<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 1998
Registration No. 333-______
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
EGGHEAD.COM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-1296187
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
22705 EAST MISSION AVENUE
LIBERTY LAKE, WASHINGTON 99019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
1997 NONOFFICER EMPLOYEE STOCK OPTION PLAN
AND
EMPLOYEE STOCK ISSUANCE PROGRAM
(FULL TITLE OF THE PLANS)
GEORGE P. ORBAN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
EGGHEAD.COM, INC.
22705 EAST MISSION AVENUE
LIBERTY LAKE, WASHINGTON 99019
(509) 922-7031
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
______________________
COPIES TO:
CHARLES J. KATZ, JR.
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED (1) OFFERING PRICE PER SHARE(2) AGGREGATE OFFERING PRICE(2) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value per share:
1997 Nonofficer Employee Stock
Option Plan 1,000,000 $7.25 $7,250,000 $2,139
Employee Stock Issuance Program 25,000 7.25 181,250 54
TOTAL 2,193
=============================================================================================================================
</TABLE>
(1) Together with an indeterminate number of additional shares that may be
necessary to adjust the number of shares reserved for issuance pursuant to
the 1997 Nonofficer Employee Stock Option Plan and the Employee Stock
Issuance Program as the result of any future stock split, stock dividend or
similar adjustment of the outstanding Common Stock of the Registrant.
(2) Estimated pursuant to Rule 457 of the Securities Act of 1933, as amended,
solely for the purpose of calculating the amount of the registration fee.
The price per share is estimated to be $7.25, based on the average of the
high sales price ($7.50) and low sales price ($7.00) for the Registrant's
Common Stock as reported on the Nasdaq National Market on June 2, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference into this
Registration Statement:
(a) The Registrant's Annual Report on Forms 10-K and 10-K/A for the
fiscal year ended March 29, 1997, filed with the Securities and Exchange
Commission (the "Commission") on June 26, 1997 and July 15, 1997, respectively;
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the fiscal year covered by the Annual Report on Forms
10-K and 10-K/A referred to in (a) above; and
(c) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission on May 13, 1988,
under Section 12(g) of the Exchange Act, including any amendments or reports
filed for the purpose of updating such descriptions.
Any document filed by the Registrant pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date hereof and prior to the filing of a
post-effective amendment that indicates that the securities offered hereby have
been sold or that deregisters the securities covered hereby then remaining
unsold shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective date
on which such document is filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 23B.08.320 of the Washington Business Corporation
Act (the "WBCA"), Article X of the Registrant's Restated Articles of
Incorporation, as amended, limits a director's liability to the Registrant or
its shareholders for monetary damages arising from his or her conduct as a
director, except for acts or omissions that involve intentional misconduct or a
knowing violation of law, approval of distributions or loans in violation of
Section 23B.06.400 of the WBCA or any transaction from which the director will
personally receive a benefit in money, property or services to which the
director is not legally entitled.
Sections 23B.08.500 through 23B.08.600 of the WBCA authorize a court to
award, or a corporation's board of directors to grant, indemnification to
directors and officers on terms sufficiently broad to permit indemnification
under certain circumstances for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act"). As permitted by Section 23B.08.560 of
the WBCA, Article IX of the Registrant's Bylaws provides that the Registrant
shall indemnify its officers and directors and may indemnify its employees and
other agents against any and all loss, liability, expenses (including attorneys'
fees), judgments, fines, ERISA excise taxes or penalties and amounts to be paid
in settlement (each, a "Loss") actually and reasonably incurred or suffered in
connection with any actual or threatened claim, suit or proceeding, whether
civil, criminal, administrative or investigative, except for a Loss arising out
of acts or omissions finally adjudged to be intentional misconduct or a known
violation of law, approval of distributions or loans that are finally adjudged
to be in violation of RCW 23B.06.400 or any transaction in which it is finally
adjudged that the indemnitee personally received a benefit in money, property or
services to which the indemnitee was not legally entitled. The Registrant's
Bylaws also permit it to secure insurance on behalf of any officer, director,
employee or other agent for any liability arising out of his or her actions in
such capacity, regardless of whether the Bylaws would permit indemnification,
and to enter into agreements to indemnify its officers and directors in
furtherance of Article IX of the Registrant's Bylaws. The Registrant has
entered into such agreements with certain of its officers and directors.
II-1
<PAGE>
ITEM 8. EXHIBITS
Exhibit
Number Description
- ------- ---------------------------------------------------------------------
5.1 Opinion of Perkins Coie LLP regarding legality of the Common Stock
being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie LLP (included in its Opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 1997 Nonofficer Employee Stock Option Plan
99.2 Employee Stock Issuance Program
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the termination of the
offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that, in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Liberty Lake, State of Washington, on the 29th day of
May, 1998.
EGGHEAD.COM, INC.
By /s/ GEORGE P. ORBAN
-------------------
George P. Orban
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints George
P. Orban and Brian W. Bender, and each of them, as true and lawful attorneys-in-
fact and agents with full power of substitution and resubstitution, to sign in
the name and on behalf of such person, individually and in each capacity stated
below, any or all amendments (including pre-effective and post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
the 29th day of May, 1998 in the capacities indicated.
Signature Title
---------
/s/ GEORGE P. ORBAN Chairman and Chief Executive Officer
- ------------------------
George P. Orban
/s/ BRIAN W. BENDER Vice President, Secretary and Chief Financial
- ------------------------ Officer (Principal Financial and Accounting
Brian W. Bender Officer)
/s/ GREGORY J. BOUDREAU Director
- ------------------------
Greg Boudreau
/s/ JONATHAN W. BRODEUR Director
- ------------------------
Jonathan Brodeur
/s/ RICHARD P. COOLEY Director
- ------------------------
Richard P. Cooley
/s/ ERIC P. ROBISON Director
- ------------------------
Eric P. Robison
/s/ SAMUEL N. STROUM Director
- ------------------------
Samuel N. Stroum
/s/ MELVIN A. WILMORE Director
- ------------------------
Melvin A. Wilmore
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
5.1 Opinion of Perkins Coie LLP regarding legality of the
Common Stock being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie LLP (included in its Opinion
filed as Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 1997 Nonofficer Employee Stock Option Plan
99.2 Employee Stock Issuance Program
<PAGE>
EXHIBIT 5.1
PERKINS COIE LLP
A LAW PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
1201 THIRD AVENUE, 40TH FLOOR, SEATTLE, WASHINGTON 98101-3099
TELEPHONE: (206) 583-8888 FACSIMILE: (206) 583-8500
June 4, 1998
Egghead.com, Inc.
22705 East Mission Avenue
Liberty Lake, WA 99019
Re: Registration Statement on Form S-8 of Shares of Common Stock, Par
Value $.01 Per Share, of Egghead.com, Inc.
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), which you are filing with the
Securities and Exchange Commission with respect to 1,000,000 shares of Common
Stock, par value $.01 per share (the "Shares"), which may be issued pursuant to
the Egghead.com, Inc. 1997 Nonofficer Employee Stock Option Plan (the "Plan")
and 25,000 Shares which may be issued pursuant to the Egghead.com, Inc. Employee
Stock Issuance Program (the "Program"). We have examined the Registration
Statement and such documents and records of the Company and other documents as
we have deemed necessary for the purpose of this opinion. In giving this
opinion, we are assuming the authenticity of all instruments presented to us as
originals, the conformity with originals of all instruments presented to us as
copies and the genuineness of all signatures.
Based upon and subject to the foregoing, we are of the opinion that any
original issuance Shares that may be issued pursuant to the Plan and pursuant to
the Program have been duly authorized and that, upon the due execution by the
Company and the registration by its registrar of such Shares, issuance thereof
by the Company in accordance with the terms of the Plan and with the terms of
the Program, and the receipt of consideration therefor in accordance with the
terms of the Plan and with the terms of the Program, such Shares will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ PERKINS COIE LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of our reports dated May
13, 1997 included in Egghead.com, Inc.'s Annual Report on Forms 10-K and 10-K/A
for the year ended March 29, 1997, and to all references to our firm included in
this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Seattle, Washington
June 4, 1998
<PAGE>
EXHIBIT 99.1
EGGHEAD.COM, INC.
1997 NONOFFICER EMPLOYEE STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the 1997 Nonofficer Employee Stock Option Plan (the "Plan")
is to provide a means whereby selected employees of Egghead.com, Inc. (the
"Company") and selected employees (including employees who are officers or
directors) of any parent or subsidiary (as defined in subsection 5.7 and
referred to hereinafter as "related corporations") thereof, who are not officers
or directors of the Company, may be granted nonqualified stock options to
purchase the Common Stock (as defined in Section 3) of the Company, in order to
attract and retain the services or advice of such employees and officers and to
provide added incentive to such persons by encouraging stock ownership in the
Company.
SECTION 2. ADMINISTRATION
This Plan shall be administered by the Board of Directors of the Company
(the "Board") or a committee or committees (which term includes subcommittees)
appointed by, and consisting of two or more members of, the Board. Committee
members shall serve for such term as the Board may determine, subject to removal
by the Board at any time. In addition to any committees appointed by the Board
to administer the Plan and to the extent consistent with applicable law, the
Board may also authorize a senior executive officer of the Company to administer
the Plan, within limits specifically prescribed by the Board. The administrator
of this Plan shall hereinafter be referred to as the "Plan Administrator."
Except for the terms and conditions explicitly set forth in this Plan, the
Plan Administrator shall have the authority, in its discretion, to determine all
matters relating to the options to be granted under this Plan, including
selection of the individuals to be granted options, the number of shares to be
subject to each option, the exercise price, and all other terms and conditions
of the options. Grants under this Plan need not be identical in any respect,
even when made simultaneously. The interpretation and construction by the Plan
Administrator of any terms or provisions of this Plan or any option issued
hereunder, or of any rule or regulation promulgated in connection herewith,
shall be conclusive and binding on all interested parties.
________________________________________________________________________________
NONOFFICER EMPLOYEE STOCK OPTION PLAN Page 1
<PAGE>
SECTION 3. STOCK SUBJECT TO THIS PLAN
The stock subject to this Plan shall be the Company's Common Stock (the
"Common Stock"), presently authorized but unissued or subsequently acquired by
the Company. Subject to adjustment as provided in Section 6, the aggregate
amount of Common Stock to be delivered upon the exercise of all options granted
under this Plan shall not exceed 1,000,000 shares. If any option granted under
this Plan shall expire or be surrendered, exchanged for another option, canceled
or terminated for any reason without having been exercised in full, the
unpurchased shares subject thereto shall thereupon again be available for
purposes of this Plan.
SECTION 4. ELIGIBILITY
Any employee of the Company and any employee of any related corporation
who, at the time an option is granted, is not a director or officer of the
Company shall be eligible to receive options under the Plan.
SECTION 5: TERMS AND CONDITIONS OF OPTIONS
Options granted under this Plan shall be evidenced by written agreements
which shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and which are not inconsistent with this
Plan. Notwithstanding the foregoing, options shall include or incorporate by
reference the following terms and conditions:
5.1 NUMBER OF SHARES AND PRICE
The maximum number of shares that may be purchased pursuant to the exercise
of each option and the price per share at which such option is exercisable (the
"Exercise Price") shall be as established by the Plan Administrator; provided
that the Plan Administrator shall act in good faith to establish the Exercise
Price.
5.2 TERM AND MATURITY
The term of each option shall be as established by the Plan Administrator
and, if not so established, shall be 10 years. To ensure that the Company or
related corporation will achieve the purpose and receive the benefits
contemplated in this Plan, any option granted to any eligible person hereunder
("Optionee") shall, unless the condition of this sentence is waived or modified
in the agreement evidencing the option or by resolution adopted at any time by
the Plan Administrator, be exercisable according to the following schedule:
________________________________________________________________________________
NONOFFICER EMPLOYEE STOCK OPTION PLAN Page 2
<PAGE>
<TABLE>
<CAPTION>
Period of Optionee's Continuous
Relationship With the Company or
Related Corporation From the Date the Portion of Total Option That Is
Option Is Granted Exercisable
------------------------------------- -------------------------------
<S> <C>
After one year 25%
Each month thereafter an additional 1/48
After four years 100%
</TABLE>
5.3 EXERCISE
Subject to the vesting schedule described in subsection 5.2, each option
may be exercised in whole or in part at any time and from time to time;
provided, however, that no fewer than 50 shares (or the remaining shares then
purchasable under the option, if less than 50 shares) may be purchased upon any
exercise of option rights hereunder and that only whole shares will be issued
pursuant to the exercise of any option. Options shall be exercised by delivery
to the Company of notice of the number of shares with respect to which the
option is exercised, together with payment of the Exercise Price.
5.4 PAYMENT OF EXERCISE PRICE
Payment of the option Exercise Price shall be made in full at the time the
notice of exercise of the option is delivered to the Company and shall be in
cash, bank certified or cashier's check or personal check (unless at the time of
exercise the Plan Administrator in a particular case determines not to accept a
personal check) for the Common Stock being purchased.
The Plan Administrator can determine at any time before exercise that
additional forms of payment will be permitted. Unless the Plan Administrator in
its sole discretion determines otherwise, either at the time the option is
granted or at any time before it is exercised, and to the extent permitted by
applicable laws and regulations (including, but not limited to, federal tax and
securities laws and regulations and state corporate law), an option may be
exercised by a combination of cash and/or check (if any) and one or more of the
following alternative forms:
(a) tendering (either actually or by attestation) shares of stock of
the Company held by an Optionee having a fair market value equal to the Exercise
Price, such fair market value to be determined in good faith by the Plan
Administrator; provided, however, that payment in stock held by an Optionee
shall not be made unless the stock shall have been owned by the Optionee for a
period of at least six
________________________________________________________________________________
NONOFFICER EMPLOYEE STOCK OPTION PLAN Page 3
<PAGE>
months (or any shorter period necessary to avoid a charge to the Company's
earnings for financial accounting purposes);
(b) delivery of a full-recourse promissory note executed by the
Optionee; provided that (i) such note may, in the sole discretion of the Plan
Administrator, bear interest at a rate specified by the Plan Administrator but
in no case less than the rate required to avoid imputation of interest (taking
into account any exceptions to the imputed interest rules) for federal income
tax purposes, and (ii) the Plan Administrator in its sole discretion shall
specify the term and other provisions of such note at any time prior to exercise
of the option, and (iii) the Plan Administrator may require that the Optionee
pledge the Optionee's shares to the Company for the purpose of securing the
payment of such note and may require that the certificate representing such
shares be held in escrow in order to perfect the Company's security interest,
and (iv) the Plan Administrator in its sole discretion may at any time restrict
or rescind this right upon notification to the Optionee; or
(c) delivery of a properly executed exercise notice, together with
irrevocable instructions to a broker, all in accordance with the regulations of
the Federal Reserve Board, to promptly deliver to the Company the amount of sale
or loan proceeds to pay the Exercise Price and any federal, state or local
withholding tax obligations that may arise in connection with the exercise.
5.5 WITHHOLDING TAX REQUIREMENT
The Company or any related corporation shall have the right to retain and
withhold from any payment of cash or Common Stock under this Plan the amount of
taxes required by any government to be withheld or otherwise deducted and paid
with respect to such payment. At its discretion, the Company may require an
Optionee receiving shares of Common Stock to reimburse the Company for any such
taxes required to be withheld by the Company and withhold any distribution in
whole or in part until the Company is so reimbursed. In lieu thereof, the
Company shall have the right to withhold from any other cash amounts due or to
become due from the Company to the Optionee an amount equal to such taxes. The
Company may also retain and withhold or the Optionee may elect, subject to
approval by the Company at its sole discretion, to have the Company retain and
withhold a number of shares having a market value not less than the amount of
such taxes required to be withheld by the Company to reimburse the Company for
any such taxes and cancel (in whole or in part) any such shares so withheld.
________________________________________________________________________________
NONOFFICER EMPLOYEE STOCK OPTION PLAN Page 4
<PAGE>
5.6 NONTRANSFERABILITY OF OPTIONS
Options granted under this Plan and the rights and privileges conferred
hereby may not be transferred, assigned, pledged or hypothecated in any manner
(whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution, and shall not be subject to
execution, attachment or similar process. During an Optionee's lifetime, any
options granted under this Plan are personal to him or her and are exercisable
solely by such Optionee or a permitted assignee or transferee of such Optionee
(as provided below). Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of any option under this Plan or of any right or privilege
conferred hereby, contrary to the Code or to the provisions of this Plan, or the
sale or levy or any attachment or similar process upon the rights and privileges
conferred hereby shall be null and void. Notwithstanding the foregoing, the
Plan Administrator may permit an Optionee to (i) during the Optionee's lifetime,
designate a person who may exercise the option after the Optionee's death by
giving written notice of such designation to the Plan Administrator (such
designation may be changed from time to time by the Optionee by giving written
notice to the Plan Administrator revoking any earlier designation and making a
new designation) or (ii) transfer the option and the rights and privileges
conferred hereby; provided, however, that any option so assigned or transferred
shall be subject to all the same terms and conditions contained in the
instrument evidencing the option.
5.7 TERMINATION OF RELATIONSHIP
The Plan Administrator shall determine the terms and conditions under which
an option may be exercised following termination of an Optionee's relationship
with the Company or any related corporation.
As used herein, the term "related corporation," when referring to a
subsidiary corporation, shall mean any corporation (other than the Company) in,
at the time of the granting of the option, an unbroken chain of corporations
ending with the Company, if stock possessing 50% or more of the total combined
voting power of all classes of stock of each of the corporations other than the
Company is owned by one of the other corporations in such chain. When referring
to a parent corporation, the term "related corporation" shall mean any
corporation in an unbroken chain of corporations ending with the Company if, at
the time of the granting of the option, 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.
________________________________________________________________________________
NONOFFICER EMPLOYEE STOCK OPTION PLAN Page 5
<PAGE>
5.8 NO STATUS AS SHAREHOLDER
Neither the Optionee nor any party to which the Optionee's rights and
privileges under the option may pass shall be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of any option granted under this Plan unless and
until such option has been exercised.
5.9 CONTINUATION OF RELATIONSHIP
Nothing in this Plan or in any option granted pursuant to this Plan shall
confer upon any Optionee any right to continue in the employ or other
relationship of the Company or of a related corporation, or to interfere in any
way with the right of the Company or of any such related corporation to
terminate his or her employment or other relationship with the Company at any
time.
SECTION 6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
The aggregate number and class of shares for which options may be granted
under this Plan, the number and class of shares covered by each outstanding
option and the exercise price per share thereof (but not the total price) shall
all be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock of the Company resulting from a split-up or
consolidation of shares or any like capital adjustment, or the payment of any
stock dividend.
6.1 EFFECT OF LIQUIDATION OR REORGANIZATION
6.1.1 CASH, STOCK OR OTHER PROPERTY FOR STOCK
Except as provided in subsection 6.1.2, upon a merger (other than a merger
of the Company in which the holders of Common Stock immediately prior to the
merger have the same proportionate ownership of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere reincorporation
or the creation of a holding company) or liquidation of the Company, as a result
of which the shareholders of the Company receive cash, stock or other property
in exchange for or in connection with their shares of Common Stock, any option
granted hereunder shall terminate, but the Optionee shall have the right
immediately prior to any such merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation to exercise such Optionee's
option in whole or in part whether or not the vesting requirements set forth in
the option agreement have been satisfied.
________________________________________________________________________________
NONOFFICER EMPLOYEE STOCK OPTION PLAN Page 6
<PAGE>
6.1.2 CONVERSION OF OPTIONS ON STOCK FOR STOCK EXCHANGE
If the shareholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common Stock in
any transaction involving a merger, consolidation, acquisition of property or
stock, separation or reorganization, all options granted hereunder shall be
converted into options to purchase shares of Exchange Stock unless the Company
and the corporation issuing the Exchange Stock, in their sole discretion,
determine that any or all such options granted hereunder shall not be converted
into options to purchase shares of Exchange Stock but instead shall terminate in
accordance with the provisions of subsection 6.1.1; provided, however, that all
options granted hereunder shall be converted automatically into Exchange Stock
in (i) a merger of the Company in which the holders of Common Stock immediately
prior to the merger have the same proportionate ownership of Common Stock in the
surviving corporation immediately after the merger, (ii) a mere reincorporation,
or (iii) the creation of a holding company. The amount and price of converted
options shall be determined by adjusting the amount and price of the options
granted hereunder in the same proportion as used for determining the number of
shares of Exchange Stock the holders of the Common Stock receive in such merger,
consolidation, acquisition of property or stock, separation or reorganization.
The converted options shall retain the vesting requirements applicable to the
options granted hereunder, unless the Company and the corporation issuing the
Exchange Stock, in their sole discretion, determine otherwise.
6.2 FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by any
option, any fractional shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full shares
resulting from such adjustment.
6.3 DETERMINATION OF BOARD TO BE FINAL
All Section 6 adjustments shall be made by the Board, and its determination
as to what adjustments shall be made, and the extent thereof, shall be final,
binding and conclusive.
SECTION 7. SECURITIES REGULATION
Shares shall not be issued with respect to an option granted under this
Plan unless the exercise of such option and the issuance and delivery of such
shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, any applicable state securities laws, the
Securities Act of 1933, as
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NONOFFICER EMPLOYEE STOCK OPTION PLAN Page 7
<PAGE>
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance, including the availability, if applicable, of an
exemption from registration for the issuance and sale of any shares hereunder.
SECTION 8. AMENDMENT AND TERMINATION
8.1 BOARD ACTION
The Board may amend, suspend or terminate this Plan at any time.
8.2 TERM OF THIS PLAN
Unless sooner terminated by the Board, this Plan shall terminate ten years
from the date on which this Plan is adopted by the Board. No option may be
granted after such termination or during any suspension of this Plan. The
amendment or termination of this Plan shall not, without the consent of the
option holder, alter or impair any rights or obligations under any option
theretofore granted under this Plan.
SECTION 9. EFFECTIVENESS OF THIS PLAN
This Plan shall become effective upon adoption by the Board.
This Plan was adopted by the Board of Directors on October 29, 1997.
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NONOFFICER EMPLOYEE STOCK OPTION PLAN Page 8
<PAGE>
EXHIBIT 99.2
EGGHEAD.COM, INC.
EMPLOYEE STOCK ISSUANCE PROGRAM
Egghead.com, Inc. (the "Company") hereby establishes its Employee Stock
Issuance Program (the "Program") as follows:
1. ELIGIBILITY
The Program is designed to reward and/or incentivize five of the Company's
key executive officers, exclusive of the Company's Chief Executive Officer (the
"Eligible Employees"). The Eligible Employees are Brian W. Bender, Jonathan W.
Brodeur, James F. Kalasky, Norman F. Hullinger and Tommy E. Collins.
2. DESCRIPTION OF THE PROGRAM
A stock bonus of 5,000 shares of the Company's common stock will be granted
to each of the Eligible Employees upon the effectiveness of the Company's Form
S-8 Restration Statement for the Program filed with the Securities and Exchange
Commission (the "Registration Statement").
3. PRICE
No payment will be due from the Eligible Employees for the stock bonuses.
4. TAX
Payment for any taxes due upon receipt or sale of the stock bonus will be
the responsibility of the Eligible Employees.
5. ELIGIBLE EMPLOYEES' RIGHTS AS SHAREHOLDERS
5.1 No Eligible Employee shall have any right as a shareholder with
respect to any shares until the shares are issued upon the effectiveness of the
Registration Statement.
<PAGE>
5.2 Shares to be delivered to an Eligible Employee under the Program will
be issued in the name of the Eligible Employee or, if the Eligible Employee so
directs by written notice to the Company prior to the issuance, in the names of
the Eligible Employee and one other person as may be designated by the Eligible
Employee, as joint tenants with rights of survivorship, tenants in common, or as
community property, to the extent and in the manner permitted by applicable law.
6. ADMINISTRATION
The Program will be administered by the Company's Legal Department.
7. REGISTRATION
The Program was adopted by the Board on April 29, 1998. The shares
reserved for issuance under the Program will not be granted or issued until the
Registration Statement is effective.
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