Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) 70 445K
2: EX-2.1 Agreement and Plan of Merger Dated May 28, 1996 11 37K
3: EX-3.1 Restated Certificate of Incorporation 13 48K
4: EX-3.2 Bylaws of the Registrant 29 126K
5: EX-5.1 Opinion of Perkins Coie 2 14K
14: EX-10.10 Investment Letter Agreement (P. Stonesifer) 2 17K
15: EX-10.11 Right of First Refusal Agreement (P. Stonesifer) 7 29K
16: EX-10.12 Subscription by Jeffrey P. Bezos 1 11K
17: EX-10.13 Shareholder's Agreement (M.A. Bezos) 8 47K
18: EX-10.14 Shareholder's Agreement (Gise Family Trust) 6 40K
19: EX-10.15 Shareholder's Agreement (Sheldon Kaphan) 8 46K
20: EX-10.16 Shareholder's Agreement (Tom Alberg) 8 46K
21: EX-10.18 Shareholder's Agreement (Scott Lipsky) 8 46K
22: EX-10.19 Shareholder's Agreement (Joy D. Covey) 8 46K
6: EX-10.2 Series A Preferred Stock Purchase Agreement 20 98K
23: EX-10.20 Amended and Restated 1994 Stock Option Plan 30 113K
24: EX-10.21 1997 Stock Option Plan 17 73K
25: EX-10.22 Amended Stock Option Letter Agreement 7 34K
26: EX-10.23 Non-Qualified Stock Option Letter Agreement 9 35K
27: EX-10.24 Non-Qualified Stock Option Letter Agreement 9 34K
28: EX-10.25 Non-Qualified Stock Option Letter Agreement 6 32K
29: EX-10.26 Incentive Stock Option Letter Agreement 7 35K
30: EX-10.27 Subrogation Agreement Dated June 19,1996 3 16K
31: EX-10.28 Lease Agreement (Trident Investments, Inc.) 52 159K
32: EX-10.29 Lease Agreement (Pacific Northwest Group A) 33 114K
7: EX-10.3 Co-Sale Agreement 6 27K
33: EX-10.30 Sublease Agreement Dated February 19,1997 13 37K
34: EX-10.31 Sublease Agreement Dated January 19,1996 46 177K
35: EX-10.32 Master Lease Agreement Dated February 12, 1997 20 94K
8: EX-10.4 Right of First Refusal Agreement 5 25K
9: EX-10.5 Repurchase Agreement Dated June 21, 1996 6 29K
10: EX-10.6 Voting Agreement 7 31K
11: EX-10.7 Investor Rights Agreement 21 100K
12: EX-10.8 Investment Letter Agreement (S. Cook) 2 16K
13: EX-10.9 Right of First Refusal Agreement 7 27K
36: EX-11.1 Statement of Net Loss Per Share 1 12K
37: EX-23.1 Consent of Ernst & Young 1 11K
38: EX-27.1 Financial Data Schedule 1 12K
EX-10.21 — 1997 Stock Option Plan
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EXHIBIT 10.21
AMAZON.COM, INC.
1997 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the Amazon.com, Inc. 1997 Stock Option Plan (the "Plan") is
to enhance the long-term stockholder value of Amazon.com, Inc., a Delaware
corporation (the "Company"), by offering opportunities to employees, directors,
officers, consultants, agents, advisors and independent contractors of the
Company and its Subsidiaries (as defined in Section 2) to participate in the
Company's growth and success, and to encourage them to remain in the service of
the Company and its Subsidiaries and to acquire and maintain stock ownership in
the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 BOARD
"Board" means the Board of Directors of the Company.
2.2 CAUSE
"Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.
2.3 CODE
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.4 COMMON STOCK
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
2.5 CORPORATE TRANSACTION
"Corporate Transaction" means any of the following events:
(a) Consummation of any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation, or
pursuant to which shares of the Common Stock are converted into cash,
securities or other property (other than a merger of the Company in which
the holders of Common Stock immediately prior to the
merger have the same proportionate ownership of capital stock of the
surviving corporation immediately after the merger);
(b) Consummation of any sale, lease, exchange or other transfer in
one transaction or a series of related transactions of all or
substantially all of the Company's assets other than a transfer of the
Company's assets to a majority-owned subsidiary corporation (as the term
"subsidiary corporation" is defined in Section 8.3) of the Company; or
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company.
Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) under the Exchange Act.
2.6 DISABILITY
"Disability" means "disability" as that term is defined for purposes of
Section 22(e)(3) of the Code.
2.7 EARLY RETIREMENT
"Early Retirement" means early retirement as that term is defined by the
Plan Administrator from time to time for purposes of the Plan.
2.8 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.9 FAIR MARKET VALUE
The "Fair Market Value" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the average of the high and low per share sales prices for the Common
Stock as reported by the Nasdaq National Market for a single trading day or (b)
if the Common Stock is listed on the New York Stock Exchange or the American
Stock Exchange, the average of the high and low per share sales prices for the
Common Stock as such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is no such
reported price for the Common Stock for the date in question, then such price on
the last preceding date for which such price exists shall be determinative of
the Fair Market Value.
2.10 GRANT DATE
"Grant Date" means the date the Plan Administrator adopted the granting
resolution. If, however, the Plan Administrator designates in a resolution a
later date as the date an Option is to be granted, then such later date shall be
the "Grant Date."
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2.11 INCENTIVE STOCK OPTION
"Incentive Stock Option" means an Option to purchase Common Stock granted
under Section 7 with the intention that it qualify as an "incentive stock
option" as that term is defined in Section 422 of the Code.
2.12 NONQUALIFIED STOCK OPTION
"Nonqualified Stock Option" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.
2.13 OPTION
"Option" means the right to purchase Common Stock granted under
Section 7.
2.14 OPTIONEE
"Optionee" means (i) the person to whom an Option is granted; (ii) for an
Optionee who has died, the personal representative of the Optionee's estate, the
person(s) to whom the Optionee's rights under the Option have passed by will or
by the applicable laws of descent and distribution, or the beneficiary
designated in accordance with Section 9; or (iii) person(s) to whom an Option
has been transferred in accordance with Section 9.
2.15 PLAN ADMINISTRATOR
"Plan Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.
2.16 RETIREMENT
"Retirement" means retirement as of the individual's normal retirement
date as that term is defined by the Plan Administrator from time to time for
purposes of the Plan.
2.17 SECURITIES ACT
"Securities Act" means the Securities Act of 1933, as amended.
2.18 SUBSIDIARY
"Subsidiary," except as provided in Section 8.3 in connection with
Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity that may
become a direct or indirect parent of the Company.
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SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board or a committee or committees
(which term includes subcommittees) appointed by, and consisting OF two or more
members of, the Board. If and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in
selecting the Plan Administrator and the membership of any committee acting as
Plan Administrator, with respect to any persons subject or likely to become
subject to Section 16 of the Exchange Act, the provisions regarding (a) "outside
directors" as contemplated by Section 162(m) of the Code and (b) "nonemployee
directors" as contemplated by Rule 16b-3 under the Exchange Act. The Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees consisting of one
or more members of the Board, subject to such limitations as the Board deems
appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan, the
Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Options under the Plan, including the
selection of individuals to be granted Options, the type of Options, the number
of shares of Common Stock subject to an Option, all terms, conditions,
restrictions and limitations, if any, of an Option and the terms of any
instrument that evidences the Option. The Plan Administrator shall also have
exclusive authority to interpret the Plan and may from time to time adopt, and
change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, shall be conclusive and binding on all
parties involved or affected. The Plan Administrator may delegate administrative
duties to such of the Company's officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 10.1, a
maximum of 4 million shares of Common Stock shall be available for issuance
under the Plan, except that any shares of Common Stock that, as of the date the
Plan is approved by the Company's stockholders, are available for issuance under
the Company's Amended and Restated 1994 Stock Option Plan (or that thereafter
become available for issuance under that Plan in accordance with its terms as in
effect on such date) and that are not issued under that Plan shall be added to
the aggregate number of shares available for issuance under the Plan. Shares
issued under the Plan shall be drawn from authorized and unissued shares or
shares now held or subsequently acquired by the Company as treasury shares.
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4.2 LIMITATIONS
Subject to adjustment from time to time as provided in Section 10.1, not
more than 250,000 shares of Common Stock may be made subject to Options under
the Plan to any individual in the aggregate in any one fiscal year of the
Company, except that the Company may make additional one-time grants of up to 1
million shares to newly hired individuals, such limitation to be applied in a
manner consistent with the requirements of, and only to the extent required for
compliance with, the exclusion from the limitation on deductibility of
compensation under Section 162(m) of the Code.
4.3 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Option that
cease to be subject to the Option (other than by reason of exercise of the
Option to the extent it is exercised for shares) and/or shares of Common Stock
subject to repurchase which are subsequently repurchased by the Company, shall
again be available for issuance in connection with future grants of Options
under the Plan; provided, however, that for purposes of Section 4.2, any such
shares shall be counted in accordance with the requirements of Section 162(m) of
the Code.
SECTION 5. ELIGIBILITY
Options may be granted under the Plan to those officers, directors and
employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects. Options may also be granted to consultants, agents,
advisors and independent contractors who provide services to the Company and its
Subsidiaries.
SECTION 6. AWARDS
6.1 FORM AND GRANT OF OPTIONS
The Plan Administrator shall have the authority, in its sole discretion,
to determine the type or types of awards to be made under the Plan. Such awards
may consist of Incentive Stock Options and/or Nonqualified Stock Options.
Options may be granted singly or in combination.
6.2 ACQUIRED COMPANY OPTION AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Options under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of an Acquired Entity) and the new Option is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan
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Administrator, except as may be required for compliance with Rule 16b-3 under
the Exchange Act, and the persons holding such awards shall be deemed to be
Optionees.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options.
7.3 TERM OF OPTIONS
The term of each Option shall be as established by the Plan Administrator
or, if not so established, shall be 10 years from the Grant Date.
7.4 EXERCISE AND VESTING OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall vest and become exercisable, which provisions may be waived or
modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option will be immediately exercisable and
the shares subject to the Option will vest according to the following schedule,
which may be waived or modified by the Plan Administrator at any time:
[Download Table]
Period of Optionee's Continuous Employment
or Service With the Company or Its
Subsidiaries Percent of Total Option
From the Grant Date That Is Vested
------------------- --------------
After 1 year 20%
After 2 years 40%
Each three-month period completed thereafter An additional 5%
After 5 years 100%
Any unvested shares acquired upon exercise of an Option shall be subject to
repurchase by the Company upon termination of the Optionee's employment or
services in accordance with the provisions of Section 13.1.
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To the extent that the right to purchase shares has accrued thereunder, an
Option may be exercised from time to time by written notice to the Company, in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the Option is being exercised and
accompanied by payment in full as described in Section 7.5. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than 100 shares at any one time for vested shares and any number in its
discretion for unvested shares (or the lesser number of remaining shares covered
by the Option).
To the extent required by the Plan Administrator, as a condition to
exercise by the Optionee of an Option, the Optionee shall execute and deliver to
the Company a Shareholders Agreement in substantially the form in use at the
time of exercise, unless either (i) the Optionee has previously executed and
delivered such Shareholder Agreement and it is in effect at the time the
Optionee exercises the Option or (ii) such Shareholders Agreement is no longer
in effect with respect to other holders of Common Stock.
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, a combination of cash and/or check (if any) and
one or both of the following alternative forms: (a) tendering (either actually
or, if and so long as the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act, by attestation) Common Stock already owned by the
Optionee for at least six months (or any shorter period necessary to avoid a
charge to the Company's earnings for financial reporting purposes) having a Fair
Market Value on the day prior to the exercise date equal to the aggregate Option
exercise price or (b) if and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, delivery of a properly executed
exercise notice, together with irrevocable instructions, to (i) a brokerage firm
designated by the Company to deliver promptly to the Company the aggregate
amount of sale or loan proceeds to pay the Option exercise price and any
withholding tax obligations that may arise in connection with the exercise and
(ii) the Company to deliver the certificates for such purchased shares directly
to such brokerage firm, all in accordance with the regulations of the Federal
Reserve Board. In addition, the exercise price for shares purchased under an
Option may be paid, either singly or in combination with one or more of the
alternative forms of payment authorized by this Section 7.5, by (y) a promissory
note delivered pursuant to Section 12 or (z) such other consideration as the
Plan Administrator may permit.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be exercisable, and
the terms and conditions of such exercise, if an Optionee ceases to be employed
by, or to provide services to, the Company or its Subsidiaries, which provisions
may be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will be
exercisable
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according to the following terms and conditions, which may be waived or modified
by the Plan Administrator at any time.
In case of termination of the Optionee's employment or services other than
by reason of death or Cause, the Option shall be exercisable, to the extent of
the number of shares vested at the date of such termination, only (a) within one
year if the termination of the Optionee's employment or services is coincident
with Retirement, Early Retirement at the Company's request or Disability or (b)
within three months after the date the Optionee ceases to be an employee,
director, officer, consultant, agent, advisor or independent contractor of the
Company or a Subsidiary if termination of the Optionee's employment or services
is for any reason other than Retirement, Early Retirement at the Company's
request or Disability, but in no event later than the remaining term of the
Option. Any Option exercisable at the time of the Optionee's death may be
exercised, to the extent of the number of shares vested at the date of the
Optionee's death, by the personal representative of the Optionee's estate, the
person(s) to whom the Optionee's rights under the Option have passed by will or
the applicable laws of descent and distribution or the beneficiary designated
pursuant to Section 9 at any time or from time to time within one year after the
date of death, but in no event later than the remaining term of the Option. Any
portion of an Option that is not vested on the date of termination of the
Optionee's employment or services shall terminate on such date, unless the Plan
Administrator determines otherwise. In case of termination of the Optionee's
employment or services for Cause, the Option shall automatically terminate upon
first notification to the Optionee of such termination, unless the Plan
Administrator determines otherwise. If an Optionee's employment or services with
the Company are suspended pending an investigation of whether the Optionee shall
be terminated for Cause, all the Optionee's rights under any Option likewise
shall be suspended during the period of investigation.
With respect to employees, unless the Plan Administrator at any time
determines otherwise, "termination of the Optionee's employment or services" for
purposes of the Plan (including without limitation this Section 7 and Section
13) shall mean any reduction in the Optionee's regular hours of employment to
less than thirty (30) hours per week. A transfer of employment or services
between or among the Company and its Subsidiaries shall not be considered a
termination of employment or services. The effect of a Company-approved leave of
absence on the terms and conditions of an Option shall be determined by the Plan
Administrator, in its sole discretion.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock Options
shall be subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the Grant
Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be subject to delayed exercisability or treated as a
Nonqualified Stock Option as set forth by the Plan Administrator in the
agreement(s)
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evidencing the Option. In the event the Optionee holds two or more such Options
that become exercisable for the first time in the same calendar year, such
limitation shall be applied on the basis of the order in which such Options are
granted.
8.2 10% STOCKHOLDERS
If an individual owns more than 10% of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the Grant Date and the Option term shall not exceed five
years. The determination of 10% ownership shall be made in accordance with
Section 422 of the Code.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, "parent corporation" and "subsidiary
corporation" shall have the meanings attributed to those terms for purposes of
Section 422 of the Code.
8.4 TERM
The term of an Incentive Stock Option shall not exceed 10 years.
8.5 EXERCISABILITY
To qualify for Incentive Stock Option tax treatment, an Option designated
as an Incentive Stock Option must be exercised within three months after
termination of employment for reasons other than death, except that, in the case
of termination of employment due to total disability, such Option must be
exercised within one year after such termination. Employment shall not be deemed
to continue beyond the first 90 days of a leave of absence unless the Optionee's
reemployment rights are guaranteed by statute or contract. For purposes of this
Section 8.5, "total disability" shall mean a mental or physical impairment of
the Optionee that is expected to result in death or that has lasted or is
expected to last for a continuous period of 12 months or more and that causes
the Optionee to be unable, in the opinion of the Company, to perform his or her
duties for the Company and to be engaged in any substantial gainful activity.
Total disability shall be deemed to have occurred on the first day after the
Company has furnished its opinion of total disability to the Plan Administrator.
8.6 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Optionee must hold the shares issued
upon the exercise of an Incentive Stock Option for two years after the Grant
Date of the Incentive Stock Option and one year from the date of exercise. An
Optionee may be subject to the alternative minimum tax at the time of exercise
of an Incentive Stock Option. The Plan Administrator may require an Optionee to
give the Company prompt notice of any disposition of shares acquired by the
exercise of an Incentive Stock Option prior to the expiration of such holding
periods.
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8.7 PROMISSORY NOTES
The amount of any promissory note delivered pursuant to Section 12 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.
SECTION 9. ASSIGNABILITY
No Option granted under the Plan may be assigned, pledged or transferred
by the Optionee other than by will or by the applicable laws of descent and
distribution, and, during the Optionee's lifetime, such Option may be exercised
only by the Optionee or a permitted assignee or transferee of the Optionee (as
provided below). Notwithstanding the foregoing, and to the extent permitted by
Section 422 of the Code, the Plan Administrator, in its sole discretion, may
permit such assignment, transfer and exercisability and may permit an Optionee
to designate a beneficiary who may exercise the Option after the Optionee's
death; provided, however, that any Option so assigned or transferred shall be
subject to all the same terms and conditions contained in the instrument
evidencing the Option.
SECTION 10. ADJUSTMENTS
10.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to stockholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Common Stock of the Company, then the Plan
Administrator shall make proportional adjustments in (i) the maximum number and
kind of securities subject to the Plan as set forth in Section 4.1, (ii) the
maximum number and kind of securities that may be made subject to Options to any
individual as set forth in Section 4.2, and (iii) the number and kind of
securities that are subject to any outstanding Option and the per share price of
such securities, without any change in the aggregate price to be paid therefor.
The determination by the Plan Administrator as to the terms of any of the
foregoing adjustments shall be conclusive and binding.
10.2 CORPORATE TRANSACTION
Except as otherwise provided in the instrument that evidences the Option,
in the event of a Corporate Transaction, the Plan Administrator shall determine
whether provision will be made in connection with the Corporate Transaction for
an appropriate assumption of the Options theretofore granted under the Plan
(which assumption may be effected by means of a payment to each Optionee (by the
Company or any other person or entity involved in the Corporate Transaction), in
exchange for the cancellation of the Options held by such Optionee, of the
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difference between the then Fair Market Value of the aggregate number of shares
of Common Stock then subject to such Options and the aggregate exercise price
that would have to be paid to acquire such shares) or for substitution of
appropriate new options covering stock of a successor corporation to the Company
or stock of an affiliate of such successor corporation. If the Plan
Administrator determines that such an assumption or substitution will be made,
the Plan Administrator shall give notice of such determination to the Optionees,
and the provisions of such assumption or substitution, and any adjustments made
(i) to the number and kind of shares subject to the outstanding Options (or to
the options in substitution therefor), (ii) to the exercise prices, and/or (iii)
to the terms and conditions of the stock options, shall be binding on the
Optionees. Any such determination shall be made in the sole discretion of the
Plan Administrator and shall be final, conclusive and binding on all Optionees.
If the Plan Administrator, in its sole discretion, determines that no such
assumption or substitution will be made, the Plan Administrator shall give
notice of such determination to the Optionees, and each Option that is at the
time outstanding shall automatically accelerate so that each such Option shall,
immediately prior to the specified effective date for the Corporate Transaction,
become 100% vested and exercisable, except that such acceleration will not occur
if, in the opinion of the Company's outside accountants, it would render
unavailable "pooling of interest" accounting for a Corporate Transaction that
would otherwise qualify for such accounting treatment. All such Options shall
terminate and cease to remain outstanding immediately following the consummation
of the Corporate Transaction, except to the extent assumed by the successor
corporation or an affiliate thereof.
10.3 FURTHER ADJUSTMENT OF OPTIONS
Subject to Section 10.2, the Plan Administrator shall have the discretion,
exercisable at any time before a sale, merger, consolidation, reorganization,
liquidation or change in control of the Company, as defined by the Plan
Administrator, to take such further action as it determines to be necessary or
advisable, and fair and equitable to Optionees, with respect to Options. Such
authorized action may include (but shall not be limited to) establishing,
amending or waiving the type, terms, conditions or duration of, or restrictions
on, Options so as to provide for earlier, later, extended or additional time for
exercise and other modifications, and the Plan Administrator may take such
actions with respect to all Optionees, to certain categories of Optionees or
only to individual Optionees. The Plan Administrator may take such action before
or after granting Options to which the action relates and before or after any
public announcement with respect to such sale, merger, consolidation,
reorganization, liquidation or change in control that is the reason for such
action.
10.4 LIMITATIONS
The grant of Options will in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 11. WITHHOLDING
The Company may require the Optionee to pay to the Company the amount of
any withholding taxes that the Company is required to withhold with respect to
the grant or exercise
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of any Option. Subject to the Plan and applicable law, the Plan Administrator
may, in its sole discretion, permit the Optionee to satisfy withholding
obligations, in whole or in part, by paying cash, by electing to have the
Company withhold shares of Common Stock or by transferring shares of Common
Stock to the Company, in such amounts as are equivalent to the Fair Market Value
of the withholding obligation. The Company shall have the right to withhold from
any shares of Common Stock issuable pursuant to an Option or from any cash
amounts otherwise due or to become due from the Company to the Optionee an
amount equal to such taxes. The Company may also deduct from any Option any
other amounts due from the Optionee to the Company or a Subsidiary.
SECTION 12. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES
To assist an Optionee (including an Optionee who is an officer or a
director of the Company) in acquiring shares of Common Stock pursuant to an
Option granted under the Plan, the Plan Administrator, in its sole discretion,
may authorize, either at the Grant Date or at any time before the acquisition of
Common Stock pursuant to the Option, (a) the extension of a loan to the Optionee
by the Company, (b) the payment by the Optionee of the purchase price, if any,
of the Common Stock in installments, or (c) the guarantee by the Company of a
loan obtained by the Optionee from a third party. The terms of any loans,
installment payments or loan guarantees, including the interest rate and terms
of repayment, will be subject to the Plan Administrator's discretion. Loans,
installment payments and loan guarantees may be granted with or without
security. The maximum credit available is the purchase price, if any, of the
Common Stock acquired, plus the maximum federal and state income and employment
tax liability that may be incurred in connection with the acquisition.
SECTION 13. REPURCHASE RIGHTS; ESCROW
13.1 REPURCHASE RIGHTS
The Plan Administrator shall have the discretion to authorize the issuance
of unvested shares of Common Stock pursuant to the exercise of an Option. In the
event of termination of the Optionee's employment or services, all shares of
Common Stock issued upon exercise of an Option which are unvested at the time of
cessation of employment or services shall be subject to repurchase at the
exercise price paid for such shares. The terms and conditions upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise) shall be established by the Plan Administrator and set forth in the
agreement evidencing such right.
All of the Company's outstanding repurchase rights under this Section 13.1
are assignable by the Company at any time and shall remain in full force and
effect in the event of a Corporate Transaction; provided that if the vesting of
Options is accelerated pursuant to Section 10.2, the repurchase rights under
this Section 13.1 shall terminate and all shares subject to such terminated
rights shall immediately vest in full.
The Plan Administrator shall have the discretionary authority, exercisable
either before or after the Optionee's cessation of employment or services, to
cancel the Company's outstanding
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repurchase rights with respect to one or more shares purchased or purchasable by
the Optionee under an Option and thereby accelerate the vesting of such shares
in whole or in part at any time.
13.2 ESCROW
To ensure that shares of Common Stock acquired upon exercise of an Option
that are subject to any repurchase right, stockholders agreement and/or security
for any promissory note will be available for repurchase, the Plan Administrator
may require the Optionee to deposit the certificate or certificates evidencing
such shares with an agent designated by the Plan Administrator under the terms
and conditions of escrow and security agreements approved by the Plan
Administrator. If the Plan Administrator does not require such deposit as a
condition of exercise of an Option, the Plan Administrator reserves the right at
any time to require the Optionee to so deposit the certificate or certificates
in escrow. The Company shall bear the expenses of the escrow.
As soon as practicable after the expiration of any repurchase rights or
stockholders agreement, and after full repayment of any promissory note secured
by the shares in escrow, the agent shall deliver to the Optionee the shares no
longer subject to such restrictions and no longer security for any promissory
note.
In the event shares held in escrow are subject to the Company's exercise
of a repurchase option or stockholders agreement, the notices required to be
given to the Optionee shall be given to the agent and any payment required to be
given to the Optionee shall be given to the agent. Within 30 days after payment
by the Company, the agent shall deliver the shares which the Company has
purchased to the Company and shall deliver the payment received from the Company
to the Optionee.
In the event of any stock dividend, stock split or consolidation of shares
or any like capital adjustment of any of the outstanding securities of the
Company, any and all new, substituted or additional securities or other property
to which the Optionee is entitled by reason of ownership of shares acquired upon
exercise of an Option shall be subject to any repurchase rights, stockholders
agreement, and/or security for any promissory note with the same force and
effect as the shares subject to such repurchase rights, stockholders agreement
and/or security interest immediately before such event.
SECTION 14. MARKET STANDOFF
In connection with any underwritten public offering by the Company of its
equity securities pursuant to an effective registration statement filed under
the Securities Act, including the Company's initial public offering, a person
shall not sell, or make any short sale of, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to,
any shares issued pursuant to an Option granted under the Plan without the prior
written consent of the Company or its underwriters. Such limitations shall be in
effect only if and to the extent and for such period of time as may be requested
by the Company or such underwriters and agreed to by the Company's officers and
directors; provided, however, that in no event shall the weighted
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average number of days in such period exceed 180 days. The limitations of this
paragraph shall in all events terminate two years after the effective date of
the Company's initial public offering.
In the event of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
Company's outstanding Common Stock effected as a class without the Company's
receipt of consideration, then any new, substituted or additional securities
distributed with respect to the purchased shares shall be immediately subject to
the provisions of this Section 14, to the same extent the purchased shares are
at such time covered by such provisions.
In order to enforce the limitations of this Section 14, the Company may
impose stop-transfer instructions with respect to the purchased shares and any
new, substituted or additional securities distributed with respect to the
purchased shares until the end of the applicable standoff period.
SECTION 15. AMENDMENT AND TERMINATION OF PLAN
15.1 AMENDMENT OF PLAN
The Plan may be amended only by the Board in such respects as it shall
deem advisable; however, to the extent required for compliance with Section 422
of the Code or any applicable law or regulation, stockholder approval will be
required for any amendment that will (a) increase the total number of shares as
to which Options may be granted under the Plan, (b) modify the class of persons
eligible to receive Options, or (c) otherwise require stockholder approval under
any applicable law or regulation.
15.2 TERMINATION OF PLAN
The Board may suspend or terminate the Plan at any time. The Plan will
have no fixed expiration date; provided, however, that no Incentive Stock
Options may be granted more than 10 years after the earlier of the Plan's
adoption by the Board and approval by the stockholders.
15.3 CONSENT OF OPTIONEE
The amendment or termination of the Plan shall not, without the consent of
the Optionee, impair or diminish any rights or obligations under any Option
theretofore granted under the Plan.
Any change or adjustment to an outstanding Incentive Stock Option shall
not, without the consent of the Optionee, be made in a manner so as to
constitute a "modification" that would cause such Incentive Stock Option to fail
to continue to qualify as an Incentive Stock Option.
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SECTION 16. GENERAL
16.1 OPTION AGREEMENTS
Options granted under the Plan shall be evidenced by a written agreement
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.
16.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN OPTIONS
None of the Plan, participation in the Plan or any action of the Plan
Administrator taken under the Plan shall be construed as giving any person any
right to be retained in the employ of the Company or limit the Company's right
to terminate the employment or services of any person.
16.3 REGISTRATION
The Company shall be under no obligation to any Optionee to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
As a condition to the exercise of an Option, the Company may require the
Optionee to represent and warrant at the time of any such exercise or receipt
that such shares are being purchased or received only for the Optionee's own
account and without any present intention to sell or distribute such shares if,
in the opinion of counsel for the Company, such a representation is required by
any relevant provision of the aforementioned laws. At the option of the Company,
a stop-transfer order against any such shares may be placed on the official
stock books and records of the Company, and a legend indicating that such shares
may not be pledged, sold or otherwise transferred, unless an opinion of counsel
is provided (concurred in by counsel for the Company) stating that such transfer
is not in violation of any applicable law or regulation, may be stamped on stock
certificates to ensure exemption from registration. The Plan Administrator may
also require such other action or agreement by the Optionee as may from time to
time be necessary to comply with the federal and state securities laws.
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16.4 NO RIGHTS AS A STOCKHOLDER
No Option shall entitle the Optionee to any dividend, voting or other
right of a stockholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Option, free of all applicable
restrictions.
16.5 COMPLIANCE WITH LAWS AND REGULATIONS
Notwithstanding anything in the Plan to the contrary, the Board, in its
sole discretion, may bifurcate the Plan so as to restrict, limit or condition
the use of any provision of the Plan to Optionees who are officers or directors
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning the Plan with respect to other Optionees. Additionally, in
interpreting and applying the provisions of the Plan, any Option granted as an
Incentive Stock Option pursuant to the Plan shall, to the extent permitted by
law, be construed as an "incentive stock option" within the meaning of Section
422 of the Code.
16.6 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Optionee, and no Optionee
shall have any rights that are greater than those of a general unsecured
creditor of the Company.
16.7 SEVERABILITY
If any provision of the Plan or any Option is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Option under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Option, such provision shall be stricken as to such jurisdiction,
person or Option, and the remainder of the Plan and any such Option shall remain
in full force and effect.
SECTION 17. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the Board,
so long as it is approved by the Company's stockholders at any time within 12
months of such adoption.
Adopted by the Board on February 25, 1997 and approved by the Company's
stockholders on February 25, 1997.
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PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
[Download Table]
Date of
Adoption/ Date of
Amendment/ Stockholder
Adjustment Section Effect of Amendment Approval
---------- ------- ------------------- --------
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Dates Referenced Herein
| Referenced-On Page |
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| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 3/24/97 | | | | | | | None on these Dates |
| | 2/25/97 | | 16 |
| List all Filings |
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