Optionee that violates any
provision of this Section 18 shall be wholly void and ineffectual and shall give
to the Company or its designee the right to purchase from Optionee all but not
less than all of the Shares then owned by Optionee for a period of 90 days from
the date the Company first learns of the purported transfer at the Agreement
Price and on the Agreement Terms (as those terms are defined in subsections
(b)(3) and (b)(4), respectively, of this Section 18). If the Shares are not
purchased by the Company or its designee, the purported transfer thereof shall
remain void and ineffectual and they shall continue to be subject to this
Agreement.
The Company shall not cause or permit the transfer of any
Shares to be made on its books except in accordance with the terms hereof.
(a)(1). PERMITTED TRANSFERS.
(i) Optionee may sell, assign or transfer any Shares held by
the Optionee but only by complying with the provisions of subsection (b)(1) of
this Section 18.
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(ii) Optionee may sell, assign or transfer any Shares held by
the Optionee without complying with the provisions of subsection (b)(1) by
obtaining the prior written consent of the Company's shareholders owning 50% of
the then issued and outstanding shares of the Company's Common Stock (determined
on a fully diluted basis) or a majority of the members of the Board of Directors
of the Company, PROVIDED that the transferee agrees in writing to be bound by
the provisions of this Option and the transfer is made in accordance with any
other restrictions or conditions contained in the written consent and in
accordance with applicable federal and state securities laws.
(iii) Upon the death of Optionee, Shares held by the Optionee
may be transferred to the personal representative of the Optionee's estate
without complying with the provisions of subsection (b)(1). Shares so
transferred shall be subject to the other provisions of this Option, including
in particular subsection (b)(2).
(a)(2). NO PLEDGE. Unless a majority of the members of the Board of
Directors consent, Shares may not be pledged, mortgaged or otherwise encumbered
to secure indebtedness for money borrowed or any other obligation for which the
Optionee is primarily or secondarily liable.
(a)(3). STOCK CERTIFICATE LEGEND. Each stock certificate for Shares
issued to the Optionee shall have conspicuously written, printed, typed or
stamped upon the face thereof, or upon the reverse thereof with a conspicuous
reference on the face thereof, one or both of the following legend:
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE TRANSFERRED IN THE ABSENCE OF REGISTRATION THEREUNDER OR AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT. SUCH SHARES MAY NOT BE
SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN ANY MANNER EXCEPT IN
ACCORDANCE WITH AND SUBJECT TO THE TERMS OF THE STOCK OPTION AGREEMENT, A COPY
OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. UNLESS A MAJORITY OF
THE MEMBERS OF THE BOARD OF DIRECTORS CONSENT, SUCH STOCK OPTION AGREEMENT
PROHIBITS ANY PLEDGE, MORTGAGE OR OTHER ENCUMBRANCE OF SUCH SHARES TO SECURE ANY
OBLIGATION OF THE HOLDER HEREOF. EVERY CREDITOR OF THE HOLDER HEREOF AND ANY
PERSON ACQUIRING OR PURPORTING TO ACQUIRE THIS CERTIFICATE OR THE SHARES HEREBY
EVIDENCED OR ANY INTEREST THEREIN IS HEREBY NOTIFIED OF THE EXISTENCE OF SUCH
STOCK OPTION AGREEMENT, AND ANY ACQUISITION OR PURPORTED ACQUISITION OF THIS
CERTIFICATE OR THE SHARES HEREBY EVIDENCED OR ANY INTEREST THEREIN SHALL BE
SUBJECT TO ALL RIGHTS AND OBLIGATIONS OF THE PARTIES TO SUCH STOCK OPTION
AGREEMENT AS THEREIN SET FORTH.
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(ii) IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS
SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE
STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
(b)(1). SALES OF SHARES.
(i) COMPANY'S RIGHT OF FIRST REFUSAL. In the event that the
Optionee shall desire to sell, assign or transfer any Shares held by the
Optionee to any other person (the "Offered Shares") and shall be in receipt of a
BONA FIDE offer to purchase the Offered Shares ("Offer"), the following
procedure shall apply. The Optionee shall give to the Company written notice
containing the terms and conditions of the Offer, including, but not limited to
(a) the number of Offered Shares; (b) the price per Share; (c) the method of
payment; and (d) the name(s) of the proposed purchaser(s).
An offer shall not be deemed BONA FIDE unless the Optionee has
informed the prospective purchaser of the Optionee's obligation under this
Option and the prospective purchaser has agreed to become a party hereunder and
to be bound hereby. The Company is entitled to take such steps as it reasonably
may deem necessary to determine the validity and BONA FIDE nature of the Offer.
Until 30 days after such notice is given, the Company or its
designee shall have the right to purchase all of the Offered Shares at the price
offered by the prospective purchaser and specified in such notice. Such purchase
shall be on the Agreement Terms, as defined in subsection (b)(4).
(ii) FAILURE OF COMPANY OR ITS DESIGNEE TO PURCHASE OFFERED SHARES. If
all of the Offered Shares are not purchased by the Company and/or its designee
within the 30-day period granted for such purchases, then any remaining Offered
Shares may be sold, assigned or transferred pursuant to the Offer; PROVIDED,
that the Offered Shares are so transferred within 30 days of the expiration of
the 30-day period to the person or persons named in, and under the terms and
conditions of, the BONA FIDE Offer described in the notice to the Company; and
PROVIDED FURTHER, that such persons agree to execute and deliver to the Company
a written agreement, in form and content satisfactory to the Company, agreeing
to be bound by the terms and conditions of this Option.
(b)(2). MANNER OF EXERCISE.
Any right to purchase hereunder shall be exercised by giving
written notice of election to the Optionee, the Optionee's personal
representative or any other selling person, as the case may be, prior to the
expiration of such right to purchase.
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(b)(3). AGREEMENT PRICE.
The "Agreement Price" shall be the higher of (A) the fair
market value of the Shares to be purchased determined in good faith by the Board
of Directors of the Company and (B) the original exercise price of the Shares to
be purchased.
(b)(4). AGREEMENT TERMS. "Agreement Terms" shall mean and include the
following:
(i) DELIVERY OF SHARES AND CLOSING DATE. At the closing, the
Optionee, the Optionee's personal representative or such other selling person,
as the case may be, shall deliver certificates representing the Shares, properly
endorsed for transfer, and with the necessary documentary and transfer tax
stamps, if any, affixed, to the purchaser of such Shares. Payment of the
purchase price therefor shall concurrently be made to the Optionee, the
Optionee's personal representative or such other selling person, as provided in
subsection (ii) of this subsection (b)(4). Such delivery and payment shall be
made at the principal office of the Company or at such other place as the
parties mutually agree.
(ii) PAYMENT OF PURCHASE PRICE. The Company shall pay the
purchase price to the Optionee at the closing.
(b)(5). RIGHT TO PURCHASE UPON CERTAIN OTHER EVENTS.
The Company or its designee shall have the right to purchase
all, but not less than all, of the Shares held by the Optionee at the Agreement
Price and on the Agreement Terms for a period of 90 days after any of the
following events:
(i) an attempt by a creditor to levy upon or sell any of the
Optionee's Shares;
(ii) the filing of a petition by the Optionee under the U.S.
Bankruptcy Code or any insolvency laws;
(iii) the filing of a petition against Optionee under any
insolvency or bankruptcy laws by any creditor of the Optionee if such petition
is not dismissed within 30 days of filing;
(iv) the entry of a decree of divorce between the Optionee and
the Optionee's spouse; or
(v) If Optionee is an employee of the Company, upon the
termination of Optionee's services as an employee.
The Optionee shall provide the Company written notice of the occurrence of any
such event within 30 days of such event.
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(c)(1). TERMINATION. The provisions of this Section 18 shall terminate
and all rights of each such party hereunder shall cease except for those which
shall have theretofore accrued upon the occurrence of any of the following
events:
(i) cessation of the Company's business;
(ii) bankruptcy, receivership or dissolution of the Company;
(iii) ownership of all of the issued and outstanding shares of
the Company by a single shareholder of the Company;
(iv) written consent or agreement of the shareholders of the
Company holding 50% of the then issued and outstanding shares of the
Company;
(v) consent or agreement of a majority of the members of the
Board of Directors of the Company; or
(vi) registration of any class of equity securities of the
Company pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended.
(c)(2). AMENDMENT. This Section 18 may be modified or amended in whole
or in part by a written instrument signed by shareholders of the Company holding
50% of the outstanding shares of Common Stock or a majority of the members of
the Board of Directors of the Company.
19. MARKET STANDOFF. Unless the Board of Directors otherwise consents,
Optionee agrees hereby not to sell or otherwise transfer any Shares or other
securities of the Company during the 180-day period following the effective date
of a registration statement of the Company filed under the Act; provided,
however, that such restriction shall apply only to the first two registration
statements of the Company to become effective under the Act which includes
securities to be sold on behalf of the Company to the public in an underwritten
public offering under the Act. The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restrictions until the end
of such 180-day period.
20. COMPLETE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter, and supersedes all other
prior or contemporaneous agreements and understandings both oral or written;
subject, however, that in the event of any conflict between this Agreement and
the Plan, the Plan shall govern. This Agreement may only be amended in a writing
signed by the Company and the Optionee.
21. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of
the rights of a shareholder with respect to any Shares until Optionee exercises
the Option and pay the Exercise Price.
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22. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated above or to such other address as
such party may designate in writing from time to tome to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by rapifax or telecopier.
23. OTHER PROVISIONS SPECIFICALLY APPLICABLE TO OPTIONEE.
--------------
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DATE OF GRANT:
-----------------
E-SMALLBUSINESS, INC.
By:
-------------------------------------
Name:
Title:
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OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR
CONSULTANT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS OPTION, THE COMPANY'S PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND
THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT
OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTING
RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan, represents that
Optionee is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of this Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board or
of the Committee upon any questions arising under the Plan.
Dated:
----------------------
---------------------------------
Optionee
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CONSENT OF SPOUSE
The undersigned spouse of the Optionee to the foregoing Stock
Option Agreement acknowledges on his or her own behalf that: I have read the
foregoing Stock Option Agreement and I know its contents. I hereby consent to
and approve of the provisions of the Stock Option Agreement, and agree that the
Shares issued upon exercise of the options covered thereby and my interest in
them are subject to the provisions of the Stock Option Agreement and that I will
take no action at any time to hinder operation of the Stock Option Agreement on
those Shares or my interest in them.
----------------------------------
Signature of Spouse
----------------------------------
Address
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Exhibit 99.4
ALLBUSINESS.COM, INC.
1999 STOCK PLAN
1. PURPOSES OF THE PLAN. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant. Stock Purchase
Rights may also be granted under the Plan.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or any of its Committees
as shall be administering the Plan in accordance with Section 4 hereof.
(b) "APPLICABLE 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 other country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as
amended.
(e) "COMMITTEE" means a committee of Directors appointed by
the Board in accordance with Section 4 hereof.
(f) "COMMON STOCK" means the Common Stock of the Company.
(g) "COMPANY" means AllBusiness.com, Inc., a California
corporation.
(h) "CONSULTANT" means any person who is engaged by the
Company or any Parent or Subsidiary to render consulting or advisory services to
such entity.
(i) "DIRECTOR" means a member of the Board.
(j) "DISABILITY" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(k) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may
<PAGE>
exceed ninety days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, on the 181st day of such
leave any Incentive Stock Option held by the Optionee shall cease to be treated
as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(m) "FAIR MARKET VALUE" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of determination;
or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(n) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(o) "NONSTATUTORY STOCK OPTION" means an Option not intended
to qualify as an Incentive Stock Option.
(p) "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(q) "OPTION" means a stock option granted pursuant to the
Plan.
(r) "OPTION AGREEMENT" means a written or electronic agreement
between the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(s) "OPTION EXCHANGE PROGRAM" means a program whereby
outstanding Options are exchanged for Options with a lower exercise price.
(t) "OPTIONED STOCK" means the Common Stock subject to an
Option or a Stock Purchase Right.
<PAGE>
(u) "OPTIONEE" means the holder of an outstanding Option or
Stock Purchase Right granted under the Plan.
(v) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(w) "PLAN" means this 1999 Stock Plan.
(x) "RESTRICTED STOCK" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11 below.
(y) "SERVICE PROVIDER" means an Employee, Director or
Consultant.
(z) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(aa) "STOCK PURCHASE RIGHT" means a right to purchase Common
Stock pursuant to Section 11 below.
(bb) "SUBSIDIARY" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares that may be subject to
option and sold under the Plan is 4,616,000 Shares. The Shares may be authorized
but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). However, Shares that have actually been issued under the Plan, upon
exercise of either an Option or Stock Purchase Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.
<PAGE>
4. ADMINISTRATION OF THE PLAN.
(a) ADMINISTRATOR. The Plan shall be administered by the Board
or a Committee appointed by the Board, which Committee shall be constituted to
comply with Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of
the Plan and, in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, the Administrator shall have the authority in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options
and Stock Purchase Rights may from time to time be granted hereunder;
(iii) to determine the number of Shares to be covered
by each such award granted hereunder;
(iv) to approve forms of agreement for use under the
Plan;
(v) to determine the terms and conditions, of any
Option or Stock Purchase Right granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options or Stock Purchase Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Purchase Right or the Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;
(vi) to determine whether and under what
circumstances an Option may be settled in cash under subsection 9(e) instead of
Common Stock;
(vii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option has declined since the date the Option was granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
(x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by Optionees
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable; and
<PAGE>
(xi) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan.
(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.
5. ELIGIBILITY.
(a) Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
(b) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(c) Neither the Plan nor any Option or Stock Purchase Right
shall confer upon any Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor shall it
interfere in any way with his or her right or the Company's right to terminate
such relationship at any time, with or without cause.
6. TERM OF PLAN. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 14 of the Plan.
7. TERM OF OPTION. The term of each Option shall be stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be provided
in the Option Agreement.
8. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) The per share exercise price for the Shares to be issued
upon exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time
of grant of such Option, owns stock representing more than ten percent (10%) of
the voting power of all classes
<PAGE>
of stock of the Company or any Parent or Subsidiary, the exercise price shall be
no less than 110% of the Fair Market Value per Share on the date of grant.
(B) granted to any other Employee, the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a Service Provider who, at
the time of grant of such Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.
(B) granted to any other Service
Provider, the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may
be granted with a per Share exercise price other than as required above
pursuant to a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, or (6) any combination of the foregoing methods of payment. In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any
Option granted hereunder shall be exercisable according to the terms hereof at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Except in the case of Options granted to
Officers, Directors and Consultants, Options shall become exercisable at a rate
of no less than 20% per year over five (5) years from the date the Options are
granted. Unless the Administrator provides otherwise, vesting of Options granted
hereunder to Officers and Directors 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
<PAGE>
agent of the Company), no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Shares, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares thereafter available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an
Optionee ceases to be a Service Provider, such Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement (of at
least thirty (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(c) DISABILITY OF OPTIONEE. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement (of at least six (6) months) to the extent the Option is vested
on the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement). In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(d) DEATH OF OPTIONEE. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (of at least six (6) months) to the extent that the
Option is vested on the date of death (but in no event later than the expiration
of the term of such Option as set forth in the Option Agreement) by the
Optionee's estate or by a person who acquires the right to exercise the Option
by bequest or inheritance. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, at the time of death, the Optionee is not vested
as to the entire Option, the Shares covered by the unvested portion of the
Option shall immediately revert to the Plan. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(e) BUYOUT PROVISIONS. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously granted, based
on such terms and conditions as
<PAGE>
the Administrator shall establish and communicate to the Optionee at the time
that such offer is made.
10. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. The
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee.
11. STOCK PURCHASE RIGHTS.
(a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid, and the time within
which such person must accept such offer. The terms of the offer shall comply in
all respects with Section 260.140.42 of Title 10 of the California Code of
Regulations. The offer shall be accepted by execution of a Restricted Stock
purchase agreement in the form determined by the Administrator.
(b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine. Except with respect to Shares purchased by
Officers, Directors and Consultants, the repurchase option shall in no case
lapse at a rate of less than 20% per year over five (5) years from the date of
purchase.
(c) OTHER PROVISIONS. The Restricted Stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
(d) RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR ASSET SALE.
(a) CHANGES IN CAPITALIZATION. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or
<PAGE>
Stock Purchase Right, as well as the price per share of Common Stock covered by
each such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option or Stock Purchase Right until
fifteen (15) days prior to such transaction as to all of the Optioned Stock
covered thereby, including Shares as to which the Option or Stock Purchase Right
would not otherwise be exercisable. In addition, the Administrator may provide
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option or Stock Purchase Right shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.
(c) MERGER OR ASSET SALE. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
<PAGE>
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
13. TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator. Notice
of the determination shall be given to each Service Provider to whom an Option
or Stock Purchase Right is so granted within a reasonable time after the date of
such grant.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) SHAREHOLDER APPROVAL. The Board shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.
15. CONDITIONS UPON ISSUANCE OF SHARES.
(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares shall comply with Applicable Laws and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
(b) INVESTMENT REPRESENTATIONS. As a condition to the exercise
of an Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
16. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
<PAGE>
17. RESERVATION OF SHARES. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. SHAREHOLDER APPROVAL. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the degree and manner
required under Applicable Laws.
19. INFORMATION TO OPTIONEES AND PURCHASERS. The Company shall provide
to each Optionee and to each individual who acquires Shares pursuant to the
Plan, not less frequently than annually during the period such Optionee or
purchaser has one or more Options or Stock Purchase Rights outstanding, and, in
the case of an individual who acquires Shares pursuant to the Plan, during the
period such individual owns such Shares, copies of annual financial statements.
The Company shall not be required to provide such statements to key employees
whose duties in connection with the Company assure their access to equivalent
information.
<PAGE>
Exhibit 99.5
HUSDAWG COMMUNICATIONS, INC.
2000 STOCK PLAN
1. PURPOSES OF THE PLAN. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant. Stock Purchase
Rights may also be granted under the Plan.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or any of its Committees
as shall be administering the Plan in accordance with Section 4 hereof.
(b) "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as
amended-
(e) "COMMITTEE" means a committee of Directors appointed by
the Board in accordance with Section 4 hereof.
(f) "COMMON STOCK" means the common stock of the Company.
(g) "COMPANY" means Husdawg Communications, Inc., a California
corporation.
(h) "CONSULTANT" means any person who is engaged by the
Company or any Parent or Subsidiary to render consulting or advisory services to
such entity.
(i) "DIRECTOR" means a member of the Board.
(j) "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 die case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If
<PAGE>
reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(l) "FAIR MARKET VALUE" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of determination;
or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(m) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(n) "NONSTATUTORY STOCK OPTION" means an Option not intended
to qualify as an Incentive Stock Option.
(o) "OPTION" means a stock option granted pursuant to the
Plan.
(p) "OPTION AGREEMENT" means a written or electronic agreement
between the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(q) "OPTION EXCHANGE PROGRAM" means a program whereby
outstanding Options are exchanged for Options with a lower exercise price.
(r) "OPTIONED STOCK" means the Common Stock subject to an
Option or a Stock Purchase Right.
(s) "OPTIONEE" means the holder of an outstanding Option or
Stock Purchase Right granted under the Plan.
<PAGE>
(t) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(u) "PLAN" means this 2000 Stock Plan.
(v) "RESTRICTED STOCK" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 10 below.
(w) "SERVICE PROVIDER" means an Employee, Director or
Consultant.
(x) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(y) "STOCK PURCHASE RIGHT" means a right to purchase Common
Stock pursuant to Section 10 below.
(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 aggregate number of Shares which may be subject to
option and sold under the Plan is 2,000,000 Shares. The Shares may be authorized
but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated). However, Shares that have actually been issued under the Plan,
upon exercise of either an Option or Stock Purchase Right, shall not be returned
to the Plan and shall not become available for future distribution under the
Plan, except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, such Shares shall become available for future
grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Board or a Committee
appointed by the Board, which Committee shall be constituted to comply with
Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of
the Plan and, in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, the Administrator shall have the authority in its discretion:
(i) to determine the Fair Market Value;
<PAGE>
(ii) to select the Service Providers to whom Options
and Stock Purchase Rights may from time to time be granted hereunder;
(iii) to determine the number of Shares to be covered
by each such award granted hereunder;
(iv) to approve forms of agreement for use under the
Plan;
(v) to determine the terms and conditions, of any
Option or Stock Purchase Right granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options or Stock Purchase Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Purchase Right or the Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;
(vi) to determine whether and under what
circumstances an Option may be settled in cash under subsection 9(e) instead of
Common Stock;
(vii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option has declined since the date the Option was granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
(x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by Optionees
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable; and
(xi) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.
5. ELIGIBILITY.
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(a) Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
(b) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(c) Neither the Plan nor any Option or Stock Purchase Right
shall confer upon any Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor shall it
interfere in any way with his or her right or the Company's right to terminate
such relationship at any time, with or without cause.
6. TERM OF PLAN. Subject to Section 18 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless sooner terminated under Section 14 of the Plan.
7. TERM OF OPTION. The term of each Option shall be stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10% ) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be provided
in the Option Agreement.
8. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) The per share exercise price for the Shares to be issued
upon exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option.
(A) granted to an Employee who, at the time
of grant of such Option, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary , the exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.
(B) granted to any other Employee, the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
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(ii) In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the Administrator.
(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price other than as required above pursuant to
a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, or (6) any combination of the foregoing methods of payment. In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any
Option granted hereunder shall be exercisable according to the terms hereof at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. 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 stockholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares thereafter available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which the Option is
exercised.
<PAGE>
(b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an
Optionee ceases to be a Service Provider, such Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement (of at
least thirty (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(c) DISABILITY OF OPTIONEE. If an Optionee ceases to be a
Service Provider as a result of the Optionee's total and permanent disability,
as defined in Section 22(e)(3) of the Code, the Optionee may exercise his or her
Option 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). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date often termination, the Optionee is
not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall immediately become vested. 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 tern
of such Option as set forth in the Notice of Grant), by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance. 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 become vested. 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 buyout for a payment in cash or Shares, an Option previously granted, based
on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
10. STOCK PURCHASE RIGHTS.
(a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made
<PAGE>
outside of the Plan. After the Administrator determines that it will offer Stock
Purchase Rights under the Plan, it shall advise the offeree in writing or
electronically of the terms, conditions and restrictions related to the offer,
including the number of Shares that such person shall be entitled to purchase,
the price to be paid, and the time within which such person must accept such
offer. The offer shall be accepted by execution of a Restricted Stock purchase
agreement in the form determined by the Administrator.
(b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (with the exception of
death or disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.
(c) OTHER PROVISIONS. The Restricted Stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
(d) RIGHTS AS A STOCKHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a stockholder
and shall be a stockholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.
11. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Unless
determined otherwise by the Administrator, Options and Stock Purchase Rights may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR ASSET SALE.
(a) CHANGES IN CAPITALIZATION. Subject to any required action
by the stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock
<PAGE>
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. The conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
(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 fifteen (15) days prior to
such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) MERGER OR ASSET SALE. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its
<PAGE>
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.
13. TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator. Notice
of the determination shall be given to each Service Provider to whom an Option
or Stock Purchase Right is so granted within a reasonable time after the date of
such grant.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) STOCKHOLDER APPROVAL. The Board shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.
15. CONDITIONS UPON ISSUANCE OF SHARES.
(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares shall comply with Applicable Laws and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
(b) INVESTMENT REPRESENTATIONS. As a condition to the exercise
of an Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
16. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
<PAGE>
17. RESERVATION OF SHARES. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the degree and manner
required under Applicable Laws.
