As filed with the Securities and Exchange Commission on
January 15, 1999
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
DYNAMICWEB ENTERPRISES, INC
(Exact name of Registrant as specified in its charter)
New Jersey 23-2394872
(State or other juris- (I.R.S. Employer
diction of incorporation Identification
or organization) Number)
DYNAMICWEB ENTERPRISES, INC. 1997 EMPLOYEE STOCK OPTION PLAN
&
DYNAMICWEB ENTERPRISES, INC. 1997 STOCK OPTION PLAN FOR OUTSIDE
DIRECTORS
(Full title of Plan)
DYNAMICWEB ENTERPRISES, INC. STEVEN L. VANECHANOS, JR.
271 Route 46 West Chief Executive Officer
Building F, Suite 209 DynamicWeb Enterprises, Inc.
Fairfield, New Jersey 07004 271 Route 46 West
(973) 244-1000 Building F, Suite 209
Fairfield, New Jersey 07004
(Address, including zip (973) 244-1000
code, and telephone number, (Name, address, including zip
including area code, of code, and telephone number,
Registrant's principal including area code, of agent
executive offices) for service)
Copies to:
Stephen F. Ritner, Esquire
Stevens & Lee
One Glenhardie Corporate Center
1275 Drummers Lane
P.O. Box 236
Wayne, Pennsylvania 19087
(610) 964-1480
____________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum Amount
Title of each Amount Offering Aggregate of
Class of Securities to be Price Offering Registration
to be Registered Registered per Share(1) Price(1) Fee
<S> <C> <C> <C> <C>
Common Stock, 413,018(2) $3.68 $1,519,906 $448.37
par value $.01
per share
<FN>
(1) Calculated in accordance with Rule 457(h)(1) and Rule 457(c), based on the
average of the bid and asked price as reported on the Nasdaq Stock Market
on January 11, 1999.
(2) Includes 334,764 shares and 78,254 shares of common stock issuable upon
the exercise of options permitted to be granted under the Employee Stock
Option Plan and the Stock Option Plan for Outside Directors,
respectively.
</TABLE>
<PAGE>
PART II
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission are incorporated by reference in this Registration
Statement and made a part hereof:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended September 30, 1998;
(b) The Company's Current Reports on Form 8-K filed on May 15,
1998 (as amended by Form 8-K/A No. 1 filed on July 15, 1998
and Form 8-K/A No. 2 filed on November 10, 1998); and
(c) All other documents filed by the Company after the date of
this Registration Statement under Section 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment to the Registration
Statement which indicates that all securities offered have
been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in
this Registration Statement and part of this Registration
Statement from the date of filing of such documents.
Item 4. Description of Securities.
Common Stock - Holders of Common Stock have the right to cast
one vote, in person or by proxy, for each share owned of record on
the record date (as defined in the Company's by-laws) on all
matters submitted to a vote of the holders of Common Stock,
including the election of directors. Holders of Common Stock do
not have cumulative voting rights, which means that holders of more
than 50% of the outstanding shares voting for the election of the
class of directors to be elected by the Common Stock can elect all
of such directors, and, in such event, the holders of the remaining
shares of Common Stock will be unable to elect any of the Company's
directors.
Holders of the Common Stock are entitled to share ratably in
such dividends as may be declared by the Board of Directors out of
funds legally available therefor, when, as and if declared by the
Board of Directors and are also entitled to share ratably in all of
the assets of the Company available for distribution to holders of
shares of Common Stock upon the liquidation, dissolution or winding
up of the affairs of the Company. Holders of Common Stock do not
have preemptive, subscription or conversion rights. All
outstanding shares of Common Stock are, and those shares of Common
Stock offered hereby will be, validly issued, fully paid and non-
assessable.
<PAGE 1>
Item 5. Interest of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation provides that
the Registrant shall indemnify any person who is or was a director,
officer, employee or agent of the Registrant to the fullest extent
permitted by the New Jersey Business Corporation Act (the "NJBCA"),
and to the fullest extent otherwise permitted by law. The NJBCA
permits a New Jersey corporation to indemnify its directors,
officers, employees and agents against liabilities and expenses
they may incur in such capacities in connection with any proceeding
in which they may be involved, unless a judgment or other final
adjudication adverse to the director, officer, employee or agent in
question establishes that his or her acts or omissions (a) were in
breach of his or her duty of loyalty (as defined in the NJBCA) to
the Registrant or its shareholders, (b) were not in good faith or
involved a knowing violation of law or (c) resulted in the receipt
by the director, officer, employee or agent of an improper personal
benefit.
Pursuant to the Registrant's Certificate of Incorporation
and the NJBCA, no director or officer of the Registrant shall be
personally liable to the Registrant or to any of its shareholders
for damages for breach of any duty owed to the Registrant or its
shareholders, except for liabilities arising from any breach of
duty based upon an act or omission (i) in breach of such director's
or officer's duty of loyalty (as defined in the NJBCA) to the
Registrant or its shareholders, (ii) not in good faith or involving
a knowing violation of law or (iii) resulting in receipt by such
director or officer of an improper personal benefit.
In addition, the Registrant's Bylaws include provisions
to indemnify its officers and directors and other persons against
expenses, judgments, fines and amounts incurred or paid in
settlement in connection with civil or criminal claims, actions,
suits or proceedings against such persons by reason of serving or
having served as officers, directors, or in other capacities, if
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, in a criminal action or proceeding, if he
had no reasonable cause to believe that his/her conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he or she reasonably believed to be in or not opposed
to the best interests of the corporation or that he or she had
reasonable cause to believe his or her conduct was unlawful.
Indemnification as provided in the Bylaws shall be made only as
<PAGE 2> authorized in a specific case and upon a determination
that the person met the applicable standards of conduct.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits
Exhibits:
Number Title
- ------ -----
4.1.1 Certificate of Incorporation of the Registrant as
filed with the Secretary of State of New Jersey on
August 7, 1979 (incorporated by reference to
Exhibit 3.1.1 filed with Registrant's Annual Report
on Form 10-K for the Year ended December 31, 1991).
4.1.2 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on May 19, 1980
(incorporated by reference to Exhibit 3.1.2 filed
with Registrant's Annual Report on Form 10-K for
the Year ended December 31, 1991).
4.1.3 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on April 1981
(incorporated by reference to Exhibit 3.1.3 filed
with Registrant's Annual Report on Form 10-K for
the Year ended December 31, 1991).
4.1.4 Certificate of Amendment of Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on April 24, 1986
(incorporated by reference to Exhibit 3.1.4 filed
with Registrant's Annual Report on Form 10-K for
the Year ended December 31, 1991).
4.1.5 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on July 15, 1988
(incorporated by reference to Exhibit 3.1.5 filed
with Registrant's Annual Report on Form 10-K for
the Year ended December 31, 1991).
4.1.6 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on November 28,
1989 (incorporated by reference to Exhibit 3.1.6
filed with Registrant's Annual Report on Form 10-K
<PAGE 3> for the Year ended December 31, 1991).
4.1.7 Certificate of Amendment to the Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on August 15, 1994
(incorporated by reference to Exhibit 3.1.7 filed
with the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1994).
4.1.8 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on May 14, 1996,
changing the name of the Company to DynamicWeb
Enterprises, Inc. (incorporated by reference to
Exhibit 3.2.3 filed with Registrant's Annual Report
on Form 10-KSB for December 41, 1995).
4.1.9 Amendment to the Certificate of Incorporation of
DynamicWeb Enterprises, Inc. dated August 6, 1998,
as filed with the State of New Jersey on August 7,
1998 (incorporated by reference to Exhibit 3.1.10
of the Registrant's S-2 filed on November 7, 1998).
4.2.1 Bylaws of the Registrant adopted August 7, 1979
(incorporated by reference to Exhibit 3.2.1 filed
with Registrant's Report on Form 10-K for the Year
ended December 31, 1991).
4.2.2 Amendments adopted March 8, 1982 to Bylaws of the
Registrant (incorporated by reference to
Exhibit 3.2.2 filed with Registrant's Report on
Form 10-K for the Year ended December 31, 1991).
4.2.3 Amended and Restated Bylaws of the Registrant
adopted March 7, 1997 (incorporated by reference to
Exhibit 3.2.3 filed with Registrant's Annual Report
on Form 10-KSB for the year ended September 30,
1996).
4.2.4 Amendments adopted January 21, 1998 to the Bylaws
of the Registrant (incorporated by
reference to Exhibit 3.2.4 of the Registrant's
Form SB-2 filed on September 15, 1997 as amended
by Registrant's Form SB-2/A No. 5 filed on January
30, 1998).
5.1 Opinion of Stevens & Lee RE: legality*
23.1 Consent of Stevens & Lee (included in Exhibit 5.1)
23.2 Consent of Richard A. Eisner & Company, LLP*
<PAGE 4>
24.1 Power of Attorney (included on signature page)
99.1 DynamicWeb Enterprises, Inc.
1997 Employee Stock Option Plan*
99.2 DynamicWeb Enterprises, Inc.
1997 Stock Option Plan for Outside Directors*
*Filed herewith
_____
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 of 1933;
(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;
and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement.
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 these paragraphs is
contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
<PAGE 5> purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
PAGE 6
<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 of filing on Form S-8
and has authorized this registration statement to be signed on its
behalf by the undersigned in the Town of Fairfield, State of New
Jersey on January 7, 1999.
DYNAMICWEB ENTERPRISES, INC.
By:/s/ STEVEN L. VANECHANOS,
Steven L. Vanechanos, Jr.
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Steven L.
Vanechanos, Jr., James D. Conners, Steve Vanechanos, Sr., and
Steven F. Ritner, Esquire, and each of them, his true and lawful
attorney-in-fact, as agent with full power of substitution and
resubstitution for him and in his name, place and stead, in any and
all capacity, to sign any or all 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 to each such attorney-in-fact and
agent full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
In accordance with the requirements of the Securities Act of
1933, as amended, this Registration Statement was signed below by
the following persons in the capacities and on the dates indicated.
/s/STEVEN L. VANECHANOS, JR. Chief Executive Jan. 7, 1999
Steven L. Vanechanos, Jr. Officer and Director
(Principal Executive
Officer)
/s/ STEVE VANECHANOS, SR. Treasurer, Chief Jan. 7, 1999
Steve Vanechanos, Sr. Financial Officer,
and Chief Accounting
Officer, Director
(Principal Financial
and Accounting
Officer)
<PAGE 7>
/s/ F. PATRICK AHEARN Director Jan. 7, 1999
F. Patrick Ahearn
Director
Denis Clark
/s/ FRANK T. DiPALMA Director Jan. 7, 1999
Frank T. DiPalma
/s/ ROBERT DROSTE Director Jan. 7, 1999
Robert Droste
/s/ KENNETH R. KONIKOWSKI Director Jan. 7, 1999
Kenneth R. Konikowski
/s/ ROBERT J. GAILUS Director Jan. 7, 1999
Robert J. Gailus
PAGE 8
<PAGE>
EXHIBIT INDEX
Number Title
- ------ -----
4.1.1 Certificate of Incorporation of the Registrant as
filed with the Secretary of State of New Jersey on
August 7, 1979 (incorporated by reference to
Exhibit 3.1.1 filed with Registrant's Annual Report
on Form 10-K for the Year ended December 31, 1991).
4.1.2 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on May 19, 1980
(incorporated by reference to Exhibit 3.1.2 filed
with Registrant's Annual Report on Form 10-K for
the Year ended December 31, 1991).
4.1.3 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on April 1981
(incorporated by reference to Exhibit 3.1.3 filed
with Registrant's Annual Report on Form 10-K for
the Year ended December 31, 1991).
4.1.4 Certificate of Amendment of Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on April 24, 1986
(incorporated by reference to Exhibit 3.1.4 filed
with Registrant's Annual Report on Form 10-K for
the Year ended December 31, 1991).
4.1.5 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on July 15, 1988
(incorporated by reference to Exhibit 3.1.5 filed
with Registrant's Annual Report on Form 10-K for
the Year ended December 31, 1991).
4.1.6 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on November 28,
1989 (incorporated by reference to Exhibit 3.1.6
filed with Registrant's Annual Report on Form 10-K
for the Year ended December 31, 1991).
4.1.7 Certificate of Amendment to the Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on August 15, 1994
(incorporated by reference to Exhibit 3.1.7 filed
with the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1994).
<PAGE 9>
4.1.8 Certificate of Amendment to Registrant's
Certificate of Incorporation, as filed with the
Secretary of State of New Jersey on May 14, 1996,
changing the name of the Company to DynamicWeb
Enterprises, Inc. (incorporated by reference to
Exhibit 3.2.3 filed with Registrant's Annual Report
on Form 10-KSB for December 41, 1995).
4.1.9 Amendment to the Certificate of Incorporation of
DynamicWeb Enterprises, Inc. dated August 6, 1998,
as filed with the State of New Jersey on August 7,
1998 (incorporated by reference to Exhibit 3.1.10
of the Registrant's S-2 filed on November 7, 1998).
4.2.1 Bylaws of the Registrant adopted August 7, 1979
(incorporated by reference to Exhibit 3.2.1 filed
with Registrant's Report on Form 10-K for the Year
ended December 31, 1991).
4.2.2 Amendments adopted March 8, 1982 to Bylaws of the
Registrant (incorporated by reference to
Exhibit 3.2.2 filed with Registrant's Report on
Form 10-K for the Year ended December 31, 1991).
4.2.3 Amended and Restated Bylaws of the Registrant
adopted March 7, 1997 (incorporated by reference to
Exhibit 3.2.3 filed with Registrant's Annual Report
on Form 10-KSB for the year ended September 30,
1996).
4.2.4 Amended and Restated Bylaws of the Registrant
adopted January 21, 1998 (incorporated by
reference to Exhibit 3.2.4 of the Registrant's
Form SB-2 filed on September 15, 1997 as amended
by Registrant's Form SB-2/A No. 5 filed on January
30, 1998).
5.1 Opinion of Stevens & Lee RE: legality*
23.1 Consent of Stevens & Lee (included in Exhibit 5.1)
23.2 Consent of Richard A. Eisner & Company, LLP*
24.1 Power of Attorney (included on signature page)
99.1 DynamicWeb Enterprises, Inc.
1997 Employee Stock Option Plan*
99.2 DynamicWeb Enterprises, Inc.
1997 Stock Option Plan for Outside Directors*
*Filed herewith
_____ <PAGE 10>
Exhibit 5.1
January 7, 1998
Board of Directors
DynamicWeb Enterprises, Inc.
271 Route 46 West
Building F, Suite 209
Fairfield, New Jersey 07004
Re: DynamicWeb Enterprises, Inc. Registration of Common Stock
pursuant to the 1997 Employee Stock Option Plan and the 1997
Stock Option Plan for Outside Directors.
Gentlemen:
You have asked us to provide you with our opinion whether
the 413,018 shares of common stock, par value $0.01 per share
(the "Common Stock"), of DynamicWeb Enterprises, Inc. (the
"Company") that may be issued from time to time pursuant to the
exercise of options issued under the DynamicWeb Enterprises, Inc.
1997 Employee Stock Option Plan (the "Employee Plan"), and the
DynamicWeb Enterprises, Inc. 1997 Stock Option Plan for Outside
Directors (the "Director Plan"), when and if such shares are
issued pursuant to and in accordance with the Employee Plan and
the Director Plan, will be duly and validly issued, fully paid
and nonassessable. We, as counsel to the Company, have reviewed:
1. The New Jersey Business Corporation Act, as amended;
2. The Articles of Incorporation of the Company, as
amended;
3. The By-laws of the Company, as amended; and
4. The Resolutions of the Board of Directors of the
Company adopted March 7, 1997 as certified by the Corporate
Secretary of the Company;
Based on our review of such documents, it is our opinion
that the Common Stock issuable upon the exercise of options
granted under the Employee Plan and the Director Plan, when and
as issued and paid for in accordance with the provisions of the
Plan, will be duly and validly issued, fully paid and
nonassessable. In giving the foregoing opinion, we have assumed
that the Company will have, at the time of the issuance of such
<PAGE 1> Common Stock, a sufficient number of authorized shares
available for issue.
We consent to the filing of this opinion as an exhibit to
the registration statement the Company is filing today in
connection with the registration of 413,018 shares of the
Company's Common Stock, and to the reference to us under the
heading "legal matters" in the related Prospectus. In giving
this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the Rules and
Regulations of the Securities and Exchange Commission thereunder.
Very truly yours
/s/ STEVENS & LEE
STEVENS & LEE <PAGE 2>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the
Registration Form S-8 of DynamicWeb Enterprises, Inc. pertaining
to the 1997 Employee Stock Option Plan and the 1997 Stock Option
Plan for Outside Directors of our reports (a) dated November 30,
1998 (December 3, 1998 with respect to Note H(7)) with respect to
the consolidated financial statements of DynamicWeb Enterprises,
Inc. and subsidiaries included in its annual report (Form 10-KSB)
for the year ended September 30, 1998, and (b) dated July 10,
1998 with respect to the financial statements of Design Crafting,
Inc. included in Form 8K/A No. 1 of DynamicWeb Enterprises, Inc.
dated July 15, 1998 both filed with the Securities and Exchange
Commission.
/s/ Richard A. Eisner & Company, LLP
New York, New York
January 14, 1999
DYNAMICWEB ENTERPRISES, INC.
1997 STOCK OPTION PLAN
<PAGE>
TABLE OF CONTENTS
Page
Article
Article 1. PURPOSE OF THE PLAN. . . . . . . . . . . . 1
Article 2. DEFINITIONS. . . . . . . . . . . . . . . . 1
Article 3. ADMINISTRATION OF THE PLAN . . . . . . . . 2
Article 4. COMMON STOCK SUBJECT TO THE PLAN . . . . . 4
Article 5. STOCK OPTIONS. . . . . . . . . . . . . . . 4
Article 6. ELIGIBILITY. . . . . . . . . . . . . . . . 6
Article 7. TERM AND EXERCISE OF OPTIONS . . . . . . . 7
Article 8. TERMINATION OF EMPLOYMENT. . . . . . . . . 12
Article 9. ADJUSTMENT PROVISIONS. . . . . . . . . . . 14
Article 10. GENERAL PROVISIONS . . . . . . . . . . . . 15
<PAGE>
Article 1. PURPOSE OF THE PLAN
1.1 Purpose - The DynamicWeb Enterprises, Inc.
1997, Stock Option Plan (the "Plan") is
intended to provide key employees of
DynamicWeb Enterprises Inc. (the
"Corporation") and any of its Subsidiaries an
opportunity to acquire Common Stock of the
Corporation. The Plan is designed to help
the corporation attract, retain and motivate
key employees to make substantial
contributions to the success of the business.
Stock options are! granted under the Plan
based on the Participant's level of
responsibility and performance within the
Corporation.
1.2 Stock Options to be Granted - Incentive Stock
Options within the meaning of Code Section
422(b) land Nonqualified Stock Options may be
granted within the limitations of the Plan
herein described.
Article 2. DEFINITIONS
2.1 "Agreement" - The written instrument
evidencing the grant of an Option. A
Participant may be issued one or more
Agreements from time to time reflecting one
or more options.
2.2 "Board" - The Board of Directors of the
Corporation.
2.3 "Code" - The Internal Revenue Code of 1986,
as amended.
2.4 "Committee" - The Committee which the Board
appoints to administer the Plan.
2.5 "Common Stock" - The class A common stock of
the Corporation ($0.0001 par value) as
described in the Corporation's Articles of
Incorporation, or such other stock as shall
be substituted therefor.
2.6 "Corporation" - Dynamicweb Enterprises, Inc.,
a New Jersey corporation.
2.7 "Employee" - Any key employee (including
officer of the Corporation or a Subsidiary.
2.8 "Exchange Act" - The Securities Exchange Act
of 1934, as amended. <PAGE 1>
2.9 "Incentive Stock Option" - A stock option
intended to satisfy the Requirements of Code
Section 422(b).
2.10 "Nonqualified Stock Option" - A stock option
other than an incentive stock option.
2.11 "Optionee" - A Participant who is awarded a
Stock Option pursuant to the provisions of
the Plan.
2.12 "Participant" - An Employee selected by the
Committee-to receive a grant of an Option
under the Plan.
2.13 "Plan" - The DynamicWeb Enterprises, Inc.
1997 Stock Option Plan.
2.14 "Retirement" - The voluntary termination of
employment upon or following the attainment
of age sixty-five.
2.15 "Securities Act" - The Securities Act of
1933, as amended.
2.16 "Stock Option" or "Option" - An award of a
right to purchase Common Stock pursuant to
the provisions of the Plan.
2.17 "Subsidiary" - A subsidiary corporation as
defined in Code Section 424(f) that is a
subsidiary of the Corporation.
Article 3. ADMINISTRATION OF THE PLAN
3.1 The Committee - The Plan shall be
administered by a committee of the Board (the
"Committee") composed of two or more members
of the Board, all of whom are "outside
directors within the meaning of Code Section
162(m). The Board may from time to time
remove members from, or add members to, the
Committee. Vacancies on the Committee,
howsoever caused, shall be filled by the
Board.
3.2 Powers of the Committee -
(a) The Committee shall be vested with full
authority to make such rules and
regulations as it deems necessary or
desirable to administer the Plan and to
interpret the provisions of the Plan,
unless otherwise determined by a
majority of the disinterested members of
<PAGE 2> the Board. Any determination,
decision or action of the Committee in
connection with the construction,
interpretation, administration or
application of the Plan shall be final,
conclusive and. binding upon all
optionees and any person claiming under
or through an Optionee, unless otherwise
determined by a majority of the
disinterested members of the Board.
(b) Subject to the terms, provisions and
conditions of the Plan and subject to
review and approval by a majority of the
disinterested members of the Board, the
Committee shall have exclusive
jurisdiction to:
(i) determine and select, based upon
the recommendation of the
Corporation's Chief Executive
Officer (except as to himself),
the key Employees to be granted
Options (it being understood that
more than one Option may be
granted to the same person);
(ii) determine the number of shares
subject to each option;
(iii) determine the date or dates when
the Options will be granted;
(iv) determine the purchase price of
the shares subject to each Option
in accordance with Article 5 of
the Plan;
(v) determine the date or dates when
each Option may be exercised
within the term of the Option
specified pursuant to Article 7 of
the Plan;
(vi) determine whether or not an option
constitutes an Incentive Stock
Option; and
(vii) prescribe the form, which shall be
consistent with the Plan, of the
Agreement evidencing any options,
granted under the Plan.
3.3 Terms - The grant of an Option under the Plan
shall be evidenced by an Agreement and may
<PAGE 3> include any terms and conditions
consistent with this Plan, as the Committee
may determine.
3.4 Liability - No member of the Board or the
Committee shall be liable for any action or
determination made in good faith by the Board
or the Committee with respect to this Plan or
any Options granted under this Plan.
Article 4. COMMON STOCK SUBJECT TO THE PLAN
4.1 Common Stock Authorized - The aggregate
number of shares of Common Stock for which
Options may be: granted under the Plan shall
not exceed 700,000 shares. The limitation
established by the preceding sentence shall
be subject to adjustment as provided in
Article 9 of the Plan.
4.2 Shares Available - The Common Stock to be
issued upon exercise of options granted under
the Plan shall be the Corporation's Common
Stock which shall be made available at the
discretion of the Board, either from
authorized but unissued Common Stock or from
Common stock acquired by the corporation,
including shares purchased in the open
market. In the event that any outstanding
Option under the Plan for any reason expires
or is terminated, the shares of Common Stock
allocable to the unexercised portion of such
Option may thereafter be regranted subject to
option under the Plan.
Article 5. STOCK OPTIONS
5.1 Exercise Price - The exercise price of Common
Stock shall be, in the case of an Incentive
Stock Option, 100 percent of the fair market
value of one share of Common Stock on the
date the Option is granted, except that the
purchase price per share shall be 110 percent
of such fair market value in the case of an
Incentive Stock Option granted to any
individual described in Section 6.2 of the
Plan. The exercise price of Common Stock
shall be, in the case of a Nonqualified Stock
option, such dollar amount as may be
specified by the Committee. The exercise
price shall be subject to adjustment as
provided in Article 9 of the Plan.
5.2 Limitation on Incentive Stock Options - The
aggregate fair market value (determined as of
<PAGE 4> the date an option is granted) of
the stock with respect to which incentive
Stock Options are exercisable for the first
time by any individual in any calendar year
(under the Plan and all other plans
maintained by the Corporation and
Subsidiaries) shall not exceed $100,000.
5.3 Determination of Fair Market Value -
(a) During such time as Common Stock is not
listed on an established stock exchange
or, exchanges but is listed in the
NASDAQ National Market System, the fair
market value per share shall be the
closing sale price for the Common Stock
on the day the Option is granted. If no
sale of Common Stock has occurred on
that day, the fair market value shall be
determined by reference to such price
for the next preceding day on which a
sale occurred.
(b) During such time as the Common Stock is
not listed on an established stock
exchange or in the NASDAO National
Market System, fair market value per
share shall be the mean between the
closing dealer "bid" and "asked'' prices
for the Common Stock for the day of the
grant, and if no "bid" and "asked"
prices are quoted for the day of the
grant, the fair market value shall be
determined by reference to such prices
on the next preceding day on which such
prices were quoted.
(c) If the Common Stock is listed on an
established stock exchange, the fair
market value shall be deemed to be the
closing price of Common Stock on such
stock exchange on the day the Option is
granted or, if no sale of Common Stock
has been made on such stock exchange on
that day, the fair market value shall be
determined by reference Lo such price
for the next preceding day on which a
sale occurred.
(d) In the event that the Common Stock is
not traded on an established stock
exchange or in the NASDAQ National
Market System, and no closing dealer
"bid" and "asked" prices are available
on the date of a grant, then fair market
<PAGE 5> value will be the price
established by the Committee in good
faith.
5.4 Limitation on Grants - Grants to any Employee
under this Plan shall not exceed in the
aggregate 250,000 Options during any period
of 12 consecutive months. Such limitation
shall be subject to adjustment in the manner
described in Article 9 and by giving effect
to any adjustment in other Options granted
during the relevant 12-month period.
5.5 Transferability of Options - Unless otherwise
designated by the Committee to the contrary,
each Option granted under the Plan shall by
its terms be non-transferable by the Optionee
(except by will or the laws of descent and
distribution, and each Option shall be
exercisable during the optionee's lifetime
only by the Optionee, his guardian or legal
representative or by such other, means as the
Committee may approve from time to time that
is not inconsistent with or contrary to the
provisions of either Section 16(b) of the
Exchange Act or Rule 16b-3, as either may be
amended from time to time, or any law, rule,
regulation or other provision that may
hereafter replace such Rule. An Optionee may
also designate a beneficiary to exercise his
or her options after the Optionee's death.
The Committee may amend outstanding Options
to provide for transfer, without payment of
consideration, to immediate family members of
the Optionee or to trusts or partnerships for
such family members.
Article 6. ELIGIBILITY
6.1 Participation - Options shall be granted only
to persons who are considered key Employees,
as determined by the Committee, based upon
the recommendation of the Chief Executive
Officer (except as to himself) and ratified
by a majority of the disinterested members of
the Board.
6.2 Incentive Stock option Eligibility -
Notwithstanding any other provision of the
Plan, an individual who owns more than 10
percent of the total combined voting power of
all classes of outstanding stock of the
Corporation or of a Subsidiary shall not be
eligible for the grant of an Incentive Stock
Option, unless the special requirements set
<PAGE 6> forth in Sections 5.1 and 7.1 of the
Plan are satisfied. For purposes of this
Section 6.2, in determining stock ownership,
an individual shall be considered as owning
the stock owned, directly or indirectly, by
or for his brothers and sisters (whether by
the whole or half blood), spouse, ancestors
and lineal descendants. Stock owned,
directly or indirectly, by or for a
corporation, partnership, estate or trust
shall be considered as being owned
proportionately by or for its shareholders,
partners or beneficiaries. "Outstanding
stock" shall include all stock actually
issued and outstanding immediately before the
grant of the Option. "outstanding stock'
shall not include shares authorized for issue
under outstanding Options held by the
Optionee or by any other person.
Article 7. TERM AND EXERCISE OF OPTIONS
7.1 Termination -
(a) Each option granted under the Plan shall
terminate on the date determined by the
Committee and approved by a majority of
the disinterested members of the Board,
and specified in the Agreement;
provided, however, that (i) each
intended Incentive Stock Option granted
to an individual described in
Section 6.2 of the Plan shall terminate
not later than five years after the date
of the grant, (ii) each other intended
Incentive Stock Option shall terminate
not later than ten years after the date
of grant, and (iii) each Option granted
under the Plan which is intended to be a
Nonqualified Stock Option shall
terminate not later than ten years and
one month after the date of grant.
Except as otherwise provided in
Section 8.4, each Option granted under
the Plan shall become exercisable only
after the earlier of the date on which
(i) the Optionee has completed one year
of continuous employment with the
Corporation or a Subsidiary immediately
following the date of the grant of the
Option or (ii) a Change it Control
occurs. The Committee at its discretion
may provide further limitations on the
exercisability of Options granted under
the Plan. An Option may be exercised
<PAGE 7> only during the continuance of
the Optionee's employment, except as
provided in Article 8.
(b) For purposes of Section 7.1(a), a
"Change in Control" shall be deemed to
have occurred upon the happening of any
of the following:
(i) any "Person" (as such term is used
in Sections 13(d) and 14(d) of the
Exchange Act (except for (1) the
Corporation or any Subsidiary, or
(2) any of the Corporation's
employee benefit plans (or any
trust forming a part thereof) (the
"Benefit Plan(s)") is or becomes
the beneficial owner, directly or
indirectly, of the Corporation's
securities representing 19.9% or
more of the combined voting power
of the Corporation's then
outstanding securities, other than
pursuant to an excepted
transaction described in
Clause (iii) below;
(ii) a binding written agreement is
executed (and, if legally
required, approved by the
Corporation's shareholders)
providing for a sale, exchange,
transfer or other disposition of
substantially all of the assets of
the Corporation to another entity,
except to an entity controlled
directly or indirectly by the
Corporation;
(iii) the shareholders of the
Corporation approve a merger,
consolidation,, share exchange,
division or other reorganization
of or relating to the Corporation,
unless:
(A) the shareholders of the
Corporation immediately
before such merger,
consolidation, share
exchange, division or
reorganization, own, directly
or indirectly immediately
following such merger,
consolidation, share
<PAGE 8> exchange, division
or reorganization at least
66-2/3% of the combined
voting power of the
outstanding voting securities
of the Corporation resulting
from such merger,
consolidation, share
exchange, division or
reorganization (the
"Surviving Corporation,") in
substantially the same
proportion as their ownership
of the voting securities
immediately before such
merger, consolidation, share
exchange, division or
reorganization; and
(B) the individuals who,
immediately before such
merger, consolidation, share
exchange, division or
reorganization, are members
of the Board (the "Incumbent
Board"), continue to
constitute at least 66-2/3%
of the Board of Directors of
the Surviving Corporation;
provided, however, that if
the election, or nomination
for election by the
Corporation's shareholders of
any new director was approved
by a vote of at least 66-2/3%
of the Incumbent Board, such
new director shall, for the
purposes hereof, be
considered a member of the
Incumbent Board; provided
further, however, that no
individual shall be
considered a member of the
Incumbent Board if such
individual initially assumed
office as a result of either
an actual or threatened
"Election Contest" (as
described in Rule 14a-11
promulgated under the
Exchange Act) or other actual
or threatened solicitation of
proxies or consents by or on
behalf of a Person other than
the Board (a "Proxy Contest")
<PAGE 9> including by reason
of any agreement intended to
avoid or settle any Election
Contest or Proxy Contest; and
(C) no Person (except (1) the
Corporation or any
Subsidiary, (2) any Benefit
Plan, (3) the Surviving
Corporation or any subsidiary
of the surviving Corporation,
or (4) any Person who
immediately prior to such
merger, consolidation, share
exchange, division or
reorganization had beneficial
ownership of 19.9% or more of
the then outstanding voting
securities of the
Corporation) has beneficial
ownership of 19.9% or more of
the combined voting power of
the Surviving Corporation's
then outstanding voting
securities immediately
following such merger,
consolidation, share
exchange, division or
reorganization;
(iv) a plan of liquidation or
dissolution of the Corporation,
other than pursuant to bankruptcy
or insolvency laws, is adopted; or
(v) during any period of two
consecutive years, individuals,
who at the beginning of such
period, constituted the Board
cease for any reason to constitute
at least a majority of the Board,
unless the election, or the
nomination for election by the
Corp oration's shareholders, of
each new director was approved by
a vote of at least 66-2/3% of the
directors then still in office who
were directors at the beginning of
the period; provided, however,
that no individual shall be
considered a member of the Board
at the beginning of such period if
such individual initially assumed
office as a result of either an
actual or threatened Election
<PAGE 10> Contest or Proxy
Contest, including by reason of
any agreement intended to avoid or
settle any Election Contest or
Proxy Contest.
Notwithstanding the foregoing, a Change in
Control shall not be deemed to have occurred
if a Person becomes the beneficial owner,
directly or indirectly, of securities
representing 19.9% or more of the combined
voting power of the Corporation's then
outstanding securities solely as a result of
an acquisition by the Corporation of its
voting securities which, by reducing the
number of shares outstanding, increases the
proportionate number of shares beneficially
owned by such Person; provided, however, that
if a Person becomes a beneficial owner of
19.9% or more of the combined voting power of
the Corporation's then outstanding securities
by reason of share repurchases by the
Corporation and thereafter becomes the
beneficial owner, directly or indirectly, of
any additional voting securities of the
Corporation (other than pursuant to a stock
split, stock dividend or similar
transaction), then a Change in Control shall
be deemed to have occurred with respect to
such Person under Clause (i).
7.2 Exercise
(a) A person electing to exercise an Option
shall give written notice to the
Corporation of such election and of the
number of shares he has elected to
purchase, in such form as the committee
shall have prescribed or approved, and
shall at the time of exercise tender the
full purchase price of the shares he has
elected to purchase. The purchase price
shall be paid in full, in cash, upon the
exercise of the option; provided,
however,' that in lieu of cash, with the
approval of the Committee at or prior to
exercise, an optionee may exercise his
Option by tendering to the Corporation
shares of Common Stock owned by him and
having a fair market value equal to the
cash exercise price applicable to his
option (with the fair market value of
such stock to be determined in the
manner provided in Section 5.3 hereof)
or by delivering such combination of
<PAGE 11> cash and such shares as the
Committee in its sole discretion may
approve. Notwithstanding the foregoing,
Common Stock acquired pursuant to, the
exercise of an incentive Stock Option
may not be tendered as payment unless
the holding period requirements of Code
Section 422(a)(1) have been satisfied.
(b) A person holding more than one Option at
any relevant time may, in accordance
with the provisions of the Plan, elect
to exercise such Options in any order.
(c) In addition, at the request of the
Participant and to the extent permitted
by applicable law, the Corporation may,
in its sole discretion, selectively
approve arrangements with a brokerage
firm under which such brokerage firm, on
behalf of the Participant, shall pay to
the Corporation the exercise price of
the Options being exercised, and the
Corporation, pursuant to an irrevocable
notice from the Participant, shall
promptly deliver the shares being
purchased to such firm.
Article 8. TERMINATION OF EMPLOYMENT
8.1 Retirement - In the event of Retirement, an
Option shall lapse at the earlier of the
expiration of the term of the Option or:
(a) In the case of an Incentive Stock
Option, three months from the date of
Retirement; and
(b) in the case of Options other than
Incentive Stock Options, up to 24
months, at the discretion of the
Committee, from the date of Retirement.
8.2 Death or Disability - In the event of
termination of employment due to death or
disability (as defined in Code Section
72(m)), the Option shall lapse at the earlier
of the expiration of the term of the Option
or one year after termination due to any such
cause.
8.3 Other Termination - Except as otherwise
provided in Sections 8.4(a) and (c), in the
event termination of employment for any
<PAGE 12> reason other than is described in
Section 8.1 or 8.2, all options shall lapse
as of the date of termination.
8.4 Special Termination Provision -
(a) Notwithstanding anything herein to the
contrary, the Committee may, in its
discretion and subject to the approval
of a majority of the disinterested
members of the Board, waive the one-year
continuous employment requirement set
forth in Section 7.1(a) and permit the
exercise of an Option held by an
Employee whose employment has terminated
prior to the satisfaction of such
requirement. Any such waiver may be
made with retroactive effect provided it
is made within 60 days following the
Optionee's termination of employment.
(b) In the event the Committee waives the
continuous service requirement with
respect to an Option and the
circumstance of the Employee's
termination is described in Section 8.1
or 8.2, the Option will lapse as,
otherwise provided in the relevant
section.
(c) Notwithstanding anything herein to the
contrary, the Committee may, in its
discretion, waive the lapse provisions
of Section 8.3 and permit the exercise
of an Option until a date which is the
earlier of the expiration of the term of
such Option or:
(i) in the case of an Incentive Stock
Option, three months from the date
of termination of employment; and
(ii) in the case of options other that
Incentive Stock options, up to 24
months from the date of
termination.
Article 9. ADJUSTMENT PROVISIONS
9.1 Share Adjustments -
(a) In the event that the shares of Common
Stock of the Corporation, as presently
constituted, shall be changed into or
exchanged for a different number or kind
<PAGE 13> of shares of stock or other
securities of the Corporation or of
another corporation (whether by reason
of merger, consolidation,
recapitalization, reclassification,
split-up, combination of shares or
otherwise) or if the number of such
shares of stock shall be increased
through the payment of a stock dividend,
then, subject to the provisions of
Subsection (c) below, there shall be
substituted for or added to each share
of Common Stock of the Corporation which
was theretofore
appropriated, or which thereafter may
become subject to an Option under the
Plan, the number and kind of shares of
stock or other securities into which
each outstanding share of the Common
Stock of the Corporation shall be so
changed or for which each such share
shall be exchanged or to which each such
share shall be entitled as the case may
be outstanding Options shall also be
appropriately amended as to price and
other terms, as may be necessary to
reflect the foregoing events.
(b) If there shall be any other change in
the number or kind of the outstanding
Shares of the Common Stock of the
Corporation, or of any stock or other
securities in which such Common Stock
shall have been changed,or for which it
shall have been exchanged, and if a
majority of the disinterested members of
the Board shall, in its sole discretion,
determine that such change equitably
requires an adjustment in any option
which was theretofore granted or which
may thereafter be granted under the
Plan, then such adjustment shall be made
in accordance with such determination.
(c) The grant of an Option pursuant to the
Plan shall not affect in any way the
right or power of the Corporation to
make adjustments, reclassifications,
reorganizations or changes of its
capital or business structure, to merge,
to consolidate, to dissolve, to
liquidate or to sell or transfer all or
any part of its business or assets.
<PAGE 14>
9.2 Corporate Changes - A dissolution or
liquidation of the Corporation, or a merger
or consolidation in which the Corporation is
not the surviving Corporation, shall cause
each outstanding Option to terminate, except
to the extent that another corporation may
and does in the transaction assume and
continue the option or substitute its own
options.
9.3 Fractional Shares - Fractional shares
resulting from any adjustment in Options
pursuant to this Article 9 may be settled as
a majority of the disinterested members of
the Boar or the Committee (as the case may
be) shall determine.
9.4 Binding Determination - To the extent that
the foregoing adjustments relate to stock or
securities of the Corporation, such
adjustments shall be made by a majority of
the disinterested members of the Board, whose
determination in that respect shall be final,
binding and conclusive. Notice of any
adjustment shall be given by the corporation
to each holder of an Option which shall have
been adjusted.
Article 10. GENERAL PROVISIONS
10.1 Effective Date - The Plan shall become
effective upon its adoption by the Board,
provided that any grant of an Option is
subject to the approval of the Plan by the
shareholders of the Corporation within 12
months of adoption by the Board.
10.2 Termination of the Plan - Unless previously
terminated by the Board of Directors, the
Plan, shall terminate on, and no Options
shall be granted after, the tenth anniversary
of its adoption by the Board.
10.3 Limitation on Termination, Amendment or
Modification
(a) The Board may at any time terminate,
amend, modify or suspend the Plan,
provided that without the approval of
the stockholders of the Corporation no
amendment or modification shall be made
by the Board which:
(i) increases the maximum number of
shares of Common Stock as to which
<PAGE 15> options may be granted
under the Plan;
(ii) changes the class of eligible
Employees; or
(iii) otherwise requires the approval of
shareholders under applicable tax,
securities or other law.
(b) No amendment, modification, suspension
or termination of the Plan shall in any
manner affect any Option theretofore
granted under the Plan without the
consent of the Optionee or any person
validly claiming under or through the
Optionee.
10.4 No Right to Employment - Neither anything
contained in the Plan or in any instrument
under the Plan nor the grant of any option
hereunder shall confer upon any Optionee any
right to continue in the employ of the
Corporation or of any Subsidiary or limit in
any respect the right of the Corporation or
of any subsidiary to terminate the Optionee's
employment at any time and for any reason.
10.5 Withholding Taxes - The Corporation will
require that an Optionee, as a condition of
the exercise of an Option, or any other
person or entity receiving Common Stock upon
exercise of an Option, pay or reimburse any
taxes which the Corporation is :required to
withhold in connection with the exercise of
the Option.
10.6 Listing and Registration of Shares -
(a) No Option granted pursuant to the Plan
shall be exercisable in whole or in part
if at any time a majority of the
disinterested members of the Board shall
determine in its discretion that the
listing, registration or qualification
of the shares of Common Stock subject to
such Option on any securities exchange
or under any applicable law, or the
consent or approval of any governmental
regulatory body, is necessary or
desirable as a condition of, or in
connection with, the granting of such
Option or the issue of shares
thereunder, unless such listing,
registration, qualification, consent or
<PAGE 16> approval shall have been
effected or obtained free of any
conditions not acceptable to a majority
of the disinterested members of the
Board.
(b) If a registration statement under the
Securities Act with respect to the
shares issuable upon exercise of any
Option granted under the Plan is not in
effect at the time of exercise, as a
condition of the issuance of the shares,
the person exercising such Option shall
give the Committee a written statement,
satisfactory in form and substance to
the Committee, that he is acquiring the
shares for his own account for
investment and not with a view to their
distribution. The Corporation may place
upon any stock Certificate for shares
issuable upon exercise of such Option
the following legend or such other
legend as the Committee may prescribe to
prevent disposition of the shares in
violation of the Securities Act or other
applicable law;
"THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
("ACT"). AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR
OFFERED FOP, SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT WITH
RESPECT TO THEM UNDER THE ACT OR A
WRITTEN OPINION OF COUNSEL FOR THE
CORPORATION THAT REGISTRATION IS NOT
REQUIRED." <PAGE 17>
Exhibit 99.2
DYNAMICWEB ENTERPRISES, INC.
1997 STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS
<PAGE>
TABLE OF CONTENTS
Page
Article
Article 1. PURPOSE OF THE PLAN. . . . . . . . . . . . 1
Article 2. DEFINITIONS. . . . . . . . . . . . . . . . 1
Article 3. ADMINISTRATION OF THE PLAN . . . . . . . . 2
Article 4. COMMON STOCK SUBJECT TO THE PLAN . . . . . 3
Article 5. STOCK OPTIONS. . . . . . . . . . . . . . . 4
Article 6. ELIGIBILITY. . . . . . . . . . . . . . . . 6
Article 7. TERM AND EXERCISE OF OPTIONS . . . . . . . 6
Article 8. TERMINATION OF STATUS AS DIRECTOR. . . . . 10
Article 9. ADJUSTMENT PROVISIONS. . . . . . . . . . . 11
Article 10. GENERAL PROVISIONS . . . . . . . . . . . . 13
<PAGE>
Article 1. PURPOSE OF THE PLAN
1.1 Purpose - The DynamicWeb Enterprises, Inc. 1997
Stock Option Plan For Outside Directors (the
"Plan") is intended to provide certain directors
of DynamicWeb Enterprises, Inc. (the
"Corporation") an opportunity to acquire Common
Stock of the Corporation. The Plan is designed to
provide such directors with an opportunity to
acquire an equity interest in the Corporation,
thereby giving them a stake in the continued
growth and success of its business.
1.2 Stock Options to be Granted - Only Nonqualified
Stock Options may be granted within the
limitations of the Plan herein described.
Article 2. DEFINITIONS
2.1 "Agreement" - The written instrument evidencing
the grant of an Option. A Participant may be
issued one or more Agreements from time to time,
reflecting one or more Options.
2.2 "Board" - The Board of Directors of the
Corporation.
2.3 "Code" - The Internal Revenue Code of 1986, as
amended.
2.4 "Committee" - The Committee which the Board
appoints to administer the Plan.
2.5 "Common Stock" - The common stock of the
Corporation ($0.0001 par value) as described in
the Corporation's Certificate of Incorporation, or
such other stock as shall be substituted therefor.
2.6 "Corporation" - DynamicWeb Enterprises, Inc., a
New Jersey corporation.
2.7 "Director" - Any director of the Corporation who
is not also, at the time of a grant, a common law
employee of the Corporation.
2.8 "Exchange Act" - The Securities Exchange Act of
1934, as amended.
2.9 "Incentive Stock Option" - A stock option intended
to satisfy the Requirements of Code
Section 422(b).
2.10 "Nonqualified Stock Option" - A stock option other
than an Incentive Stock Option. <PAGE 1>
2.11 "Optionee" - A Participant who is awarded a Stock
Option pursuant to the provisions of the Plan.
2.12 "Participant" - A Director selected by the
Committee to receive a grant of an Option under
the Plan.
2.13 "Plan" - The DynamicWeb Enterprises, Inc. 1997
Stock Option Plan for Outside Directors.
2.14 "Retirement" - The voluntary termination of an
individual as a Director upon or following the
attainment of age sixty-five.
2.15 "Securities Act" - The Securities Act of 1933, as
amended.
2.16 "Stock Option" or "Option" - An award of a right
to purchase Common Stock pursuant to the
provisions of the Plan.
Article 3. ADMINISTRATION OF THE PLAN
3.1 The Committee - The Plan shall be administered by
a committee of the Board (the "Committee")
composed of two or more members of the Board, all
of whom are "outside directors" within the meaning
of Code Section 162(m). The Board may from time
to time remove members from, or add members to,
the Committee. Vacancies on the Committee,
howsoever caused, shall be filled by the Board.
3.2 Powers of the Committee -
(a) The Committee shall be vested with full
authority to make such rules and regulations
as it deems necessary or desirable to
administer the Plan and to interpret the
provisions of the Plan, unless otherwise
determined by a majority of the members of
the Board. Any determination, decision or
action of the Committee in connection with
the construction, interpretation,
administration or application of the Plan
shall be final, conclusive and binding upon
all Optionees and any person claiming under
or through an Optionee, unless otherwise
determined by a majority of the members of
the Board.
(b) Subject to the terms, provisions and
conditions of the Plan and subject to review
and approval by a majority of the members of
the Board, the Committee shall have exclusive
jurisdiction to: <PAGE 2>
(i) determine the date or dates when
each Option may be exercised within
the term of the Option specified
pursuant to Article 7 of the Plan;
and
(ii) prescribe the form, which shall be
consistent with the Plan, of the
Agreement evidencing any Options
granted under the Plan.
3.3 Terms - The grant of an Option under the Plan
shall be evidenced by an Agreement and may include
any terms and conditions consistent with this
Plan, as the Committee may determine.
3.4 Liability - No member of the Board or the
Committee shall be liable for any action or
determination made in good faith by the Board or
the Committee with respect to this Plan or any
Options granted under this Plan.
Article 4. COMMON STOCK SUBJECT TO THE PLAN
4.1 Common Stock Authorized - The aggregate number of
shares of Common Stock for which Options may be
granted under the Plan shall not exceed 300,000
shares. The limitation established by the
preceding sentence shall be subject to adjustment
as provided in Article 9 of the Plan.
4.2 Shares Available - The Common Stock to be issued
upon exercise of Options granted under the Plan
shall be the Corporation's Common Stock which
shall be made available at the discretion of the
Board, either from authorized but unissued Common
Stock or from Common Stock acquired by the
Corporation, including shares purchased in the
open market. In the event that any outstanding
Option under the Plan for any reason expires or is
terminated, the shares of Common Stock allocable
to the unexercised portion of such Option may
thereafter be regranted subject to option under
the Plan.
Article 5. STOCK OPTIONS
5.1 Grant of Options; Exercise Price -
(a) Each Director shall be granted, on the date
of his or her election and on each date of
his or her reelection (whether at an annual
meeting or an adjournment thereof), an Option
to acquire 15,000 shares of Common Stock. In
the event the Corporation's Board shall at
<PAGE 3> any time be classified, for purposes
of this Plan, any continuing Director not on
the slate for reelection at an annual meeting
of the Corporation's shareholders shall,
notwithstanding such fact, be treated as
being reelected at such meeting (or any
adjournment thereof).
(b) The exercise price of a Nonqualified Stock
Option to purchase a share of Common Stock
shall be the fair market value of a share on
the grant date, as determined in Section 5.2.
The exercise price shall be subject to
adjustment as provided in Article 9 of the
Plan.
(c) Notwithstanding the provisions of
Section 5.1(a) and (b), in the initial
calendar year of the Plan, the Option grant
to each Director shall be made as of the
earlier of (i) the closing date of a public
offering of Common Stock by the Corporation,
or (ii) September 30, 1997. The exercise
price of such Option grants shall be the fair
market value of such Common Stock, as
determined in Section 5.2, on the grant date.
5.2 Determination of Fair Market Value -
(a) During such time as Common Stock is not
listed on an established stock exchange or
exchanges but is listed in the NASDAQ
National Market System, the fair market value
per share shall be the closing sale price for
the Common Stock on the day the Option is
granted. If no sale of Common Stock has
occurred on that day, the fair market value
shall be determined by reference to such
price for the next preceding day on which a
sale occurred.
(b) During such time as the Common Stock is not
listed on an established stock exchange or in
the NASDAQ National Market System, fair
market value per share shall be the mean
between the closing dealer "bid" and "asked"
prices for the Common Stock for the day of
the grant, and if no "bid" and "asked" prices
are quoted for the day of the grant, the fair
market value shall be determined by reference
to such prices on the next preceding day on
which such prices were quoted.
(c) If the Common Stock is listed on an
established stock exchange, the fair market
<PAGE 4> value shall be deemed to be the
closing price of Common Stock on such stock
exchange on the day the Option is granted or,
if no sale of Common Stock has been made on
such stock exchange on that day, the fair
market value shall be determined by reference
to such price for the next preceding day on
which a sale occurred.
(d) In the event that the Common Stock is not
traded on an established stock exchange or in
the NASDAQ National Market System, and no
closing dealer "bid" and "asked" prices are
available on the date of a grant, then fair
market value will be the price established by
the Committee in good faith.
5.3 Transferability of Options - Unless otherwise
designated by the Committee to the contrary, each
Option granted under the Plan shall by its terms
be non-transferable by the Optionee (except by
will or the laws of descent and distribution), and
each Option shall be exercisable during the
Optionee's lifetime only by the Optionee, his
guardian or legal representative or by such other
means as the Committee may approve from time to
time that is not inconsistent with or contrary to
the provisions of either Section 16(b) of the
Exchange Act or Rule 16b-3, as either may be
amended from time to time, or any law, rule,
regulation or other provision that may hereafter
replace such Rule. An Optionee may also designate
a beneficiary to exercise his or her Options after
the Optionee's death. The Committee may amend
outstanding Options to provide for transfer,
without payment of consideration, to immediate
family members of the Optionee or to trusts or
partnerships for such family members.
Article 6. ELIGIBILITY
6.1 Participation - Options shall be granted only to
persons who are Directors.
Article 7. TERM AND EXERCISE OF OPTIONS
7.1 Termination -
(a) Each Option granted under the Plan shall
terminate on the date determined by the
Committee and approved by a majority of the
members of the Board, and specified in the
Agreement; provided, however, that no Option
shall terminate later than ten years and one
month after the date of grant. Except as
<PAGE 5> otherwise provided in Section 8.4,
each Option granted under the Plan shall
become exercisable only after the earlier of
the date on which (i) the Optionee has
completed 11 months of continuous service as
a Director with the Corporation immediately
following the date of the grant of the Option
or (ii) a Change in Control occurs. The
Committee at its discretion may provide
further limitations on the exercisability of
Options granted under the Plan. An Option
may be exercised only during the continuance
of the Optionee's service as a Director,
except as provided in Article 8.
(b) For purposes of Section 7.1(a), a "Change in
Control" shall be deemed to have occurred
upon the happening of any of the following:
(i) any "Person" (as such term is used
in Sections 13(d) and 14(d) of the
Exchange Act (except for (1) the
Corporation or any Subsidiary, or
(2) any of the Corporation's
employee benefit plans (or any
trust forming a part thereof) (the
"Benefit Plan(s)")) is or becomes
the beneficial owner, directly or
indirectly, of the Corporation's
securities representing 19.9% or
more of the combined voting power
of the Corporation's then
outstanding securities, other than
pursuant to an excepted transaction
described in Clause (iii) below;
(ii) a binding written agreement is
executed (and, if legally required,
approved by the Corporation's
shareholders) providing for a sale,
exchange, transfer or other
disposition of substantially all of
the assets of the Corporation to
another entity, except to an entity
controlled directly or indirectly
by the Corporation;
(iii) the shareholders of the Corporation
approve a merger, consolidation,
share exchange, division or other
reorganization of or relating to
the Corporation, unless:
(A) the shareholders of the
Corporation immediately before
<PAGE 6> such merger,
consolidation, share exchange,
division or reorganization,
own, directly or indirectly
immediately following such
merger, consolidation, share
exchange, division or
reorganization at least
66-2/3% of the combined voting
power of the outstanding
voting securities of the
Corporation resulting from
such merger, consolidation,
share exchange, division or
reorganization (the "Surviving
Corporation") in substantially
the same proportion as their
ownership of the voting
securities immediately before
such merger, consolidation,
share exchange, division or
reorganization; and
(B) the individuals who,
immediately before such
merger, consolidation, share
exchange, division or
reorganization, are members of
the Board (the "Incumbent
Board"), continue to
constitute at least 66-2/3% of
the Board of Directors of the
Surviving Corporation;
provided, however, that if the
election, or nomination for
election by the Corporation's
shareholders of any new
director was approved by a
vote of at least 66-2/3% of
the Incumbent Board, such new
director shall, for the
purposes hereof, be considered
a member of the Incumbent
Board; provided further,
however, that no individual
shall be considered a member
of the Incumbent Board if such
individual initially assumed
office as a result of either
an actual or threatened
"Election Contest" (as
described in Rule 14a-11
promulgated under the Exchange
Act) or other actual or
threatened solicitation of
<PAGE 7> proxies or consents
by or on behalf of a Person
other than the Board (a "Proxy
Contest") including by reason
of any agreement intended to
avoid or settle any Election
Contest or Proxy Contest; and
(C) no Person (except (1) the
Corporation or any Subsidiary,
(2) any Benefit Plan, (3) the
Surviving Corporation or any
subsidiary of the Surviving
Corporation, or (4) any Person
who, immediately prior to such
merger, consolidation, share
exchange, division or
reorganization had beneficial
ownership of 19.9% or more of
the then outstanding voting
securities of the Corporation)
has beneficial ownership of
19.9% or more of the combined
voting power of the Surviving
Corporation's then outstanding
voting securities immediately
following such merger,
consolidation, share exchange,
division or reorganization;
(iv) a plan of liquidation or
dissolution of the Corporation,
other than pursuant to bankruptcy
or insolvency laws, is adopted; or
(v) during any period of two
consecutive years, individuals, who
at the beginning of such period,
constituted the Board cease for any
reason to constitute at least a
majority of the Board, unless the
election, or the nomination for
election by the Corporation's
shareholders, of each new director
was approved by a vote of at least
66-2/3% of the directors then still
in office who were directors at the
beginning of the period; provided,
however, that no individual shall
be considered a member of the Board
at the beginning of such period if
such individual initially assumed
office as a result of either an
actual or threatened Election
Contest or Proxy Contest, including
<PAGE 8> by reason of any agreement
intended to avoid or settle any
Election Contest or Proxy Contest.
Notwithstanding the foregoing, a Change in
Control shall not be deemed to have occurred
if a Person becomes the beneficial owner,
directly or indirectly, of securities
representing 19.9% or more of the combined
voting power of the Corporation's then
outstanding securities solely as a result of
an acquisition by the Corporation of its
voting securities which, by reducing the
number of shares outstanding, increases the
proportionate number of shares beneficially
owned by such Person; provided, however, that
if a Person becomes a beneficial owner of
19.9% or more of the combined voting power of
the Corporation's then outstanding securities
by reason of share repurchases by the
Corporation and thereafter becomes the
beneficial owner, directly or indirectly, of
any additional voting securities of the
Corporation (other than pursuant to a stock
split, stock dividend or similar
transaction), then a Change in Control shall
be deemed to have occurred with respect to
such Person under Clause (i).
7.2 Exercise -
(a) A person electing to exercise an Option shall
give written notice to the Corporation of
such election and of the number of shares he
has elected to purchase, in such form as the
Committee shall have prescribed or approved,
and shall at the time of exercise tender the
full purchase price of the shares he has
elected to purchase. The purchase price
shall be paid in full, in cash, upon the
exercise of the Option; provided, however,
that in lieu of cash, with the approval of
the Committee at or prior to exercise, an
Optionee may exercise his Option by tendering
to the Corporation shares of Common Stock
owned by him and having a fair market value
equal to the cash exercise price applicable
to his Option (with the fair market value of
such stock to be determined in the manner
provided in Section 5.2 hereof) or by
delivering such combination of cash and such
shares as the Committee in its sole
discretion may approve.
<PAGE 9>
(b) A person holding more than one Option at any
relevant time may, in accordance with the
provisions of the Plan, elect to exercise
such Options in any order.
(c) In addition, at the request of the
Participant and to the extent permitted by
applicable law, the Corporation may, in its
sole discretion, selectively approve
arrangements with a brokerage firm under
which such brokerage firm, on behalf of the
Participant, shall pay to the Corporation the
exercise price of the Options being
exercised, and the Corporation, pursuant to
an irrevocable notice from the Participant,
shall promptly deliver the shares being
purchased to such firm.
Article 8. TERMINATION OF STATUS AS DIRECTOR
8.1 Retirement - In the event of Retirement, an Option
shall lapse at the earlier of the expiration of
the term of the Option or up to 24 months, at the
discretion of the Committee, from the date of
Retirement.
8.2 Death or Disability - In the event of termination
of an individual's status as a Director due to
death or disability (as defined in Code
Section 72(m)), the Option shall lapse at the
earlier of the expiration of the term of the
Option or one year after termination due to any
such cause.
8.3 Other Termination - Except as otherwise provided
in Sections 8.4(a) and (c), in the event of
termination of an individual's status as a
Director for any reason other than is described in
Section 8.1 or 8.2, all Options shall lapse as of
the date of termination.
8.4 Special Termination Provisions -
(a) Notwithstanding anything herein to the
contrary, the Committee may, in its
discretion and subject to the approval of a
majority of the members of the Board, waive
the eleven-month continuous service
requirement set forth in Section 7.1(a) and
permit the exercise of an Option held by a
Director whose service as such has terminated
prior to the satisfaction of such
requirement. Any such waiver may be made
with retroactive effect provided it is made
<PAGE 10> within 60 days following the
Optionee's termination.
(b) In the event the Committee waives the
continuous service requirement with respect
to an Option and the circumstance of the
Director's termination is described in
Section 8.1 or 8.2, the Option will lapse as
otherwise provided in the relevant section.
(c) Notwithstanding anything herein to the
contrary, the Committee may, in its
discretion, waive the lapse provisions of
Section 8.3 and permit the exercise of an
Option until a date which is the earlier of
the expiration of the term of such Option or
up to 24 months from the date of termination.
Article 9. ADJUSTMENT PROVISIONS
9.
(a) In the event that the shares of Common Stock
of the Corporation, as presently constituted,
shall be changed into or exchanged for a
different number or kind of shares of stock
or other securities of the Corporation or of
another corporation (whether by reason of
merger, consolidation, recapitalization,
reclassification, split-up, combination of
shares or otherwise) or if the number of such
shares of stock shall be increased through
the payment of a stock dividend, then,
subject to the provisions of Subsection (c)
below, there shall be substituted for or
added to each share of Common Stock of the
Corporation which was theretofore
appropriated, or which thereafter may become
subject to an Option under the Plan, the
number and kind of shares of stock or other
securities into which each outstanding share
of the Common Stock of the Corporation shall
be so changed or for which each such share
shall be exchanged or to which each such
share shall be entitled, as the case may be.
Outstanding Options shall also be
appropriately amended as to price and other
terms, as may be necessary to reflect the
foregoing events.
(b) If there shall be any other change in the
number or kind of the outstanding shares of
the Common Stock of the Corporation, or of
any stock or other securities in which such
Common Stock shall have been changed, or for
<PAGE 11> which it shall have been exchanged,
and if a majority of the members of the Board
shall, in its sole discretion, determine that
such change equitably requires an adjustment
in any Option which was theretofore granted
or which may thereafter be granted under the
Plan, then such adjustment shall be made in
accordance with such determination.
(c) The grant of an Option pursuant to the Plan
shall not affect in any way the right or
power of the Corporation to make adjustments,
reclassifications, reorganizations or changes
of its capital or business structure, to
merge, to consolidate, to dissolve, to
liquidate or to sell or transfer all or any
part of its business or assets.
9.2 Corporate Changes - A dissolution or liquidation
of the Corporation, or a merger or consolidation
in which the Corporation is not the surviving
Corporation, shall cause each outstanding Option
to terminate, except to the extent that another
corporation may and does in the transaction assume
and continue the Option or substitute its own
options.
9.3 Fractional Shares - Fractional shares resulting
from any adjustment in Options pursuant to this
Article 9 may be settled as a majority of the
members of the Board or the Committee (as the case
may be) shall determine.
9.4 Binding Determination - To the extent that the
foregoing adjustments relate to stock or
securities of the Corporation, such adjustments
shall be made by a majority of the members of the
Board, whose determination in that respect shall
be final, binding and conclusive. Notice of any
adjustment shall be given by the Corporation to
each holder of an Option which shall have been
adjusted.
Article 10. GENERAL PROVISIONS
10.1 Effective Date - The Plan shall become effective
upon its adoption by the Board.
10.2 Termination of the Plan - Unless previously
terminated by the Board of Directors, the Plan
shall terminate on, and no Options shall be
granted after, the tenth anniversary of its
adoption by the Board.
<PAGE 12>
10.3 Limitation on Termination, Amendment or
Modification
(a) The Board may at any time terminate, amend,
modify or suspend the Plan, provided that
without the approval of the stockholders of
the Corporation no amendment or modification
shall be made by the Board which otherwise
requires the approval of such stockholders
under applicable tax, securities or other
law.
(b) No amendment, modification, suspension or
termination of the Plan shall in any manner
affect any Option theretofore granted under
the Plan without the consent of the Optionee
or any person validly claiming under or
through the Optionee.
10.4 No Right to Continued Status as Director - Neither
anything contained in the Plan or in any
instrument under the Plan nor the grant of any
Option hereunder shall confer upon any Optionee
any right to continue as a Director (or to be
nominated for such position) of the Corporation.
10.5 Withholding Taxes - The Corporation will require
that an Optionee, as a condition of the exercise
of an Option, or any other person or entity
receiving Common Stock upon exercise of an Option,
pay or reimburse any taxes which the Corporation
may be required to withhold in connection with the
exercise of the Option.
10.6 Listing and Registration of Shares -
(a) No Option granted pursuant to the Plan shall
be exercisable in whole or in part if at any
time a majority of the members of the Board
shall determine in its discretion that the
listing, registration or qualification of the
shares of Common Stock subject to such Option
on any securities exchange or under any
applicable law, or the consent or approval of
any governmental regulatory body, is
necessary or desirable as a condition of, or
in connection with, the granting of such
Option or the issue of shares thereunder,
unless such listing, registration,
qualification, consent or approval shall have
been effected or obtained free of any
conditions not acceptable to a majority of
the members of the Board.
<PAGE 13>
(b) If a registration statement under the
Securities Act with respect to the shares
issuable upon exercise of any Option granted
under the Plan is not in effect at the time
of exercise, as a condition of the issuance
of the shares, the person exercising such
Option shall give the Committee a written
statement, satisfactory in form and substance
to the Committee, that he is acquiring the
shares for his own account for investment and
not with a view to their distribution. The
Corporation may place upon any stock
certificate for shares issuable upon exercise
of such Option the following legend or such
other legend as the Committee may prescribe
to prevent disposition of the shares in
violation of the Securities Act or other
applicable law:
"THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("ACT")
AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR
OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT WITH
RESPECT TO THEM UNDER THE ACT OR A
WRITTEN OPINION OF COUNSEL FOR THE
CORPORATION THAT REGISTRATION IS NOT
REQUIRED." <PAGE 14>
