<PAGE>
As filed with the Securities and Exchange Commission on April 11, 2000
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
___________________
CACHEFLOW INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 7373 91-1715963
(State or other jurisdiction (Primary Standard Industrial (IRS Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
650 Almanor Avenue
Sunnyvale, California 94086
(Address of principal executive offices) (Zip Code)
___________________
CACHEFLOW INC.
Employee Stock Purchase Plan
1999 Stock Incentive Plan
2000 Supplemental Stock Option Plan
Options Granted Under Written
Compensation Agreements to
Susan Hovatter Thornton and Farhad Kashani
(Full title of the Plans)
___________________
Michael A. Johnson
Chief Financial Officer
CACHEFLOW INC.
650 Almanor Avenue
Sunnyvale, California 94086
(Name and address of agent for service)
(408) 220-2200
(Telephone number, including area code, of agent for service)
___________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount Proposed Maximum Proposed Maximum Amount of
to be to be Offering Price Aggregate Offering Registration
Registered Registered (1) per Share (2) Price (2) Fee
- ----------------------------------------------------- -------------- ------------------- ------------------ --------------
<S> <C> <C> <C> <C>
Employee Stock Purchase Plan
- -----------------------------------------------------
Rights to purchase Common Stock (par value $.0001) 500,000 N/A N/A N/A
Common Stock (par value $.0001) 500,000 $90.15625 $45,078,125 $11,900.63
1999 Stock Incentive Plan, 2000 Supplemental Stock
Option Plan, Options under Written Compensation
Agreements
- -----------------------------------------------------
Options to purchase Common Stock (par value $.0001) 5,094,013 N/A N/A N/A
Common Stock (par value $.0001) 5,094,013 $90.15625 $459,257,110 $121,243.88
- -----------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1999 Employee Stock Purchase
Plan, 1999 Stock Incentive Plan, 2000 Supplemental Stock Option Plan
and Options Granted under Written Compensation Agreements to Susan
Hovatter Thornton and Farhad Kashani by reason of any stock dividend,
stock split, recapitalization or other similar transaction effected
without the receipt of consideration which results in an increase in the
number of the outstanding shares of Common Stock of CacheFlow Inc.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low price per share of Common Stock of CacheFlow Inc. on April 4, 2000.
<PAGE>
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
----------------------------------------
CacheFlow Inc. (the "Registrant") hereby incorporates by reference into
this Registration Statement the following documents previously filed with the
Securities and Exchange Commission (the "SEC"):
(a) The Registrant's prospectus filed with the SEC pursuant to Rule
424(b) under the Securities Act of 1933, as amended (the "1933
Act"), in connection with Registration Statement No. 333-87997 on
Form S-1 filed with the SEC on September 28, 1999, together with
any and all amendments thereto, in which there are set forth
audited financial statements for the Registrant's fiscal years
ended April 30, 1997, 1998, and 1999,
(b) The Registrant's Quarterly Report on Form 10-Q filed with the SEC
for the fiscal quarter ended January 31, 2000;
(c) The Registrant's Quarterly Report on Form 10-Q filed with the SEC
for the fiscal quarter ended October 31, 1999; and
(d) The description of the Registrant's outstanding Common Stock
contained in the Registrant's Registration Statement No. 000-28139
on Form 8-A12G filed with the SEC on November 16, 1999, pursuant
to Section 12 of the 1934 Act, including any amendment or report
filed for the purpose of updating such description.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 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.
Item 4. Description of Securities
-------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
Section 145 of the Delaware General Corporation Law authorizes a court
to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act. The
Registrant's Bylaws provide for mandatory indemnification of its directors and
permissible indemnification of officers, employees and other agents to the
maximum extent permitted by the Delaware General Corporation Law. The
Registrant's Certificate of Incorporation provides that, pursuant to Delaware
law, its directors shall not be liable for monetary damages for breach of their
fiduciary duty as directors to the Registrant and its stockholders. This
provision in the Certificate of Incorporation does not eliminate the fiduciary
duty of the directors, 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 actions leading to improper personal benefit to
the director 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 law, such as the federal
securities laws or state or federal environmental laws. The Registrant has
entered into Indemnification Agreements with its directors. The Indemnification
Agreements provide the Registrant's directors with further indemnification to
the maximum extent permitted by the Delaware General Corporation Law.
II-2
<PAGE>
Item 7. Exemption from Registration Claimed
-----------------------------------
The sale and issuance of securities to the registered stockholders by
CacheFlow Inc. to whom the shares offered for resale pursuant to this
Registration Statement were sold were in each case deemed to be exempt from
registration under the Securities Act of 1933 by virtue of Section 4(2) thereof.
Item 8. Exhibits
--------
Exhibit Number Exhibit
- -------------- -------
4 Instrument Defining Rights of Stockholders. Reference is made to
Registrant's Registration Statement No. 000-28139 on Form 8-
A12G, which is incorporated herein by reference pursuant to Item
3(d) of this Registration Statement.
5 Opinion and consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 2000 Supplemental Stock Option Plan
99.2 Form of Written Compensation Agreement
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 1933 Act, (ii) to reflect in the prospectus any facts
or events arising after the effective date of this Registration Statement (or
the most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall
--------
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the SEC by the Registrant pursuant to Section 13 or Section 15(d)
of the 1934 Act that are incorporated by reference in this Registration
Statement; (2) that for the purpose of determining any liability under the 1933
Act each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof and (3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the Registrant's Employee Stock Purchase Plan, 1999 Stock
Incentive Plan 2000 Supplemental Stock Option Plan and under options granted
under Written Compensation Agreement to Susan Hovatter Thoruton and Kashani
Farhad.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item 6 or
otherwise, the Registrant has been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the 1933 Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Sunnyvale, State of California on this 10th day
of April, 2000.
CACHEFLOW INC.
By: /s/ Brian M. NeSmith
--------------------------------------
Brian M. NeSmith
Chief Executive Officer, President, and
Director
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Cacheflow Inc., a
Delaware corporation, do hereby constitute and appoint Brian M. NeSmith and
Michael A. Johnson, and either of them, the lawful attorneys-in-fact and agents
with full power and authority to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, and either one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or either one of them, shall do or cause to
be done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Brian M. NeSmith Chief Executive Officer, April 10, 2000
- ------------------------ President, and Director
Brian M. NeSmith (Principal Executive Officer)
/s/ Michael A. Johnson Chief Financial Officer, Vice April 10, 2000
- ------------------------ President, and Secretary
Michael A. Johnson (Principal Financial and Accounting Officer)
II-4
<PAGE>
Signature Title Date
- --------- ----- ----
/s/ Marc Andreessen Director April 10, 2000
- ------------------------
Marc Andreessen
/s/ David W. Hanna Director April 10, 2000
- ------------------------
David W. Hanna
/s/ Michael A. Malcolm Director April 10, 2000
- ------------------------
Michael A. Malcolm
/s/ Stuart G. Phillips Director April 10, 2000
- ------------------------
Stuart G. Phillips
/s/ Andrew Rachleff Director April 10, 2000
- ------------------------
Andrew Rachleff
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<C> <S>
4 Instrument Defining Rights of Stockholders. Reference is made to
CacheFlow Inc.'s Registration Statement No. 0-25853 on Form 8-A,
which is incorporated herein by reference under Item 3(b) of
this Registration Statement.
5 Opinion and consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 2000 Supplemental Stock Option Plan
99.2 Form of Written Compensation Agreement
</TABLE>
II-6
<PAGE>
Exhibit 5
---------
April 3, 2000
CacheFlow Inc.
650 Almanor Avenue
Sunnyvale, California 94539
Re: CacheFlow Inc. Registration Statement
for Offering of 5,594,013 Shares of Common Stock
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of , (i) 500,000
shares of Common Stock under the 1999 Employee Stock Purchase Plan, and (ii)
5,094,013 shares of Common Stock under the 1999 Stock Incentive Plan under the
2000 Supplemental Stock Option Plan, and the Written Compensation Agreements. We
advise you that, in our opinion, when such shares have been issued and sold
pursuant to the applicable provisions of the 1999 Employee Stock Purchase Plan,
1999 Stock Incentive Plan, the 2000 Supplemental Stock Option Plan, Options
Granted Under Written Compensation Agreements and in accordance with the
Registration Statement, such shares will be validly issued, fully paid and
nonassessable shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP
<PAGE>
Exhibit 23.1
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
(Form S-8) pertaining to the 1999 Employee Stock Purchase Plan, 1999 Stock
Incentive Plan, the 2000 Supplemental Stock Option Plan, and Options Granted
Under Written Compensation Agreements to Susan Hovatter Thornton and Farhad
Kashani of CacheFlow Inc. of our report dated September 24, 1999 with respect
to the consolidated financial statements and schedule of CacheFlow Inc.as of
April 30, 1999 and 1998 and for each of the three years in the period ended
April 30, 1999, included in its Registration Statement (No. 333-87997), on
Form S-1, as amended, filed with the Securities and Exchange Commission.
Walnut Creek, California /s/ Ernst & Young LLP
April 10, 2000
<PAGE>
Exhibit 99.1
------------
CACHEFLOW INC.
2000 Supplemental Stock Option Plan
(As Adopted February 15, 2000)
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. INTRODUCTION......................... 1
ARTICLE II. ADMINISTRATION...................... 1
2.1 Committee Composition.................. 1
2.2 Committee Responsibilities............. 1
ARTICLE III. SHARES AVAILABLE FOR GRANTS........ 1
3.1 Basic Limitation....................... 1
3.3 Additional Shares...................... 1
3.4 Dividend Equivalents................... 1
ARTICLE IV. ELIGIBILITY......................... 1
4.1 Other Grants........................... 1
ARTICLE V. OPTIONS.............................. 2
5.1 Stock Option Agreement................. 2
5.2 Number of Shares....................... 2
5.3 Exercise Price......................... 2
5.4 Exercisability and Term................ 2
5.5 Modification or Assumption of Options.. 2
5.6 Buyout Provisions...................... 2
ARTICLE VI. PAYMENT FOR OPTION SHARES........... 2
6.1 General Rule........................... 2
6.2 Surrender of Stock..................... 2
6.3 Exercise/Sale.......................... 3
6.4 Exercise/Pledge........................ 3
6.5 Promissory Note........................ 3
6.6 Other Forms of Payment................. 3
ARTICLE VII. RESTRICTED SHARES.................. 3
7.1 Restricted Stock Agreement............. 3
7.2 Payment for Awards..................... 3
7.3 Vesting Conditions..................... 3
7.4 Voting and Dividend Rights............. 3
ARTICLE VIII. CHANGE IN CONTROL................. 3
8.1 Effect of Change in Control............ 3
8.2 Involuntary Termination................ 4
ARTICLE IX. PROTECTION AGAINST DILUTION......... 4
9.1 Adjustments............................ 4
9.2 Dissolution or Liquidation............. 4
9.3 Reorganizations........................ 4
i
<PAGE>
ARTICLE X. DEFERRAL OF AWARDS................... 4
ARTICLE XI. LIMITATION ON RIGHTS................ 5
11.1 Retention Rights...................... 5
11.2 Stockholders' Rights.................. 5
11.3 Regulatory Requirements............... 5
ARTICLE XII. WITHHOLDING TAXES.................. 5
12.1 General............................... 5
12.2 Share Withholding..................... 5
ARTICLE XIII. FUTURE OF THE PLAN................ 5
13.1 Term of the Plan...................... 6
13.2 Amendment or Termination.............. 6
ARTICLE XIV. DEFINITIONS........................ 6
ii
<PAGE>
CacheFlow Inc.
2000 Supplemental Stock Option Plan
ARTICLE I INTRODUCTION.
The Plan was adopted by the Board to be effective on February 15,
2000. The purpose of the Plan is to promote the long-term success of the
Company and the creation of stockholder value by (a) encouraging Employees and
Consultants to focus on critical long-range objectives, (b) encouraging the
attraction and retention of Employees and Consultants with exceptional
qualifications, and (c) linking Employees and Consultants directly to
stockholder interests through increased stock ownership. The Plan seeks to
achieve this purpose by providing for awards in the form of Restricted Shares or
Options (which shall be nonstatutory stock options).
The Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware (except their choice-of-law provisions).
ARTICLE II ADMINISTRATION.
2.1 Committee Composition. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of one or more directors of
the Company, who shall be appointed by the Board.
2.2 Committee Responsibilities. The Committee shall (a) select the
Employees and Consultants who are to receive awards under the Plan, (b)
determine the type, number, vesting requirements and other features and
conditions of such awards, (c) interpret the Plan and (d) make all other
decisions relating to the operation of the Plan. The Committee may adopt such
rules or guidelines as it deems appropriate to implement the Plan. The
Committee's determinations under the Plan shall be final and binding on all
persons.
ARTICLE III SHARES AVAILABLE FOR GRANTS.
3.1 Basic Limitation. Shares of Common Stock issued pursuant to the
Plan may be authorized but unissued shares or treasury shares or re-acquired
shares. The aggregate number of Options and Restricted Shares awarded under the
Plan shall not exceed (a) 3,000,000, plus (b) the additional shares of Common
Stock described in Sections 3.2 and 3.3. The limitations of this Section 3.1 and
Section 3.2 shall be subject to adjustment pursuant to Article 9.
3.2 Additional Shares. If Restricted Shares or shares of Common Stock
issued upon the exercise of Options are forfeited, then such shares of Common
Stock shall again become available for awards under the Plan. If Options are
forfeited or terminate for any other reason before being exercised, then the
corresponding shares of Common Stock shall again become available for awards
under the Plan.
3.3 Dividend Equivalents. Any dividend equivalents paid or credited
under the Plan shall not be applied against the number of Restricted Shares or
Options available for awards.
ARTICLE IV ELIGIBILITY.
4.1 Other Grants. Employees and Consultants shall be eligible for the
grant of Restricted Shares and NSOs. Outside Directors and Executive Officers
shall not be eligible for awards under the Plan.
ARTICLE V OPTIONS.
5.1 Stock Option Agreement. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a reduction in
the Optionee's other compensation. A Stock Option Agreement may provide that a
1
<PAGE>
new Option will be granted automatically to the Optionee when he or she
exercises a prior Option and pays the Exercise Price in the form described in
Section 6.2.
5.2 Number of Shares. Each Stock Option Agreement shall specify the
number of shares of Common Stock subject to the Option and shall provide for the
adjustment of such number in accordance with Article 9.
5.3 Exercise Price. Each Stock Option Agreement shall specify the
Exercise Price; provided that the Exercise Price under an NSO shall in no event
be less than 25% of the Fair Market Value of a Common Share on the date of
grant. A Stock Option Agreement may specify an Exercise Price that varies in
accordance with a predetermined formula while the NSO is outstanding.
5.4 Exercisability and Term. Each Stock Option Agreement shall
specify the date or event when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of the
Option. A Stock Option Agreement may provide for accelerated exercisability in
the event of the Optionee's death, disability or retirement or other events and
may provide for expiration prior to the end of its term in the event of the
termination of the Optionee's service.
5.5 Modification or Assumption of Options. Within the limitations of
the Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.
5.6 Buyout Provisions. The Committee may at any time (a) offer to buy
out for a payment in cash or cash equivalents an Option previously granted or
(b) authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.
ARTICLE VI PAYMENT FOR OPTION SHARES.
6.1 General Rule. The entire Exercise Price of shares of Common Stock
issued upon exercise of Options shall be payable in cash or cash equivalents at
the time when such shares of Common Stock are purchased and the Committee may at
any time accept payment in any form(s) described in this Article 6.
6.2 Surrender of Stock. To the extent that this Section 6.2 is
applicable, all or any part of the Exercise Price may be paid by surrendering,
or attesting to the ownership of, shares of Common Stock that are already owned
by the Optionee. Such shares of Common Stock shall be valued at their Fair
Market Value on the date when the new shares of Common Stock are purchased under
the Plan. The Optionee shall not surrender, or attest to the ownership of,
shares of Common Stock in payment of the Exercise Price if such action would
cause the Company to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes.
6.3 Exercise/Sale. To the extent that this Section 6.3 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to a
securities broker approved by the Company to sell all or part of the shares of
Common Stock being purchased under the Plan and to deliver all or part of the
sales proceeds to the Company.
6.4 Exercise/Pledge. To the extent that this Section 6.4 is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid by delivering (on a form prescribed by the Company) an irrevocable
direction to pledge all or part of the shares of Common Stock being purchased
under the Plan to a securities broker or lender approved by the Company, as
security for a loan, and to deliver all or part of the loan proceeds to the
Company.
2
<PAGE>
6.5 Promissory Note. To the extent that this Section 6.5 is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid by delivering (on a form prescribed by the Company) a full-recourse
promissory note. However, the par value of the shares of Common Stock being
purchased under the Plan, if newly issued, shall be paid in cash or cash
equivalents.
6.6 Other Forms of Payment. To the extent that this Section 6.6 is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.
ARTICLE VII RESTRICTED SHARES.
7.1 Restricted Stock Agreement. Each grant of Restricted Shares under
the Plan shall be evidenced by a Restricted Stock Agreement between the
recipient and the Company. Such Restricted Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical.
7.2 Payment for awards. Subject to the following sentence, Restricted
Shares may be sold or awarded under the Plan for such consideration as the
Committee may determine, including (without limitation) cash, cash equivalents,
full-recourse promissory notes, past services and future services. To the extent
that an award consists of newly issued Restricted Shares, the consideration
shall consist exclusively of cash, cash equivalents or past services rendered to
the Company (or a Parent or Subsidiary) or, for the amount in excess of the par
value of such newly issued Restricted Shares, full-recourse promissory notes, as
the Committee may determine.
7.3 Vesting Conditions. Each award of Restricted Shares may or may
not be subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock Agreement. A
Restricted Stock Agreement may provide for accelerated vesting in the event of
the Participant's death, disability or retirement or other events.
7.4 Voting and Dividend Rights. The holders of Restricted Shares
awarded under the Plan shall have the same voting, dividend and other rights as
the Company's other stockholders. A Restricted Stock Agreement, however, may
require that the holders of Restricted Shares invest any cash dividends received
in additional Restricted Shares. Such additional Restricted Shares shall be
subject to the same conditions and restrictions as the award with respect to
which the dividends were paid.
ARTICLE VIII CHANGE IN CONTROL.
8.1 Effect of Change in Control. In the event of any Change in
Control, each outstanding award shall automatically accelerate so that each such
award shall, immediately prior to the effective date of the Change in Control,
become fully exercisable for all of the shares of Common Stock at the time
subject to such award and may be exercised for any or all of those shares as
fully-vested shares of Common Stock. However, an outstanding award shall not so
accelerate if and to the extent such award is, in connection with the Change in
Control, either to be assumed by the successor corporation (or parent thereof)
or to be replaced with a comparable award for shares of the capital stock of the
successor corporation (or parent thereof). The determination of award
comparability shall be made by the Plan Administrator, and its determination
shall be final, binding and conclusive.
8.2 Involuntary Termination. In addition, in the event that the award
is assumed by the successor corporation (or parent thereof) and the Participant
experiences an Involuntary Termination within eighteen months following a Change
in Control, each outstanding award shall automatically accelerate so that each
such award shall, immediately prior to the effective date of the Involuntary
Termination, become fully exercisable for all of the shares of Common Stock at
the time subject to such award and may be exercised for any or all of those
shares as fully-vested shares of Common Stock.
ARTICLE IX PROTECTION AGAINST DILUTION.
9.1 Adjustments. In the event of a subdivision of the outstanding
shares of Common Stock, a declaration of a dividend payable in shares of Common
Stock, a declaration of a dividend payable in a form other
3
<PAGE>
than shares of Common Stock in an amount that has a material affect on the price
of shares of Common Stock, a combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a lesser number
of shares of Common Stock, a recapitalization, a spin-off or a similar
occurrence, the Committee shall make such adjustments as it, in its sole
discretion, deems appropriate in one or more of:
(a) The number of Options or Restricted Shares available for future
awards under Article 3;
(b) The number of shares of Common Stock covered by each outstanding
Option; or
(c) The Exercise Price under each outstanding Option.
Except as provided in this Article 9, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
9.2 Dissolution or Liquidation. To the extent not previously
exercised or settled, Options shall terminate immediately prior to the
dissolution or liquidation of the Company.
9.3 Reorganizations. In the event that the Company is a party to a
merger or other reorganization, outstanding awards shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for (a) the
continuation of the outstanding awards by the Company, if the Company is a
surviving corporation, (b) the assumption of the outstanding awards by the
surviving corporation or its parent or subsidiary, (c) the substitution by the
surviving corporation or its parent or subsidiary of its own awards for the
outstanding awards, (d) full exercisability or vesting and accelerated
expiration of the outstanding awards or (e) settlement of the full value of the
outstanding awards in cash or cash equivalents followed by cancellation of such
awards.
ARTICLE X DEFERRAL OF AWARDS.
The Committee (in its sole discretion) may permit or require a
Participant to have shares of Common Stock that otherwise would be delivered to
such Participant as a result of the exercise of an Option converted into amounts
credited to a deferred compensation account established for such Participant by
the Committee as an entry on the Company's books. Such amounts shall be
determined by reference to the Fair Market Value of such shares of Common Stock
as of the date when they otherwise would have been delivered to such
Participant.
A deferred compensation account established under this Article 10 may
be credited with interest or other forms of investment return, as determined by
the Committee. A Participant for whom such an account is established shall have
no rights other than those of a general creditor of the Company. Such an
account shall represent an unfunded and unsecured obligation of the Company and
shall be subject to the terms and conditions of the applicable agreement between
such Participant and the Company. If the deferral or conversion of awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Article 10.
ARTICLE XI LIMITATION ON RIGHTS.
11.1 Retention Rights. Neither the Plan nor any award granted under
the Plan shall be deemed to give any individual a right to remain an Employee or
Consultant. The Company and its Parents, Subsidiaries and Affiliates reserve the
right to terminate the service of any Employee, or Consultant at any time, with
or without cause, subject to applicable laws, the Company's certificate of
incorporation and by-laws and a written employment agreement (if any).
11.2 Stockholders' Rights'. A Participant shall have no dividend
rights, voting rights or other rights as a stockholder with respect to any
shares of Common Stock covered by his or her award prior to the time
4
<PAGE>
when a stock certificate for such shares of Common Stock is issued or, if
applicable, the time when he or she becomes entitled to receive such shares of
Common Stock by filing any required notice of exercise and paying any required
Exercise Price. No adjustment shall be made for cash dividends or other rights
for which the record date is prior to such time, except as expressly provided in
the Plan.
11.3 Regulatory Requirements. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue shares of Common Stock
under the Plan shall be subject to all applicable laws, rules and regulations
and such approval by any regulatory body as may be required. The Company
reserves the right to restrict, in whole or in part, the delivery of shares of
Common Stock pursuant to any award prior to the satisfaction of all legal
requirements relating to the issuance of such shares of Common Stock, to their
registration, qualification or listing or to an exemption from registration,
qualification or listing.
ARTICLE XII WITHHOLDING TAXES.
12.1 General. To the extent required by applicable federal, state,
local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan. The Company shall not be
required to issue any shares of Common Stock or make any cash payment under the
Plan until such obligations are satisfied.
12.2 Share Withholding. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any shares of Common Stock that
otherwise would be issued to him or her or by surrendering all or a portion of
any shares of Common Stock that he or she previously acquired. Such shares of
Common Stock shall be valued at their Fair Market Value on the date when taxes
otherwise would be withheld in cash.
ARTICLE XIII FUTURE OF THE PLAN.
13.1 Term of the Plan. The Plan, as set forth herein, shall become
effective on February 15, 2000. The Plan shall remain in effect until it is
terminated under Section 13.2.
13.2 Amendment or Termination. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules. No awards shall be granted under the Plan
after the termination thereof. The termination of the Plan, or any amendment
thereof, shall not affect any award previously granted under the Plan.
ARTICLE XIV DEFINITIONS.
14.1 "Affiliate" means any entity other than a Subsidiary, if the
Company and/or one or more Subsidiaries own not less than 50% of such entity.
14.2 "Board" means the Company's Board of Directors, as constituted from time to
time.
14.3 "Change in Control" shall mean:
(a) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, if
persons who were not stockholders of the Company immediately prior to such
merger, consolidation or other reorganization own immediately after such merger,
consolidation or other reorganization 50% or more of the voting power of the
outstanding securities of each of (i) the continuing or surviving entity and
(ii) any direct or indirect parent corporation of such continuing or surviving
entity;
(b) The sale, transfer or other disposition of all or
substantially all of the Company's assets;
5
<PAGE>
(c) A change in the composition of the Board, as a result of
which fewer than 50% of the incumbent directors are directors who either (i) had
been directors of the Company on the date 24 months prior to the date of the
event that may constitute a Change in Control (the "original directors") or (ii)
were elected, or nominated for election, to the Board with the affirmative votes
of at least a majority of the aggregate of the original directors who were still
in office at the time of the election or nomination and the directors whose
election or nomination was previously so approved; or
(d) Any transaction as a result of which any person is the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing at least 50% of the
total voting power represented by the Company's then outstanding voting
securities. For purposes of this Paragraph (d), the term "person" shall have the
same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but
shall exclude(i) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or of a Parent or Subsidiary and (ii) a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the common stock of the
Company.
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
14.4 "Code" means the Internal Revenue Code of 1986, as amended.
14.5 "Committee" means a committee of the Board, as described in
Article 2.
14.6 "Common Stock" means the common stock of the Company.
14.7 "Company" means CacheFlow Inc., a Delaware corporation.
14.8 "Consultant" means a consultant or adviser who provides bona
fide services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered employment
for all purposes of the Plan, except as provided in Section 4.1.
14.9 "Employee" means a common-law employee of the Company, a Parent,
a Subsidiary or an Affiliate.
14.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
14.11 "Exercise Price," in the case of an Option, means the amount
for which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement.
14.12 "Executive Officer" means an officer of the Company who is
subject to the short-swing profit rules under Section 16 of the Exchange Act.
14.13 "Fair Market Value" means the market price of one share of
Common Stock, determined by the Committee in good faith on such basis as it
deems appropriate. Whenever possible, the determination of Fair Market Value by
the Committee shall be based on the prices reported in The Wall Street Journal.
-----------------------
Such determination shall be conclusive and binding on all persons.
14.14 "Involuntary Termination" means the termination of the Service
of any individual which occurs by reason of:
(a) such individual's involuntary dismissal or discharge by the
Company for reasons other than Misconduct, or
(b) such individual's voluntary resignation following (A) a
change in his or her position with the Company which materially reduces his or
her
6
<PAGE>
level of responsibility, (B) a reduction in his or her level of compensation
(including base salary, fringe benefits and participation in bonus or incentive
programs) or (C) a relocation of such individual's place of employment by more
than fifty (50) miles, provided and only if such change, reduction or relocation
is effected by the Company without the individual's consent.
14.15 "Misconduct" means the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Company (or any Parent or Subsidiary), or any other intentional misconduct by
such person adversely affecting the business or affairs of the Company (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Company (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
any Optionee or Participant or other person in the Service of the Company (or
any Parent or Subsidiary).
14.16 "NSO" means a stock option not described in sections 422 or 423
of the Code.
14.17 "Option" means an NSO granted under the Plan and entitling the
holder to purchase shares of Common Stock.
14.18 "Optionee" means an individual or estate who holds an Option.
14.19 "Outside Director" shall mean a member of the Board who is not
an Employee.
14.20 "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.
14.21 "Plan" means this CacheFlow Inc. 2000 Supplemental Stock Option
Plan, as amended from time to time.
14.22 "Restricted Share" means a Common Share awarded under the Plan.
14.23 "Restricted Stock Agreement" means the agreement between the
Company and the recipient of a Restricted Share which contains the terms,
conditions and restrictions pertaining to such Restricted Share.
14.24 "Stock Option Agreement" means the agreement between the
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to his or her Option.
14.25 "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
7
<PAGE>
EXHIBIT 99.2
CacheFlow Inc.
Notice of Stock Option Grant
You have been granted the following option to purchase Common Stock of
CacheFlow Inc. (the "Company"):
Name of Optionee:
Total Number of Shares Granted:
Type of Option: Nonstatutory Stock Option
Exercise Price Per Share: $(PricePerShare)
Date of Grant:
Vesting Commencement Date:
Vesting Schedule: This option becomes exercisable with
respect to the first 25% of the Shares
subject to this option when you complete
12 months of continuous Service from the
Vesting Commencement Date and with
respect to an additional 2.083% of the
Shares subject to this option when you
complete each month of continuous
Service thereafter.
Expiration Date:
By your signature and the signature of the Company's representative below, you
and the Company agree that this option is granted under and governed by the
terms and conditions of the Stock Option Agreement, which is attached to and
made a part of this document.
Optionee: CacheFlow Inc.
By:
- ------------------------------ --------------------------------
Title:
- ------------------------------ -----------------------------
Print Name
<PAGE>
CacheFlow Inc.
Stock Option Agreement
Grant of Option You have been granted an option as of the Grant Date
to purchase up to the number of Shares of Company
Common Stock specified in the Notice of Stock Option
Grant.
Tax Treatment This option is intended to be a nonstatutory option,
as provided in the Notice of Stock Option Grant.
Vesting This option becomes exercisable in installments, as
shown in the Notice of Stock Option Grant. No
additional shares become exercisable after your
service as an employee, consultant or outside
director of the Company or a parent or subsidiary of
the Company ("Service") has terminated for any
reason.
Term This option expires in any event on the day before
the 10th anniversary of the Date of Grant, as shown
in the Notice of Stock Option Grant. (It will
expire earlier if your Service terminates, as
described below.)
Regular If your Service terminates for any reason except
Termination death, Permanent Disability or Misconduct, then this
option will expire on the date 3 months after your
termination date. The Company determines when your
Service terminates for this purpose.
Permanent If your Service terminates because of your Permanent
Disability Disability, then this option will expire on the date
12 months after your termination date. The Company
determines when your Service terminates for this
purpose.
Permanent Disability means that you are unable to
engage in any substantial gainful activity by reason
of any medically determinable physical or mental
impairment which can be expected to result in death
or which has lasted, or can be expected to last, for
a continuous period of not less than 12 months.
Death If you die while in Service, the option will expire
on the date 12 months after the date of death.
<PAGE>
Misconduct If your Service terminates for Misconduct, then this
option will terminate immediately and cease to be
outstanding. "Misconduct" includes fraud,
embezzlement, dishonesty or any unauthorized use or
disclosure of confidential information or trade
secrets of the Company or any parent or subsidiary
or any other intentional misconduct adversely
affecting the business or affairs of the Company or
a parent or subsidiary of the Company. The
foregoing definition is not deemed to be inclusive
of all the acts or omissions that the Company or any
parent or subsidiary corporation may consider as
grounds for your dismissal or discharge or the
discharge of any other individual in the Service of
the Company or any parent or subsidiary corporation.
Change in In the event of a Change in Control, then the
Control vesting of this option will not automatically
accelerate unless this option is, in connection with
the Change in Control, not to be assumed by the
successor corporation (or its parent) or to be
replaced with a comparable option for shares of the
capital stock of the successor corporation (or its
parent). The determination of option comparability
will be made by the Company's Board of Directors,
and its determination will be final, binding and
conclusive.
Change in Control" shall mean:
. The consummation of a merger or consolidation of the
Company with or into another entity or any other
corporate reorganization, if persons who were not
stockholders of the Company immediately prior to such
merger, consolidation or other reorganization own
immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the
outstanding securities of each of (i) the continuing or
surviving entity and (ii) any direct or indirect parent
corporation of such continuing or surviving entity;
. The sale, transfer or other disposition of all or
substantially all of the Company's assets;
. A change in the composition of the Board, as a result of
which fewer than 50% of the incumbent directors are
directors who either (i) had been directors of the
Company on the date 24 months prior to the date of the
event that may constitute a Change in Control (the
"original directors") or (ii) were elected, or nominated
for election, to the Board with the affirmative votes of
at least a majority of the aggregate of the original
directors who were still in office at the time of the
election or nomination and the directors whose election
or nomination was previously so approved; or
. Any transaction as a result of which any person is the
"beneficial
2
<PAGE>
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
representing at least 50% of the total voting power
represented by the Company's then outstanding voting
securities. For purposes of this Paragraph (d), the term
"person" shall have the same meaning as when used in
sections 13(d) and 14(d) of the Exchange Act but shall
exclude(i) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or of a Parent or Subsidiary and (ii) a corporation owned
directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership
of the common stock of the Company.
A transaction shall not constitute a Change in Control if
its sole purpose is to change the state of the Company's
incorporation or to create a holding company that will be
owned in substantially the same proportions by the persons
who held the Company's securities immediately before such
transaction.
Involuntary If the option is assumed by the successor
Termination corporation (or its parent) and you experience an
Involuntary Termination within eighteen months following a
Change in Control, the vesting of this option will
automatically accelerate so that this option will,
immediately before the effective date of the Involuntary
Termination, become fully exercisable for all of the shares
of Common Stock at the time subject to this option and may
be exercised for any or all of those shares as fully-vested
shares of Common Stock.
An Involuntary Termination means the termination of your
Service by reason of: your involuntary dismissal or
discharge by the Company for reasons other than Misconduct
(as defined below), or (b) your voluntary resignation
following (1) a change in your position with the Company
which materially reduces your level of responsibility, (2) a
reduction in your level of compensation (including base
salary, fringe benefits and participation in bonus or
incentive programs) or (3) a relocation of your place of
employment by more than fifty (50) miles, provided and only
if such change, reduction or relocation is effected by the
Company without your consent.
Restrictions The Company will not permit you to exercise this
on Exercise option if the issuance of shares at that time would
violate any law or regulation.
Notice of When you wish to exercise this option, you must
Exercise notify the Company by filing the proper "Notice of
Exercise" form at the address given on the form.
Your notice must specify how many shares you wish to
purchase. Your notice must also specify how your
shares should be registered (in your name only or in
your and your spouse's names as community
3
<PAGE>
property or as joint tenants with right of survivorship).
The notice will be effective when it is received by the
Company.
If someone else wants to exercise this option after
your death, that person must prove to the Company's
satisfaction that he or she is entitled to do so.
Form of Payment When you submit your notice of exercise, you must
include payment of the option exercise price for the
shares you are purchasing. Payment may be made in
one (or a combination of two or more) of the
following forms:
. Cash or check made payable to the Company.
. Certificates for shares of Common Stock that you own,
along with any forms needed to effect a transfer of those
shares to the Company. The value of the shares,
determined as of the effective date of the option
exercise, will be applied to the option exercise price.
However, you may not surrender the ownership of shares of
Common Stock in payment of the exercise price if your
action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect
to this option for financial reporting purposes.
. Irrevocable directions to a securities broker approved by
the Company to sell all or part of your option shares and
to deliver to the Company from the sale proceeds an
amount sufficient to pay the option exercise price and
any withholding taxes. (The balance of the sale proceeds,
if any, will be delivered to you.) The directions must be
given by signing a special "Notice of Exercise" form
provided by the Company.
. Irrevocable directions to pledge all or part of your
option shares to a securities broker or lender approved
by the Company, as security for a loan, and to deliver
all or part of the loan proceeds to the Company in an
amount sufficient to pay the option exercise price and
any withholding taxes. (The balance of the loan proceeds,
if any, will be delivered to you.) The directions must be
given by signing a special "Notice of Exercise" form
provided by the Company.
Withholding You will not be allowed to exercise this option
Taxes and unless you make arrangements acceptable to the
Stock Company to pay any withholding taxes that may be due
Withholding as a result of the option exercise. These arrangements may
include withholding shares of Common Stock that otherwise
would be issued to you when you exercise this option. The
value of these shares, determined as of the effective date
of the option exercise, will be applied to the withholding
taxes.
4
<PAGE>
Restrictions By signing this Agreement, you agree not to sell any
on Resale option shares at a time when applicable laws,
Company policies or an agreement between the Company
and its underwriters prohibit a sale.
Market In connection with any underwritten public offering
Stand-off by the Company of its equity securities pursuant to
an effective registration statement filed under the
Securities Act of 1933, you agree that you will not directly
or indirectly sell, make any short sale of, loan,
hypothecate, pledge, offer, grant or sell any option or
other contract for the purchase of, purchase any option or
other contract for the sale of, or otherwise dispose of or
transfer, or agree to engage in any of the foregoing
transactions with respect to, any shares acquired under this
option without the prior written consent of the Company or
its underwriters. This market stand-off restriction shall be
in effect for such period of time following the offering as
may be requested by the Company or its underwriters up to a
maximum of 180 days but shall terminate two years after the
date of the Company's initial public offering. The Company
may impose stop-transfer instructions with respect to the
shares acquired under this option.
Transfer of Before your death, only you may exercise this
Option option. You cannot transfer or assign this option.
For instance, you may not sell this option or use it
as security for a loan. If you attempt to do any of
these things, this option will immediately become
invalid. You may, however, dispose of this option
in your will or a beneficiary designation.
Regardless of any marital property settlement agreement, the
Company is not obligated to honor a notice of exercise from
your former spouse, nor is the Company obligated to
recognize your former spouse's interest in your option in
any other way.
Employment or Your option or this Agreement do not give you the
Retention right to be retained by the Company or a parent or
Rights subsidiary of the Company in any capacity. The
Company and its parents or subsidiaries reserve the
right to terminate your Service at any time, with or
without cause.
Stockholder You, or your estate or heirs, have no rights as a
Rights stockholder of the Company until you have exercised
this option by giving the required notice to the Company and
paying the exercise price. No adjustments are made for
dividends or other rights if the applicable record date
occurs before you exercise this option; except to the extent
adjustments would be made pursuant to the Company's 1999
Stock Incentive Plan.
5
<PAGE>
Adjustments In the event of a stock split, a stock dividend or a
similar change in Common Stock, the number of shares
covered by this option and the exercise price per
share may be adjusted in the same manner and to the
same extent as options are adjusted pursuant to the
Company's 1999 Stock Incentive Plan.
Applicable Law This Agreement will be interpreted and enforced
under the laws of the State of Delaware (without
regard to their choice-of-law provisions).
This Agreement constitutes the entire understanding
between you and the Company regarding this option.
Any prior agreements, commitments or negotiations
concerning this option are superseded. This
Agreement may be amended only by another written
agreement, signed by both parties.
By signing the Notice of Stock Option Grant, you agree to all of the terms and
conditions described above.
6
