<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 10, 1998
REGISTRATION STATEMENT NO. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------------------
NETSCAPE COMMUNICATIONS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-3200270
- ------------------------------- ------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
501 EAST MIDDLEFIELD ROAD, MOUNTAIN VIEW, CALIFORNIA 94043
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
-----------------------
NETSCAPE COMMUNICATIONS CORPORATION
1995 STOCK PLAN
(FULL TITLE OF THE PLAN)
-----------------------
<TABLE>
<S> <C>
ROBERTA R. KATZ, ESQ. Copy to:
SENIOR VICE PRESIDENT, GENERAL COUNSEL, AND SECRETARY LARRY W. SONSINI, ESQ.
NETSCAPE COMMUNICATIONS CORPORATION JAMES N. STRAWBRIDGE, ESQ.
501 EAST MIDDLEFIELD ROAD WILSON SONSINI GOODRICH & ROSATI
MOUNTAIN VIEW, CALIFORNIA 94043 PROFESSIONAL CORPORATION
(650) 254-1900 650 PAGE MILL ROAD
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, PALO ALTO, CA 94304-1050
INCLUDING AREA CODE, OF AGENT FOR SERVICE) (650) 493-9300
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(3) PRICE(3) FEE
- ------------------- ------------ ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Common Stock,
$.0001 par value(1)(2) 3,992,726 shares $36.75 $146,732,680.50 $40,792.00
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416, this Registration Statement shall also cover any
additional shares of the Registrant's Common Stock that become issuable
under this plan by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration that increases the number of the Registrant's outstanding
shares of Common Stock.
(2) Includes associated rights to purchase shares of Series A Preferred Stock,
par value $0.0001 per share, of the Registrant.
(3) Estimated solely for the purpose of computing the registration fee required
by Section 6(b) of the Securities Act and computed pursuant to Rule 457(c)
under the Securities Act based upon the average of the high and low prices
of the Common Stock on December 4, 1998, as reported on the Nasdaq
National Market.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
ITEM 1. PLAN INFORMATION.
The Registrant will send or give the documents containing the information
specified in this Item 1 to employees, officers, directors or others as
specified by Rule 428(b)(1). In accordance with the rules and regulations of the
Securities and Exchange Commission (the "Commission") and the instructions to
Form S-8, the Registrant is not filing such documents with the Commission either
as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424.
ITEM 2. REGISTRATION INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The Registrant will send or give the documents containing the information
specified in this Item 2 to employees, officers, directors or others as
specified by Rule 428(b)(1). In accordance with the rules and regulations of the
Commission and the instructions to Form S-8, the Registrant is not filing such
documents with the Commission either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information previously filed with the
Commission by the Registrant are incorporated into this Registration Statement
by reference:
(a) The Registrant's Annual Report on Form 10-K (the "Annual Report") for
the fiscal year ended December 31, 1997 filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) The Registrant's Quarterly Report on Form 10-Q for the four months
ended April 30, 1998 filed pursuant to the Exchange Act;
(c) The Registrant's Quarterly Report on Form 10-Q for the three months
ended July 31, 1998 filed pursuant to the Exchange Act;
(d) The Registrant's Current Report on Form 8-K filed on November 25, 1998
pursuant to the Exchange Act;
(e) The Registrant's Current Report on Form 8-K filed on December 7, 1998
pursuant to the Exchange Act;
(f) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed on June 23,
1995, as amended by the Registrant's Registration Statement on Form
8-A/A filed on August 4, 1995 pursuant to the Exchange Act (File No.
0-26310);
(g) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed on December 7,
1998 pursuant to the Exchange Act.
All documents subsequently filed with the Commission by Registrant pursuant
to Sections
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<PAGE> 3
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered under this
Registration Statement have been sold or which deregisters all securities then
remaining unsold under this Registration Statement, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Amended and Restated Certificate of Incorporation includes a
provision that eliminates the personal liability of its directors for monetary
damages for breach or alleged breach of their duty of care. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Amended and Restated Bylaws provide that: (i) the Registrant shall
indemnify its directors and officers and persons serving in such capacities in
other business enterprises (including, for example, the Registrant's
subsidiaries) at the Registrant's request, to the fullest extent permitted by
Delaware law, including in those circumstances in which indemnification would
otherwise be discretionary; (ii) the Registrant may, in its discretion,
indemnify employees and agents in those circumstances where indemnification is
not required by law; (iii) the Registrant is required to advance expenses, as
incurred, to its directors and officers in connection with defending a
proceeding (except that it is not required to advance expenses to a person
against whom the Registrant brings a claim for breach of the duty of loyalty,
failure to act in good faith, intentional misconduct, knowing violation of law
or deriving an improper personal benefit); (iv) the rights conferred in the
Amended and Restated Bylaws are not exclusive, and the Registrant is authorized
to enter into indemnification agreements with its directors, officers and
employees; and (v) the Registrant may not retroactively amend the Bylaw
provisions in a way that is adverse to such directors, officers and employees.
The Registrant's policy is to enter into indemnification agreements with
each of its directors and officers that provide the maximum indemnity allowed by
Section 145 of the Delaware General Corporation Law and the Amended and Restated
Bylaws, as well as certain additional procedural protections. In addition, the
indemnification agreements provide that directors and officers will be
indemnified to the fullest possible extent not prohibited by law against all
expenses (including attorney's fees), judgments, fines, penalties and settlement
amounts paid or incurred by them in an action or proceeding, including any
action by or in the right of the Registrant, arising out of such person's
services as a director or officer of the Registrant, any subsidiary of the
Registrant or any other company or enterprise to which such person provides
services at the request of the Registrant. The indemnification agreements do not
require the Registrant to indemnify or advance expenses to an indemnified party
with respect to proceedings or claims initiated by the indemnified party and not
by way of defense, except with respect to proceedings specifically authorized by
the Board of Directors or brought to enforce a right to indemnification under
the indemnification agreements, the Registrants's Amended and Restated Bylaws or
any statute or law. Under the indemnification agreements and Sections 102 and
145 of the Delaware General Corporation Law, the Registrant is
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<PAGE> 4
not obligated to indemnify the indemnified party: (i) for any expenses incurred
by the indemnified party with respect to any proceeding instituted by the
indemnified party to enforce or interpret the indemnification agreements, if a
court of competent jurisdiction determines that each of the material assertions
made by the indemnified party in such proceeding was not made in good faith or
was frivolous; (ii) for any amounts paid in settlement of a proceeding unless
the Registrant consents to such settlement; (iii) for any expenses incurred by
the indemnified party with respect to any proceeding instituted by the
Registrant to enforce or interpret the indemnification agreements if a court
determines that each of such defenses asserted by the indemnified party in such
action was made in bad faith or was frivolous; (iv) on account of any suit in
which judgment is rendered against the indemnified party for an accounting of
profits made from the purchase or sale by the indemnified party of securities of
the Registrant pursuant to the provisions of Section 16(b) of the Securities
Exchange Act and related laws; (v) on account of the indemnified party's acts or
omissions which are finally adjudged to have been knowingly fraudulent or
deliberately dishonest, or to constitute willful misconduct or a knowing
violation of the law; (vi) on account of any conduct from which the indemnified
party derived an improper personal benefit; (vii) on account of conduct the
indemnified party believed to be contrary to the best interests of the
Registrant or its stockholders; (viii) on account of conduct that constituted a
breach of the indemnified party's duty of loyalty to the Registrant or its
stockholders; or (ix) if a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
The indemnification provisions in the Amended and Restated Bylaws and the
indemnification agreements entered into between the Registrant and its directors
and officers may be sufficiently broad to permit indemnification of the
Registrant's directors and officers for liabilities arising under the Securities
Act of 1933.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. INDEX TO EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
4.1 Restated Certificate of Incorporation of Registrant, as amended through
January 23, 1996 (which is incorporated herein by reference to Exhibit 3.(i)
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995).
4.2 Amended and Restated Bylaws of Registrant, as amended through January 24, 1997
(which are incorporated herein by reference to Exhibit 3.(ii) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996).
4.3 Form of Registrant's Common Stock Certificate (which is incorporated herein by
reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-1
(File No. 33-93862)).
4.4 Preferred Shares Rights Agreement, dated as of November 23, 1998 between Netscape
Communications Corporation and BankBoston, N.A., including the Certificate of
Designation, the form of Rights Certificate and the Summary of Rights attached
thereto as Exhibits A, B and C, respectively (which is incorporated herein by
reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed
December 7, 1998).
4.5 1995 Stock Plan and related agreements, as amended and restated.
5.1 Opinion of Counsel as to legality of securities being registered.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Counsel (which is contained in Exhibit 5.1).
24.1 Powers of Attorney (which are included as part of the signature page of this
registration statement).
</TABLE>
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<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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective 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
registration statement is on Form S-3 or Form S-8, and 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 Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
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<PAGE> 6
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 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 of 1933 and will be governed by the final adjudication of such issue.
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<PAGE> 7
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 Mountain View, State of California, on this 10th day
of December 1998.
NETSCAPE COMMUNICATIONS CORPORATION
By: /s/ Peter L.S. Currie
----------------------------------
Peter L.S. Currie,
Executive Vice President and Chief
Administrative Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James L. Barksdale, Roberta R. Katz and
Peter L.S. Currie, jointly and severally, as such person's attorneys-in-fact,
each with the power of substitution, for him or her in any and all capacities,
to sign any amendments 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, hereby ratifying and confirming all
that each of said attorneys-in-fact, or his or her 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 by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ James L. Barksdale President, Chief Executive Officer December 10, 1998
- ------------------------------- Principal Executive Officer) and
James L. Barksdale Director
/s/ Peter L.S. Currie Executive Vice President and Chief December 10, 1998
- ------------------------------- Administrative Officer (Principal
Peter L.S. Currie Financial Officer)
/s/ Noreen G. Bergin Senior Vice President and Corporate December 10, 1998
- ------------------------------- Controller (Principal Accounting
Noreen G. Bergin Officer)
/s/ James H. Clark Chairman of the Board of Directors December 10, 1998
- -------------------------------
James H. Clark
Executive Vice President, Products December __, 1998
- ------------------------------- and Director
Marc L. Andreessen
/s/ Eric A. Benhamou Director December 10, 1998
- -------------------------------
Eric A. Benhamou
/s/ L. John Doerr Director December 10, 1998
- -------------------------------
L. John Doerr
/s/ William V. Campbell Director December 10, 1998
- -------------------------------
William V. Campbell
</TABLE>
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<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
4.1 Restated Certificate of Incorporation of Registrant, as amended through
January 23, 1996 (which is incorporated herein by reference to Exhibit 3.(i)
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995).
4.2 Amended and Restated Bylaws of Registrant, as amended through January 24, 1997
(which are incorporated herein by reference to Exhibit 3.(ii) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996).
4.3 Form of Registrant's Common Stock Certificate (which is incorporated herein by
reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-1
(File No. 33-93862)).
4.4 Preferred Shares Rights Agreement, dated as of November 23, 1998 between Netscape
Communications Corporation and BankBoston, N.A., including the Certificate of
Designation, the form of Rights Certificate and the Summary of Rights attached
thereto as Exhibits A, B and C, respectively (which is incorporated herein by
reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed
December 7, 1998).
4.5 1995 Stock Plan and related agreements, as amended and restated.
5.1 Opinion of Counsel as to legality of securities being registered.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Counsel (which is contained in Exhibit 5.1).
24.1 Powers of Attorney (which are included as part of the signature page of this
registration statement).
</TABLE>
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<PAGE> 1
NETSCAPE COMMUNICATIONS CORPORATION
1995 STOCK PLAN
AS AMENDED AND RESTATED THROUGH MAY 22, 1998
1. Purposes of the Plan. The purposes of this Stock 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.
Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights and Long-Term Performance Awards 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 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 under state corporate and securities law,
the Code, and the applicable laws of any foreign jurisdiction or country where
Options or Rights 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 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 Netscape Communications Corporation, a Delaware
corporation.
(h) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services and who is compensated
for such services. The term "Consultant" shall not include Directors who are
paid only a director's fee by the Company or who are not compensated by the
Company for their services as Directors.
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<PAGE> 2
(i) "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the Company. For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option.
(j) "Director" means a member of the Board.
(k) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(n) "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 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 with the greatest volume of trading in 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 Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the Nasdaq National Market thereof) or is 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 high bid and low 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 Administrator deems reliable;
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<PAGE> 3
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(o) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(p) "Long-Term Performance Award" means an award under Section 12
below. A Long-Term Performance Award shall permit the recipient to receive a
cash or stock bonus (as determined by the Administrator) in accordance with the
terms of the recipient's individual grant. Long-Term Performance Awards may be
based upon (i) the value of the Common Stock, (ii) the components of such value,
(iii) the achievement of Company, Subsidiary and/or individual performance
factors, or (iv) upon such other criteria as the Administrator may deem
appropriate.
(q) "Long-Term Performance Award Agreement" means a written agreement
between the Company and an Optionee evidencing the terms and conditions of an
individual Long-Term Performance Award grant. The Long-Term Performance Award
Agreement is subject to the terms and conditions of the Plan.
(r) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(s) "Notice of Grant" means a written notice or agreement (which may
be styled "Notice of Grant" or "Option Agreement") evidencing certain terms and
conditions of an individual Option or Right grant. The Notice of Grant is
subject to the terms and conditions of the Plan.
(t) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(u) "Option" means a stock option granted pursuant to the Plan.
(v) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.
(w) "Optioned Stock" means the Common Stock subject to an Option or
Right.
(x) "Optionee" means an Employee or Consultant who holds an
outstanding Option or Right.
(y) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
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<PAGE> 4
(z) "Plan" means this 1995 Stock Plan.
(aa) "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of Rights under Section 11 below.
(bb) "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
(cc) "Right" means and includes Long-Term Performance Awards and Stock
Purchase Rights granted pursuant to the Plan.
(dd) "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.
(ee) "Section 16(b)" means Section 16(b) of the Securities Exchange
Act of 1934, as amended.
(ff) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.
(gg) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(hh) "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 Section 14 of the Plan, the
total number of Shares reserved and available for issuance under the Plan is
9,000,000 Shares, increased on the first day of each new fiscal year of the
Company from and including the 1997 fiscal year by a number of Shares equal to
4% of the number of Shares outstanding as of the last business day preceding
each such first day of each new fiscal year. However, the maximum number of
Shares reserved and available for issuance pursuant to Incentive Stock Options
is 9,000,000 Shares.
If an Option or Right expires or becomes unexercisable without having
been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, and the original purchaser of such Shares did not
receive any benefits of ownership of such Shares, such
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<PAGE> 5
Shares shall become available for future grant under the Plan. For purposes of
the preceding sentence, voting rights shall not be considered a benefit of Share
ownership.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to Directors,
Officers who are not Directors, and Employees who are neither Directors nor
Officers.
(ii) Administration With Respect to Directors and Officers
Subject to Section 16(b). With respect to Option or Right grants made to
Employees who are also Officers or Directors subject to Section 16(b) of the
Exchange Act, the Plan shall be administered by (A) the Board, if the Board may
administer the Plan in a manner complying with the rules under Rule 16b-3
relating to the disinterested administration of employee benefit plans under
which Section 16(b) exempt discretionary grants and awards of equity securities
are to be made, or (B) a committee designated by the Board to administer the
Plan, which committee shall be constituted to comply with the rules under Rule
16b-3 relating to the disinterested administration of employee benefit plans
under which Section 16(b) exempt discretionary grants and awards of equity
securities are to be made. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time 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 the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.
(iii) Administration With Respect to Other Persons. With respect
to Option or Right grants made to Employees or Consultants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A) the
Board or (B) 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:
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<PAGE> 6
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(n) of the Plan;
(ii) to select the Consultants and Employees to whom Options and
Rights may be granted hereunder;
(iii) to determine whether and to what extent Options and Rights
or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each Option and Right granted hereunder;
(v) to approve forms of notice 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 or Rights 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 Right 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 reduce the exercise price of any Option or Right to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option or Right shall have declined since the date the Option or
Right was granted;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) 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;
(x) to modify or amend each Option or Right (subject to Section
16(c) 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;
(xi) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option or Right previously
granted by the Administrator;
(xii) to institute an Option Exchange Program;
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<PAGE> 7
(xiii) to determine the terms and restrictions applicable to
Options and Rights and any Restricted Stock; and
(xiv) 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 or Rights.
5. Eligibility. Nonstatutory Stock Options and Rights may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. If otherwise eligible, an Employee or Consultant who has been granted
an Option or Right may be granted additional Options or Rights.
6. Limitations.
(a) Each Option shall be designated in the Notice of Grant as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option or Right 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.
(c) The following limitations shall apply to grants of Options and
Rights to Employees:
(i) No Employee shall be granted, in any fiscal year of the
Company, Options and Rights to purchase more than 1,200,000 Shares and, with
respect to Rights which consist of cash, no Employee shall be granted in any
fiscal year of the Company Rights for more than twice such Employee's annual
salary or $1,000,000, whichever is less.
(ii) In connection with his or her initial employment, an
Employee may be granted Options and Rights to purchase up to an additional
1,200,000 Shares and, with respect to Rights which consist of cash, may be
granted Rights for up to an additional $1,000,000, which amounts shall not count
against the limits set forth in subsection (i) above.
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<PAGE> 8
(iii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 14.
(iv) If an Option or Right is cancelled in the same fiscal year
of the Company in which it was granted (other than in connection with a
transaction described in Section 14), the cancelled Option or Right will be
counted against the limit set forth in subsection (i) above. For this purpose,
if the exercise price of an Option or Right is reduced, the transaction will be
treated as a cancellation of the Option or Right and the grant of a new Option
or Right.
7. Term of Plan. Subject to Section 20 of the Plan, the Plan shall become
effective upon the earlier to occur of its adoption by the Board or its approval
by the shareholders of the Company as described in Section 20 of the Plan. It
shall continue in effect for a term of ten (10) years unless terminated earlier
under Section 16 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Notice
of Grant; provided, however, that in the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Notice of Grant. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock 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 or
such shorter term as may be provided 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, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive
Stock 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 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 Employee other than an Employee
described in paragraph (A) immediately above, 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, the per Share
exercise price shall be determined by the Administrator.
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<PAGE> 9
(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 the completion of a service period.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. 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 Notice of Grant.
An Option may not be exercised for a fraction of a Share.
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<PAGE> 10
An Option shall be deemed exercised when the Company receives:
(i) written notice of exercise (in accordance with the Notice of Grant) 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 Notice of Grant 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 of the Optionee and his or her spouse. Until the stock
certificate evidencing such Shares is 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
stock certificate 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 stock certificate is issued, except as provided in Section 14 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. Upon
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at 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. In the
case of an Incentive Stock Option, such period of time for exercise shall not
exceed three (3) months from the date of termination. If, on the date of
termination, the Optionee is not entitled to exercise the Optionee's 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, an Optionee's
Continuous Status as an Employee or Consultant shall not automatically terminate
solely as a result of such change in status. However, in such event, an
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option three months and one day following such change of status.
(c) Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such
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<PAGE> 11
termination, but 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
the term of such Option as set forth in the Notice of Grant). If, at 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 may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the 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, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. 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.
(e) Rule 16b-3. Options granted to individuals subject to Section 16
of the Exchange Act ("Insiders") must comply with the applicable provisions of
Rule 16b-3 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.
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, by means of a Notice of Grant, of the terms, conditions and
restrictions related to the offer, including the number of Shares that the
offeree shall be entitled to purchase, the price to be paid, and the time within
which the offeree must accept such offer, which shall in no event exceed six (6)
months from the date upon which the Administrator made the determination to
grant the Stock Purchase Right. 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 employment 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 a rate determined by the
Administrator.
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<PAGE> 12
(c) Rule 16b-3. Stock Purchase Rights granted to Insiders, and Shares
purchased by Insiders in connection with Stock Purchase Rights, shall be subject
to any restrictions applicable thereto in compliance with Rule 16b-3. An Insider
may only purchase Shares pursuant to the grant of a Stock Purchase Right, and
may only sell Shares purchased pursuant to the grant of a Stock Purchase Right,
during such time or times as are permitted by Rule 16b-3.
(d) 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. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.
(e) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the 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
will 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 14
of the Plan.
12. Long-Term Performance Awards.
(a) Administration. Long-Term Performance Awards are cash or stock
bonus awards that may be granted either alone or in addition to other awards
granted under the Plan. The Administrator shall determine the nature, length and
starting date of any performance period (the "Performance Period") for each
Long-Term Performance Award, and shall determine the performance or employment
factors, if any, to be used in the determination of Long-Term Performance Awards
and the extent to which such Long-Term Performance Awards are valued or have
been earned. Long-Term Performance Awards may vary from participant to
participant and between groups of participants and may be based upon (i) the
value of the Common Stock, (ii) the components of such value, (iii) the
achievement of Company, Subsidiary, Parent and/or individual performance
factors, or (iv) upon such other criteria as the Administrator may deem
appropriate. Performance Periods may overlap and participants may participate
simultaneously with respect to Long-Term Performance Awards that are subject to
different Performance Periods and different performance factors and criteria.
Long-Term Performance Awards shall be confirmed by, and be subject to the terms
of, a Long-Term Performance Award agreement. The terms of such awards need not
be the same with respect to each participant.
At the beginning of each Performance Period, the Administrator
may determine for each Long-Term Performance Award subject to such Performance
Period the range of dollar values or number of shares of Common Stock to be
awarded to the participant at the end of the Performance Period if and to the
extent that the relevant measures of performance for such Long-Term Performance
Award are met. Such dollar values or number of shares of Common Stock may be
fixed or may vary in accordance with such performance or other criteria as may
be determined by the Administrator.
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<PAGE> 13
(b) Adjustment of Awards. The Administrator may adjust the
performance factors applicable to the Long-Term Performance Awards to take into
account changes in legal, accounting and tax rules and to make such adjustments
as the Administrator deems necessary or appropriate to reflect the inclusion or
exclusion of the impact of extraordinary or unusual items, events or
circumstances in order to avoid windfalls or hardships.
13. Non-Transferability of Options and Rights. An Option or Right 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.
14. 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 of Common Stock covered by
each outstanding Option and 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 Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Right, as well as the price per
share of Common Stock covered by each such outstanding Option or 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; 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 of Common Stock subject to an
Option or Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Right
has not been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its sole
discretion in such instances, declare that any Option or Right shall terminate
as of a date fixed by the Board and give each Optionee the right to exercise his
or her Option or Right as to all or any part of the Optioned Stock, including
Shares as to which the Option or Right would not otherwise be exercisable.
(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 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 Right, the
Administrator
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<PAGE> 14
shall, in lieu of such assumption or substitution, provide for the Optionee to
have the right to exercise the Option or Right as to all or a portion of the
Optioned Stock, including Shares as to which it would not otherwise be
exercisable; provided, however, that in the case of a Long-Term Performance
Award which is to consist, in whole or in part, of cash, the Administrator shall
provide, in lieu of assumption or substitution, for such Long-Term Performance
Award, or such portion thereof which is to consist of cash, to be payable in
full to the Optionee. If the Administrator makes an Option or Right exercisable
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Administrator shall notify the Optionee that the Option or Right
shall be fully exercisable for a period of fifteen (15) days from the date of
such notice, and the Option or Right shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option or 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 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 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 or Right, for each Share of Optioned
Stock subject to the Option or 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.
15. Date of Grant. The date of grant of an Option or Right shall be,
for all purposes, the date on which the Administrator makes the determination
granting such Option or Right, 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.
16. 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 Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.
(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
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<PAGE> 15
otherwise between the Optionee and the Administrator, which agreement must be in
writing and signed by the Optionee and the Company.
17. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Right unless the exercise of such Option or Right and
the issuance and delivery of such Shares 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,
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 or Right, the Company may require the person exercising such Option or
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.
18. Liability of Company.
(a) Inability to Obtain Authority. 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.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock covered
by an Option or Right exceeds, as of the date of grant, the number of Shares
which may be issued under the Plan without additional shareholder approval, such
Option or Right shall be void with respect to such excess Optioned Stock, unless
shareholder approval of an amendment sufficiently increasing the number of
Shares subject to the Plan is timely obtained in accordance with Section 16(b)
of the Plan.
19. 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.
20. 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 manner and to the degree required under applicable federal and state law.
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<PAGE> 16
NETSCAPE COMMUNICATIONS CORPORATION
1995 STOCK PLAN
NOTICE OF GRANT
TERMS & CONDITIONS OF GRANT
1. Definitions; Terms. Unless otherwise defined herein, the terms of this
Notice shall have the meanings defined in the Plan. The terms and conditions of
the Plan shall prevail over any inconsistent terms and conditions of this Notice
of Grant.
2. Grant of Option. The Plan Administrator of Netscape Communications
Corporation ("Netscape") hereby grants to
--------------------------,
("the Optionee"), an option (the "Option") to purchase the following number of
Shares at the following exercise price per share (the "Exercise Price"), subject
to and conditioned on the terms and conditions of the 1995 Stock Plan, which is
incorporated by reference, and this Notice of Grant:
Grant Number
---------------------
Date of Grant
---------------------
Vesting Commencement Date
---------------------
Exercise Price per Share
---------------------
Total Number of Shares Granted
Type of Option: Nonstatutory Stock Option
Term/Expiration Date:
---------------------
3. Vesting Schedule. During Optionee's continued full-time employment at
Netscape, the Option shall vest and be exercisable as to [varies] of the Option
shares per month, over a period of [varies] months from the Vesting Commencement
Date, until all the shares are exercisable. Upon a change in Optionee's status
from full-time to part-time, the rate at which the Option vests shall be reduced
in proportion to Optionee's reduced hours. Vesting of the Option shall cease
upon the 91st day of an approved medical leave of absence or upon the first day
of any unpaid leave of absence taken by the Optionee, unless otherwise required
by law, and start again upon the Optionee's resumption of regular active
employment. The Option vests based solely on Optionee's continuing status as an
at-will employee or consultant during the vesting period.
<PAGE> 17
4. Termination Period: This Option may be exercised for three months
after Optionee ceases to be an Employee. Upon the death or Disability of the
Optionee, this Option may be exercised for such longer period as provided in the
Plan. In no event shall this Option be exercised later than the Term/Expiration
Date as provided above.
5. Exercise of Option. The Optionee may exercise this Option by
delivering to Netscape's Stock Administration an exercise notice, in the form
provided by Netscape (the "Exercise Notice"), which shall include the election
to exercise the Option, the number of Shares as to which the Option is being
exercised (the "Exercised Shares"), and any other statements reasonably required
by Netscape. The Exercise Notice shall be accompanied by payment of the
aggregate exercise price as to all Exercised Shares (the "Aggregate Exercise
Price"). This Option shall be deemed exercised when Netscape receives a
completed Exercise Notice accompanied by the Aggregate Exercise Price in an
authorized method of payment.
No Shares shall be issued pursuant to the exercise of this Option unless
the issuance and exercise complies with Applicable Laws. For income tax purposes
the Exercised Shares shall be considered transferred to the Optionee on the date
the Option is exercised with respect to such Exercised Shares.
6. Method of Payment. The Optionee may pay the Aggregate Exercise Price
by way of one or more of the following: (a) cash; (b) check; (c) consideration
received by Netscape under a cashless exercise program implemented by Netscape
in connection with the Plan; or (d) surrender of other Shares that: (i) have a
Fair Market Value on the date of surrender equal to the Exercise Price of the
Exercised Shares, and (ii) 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.
7. Non-Transferability of Option. This Option may not be transferred
other than by will or the laws of descent or distribution. During the lifetime
of Optionee, only the Optionee may exercise the Option. The terms of the Plan
and this Notice of Grant bind the Optionee's executors, administrators, heirs,
successors and assigns.
8. Insider Trading Policy. All transactions involving the Option and
shares derived from the Option are subject to the limits imposed by Netscape's
Insider Trading Policy (the "Insider Trading Policy").
9. No Guarantee of Employment; No Right to Additional Options. Nothing in
this Notice of Grant constitutes a promise of continued employment or changes
the right of either the Optionee or Netscape to terminate Optionee's
relationship as an employee or consultant at any time, with or without cause. In
addition, Netscape maintains the Plan in its discretion, and may terminate it at
any time, and Optionee has no right to continued option grants under the Plan.
10. Incorporation by Reference. The Plan and the Insider Trading Policy
are incorporated herein by reference. The Plan, Insider Trading Policy, and this
Notice of Grant supersede all prior undertakings of Netscape with respect to the
subject matter hereof, and may not be modified except by means of a writing
signed by the General Counsel or Associate General Counsel of Netscape.
<PAGE> 18
11. Arbitration; Choice of Law; Venue; Statute of Limitations. It is a
condition of this grant that any dispute regarding the issuance, administration,
vesting, or exercise of this grant are subject to final and binding arbitration
on the following terms: The parties will refer any dispute to binding
arbitration by JAMS/Endispute in Santa Clara County, California. The results of
any arbitration will be final and non-appeallable. The losing party will pay the
costs of the arbitration and the reasonable legal fees and expenses of the
prevailing party, as determined by the arbitrator. The parties waive any right
to judicial process. Delaware law, without regard to its conflict-of-law
provisions, will govern any dispute. The U.S. Arbitration Act and JAMS/Endispute
rules will govern the arbitration process. Any claim must be raised within the
period provided by any applicable statute of limitations.
(Revised 7/98)
<PAGE> 19
EXERCISE NOTICE
Effective as of today, , 19_____, I elect to exercise the following stock
option(s) and purchase shares of Common Stock (the "shares") of Netscape
Communications Corporation ("Netscape"):
<TABLE>
<CAPTION>
- ------------------- ------------------------- --------------- -------------- --------------------- ------------------
Grant No. Grant Date Plan Type Shares Price
- ------------------- ------------------------- --------------- -------------- --------------------- ------------------
<S> <C> <C> <C> <C> <C>
- ------------------- ------------------------- --------------- -------------- --------------------- ------------------
- ------------------- ------------------------- --------------- -------------- --------------------- ------------------
- ------------------- ------------------------- --------------- -------------- --------------------- ------------------
</TABLE>
The procedure to use is indicated below (check either A or B):
___ Cash Exercise
I elect to exercise the option and pay for the shares in full. Enclosed is
my check payable to Netscape Communications Corporation for $ , which
represents the full exercise price of the shares. (For non-qualified
options, tax withholding is required. I agree to contact Stock
Administration to determine amount to be withheld.)
Delivery Instructions (if certificate is to be mailed to other than home
address):
- --------------------------------------------------------------------------------
___ Cashless Exercise (Same Day Sale)
<TABLE>
<S> <C>
Brokerage Company Contact Name
------------------------------------- -----------------------
Account No. FAX No. (REQUIRED)
-------------------------------------------- -----------------
Telephone No.
------------------------------------------
</TABLE>
I hereby authorize the Brokerage Company designated above (my "broker") to sell
up to shares of Netscape common stock (check one):
[ ] I will call my broker to place a market order.
[ ] At a price of at least $__________ per share.
I UNDERSTAND THAT THIS AUTHORIZATION WILL EXPIRE ON THE LAST TRADING DAY OF THE
CURRENT QUARTER'S OPEN WINDOW PERIOD, AND THAT I AM RESPONSIBLE FOR ARRANGING
THE SALE OF THESE SHARES.
<PAGE> 20
My broker may provide Netscape confirmation and price of sale. I hereby direct
Netscape to authorize Boston EquiServe to electronically deliver via Depository
Trust Company up to ____________ shares to the account of my broker for my
benefit.
Additionally, I authorize my broker to pay Netscape directly for the total
purchase price of the option exercise, including applicable taxes, in the amount
of $__________________. The remaining balance of the sale proceeds are to be
(check one):
[ ] Deposited in my brokerage account.
[ ] Sent by check to the address below.
[ ] Wired to my bank account. I understand I must provide wiring
instructions to my broker prior to settlement date.
TAX CONSULTATION
I understand that my purchase or disposition of the shares may have significant
tax implications. I will consult my own tax advisor if I require tax advice and
I am not relying on Netscape for any tax advice.
- ---------------------------------- ----------------------------------
Submitted by: Accepted by the Company:
- ---------------------------------- ----------------------------------
Purchaser Signature Stock Administration Signature
- ---------------------------------- ----------------------------------
Print (Last Name, First Name) Date
- ----------------------------------
Address
- ----------------------------------
City, State and Zip Code
- ----------------------------------
Daytime Telephone No.
================================================================================
Instructions for Cash Exercise:
1. Complete "Exercise Notice."
2. For non-qualified options, call Stock Administration to determine tax
withholding.
3. Mail or deliver Exercise Notice with check payable to Netscape
Communications Corporation to Stock Administration, Mail Stop MV-002.
Instructions for Cashless Exercise (Same Day Sale):
1. Contact Stock Administration to determine number of shares exercisable:
Donna Harris (650) 937- 6720/dharris/stock or Monica Volta (650)
937-5890/mvolta/stock.
2. Complete Exercise Notice and deliver or fax to Stock Administration at
(650) 428-4363. Stock Administration will fax the Exercise Notice to your
designated Broker.
revised 10/97
<PAGE> 1
Exhibit 5.1
December 10, 1998
Netscape Communications Corporation
501 East Middlefield Road
Mountain View, California 94043
Re: Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by Netscape Communications
Corporation, a Delaware corporation (the "Registrant" or "you"), with the
Securities and Exchange Commission on or about December 10, 1998, in connection
with the registration under the Securities Act of 1933, as amended, of an
aggregate of 3,992,726 shares of your Common Stock, $.0001 par value (the
"Shares"), outstanding or reserved for issuance pursuant to the 1995 Stock Plan
(the "Plan"). As your legal counsel, we have reviewed the actions proposed to be
taken by you in connection with the proposed sale and issuance of the Shares by
the Registrant under the Plan. We assume that the consideration received by you
in connection with each issuance of Shares will include an amount in the form of
cash, services rendered or property that exceeds the greater of (i) the
aggregate par value of such Shares or (ii) the portion of such consideration
determined by the Registrant's Board of Directors to be "capital" for purposes
of the Delaware General Corporation Law.
It is our opinion that, upon completion of the proceedings being taken,
or contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares pursuant to the Registration Statement and the Plan, including the
proceedings being taken in order to permit such transaction to be carried out in
accordance with applicable state securities laws, the Shares, when issued and
sold in the manner described in the Registration Statement and in accordance
with the resolutions adopted by the Board of Directors of the Registrant, 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 amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the 1995 Stock Plan of Netscape Communications Corporation of
our report dated January 23, 1998 (except for Note 14, as to which the date is
March 25, 1998) with respect to the consolidated financial statements and
schedule of Netscape Communications Corporation included in its Annual Report
(Form 10-K) for the year ended December 31, 1997, filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG
-----------------
ERNST & YOUNG
Palo Alto, California
December 10, 1998
