<PAGE> 1
As filed with the Securities and Exchange Commission on November 13, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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METACREATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-4102687
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6303 Carpinteria Avenue
Carpinteria, California 93013
-----------------------------
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
METACREATIONS CORPORATION 1995 STOCK PLAN
METACREATIONS CORPORATION 1995 EMPLOYEE STOCK PURCHASE PLAN
METACREATIONS CORPORATION 1996 NONSTATUTORY STOCK OPTION PLAN
(Full title of plans)
----------
Terance A. Kinninger
Sr. Vice President Finance and Operations and Chief Financial Officer
MetaCreations Corporation
6303 Carpinteria Avenue
Carpinteria, California 93013
(805) 566-6200
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
----------
Copy to:
Jeffrey D. Saper, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
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<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Securities to be Price Offering Registration
to be Registered Registered Per Share Price Fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value
- ------------------------------------------------------------------------------------------------------------------------
- Common Stock (par value $0.001 per share)
to be issued upon exercise of options
granted under the Company's 1995 Stock 1,087,740 $ 5.0482(1) $ 5,491,133.00 $ 1,527.00
Option Plan 412,260 $ 3.5625(2) $ 1,468,677.00 $ 409.00
- ------------------------------------------------------------------------------------------------------------------------
- Common Stock (par value $0.001 per share)
to be issued pursuant to the Company's
1995 Employee Stock Purchase Plan 287,097 $ 3.5625(2) $ 1,022,784.00 $ 285.00
- ------------------------------------------------------------------------------------------------------------------------
- Common Stock (par value $0.001 per share)
to be issued upon exercise of options
granted under the Company's 1996 569,102 $ 4.2100(1) $ 2,395,920.00 $ 667.00
Nonstatutory Stock Option Plan 780,898 $ 3.5625(2) $ 2,781,950.00 $ 774.00
- ------------------------------------------------------------------------------------------------------------------------
Total 3,137,097 $ 13,160,464.00 $ 3,662.00
========================================================================================================================
</TABLE>
(1) Computed in accordance with Rule 457(h) under the Securities Act of
1933, as amended, solely for the purpose of calculating the
registration fee. The computation is based upon the weighted average
per share exercise price (rounded to the nearest 1/10th of one cent)
of the outstanding options under the referenced plan, the shares
issuable under which are registered hereby.
(2) Estimated in accordance with Rule 457(h) under the Securities Act of
1933, as amended, solely for the purpose of calculating the
registration fee based upon the average of the high and low sale
prices of the Company's Common Stock as reported by the Nasdaq Stock
Market on November 9, 1998, within five (5) business days prior to
the date of this registration statement.
<PAGE> 3
PART I: INFORMATION REQUIRED IN THE PROSPECTUS
ITEM 1. PLAN INFORMATION
Omitted pursuant to the instructions and provisions of Form S-8.
ITEM 2. REGISTRATION INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Omitted pursuant to the instructions and provisions of Form S-8.
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INFORMATION INCORPORATED BY REFERENCE
There are hereby incorporated by reference into this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission (the "Commission") by the Registrant:
(a) The Registrant's Annual Report on Form 10-K (File No. 000-27168)
for the fiscal year ended December 31, 1997, filed pursuant to Section 13(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Registrant's Form 10-Q (File No. 000-27168) for the fiscal
quarter ending March 31, 1998, filed pursuant to Section 13(a) of the Exchange
Act.
(c) The Registrant's Form 10-Q (File No. 000-27168) for the fiscal
quarter ending June 30, 1998, filed pursuant to Section 13(a) of the Exchange
Act.
(d) The Registrant's Form 10-Q (File No. 000-27168) for the fiscal
quarter ending September 30, 1998, filed pursuant to Section 13(a) of the
Exchange Act.
(e) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A (File No. 000-27168) filed
pursuant to Section 12 of the Exchange Act, including any amendment or report
filed for the purpose of updating such description.
All documents filed by Registrant pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date hereof, and prior to the filing
of a post-effective amendment which indicates that all securities offered
hereunder have been sold or which de-registers all securities then remaining
unsold under this registration statement, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of filing of such
documents.
The MetaCreations Corporation documents incorporated by reference
herein contain forward-looking statements that involve risks and uncertainties.
MetaCreations Corporation's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, the risks identified in the
respective documents incorporated by reference.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
II-1
<PAGE> 4
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the issuance of shares of Common Stock offered hereby
will be passed upon for the Registrant by Wilson Sonsini Goodrich & Rosati,
Professional Corporation ("WSGR"), Palo Alto, California. Certain members of
WSGR beneficially own an aggregate of approximately 25,000 shares of the
Registrant's Common Stock.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the Delaware General Corporation Law authorizes a
court to award, or a corporation's Board of Directors to grant, indemnity to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Article 9 of the Company's Restated
Certificate of Incorporation and Article 6.1 of the Bylaws of the Company
provide for indemnification of certain agents to the maximum extent permitted by
the Delaware General Corporation Law. Persons covered by these indemnification
provisions include current and former directors, officers, employees and other
agents of the Company, as well as persons who serve at the request of the
Company as directors, officers, employees or agents of another enterprise.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Document
- ------ --------
<S> <C>
4.1 MetaCreations Corporation 1995 Stock Plan, as amended.(1)
4.2 MetaCreations Corporation 1995 Employee Stock Purchase Plan, as
amended.(2)
4.3 MetaCreations Corporation 1996 Nonstatutory Stock Option Plan, as
amended.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
- ----------
(1) Incorporated herein by reference to the Company's Form 10-Q for the
quarter ended June 30, 1998.
(2) Incorporated herein by reference to the Company's Form 10-Q for the
quarter ended March 31, 1998.
II-2
<PAGE> 5
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto, duly
authorized, in the City of Carpinteria, State of California, on November 13,
1998.
METACREATIONS CORPORATION
By: /s/ Terance A. Kinninger
-------------------------------------
Terance A. Kinninger,
Sr. Vice President and Chief Financial
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature
appears below constitutes and appoints Terance A. Kinninger his
attorney-in-fact, with the power of substitution, for him in any and all
capacities, to sign any amendment to this Registration Statement on Form S-8,
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting to said
attorney-in-fact full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact, or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant on November 13, 1998.
SIGNATURE TITLE
--------- -------
/s/ Gary L. Lauer President, Chief Executive Officer and Director
- ------------------------- (Principal Executive Officer)
Gary L. Lauer
/s/ Terance A. Kinninger Sr. Vice President and Chief Financial Officer
- ------------------------- (Principal Financial and Accounting Officer)
Terance A. Kinninger
Director and Chief Design Officer
- -------------------------
Kai Krause
/s/ Samuel H. Jones, Jr. Director
- -------------------------
Samuel H. Jones, Jr.
Director
- -------------------------
Bert Kolde
/s/ William H. Lane III Director
- -------------------------
William H. Lane III
/s/ Howard L. Morgan Chairman of the Board
- -------------------------
Howard L. Morgan
/s/ Mark Zimmer Director
- -------------------------
Mark Zimmer
/s/ Terrance A. Kinninger
- -------------------------
Terrance A. Kinninger,
as attorney-in-fact
II-4
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description of Document Page
------ ----------------------- ------------
<S> <C> <C>
4.1 MetaCreations Corporation 1995 Stock Plan, as amended.(1)
4.2 MetaCreations Corporation 1995 Employee Stock Purchase Plan, as
amended.(2)
4.3 MetaCreations Corporation 1996 Nonstatutory Stock Option Plan, as
amended.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
- ----------
(1) Incorporated herein by reference to the Company's Form 10-Q for the
quarter ended June 30, 1998.
(2) Incorporated herein by reference to the Company's Form 10-Q for the
quarter ended March 31, 1998.
<PAGE> 1
EXHIBIT 4.3
METACREATIONS CORPORATION
1996 NONSTATUTORY STOCK OPTION
PLAN AS AMENDED ON FEBRUARY 20, 1998
1. Purposes of the Plan. The purposes of this Plan are:
o to attract and retain the best available personnel for positions
of substantial responsibility,
o to provide additional incentive to Employees and Consultants, and
o to promote the success of the Company's business.
Nonstatutory Stock Options may be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to the
administration of stock option plans and issuance of stock and stock options
under U.S. state corporate laws, U.S. federal and state securities laws, the
Code and the applicable laws of any foreign country or jurisdiction where
Options will be or are being granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means MetaCreations Corporation, a Delaware
corporation.
(h) "Consultant" means any person, including an advisor, engaged by
the Company or a parent, subsidiary or affiliate to render services. The term
"Consultant" shall not include any person who is also an Officer or Director of
the Company.
(i) "Director" means a member of the Board.
<PAGE> 2
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person employed by the Company or any
parent, subsidiary or affiliate of the Company.
(l) "Fair Market Value" means, as of any date, the closing sales
price for the Common Stock (or the closing bid, if no sales were reported) as
listed or quoted on any established stock exchange or national market system,
including without limitation The Nasdaq National Market or The Nasdaq SmallCap
Market of The Nasdaq Stock Market, for the date of such determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable.
(m) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.
(n) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
(o) "Option" means a stock option granted pursuant to the Plan.
Options granted under the Plan are nonstatutory stock options.
(p) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.
(q) "Optioned Stock" means the Common Stock subject to an Option.
(r) "Optionee" means an Employee or Consultant who holds an
outstanding Option.
(s) "Plan" means this 1996 Nonstatutory Stock Option Plan.
(t) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
3. Stock Subject to the Plan. Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 3,100,00 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated).
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<PAGE> 3
4. Administration of the Plan.
(a) Administration. The Plan shall be administered by (i) the Board
or (ii) a Committee designated by the Board, which Committee shall be
constituted to satisfy Applicable Laws. Once appointed, such Committee shall
serve in its designated capacity until otherwise directed by the Board. The
Board may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by
Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(l) of the Plan;
(ii) to select the Consultants and Employees to whom Options may
be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each Option 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. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;
(vii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
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<PAGE> 4
(ix) to modify or amend each Option (subject to Section 14(b) of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;
(x) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option previously granted by
the Administrator;
(xi) to determine the terms and restrictions applicable to
Options;
(xii) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option that number of Shares having a Fair Market Value equal to
the amount required to be withheld; and
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.
5. Eligibility. Stock Options may be granted to Employees and
Consultants.
6. Limitations. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's employment or
consulting relationship with the Company, nor shall they interfere in any way
with the Optionee's right or the Company's right to terminate such employment or
consulting relationship at any time, with or without cause.
7. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect until terminated under Section 14 of the
Plan.
8. Term of Option. The term of each Option shall be stated in the
Notice of Grant.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before
the Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until either the completion of a service period or
the achievement of performance criteria with respect to the Company or the
Optionee.
-4-
<PAGE> 5
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) 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;
(v) 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;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii)such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name
-5-
<PAGE> 6
of the Optionee and his or her spouse. Until the Shares are issued (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a 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 Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Shares are issued, except as provided in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Employment or Consulting Relationship. In the
event an Optionee ceases to be an Employee or Consultant, other than upon the
Optionee's death or Disability, the Optionee may exercise his or her Option
within such period of time as is specified in the Notice of Grant to the extent
that he or she is entitled to exercise it on the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the
Notice of Grant). In the absence of a specified time in the Notice of Grant, the
Option shall remain exercisable for three (3) months following the Optionee's
termination. If, on the date of termination, the Optionee is not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
Notwithstanding the above, in the event of an Optionee's change in
status from Consultant to Employee or Employee to Consultant, the Optionee's
Continuous Status as an Employee or Consultant shall not automatically terminate
solely as a result of such change in status.
(c) Disability of Optionee. In the event an Optionee ceases to be
an Employee or Consultant as a result of the Optionee's Disability, the Optionee
may exercise his or her Option at any time within twelve (12) months (or such
other period of time as is determined by the Administrator) from the date of
termination, but only to the extent that the Optionee is entitled to exercise it
on the date of termination (and in no event later than the expiration of the
term of the Option as set forth in the Notice of Grant). If, on the date of
termination, the Optionee is not entitled to exercise his or her entire Option,
the Shares covered by the unexercisable portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee,
the Option shall become fully exercisable, including as to Shares for which it
would not otherwise be exercisable and may be exercised at any time within
twelve (12) months (or such other period of time as is determined by the
Administrator) following the date of death (but in no event later than the
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<PAGE> 7
expiration of the term of such Option as set forth in the Notice of Grant), by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance. If, after death, the Optionee's estate or a
person who acquired the right to exercise the Option by bequest or inheritance
does not exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
11. Non-Transferability of Options. Unless otherwise specified by the
Administrator in the Option Agreement, an 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.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
shareholders 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." 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 subject to an Option.
(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 all Options to
vest and for an Optionee to have the right to exercise his or her Option until
ten (10) days prior to such transaction as to all of the Optioned Stock covered
thereby, including Shares as to which the Option would not otherwise be vested
and exercisable. To the extent it has not been previously exercised, an Option
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
or right substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation, or in the event that the successor corporation
refuses to assume or substitute for the Option, the Option shall fully vest and
the Optionee shall have the right to exercise the Option as to all of the
Optioned Stock, including Shares as to which it would
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<PAGE> 8
not otherwise be vested and exercisable. If an Option is 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 shall be fully vested and exercisable for a period of fifteen (15) days
from the date of such notice, and the Option shall terminate upon the expiration
of such period. 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 or receive, 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 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 was 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, for each Share of Optioned Stock subject to the Option,
to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.
13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) 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.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with all Applicable Laws, and the
requirements of any stock exchange or quotation system upon which the Shares may
then be listed or quoted, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
Option, the 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
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<PAGE> 9
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.
16. Liability of Company. 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.
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.
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<PAGE> 10
METACREATIONS CORPORATION
1996 NONSTATUTORY STOCK OPTION PLAN
STOCK OPTION AGREEMENT
MetaCreations Corporation, a Delaware corporation (the "Company"), has
granted to the optionee (the "Optionee") named on the Notice of Grant of Stock
Options (the "Notice of Grant") which is attached hereto a nonstatutory stock
option to purchase that number of shares of Common Stock (the "Shares") set
forth on the Notice of Grant at the price set forth on the Notice of Grant and
in all respects subject to the terms, definitions and provisions of the 1996
Nonstatutory Stock Option Plan (the "Plan") adopted by the Company which is
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings herein.
18. Nature of the Option. This Option is a nonstatutory stock option
and will not qualify as an incentive stock option as defined in Section 422 of
the Code.
19. Exercise of Option. This Option shall be exercisable during its term
in accordance with the provisions of Section 10 of the Plan as follows:
(a) Right to Exercise.
(i) Subject to Sections 2(a)(ii) and (iii) below, this Option
shall vest over the period and at the rate set forth on the Notice of Grant.
(ii) This Option may not be exercised for a fraction of a share.
(iii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Sections 6, 7 and 8 of this Agreement.
(b) Method of Exercise. This Option shall be exercisable by written
notice which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company. The written notice shall be accompanied by payment of the exercise
price. This Option shall be deemed to be exercised upon receipt by the Company
of such written notice accompanied by the exercise price.
No Shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of
law and the requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, the Shares shall be considered transferred to
the Optionee on the date on which the Option is exercised with respect to such
Shares.
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<PAGE> 11
20. Optionee's Representations. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company an Investment Representation Statement in the
form provided by the Company.
21. METHOD OF PAYMENT. PAYMENT OF THE EXERCISE PRICE SHALL BE BY (I)
CASH, (II) CHECK, (III) SURRENDER OF OTHER SHARES OF COMMON STOCK OF THE COMPANY
WHICH 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 HAVE A FAIR MARKET VALUE ON THE DATE OF SURRENDER EQUAL TO THE EXERCISE
PRICE OF THE SHARES AS TO WHICH THE OPTION IS BEING EXERCISED OR (IV) DELIVERY
OF A PROPERLY EXECUTED EXERCISE NOTICE TOGETHER WITH IRREVOCABLE INSTRUCTIONS TO
AN AGENT OF THE COMPANY TO SELL THE SHARES AND PROMPTLY DELIVER TO THE COMPANY
THAT PORTION OF THE SALE OR LOAN PROCEEDS REQUIRED TO PAY THE EXERCISE PRICE.
22. Restrictions on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
23. Termination of Status as an Employee. If Optionee ceases to serve as
an Employee or Consultant, he or she may, but only within three (3) months after
the date he or she ceases to be an Employee or Consultant of the Company,
exercise this Option to the extent that he or she was entitled to exercise it at
the date of such termination. To the extent that he or she was not entitled to
exercise this Option at the date of such termination, or if he or she does not
exercise this Option within the time specified herein, the Option shall
terminate.
24. Disability of Optionee. Notwithstanding the provisions of Section 6
above, if Optionee is unable to continue his or her employment or consultancy
relationship with the Company as a result of his or her total and permanent
Disability, he or she may, but only within twelve (12) months from the date of
termination of employment or consultancy, exercise his or her Option to the
extent he or she was entitled to exercise it at the date of such termination. To
the extent that he or she was not entitled to exercise the Option at the date of
termination, or if he or she does not exercise such Option (which he or she was
entitled to exercise) within the time specified herein, the Option shall
terminate.
25. Death of Optionee. Notwithstanding the provisions of Section 6 above,
in the event of the death of Optionee during the term of this Option and while
an Employee or Consultant of the Company, the Option may be exercised, at any
time within twelve (12) months following the date of death, by Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had accrued at
the date of death.
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<PAGE> 12
26. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
27. Term of Option. This Option may be exercised only within the term set
out on the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
28. Tax Consequences. Some of the federal and state tax consequences
relating to this Option, as of the date of this Option, are set forth below.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option. The Optionee may incur regular federal
income tax and state income tax liability upon exercise of a nonstatutory stock
option (an "NSO"). The Optionee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of
the Fair Market Value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price. If the Optionee is an Employee or a former Employee,
the Company will be required to withhold from his or her compensation or collect
from Optionee and pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the time of exercise, and
may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.
(b) Disposition of Shares. If the Optionee holds NSO Shares for at
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.
29. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by California law except for that body of
law pertaining to conflict of laws.
30. NO GUARANTEE OF EMPLOYMENT. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING SERVICE AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
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<PAGE> 13
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN
EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND
SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S EMPLOYMENT OR CONSULTING RELATIONSHIP AT ANY TIME, WITH OR WITHOUT
CAUSE.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: METACREATIONS CORPORATION
- ------------------------------------ --------------------------------
Signature By
- ------------------------------------ ---------------------------------
Print Name Title
- ------------------------------------
Residence Address
- ------------------------------------
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<PAGE> 14
METACREATIONS CORPORATION
1996 NONSTATUTORY STOCK OPTION PLAN
NOTICE OF GRANT OF STOCK OPTIONS
[Optionee's Name and Address]
You have been granted a nonstatutory stock option to purchase Common
Stock of the Company, subject to the terms and conditions of the 1996
Nonstatutory Stock Option Plan and this Option Agreement, as follows:
Grant Number
-------------------------------
Date of Grant
-------------------------------
Vesting Commencement Date
-------------------------------
Exercise Price per Share $
-------------------------------
Total Number of Shares Granted
-------------------------------
Total Exercise Price $
-------------------------------
Term/Expiration Date:
-------------------------------
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
25% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 1/48 of the Shares subject to the Option
shall vest each month thereafter.
<PAGE> 15
EXHIBIT A
METACREATIONS CORPORATION
1996 NONSTATUTORY STOCK OPTION PLAN
EXERCISE NOTICE
MetaCreations Corporation
6303 Carpinteria Avenue
Carpinteria, CA 93013
Attention: Secretary
1. Exercise of Option. Effective as of today, ________________, 199__,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of MetaCreations Corporation (the "Company")
under and pursuant to the 1996 Nonstatutory Stock Option Plan (the "Plan") and
the Stock Option Agreement dated _________, 19___ (the "Option Agreement"). The
purchase price for the Shares shall be $_______, as required by the Option
Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. 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 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 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 Shares are issued, except as provided in
Section 12 of the Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior
<PAGE> 16
undertakings and agreements of the Company and Purchaser with respect to the
subject matter hereof, and may not be modified adversely to the Purchaser's
interest except by means of a writing signed by the Company and Purchaser. This
agreement is governed by California law except for that body of law pertaining
to conflict of laws.
Submitted by: Accepted by:
PURCHASER: METACREATIONS CORPORATION
- -------------------------------- -------------------------------
Signature By
- -------------------------------- -------------------------------
Print Name Title
Address: Address:
6303 Carpinteria Avenue
- -------------------------------- Carpinteria, CA 93013
- --------------------------------
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<PAGE> 1
EXHIBIT 5.1
November 13, 1998
MetaCreations Corporation
6303 Carpinteria Avenue
Carpinteria, CA 93013
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed
by you with the Securities and Exchange Commission on or about November 13, 1998
(the "Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of 3,124,194 shares of your Common Stock
reserved for issuance under the MetaCreations Corporation 1995 Stock Plan, as
amended, the MetaCreations Corporation 1995 Employee Stock Purchase Plan, as
amended, and the MetaCreations Corporation 1996 Nonstatutory Option Plan, as
amended (collectively, the "Plans") (collectively, the "Shares"). As legal
counsel for MetaCreations Corporation, we have examined the proceedings taken
and are familiar with the proceedings proposed to be taken by you in connection
with the sale and issuance of the Shares under the Plans.
It is our opinion that, upon completion of the actions being taken,
or contemplated by us as your counsel to be taken by you prior to the issuance
of the Shares pursuant to the Registration Statement and the Plans, and upon
completion of the actions being taken in order to permit such transactions to be
carried out in accordance with the securities laws of the various states where
required, the Shares will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement and any subsequent amendments to it.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
MetaCreations Corporation
We consent to the incorporation by reference in the Registration
Statement of MetaCreations Corporation on Form S-8 (to be filed on or about
November 13, 1998) of our report dated January 26, 1998 on our audits of the
consolidated financial statements and financial statement schedule of
MetaCreations Corporation as of December 31, 1997 and 1996 and for each of the
three years in the period ended December 31, 1997.
PricewaterhouseCoopers LLP
Woodland Hills, California
November 11, 1998
