SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
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HYPERMEDIA COMMUNICATIONS, INC.
(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY COPY. INTENDED DATE OF DEFINITIVE PROXY: APRIL 28, 2000.
HYPERMEDIA COMMUNICATIONS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 6, 2000
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
HYPERMEDIA COMMUNICATIONS, INC., a California corporation (the "Company" or
"HyperMedia"), will be held on Tuesday, June 6, 2000 at 12:00 p.m., local time,
at the Company's offices at 901 Mariner's Island Boulevard, Suite 365, San
Mateo, California 94404, for the following purposes:
(1) To elect four directors to serve until the next Annual Meeting of
Shareholders and until their successors are elected.
(2) To approve an amendment to our 1991 Stock Plan to increase the
number of shares reserved for issuance thereunder to 2,925,000.
(3) To approve an amendment to our 1993 Director Option Plan to
increase the number of shares reserved for issuance thereunder to
350,000.
(4) To approve an amendment to our 1993 Director Option Plan to change
the initial grant to 10,000 shares fully vested and the annual
grant to 10,000 shares fully vested.
(5) To approve an amendment to the Articles of Incorporation to
increase the number of authorized Preferred shares to 20,064,516.
(6) To ratify the appointment of PricewaterhouseCoopers LLP to serve as
the Company's independent accountants for fiscal 2000.
(7) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on April 21,
2000 as the record date for the determination of shareholders entitled to vote
at this meeting. Only shareholders of record at the close of business on April
21, 2000 are entitled to notice of and to vote at the meeting.
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All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed Proxy as promptly as possible in the postage
prepaid envelope enclosed for that purpose. Any shareholder attending the
meeting may vote in person even if he or she has returned a Proxy.
Sincerely,
/s/ RICHARD LANDRY
Richard Landry
Chief Executive Officer and
Chairman of the Board
San Mateo, California
April 28, 2000
YOUR VOTE IS IMPORTANT.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING,
YOU ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
PRELIMINARY COPY. INTENDED DATE OF DEFINITIVE PROXY: APRIL 28, 2000
HYPERMEDIA COMMUNICATIONS, INC.
PROXY STATEMENT FOR 2000
ANNUAL MEETING OF SHAREHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
HYPERMEDIA COMMUNICATIONS, INC., a California corporation ("HyperMedia"), for
use at the Annual Meeting of Shareholders to be held Tuesday, June 6, 2000 at
12:00 p.m., local time, or at any adjournment thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of Shareholders.
The Annual Meeting will be held at 901 Mariner's Island Boulevard, Suite 365,
San Mateo, California 94404. Our principal executive offices are located at 901
Mariner's Island Boulevard, Suite 365, San Mateo, California 94404, and our
telephone number at that location is (650) 573-5170.
These proxy solicitation materials and the Annual Report on Form 10-K
for the year ended December 31, 1999, including financial statements, will be
mailed on or about April 28, 2000 to all shareholders entitled to vote at the
meeting.
Record Date and Principal Share Ownership
Shareholders of record at the close of business on April 21, 2000 (the
"Record Date") are entitled to notice of and to vote at the meeting. We have one
series of common shares outstanding, designated Common Stock, $.001 par value.
At the Record Date, 3,200,975 shares of our authorized Common Stock were issued
and outstanding and held of record by approximately 350 shareholders. We have
six series of preferred shares outstanding, designated Series E Preferred Stock,
$.001 par value, Series F Preferred Stock, $.001 par value, Series G Preferred
Stock, $.001 par value, Series H Preferred Stock, $.001 par value, Series I
Preferred Stock, $.001 par value, and Series J Preferred Stock, $.001 par value.
At the Record Date, 8,064,516 shares of Series E Preferred Stock were
outstanding and held of record by one shareholder, 82,250 shares of Series F
Preferred Stock were outstanding and held of record by one shareholder, 50,344
shares of Series G Preferred Stock were outstanding and held of record by one
shareholder, 117,000 shares of Series H Preferred Stock were outstanding and
held of record by one shareholder, 28,800 shares of Series I Preferred Stock
were outstanding and held of record by one shareholder and 169,281 shares of
Series J Preferred Stock were outstanding and held of record by one shareholder.
The shares of Series E Preferred Stock, Series F Preferred Stock, Series G
Preferred Stock, Series H Preferred Stock, Series I Preferred Stock, and Series
J Preferred Stock are convertible under certain circumstances into approximately
2,092,050 shares of Common Stock, 82,250 shares of Common Stock, 209,802 shares
of Common Stock, 522,828 shares of Common Stock, 941,121 shares of Common Stock
and 4,080,209 shares of Common Stock, respectively, and are entitled to the
number of votes each would be entitled to cast if converted to Common Stock.
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<TABLE>
The following table sets forth certain information regarding the
beneficial ownership of Common Stock of HyperMedia as of April 21, 2000 as to
(i) each person who is known by us to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director and each nominee for
director of the Company, (iii) each of the executive officers named in the
Summary Compensation Table in "Executive Compensation and Other Matters" below
and (iv) all directors and executive officers as a group.
<CAPTION>
Shares Beneficially Owned (1)
-----------------------------
Approximate
Five Percent Shareholders, Directors Percent of
and Certain Executive Officers Number Total
------------------------------ ------ -----
<S> <C> <C>
MK Global 10,041,730 (2) 83.4%
2471 E. Bayshore Road
Palo Alto, CA 94303
Michael Kaufman 10,055,480 (3) 83.4%
c/o MK Global Ventures
2471 E. Bayshore Road
Palo Alto, CA 94303
Greg Lahann 9,995,825 (4) 83.0%
c/o MK Global Ventures
2471 E. Bayshore Road
Palo Alto, CA 94303
Dirk Spiers -- --
Dr. Eugene C. Y. Duh 181,359 5.7%
c/o Orient Semi-Conductor Electronics, Ltd.
Bldg. 1, Section 4
NAN-TZE
Export Processing Zone
Taiwan, R.O.C.
Richard Landry 263,103 (5) 7.6%
c/o HyperMedia Communications, Inc.
901 Mariner's Island Blvd.
San Mateo, CA 94404
John Topping 68,750 (6) 2.1%
c/o HyperMedia Communications, Inc
901 Mariner's Island Blvd.
San Mateo, CA 94404
Kenneth Klein 30,000 (7) .9%
c/o HyperMedia Communications, Inc
901 Mariner's Island Blvd.
San Mateo, CA 94404
Directors and executive officers as a group (6 persons) 20,413,158 (8) 96.0%
<FN>
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(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock subject
to options, warrants and convertible notes currently exercisable or
convertible, or exercisable or convertible within 60 days of April 21, 2000
are deemed outstanding for computing the percentage of the person holding
such option but are not outstanding for computing the percentage of any
other person. Except as indicated by footnote, and subject to community
property laws where applicable, the persons named in the table above have
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
(2) Includes 57,931 shares of Common Stock owned by MK Global Ventures, 925,450
shares of Common Stock owned by MK Global Ventures II, 220,320 shares of
Common Stock owned by MK GVD Fund, and 1,724 shares of Common Stock
issuable upon exercise of a warrant to purchase Common Stock held by MK GVD
Fund. This also includes 2,090,050 shares of Common Stock issuable upon
conversion of the Series E Preferred Stock held by MK Global Ventures II
and 910,042 shares of Common Stock issuable as dividends upon the
conversion of
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the Series E Preferred Stock, 82,250 shares of Common Stock issuable upon
conversion of the Series F Preferred Stock, 209,802 shares of Common Stock
issuable upon conversion of the Series G Preferred Stock, 522,828 shares of
Common Stock issuable upon conversion of the Series H Preferred Stock,
941,121 shares of Common Stock issuable upon conversion of the Series I
Preferred Stock and 4,080,209 shares of Common Stock issuable upon
conversion of the Series J Preferred Stock all held by MK GVD Fund. MK
Global Ventures II and MK GVD Fund own, in the aggregate, 8,512,191 shares
of Preferred Stock or 100% of the outstanding Preferred Stock.
(3) Includes 13,750 shares of Common Stock issuable upon the exercise of
options to purchase Common Stock that are exercisable within 60 days of
April 21, 2000. Also includes 57,931 shares of Common Stock owned by MK
Global Ventures, 925,450 shares of Common Stock owned by MK Global Ventures
II, 220,320 shares of Common Stock owned by MK GVD Fund, and 1,724 shares
of Common Stock issuable upon exercise of a warrant to purchase Common
Stock held by MK GVD Fund. This also includes 2,090,050 shares of Common
Stock issuable upon conversion of the Series E Preferred Stock held by MK
Global Ventures II and 910,042 shares of Common Stock issuable as dividends
upon the conversion of the Series E Preferred Stock, 82,250 shares of
Common Stock issuable upon conversion of the Series F Preferred Stock,
209,802 shares of Common Stock issuable upon conversion of the Series G
Preferred Stock, 522,828 shares of Common Stock issuable upon conversion of
the Series H Preferred Stock, 941,121 shares of Common Stock issuable upon
conversion of the Series I Preferred Stock and 4,080,209 shares of Common
Stock issuable upon conversion of the Series J Preferred Stock all held by
MK GVD Fund. Mr. Kaufman, a director of the Company, is a general partner
of MK Global Ventures, MK Global Ventures II and MK GVD Fund and may be
deemed to have voting and investment power with respect to such shares,
although he has disclaimed beneficial ownership of such shares. MK Global
Ventures II and MK GVD Fund own, in the aggregate, 8,512,191 shares of
Preferred Stock or 100% of the outstanding Preferred Stock. Mr. Kaufman
disclaims beneficial ownership of such shares.
(4) Includes 13,750 shares of Common Stock issuable upon the exercise of
options to purchase Common Stock that are exercisable within 60 days of
April 21, 1999. Also includes 925,450 shares of Common Stock owned by MK
Global Ventures II, 220,320 shares of Common Stock owned by MK GVD Fund.
This also includes 2,090,050 shares of Common Stock issuable upon
conversion of the Series E Preferred Stock held by MK Global Ventures II
and 910,042 shares of Common Stock issuable as dividends upon the
conversion of the Series E Preferred Stock, 82,250 shares of Common Stock
issuable upon conversion of the Series F Preferred Stock, 209,802 shares of
Common Stock issuable upon conversion of the Series G Preferred Stock,
522,828 shares of Common Stock issuable upon conversion of the Series H
Preferred Stock, 941,121 shares of Common Stock issuable upon conversion of
the Series I Preferred Stock and 4,080,209 shares of Common Stock issuable
upon conversion of the Series J Preferred Stock all held by MK GVD Fund.
Mr. Lahann, a director of the Company, is a general partner of MK Global
Venture II and MK GVD Fund and may be deemed to have voting and investment
power with respect to such shares, although he has disclaimed beneficial
ownership of such shares. MK Global Venture II and MK GVD Fund own, in the
aggregate, 8,512,191 shares of Preferred Stock or 100% of the outstanding
Preferred Stock. Mr. Lahann disclaims beneficial ownership of such shares.
(5) Represents 263,103 shares of Common Stock issuable upon exercise of options
to purchase Common Stock that are exercisable within 60 days of April 21,
2000.
(6) Represents 68,750 shares of Common Stock issuable upon exercise of options
to purchase Common Stock that are exercisable within 60 days of April 21,
2000.
(7) Represents 30,000 shares of Common Stock issuable upon exercise of options
to purchase Common Stock that are exercisable within 60 days of April 21,
2000.
(8) Includes 1,724 shares of Common Stock issuable upon exercise of the
warrants to purchase Common Stock, and 8,836,305 shares of Common Stock
issuable upon conversion of Series E Preferred Stock and dividends, Series
F Preferred Stock, Series G Preferred Stock, Series H Preferred Stock,
Series I Preferred Stock and Series J Preferred Stock listed in Notes 2, 3
and 4 above, and 389,353 shares of Common Stock issuable upon exercise of
options to purchase Common Stock listed in Notes 3, 4, 5, 6 and 7 above,
that are exercisable within 60 days of April 21, 2000.
</FN>
</TABLE>
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
HyperMedia a written notice of revocation or a duly executed proxy bearing a
later date or by attending the meeting and voting in person.
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Voting and Solicitation
Each holder of Common Stock is entitled to one vote for each share
held. Each holder of Series E Preferred Stock, Series F Preferred Stock, Series
G Preferred Stock, Series H Preferred Stock, Series I Preferred Stock and Series
J Preferred Stock is entitled to the number of votes such holder could cast if
such shares were converted into Common Stock. As of April 21, 2000, (i) each
share of Series E Preferred Stock was convertible into 0.3 shares of Common
Stock, (ii) each share of Series F Preferred Stock was convertible into 1 share
of Common Stock, (iii) each share of Series G Preferred Stock was convertible
into 4.2 shares of Common Stock, (iv) each share of Series H Preferred Stock was
convertible into 4.5 shares of Common Stock, (v) each share of Series I
Preferred Stock was convertible into 32.7 shares of Common Stock and (vi) each
share of Series J Preferred Stock was convertible into 24.1 shares of Common
Stock. Every shareholder voting for the election of directors (Proposal One) may
cumulate such shareholder's votes and give one candidate a number of votes equal
to the number of directors to be elected multiplied by the number of shares that
such shareholder is entitled to vote, or distribute such shareholder's votes on
the same principle among as many candidates as the shareholder may select,
provided that votes cannot be cast for more than four candidates. However, no
shareholder shall be entitled to cumulate votes for a candidate unless that
candidate's name has been placed in nomination prior to the voting and the
shareholder, or any other shareholder, has given notice at the meeting, prior to
the voting, of the intention to cumulate the shareholder's votes. On all other
matters, shareholders may not cumulate votes.
This solicitation of proxies is made by us, and all related costs will
be borne by us. In addition, we may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation material to such beneficial owners. Proxies may also be solicited
by certain of our directors, officers and regular employees, without additional
compensation, personally or by telephone, telegram or facsimile.
Deadline for Receipt of Shareholder Proposals
If you wish to submit proposals to be included in our 2001 proxy
statement, we must receive them, in a form which complies with the applicable
securities laws, on or before December 28, 2000. In addition, in the event a
stockholder proposal is not submitted to us prior to March 12, 2001, the proxy
to be solicited by the Board of Directors for the 2001 Annual Meeting will
confer authority on the holders of the proxy to vote the shares in accordance
with their best judgment and discretion if the proposal is presented at the 2001
Annual Meeting without any discussion of the proposal in the proxy statement for
such meeting
PROPOSAL ONE
ELECTION OF DIRECTORS
Our Board of Directors is composed of four directors. A board of four
directors is to be elected at the Annual Meeting of Shareholders. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the four nominees named below, all four of whom are presently serving as our
directors. In the event that any of our nominees are unable or decline to serve
as a director at the time of the Annual Meeting of Shareholders, the proxies
will be voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. We are not aware of any nominee who will be
unable or will decline to serve as a director. In the event that additional
persons are nominated for election as directors, the proxy holders intend to
vote all proxies received by them in such a manner (in accordance with
cumulative voting) as will assure the election of as many of the nominees listed
below as possible, and, in such event, the specific nominees to be voted for
will be determined by the proxy holders. The term of office for each person
elected
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<PAGE>
as a director will continue until the next Annual Meeting of Shareholders and
until a successor has been elected and qualified.
Vote Required
If a quorum is present and voting, the four nominees receiving the
highest number of votes will be elected to the Board of Directors. Votes
withheld from any nominee are counted for purposes of determining the presence
or absence of a quorum. Abstentions and shares held by brokers that are present
but not voted because the brokers were prohibited from exercising discretionary
authority ("broker non-votes") will be counted as present for the purposes of
determining if a quorum is present.
The Board of Directors unanimously recommends that the Shareholders
vote "FOR" each of the nominees listed below.
Nominees
The names of the nominees and certain information about them as of
April 21, 2000 are set forth below:
Name of Nominee Age Position with the Company Director Since
--------------- --- ------------------------- --------------
Richard Landry 43 Chief Executive Officer and 1992
Chairman of the Board
Michael Kaufman (2) 58 Director 1991
Greg Lahann (1) 41 Director 1990
Dirk Spiers (1) (2) 42 Director 2000
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(1) Member of the Audit Committee
(2) Member of the Compensation Committee
All directors hold office until the next annual meeting of shareholders
of HyperMedia and until their successors have been elected. Directors do not
receive any cash compensation for their service as our directors, but are
reimbursed for expenses incurred in connection with attending Board or committee
meetings. Pursuant to the 1993 Director Option Plan, each of our non-employee
directors receives one initial non-statutory stock option for 25,000 shares of
Common Stock and an additional non-statutory stock option grant for 5,000 shares
of Common Stock each year if he or she has been on the Board for at least six
months, provided such issuances are approved by the Board of Directors. These
options become exercisable cumulatively at the rate of 25 percent of the shares
subject to the option for every year after the date of grant, based on the Board
member's continued service. There is no family relationship between any director
or executive officer of HyperMedia.
Richard Landry joined us in January 1992 as our President and
Publisher; he also became a director of HyperMedia at that time. Mr. Landry
served as President and Publisher from 1992 until July, 1998. In July 1992, Mr.
Landry became our Chief Executive Officer. In February 1997, Mr. Landry became
the Chairman of the Board. From 1988 to 1991, Mr. Landry was Editor-in-Chief and
Associate Publisher of PC World, a publication of PCW Communications, Inc. From
1986 to 1988, Mr. Landry was Managing Editor and Editor of PC World.
Michael Kaufman became a director of HyperMedia in July 1991. Since
October 1987, he has been the President of MK Global Ventures, Palo Alto,
California, a venture capital firm specializing in early-stage
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and start-up financing of high technology companies. From August 1981 until
October 1987, Mr. Kaufman was a general partner of Oak Investment Partners, a
venture capital firm. Prior to August 1981, Mr. Kaufman was President and Chief
Operating Officer of Centronics Data Corporation, a manufacturer of computer
peripherals. Mr. Kaufman serves on the boards of directors of Asante
Technologies, Inc., a networking products company, Davox Corp., a
telecommunications company, DISC, an optical storage systems company, Human
Pheromone Sciences, Inc. a technology-based company and Syntellect, an
interactive company.
Greg Lahann became a director of the HyperMedia in August 1990. From
October 1987 until December 1993, he was the Chief Financial Officer of MK
Global Ventures, and since January 1990 he has been a General Partner of MK
Global Ventures II. From 1981 to 1987, Mr. Lahann was employed by Price
Waterhouse LLP, as a Certified Public Accountant, in various positions, the last
of which was as manager in the Audit Department..
Dirk Spiers became a director of HyperMedia in February 2000. In
January 2000 Mr. Spiers founded Agency3, a London based hi-tech advertising
agency, where he serves as Managing Director. Since 1999 Mr. Spiers has been a
founding partner and general manager of Conferenza, an online membership service
and Web-based information resource for the digital media community. From
September 1996 until December 1997 Mr. Spiers was vice president, product
development at Compressent Inc. In 1987 Mr. Spiers founded and was President
until 1996, of SMI Group, an international strategic marketing organization that
services information technology companies throughout the UK, Europe, and the
United States
Voting Agreement
MK Global and Richard Landry have entered into a Shareholder Voting
Agreement pursuant to which they have each agreed to vote the shares of stock
held by each of them to elect Richard Landry and a nominee of MK Global to our
Board of Directors. Pursuant to the Shareholder Voting Agreement, MK Global will
vote for nominee Richard Landry and Richard Landry will vote for nominees
Richard Landry and at least one of Michael Kaufman or Greg Lahann.
Board Meetings and Committees
Our Board of Directors held a total of 3 meetings during fiscal 1999.
No director attended fewer than 75% of the meetings of the Board of Directors
and committees thereof, if any, upon which such director served. The Board of
Directors has a Compensation Committee and an Audit Committee. The Board of
Directors has no nominating committee or any committee performing such
functions.
The Compensation Committee, which consisted of directors Michael
Kaufman and Greg Lahann at the end of fiscal 1999, met once during the fiscal
year. This Committee is responsible for determining salaries, incentives and
other forms of compensation for our directors and officers.
The Audit Committee, which consisted of directors Michael Kaufman and
Greg Lahann at the end of fiscal 1999, met once during the fiscal 1999. This
Committee is responsible for overseeing actions taken by our independent
auditors and reviews our internal financial controls.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consisted of the following directors during
fiscal 1999: Michael Kaufman and Greg Lahann. The Compensation Committee makes
recommendations to the Board of Directors concerning salaries and incentive
compensation for our directors and officers. Mr. Landry, our
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<PAGE>
Chief Executive, is not a member of the Compensation Committee and cannot vote
on matters decided by the Committee. He does participate in all discussions and
decisions regarding salaries and incentive compensation for all of our employees
of and consultants, except that Mr. Landry is excluded from discussions and
decisions regarding his own salary and incentive compensation.
MK Global Ventures, MK Global Ventures II and MK GVD Fund
(collectively, "MK Global") own approximately 37.6% of our outstanding Common
Stock and 100% of our outstanding Preferred Stock. Michael Kaufman, one of our
directors, is the General Partner of MK Global Ventures. Greg Lahann, one of our
directors, is a General Partner of MK Global Ventures II. MK Global and Richard
Landry have entered into a Shareholder Voting Agreement pursuant to which they
have each agreed to vote the shares of Common Stock held by each of them to
elect Richard Landry and a nominee of MK Global to our Board of Directors.
PROPOSAL TWO
APPROVAL OF THE AMENDMENT TO THE 1991 STOCK PLAN TO INCREASE THE NUMBER
OF SHARES RESERVED FOR ISSUANCE THEREUNDER TO 2,925,000.
General
We are seeking your approval of an amendment to the 1991 Stock Plan.
The proposal will increase the number of shares reserved for issuance under the
plan from 1,400,000 shares to 2,925,000 shares. The Board adopted an amendment
to increase the number of shares of common stock reserved for issuance under the
1991 Stock Plan on February 18, 2000, subject to your approval at the Annual
Meeting. The 1991 Stock Plan is attached as Appendix A to this Proxy Statement.
We propose to amend the 1991 Stock Plan to increase the number of
shares of common stock reserved for issuance under the 1991 Stock Plan by
1,525,000, from 1,400,000 to 2,925,000. As of April 21, 2000, of the 1,400,000
shares reserved for issuance under the 1991 Stock Plan, only 196,690 are
available for future grants. We believe that in order to attract, retain and
motivate officers, employees and non-employee consultants, the number of shares
available for issuance under the 1991 Stock Plan must be increased. While we
recognize the possible dilutive effect on our shareholders, we believe, on
balance, the incentive that is provided by the opportunity to participate in the
growth and earnings of HyperMedia through the granting of awards to acquire
HyperMedia common stock is important to our success and, accordingly, will
benefit HyperMedia and our shareholders. We believe it is in the best interests
of our shareholders to approve this amendment to the 1991 Stock Plan. If the
proposal is not approved by the shareholders, the 1991 Stock Plan will continue
with only 196,690 shares of common stock reserved for issuance thereunder.
Amended section 3. of the plan will read, in part, as follows:
"Stock Subject to the Plan. Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of shares which may be
optioned and sold under the Plan is 2,925,000 shares of Common Stock."
Vote Required and Recommendations of the Board of Directors
The affirmative vote of a majority of the votes cast at the Annual
Meeting on this proposal is required to approve this proposal to amend the 1991
Stock Plan to increase the number of shares reserved for issuance thereunder to
2,925,000. So, if you "ABSTAIN" from voting, it has the same effect as if you
voted "against" this proposal. Your broker is not entitled to vote on this
proposal unless it receives instructions from you. If your broker does not vote
your shares on this proposal, it will have the same effect as a vote "against"
this proposal.
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The Board of Directors unanimously recommends a vote "FOR" the
amendment of the 1991 Stock Plan.
Summary of the 1991 Stock Plan
We have summarized below certain key provisions of the 1991 Stock Plan.
Description of the Plan
The purpose of the 1991 Stock Plan is to attract and retain the best
available personnel for positions of substantial responsibility with HyperMedia,
to provide additional incentive to our employees (including officers and
employee-directors) and consultants and to promote the success of our business.
Options and stock purchase rights may be granted under the Plan. Options granted
under the Plan may be either "incentive stock options," as defined in Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
non-statutory stock options.
Administration
The Plan may generally be administered by the Board or the Committee
appointed by the Board (as applicable, the "Administrator").
Eligibility; Limitations
Non-statutory stock options and stock purchase rights may be granted
under the 1991 Plan to our employees and consultants and to employees and
consultants of any parent or subsidiary of HyperMedia. Incentive stock options
may be granted only to employees of HyperMedia and employees of any parent or
subsidiary of HyperMedia. The Administrator, in its discretion, selects the
employees and consultants to whom options and stock purchase rights may be
granted, the time or times at which such options and stock purchase rights shall
be granted, and the number of shares subject to each such grant. Approximately
35 people are currently eligible to be granted options or stock purchase rights
under the 1991 Stock Plan.
Terms and Conditions of Options
Each option is evidenced by a stock option agreement between us and the
optionee, and is subject to the following additional terms and conditions:
(a) Exercise Price: The Administrator determines the exercise price of
options at the time the options are granted. The exercise price of an incentive
stock option may not be less than 100% of the fair market value of the Common
Stock on the date such option is granted; provided, however, the exercise price
of an incentive stock option granted to a 10% shareholder may not be less than
110% of the fair market value of the Common Stock on the date such option is
granted. The exercise price of a non-statutory stock option may not be less than
85% of the fair market value of the Common Stock on the date such option is
granted; provided, however, the exercise price of a non-statutory stock option
granted to a 10% shareholder may not be less than 110% of the fair market value
of the Common Stock on the date such option is granted. The fair market value of
the Common Stock is generally determined by the Administrator.
(b) Exercise of Option; Form of Consideration: The Administrator
determines when options become exercisable; provided, however, that options
granted to individuals other than officers, directors and consultants must vest
at a rate of no less than 20% per year over five years from the date of grant.
The Administrator may, in its discretion, accelerate the vesting of any
outstanding option. Stock options granted
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under the Plan generally vest and become exercisable over four years. The means
of payment for shares issued upon exercise of an option is specified in each
option agreement. The Plan permits payment to be made by cash, check, promissory
note, other shares of our Common Stock (with some restrictions), cashless
exercises, a reduction in the amount of any HyperMedia liability to the
optionee, any other form of consideration permitted by applicable law, or any
combination thereof.
(c) Term of Option: The term of an incentive stock option may be no
more than ten (10) years from the date of grant; provided that in the case of an
incentive stock option granted to a 10% shareholder, the term of the option may
be no more than five (5) years from the date of grant. No option may be
exercised after the expiration of its term.
(d) Termination of Employment. If an optionee's employment or
consulting relationship terminates for any reason (other than death or
disability), then all options held by the optionee under the Plan expire on the
earlier of (i) the date set forth in his or her notice of grant or (ii) the
expiration date of such option. To the extent the option is exercisable at the
time of such termination, the optionee may exercise all or part of his or her
option at any time before termination.
(e) Death or Disability: If an optionee's employment or consulting
relationship terminates as a result of death or disability, then all options
held by such optionee under the Plan expire on the earlier of (i) 12 months from
the date of such termination or (ii) the expiration date of such option. The
optionee (or the optionee's estate or the person who acquires the right to
exercise the option by bequest or inheritance), may exercise all or part of the
option at any time before such expiration to the extent that the option was
exercisable at the time of such termination.
(g) Non-transferability of Options: Options granted under the Plan are
not transferable other than by will or the laws of descent and distribution, and
may be exercised during the optionee's lifetime only by the optionee.
(h) Other Provisions: The stock option agreement may contain other
terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator.
Stock Purchase Rights
In the case of Stock Purchase Rights, unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant us a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with us or any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to us. The repurchase option shall lapse at a rate determined by the
Administrator, but at a minimum rate of 20 percent per year.
Adjustments Upon Changes in Capitalization
In the event that our Common Stock changes by reason of any stock
split, reverse stock split, stock dividend, combination, reclassification or
other similar change in our capital structure effected without the receipt of
consideration, appropriate adjustments shall be made in the number and class of
shares of stock subject to the Plan, the number and class of shares of stock
subject to any option or stock purchase right outstanding under the Plan, and
the exercise price of any such outstanding option or stock purchase right. In
the event of a liquidation or dissolution, any unexercised options or stock
purchase rights will terminate. The Administrator may, in its discretion provide
that each optionee shall have the right to exercise all of the
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optionee's options and stock purchase rights, including those not otherwise
exercisable, until the date ten (10) days prior to the consummation of the
liquidation or dissolution. In the event of our merger with or into another
corporation or the sale of substantially all of our assets, each outstanding
option or stock purchase right shall be assumed or an equivalent option or right
substituted by the successor corporation. If the successor corporation refuses
to assume the options and stock purchase rights or to substitute substantially
equivalent options and stock purchase rights, the optionee shall have the right
to exercise the option or stock purchase right as to all the optioned stock,
including shares not otherwise exercisable. In such event, the Administrator
shall notify the optionee that the option or stock purchase right is fully
exercisable for fifteen (15) days from the date of such notice and that the
option or stock purchase right terminates upon expiration of such period.
Amendment and Termination of the Plan
The Board may amend, alter, suspend or terminate the Plan, or any part
thereof, at any time and for any reason. However, we shall obtain shareholder
approval for any amendment to the Plan to the extent necessary to comply with
Section 422 of the Code, or any similar rule or statute. No such action by our
Board or shareholders may alter or impair any option or stock purchase right
previously granted under the Plan without the written consent of the optionee.
Unless terminated earlier, the Plan shall terminate ten years from the date of
its approval by the shareholders or the Board, whichever is earlier.
Federal Income Tax Consequences
Incentive Stock Options: An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise may subject the optionee to the
alternative minimum tax. Upon a disposition of the shares more than two years
after grant of the option and one year after exercise of the option, any gain or
loss is treated as long-term capital gain or loss. If these holding periods are
not satisfied, the optionee recognizes ordinary income at the time of
disposition equal to the difference between the exercise price and the lower of
(i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. Any gain recognized on such a premature
disposition of the shares in excess of the amount treated as ordinary income is
treated as long-term or short-term capital gain, depending on the holding
period. A different rule for measuring ordinary income upon such a premature
disposition may apply if the optionee is also one of our officers, directors, or
10% shareholders. We are entitled to a deduction in the same amount as the
ordinary income recognized by the optionee.
Non-statutory Stock Options: An optionee does not recognize any taxable
income at the time he or she is granted a non-statutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by one of our
employees is subject to tax withholding by us. We are entitled to a deduction in
the same amount as the ordinary income recognized by the optionee. Upon a
disposition of such shares by the optionee, any difference between the sale
price and the optionee's exercise price, is treated as long-term or short-term
capital gain or loss, depending on the holding period.
Stock Purchase Rights: Stock purchase rights will generally be taxed in
the same manner as non-statutory stock options. However, restricted stock is
generally purchased upon the exercise of a stock purchase right. At the time of
purchase, restricted stock is subject to a "substantial risk of forfeiture
"within the meaning of Section 83 of the Code. As a result, the purchaser will
not recognize ordinary income at the time of purchase. Instead, the purchaser
will recognize ordinary income on the dates when the stock ceases to be subject
to a substantial risk of forfeiture. The stock will generally cease to be
subject to a substantial risk
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<PAGE>
of forfeiture when it is no longer subject to our right to repurchase the stock
upon the purchaser's termination of employment with us. At such times, the
purchaser will recognize ordinary income measured as the difference between the
purchase price and the fair market value of the stock on the date the stock is
no longer subject to a substantial risk of forfeiture.
The purchaser may accelerate to the date of purchase his or her
recognition of ordinary income, if any, and the beginning of any capital gain
holding period by timely filing an election pursuant to Section 83(b) of the
Code. In such event, the ordinary income recognized, if any, is measured as the
difference between the purchase price and the fair market value of the stock on
the date of purchase, and the capital gain holding period commences on such
date. The ordinary income recognized by a purchaser who is an employee will be
subject to tax withholding by us
The foregoing is only a summary of the effect of federal income
taxation upon optionees, holders of stock purchase rights, and us with respect
to the grant and exercise of options and stock purchase rights under the Plan.
It does not purport to be complete, and does not discuss the tax consequences
under the provisions of the income tax laws of any municipality, state or
foreign country in which the employee or consultant may reside or consequences
under tax laws other than income tax laws.
Participation in the 1991 Stock Plan
Please see "Executive Compensation and Other Matters - Executive
Compensation -- Option Grants in Fiscal 1999" for information with respect to
the grant of options to the Named Executive officers during fiscal 1999. During
fiscal 1999, all other employees as a group were granted options to purchase
488,500 shares pursuant to the 1991 Stock Plan.
PROPOSAL THREE
APPROVAL OF AN AMENDMENT TO THE 1993 DIRECTOR OPTION PLAN TO INCREASE
THE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER TO 350,000
General
We are seeking your approval of an amendment to the 1993 Director
Option Plan. The proposal will increase the number of shares reserved for
issuance under the plan from 250,000 shares to 350,000 shares. The Board adopted
this amendment to increase the number of shares of common stock reserved for
issuance under the 1993 Director Option Plan on February 18, 2000 subject to
your approval at the Annual Meeting. The 1993 Director Option Plan is attached
as Appendix B to this Proxy Statement.
As of April 21, 2000, of the 250,000 shares reserved for issuance under
the 1993 Director Option Plan, only 115,000 are available for future grants. We
believe that in order to attract, retain and motivate non-employee Directors,
the number of shares available for issuance under the 1993 Director Option Plan
must be increased. While we recognize the possible dilutive effect on our
shareholders, we believe, on balance, the incentive that is provided by the
opportunity to participate in the growth and earnings of HyperMedia through the
granting of awards to acquire HyperMedia common stock is important to our
success and, accordingly, will benefit HyperMedia and our shareholders. We
believe it is in the best interests of our shareholders to approve this
amendment to the 1993 Director Option Plan. If the proposal is not approved by
the shareholders, the 1993 Directors' Option Plan will continue with only
250,000 shares of common stock reserved for issuance thereunder. Amended section
3. of the 1993 Director Option Plan will read, in part, as follows:
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<PAGE>
"Stock Subject to the Plan. Subject to the provisions of
Section 10 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan, is 350,000 Shares (the "Pool") of Common
Stock."
Vote Required and Recommendations of the Board of Directors
The affirmative vote of a majority of the votes cast at the Annual
Meeting on this proposal is required to approve this proposal to amend the 1993
Director Option Plan to increase the number of shares reserved for issuance
thereunder to 350,000. So, if you "ABSTAIN" from voting, it has the same effect
as if you voted "against" this proposal. Your broker is not entitled to vote on
this proposal unless it receives instructions from you. If your broker does not
vote your shares on this proposal, it will have the same effect as a vote
"against" this proposal.
The Board of Directors unanimously recommends a vote "FOR" the
amendment of the 1993 Director Option Plan.
PROPOSAL FOUR
APPROVAL OF AN AMENDMENT TO THE 1993 DIRECTOR OPTION PLAN TO CHANGE THE
INITIAL GRANT TO 10,000 SHARES FULLY VESTED AND THE ANNUAL GRANT TO 10,000
SHARES FULLY VESTED
General
We are seeking your approval of an amendment to the 1993 Director
Option Plan. The amendment will change the way option grants are issued to
non-employee Directors. The Board adopted this amendment to change the amount of
the initial grant given to new directors and the amount of the annual grant
given to serving directors and the vesting schedule for both grants under the
1993 Director Option Plan on February 18, 2000, subject to your approval at the
Annual Meeting. The 1993 Director Option Plan is attached as Appendix B to this
Proxy Statement.
We propose to amend the 1993 Director Option Plan to change the amount
of the initial grant given to new non-employee directors from 25,000 shares to
10,000 shares and to change the amount of the annual grants from 5,000 shares to
10,000. We, also propose to change the vesting schedule for both the initial
grant and the annual grants from 25 percent per year to grants that are fully
vested on the date of the grant. We believe that in order to attract, retain and
motivate non-employee Directors, we need to change the amount of the directors'
grants and their vesting schedule. While we recognize the possible dilutive
effect on our shareholders, we believe, on balance, the incentive that is
provided by the opportunity to participate in the growth and earnings of
HyperMedia through the granting of awards to acquire HyperMedia common stock is
important to our success and, accordingly, will benefit HyperMedia and our
shareholders. We believe it is in the best interests of our shareholders to
approve this amendment to the 1993 Plan. If the proposal is not approved by the
shareholders, the 1993 Director Option Plan will continue to make initial grants
to new directors of 25,000 shares and annual grants of 5,000 shares.
Additionally both the initial grants and annual grants will continue to vest at
the rate of 25 percent per year. Amended sections of the plan will read, in
part, as follows:
"4.(a)(ii) Each Outside Director shall be automatically granted an
Option to purchase 10,000 Shares (the "First Option") on the date on which the
later of the following events occurs: (A) the effective date of this Plan, as
determined in accordance with Section 6 hereof, or (B) the date on which
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<PAGE>
such person first becomes a Director, whether through election by the
stockholders of the Company or appointment by the Board to fill a vacancy.
4.(a)(iii) After the First Option has been granted to an Outside
Director, such Outside Director shall thereafter be automatically granted an
Option to purchase 10,000 Shares (a "Subsequent Option") on June 1 of each year,
if on such date, he shall have served on the Board for at least six (6) months.
4.(a)(v)(D) the First Option shall become exercisable on the date of
the grant.
4.(a)(vi)(D) the Subsequent Option shall become exercisable on the date
of the grant."
Vote Required and Recommendations of the Board of Directors
The affirmative vote of a majority of the votes cast at the Annual
Meeting on this proposal is required to approve this proposal to amend the 1993
Director Option Plan to change the initial grant to 10,000 shares fully vested
and the annual grant to 10,000 shares fully vested. So, if you "ABSTAIN" from
voting, it has the same effect as if you voted "against" this proposal. Your
broker is not entitled to vote on this proposal unless it receives instructions
from you. If your broker does not vote your shares on this proposal, it will
have the same effect as a vote "against" this proposal.
The Board of Directors unanimously recommends a vote "FOR" the
amendment of the 1993 Director Option Plan.
Summary of the 1993 Director Option Plan
We have summarized below certain key provisions of the 1993 Director
Option Plan.
Purpose
The purposes of the 1993 Director Option Plan is to attract and retain
the best available individuals for service as our directors, to provide
additional incentive to our directors and to encourage their continued service
on our Board. The 1993 Director Option Plan, and the right of directors to
receive options thereunder, upon its initial adoption was intended to qualify as
a plan having "disinterested administration" under Rule 16b-3 pursuant to the
Exchange Act.
Administration
The 1993 Director Option Plan is administered by the Board of
Directors, who receive no additional compensation for such service. All grants
of options under the 1993 Director Option Plan are automatic and non
discretionary pursuant to the terms of the 1993 Director Option Plan. All
questions of interpretation or application of the 1993 Director Option Plan are
determined by the Board, whose decisions are final and binding upon all
participants.
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<PAGE>
Eligibility
Options under the 1993 Director Option Plan may be granted only to our
non-employee directors. As of the Annual Meeting, we will have three
non-employee directors, all of whom have been nominated to serve as directors
for the 2000 fiscal year.
Participation In The Plan
Participation in the 1993 Director Option Plan provides for grants of
options to be made in two ways: (1) Each non-employee director is automatically
granted a non-statutory option to purchase 25,000 shares of our Common Stock
upon the date on which such individual first becomes a director, whether through
election by our shareholders or by appointment by the Board of Directors in
order to fill a vacancy; (2) Each non-employee director who has served at least
six months and who continues to serve on the Board on such date receives, on
June 1 of each year, a non-statutory option for 5,000 shares.
Terms of Options
Each option granted under the 1993 Director Option Plan is evidenced by
a written stock option agreement between us and the optionee. Options are
generally subject to the terms and conditions listed below:
(a) Exercise of the Option: Options granted under the 1993 Director
Option Plan become exercisable at the rate of 25 percent per year. Options
granted under the 1993 Director Option Plan have a term of ten years unless
terminated sooner upon termination of the optionee's status as a director or
otherwise pursuant to the 1993 Director Option Plan. An option is exercised upon
written notice of exercise to us specifying the number of full shares of Common
Stock to be purchased and tender of payment of the purchase price. Payment for
shares purchased upon exercise of an option shall be in such form of
consideration as is authorized by the 1993 Director Option Plan.
(b) Exercise Price: The per share exercise price of options granted
under the 1993 Director Option Plan is 100% of the fair market value per share
of our Common Stock on the date of grant of the option. The fair market value is
determined by the closing price on OTC:BB Market on the date of grant.
(c) Termination of Employment: If an optionee ceases to serve as our
director, he may, but only within three months after the date he ceases to be a
director, exercise his option to the extent that he was entitled to exercise it
at the date of such termination. To the extent that he was not entitled to
exercise the option on the date of such termination, or if he does not exercise
such option within the time specified, the option terminates.
(d) Disability: In the event that a director is unable to continue his
service as such with us as a result of his total and permanent disability (as
defined in Section 22(e)(3) of the Tax Code), he may, but only within twelve
months from the date of termination, exercise his option to the extent he was
entitled to exercise his option at the date of such termination. To the extent
that the option is not exercised within such twelve-month period, the option
terminates.
(e) Death: If an optionee should die while serving as a director, the
option may be exercised at any time within twelve months after death by the
optionee's estate to the extent the option would have been exercisable by the
optionee on the date of death. To the extent that the option is not exercised
within such twelve-month period, the option terminates.
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(f) Liquidation or Acquisition: In the event of our proposed
liquidation or dissolution, options granted under the 1993 Director Option Plan
shall terminate, to the extent they have not previously been exercised. In the
event of a proposed sale of all or substantially all of our assets, or our
merger with or into another corporation, options shall be assumed or equivalent
options shall be substituted by such successor corporation or its parent or
subsidiaries. If such successor corporation refuses to assume the options or to
substitute equivalent options, then the options will terminate on the date of
merger or sale.
(g) Non-transferability of Options: Options granted pursuant to the
1993 Director Option Plan may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
optionee, only by the optionee.
Options Outstanding
As of the Record Date, none of the options to purchase shares have been
exercised, options to purchase an aggregate of 135,000 shares held by three
optionees were outstanding, and 115,000 shares remained available for future
grants under the 1993 Director Option Plan.
Capital Changes
In the event of any changes made in our capitalization which result in
a change in the number of issued shares of Common Stock without receipt of
consideration, appropriate adjustments shall be made in the exercise price and
in the number of shares subject to options outstanding under the 1993 Director
Option Plan, as well as in the number of shares reserved for issuance under the
1993 Director Option Plan.
Amendment and Termination of the Plan
The Board may at any time amend, alter, suspend or discontinue the 1993 Director
Option Plan, but no amendment, alteration, suspension or discontinuation shall
be made which would impair the rights of any optionee under any grant
theretofore made, without such optionee's consent. In addition, to the extent
necessary and desirable to comply with applicable law, we shall obtain
shareholder approval of any amendment to the 1993 Director Option Plan in such a
manner and to such a degree as required.
Federal Income Tax Consequences
Options granted pursuant to the 1993 Director Option Plan are
non-statutory options and will not qualify for any special tax benefits to the
optionee. An optionee will not recognize any taxable income at the time the
option is granted. Upon exercise of the option, the optionee will generally
recognize ordinary income for federal tax purposes measured by the excess, if
any, of the fair market value of the shares over the exercise price. Because
shares held by directors might be subject to restrictions on resale under
Section 16(b) of the Securities Exchange Act of 1934, as amended, the date of
taxation may be deferred unless the optionee files an election with the Internal
Revenue Service pursuant to Section 83(b) of the Tax Code within thirty days
after the date of exercise.
Upon a disposition of shares acquired pursuant to an option under the
1993 Director Option Plan, any difference between the sales price and the
exercise price, will be treated as long-term or short-term capital gain or loss
depending on the holding period.
We will be entitled to a tax deduction in the amount and at the time
that the optionee recognizes ordinary income with respect to shares acquired
upon exercise of an option under the 1993 Director Option
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<PAGE>
Plan. We are not required to withhold any amount for tax purposes on any such
income included by the optionee.
The foregoing is only a summary of the effect of federal income
taxation upon optionees and us with respect to the grant and exercise of options
under the 1993 Director Option Plan. It does not purport to be complete, and
does not discuss the tax consequences under provisions of the income tax laws of
any municipality, state or foreign country in which the participant may reside
or the consequences under tax laws other than income tax laws.
Participation in the 1993 Director Option Plan
We are unable to predict the amount of benefits that will be received
or allocated to any particular participant under the 1993 Director Option Plan.
The following table sets forth the dollar amount and the number of shares that
would have been granted under the 1993 Director Option Plan during the last
fiscal year to (i) each of our Named Executive Officers, (ii) all current
executive officers as a group, (iii) all current directors who are not executive
officers as a group and (iv) all employees other than executive officers as a
group.
1993 Director Option Plan
---------------------------------
Shares Subject Dollar Value
to Options of Option
Name And Position Granted Grants (2) ($)
----------------- ------- --------------
Richard Landry -- --
Chief Executive Officer and
Chairman of the Board
John Topping -- --
President and Publisher
Kenneth Klein -- --
Vice President, Finance and Administration,
Chief Financial Officer and Secretary
All current executive officers as a group -- --
(3 persons)
All current non-executive directors as a group 30,000(1) $9,000
(3 persons)
All other employees as a group -- --
(excluding current executive officer)
- ----------------------
(1) Reflects the number of options that would have been granted to the current
directors who are not executive officers, if all such directors were
directors during fiscal 1999.
(2) The dollar value of options granted under the 1993 Director Option Plan is
computed by multiplying the number of shares subject to the option times
the exercise price of the option on the date that such option would have
been granted. All options that would have been granted under the 1993
Director Option Plan would have been granted at an exercise price equal to
the fair market value of the Common Stock on the date of the grant.
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PROPOSAL FIVE
APPROVAL OF AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE THE
AUTHORIZED NUMBER OF PREFERRED STOCK SHARES TO 20,064,516.
General
We are seeking your approval of an amendment to our Articles of
Incorporation. The proposal will increase the number of Preferred Stock shares
that we are authorized to issue from 10,064,516 to 20,064,516. The Board adopted
this amendment to the Articles of Incorporation to increase the number of
authorized Preferred Shares on February 18, 2000, subject to your approval at
the Annual Meeting.
We propose to amend Article Three of our Articles of Incorporation to
increase the number of authorized Preferred Shares from 10,064,516 to
20,064,516. As of April 21, 2000 we have issued 8,512,191 shares of Preferred
Stock. We have only 1,552,325 authorized but unissued Preferred Shares available
for future financing. The Additional Preferred Stock may be issued by the Board
of Directors in one or more series with such designations, powers, preferences
and relative participating, optional and other rights, including without
limitation, dividend rights, conversion rights, voting rights, redemption terms
and liquidation preferences, and such qualifications and limitations as the
Board of Directors may determine. No additional common shareholder approval
would be required to set the terms of or for issuance of the Preferred Stock.
Issuance of additional shares of Preferred Stock could effect the
rights of our Common Stock shareholders, if the Preferred Stock, when issued,
has rights and preferences senior to our Common Stock. The proposed amendment
does not change the par value of the Preferred Stock. If adopted, the amendment
will become effective upon the filing of a Certificate of Amendment to our
Articles of Incorporation with the Secretary of the State of California. Amended
Article III. of the Articles of Incorporation will read, in part, as follows:
"The total number of shares of Preferred Stock this Corporation shall
have authority to issue is 20,064,516, with a par value of $0.001 per share."
The purpose for increasing the amount of authorized Preferred Stock
Shares is to provide us with additional shares of Preferred Stock that could be
issued for corporate purposes without further shareholder approval unless
required by applicable law or regulation. We currently expect that the reasons
for issuing additional Preferred Stock will include effecting acquisitions of
other businesses or properties, establishing strategic relationships with other
companies and securing additional financing for our operations. The Board of
Directors believes that it is in our best interest to have the additional
Preferred Shares authorized at this time to alleviate the expense and delay of
holding a special meeting of Shareholders to authorize additional shares of
Preferred Stock when the need arises.
Vote Required and Recommendations of the Board of Directors
The affirmative vote of a majority of the outstanding shares of each
class or series of security entitled to vote is required to approve this
proposal to amend the Articles of Incorporation to increase the authorized
number of preferred stock to 20,064,516. So, if you "ABSTAIN" from voting, it
has the same effect as if you voted "against" this proposal. Your broker is not
entitled to vote on this proposal unless it receives instructions from you. If
your broker does not vote your shares on this proposal, it will have the same
effect as a vote "against" this proposal.
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The Board of Directors unanimously recommends a vote "FOR" the
amendment of the Articles of Incorporation.
PROPOSAL SIX
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP,
independent public accountants, to audit our financial statements for the fiscal
year ending December 31, 2000, and recommends that shareholders vote for
ratification of such appointment. In the event of a negative vote on
ratification, the Board of Directors will reconsider its selection.
PricewaterhouseCoopers LLP has audited our financial statements
annually since 1991. Representatives of PricewaterhouseCoopers LLP are expected
to be present at the meeting with the opportunity to make a statement if they
desire to do so and are expected to be available to respond to appropriate
questions.
Required Vote
The affirmative vote of the holders of a majority of the shares of
HyperMedia Common Stock voting in person or by proxy on this proposal at the
annual meeting is required to approve the appointment of the independent
auditors.
The Board of Directors unanimously recommends a vote "FOR" the
ratification of the appointment of PricewaterhouseCoopers LLP as independent
accountants.
EXECUTIVE COMPENSATION AND OTHER MATTERS
Executive Compensation
The following table sets forth the compensation paid by us during the
fiscal years ended December 31, 1999, 1998 and 1997 to the Chief Executive
Officer, President, and Chief Financial Officer (the "Named Executive
Officers"). No other executive officer of HyperMedia received total annual
salary and bonus in 1999 in excess of $100,000.
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Summary Compensation Table
Long-Term
Compensation
Awards
Annual Compensation Securities
-------------------- Underlying
Name and Principal Position Year Salary($) Options
--------------------------- ---- --------- -------
Richard Landry ......................... 1999 $150,000 100,000
Chief Executive Officer and 1998 150,000 100,000
Chairman of the Board 1997 150,000 --
John Topping ........................... 1999 $186,455 80,000
President and Publisher 1998 108,991(1) 120,000
1997 -- --
Kenneth Klein .......................... 1999 $110,000 85,000
Vice President, Finance and 1998 -- --
Administration, Chief Financial 1997 -- --
Officer and Secretary
- -----------------
(1) Mr. Topping joined us in July 1998. 1998 salary amount is based on an
annualized salary of $150,000, and also reflects a guaranteed commission
payment of $35,625.
<TABLE>
Option Grants in Fiscal 1999
<CAPTION>
Potential Realizable
Number of Value at Assumed
Securities % of Total Annual Rates of Stock
Underlying Options Exercise Price Appreciation for
Options Granted to Price Option Term(3)
Granted Employees in ------- Expiration -----------------------
Name (#)(1) Fiscal Year(2) ($/sh.) Date 5% 10%
---- ------ -------------- ------- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Richard Landry ..... 100,000 21% 0.375 8/30/09 $61,084 $97,264
John Topping ....... 30,000 6% 0.281 1/04/09 $13,733 $21,865
50,000 11% 0.375 8/30/09 $30,542 $48,634
Kenneth Klein ...... 80,000 17% 0.281 1/04/09 $36,618 $58,307
5,000 1% 0.375 8/30/09 $ 3,056 $ 4,865
<FN>
- ------------------
(1) These options were granted under our 1991Stock Plan (the "Option Plan").
Options granted under the Option Plan generally have a ten-year term.
Generally, 25 percent of the grant becomes exercisable 12 months after the
date of grant. The balance of the grant then vests monthly, with full
exercisability occurring on the fourth anniversary date. The per share
exercise price is the fair market value of our Common Stock on the date of
grant. Unless otherwise determined by the Board of Directors, the Option
Plan provides for the automatic acceleration of vesting of all outstanding
options (such that they become exercisable in full) in the event of a
"change in control," as defined in the Option Plan.
(2) Based on options to purchase an aggregate of shares granted to employees
during 1999.
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<PAGE>
(3) Potential realizable value is based on an assumption that the stock price
appreciates at the annual rate shown (compounded annually) from the date of
grant until the end of the ten-year option term. These numbers are
calculated based on the requirements promulgated by the SEC and do not
reflect our estimate of future stock price.
</FN>
</TABLE>
Aggregated 1999 Fiscal Year-End Option Values
The following table provides information on the value of unexercised
options held by the Named Executive Officers at December 31, 1999.
Value of Unexercised
Number of Securities ---------------------------
Underlying Unexercised Options In-the-Money Options at
at December 31, 1999 December 31, 1999
---------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
Richard Landry.... 242,454 175,590 $85,765 $117,851
John Topping...... 42,500 157,500 42,500 104,689
Kenneth Klein..... -- 85,000 -- 24,379
Limitation of Liability and Indemnification Matters
Pursuant to the California Corporations Code ("California Law"), we
have adopted provisions in our Amended and Restated Articles of Incorporation
that eliminate the personal liability of our directors and officers and our
shareholders for monetary damages for breach of the directors' fiduciary duties
in certain circumstances. Our Bylaws require us to indemnify our directors,
officers, employees and other agents to the fullest extent permitted by law.
We have entered into indemnification agreements with each of our
current directors and officers that provide for indemnification to the fullest
extent permitted by California Law, including circumstances in which
indemnification and the advancement of expenses are discretionary under
California Law. We believe that the limitation of liability provisions in its
Amended and Restated Articles of Incorporation and the indemnification
agreements will enhance our ability to continue to attract and retain qualified
individuals to serve as directors and officers.
There is no pending litigation or proceeding involving any of our
directors, officers or employees to which the indemnification agreements would
apply.
Compensation of Directors
Directors who are non-employees are automatically granted an option to
purchase (i) 25,000 shares of our Common Stock at a purchase price equal to the
fair market value of such shares on the date of grant, upon becoming a director
and (ii) an additional 5,000 shares of our Common Stock on June 1 of each year
if on such date he has served on the Board for at least six months. Such
directors do not receive any other compensation for their services as members of
the Board of Directors.
Report of the Compensation Committee of the Board of Directors on its
Compensation Policies
The following is the report of the Compensation Committee of the Board
of Directors (the "Compensation Committee") describing compensation policies and
rationales applicable to our executive officers with respect to the compensation
paid to such executive officers for the fiscal year ended December 31, 1999. The
information contained in such report shall not be deemed to be "soliciting
material"
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<PAGE>
or to be "filed" with the Securities and Exchange Commission, nor shall such
information be incorporated by reference into any future filing under the
Securities Act or Exchange Act, except to the extent that we specifically
incorporate it by reference into such filing.
General
The Compensation Committee is responsible for setting compensation
levels for our executive officers. All decisions by the Compensation Committee
are reviewed by the entire Board of Directors.
The Committee determines annual compensation levels for executive
officers, including the Chief Executive Officer, and compensation levels which
may be implemented from time to time based primarily on its review and analysis
of the following factors: (1) the responsibilities of the position, (2) the
performance of the individual and his or her general experience and
qualifications, (3) our overall financial performance (including return on
equity, levels of general and administrative expense and budget variances) for
the previous year and the contributions to such performance measures by the
individual or his or her department, (4) the officer's total compensation during
the previous year, (5) compensation levels that comparable companies in similar
industries pay, (6) the officer's length of service with us, and (7) the
officer's effectiveness in dealing with external and internal audiences. In
addition, the Committee receives the recommendations of the Chief Executive
Officer with respect to the compensation of other executive officers, which the
Committee reviews in light of the above factors.
In fiscal 1999, the Compensation Committee determined the salaries of
Richard Landry, Chief Executive Officer, John Topping, President and Publisher
and Kenneth Klein, Vice President, Finance and Administration, Chief Financial
Officer and Secretary. The Compensation Committee also reviewed and approved
employment compensation matters for other management personnel. We formed the
Compensation Committee in October 1993. It is comprised of two non-employee
directors. The Compensation Committee met once during fiscal 1999.
Overview and Policies for 2000
The goals of the executive compensation program are to attract,
motivate, reward and retain the key executive talent necessary to achieve our
business objectives and contribute to our long-term success. The Compensation
Committee currently uses salary and stock options to meet these goals.
In fiscal 1999, the Compensation Committee reviewed the base salaries
of our executive officers by evaluating each executive's scope of
responsibility, prior experience and salary history, and also took into account
the salaries for similar positions at comparable companies. In reviewing the
base salaries, the Compensation Committee focused on each executive's prior
performance with us and expected contribution to our future success. The
Compensation Committee will continue to perform this role in 2000.
We provide long-term incentives to executive officers through our 1991
Stock Plan. The purpose of the 1991 Stock Plan is to attract and retain the best
employee talent available and to create a direct link between compensation and
our long-term performance. In general, the 1991 Stock Plan incorporates
four-year vesting periods to encourage employees to remain with us. The size of
each option grant is based on the recipient's position and tenure with us, the
recipient's past performance, and the size of previous stock option grants,
primarily weighted toward the recipient's position.
The compensation for Richard Landry, John Topping and Kenneth Klein in
1999 was approved by the Compensation Committee.
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<PAGE>
Summary
The Compensation Committee believes that our compensation policies as
practiced to date have been successful in attracting and retaining qualified
employees and in linking compensation directly to corporate performance relative
to our goals. Our compensation policies will evolve over time as we move to
attain the near-term goals we have set for ourselves while maintaining our focus
on building long-term shareholder value.
Greg Lahann
Michael Kaufman
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<PAGE>
Performance Graph
Set forth below is a graph comparing the annual percentage change in
the cumulative return to the shareholders of our Common Stock with the
cumulative return of the Nasdaq U.S. Index and the Standard & Poor's Publishing
(Newspapers) Index for the period commencing December 31, 1994 and ending on
December 31, 1999. The information contained in the performance graph shall not
be deemed to be "soliciting material" or to be "filed" with the Securities and
Exchange Commission, nor shall such information be incorporated by reference
into any future filing under the Securities Act or Exchange Act, except to the
extent that we specifically incorporate it by reference into such filing.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
Cummulative Total Return
-----------------------------------
12/94 12/95 12/96 12/97 12/98 12/99
HYPERMEDIA COMMUNICATIONS, INC. 100 65 28 20 2 24
NASDAQ STOCK MARKET (U.S.) 100 141 174 213 300 542
S&P PUBLISHING (NEWSPAPERS) 100 126 160 261 270 371
(1) The graph assumes that $100 was invested on December 31, 1994 in the Common
Stock and in each Index, and that all dividends were reinvested. No
dividends have been declared or paid on our Common Stock. Shareholder
returns over the indicated period should not be considered indicative of
future shareholder returns.
(2) We operate on a 52-week fiscal year which ended on December 31, 1999.
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<PAGE>
Certain Relationships and Related Transactions.
We have entered into a financing arrangement with MK Global Ventures,
in association with its MK GVD Fund. MK Global held approximately 83% of the
outstanding shares of the common stock of HyperMedia, on an as converted basis,
as of April 21, 2000. At December 31, 1999, we had $4,127,000 in loans
outstanding to MK Global Ventures, in association with its MK GVD Fund. These
borrowings accrue interest at a rate of 10% per annum and are secured by the
assets of the company.
Interests of Certain Persons in Matters to be Acted Upon
Each of the three current non-employee directors of the Company will
annually be granted additional options to purchase 5,000 shares of the Company's
common stock if proposal number four is approved. If proposal number four is
approved, non-employee directors of the Company will annually be granted options
to purchase a total of 10,000 shares of the Company's common stock. Currently
non-employee directors are annually granted options to purchase a total of 5,000
shares of the Company's common stock. Although Richard Landry serves on our
Board of Directors, since he is Chief Executive Officer of the Company he is not
eligible for non-employee directors' option grants.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires our executive officers and directors, and persons who own more
than ten percent of a registered class of our equity securities to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC") and the National Association of Securities Dealers, Inc.
Executive officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish us with copies of all Section 16(a) forms
they file. Based solely in its review of the copies of such forms received by
us, or written representations from certain reporting persons, we believe that,
during fiscal 2000, all reporting persons complied with Section 16(a) filing
requirements applicable to them.
OTHER MATTERS
We know of no other matters to be submitted at the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Board of Directors may recommend.
THE BOARD OF DIRECTORS
Dated: April 28, 2000
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<PAGE>
APPENDIX A
HYPERMEDIA COMMUNICATIONS, INC.
1991 STOCK PLAN
(As Amended)
1. Purposes of the Plan. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder. Stock purchase rights may also be
granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means the a committee of directors appointed
by the Board of Directors in accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means HyperMedia Communications, Inc., a
California corporation.
(h) "Consultant" means any person, including an advisor, who
is engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not; provided that if and in the event the
Company registers any class of any equity security pursuant to the Exchange Act,
the term Consultant shall thereafter not include directors who are not
compensated for their services or are paid only a director's fee by the Company.
(i) "Continuous Status as an Employee" means the absence of
any interruption or termination of the employment relationship by the Company or
any Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other
leave of absence approved by the Board, provided that such leave is for a period
of not more than ninety (90) days, unless reemployment upon the expiration of
such
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<PAGE>
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) in the case of
transfers between locations of the Company or between the Company, its
Subsidiaries or its successor.
(j) "Employee" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(l) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of determination;
or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(m) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(n) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
(o) "Option" means a stock option granted pursuant to the
Plan.
(p) "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.
(q) "Optionee" means an Employee or Consultant who receives an
Option or Stock Purchase Right.
(r) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(s) "Plan" means this 1991 Stock Plan.
(t) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.
3
<PAGE>
(u) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(v) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the means a share of the Common Stock, as adjusted
in accordance with Section 13 of the Plan.
(w) "Stock Purchase Right" shall mean a right, other than
Option, to purchase Common Stock pursuant to the Plan.
(x) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares, which may be optioned and
sold under the Plan, is 2,925,000 Shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of
Employees and/or Consultants.
(ii) Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iv) Other Administration. Other than as provided
above, the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common
Stock;
(ii) to select the Employees and Consultants to whom
Options and Stock Purchase Rights may from time to time be granted hereunder;
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<PAGE>
(iii) to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof, are granted hereunder;
(iv) to determine the number of Shares of Common
Stock to be covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder
(including, but not limited to, the rate of vesting of any Option, the per Share
price and any restriction or limitation or waiver of forfeiture restrictions
regarding any Option or other award and/or the Shares of Common Stock relating
thereto, based in each case on such factors as the Administrator shall
determine, in its sole discretion);
(vii) to determine whether and under what
circumstances an Option or Stock Purchase Right may be settled in cash under
subsection 9(e) instead of Common Stock;
(viii) to determine whether, to what extent and under
what circumstances Common Stock and other amounts payable with respect to an
award under this Plan shall be deferred either automatically or at the election
of the participant (including providing for and determining the amount, if any,
of any deemed earnings on any deferred amount during any deferral period);
(ix) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted; and
(x) to determine the terms and restrictions
applicable to Stock Purchase Rights and the Restricted Stock purchased by
exercising such Stock Purchase Rights.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.
5. Eligibility.
(a) Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee or Consultant who has been granted an Option or
Stock Purchase Right may, if he is otherwise eligible, be granted additional
Options or Stock Purchase Rights.
(b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of the Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options
shall be taken into account in the order in which they were granted, and the
Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.
5
<PAGE>
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time, with or
without cause.
(e) The following limitations shall apply to grants of Options
and Stock Purchase Rights to Employees:
(i) No Employee shall be granted, in any fiscal year
of the Company, Options and Stock Purchase Rights to purchase more than 200,000
Shares.
(ii) The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.
(iii) If an Option or Stock Purchase Right is
cancelled (other than in connection with a transaction described in Section 13,
the cancelled Option or Stock Purchase Right will be counted against the limit
set forth in Section 5(e)(i). For this purpose, if the exercise price of an
Option or Stock Purchase Right is reduced, the transaction will be treated as a
cancellation of the Option or Stock Purchase Right and the grant of a new Option
or Stock Purchase Right.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 15 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the written option agreement; provided, however, that in the case of an
Incentive Stock Option, the term shall be no more than ten (10) years from the
date of grant thereof or such shorter term as may be provided in the written
option agreement. However, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Incentive Stock Option
shall be five (5) years from the date of grant thereof or such shorter term as
may be provided in the written option agreement.
8. Option Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time
of the grant of such Incentive Stock Option, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of the grant.
(B) granted to any other Employee, the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
6
<PAGE>
(A) granted to an Employee or Consultant
who, at the time of grant of such Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.
(B) granted to any other Employee or
Consultant, the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price other than as required above pursuant to
a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an option either have been owned by the Optionee for
more than six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain from the
total number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (6) delivery
of a properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price, (7) by delivering an irrevocable
subscription agreement for the Shares which irrevocably obligates the option
holder to take and pay for the Shares not more than twelve months after the date
of delivery of the subscription agreement, (8) any combination of the foregoing
methods of payment, or (9) such other consideration and method of payment for
the issuance of Shares to the extent permitted under Applicable Laws. In making
its determination as to the type of consideration to accept, the Board shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company (Section 315(b) of the California Corporation law).
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms hereof at
such times and under such conditions as determined by the Administrator and set
forth in the written option agreement. Except in the case of Options granted to
officers, directors and Consultants, Options shall become exercisable at a rate
of no less than 20% per year over five (5) years from the date the Options are
granted.
An Option may not be exercised for a fraction of a
Share.
An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Administrator,
consist of any consideration and method of payment allowable under Section 8(b)
of the Plan. Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company) of
the stock certificate
7
<PAGE>
evidencing such Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares, which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.
(b) Termination of Employment. In the event of termination of
an Optionee's consulting relationship or Continuous Status as an Employee with
the Company (as the case may be), such Optionee may, but only within three
months (or such other period of time (of at least thirty (30) days) as is
determined by the Administrator, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the Option and not
exceeding three months after the date of such termination (but in no event later
than the expiration date of the term of such Option as set forth in the option
agreement), exercise his Option to the extent that Optionee was entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of such termination, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of an Optionee's consulting
relationship or Continuous Status as an Employee as a result of his disability,
Optionee may, but only within twelve (12) months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the option agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination; provided,
however, that if such disability is not a "disability" as such term is defined
in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall automatically convert to a Nonstatutory Stock
Option on the day three months and one day following such termination. To the
extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised, at any time within twelve (12) months
following the date of death (but in no event later than the expiration date of
the term of such Option as set forth in the option agreement), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate.
(e) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously granted, based
on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
10. Non-Transferability of Options and Stock Purchase Rights. The
Option or Stock Purchase Right may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in
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any manner other than by will or by the laws of descent or distribution and may
be exercised, during the lifetime of the Optionee, only by the Optionee.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid, and the time within
which such person must accept such offer. The terms of the offer shall comply in
all respects with Section 260.140.42 of Title 10 of the California Code of
Regulations. The offer shall be accepted by execution of a Restricted Stock
purchase agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine. Except with respect to Shares purchased by
officers, directors and Consultants, the repurchase option shall in no case
lapse at a rate of less than 20% per year over five (5) years from the date of
purchase.
(c) Other Provisions. The Restricted Stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 13 of
the Plan.
12. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by Optionees
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable
13. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of Shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of Shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been
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granted or which have been returned to the Plan upon cancellation or expiration
of an Option or Stock Purchase Right, as well as the price per Share of Common
Stock covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued Shares of Common Stock effected
without receipt of consideration by the Company. The conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of Shares of
stock of any class, or securities convertible into Shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect
to,the number or price of Shares of Common Stock subject to an Option or Stock
Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option or Stock Purchase Right until
fifteen (15) days prior to such transaction as to all of the Optioned Stock
covered thereby, including Shares as to which the Option or Stock Purchase Right
would not otherwise be exercisable. In addition, the Administrator may provide
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option or Stock Purchase Right shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
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14. Time of Granting Options and Stock Purchase Rights. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Board. Notice of the
determination shall be given to each Employee or Consultant to whom an Option or
Stock Purchase Right is so granted within a reasonable time after the date of
such grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Board shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.
16. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option or Stock Purchase
Right, the Company may require the person exercising such Option or Stock
Purchase Right to represent and warrant at the time of any such exercise that
the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.
17. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
18. Agreements. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Board shall approve from time to time.
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19. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws.
20. Information to Optionees. The Company shall provide to each
Optionee and to each individual who acquired Shares pursuant to the Plan, not
less frequently than annually during the period such Optionee or purchaser has
one or more Options or Stock Purchase Rights outstanding, and, in the case of an
individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares, copies of annual financial statements. The Company
shall not be required to provide such statements to key employees whose duties
in connection with the Company assure their access to equivalent information.
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APPENDIX B
HYPERMEDIA COMMUNICATIONS, INC.
1993 DIRECTOR OPTION PLAN
(As Amended)
1. Purposes of the Plan. The purposes of this 1993 Director Option Plan
are to attract and retain the best available personnel for service as Outside
Directors (as defined herein) of the Company, to provide additional incentive to
the Outside Directors of the Company to serve as Directors, and to encourage
their continued service on the Board.
All Options granted hereunder shall be "non-statutory stock
Options."
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" means the Common Stock of the Company.
(d) "Company" means HyperMedia Communications, Inc., a
California corporation.
(e) "Continuous Status as a Director" means the absence of any
interruption or termination of service as a Director.
(f) "Director" means a member of the Board.
(g) "Employee" means any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a Director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.
(h) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(i) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange
<PAGE>
with the greatest volume of trading in Common Stock) on the date of grant, as
reported in The Wall Street Journal or such other source as the Board deems
reliable;
(ii) If the Common Stock is quoted on the NASDAQ
System (but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the bid and
asked prices for the Common Stock on the last market trading day prior to the
day of determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable, or;
(iii) in the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.
(j) "Option" means a stock option granted pursuant to the
Plan.
(k) "Optioned Stock" means the Common Stock subject to an
Option.
(l) "Optionee" means an outside Director who receives an
Option.
(m) "Outside Director" means a Director who is not an
Employee.
(n) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(o) "Plan" means this 1993 Director Option Plan.
(i) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.
(p) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Internal Revenue Code
of 1986.
3. Stock Subject to the Plan. Subject to the provisions of Section 10
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 350,000 Shares (the "Pool") of Common Stock. The Shares
may be authorized but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
4. Administration of and Grants of Options under the Plan.
(a) Procedure for Grants. The provisions set forth in this
Section 4(a) shall not be amended more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder. All
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grants of Options to Outside Directors under this Plan shall be automatic and
non-discretionary and shall be made strictly in accordance with the following
provisions:
(i) No person shall have any discretion to select
which Outside Directors shall be granted Options or to determine the number of
Shares to be covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically
granted an Option to purchase 10,000 Shares (the "First Option") on the date on
which the later of the following events occurs: (A) the effective date of this
Plan, as determined in accordance with Section 6 hereof, or (B) the date on
which such person first becomes a Director, whether through election by the
stockholders of the Company or appointment by the Board to fill a vacancy.
(iii) After the First Option has been granted to an
Outside Director, such Outside Director shall thereafter be automatically
granted an Option to purchase 10,000 Shares (a "Subsequent Option") on June 1 of
each year, if on such date, he shall have served on the Board for at least six
(6) months.
(iv) Notwithstanding the provisions of subsections
(ii) and (iii) hereof, any exercise of an Option made before the Company has
obtained stockholder approval of the Plan in accordance with Section 16 hereof
shall be conditioned upon obtaining such stockholder approval of the Plan in
accordance with Section 16 hereof.
(v) The terms of a First Option granted hereunder
shall be as follows:
(A) the term of the First Option shall be
ten (10) years.
(B) the First Option shall be exercisable
only while the Outside Director remains a Director of the Company, except as set
forth in Section 8 hereof.
(C) the exercise price per Share shall be
100% of the fair market value per Share on the date of grant of the First
Option.
(D) the First Option shall become
exercisable on the date of the grant.
(vi) The terms of a Subsequent Option granted
hereunder shall be as follows:
(A) the term of the Subsequent Option shall
be ten (10) years.
(B) the Subsequent Option shall be
exercisable only while the Outside Director remains a Director of the Company,
except as set forth in Section 8 hereof.
(C) the exercise price per Share shall be
100% of the fair market value per Share on the date of grant of the Subsequent
Option.
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(D) the Subsequent Option shall become
exercisable on the date of the grant.
(vii) In the event that any Option granted under the
Plan would cause the number of Shares subject to outstanding Options plus the
number of Shares previously purchased under Options to exceed the Pool, then the
remaining Shares available for Option grant shall be granted under Options to
the Outside Directors on a pro rata basis. No further grants shall be made until
such time, if any, as additional Shares become available for grant under the
Plan through action of the stockholders to increase the number of Shares which
may be issued under the Plan or through cancellation or expiration of Options
previously granted hereunder.
5. Eligibility. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4 hereof. An Outside Director who has been granted an Option may, if he
is otherwise eligible, be granted an additional Option or Options in accordance
with such provisions.
The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his or her directorship at any time.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the stockholders of the
Company as described in Section 16 of the Plan. It shall continue in effect for
a term of ten (10) years unless sooner terminated under Section 11 of the Plan.
7. Form of Consideration. The consideration to be paid for the Shares
to be issued upon exercise of an Option, including the method of payment, shall
consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (iv) delivery of a properly
executed exercise notice together with such other documentation as the Company
and the broker, if applicable, shall require to effect an exercise of the Option
and delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (v) any combination of the foregoing methods of payment.
8. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times as are set forth in
Section 4 hereof; provided, however, that no Options shall be exercisable until
stockholder approval of the Plan in accordance with Section 16 hereof has been
obtained.
An Option may not be exercised for a fraction of a Share.
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An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may consist of any consideration and method of payment
allowable under Section 7 of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 10 of the
Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Rule 16b-3. Options granted to Outside Directors must
comply with the applicable provisions of Rule 16b-3 promulgated under the
Exchange Act or any successor thereto and shall contain such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
(c) Termination of Continuous Status as a Director. In the
event an Optionee's Continuous Status as a Director terminates (other than upon
the Optionee's death or disability), the Optionee may exercise his or her
Option, but only within three (3) months from the date of such termination, and
only to the extent that the Optionee was entitled to exercise it at the date of
such termination (but in no event later than the expiration of its ten (10) year
term). To the extent that the Optionee was not entitled to exercise an Option at
the date of such termination, and to the extent that the Optionee does not
exercise such Option (to the extent otherwise so entitled) within the time
specified herein, the Option shall terminate.
(d) Disability of Optionee. In the event Optionee's Continuous
Status as a Director terminates as a result of his or her disability, the
Optionee may exercise his or her Option, but only within twelve (12) months from
the date of such termination, and only to the extent that the Optionee was
entitled to exercise it at the date of such termination (but in no event later
than the expiration of its ten (10) year term); provided, however, that if such
disability is not a "disability" as such term is defined in Section 22(e)(3) of
the Code, in the case of an Incentive Stock Option such Incentive Stock Option
shall automatically convert to a Nonstatutory Stock Option on the day three
months and one day following such termination. To the extent that the Optionee
was not entitled to exercise an Option at the date of termination, or if he or
she does not exercise such Option (to the extent otherwise so entitled) within
the time specified herein, the Option shall terminate.
(e) Death of Optionee. In the event of an Optionee's death,
the Optionee's estate or a person who acquired the right to exercise the Option
by bequest or inheritance may
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exercise the Option, but only within twelve (12) months following the date of
death, and only to the extent that the Optionee was entitled to exercise it at
the date of death (but in no event later than the expiration of its ten (10)
year term). To the extent that the Optionee was not entitled to exercise an
Option at the date of death, and to the extent that the Optionee's estate or a
person who acquired the right to exercise such Option does not exercise such
Option (to the extent otherwise so entitled) within the time specified herein,
the Option shall terminate.
9. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
10. Adjustments Upon Changes in Capitalization, Dissolution, Merger,
Asset Sale or Change of Control.
(a) Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of Shares covered by each
outstanding Option and the number of Shares which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per Share covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option shall be assumed or an
equivalent Option shall be substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation does not agree to assume the Option or to substitute an equivalent
Option, each outstanding Option shall terminate as of the date of the closing of
the merger or sale of assets. For the purposes of this paragraph, the Option
shall be considered assumed if, following the merger or sale of assets, the
Option or right confers the right to purchase, for each Share of Optioned Stock
subject to the Option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the
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transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares).
11. Amendment and Termination of the Plan.
(a) Amendment and Termination. Except as set forth in Section
4, the Board may at any time amend, alter, suspend, or discontinue the Plan, but
no amendment, alteration, suspension, or discontinuation shall be made which
would impair the rights of any Optionee under any grant theretofore made,
without his or her consent. In addition, to the extent necessary and desirable
to comply with Rule 16b-3 under the Exchange Act (or any other applicable law or
regulation), the Company shall obtain stockholder approval of any Plan amendment
in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated.
12. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4 hereof. Notice
of the determination shall be given to each Outside Director to whom an Option
is so granted within a reasonable time after the date of such grant.
13. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, 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.
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
14. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
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15. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
16. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company at or prior to the first annual
meeting of stockholders held subsequent to the granting of an Option hereunder.
Such stockholder approval shall be obtained in the degree and manner required
under applicable state and federal law.
17. Information to Optionees. The Company shall provide to each
Optionee, not less frequently than annually during the period such Optionee has
one or more Options outstanding, copies of annual financial statements. The
Company shall not be required to provide such statements to key employees whose
duties in connection with the Company assure their access to equivalent
information.
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APPENDIX C
HYPERMEDIA COMMUNICATIONS, INC.
PROXY FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of HYPERMEDIA COMMUNICATIONS, INC., a
California corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, each dated April 28, 2000, and
hereby appoints Richard Landry and Kenneth Klein, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution and re-substitution,
on behalf and in the name of the undersigned, to represent the undersigned at
the 2000 Annual Meeting of Shareholders of HYPERMEDIA COMMUNICATIONS, INC. to be
held on Tuesday, June 6, 2000, at 12:00 p.m., local time, at Company's offices
at 901 Mariner's Island Blvd., Suite 365, San Mateo, California 94404, and at
any and all continuation(s) or adjournment(s) thereof, and to vote all shares of
Common Stock which the undersigned would be entitled to vote, if then and there
personally present, on the matters set forth on the reverse side.
Both of such attorneys or substitutes as shall be present and shall act
at said meeting or any and all continuation(s) or adjournment(s) thereof (or if
only one shall be present and acting, then that one) and shall have and may
exercise all of the powers of said attorneys-in-fact hereunder.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE APPROVAL OF AN
AMMENDMENT TO OUR 1991 STOCK PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR
ISSUANCE THEREUNDER TO 2,925,000, FOR THE APPROVAL OF AN AMMENDMENT TO OUR 1993
DIRECTOR OPTION PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE
THEREUNDER TO 350,000, FOR THE APPROVAL OF AN AMMENDMENT TO OUR 1993 DIRECTOR
OPTION PLAN TO CHANGE THE INITIAL GRANT TO 10,000 SHARES FULLY VESTED AND THE
ANNUAL GRANT TO 10,000 SHARES FULLY VESTED, FOR THE APPROVAL OF AN AMMENDMENT TO
THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED PREFERRED
SHARES TO 20,064,516, FOR THE RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS FOR THE COMPANY FOR FISCAL
2000, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
................................................................................
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<PAGE>
1. ELECTION OF DIRECTORS:
FOR WITHHOLD Nominees: Richard Landry, Michael Kaufman,
AUTHORITY Greg Lahann and Dirk Spiers
[ ] [ ] __________________________________________
For all nominees except as noted above
2. PROPOSAL TO APPROVE AN AMENDMENT TO OUR 1991 STOCK PLAN TO INCREASE THE
NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER TO 2,925,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. PROPOSAL TO APPROVE AN AMENDMENT TO OUR 1993 DIRECTOR OPTION PLAN TO
INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER TO 350,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. PROPOSAL TO APPROVE AN AMENDMENT TO OUR 1993 DIRECTOR OPTION PLAN TO CHANGE
THE INITIAL GRANT TO 10,000 SHARES FULLY VESTED AND THE ANNUAL GRANT TO
10,000 SHARES FULLY VESTED.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. PROPOSAL TO APPROVE AN AMENDMENT TO THE ARTICLES OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED PREFERRED SHARES TO 20,064,516.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
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<PAGE>
6. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS FOR THE THE COMPANY FOR FISCAL 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the proxies are authorized to vote upon such other
matter or matters which may properly come before the meeting or any and all
continuation(s) or adjournment(s) thereof.
Signature: ________________________________ Date: ________________________
Signature: ________________________________ Date: ________________________
This Proxy should be marked, dated and signed by the shareholder(s) exactly as
his or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If a corporation,
please sign in full corporate name by an authorized officer. If a partnership,
please sign in partnership name by an authorized person. If shares are held by
joint tenants or as community property, both should sign.
................................................................................
^ FOLD AND DETACH HERE ^
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