<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 12, 1998
REGISTRATION STATEMENT NO. 333-________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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NETSCAPE COMMUNICATIONS CORPORATION
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-3200270
------------------------------- -----------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
501 EAST MIDDLEFIELD ROAD, MOUNTAIN VIEW, CALIFORNIA 94043
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
--------------
NETSCAPE COMMUNICATIONS CORPORATION KIVA SOFTWARE CORPORATION
1995 STOCK PLAN 1995 STOCK OPTION PLAN
(FULL TITLE OF THE PLANS)
--------------
ROBERTA R. KATZ
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
NETSCAPE COMMUNICATIONS CORPORATION
501 EAST MIDDLEFIELD ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 254-1900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
--------------
Copy to:
LARRY W. SONSINI
JAMES N. STRAWBRIDGE
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(650) 493-9300
--------------
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>
Newly reserved under the
Netscape 1995 Stock Plan
(the "NETSCAPE PLAN") (1) 3,919,372 shares $ 18.21875 $ 71,406,058.62 $ 21,064.79
Common Stock, $.0001 par value
KIVA Software Corporation
1995 Stock Option Plan
(the "KIVA PLAN") (2) 740,730 shares $ 18.21875 $ 13,495,174.68 $ 3,981.08
Common Stock, $.0001 par value
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
TOTAL: 4,660,102 shares $ 84,901,233.30 $ 25,045.87
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</TABLE>
(1) The Netscape Plan provides for an annual increase in the number of
shares of the Registrant's Common Stock reserved and available for
issuance under the Plan equal to 4% of the Registrant's Common Stock
outstanding as of the last business day preceding the first day of such
fiscal year. Pursuant to Rule 416(a), this Registration Statement shall
also cover any additional shares of the Registrant's Common Stock that
becomes issuable under the Plan by reason
<PAGE>
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) Pursuant to an Agreement and Plan of Reorganization dated as of November
24, 1997 (the "REORGANIZATION AGREEMENT"), by and among the Registrant,
Knife Acquisition Corporation and KIVA Software Corporation ("KIVA"),
the Registrant assumed all of the outstanding options to purchase common
stock of KIVA under the KIVA Plan (the "ASSUMED OPTIONS"), with
appropriate adjustments to the number of shares and exercise price of
each Assumed Option to reflect the ratio at which the common stock of
KIVA was converted into common stock of the Registrant under the
Reorganization Agreement.
(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 January 9, 1998, as reported on
the Nasdaq National Market.
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-2-
<PAGE>
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 heretofore filed with the
Commission by the Registrant are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 filed pursuant to the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT");
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997
filed pursuant to the Exchange Act;
(c) The Registrant's current reports on Form 8-K and 8-K/A, filed with
the Commission on July 23, 1997, November 28, 1997, December 15,
1997, December 16, 1997 and January 5, 1998; and
(d) 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 (File No. 0-26310).
All documents subsequently filed with the Commission by the Registrant
pursuant to Sections 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 hereunder 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. Any statement contained
herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein
or in any other
-3-
<PAGE>
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such earlier statement. Any
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
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 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
-4-
<PAGE>
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.
Exhibit
Number Description of Document
- ---------- -----------------------------------------------------------------
4.1 Specimen Certificate representing the Common Stock of the
Registrant (WHICH IS INCORPORATED HEREIN BY REFERENCE TO
EXHIBIT 4.1 TO REGISTRANT'S REGISTRATION STATEMENT ON FORM S-1
(FILE NO. 33-93862)).
4.2 Amended and Restated Certificate of Incorporation of Registrant
(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 1995).
4.3 Amended and Restated Bylaws of Registrant (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 1996).
4.4 Registrant's 1995 Stock Plan and related agreements (WHICH ARE
INCORPORATED HEREIN BY REFERENCE TO EXHIBIT 10.6 OF THE
REGISTRANT'S 1995 S-1).
4.5 KIVA Software Corporation 1995 Stock Option Plan and related
agreements.
5.1 Opinion of Counsel as to legality of securities being registered.
-5-
<PAGE>
Exhibit
Number Description of Document
- ---------- -----------------------------------------------------------------
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).
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 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.
-6-
<PAGE>
(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 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>
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 12th day of January 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 attorney-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 below by the following persons on the
12th day of January 1998 in the capacities indicated.
SIGNATURES TITLE
/s/ James L. Barksdale President, Chief Executive Officer
- --------------------------- (PRINCIPAL EXECUTIVE OFFICER) and Director
James L. Barksdale
/s/ Peter L.S. Currie Executive Vice President and Chief
- --------------------------- Administrative Officer (PRINCIPAL
Peter L.S. Currie FINANCIAL OFFICER)
/s/ Noreen G. Bergin Vice President and Corporate Controller
- --------------------------- (PRINCIPAL ACCOUNTING OFFICER)
Noreen G. Bergin
/s/ James H. Clark Chairman of the Board of Directors
- ---------------------------
James H. Clark
/s/ Marc L. Andreessen Senior Vice President, Products
- --------------------------- and Director
Marc L. Andreessen
/s/ Eric A. Benhamou Director
- ---------------------------
Eric A. Benhamou
/s/ L. John Doerr Director
- ---------------------------
L. John Doerr
/s/ John E. Warnock Director
- ---------------------------
John E. Warnock
-8-
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Document
- ---------- -----------------------------------------------------------------
4.1 Specimen Certificate representing the Common Stock of the
Registrant (WHICH IS INCORPORATED HEREIN BY REFERENCE TO
EXHIBIT 4.1 TO REGISTRANT'S REGISTRATION STATEMENT ON FORM S-1
(FILE NO. 33-93862)).
4.2 Amended and Restated Certificate of Incorporation of Registrant
(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 1995).
4.3 Amended and Restated Bylaws of Registrant (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 1996).
4.4 Registrant's 1995 Stock Plan and related agreements (WHICH ARE
INCORPORATED HEREIN BY REFERENCE TO EXHIBIT 10.6 OF THE
REGISTRANT'S 1995 S-1).
4.5 KIVA Software Corporation 1995 Stock Option Plan and related
agreements.
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).
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<PAGE>
KIVA SOFTWARE CORPORATION
1995 STOCK OPTION PLAN
AS ADOPTED NOVEMBER 6, 1995
AMENDED FEBRUARY 7, 1996
AMENDED JUNE 11, 1996
AMENDED MAY 1, 1997 (*)
1. PURPOSE. The purpose of this Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent or
Subsidiaries, by offering them an opportunity to participate in the Company's
future performance through awards of Options. Capitalized terms not defined
in the text of this Plan are defined in Section 21. This Plan is intended to
be a written compensatory benefit plan within the meaning of Rule 701
promulgated under the Securities Act.
2. SHARES SUBJECT TO THIS PLAN.
2.1 NUMBER OF SHARES AVAILABLE. Subject to Section 2.2 and Section
16, the total number of Shares reserved and available for grant and issuance
pursuant to this Plan shall be 3,500,000 Shares which, together with all
non-Plan options and warrants to purchase stock of the Company that are
outstanding on May 1, 1997, is Forty and Two-Tenths percent (40.2%) of the
outstanding shares of the Company on May 1, 1997, the date the Board approved
the increase in Shares issuable hereunder. Subject to Section 2.2 and
Section 16, Shares that: (a) are subject to issuance upon exercise of an
Option but cease to be subject to such Option for any reason other than the
purchase of such Shares upon exercise of such Option or (b) are subject to
issuance upon exercise of an Option that otherwise terminates or expires
without such Shares being issued, shall again be available for grant and
issuance in connection with future grants of Options under this Plan. At all
times the Company will reserve and keep available a sufficient number of
Shares as will be required to satisfy the requirements of all outstanding
Options granted under this Plan.
2.2 ADJUSTMENT OF SHARES. In the event that the number of
outstanding shares of the Company's Common Stock is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of
the Company without the payment of consideration therefor, then (a) the
number of Shares reserved for issuance under this Plan and (b) the Exercise
Prices of and number of Shares subject to outstanding Options shall be
proportionately adjusted, subject to any required action by the Board or the
shareholders of the Company
- ---------------
(*) Stock options granted on or after May 1, 1997 shall be issued in
reliance on Section 25102(o) of the California Corporations Code. The
issuance of Shares on exercise of options granted on or after May 1,
1997 shall also be in reliance on Section 25102(o).
<PAGE>
and compliance with applicable securities laws; PROVIDED, HOWEVER, that
fractions of a Share shall not be issued but shall either be (i) replaced by a
cash payment equal to the Fair Market Value of such fractional shares in lieu
thereof, or (ii) rounded up to the nearest whole Share, as determined by the
Committee.
3. ELIGIBILITY. ISOs (as defined in Section 5 of this Plan) may be
granted only to employees (including officers and directors who are also
employees) of the Company or of a Parent or Subsidiary of the Company. NQSOs
(as defined in Section 5 of this Plan) may be granted to employees, including
employees that are officers, directors and consultants, of the Company or any
Parent or Subsidiary of the Company; PROVIDED that such consultants render
bona fide services not in connection with the offer and sale of securities in
a capital-raising transaction. A person may be granted more than one Option
under this Plan.
4. ADMINISTRATION.
4.1 COMMITTEE AUTHORITY. This Plan shall be administered by the
Committee. Subject to the general purposes, terms and conditions of this
Plan, and to the direction of the Board, the Committee has full power and
authority to implement and carry out this Plan. Without limitation the
Committee has authority to:
(a) construe and interpret this Plan, any Stock Option
Agreement (as defined in Section 5 below) and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations
relating to this Plan;
(c) select persons to receive Options;
(d) determine the form and terms of Options;
(e) determine the number of Shares subject to Options;
(f) determine whether Options will be granted singly, in
combination with, in tandem with, in replacement of, or as
alternatives to, any awards under any other incentive or
compensation plan of the Company or any Parent or
Subsidiary of the Company;
(g) grant waivers of Plan or Option conditions;
(h) determine the vesting, exercisability and payment terms of
Options;
-2-
<PAGE>
(i) correct any defect, supply any omission, or reconcile any
inconsistency in this Plan, any Option, Stock Option
Agreement (as defined in Section 5 below) or Exercise
Agreement (as defined in Section 5 below);
(j) determine whether an Option has been earned; and
(k) make all other determinations necessary or advisable for
the administration of this Plan.
4.2 COMMITTEE DISCRETION. Any determination made by the Committee
with respect to any Option shall be made in its sole discretion at the time
of grant of the Option or (unless in contravention of any express term of
this Plan or Option) at any later time, and such determination shall be final
and binding on the Company and on all persons having an interest in any
Option under this Plan. The Committee may delegate to one or more officers
of the Company the authority to grant Options under this Plan to Participants
who are not Insiders and the authority to administer such Options.
5. OPTIONS. The Committee may grant Options to eligible persons and
shall determine whether such Options shall be Incentive Stock Options within
the meaning of Section 421 of the Code ("ISOs") (and any amendments,
successors to or replacements of such Code Section) or Nonqualified Stock
Options ("NQSOs"), the number of Shares subject to the Option, the Exercise
Price of the Option, the period during which the Option may be exercised, and
all other terms and conditions of the Option, subject to the following:
5.1 FORM OF OPTION GRANT. Each Option granted under this Plan
shall be evidenced by an agreement which shall expressly identify the Option
as an ISO or an NQSO ("STOCK OPTION AGREEMENT"), and be in such form and
contain such provisions (which need not be the same for each Participant) as
the Committee shall from time to time approve, and which, shall comply with
and be subject to the terms and conditions of this Plan.
5.2 DATE OF GRANT. The date of grant of an Option shall be the
date on which the Committee makes the determination to grant such Option,
unless otherwise specified by the Committee. The Stock Option Agreement and
a copy of this Plan will be delivered to the Participant promptly after the
Committee grants the Option.
5.3 EXERCISE PERIOD. Options may be exercisable immediately
(subject to repurchase pursuant to Section 10 of this Plan) or may be
exercisable within the times or upon the events determined by the Committee
as set forth in the Stock Option Agreement governing such Option; PROVIDED,
HOWEVER, that no Option shall be exercisable after the expiration of ten (10)
years from the date such Option is granted; and PROVIDED FURTHER that no ISO
granted to a person who directly or by attribution owns more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary of the Company ("TEN PERCENT
SHAREHOLDER") shall be exercisable after the expiration of five (5) years
from the date such ISO is granted. The Committee also may provide for
Options to become exercisable at one time or from time to time, periodically
or otherwise, in such number of Shares or percentage of Shares as the
Committee determines. Subject to
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<PAGE>
earlier termination of the Option as provided herein, each Participant who is
not an officer, director or consultant of the Company or of a Parent or
Subsidiary of the Company shall have the right to exercise an Option granted
hereunder at the rate of at least twenty percent (20%) per year over the five
(5) year period from the date such Option is granted.
5.4 EXERCISE PRICE. The Exercise Price of an Option shall be
determined by the Committee when the Option is granted and may be not less
than 85% of the Fair Market Value of the Shares on the date of grant;
PROVIDED that (i) the Exercise Price of an ISO shall be not less than 100% of
the Fair Market Value of the Shares on the date of grant and (ii) the
Exercise Price of any Option granted to a Ten Percent Shareholder shall not
be less than 110% of the Fair Market Value of the Shares on the date of
grant. Payment for the Shares purchased may be made in accordance with
Section 6 of this Plan.
5.5 METHOD OF EXERCISE. Options may be exercised only by delivery
to the Company of a written stock option exercise agreement (the "EXERCISE
AGREEMENT") in a form approved by the Committee (which need not be the same
for each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement,
if any, and such representations and agreements regarding Participant's
investment intent and access to information and other matters, if any, as may
be required or desirable by the Company to comply with applicable securities
laws, together with payment in full of the Exercise Price for the number of
Shares being purchased in the manner permitted by the terms of such Option,
as determined under Section 6.1 of this Plan and provision for any required
tax withholding in accordance with Section 7 of this Plan.
5.6 TERMINATION. Subject to earlier termination pursuant to
Sections 16 or 17, and notwithstanding the exercise periods set forth in the
Stock Option Agreement, subject to the provisions of Section 5.9, exercise of
an Option shall always be subject to the following:
(a) If the Participant is Terminated for any reason except
death or Disability or for Cause, then Participant may
exercise such Participant's Options, only to the extent
that such Options are exercisable upon the Termination
Date, and such Options must be exercised by Participant
within three (3) months after the Termination Date (or
within such shorter time period, not less than thirty (30)
days after the Termination Date, or longer time period,
not exceeding five (5) years after the Termination Date,
as may be determined by the Committee, with any exercise
beyond three (3) months after the Termination Date deemed
to be an NQSO, but in any event, no later than the
expiration date of the Options).
(b) If the Participant is Terminated because of Participant's
death or Disability (or the Participant dies within three
(3) months after a Termination other than for Cause or
because of Participant's Disability, then Participant's
Options may be exercised only to the extent that such
Options are exercisable by Participant on the Termination
Date and must be exercised by Participant (or
Participant's legal representative or
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authorized assignee) within twelve (12) months after the
Termination Date (or within such shorter time period, not
less than six (6) months after the Termination Date, or
longer time period, not exceeding five (5) years after the
Termination Date, as may be determined by the Committee),
with any exercise beyond (a) three (3) months after the
Termination Date when the Termination is for any reason
other than the Participant's death or disability, within
the meaning of Code Section 22(e)(3) or (b) twelve (12)
months after the Termination Date when the Termination is
because of Participant's death or Disability, deemed to be
an NQSO, but in any event no later than the expiration
date of the Options.
(c) If Participant is Terminated for Cause, then
Participant's Options shall expire on such Participant's
Termination Date, or at such later time and on such
conditions as are determined by the Committee.
5.7 LIMITATIONS ON EXERCISE. The Committee may specify a
reasonable minimum number of Shares that may be purchased on any exercise of
an Option, PROVIDED that such minimum number will not prevent Participant
from exercising the Option for the full number of Shares for which it is then
exercisable.
5.8 LIMITATIONS ON ISOs. The aggregate Fair Market Value
(determined as of the date of grant) of Shares with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year
(under this Plan or under any other incentive stock option plan of the
Company or any Parent or Subsidiary of the Company) shall not exceed
$100,000. If the Fair Market Value of Shares on the date of grant with
respect to which ISOs are exercisable for the first time by a Participant
during any calendar year exceeds $100,000, then the Options for the first
$100,000 worth of Shares to become exercisable in such calendar year shall be
ISOs and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year shall be NQSOs. In the event that the Code
or the regulations promulgated thereunder are amended after the Effective
Date (as defined in Section 17) to provide for a different limit on the Fair
Market Value of Shares permitted to be subject to ISOs, then such different
limit shall be automatically incorporated herein and shall apply to any
Options granted after the effective date of such amendment and, to the extent
permitted under the Code or the regulations promulgated thereunder, as so
amended, such different limit shall apply to any outstanding Option; PROVIDED
that such different limit is greater than $100,000.
5.9 MODIFICATION, EXTENSION OR RENEWAL. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, PROVIDED that any such action may not, without the
written consent of Participant, impair any of Participant's rights under any
Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered shall be treated in accordance with Code Section
424(h) (and any amendments, successors to or replacements of such Code
Section). The Committee may reduce the Exercise Price of outstanding Options
without the consent of affected Participants by a written notice to them;
PROVIDED, HOWEVER, that the Exercise Price may not be reduced below the
minimum Exercise Price that would be
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permitted under Section 5.4 of this Plan for Options granted on the date the
action is taken to reduce the Exercise Price.
5.10 NO DISQUALIFICATION. Notwithstanding any other provision in
this Plan, no term of this Plan relating to ISOs shall be interpreted,
amended or altered, nor shall any discretion or authority granted under this
Plan be exercised, so as to disqualify this Plan under Section 422 of the
Code or, without the consent of the affected Participants, to disqualify any
ISO under Section 422 of the Code.
6. PAYMENT FOR SHARE PURCHASES.
6.1 PAYMENT. Payment for Shares purchased pursuant to this Plan
may be made in cash (by check) or, where expressly approved for the
Participant by the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares that either: (i) have been owned by
Participant for more than six (6) months and have been
paid for within the meaning of SEC Rule 144 (and, if such
shares were purchased from the Company by use of a
promissory note, such note has been fully paid with
respect to such shares); or (ii) were obtained by
Participant in the public market;
(c) by tender of a full recourse promissory note having such
terms as may be approved by the Committee and bearing
interest at a rate sufficient to avoid imputation of
income under Sections 483 and 1274 of the Code; PROVIDED,
HOWEVER, that Participants who are not employees or
directors of the Company shall not be entitled to purchase
Shares with a promissory note unless the note is
adequately secured by collateral other than the Shares;
and PROVIDED FURTHER, that the portion of the Exercise
Price equal to the par value of the Shares, if any, must
be paid in cash; and PROVIDED FURTHER, that the promissory
note shall be secured as provided in Section 12 of this
Plan;
(d) by waiver of compensation due or accrued to Participant
for services rendered;
(e) by tender of property;
(f) PROVIDED that a public market for the Company's stock then
exists;
(i) through a "same day sale" commitment from Participant
and a broker-dealer that is a member of the National
Association of Securities Dealers (an "NASD DEALER")
whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of
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the Shares so purchased to pay for the Exercise
Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
(ii) through a "margin" commitment from Participant and an
NASD Dealer whereby Participant irrevocably elects to
exercise the Option and to pledge the Shares so
purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the
amount of the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the
Company; or
(g) by any combination of the foregoing.
6.2 LOAN GUARANTEES. The Committee may help the Participant pay
for Shares purchased under this Plan by authorizing a guarantee by the
Company of a third-party loan to the Participant; PROVIDED, HOWEVER, that no
such guarantee may be made if it would be in contravention of applicable law.
7. WITHHOLDING TAXES.
7.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued upon
the exercise of Options granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan,
payments in satisfaction of Options are to be made in cash, such payment
shall be net of an amount sufficient to satisfy any federal, state and local
withholding tax requirement.
7.2 STOCK WITHHOLDING. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting
of any Option that is subject to tax withholding and the Participant is
obligated to pay the Company the amount required to be withheld, the
Committee may in its sole discretion allow the Participant to satisfy the
minimum withholding tax obligation by electing to have the Company withhold
from the Shares to be issued that number of Shares having a Fair Market Value
equal to the minimum amount required to be withheld, determined on the date
that the amount of tax to be withheld is to be determined. All elections by
a Participant to have Shares withheld for this purpose shall be made in
accordance with the requirements established by the Committee and be in
writing in a form acceptable to the Committee.
8. PRIVILEGES OF STOCK OWNERSHIP.
8.1 VOTING AND DIVIDENDS. No Participant shall have any of the
rights of a shareholder with respect to any Shares until the Shares are
issued to the Participant. After Shares are issued to the Participant, the
Participant shall be a shareholder and have all the rights of a shareholder
with respect
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to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; PROVIDED, that
if such Shares are subject to repurchase restrictions or other restrictions,
then any new, additional or different securities the Participant may become
entitled to receive with respect to such Shares by virtue of a stock
dividend, stock split or any other change in the corporate or capital
structure of the Company shall be subject to the same restrictions as the
Shares subject to repurchase restrictions or other restrictions; PROVIDED,
FURTHER, that the Participant shall have no right to retain such stock
dividends or stock distributions, paid or distributed, with respect to Shares
that are not "Vested" (as defined in the Stock Option Agreement) and are
repurchased pursuant to Section 10. The Company will comply with Section
260.140.1 of Title 10 of the California Code of Regulations with respect to
the voting rights of Common Stock.
8.2 FINANCIAL STATEMENTS. The Company shall provide fiscal year
end financial statements to each Participant prior to such Participant's
purchase of Shares under this Plan, and to each Participant annually during
the period such Participant has Options outstanding or as otherwise required
or permitted under Section 260.140.46 of Title 10 of the California Code of
Regulations. Notwithstanding the foregoing, the Company shall not be required
to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.
9. TRANSFERABILITY. Options granted under this Plan, and any interest
therein, shall not be transferable or assignable by Participant, and may not
be made subject to execution, attachment or similar process, otherwise than
by will or by the laws of descent and distribution. During the lifetime of
the Participant an Option shall be exercisable only by the Participant who
holds such Option, and any elections with respect to an Option may be made
only by the Participant who holds such Option.
10. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Stock Option
Agreement (a) a right of first refusal to purchase all Shares that a
Participant (or a subsequent transferee) may propose to transfer to a third
party unless doing so is not permitted by Section 25102(o) of the California
Corporations Code ("SECTION 25102(o)"); PROVIDED that such right of first
refusal terminates upon the closing of the initial registered public offering
of the Company's Common Stock or other securities under the Securities Act,
and/or (b) a right to repurchase (subject to the following provisions of this
Section) all Shares held by a Participant following such Participant's
Termination at any time within ninety (90) days after the later of
Participant's Termination Date or the date Participant purchases Shares under
this Plan, for cash and/or cancellation of purchase money indebtedness of
Purchaser to the Company, at: (A) with respect to Shares that are "Vested"
(as defined in the Stock Option Agreement), the Fair Market Value of such
Shares on the Participant's Termination Date, PROVIDED that such right of
repurchase terminates when the Company's securities become publicly traded;
or (B) with respect to Shares that are not "Vested" (as defined in the Stock
Option Agreement), at the Participant's original Exercise Price or such
higher price as may be determined by the Committee, PROVIDED, that for
Participants OTHER THAN directors, officers or consultants of the Company or
any Parent or Subsidiary, the right to repurchase Shares that are not
"Vested" at the original Exercise Price lapses at the rate of at least 20%
per year over the five (5) year period from the date of grant of the Option
under which such Shares were purchased.
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11. CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan shall be subject to such stock transfer orders,
legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of
the SEC or any stock exchange or automated quotation system upon which the
Shares may be listed or quoted.
12. ESCROW; PLEDGE OF SHARES. To enforce the Company's right of
repurchase, set forth in Section 10, on a Participant's Shares that are not
Vested (as defined in the Stock Option Agreement), the Committee may require
the Participant to deposit all certificates representing Shares, together
with stock powers or other instruments of transfer approved by the Committee,
appropriately endorsed in blank, with the Company or an officer or an agent
designated by the Company to hold in escrow until such right of repurchase
shall have lapsed or terminated (provided, however, that such Shares will be
retained in escrow so long as such Shares secure any debts to the Company),
and the Committee may cause a legend or legends referencing such restrictions
to be placed on the certificates. Any Participant who is permitted to
execute a promissory note as partial or full consideration for the purchase
of Shares under this Plan shall be required to pledge and deposit with the
Company all or part of the Shares so purchased as collateral to secure the
payment of Participant's obligation to the Company under the promissory note;
PROVIDED, HOWEVER, that the Committee may require or accept other or
additional forms of collateral to secure the payment of such obligation and,
in any event, the Company shall have full recourse against the Participant
under the promissory note notwithstanding any pledge of the Participant's
Shares or other collateral. In connection with any pledge of the Shares,
Participant shall be required to execute and deliver a written pledge
agreement in such form as the Committee shall from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on
a pro rata basis as the promissory note is paid.
13. EXCHANGE AND BUYOUT OF OPTIONS. The Committee may, at any time or
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Options in exchange for the surrender and
cancellation of any or all outstanding Options. The Committee may at any
time buy from a Participant an Option previously granted with payment in
cash, Shares (including restricted stock) or other consideration, based on
such terms and conditions as the Committee and the Participant shall agree.
14. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. This Plan is
intended to comply with Section 25102(o). Any provision of this Plan which
is inconsistent with Section 25102(o) shall, without further act or amendment
by the Company, be reformed to comply with the requirements of Section
25102(o) with respect to Options granted under this Plan in reliance on the
Section 25102(o) exemption. An Option shall not be effective unless such
Option is granted by the Committee and is exercisable in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed, as they are in
effect on the date of grant of the Option and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
shall have no obligation to issue or deliver certificates for Shares under
this Plan prior to (a) obtaining any approvals from governmental agencies
that the Company determines are necessary or advisable, and/or (b) completion
of any registration or other qualification of such Shares
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under any state or federal law or ruling of any governmental body that the
Company determines to be necessary or advisable. The Company shall be under
no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the
Company shall have no liability for any inability or failure to do so.
15. NO OBLIGATION TO EMPLOY. Nothing in this Plan or in any Option
granted under this Plan shall confer or be deemed to confer on any
Participant any right to continue in the employ of, or to continue any other
relationship with, the Company or any Parent or Subsidiary of the Company or
limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Participant's employment or other relationship at any
time, with or without cause.
16. CORPORATE TRANSACTIONS.
16.1 ASSUMPTION OR REPLACEMENT OF OPTIONS BY SUCCESSOR. In the
event of:
(a) a merger or consolidation in which the Company is not the
surviving corporation (OTHER THAN (i) a merger or
consolidation of the Company with a wholly-owned
subsidiary, (ii) a reincorporation of the Company in a
different jurisdiction or (iii) any other transaction in
which there is no substantial change in the shareholders
of the Company and their respective stockholdings in the
successor corporation and the Options granted under this
Plan are assumed or replaced by the successor corporation
in a manner that is binding on all Participants);
(b) a merger in which the Company survives but following
which the shareholders of the Company (OTHER THAN any
shareholder that (i) merges with the Company in such
reverse triangular merger or (ii) is an affiliate of
another corporation that merges with the Company in such
reverse triangular merger) cease to own their shares or
other equity interests in the Company as a result of such
merger;
(c) a dissolution or liquidation of the Company;
(d) the sale of all or substantially all of the assets of the
Company; or
(e) any other transaction which qualifies as a "corporate
transaction" under Section 424(a) of the Code or the
regulations thereunder wherein shareholders of the
Company give up all of their equity interest in the
Company;
any or all outstanding Options may be assumed, converted or replaced by the
successor corporation (if any), which assumption, conversion or replacement
shall be binding on all Participants. In the alternative, the successor
corporation may substitute equivalent stock options or provide substantially
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similar consideration to Participants as was provided to shareholders (after
taking into account the existing provisions of the Options). The successor
corporation may also issue, in place of outstanding Shares of the Company
held by the Participant, substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Participant.
If such successor corporation (if any) refuses to assume, replace
or substitute Options as provided above pursuant to a transaction described
in this Section 16.1, then such Options shall expire prior to the
consummation of such transaction at such time and on such conditions as the
Board shall determine.
16.2 OTHER TREATMENT OF OPTIONS. Subject to any greater rights
granted to Participants under the foregoing provisions of this Section 16, in
the event of the occurrence of any transaction described in Section 16.1, any
outstanding Options shall be treated as provided in the applicable agreement
or plan of merger, consolidation, dissolution, liquidation, sale of assets or
other "corporate transaction."
16.3 ASSUMPTION OF OPTIONS BY THE COMPANY. The Company, from time
to time, also may substitute or assume outstanding stock options granted by
another company, whether in connection with an acquisition of such other
company or otherwise, by either (a) granting an Option under this Plan in
substitution of such other company's stock option, or (b) assuming such award
as if it had been granted under this Plan if the terms of such assumed stock
option could be applied to an Option granted under this Plan. Such
substitution or assumption shall be permissible if the holder of the
substituted or assumed stock option would have been eligible to be granted an
Option under this Plan if the other company had applied the rules of this
Plan to such grant. In the event the Company assumes a stock option granted
by another company, the terms and conditions of such stock option shall
remain unchanged (EXCEPT that the exercise price and the number and nature of
Shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to Section 424(a) of the Code). In the event the
Company elects to grant a new Option rather than assuming an existing stock
option, such new Option may be granted with a similarly adjusted Exercise
Price.
17. ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall become
effective on the date that it is adopted by the Board (the "EFFECTIVE DATE").
This Plan shall be approved by the shareholders of the Company (excluding
Shares issued pursuant to this Plan), consistent with applicable laws, within
twelve (12) months before or after the Effective Date. Upon the Effective
Date, the Board may grant Options pursuant to this Plan; PROVIDED, HOWEVER,
that: (a) no Option may be exercised prior to initial shareholder approval of
this Plan; (b) no Option granted pursuant to an increase in the number of
Shares approved by the Board shall be exercised prior to the time such
increase has been approved by the shareholders of the Company (which
shareholder approval must be obtained within twelve (12) months of the
Board's approval of such increase), and (c) in the event that shareholder
approval is not obtained within the time period provided herein, all Options
granted hereunder without such approval shall be canceled.
18. TERM OF PLAN. This Plan will terminate ten (10) years from the
Effective Date or, if earlier, the date of initial shareholder approval of
this Plan.
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19. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend this Plan in any respect, including without limitation
amendment of any form of Stock Option Agreement or instrument to be executed
pursuant to this Plan; PROVIDED HOWEVER, that the Board shall not, without
the approval of the shareholders of the Company, amend this Plan in any
manner that requires such shareholder approval pursuant to the Code or the
regulations promulgated thereunder as such provisions apply to ISO plans.
20. NONEXCLUSIVITY OF THIS PLAN. Neither the adoption of this Plan by
the Board, the submission of this Plan to the shareholders of the Company for
approval, nor any provision of this Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and other equity awards outside of this Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.
21. DEFINITIONS. As used in this Plan, the following terms shall have
the following meanings:
"BOARD" means the Board of Directors of the Company.
"CAUSE" means a good faith determination by the Committee that the
Participant has: (i) committed a material breach of any material term of any
invention assignment, confidentiality or similar agreement between
Participant and the Company or any Parent or Subsidiary of the Company which
breach continues uncured for a period of thirty (30) days after the
Participant receives notice of such breach; (ii) committed an act of fraud or
embezzlement; (iii) habitually failed to report for work during normal work
hours; (iv) willfully and wrongfully disclosed, or permitted any other party
to in any manner use, any of the trade secrets of the Company or of any
Parent or Subsidiary of the Company; (v) committed an act of willful
misconduct which is seriously prejudicial to the best interests of the
Company or any Parent or Subsidiary of the Company; (vi) committed a felony;
(vii) been under the influence of any unlawful drugs, controlled substances
or alcohol at any time while performing duties or services for the Company or
any Parent or Subsidiary of the Company; or (viii) been Terminated for
"cause" as defined in an employment agreement between the Company and the
Participant.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the committee of the Board appointed by the Board
to administer this Plan, or if no such committee is appointed, the Board.
"COMPANY" means Kiva Software Corporation, a corporation organized
under the laws of the State of California, or any successor corporation.
"DISABILITY" means a disability, whether temporary or permanent,
partial or total, as determined by the Committee.
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"EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of
the Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National
Market, its last reported sale price on the Nasdaq National
Market or, if no such reported sale takes place on such date,
the average of the closing bid and asked prices;
(b) if such Common Stock is publicly traded and is then listed on
a national securities exchange, the last reported sale price
or, if no such reported sale takes place on such date, the
average of the closing bid and asked prices on the principal
national securities exchange on which the Common Stock is
listed or admitted to trading;
(c) if such Common Stock is publicly traded but is not quoted on
the Nasdaq National Market nor listed or admitted to trading
on a national securities exchange, the average of the closing
bid and asked prices on such date, as reported by THE WALL
STREET JOURNAL, for the over-the-counter market; or
(d) if none of the foregoing is applicable, by the Board in good
faith.
"INSIDER" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to
Section 16 of the Securities Exchange Act of 1934, as amended.
"OPTION" means an option to purchase Shares granted pursuant to
this Plan.
"PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of such
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
"PARTICIPANT" means a person who receives an Option under this Plan.
"PLAN" means this Kiva Software Corporation 1995 Stock Option Plan,
as amended from time to time.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
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"SHARES" means shares of the Company's Common Stock reserved for
issuance under this Plan as set forth in Section 2.1, and as adjusted
pursuant to Sections 2.2 and 16, and any successor security.
"SUBSIDIARY" or "SUBSIDIARIES" means any corporation (other than
the Company) in an unbroken chain of corporations beginning with the Company
if each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan with
respect to a Participant, that the Participant has ceased to provide services
as an employee, director, or consultant to the Company or a Parent or
Subsidiary of the Company, except in the case of sick leave, military leave,
or any other leave of absence approved by the Committee, PROVIDED, that such
leave is for a period of not more than three (3) months, or reinstatement
upon the expiration of such leave is guaranteed by contract or statute. In
the case of any Participant on sick leave, military leave or any other leave
of absence approved by the Committee, the Committee may make such provisions
respecting suspension of vesting of any Option held by such Participant while
such Participant is on leave from the Company, Parent or Subsidiary as the
Committee may deem appropriate. The Committee shall have sole discretion to
determine whether a Participant has ceased to provide services and the
effective date on which the Participant ceased to provide services (the
"TERMINATION DATE").
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KIVA SOFTWARE CORPORATION
1995 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "AGREEMENT") is made and entered into
as of the Date of Grant set forth below (the "DATE OF GRANT") by and between
Kiva Software Corporation, a California corporation (the "COMPANY"), and the
Participant named below ("PARTICIPANT"). Capitalized terms not defined
herein shall have the meanings ascribed to them in the Company's 1995 Stock
Option Plan, as amended on May 1, 1997 or thereafter (the "PLAN").
PARTICIPANT: ______________________________________
SOCIAL SECURITY NUMBER: ______________________________________
ADDRESS: ______________________________________
______________________________________
TOTAL OPTION SHARES: ______________________________________
EXERCISE PRICE PER SHARE: ______________________________________
DATE OF GRANT: ______________________________________
FIRST VESTING DATE: ______________________________________
EXPIRATION DATE: ______________________________________
(unless terminated earlier under Section 3 below)
TYPE OF STOCK OPTION
(CHECK ONE): [ ] INCENTIVE STOCK OPTION
[ ] NONQUALIFIED STOCK OPTION
1. GRANT OF OPTION. The Company hereby grants to Participant an
option (this "OPTION") to purchase up to the total number of shares of Common
Stock of the Company set forth above as the "Total Option Shares" (the
"SHARES") at the Exercise Price Per Share set forth above (the "EXERCISE
PRICE"), subject to all of the terms and conditions of this Agreement and the
Plan. If designated as an Incentive Stock Option above, this Option is
intended to qualify as an "incentive stock option" ("ISO") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "CODE").
<PAGE>
2. VESTING: EXERCISE PERIOD.(*)
2.1 EXERCISE PERIOD OF OPTION. This Option will become
exercisable as it vests. Provided Participant continues to [FOR EMPLOYEES: be
employed by] [FOR CONTRACTORS AND CONSULTANTS (BUT NOT DIRECTORS): provide
services to] the Company throughout the specified period, this Option will
vest and become exercisable with respect to [ONE-FOURTH (1/4)] of the Shares
on __________, 199_ (the "FIRST VESTING DATE"), and thereafter at the end of
each full succeeding month this Option will vest and become exercisable as to
an additional [ONE-FORTY-EIGHTH (1/48)] of the Shares; PROVIDED that this
Option shall in no event become exercisable with respect to more than 100% of
the Shares.
2.2 VESTING OF OPTIONS. Shares with respect to which this Option has
vested and become exercisable pursuant to the vesting schedule set forth in
Section 2.1 are "VESTED" Shares.
2.3 EXPIRATION. This Option shall expire and must be exercised,
if at all, on or before the earlier of the Expiration Date or the date on
which this Option is earlier terminated in accordance with the provisions of
Section 3.
3. TERMINATION.
3.1 TERMINATION FOR ANY REASON EXCEPT DEATH, DISABILITY OR CAUSE. If
Participant is Terminated for any reason other than Participant's death,
Disability or Cause, then this Option, to the extent (and only to the extent)
that it was vested and would have been exercisable by Participant on the date of
Termination, may be exercised by Participant no later than ninety (90) days
after the date of Termination, but in any event no later than the Expiration
Date.
3.2 TERMINATION BECAUSE OF DEATH OR DISABILITY. If Participant is
Terminated because of the death or Disability of Participant (or Participant
dies within three (3) months after being Terminated other than for Cause or
because of Participant's Disability), then this Option, to the extent that it
is vested and exercisable by Participant on the date of Termination, may be
exercised by Participant (or Participant's legal representative) no later
than twelve (12) months after the date of Termination, but in any event no
later than the Expiration Date.
3.3 TERMINATION FOR CAUSE. If Participant is Terminated for
Cause, then this Option will expire on Participant's Termination Date, or at
such later time and on such conditions as may be determined by the Committee.
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(*) IMPORTANT: Under 25102(o), if Optionee is not a director, officer or
consultant of the Company or a Parent or Subsidiary of the Company,
then in no event shall this Option vest at a rate of less than 20% of
the Total Option Shares per year over the 5 year period from the date
the Option is granted.
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<PAGE>
3.4 NO OBLIGATION TO EMPLOY. Nothing in the Plan or this
Agreement confers on Participant any right to continue in the employ of, or
other relationship with, the Company or any Parent or Subsidiary of the
Company, or limits in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's employment or other
relationship at any time, with or without Cause.
4. MANNER OF EXERCISE.
4.1 STOCK OPTION EXERCISE AGREEMENT. To exercise this Option,
Participant (or in the case of any exercise permitted after Participant's
death, Participant's executor, administrator, heir or legatee, as the case
may be) must deliver to the Company an executed Stock Option Exercise
Agreement in the form attached hereto as EXHIBIT A, or in such other form as
may be approved in writing by the Company from time to time (the "EXERCISE
AGREEMENT"), which shall set forth, among other things, Participant's
election to exercise this Option, the number of Shares being purchased upon
such exercise of this Option, any restrictions imposed on the Shares and any
representations, warranties and agreements regarding Participant's investment
intent and access to information as may be required by the Company to comply
with applicable securities laws. If someone other than Participant exercises
this Option, then such person must submit documentation reasonably acceptable
to the Company that such person has the right to exercise this Option.
4.2 LIMITATIONS ON EXERCISE. This Option may not be exercised
unless such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise. This Option
may not be exercised as to fewer than one hundred (100) Shares unless it is
exercised as to all Shares as to which this Option is then exercisable.
4.3 PAYMENT. The Exercise Agreement shall be accompanied by full
payment of the Exercise Price for the Shares being purchased in cash (by
check), or where permitted by law:
(a) provided that a public market for the Company's stock
exists, (1) through a "same day sale" commitment from
Participant and an NASD Dealer whereby Participant
irrevocably elects to exercise this Option and to sell a
portion of the Shares so purchased to pay for the Exercise
Price and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the Exercise Price
directly to the Company, OR (2) through a "margin"
commitment from Participant and an NASD Dealer whereby
Participant irrevocably elects to exercise this Option and
to pledge the Shares so purchased to the NASD Dealer in a
margin account as security for a loan from the NASD Dealer
in the amount of the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or
(b) by any combination of the foregoing.
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<PAGE>
4.4 TAX WITHHOLDING. Prior to the issuance of the Shares upon
exercise of the Option, Participant (or Participant's estate) must pay or
provide for any applicable federal or state withholding obligations of the
Company arising from exercise of this Option. If the Committee permits,
Participant may provide for payment of withholding taxes upon exercise of
this Option by requesting that the Company retain Shares with a Fair Market
Value equal to the minimum amount of taxes required to be withheld. In such
case, the Company shall issue the net number of Shares to the Participant by
deducting the Shares retained from the Shares issuable upon exercise.
4.5 ISSUANCE OF SHARES. Provided that the Exercise Agreement and
payment are in form and substance satisfactory to counsel for the Company,
the Company shall issue the Shares registered in the name of Participant,
Participant's authorized assignee, or Participant's legal representative, and
shall deliver certificates representing the Shares with the appropriate
legends affixed thereto.
5. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If this Option
is an ISO, and if Participant sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (1) the date
two years after the Date of Grant, and (2) the date one year after issuance
of such Shares to Participant upon exercise of this Option, Participant shall
immediately notify the Company in writing of such disposition. Participant
agrees that Participant may be subject to income tax withholding by the
Company on the compensation income recognized by Participant from the early
disposition by payment in cash or out of the current wages or other
compensation payable to Participant.
6. COMPLIANCE WITH LAWS AND REGULATIONS. The Plan and this Agreement
are intended to comply with Section 25102(o) of the California Corporations
Code. Any provision of this Agreement which is inconsistent with Section
25102(o) shall, without further act or amendment by the Company, be reformed
to comply with the requirements of Section 25102(o). The exercise of this
Option and the issuance and transfer of Shares shall be subject to compliance
by the Company and Participant with all applicable requirements of federal
and state securities laws and with all applicable requirements of any stock
exchange or automated quotation system on which the Company's Common Stock
may be listed or quoted at the time of such issuance or transfer. Participant
understands that the Company is under no obligation to register or qualify
the Shares with the SEC, any state securities commission or any stock
exchange or automated quotation system to effect such compliance.
7. NONTRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and
may be exercised during the lifetime of Participant only by Participant. The
terms of this Option shall be binding upon the executors, administrators,
successors and assigns of Participant.
8. RIGHT OF FIRST REFUSAL. The Company has an assignable right of
first refusal to purchase Shares on the terms and conditions set forth in the
Exercise Agreement.
9. TAX CONSEQUENCES. Set forth below is a brief summary as of May __,
1997 of some of the federal and California tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND
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<PAGE>
REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
9.1 EXERCISE OF ISO. If this Option qualifies as an ISO, there
will be no regular federal or California income tax liability upon the
exercise of this Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price will be
treated as a tax preference item for alternative minimum tax purposes and may
subject the Participant to the alternative minimum tax in the year of
exercise.
9.2 EXERCISE OF NONQUALIFIED STOCK OPTION. If this Option does
not qualify as an ISO, there may be a regular federal and California income
tax liability upon the exercise of this Option. Participant 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 Shares on the
date of exercise over the Exercise Price. The Company will be required to
withhold from Participant's compensation or collect from Participant and pay
to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
9.3 DISPOSITION OF SHARES. If the Shares are held for more than
twelve (12) months after the date of the issuance of the Shares pursuant to
the exercise of this Option (and, in the case of an ISO, are disposed of more
than two years after the Date of Grant), any gain realized on disposition of
the Shares will be treated as long term capital gain for federal and
California income tax purposes. If Shares purchased under an ISO are
disposed of within one year of exercise or within two years after the Date of
Grant, any gain realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the excess, if
any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price. The Company will be required to withhold from Participant's
compensation or collect from Participant and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at
the time of exercise.
10. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of
the rights of a shareholder with respect to any Shares until Participant
exercises this Option and pays the Exercise Price for such Shares.
11. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the Committee
for review. The resolution of such a dispute by the Committee shall be final
and binding on the Company and Participant.
12. ENTIRE AGREEMENT. The Plan is incorporated herein by reference.
This Agreement (including the Exercise Agreement attached hereto as EXHIBIT
A, which is incorporated herein by this reference) and the Plan constitute
the entire agreement and understanding of the parties, and supersede all
prior undertakings and agreements, with respect to the subject matter hereof.
13. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed
to the corporate Secretary of the Company at its principal corporate offices.
Any notice required to be given or delivered to Participant shall be in
writing
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<PAGE>
and addressed to Participant at the address indicated above or to such other
address as such party may designate in writing from time to time to the
Company. All notices shall be deemed to have been given or delivered upon:
personal delivery; three (3) days after deposit in the United States mail by
certified or registered mail (return receipt requested); one (1) business day
after deposit with any return receipt express courier (prepaid); or one (1)
business day after transmission by rapifax or telecopier.
14. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding
upon Participant and Participant's heirs, executors, administrators, legal
representatives, successors and permitted assigns.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California as such laws are
applied to agreements between California residents entered into and to be
performed entirely within California.
16. ACCEPTANCE. Participant hereby acknowledges receipt of a copy of
the Plan and this Agreement. Participant has read and understands the terms
and provisions of this Agreement, and accepts this Option subject to all the
terms and conditions of the Plan and this Agreement. Participant
acknowledges that there may be adverse tax consequences upon exercise of this
Option or disposition of the Shares and that Participant should consult a tax
adviser prior to such exercise or disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in duplicate by its duly authorized representative and Participant has
executed this Agreement in duplicate as of the Date of Grant.
KIVA SOFTWARE CORPORATION PARTICIPANT
By:_________________________________ __________________________________
(Signature)
____________________________________ ___________________________________
(Please print name) (Please print name)
____________________________________
(Please print title)
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<PAGE>
EXHIBIT A
STOCK OPTION EXERCISE AGREEMENT
<PAGE>
KIVA SOFTWARE CORPORATION
1995 STOCK OPTION PLAN
STOCK OPTION EXERCISE AGREEMENT
This Exercise Agreement (this "EXERCISE AGREEMENT") is made and entered
into as of ___________, 19__ (the "EFFECTIVE DATE") by and between Kiva
Software Corporation, a California corporation (the "COMPANY"), and the
Purchaser named below (the "PURCHASER"). Capitalized terms not defined
herein shall have the meanings ascribed to them in the Company's 1995 Stock
Option Plan, as amended on May 1, 1997 or thereafter (the "PLAN").
PURCHASER: __________________________________________
SOCIAL SECURITY NUMBER: __________________________________________
ADDRESS: __________________________________________
__________________________________________
TOTAL NUMBER OF SHARES: __________________________________________
PURCHASE PRICE PER SHARE: __________________________________________
TOTAL PURCHASE PRICE: __________________________________________
DATE OF GRANT: __________________________________________
TYPE OF STOCK OPTION:
(CHECK ONE): [ ] INCENTIVE STOCK OPTION
[ ] NONQUALIFIED STOCK OPTION
1. EXERCISE OF OPTION.
1.1 EXERCISE. Pursuant to exercise of that certain option
("OPTION") granted to Purchaser under the Plan and the Stock Option Agreement
between the Company and the Purchaser dated as of the Date of Grant set forth
above (the "STOCK OPTION AGREEMENT"), and subject to the terms and conditions
of this Exercise Agreement, Purchaser hereby purchases from the Company, and
the Company hereby sells to Purchaser, the total number of shares of the
Company's Common Stock set forth above as the "Total Number of Shares" (the
"SHARES") at a Purchase Price Per Share set forth above for a Total Purchase
Price set forth above (the "PURCHASE PRICE"). As used in this Agreement, the
term "SHARES" refers to the Shares purchased under this Exercise Agreement
and includes all securities received (a) in replacement of the Shares, (b) as
a result of stock dividends or stock splits with respect to the Shares, and
(c) all securities received in replacement of the Shares in a merger,
recapitalization, reorganization or similar corporate transaction.
<PAGE>
1.2 PAYMENT. Purchaser hereby delivers payment of the entire
Purchase Price in the manner permitted in the Stock Option Agreement as
follows (check and complete as appropriate):
[ ] in cash (by check) in the amount of $__________, receipt of
which is acknowledged by the Company; or
[ ] where permitted by law, and provided that a public market
for the Company's stock exists, (1) through a "same day
sale" commitment from Participant and an NASD Dealer whereby
Participant irrevocably elects to exercise the Option and to
sell a portion of the Shares so purchased to pay for the
Purchase Price and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the Purchase
Price directly to the Company, OR (2) through a "margin"
commitment from Participant and an NASD Dealer whereby
Participant irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in a
margin account as security for a loan from the NASD Dealer
in the amount of the Purchase Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to
forward the Purchase Price directly to the Company; or
[ ] by any combination of the foregoing.
2. DELIVERY.
2.1 DELIVERIES BY PURCHASER. Purchaser hereby delivers to the
Company (i) this Exercise Agreement, (ii) two (2) copies of a blank Stock
Power and Assignment Separate from Stock Certificate in the form of EXHIBIT 1
attached hereto (the "STOCK POWERS"), both executed by Purchaser (and
Purchaser's spouse, if any), (iii) if Purchaser is married, a Consent of
Spouse in the form of EXHIBIT 2 attached hereto (the "SPOUSE CONSENT")
executed by Purchaser's spouse, and (iv) the entire Purchase Price as
provided in Section 1.2.
2.2 DELIVERIES BY THE COMPANY. Upon its receipt of the Purchase
Price, provision for any required tax withholding and all the documents to be
executed and delivered by Purchaser to the Company under Section 2.1, the
Company will issue a duly executed stock certificate evidencing the Shares in
the name of Purchaser, to be placed in escrow as provided in Section 8 until
expiration or termination of the Company's Right of First Refusal described
in Section 6.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to the Company that:
3.1 AGREES TO TERMS OF THE PLAN. Purchaser has received a copy of
the Plan and the Stock Option Agreement, has read and understands the terms
of the Plan, the Stock Option Agreement and this Exercise Agreement, and
agrees to be bound by their terms and conditions. Purchaser acknowledges that
there may be adverse tax consequences upon exercise of the Option or
disposition of the Shares, and that Purchaser should consult a tax adviser
prior to such exercise or disposition.
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<PAGE>
3.2 PURCHASE FOR OWN ACCOUNT FOR INVESTMENT. Purchaser is
purchasing the Shares for Purchaser's own account for investment purposes
only and not with a view to, or for sale in connection with, a distribution
of the Shares within the meaning of the Securities Act. Purchaser has no
present intention of selling or otherwise disposing of all or any portion of
the Shares and no one other than Purchaser has any beneficial ownership of
any of the Shares.
3.3 ACCESS TO INFORMATION. Purchaser has had access to all
information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably
considers important in making the decision to purchase the Shares, and
Purchaser has had ample opportunity to ask questions of the Company's
representatives concerning such matters and this investment.
3.4 UNDERSTANDING OF RISKS. Purchaser is fully aware of: (i) the
highly speculative nature of the investment in the Shares; (ii) the financial
hazards involved; (iii) the lack of liquidity of the Shares and the
restrictions on transferability of the Shares (E.G., that Purchaser may not
be able to sell or dispose of the Shares or use them as collateral for
loans); (iv) the qualifications and backgrounds of the management of the
Company; and (v) the tax consequences of investment in the Shares. Purchaser
is capable of evaluating the merits and risks of this investment, has the
ability to protect Purchaser's own interests in this transaction and is
financially capable of bearing a total loss of this investment.
3.5 NO GENERAL SOLICITATION. At no time was Purchaser presented
with or solicited by any publicly issued or circulated newspaper, mail,
radio, television or other form of general advertising or solicitation in
connection with the offer, sale and purchase of the Shares.
4. COMPLIANCE WITH SECURITIES LAWS.
4.1 COMPLIANCE WITH FEDERAL SECURITIES LAWS. Purchaser understands
and acknowledges that the Shares have not been registered with the SEC under
the Securities Act and that, notwithstanding any other provision of the Stock
Option Agreement to the contrary, the exercise of any rights to purchase any
Shares is expressly conditioned upon compliance with the Securities Act and
all applicable state securities laws. Purchaser agrees to cooperate with the
Company to ensure compliance with such laws. The Shares are being issued
under the Securities Act pursuant to the exemption provided by SEC Rule 701.
4.2 COMPLIANCE WITH CALIFORNIA SECURITIES LAWS. THE PLAN, THE
STOCK OPTION AGREEMENT, AND THIS EXERCISE AGREEMENT ARE INTENDED TO COMPLY
WITH SECTION 25102(o) OF THE CALIFORNIA CORPORATIONS CODE ("SECTION
25102(o)"). ANY PROVISION OF THIS EXERCISE AGREEMENT WHICH IS INCONSISTENT
WITH SECTION 25102(o) SHALL, WITHOUT FURTHER ACT OR AMENDMENT BY THE COMPANY,
BE REFORMED TO COMPLY WITH THE REQUIREMENTS OF SECTION 25102(o). THE SALE OF
THE SECURITIES THAT ARE THE SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET
QUALIFIED WITH THE CALIFORNIA COMMISSIONER OF CORPORATIONS AND NOT EXEMPT
FROM SUCH QUALIFICATION, IS SUBJECT TO SUCH QUALIFICATION, AND THE
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<PAGE>
ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE IS EXEMPT.
THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION BEING
AVAILABLE.
5. RESTRICTED SECURITIES.
5.1 NO TRANSFER UNLESS REGISTERED OR EXEMPT. Purchaser understands
that Purchaser may not transfer any Shares unless such Shares are registered
under the Securities Act and qualified under applicable state securities laws
or unless, in the opinion of counsel to the Company, exemptions from such
registration and qualification requirements are available. Purchaser
understands that only the Company may file a registration statement with the
SEC and that the Company is under no obligation to do so with respect to the
Shares. Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer
all or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2 SEC RULE 144. In addition, Purchaser has been advised that SEC
Rule 144 promulgated under the Securities Act, which permits certain limited
sales of unregistered securities, is not presently available with respect to
the Shares and, in any event, requires that the Shares be held for a minimum
of one year, and in certain cases two years, after they have been purchased
AND PAID FOR (within the meaning of Rule 144), before they may be resold
under Rule 144. Purchaser understands that Rule 144 may indefinitely restrict
transfer of the Shares so long as Purchaser remains an "affiliate" of the
Company or if "current public information" about the Company (as defined in
Rule 144) is not publicly available.
5.3 SEC RULE 701. The Shares are issued pursuant to SEC Rule 701
and may become freely tradable by non-affiliates issued pursuant to SEC Rule
701 promulgated under the Securities Act (under limited conditions regarding
the method of sale) 90 days after the first sale of Common Stock of the
Company to the general public pursuant to a registration statement filed with
and declared effective by the SEC, subject to the lengthier market standoff
agreement contained in Section 7 of this Exercise Agreement or any other
agreement entered into by Purchaser. Affiliates must comply with the
provisions (other than the holding period requirements) of Rule 144.
6. RESTRICTIONS ON TRANSFERS.
6.1 DISPOSITION OF SHARES. Purchaser hereby agrees that Purchaser
shall make no disposition of the Shares (other than as permitted by this
Agreement) unless and until:
(a) Purchaser shall have notified the Company of the proposed
disposition and provided a written summary of the terms
and conditions of the proposed disposition;
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<PAGE>
(b) Purchaser shall have complied with all requirements of
this Exercise Agreement applicable to the disposition of
the Shares;
(c) Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to counsel
for the Company, that (i) the proposed disposition does
not require registration of the Shares under the
Securities Act and applicable state securities laws or
(ii) all appropriate action necessary for compliance with
the registration requirements of the Securities Act and
applicable state securities laws or of any exemption from
registration available under the Securities Act and
applicable state securities laws (including Rule 144) has
been taken; and
6.2 RESTRICTION ON TRANSFER. Purchaser shall not transfer,
assign, grant a lien or security interest in, pledge, hypothecate, encumber
or otherwise dispose of any of the Shares which are subject to the Company's
Right of First Refusal described below, except as permitted by this Exercise
Agreement.
6.3 TRANSFEREE OBLIGATIONS. Each person (other than the Company)
to whom the Shares are transferred by means of one of the permitted transfers
specified in this Exercise Agreement must, as a condition precedent to the
validity of such transfer, acknowledge in writing to the Company that such
person is bound by the provisions of this Exercise Agreement and that the
transferred shares are subject to (i) the Company's Right of First Refusal
granted hereunder and (ii) the market stand-off provisions of Section 7, to
the same extent such Shares would be so subject if retained by the Purchaser.
7. MARKET STANDOFF AGREEMENT. Purchaser agrees in connection with the
initial registration of the Company's securities that, upon the request of
the Company or the underwriters managing such public offering of the
Company's securities, Purchaser will not sell or otherwise dispose of any
Shares without the prior written consent of the Company or such underwriters,
as the case may be, for such period of time (not to exceed 180 days) after
the effective date of such initial registration requested by such managing
underwriters and subject to all restrictions as the Company or the
underwriters may specify.
8. COMPANY'S RIGHT OF FIRST REFUSAL. Before any Shares held by
Purchaser or any transferee of such Shares (either being sometimes referred
to herein as the "HOLDER") may be sold or otherwise transferred (including
without limitation a transfer by gift or operation of law), the Company
and/or its assignee(s) shall have an assignable right of first refusal to
purchase the Shares to be sold or transferred (the "OFFERED SHARES") on the
terms and conditions set forth in this Section (the "RIGHT OF FIRST REFUSAL").
8.1 NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "NOTICE") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer the Offered
Shares; (ii) the name of each proposed bona fide purchaser or other
transferee ("PROPOSED TRANSFEREE"); (iii) the number of Offered Shares
proposed to be transferred to each Proposed Transferee; (iv) the bona fide
cash price or other consideration for which the Holder proposes to transfer
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<PAGE>
the Offered Shares (the "OFFERED PRICE"); and (v) that the Holder will offer
to sell the Offered Shares to the Company and/or its assignee(s) at the
Offered Price as provided in this Section.
8.2 EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within thirty
(30) days after the date of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all of the
Offered Shares proposed to be transferred to any one or more of the Proposed
Transferees named in the Notice, at the purchase price determined as
specified below.
8.3 PURCHASE PRICE. The purchase price for the Offered Shares
purchased under this Section will be the Offered Price. If the Offered Price
includes consideration other than cash, then the cash equivalent value of the
non-cash consideration, as determined in good faith by the Board shall
conclusively be deemed to be the value of such non-cash consideration.
8.4 PAYMENT. Payment of the purchase price for Offered Shares will
be payable, at the option of the Company and/or its assignee(s) (as
applicable), by check, by cancellation of all or a portion of any outstanding
indebtedness of the Holder to the Company (or to such assignee, in the case
of a purchase of Offered Shares by such assignee) or by any combination
thereof. The purchase price will be paid without interest within sixty (60)
days after the Company's receipt of the Notice, or, at the option of the
Company and/or its assignee(s), in the manner and at the time(s) set forth in
the Notice.
8.5 HOLDER'S RIGHT TO TRANSFER. If all of the Offered Shares
proposed in the Notice to be transferred to a given Proposed Transferee are
not purchased by the Company and/or its assignee(s) as provided in this
Section, then the Holder may sell or otherwise transfer such Offered Shares
to that Proposed Transferee at the Offered Price or at a higher price,
PROVIDED that such sale or other transfer is consummated within 120 days
after the date of the Notice, and PROVIDED FURTHER, that (i) any such sale or
other transfer is effected in compliance with all applicable securities laws
and (ii) the Proposed Transferee agrees in writing that the provisions of
this Section will continue to apply to the Offered Shares in the hands of
such Proposed Transferee. If the Offered Shares described in the Notice are
not transferred to the Proposed Transferee within such 120 day period, then a
new Notice must be given to the Company, and the Company must again be
offered the Right of First Refusal before any Shares held by the Holder may
be sold or otherwise transferred.
8.6 EXEMPT TRANSFERS. Notwithstanding anything to the contrary in
this Section, the following transfers of Shares will be exempt from the Right
of First Refusal: (i) the transfer of any or all of the Shares during
Purchaser's lifetime by gift or on Purchaser's death by will or intestacy to
Purchaser's "immediate family" (as defined below) or to a trust for the
benefit of Purchaser or Purchaser's immediate family, PROVIDED that each
transferee or other recipient agrees in a writing satisfactory to the Company
that the provisions of this Section will continue to apply to the transferred
Shares in the hands of such transferee or other recipient; (ii) any transfer
of Shares made pursuant to a statutory merger or statutory consolidation of
the Company with or into another corporation or corporations (except that the
Right of First Refusal will continue to apply thereafter to such Shares, in
which case the surviving corporation of such merger or consolidation shall
succeed to the rights of the Company under this Section unless the agreement
of merger or consolidation expressly otherwise provides); or (iii) any
transfer of Shares pursuant to the winding up and dissolution of the Company.
As used herein, the term
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<PAGE>
"IMMEDIATE FAMILY" will mean Purchaser's spouse, the lineal descendant or
antecedent, father, mother, brother or sister, child, adopted child,
grandchild or adopted grandchild of Purchaser or the Purchaser's spouse.
8.7 TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal will terminate as to all Shares on the effective date of the first sale
of Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the SEC under the Securities Act
(other than a registration statement relating solely to the issuance of Common
Stock pursuant to a business combination or an employee incentive or benefit
plan).
9. RIGHTS AS SHAREHOLDER. Subject to the terms and conditions of this
Exercise Agreement, Purchaser will have all of the rights of a shareholder of
the Company with respect to the Shares from and after the date that Purchaser
delivers payment of the Purchase Price and any required withholding tax until
such time as Purchaser disposes of the Shares or the Company and/or its
assignee(s) exercise(s) Right of First Refusal. Upon an exercise of the
Right of First Refusal, Purchaser will have no further rights as a holder of
the Shares so purchased upon such exercise, except the right to receive
payment for the Shares so purchased in accordance with the provisions of this
Exercise Agreement, and Purchaser will promptly surrender the stock
certificate(s) evidencing the Shares so purchased to the Company for transfer
or cancellation.
10. ESCROW. As security for Purchaser's faithful performance of this
Exercise Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s),
together with the Stock Powers executed by Purchaser and by Purchaser's
spouse, if any (with the date and number of Shares left blank), to the
Secretary of the Company or other designee of the Company ("ESCROW HOLDER"),
who is hereby appointed to hold such certificate(s) and Stock Powers in
escrow and to take all such actions and to effectuate all such transfers
and/or releases of such Shares as are in accordance with the terms of this
Exercise Agreement. Purchaser and the Company agree that Escrow Holder will
not be liable to any party to this Exercise Agreement (or to any other party)
for any actions or omissions unless Escrow Holder is grossly negligent or
intentionally fraudulent in carrying out the duties of Escrow Holder under
this Exercise Agreement. Escrow Holder may rely upon any letter, notice or
other document executed by any signature purported to be genuine and may rely
on the advice of counsel and obey any order of any court with respect to the
transactions contemplated by this Exercise Agreement. The Shares will be
released from escrow upon termination of the Right of First Refusal.
11. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
11.1 LEGENDS. Purchaser understands and agrees that the Company
will place the legends set forth below or similar legends on any stock
certificate(s) evidencing the Shares, together with any other legends that
may be required by state or federal securities laws, the Company's Articles
of Incorporation or Bylaws, any other agreement between Purchaser and the
Company or any agreement between Purchaser and any third party:
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE
IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON PUBLIC RESALE, TRANSFER, AND RIGHT OF FIRST
REFUSAL OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET
FORTH IN A STOCK OPTION EXERCISE AGREEMENT BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH PUBLIC SALE
AND TRANSFER RESTRICTIONS AND THE RIGHT OF FIRST REFUSAL ARE
BINDING ON TRANSFEREES OF THESE SHARES.
11.2 STOP-TRANSFER INSTRUCTIONS. Purchaser agrees that, to ensure
compliance with the restrictions imposed by this Exercise Agreement, the
Company may issue appropriate "stop-transfer" instructions to its transfer
agent, if any, and if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
11.3 REFUSAL TO TRANSFER. The Company will not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Exercise Agreement or (ii) to
treat as owner of such Shares, or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares have been
so transferred.
12. TAX CONSEQUENCES. 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 ADVISER 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. Set forth below is a brief summary as of May __, 1997 of
some of the federal and California tax consequences of exercise of the Option
and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
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<PAGE>
12.1 EXERCISE OF INCENTIVE STOCK OPTION. If the Option qualifies
as an ISO there will be no regular federal income tax liability or California
income tax liability upon the exercise of the Option, although the excess, if
any, of the Fair Market Value of the Shares on the date of exercise over the
Purchase Price Per Share will be treated as a tax preference item for
alternative minimum tax purposes AND MAY SUBJECT PURCHASER TO THE ALTERNATIVE
MINIMUM TAX IN THE YEAR OF EXERCISE.
12.2 EXERCISE OF NONQUALIFIED STOCK OPTION. If the Option does not
qualify as an incentive stock option, there may be a regular federal income
tax liability and a California income tax liability upon the exercise of the
Option. Purchaser 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 Shares on the date of exercise over the Purchase
Price Per Share. The Company will be required to withhold from Purchaser's
compensation or collect from Purchaser and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at
the time of exercise.
12.3 DISPOSITION OF SHARES. If the Shares are held for more than
twelve months after the date of the issuance of the Shares pursuant to the
exercise of the Option (and, in the case of an ISO, are disposed of more than
two years after the Date of Grant), any gain realized on disposition of the
Shares will be treated as long term capital gain for federal and California
income tax purposes. If Shares purchased under an ISO are disposed of within
one year of exercise or within two years after the Option Date of Grant, any
gain realized on such disposition will be treated as compensation income
(taxable at ordinary income rates) to the extent of the excess, if any, of
the Fair Market Value of the Shares on the date of exercise over the Purchase
Price Per Share. The Company may be required to withhold from Purchaser's
compensation or collect from Purchaser and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at
the time of exercise.
13. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
the Shares will be subject to and conditioned upon compliance by the Company
and Purchaser with all applicable state and federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company's Common Stock may be listed or quoted at the
time of such issuance or transfer.
14. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Exercise Agreement, including its rights to repurchase Shares
under the Right of First Refusal. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject
to the restrictions on transfer herein set forth, this Exercise Agreement
will be binding upon Purchaser and Purchaser's heirs, executors,
administrators, legal representatives, successors and assigns.
15. GOVERNING LAW; SEVERABILITY. This Exercise Agreement shall be
governed by and construed in accordance with the internal laws of the State
of California as such laws are applied to agreements between California
residents entered into and to be performed entirely within California,
excluding that body of laws pertaining to conflict of laws. If any provision
of this Exercise Agreement is determined by a court of law to be illegal or
unenforceable, then such provision will be enforced to the maximum extent
possible and the other provisions will remain fully effective and enforceable.
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<PAGE>
16. NOTICES. Any notice required to be given or delivered to the
Company shall be in writing and addressed to the Corporate Secretary of the
Company at its principal corporate offices. Any notice required to be given
or delivered to Purchaser shall be in writing and addressed to Purchaser at
the address indicated above or to such other address as Purchaser may
designate in writing from time to time to the Company. All notices shall be
deemed effectively given upon personal delivery, three (3) days after deposit
in the United States mail by certified or registered mail (return receipt
requested), one (1) business day after its deposit with any return receipt
express courier (prepaid), or one (1) business day after transmission by
rapifax or telecopier.
17. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Exercise Agreement.
18. HEADINGS. The captions and headings of this Exercise Agreement are
included for ease of reference only and will be disregarded in interpreting
or construing this Exercise Agreement. All references herein to Sections
refer to Sections of this Exercise Agreement.
19. ENTIRE AGREEMENT. The Plan, the Stock Option Agreement and this
Exercise Agreement, together with all its Exhibits, constitute the entire
agreement and understanding of the parties with respect to the subject matter
of this Exercise Agreement, and supersede all prior understandings and
agreements, whether oral or written, between the parties hereto with respect
to the specific subject matter hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Exercise Agreement to be
executed in duplicate by its duly authorized representative and Purchaser has
executed this Exercise Agreement in duplicate as of the Effective Date.
KIVA SOFTWARE CORPORATION PURCHASER
By:________________________________ _____________________________________
(Signature)
Name:______________________________ _____________________________________
(Please print name)
Title:_____________________________
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<PAGE>
LIST OF EXHIBITS
Exhibit 1: Stock Power and Assignment Separate from Stock Certificate
Exhibit 2: Spouse Consent
<PAGE>
EXHIBIT I
STOCK POWER AND ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE
<PAGE>
STOCK POWER AND ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Stock Option Exercise
Agreement No. ____ dated as of __________, 19__, (the "EXERCISE AGREEMENT"),
the undersigned hereby sells, assigns and transfers unto __________________,
______________________ shares of the Common Stock of Kiva Software
Corporation, a California corporation (the "COMPANY"), standing in the
undersigned's name on the books of the Company represented by Certificate
No(s) ____ delivered herewith, and does hereby irrevocably constitute and
appoint the Secretary of the Company as the undersigned's attorney-in-fact,
with full power of substitution, to transfer said stock on the books of the
Company. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE EXERCISE
AGREEMENT AND ANY EXHIBITS THERETO.
Dated:______________________
PURCHASER
______________________________________
(Signature)
______________________________________
(Please Print Name)
______________________________________
(Spouse's Signature, if any)
______________________________________
(Please Print Spouse's Name)
INSTRUCTIONS: Please do not fill in any blanks other than the signature
line. The purpose of this Stock Power and Assignment is to enable the Company
to acquire the shares upon exercise of its Right of First Refusal set forth
in the Exercise Agreement without requiring additional signatures on the part
of the Purchaser or Purchaser's Spouse (if any).
<PAGE>
EXHIBIT 2
SPOUSE CONSENT
<PAGE>
SPOUSE CONSENT
The undersigned spouse of _______________ ("PURCHASER") has read,
understands, and hereby approves the Stock Option Exercise Agreement between
Purchaser and the Company dated __________, 199_ (the "EXERCISE AGREEMENT").
In consideration of the Company's granting my spouse the right to purchase
the Shares as set forth in the Exercise Agreement, the undersigned hereby
agrees to be irrevocably bound by the Exercise Agreement and further agrees
that any community property interest shall similarly be bound by the Exercise
Agreement. The undersigned hereby appoints Purchaser as my attorney-in-fact
with respect to any amendment or exercise of any rights under the Exercise
Agreement.
Date:________________________ _____________________________________
Purchaser's Spouse
Address: _____________________________________
_____________________________________
<PAGE>
January 12, 1998
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 January 12, 1998, in connection with the
registration under the Securities Act of 1933, as amended, of an aggregate of
4,660,102 shares of your Common Stock, $.0001 par value (the "SHARES"),
reserved for issuance pursuant to your 1995 Stock Plan and the KIVA Software
Corporation 1995 Stock Option Plan (collectively, the "PLANS"). 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 Plans. 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 Company's Board of Directors to be "capital" for purposes
of the Delaware General Corporation Law.
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 amendment thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Netscape Communications Corporation pertaining to the Netscape
1995 Stock Plan and the KIVA Software Corporation 1995 Stock Option Plan of
our report dated January 24, 1997, with respect to the consolidated financial
statements of Netscape Communications Corporation incorporated by reference
in its Annual Report (Form 10-K) for the year ended December 31, 1996 filed
with the Securities and Exchange Commission.
We also consent to the incorporation by reference therein of our report dated
March 27, 1997 with respect to the financial statement schedule of Netscape
Communications Corporation for the year ended December 31, 1996 included in
the Annual Report (Form 10-K) for the year ended December 31, 1996 filed with
the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
January 12, 1998
