Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Form S-1 Amendment 130 888K
2: EX-1.1 Purchase Agreement 24 113K
3: EX-1.2 Form of Lock-Up Agreement 2 13K
4: EX-3.1 Amended and Restated Certificate of Incorporation 3 17K
5: EX-3.2 By-Laws of the Company 10 39K
6: EX-5.1 Opinion re: Legality 2 12K
7: EX-10.1 1998 Stock Incentive Plan 29 112K
10: EX-10.16 Globalcenter Master Service Agreement 8 34K
11: EX-10.17 Operating Lease Agreement 5 19K
12: EX-10.18 Operating Lease Agreement 12± 52K
13: EX-10.19 Pledge and Security Agreement 9 45K
14: EX-10.20 Senior Convertible Note With Warrants Purchase 19 66K
15: EX-10.21 Amended and Restated Stockholder's Agreement 19 72K
8: EX-10.3.2 Material Contract 4 16K
9: EX-10.6 Purchase Agreement Between K2 Design & 24/7 Media 18 66K
16: EX-11.1 Computation of Loss Per Share 1 10K
17: EX-23.1 Accountants' Consent and Report on Schedule 2 11K
18: EX-23.2 Consent of Arthur Andersen LLP 1 8K
19: EX-23.3 Consent of Arthur Andersen LLP 1 8K
20: EX-23.5 Consent of Media Metrix 1 8K
21: EX-23.6 Consent of Jupiter Communications 1 8K
22: EX-23.7 Consent of Idc 1 8K
23: EX-23.8 Consent of Network Solutions 1 8K
24: EX-23.9 Consent of Direct Marketing Association 1 8K
EX-10.1 — 1998 Stock Incentive Plan
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24/7 MEDIA, INC.
1998 Stock Incentive Plan
As Amended and Restated as of July 20, 1998
ARTICLE I.
PURPOSE
The purpose of this 24/7 Media, Inc. 1998 Stock Incentive Plan (the
"Plan") is to enhance the profitability and value of 24/7 Media, Inc. (the
"Company") for the benefit of its stockholders by enabling the Company (i) to
offer employees and consultants of the Company and its Affiliates stock based
incentives and other equity interests in the Company, thereby creating a means
to raise the level of stock ownership by employees and consultants in order to
attract, retain and reward such employees and consultants and strengthen the
mutuality of interests between employees or consultants and the Company's
stockholders and (ii) to offer equity based awards to non-employee directors
thereby attracting, retaining and rewarding such non-employee directors and
strengthening the mutuality of interests between non-employee directors and the
Company's stockholders. This Plan subsumes and replaces in its entirety the
Amended and Restated 1995 Stock Option Plan (the "1995 Plan") adopted by the
Company's Board of Directors, and subsequently adopted by the Company's
shareholders at the Company's Annual Meeting of Shareholders on March 8, 1996,
and all Options granted under the 1995 Plan will continue to be outstanding
Options under the Plan. The Plan was originally effective February 13, 1998. It
has been amended and restated in the form set forth herein effective July 20,
1998, conditioned upon the approval of the Company's Board of Directors and the
Company's stockholders within twelve (12) months of the effective date.
ARTICLE II.
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
"Affiliate" shall mean other than the Company, (i) any corporation in an
unbroken chain of corporations beginning with the Company, or in the event the
Company is a subsidiary within the meaning of Code Section 424(f), beginning
with the Company's parent within the meaning of Code Section 424(e), which owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain; (ii) any
corporation, trade or business (including, without limitation, a partnership or
limited liability company) which is controlled fifty percent (50%) or more
(whether by ownership of stock, assets or an equivalent ownership interest or
voting interest) by the Company or one of its Affiliates; or (iii) any other
entity, approved by the Committee as an Affiliate under the Plan, in which the
Company or any of its Affiliates has a material equity interest.
"Award" shall mean any award under this Plan of any Stock Option, Stock
Appreciation Right or Restricted Stock. All Awards shall be confirmed by, and
subject to the terms of, a written agreement executed by the Company and the
Participant.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean, with respect to a Participant's Termination of
Employment or Termination of Consultancy, unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced, thereafter,
termination due to a Participant's dishonesty, fraud, insubordination, willful
misconduct, refusal to perform services (for any reason other than illness or
incapacity) or materially unsatisfactory performance of his or her duties for
the Company as determined by the Committee in its sole discretion. With respect
to a Participant's Termination of Directorship, Cause shall mean an act or
failure to act that constitutes "cause" for removal of a director under
applicable state corporate law.
"Change in Control" shall have the meaning set forth in Article XI.
"Code" shall mean the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any successor
provision.
"Committee" shall mean a committee of the Board that may be appointed
from time to time by the Board. To the extent determined appropriate by the
Board, such committee shall consist of two or more non-employee directors, each
of whom shall be a non-employee director as defined in Rule 16b-3 and an outside
director as defined under Section 162(m) of the Code. To the extent that no
Committee exists which has the authority to administer the Plan, the functions
of the Committee shall be exercised by the Board. If for any reason the
appointed Committee does not meet the requirements of Rule 16b-3 or Section
162(m) of the Code, such noncompliance with the requirements of Rule 16b-3 or
Section 162(m) of the Code shall not affect the validity of the awards, grants,
interpretations or other actions of the Committee.
"Common Stock" means the Common Shares, $.01 par value per share, of the
Company.
"Consultant" shall mean any advisor or consultant to the Company or an
Affiliate who is eligible pursuant to Article V to be granted Awards under this
Plan.
"Disability" shall mean total and permanent disability, as defined in
Section 22(e)(3) of the Code.
"Effective Date" shall mean February 13, 1998.
"Eligible Employees" shall mean the employees of the Company and its
Subsidiaries who are eligible pursuant to Article V to be granted Awards under
this Plan. Notwithstanding the foregoing, with respect to the grant of Incentive
Stock Options, Eligible Employees shall mean the employees of the Company, its
Subsidiaries and its parent (within the meaning of Code
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Section 424(e)) who are eligible pursuant to Article V to be granted Stock
Options under the Plan.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Fair Market Value" for purposes of this Plan, unless otherwise required
by any applicable provision of the Code or any regulations issued thereunder,
shall mean, as of any date, the last sales price reported for the Common Stock
on the applicable date (i) as reported by the principal national securities
exchange in the United States on which it is then traded or the Nasdaq Stock
Market, Inc., or (ii) if not traded on any such national securities exchange or
the Nasdaq Stock Market, Inc., as quoted on an automated quotation system
sponsored by the National Association of Securities Dealers. If the Common Stock
is not readily tradable on a national securities exchange, the Nasdaq Stock
Market, Inc. or any system sponsored by the National Association of Securities
Dealers, its Fair Market Value shall be set in good faith by the Committee. For
purposes of the grant of any Award, the applicable date shall be the date on
which the Award is granted or, in the case of a Stock Appreciation Right, the
date a notice of exercise is received by the Committee or, if the sale of Common
Stock shall not have been reported or quoted on such date, the first day prior
thereto on which the sale of Common Stock was reported or quoted.
"Good Reason" shall mean, with respect to a Participant's Termination of
Employment or Termination of Consultancy unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced, thereafter,
a voluntary termination due to "good reason," as the Committee, in its sole
discretion, decides to treat as a Good Reason termination.
"Incentive Stock Option" shall mean any Stock Option awarded under this
Plan intended to be and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
"Non-Qualified Stock Option" shall mean any Stock Option awarded under
this Plan that is not an Incentive Stock Option.
"Participant" shall mean the following persons to whom an Award has been
made pursuant to this Plan: Eligible Employees of the Company and its
Subsidiaries non-employee directors of the Company; provided, however, that
non-employee directors shall be Participants for purposes of the Plan solely
with respect to awards of Stock Options pursuant to Article IX.
"Restricted Stock" shall mean an award of shares of Common Stock under
the Plan that is subject to restrictions under Article VII.
"Restriction Period" shall have the meaning set forth in Subsection
7.3(a) with respect to Restricted Stock for Eligible Employees.
"Retirement" with respect to a Participant's Termination of Employment
or Termination of Consultancy, shall mean a Termination of Employment or
Termination of Consultancy
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without Cause from the Company by a Participant who has attained (i) at least
age sixty-five (65); or (ii) such earlier date after age fifty-five (55) as
approved by the Committee with regard to such Participant. With respect to a
Participant's Termination of Directorship, Retirement shall mean the failure to
stand for reelection or the failure to be reelected after a Participant has
attained age sixty-five (65).
"Rule 16b-3" shall mean Rule 16b-3 under Section 16(b) of the Exchange
Act as then in effect or any successor provisions.
"Section 162(m) of the Code" shall mean the exception for
performance-based compensation under Section 162(m) of the Code and any Treasury
regulations thereunder.
"Stock Appreciation Right" shall mean the right pursuant to an Award
granted under Article VIII. A Tandem Stock Appreciation Right shall mean the
right to surrender to the Company all (or a portion) of a Stock Option in
exchange for an amount in cash or stock equal to the excess of (i) the Fair
Market Value, on the date such Stock Option (or such portion thereof) is
surrendered, of the Common Stock covered by such Stock Option (or such portion
thereof), over (ii) the aggregate exercise price of such Stock Option (or such
portion thereof). A Non-Tandem Stock Appreciation Right shall mean the right to
receive an amount in cash or stock equal to the excess of (x) the Fair Market
Value of a share of Common Stock on the date such right is exercised, over (y)
the aggregate exercise price of such right, other than on surrender of a Stock
Option.
"Stock Option" or "Option" shall mean any Option to purchase shares of
Common Stock granted to Eligible Employees pursuant to Article VI.
"Subsidiary" shall mean any corporation that is defined as a subsidiary
corporation in Section 424(f) of the Code.
"Ten Percent Stockholder" shall mean a person owning Common Stock of the
Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company as defined in Section 422 of the
Code.
"Termination of Consultancy" shall mean, with respect to an individual,
that the individual is no longer acting as a Consultant to the Company or an
Affiliate. In the event an entity shall cease to be an Affiliate, there shall be
deemed a Termination of Consultancy of any individual who is not otherwise a
Consultant of the Company or another Affiliate at the time the entity ceases to
be an Affiliate.
"Termination of Directorship" shall mean, with respect to a
non-employee director, that the non-employee director has ceased to be a
director of the Company.
"Termination of Employment," except as provided in the next sentence,
shall mean (i) a termination of service (for reasons other than a military or
personal leave of absence granted by the Company) of a Participant from the
Company and its Affiliates; or (ii) when an entity which
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is employing a Participant ceases to be an Affiliate, unless the Participant
thereupon becomes employed by the Company or another Affiliate. The Committee
may otherwise define Termination of Employment in the Option grant or, if no
rights of the Participant are reduced, may otherwise define Termination of
Employment thereafter, including, but not limited to, defining Termination of
Employment with regard to entities controlling, under common control with or
controlled by the Company rather than just the Company and its Affiliates and/or
entities that provide substantial services to the Company or its Affiliates to
which the Participant has transferred directly from the Company or its
Affiliates at the request of the Company.
"Transfer" or "Transferred" shall mean anticipate, alienate, attach,
sell, assign, pledge, encumber, charge or otherwise transfer.
"Withholding Election" shall have the meaning set forth in Section 14.4.
ARTICLE III.
ADMINISTRATION
1. The Committee. The Plan shall be administered and interpreted by the
Committee.
2. Awards. The Committee shall have full authority to grant, pursuant to
the terms of this Plan, (i) Stock Options, (ii) Stock Appreciation Rights, both
Tandem and Non-Tandem and (iii) Restricted Stock to Eligible Employees and
Consultants. Stock Options may be granted to non-employee directors of the
Company pursuant to Article IX. In particular, the Committee shall have the
authority:
(a) to select the Eligible Employees and Consultants to whom Stock
Options, Stock Appreciation Rights and Restricted Stock may from time to
time be granted hereunder;
(b) to determine whether and to what extent Stock Options, Stock
Appreciation Rights and Restricted Stock or any combination thereof are to
be granted hereunder to one or more Eligible Employees or Consultants;
(c) to determine, in accordance with the terms of this Plan, the
number of shares of Common Stock to be covered by each Award to an
Eligible Employee or Consultant granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the
terms of this Plan, of any Award granted hereunder to an Eligible Employee
or Consultant (including, but not limited to, the share price, any
restriction or limitation, any vesting schedule or acceleration thereof,
or any forfeiture restrictions or waiver thereof, regarding any Stock
Option or other Award, and the shares of Common Stock relating
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thereto, based on such factors, if any, as the Committee shall determine,
in its sole discretion);
(e) to determine whether and under what circumstances a Stock Option
may be settled in cash, Common Stock and/or Restricted Stock under
Subsection 6.3(d);
(f) to determine whether, to what extent and under what
circumstances to provide loans (which shall be on a recourse basis and
shall bear a reasonable rate of interest) to Eligible Employees and
Consultants in order to exercise Options under the Plan;
(g) to modify, extend or renew a Stock Option, subject to Article
XII hereof, provided, however, that if a Stock Option is modified,
extended or renewed and thereby deemed to be the issuance of a new Stock
Option under the Code or the applicable accounting rules, the exercise
price of such Stock Option may continue to be the original exercise price
even if less than the Fair Market Value of the Common Stock at the time of
such modification, extension or renewal;
(h) to determine whether a Stock Appreciation Right is Tandem or
Non-Tandem; and
(i) to determine whether to require an Eligible Employee or
Consultant, as a condition of the granting of any Award, to not sell or
otherwise dispose of shares acquired pursuant to the exercise of an Option
or as an Award for a period of time as determined by the Committee, in its
sole discretion, following the date of the acquisition of such Option or
Award.
3. Guidelines. Subject to Article XII hereof, the Committee shall have the
authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing this Plan and perform all acts, including the delegation of
its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of this Plan and
any Award issued under this Plan (and any agreements relating thereto); and to
otherwise supervise the administration of this Plan. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in this Plan or
in any agreement relating thereto in the manner and to the extent it shall deem
necessary to carry this Plan into effect, but only to the extent any such action
would be permitted under the applicable provisions of Rule 16b-3 (if any) and
the applicable provisions of Section 162(m) of the Code (if any). The Committee
may adopt special guidelines and provisions for persons who are residing in, or
subject to the taxes of, countries other than the United States to comply with
applicable tax and securities laws. If and to the extent applicable, this Plan
is intended to comply with Section 162(m) of the Code and the applicable
requirements of Rule 16b-3 and shall be limited, construed and interpreted in a
manner so as to comply therewith.
4. Decisions Final. Any decision, interpretation or other action made or
taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its
6
members) arising out of or in connection with the Plan shall be within the
absolute discretion of all and each of them, as the case may be, and shall be
final, binding and conclusive on the Company and all employees and Participants
and their respective heirs, executors, administrators, successors and assigns.
5. Reliance on Counsel. The Company, the Board or the Committee may
consult with legal counsel, who may be counsel for the Company or other counsel,
with respect to its obligations or duties hereunder, or with respect to any
action or proceeding or any question of law, and shall not be liable with
respect to any action taken or omitted by it in good faith pursuant to the
advice of such counsel.
6. Procedures. If the Committee is appointed, the Board may designate one
of the members of the Committee as chairman and the Committee shall hold
meetings, subject to the By-Laws of the Company, at such times and places as it
shall deem advisable. A majority of the Committee members shall constitute a
quorum. All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by all
Committee members in accordance with the By-Laws of the Company shall be fully
effective as if it had been made by a vote at a meeting duly called and held.
The Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
7. Designation of Consultants -- Liability.
(a) The Committee may designate employees of the Company and
professional advisors to assist the Committee in the administration of the
Plan and may grant authority to employees to execute agreements or other
documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may
rely upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred
by the Committee or Board in the engagement of any such counsel,
consultant or agent shall be paid by the Company. The Committee, its
members and any person designated pursuant to paragraph (a) above shall
not be liable for any action or determination made in good faith with
respect to the Plan. To the maximum extent permitted by applicable law, no
officer of the Company or member or former member of the Committee or of
the Board shall be liable for any action or determination made in good
faith with respect to the Plan or any Award granted under it. To the
maximum extent permitted by applicable law and the Certificate of
Incorporation and By-Laws of the Company and to the extent not covered by
insurance, each officer and member or former member of the Committee or of
the Board shall be indemnified and held harmless by the Company against
any cost or expense (including reasonable fees of counsel reasonably
acceptable to the Company) or liability (including any sum paid in
settlement of a claim with the approval of the Company), and advanced
amounts necessary to pay the foregoing at the earliest time and to the
fullest extent permitted, arising out of any act or omission to act in
connection with the Plan, except to
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the extent arising out of such officer's, member's or former member's own
fraud or bad faith. Such indemnification shall be in addition to any
rights of indemnification the officers, directors or members or former
officers, directors or members may have under applicable law or under the
Certificate of Incorporation or By-Laws of the Company or Affiliate.
Notwithstanding anything else herein, this indemnification will not apply
to the actions or determinations made by an individual with regard to
Awards granted to him or her under this Plan.
ARTICLE IV.
SHARE AND OTHER LIMITATIONS
1. Shares.
(a) General Limitation. The aggregate number of shares of Common
Stock which may be issued or used for reference purposes under this Plan
or with respect to which other Awards may be granted shall not exceed
3,000,000 shares (all share numbers set forth in the Plan give effect to a
1-for-4 reverse stock split effected July 20, 1998 and are subject to any
increase or decrease pursuant to Section 4.2) which may be either
authorized and unissued Common Stock or Common Stock held in or acquired
for the treasury of the Company. If any Option or Stock Appreciation Right
granted under this Plan expires, terminates or is canceled for any reason
without having been exercised in full or, with respect to Options, the
Company repurchases any Option pursuant to Section 6.3(f), the number of
shares of Common Stock underlying the repurchased Option, and/or the
number of shares of Common Stock underlying any unexercised Stock
Appreciation Right or Option shall again be available for the purposes of
Awards under the Plan. If a Tandem Stock Appreciation Right or a limited
Stock Appreciation Right is granted in tandem with an Option, such grant
shall only apply once against the maximum number of shares of Common Stock
which may be issued under this Plan.
(b) Individual Participant Limitations. The maximum number of shares
of Common Stock subject to any Option which may be granted under this Plan
to each Participant shall not exceed 187,500 shares (subject to any
increase or decrease pursuant to Section 4.2) during each fiscal year of
the Company.
There are no annual individual Participant limitations on Restricted
Stock.
The maximum number of shares of Common Stock subject to any Stock
Appreciation Right which may be granted under this Plan to each
Participant shall not exceed 750,000 shares (subject to any increase or
decrease pursuant to Section 4.2) during each fiscal year of the Company.
If a Tandem Stock Appreciation Right or limited Stock Appreciation Right
is granted in tandem with an Option it shall apply against the
Participant's individual share limitations for both Stock Appreciation
Rights and Options.
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2. Changes.
(a) The existence of the Plan and the Awards granted hereunder shall
not affect in any way the right or power of the Board or the stockholders
of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company or its Affiliates,
any issue of bonds, debentures, preferred or prior preference stock ahead
of or affecting Common Stock, the dissolution or liquidation of the
Company or its Affiliates, any sale or transfer of all or part of its
assets or business or any other corporate act or proceeding.
(b) In the event of any such change in the capital structure or
business of the Company by reason of any stock dividend or distribution,
stock split or reverse stock split, recapitalization, reorganization,
merger, consolidation, split-up, combination or exchange of shares,
distribution with respect to its outstanding Common Stock or capital stock
other than Common Stock, sale or transfer of all or part of its assets or
business, reclassification of its capital stock, or any similar change
affecting the Company's capital structure or business and the Committee
determines an adjustment is appropriate under the Plan, then the aggregate
number and kind of shares which thereafter may be issued under this Plan,
the number and kind of shares or other property (including cash) to be
issued upon exercise of an outstanding Option or other Awards granted
under this Plan and the purchase price thereof shall be appropriately
adjusted consistent with such change in such manner as the Committee may
deem equitable to prevent substantial dilution or enlargement of the
rights granted to, or available for, Participants under this Plan or as
otherwise necessary to reflect the change, and any such adjustment
determined by the Committee shall be binding and conclusive on the Company
and all Participants and employees and their respective heirs, executors,
administrators, successors and assigns.
(c) Fractional shares of Common Stock resulting from any adjustment
in Options or Awards pursuant to Section 4.2(a) or (b) shall be aggregated
until, and eliminated at, the time of exercise by rounding-down for
fractions less than one-half (1/2) and rounding-up for fractions equal to
or greater than one-half (1/2). No cash settlements shall be made with
respect to fractional shares eliminated by rounding. Notice of any
adjustment shall be given by the Committee to each Participant whose
Option or Award has been adjusted and such adjustment (whether or not such
notice is given) shall be effective and binding for all purposes of the
Plan.
(d) In the event of a merger or consolidation in which the Company
is not the surviving entity or in the event of any transaction that
results in the acquisition of substantially all of the Company's
outstanding Common Stock by a single person or entity or by a group of
persons and/or entities acting in concert, or in the event of the sale or
transfer of all of the Company's assets (all of the foregoing being
referred to as "Acquisition Events"), then the Committee may, in its sole
discretion, terminate all outstanding Options and Stock Appreciation
Rights of Eligible Employees and Consultants, effective as of the date of
the Acquisition Event, by delivering notice of
9
termination to each such Participant at least twenty (20) days prior to
the date of consummation of the Acquisition Event; provided, that during
the period from the date on which such notice of termination is delivered
to the consummation of the Acquisition Event, each such Participant shall
have the right to exercise in full all of his or her Options and Stock
Appreciation Rights that are then outstanding (without regard to any
limitations on exercisability otherwise contained in the Option or Award
Agreements) but contingent on occurrence of the Acquisition Event, and,
provided that, if the Acquisition Event does not take place within a
specified period after giving such notice for any reason whatsoever, the
notice and exercise shall be null and void.
If an Acquisition Event occurs, to the extent the Committee does not
terminate the outstanding Options and Stock Appreciation Rights pursuant
to this Section 4.2(d), then the provisions of Section 4.2(b) shall apply.
3. Purchase Price. Notwithstanding any provision of this Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.
ARTICLE V.
ELIGIBILITY
1. All employees of and Consultants to the Company and its Affiliates are
eligible to be granted Non-Qualified Stock Options, Stock Appreciation Rights
and Restricted Stock under this Plan. All employees of the Company, its
Subsidiaries and its parent (within the meaning of Code Section 424(e)) are
eligible to be granted Incentive Stock Options under the Plan. Eligibility under
this Plan shall be determined by the Committee.
2. Non-employee directors of the Company are only eligible to receive an
Award of Stock Options in accordance with Article IX of the Plan.
ARTICLE VI.
STOCK OPTION GRANTS
1. Options. Each Stock Option granted hereunder shall be one of two types:
(i) an Incentive Stock Option intended to satisfy the requirements of Section
422 of the Code or (ii) a Non-Qualified Stock Option.
2. Grants. The Committee shall have the authority to grant to any Eligible
Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options (in each case with or without Stock Appreciation
Rights). The Committee shall have the authority to grant to any Consultant one
or more Non-Qualified Stock Options (with or
10
without Stock Appreciation Rights). To the extent that any Stock Option does not
qualify as an Incentive Stock Option (whether because of its provisions or the
time or manner of its exercise or otherwise), such Stock Option or the portion
thereof which does not qualify, shall constitute a separate Non-Qualified Stock
Option.
3. Terms of Options. Options granted under this Plan shall be subject to
the following terms and conditions, shall be subject to Section 3.2 hereof and
the other provisions of this Plan, and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock
purchasable under an Incentive Stock Option shall be determined by the
Committee at the time of grant but shall not be less than 100% of the Fair
Market Value of the share of Common Stock at the time of grant; provided,
however, if an Incentive Stock Option is granted to a Ten Percent
Stockholder, the purchase price shall be no less than 110% of the Fair
Market Value of the Common Stock. The purchase price of shares of Common
Stock subject to a Non-Qualified Stock Option shall be determined by the
Committee but shall not be less than 100% of the Fair Market Value of the
Common Stock at the time of grant. Notwithstanding the foregoing, if an
Option is modified, extended or renewed and, thereby, deemed to be the
issuance of a new Option under the Code, the exercise price of an Option
may continue to be the original exercise price even if less than the Fair
Market Value of the Common Stock at the time of such modification,
extension or renewal.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10)
years after the date the Option is granted, provided, however, the term of
an Incentive Stock Option granted to a Ten Percent Stockholder may not
exceed five (5) years.
(c) Exercisability. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined
by the Committee at grant. If the Committee provides, in its discretion,
that any Stock Option is exercisable subject to certain limitations
(including, without limitation, that it is exercisable only in
installments or within certain time periods), the Committee may waive such
limitations on the exercisability at any time at or after grant in whole
or in part (including, without limitation, that the Committee may waive
the installment exercise provisions or accelerate the time at which
Options may be exercised), based on such factors, if any, as the Committee
shall determine, in its sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (c) above, Stock Options
may be exercised in whole or in part at any time during the Option term,
by giving written notice of exercise to the Company specifying the number
of shares to be purchased. Such notice shall be accompanied by payment in
full of the purchase price in such form, or such other arrangement for the
satisfaction of the purchase price, as the Committee may accept. If
11
and to the extent determined by the Committee in its sole discretion at or
after grant, payment in full or in part may also be made in the form of
Common Stock withheld from the shares to be received on the exercise of a
Stock Option hereunder, Common Stock owned by the Participant (and for
which the Participant has good title free and clear of any liens and
encumbrances) or Restricted Stock based, in each case, on the Fair Market
Value of the Common Stock on the payment date as determined by the
Committee (without regard to any forfeiture restrictions applicable to
such Restricted Stock). No shares of Common Stock shall be issued until
payment, as provided herein, therefor has been made or provided for. If
payment in full or in part has been made in the form of Restricted Stock,
an equivalent number of shares of Common Stock issued on exercise of the
Option shall be subject to the same restrictions and conditions, during
the remainder of the Restriction Period, applicable to the Restricted
Stock surrendered therefor.
(e) Incentive Stock Option Limitations. To the extent that the
aggregate Fair Market Value (determined as of the time of grant) of the
Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by an Eligible Employee during any calendar year under
the Plan and/or any other stock option plan of the Company or any
Subsidiary or parent corporation (within the meaning of Section 424(e) of
the Code) exceeds $100,000, such Options shall be treated as Options which
are not Incentive Stock Options. In addition, if an Eligible Employee does
not remain employed by the Company, any Subsidiary or parent corporation
(within the meaning of Section 424(e) of the Code) at all times from the
time the Option is granted until three (3) months prior to the date of
exercise (or such other period as required by applicable law), such Option
shall be treated as an Option which is not an Incentive Stock Option.
Should the foregoing provision not be necessary in order for the
Stock Options to qualify as Incentive Stock Options, or should any
additional provisions be required, the Committee may amend the Plan
accordingly, without the necessity of obtaining the approval of the
stockholders of the Company.
(f) Buy Out and Settlement Provisions. The Committee may at any time
on behalf of the Company offer to buy out an Option previously granted,
based on such terms and conditions as the Committee shall establish and
communicate to the Participant at the time that such offer is made.
(g) Form, Modification, Extension and Renewal of Options. Subject to
the terms and conditions and within the limitations of the Plan, an Option
shall be evidenced by such form of agreement or grant as is approved by
the Committee, and the Committee may modify, extend or renew outstanding
Options granted under the Plan (provided that the rights of a Participant
are not reduced without his consent), or accept the surrender of
outstanding Options (up to the extent not theretofore exercised) and
authorize the granting of new Options in substitution therefor (to the
extent not theretofore exercised).
(h) Other Terms and Conditions. Options may contain such other
provisions, which shall not be inconsistent with any of the foregoing
terms of the Plan, as the
12
Committee shall deem appropriate including, without limitation, permitting
"reloads" such that the same number of Options are granted as the number
of Options exercised, shares used to pay for the exercise price of Options
or shares used to pay withholding taxes ("Reloads"). With respect to
Reloads, the exercise price of the new Stock Option shall be the Fair
Market Value on the date of the "reload" and the term of the Stock Option
shall be the same as the remaining term of the Options that are exercised,
if applicable, or such other exercise price and term as determined by the
Committee.
4. Termination of Employment. The following rules apply with regard to
Options upon the Termination of Employment or Termination of Consultancy of a
Participant:
(a) Termination by Reason of Death. If a Participant's Termination
of Employment or Termination of Consultancy is by reason of death, any
Stock Option held by such Participant, unless otherwise determined by the
Committee at grant or, if no rights of the Participant's estate are
reduced, thereafter, may be exercised, to the extent exercisable at the
Participant's death, by the legal representative of the estate, at any
time within a period of one (1) year from the date of such death, but in
no event beyond the expiration of the stated term of such Stock Option.
(b) Termination by Reason of Disability. If a Participant's
Termination of Employment or Termination of Consultancy is by reason of
Disability, any Stock Option held by such Participant, unless otherwise
determined by the Committee at grant or, if no rights of the Participant
are reduced, thereafter, may be exercised, to the extent exercisable at
the Participant's termination, by the Participant (or the legal
representative of the Participant's estate if the Participant dies after
termination) at any time within a period of one (1) year from the date of
such termination, but in no event beyond the expiration of the stated term
of such Stock Option.
(c) Termination by Reason of Retirement. If a Participant's
Termination of Employment or Termination of Consultancy is by reason of
Retirement, any Stock Option held by such Participant, unless otherwise
determined by the Committee at grant, or, if no rights of the Participant
are reduced, thereafter, shall be fully vested and may thereafter be
exercised by the Participant at any time within a period of one (1) year
from the date of such termination, but in no event beyond the expiration
of the stated term of such Stock Option; provided, however, that, if the
Participant dies within such exercise period, any unexercised Stock Option
held by such Participant shall thereafter be exercisable, to the extent to
which it was exercisable at the time of death, for a period of one (1)
year (or such other period as the Committee may specify at grant or, if no
rights of the Participant's estate are reduced, thereafter) from the date
of such death, but in no event beyond the expiration of the stated term of
such Stock Option.
(d) Involuntary Termination Without Cause or Termination for Good
Reason. If a Participant's Termination of Employment or Termination of
Consultancy is by involuntary termination without Cause or for Good
Reason, any Stock Option held by such Participant, unless otherwise
determined by the Committee at grant or, if no rights
13
of the Participant are reduced, thereafter, may be exercised, to the
extent exercisable at termination, by the Participant at any time within a
period of ninety (90) days from the date of such termination, but in no
event beyond the expiration of the stated term of such Stock Option.
(e) Termination Without Good Reason. If a Participant's Termination
of Employment or Termination of Consultancy is voluntary but without Good
Reason and occurs prior to, or more than ninety (90) days after, the
occurrence of an event which would be grounds for Termination of
Employment or Termination of Consultancy by the Company for Cause (without
regard to any notice or cure period requirements), any Stock Option held
by such Participant, unless otherwise determined by the Committee at grant
or, if no rights of the Participant are reduced, thereafter, may be
exercised, to the extent exercisable at termination, by the Participant at
any time within a period of thirty (30) days from the date of such
termination, but in no event beyond the expiration of the stated term of
such Stock Option.
(f) Other Termination. Unless otherwise determined by the Committee
at grant or, if no rights of the Participant are reduced, thereafter, if a
Participant's Termination of Employment or Termination of Consultancy is
for any reason other than death, Disability, Retirement, Good Reason,
involuntary termination without Cause or voluntary termination as provided
in subsection (e) above, any Stock Option held by such Participant shall
thereupon terminate and expire as of the date of termination, provided
that (unless the Committee determines a different period upon grant or, if
no rights of the Participant are reduced, thereafter) in the event the
termination is for Cause or is a voluntary termination without Good Reason
within ninety (90) days after occurrence of an event which would be
grounds for Termination of Employment or Termination of Consultancy by the
Company for Cause (without regard to any notice or cure period
requirement), any Stock Option held by the Participant at the time of
occurrence of the event which would be grounds for Termination of
Employment or Termination of Consultancy by the Company for Cause shall be
deemed to have terminated and expired upon occurrence of the event which
would be grounds for Termination of Employment or Termination of
Consultancy by the Company for Cause.
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ARTICLE VII.
RESTRICTED STOCK AWARDS
1. Awards of Restricted Stock. Shares of Restricted Stock may be issued to
Eligible Employees or Consultants either alone or in addition to other Awards
granted under the Plan. The Committee shall determine the eligible persons to
whom, and the time or times at which, grants of Restricted Stock will be made,
the number of shares to be awarded, the price (if any) to be paid by the
recipient (subject to Section 7.2), the time or times within which such Awards
may be subject to forfeiture, the vesting schedule and rights to acceleration
thereof, and all other terms and conditions of the Awards.
2. Awards and Certificates. The prospective Participant selected to
receive a Restricted Stock Award shall not have any rights with respect to such
Award, unless and until such Participant has delivered a fully executed copy of
the Restricted Stock Award agreement evidencing the Award to the Company and has
otherwise complied with the applicable terms and conditions of such Award.
Further, such Award shall be subject to the following conditions:
(a) Purchase Price. The purchase price of Restricted Stock shall be
fixed by the Committee. Subject to Section 4.3, the purchase price for
shares of Restricted Stock may be zero to the extent permitted by
applicable law, and, to the extent not so permitted, such purchase price
may not be less than par value.
(b) Acceptance. Awards of Restricted Stock must be accepted within a
period of sixty (60) days (or such shorter period as the Committee may
specify at grant) after the Award date, by executing a Restricted Stock
Award agreement and by paying whatever price (if any) the Committee has
designated thereunder.
(c) Legend. Each Participant receiving a Restricted Stock Award
shall be issued a stock certificate in respect of such shares of
Restricted Stock, unless the Committee elects to use another system, such
as book entries by the transfer agent, as evidencing ownership of a
Restricted Stock Award. Such certificate shall be registered in the name
of such Participant, and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award,
substantially in the following form:
"The anticipation, alienation, attachment, sale, transfer,
assignment, pledge, encumbrance or charge of the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the 24/7 Media, Inc. (the "Company") 1998
Stock Incentive Plan and an Agreement entered into between the
registered owner and the Company, dated _____________, 19__. Copies
of such Plan and Agreement are on file at the principal office of
the Company."
(d) Custody. The Committee may require that any stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon
15
shall have lapsed, and that, as a condition of any Restricted Stock Award,
the Participant shall have delivered a duly signed stock power, endorsed
in blank, relating to the Common Stock covered by such Award.
3. Restrictions and Conditions on Restricted Stock Awards. The shares of
Restricted Stock awarded pursuant to this Plan shall be subject to Article X and
the following restrictions and conditions:
(a) Restriction Period; Vesting and Acceleration of Vesting. The
Participant shall not be permitted to Transfer shares of Restricted Stock
awarded under this Plan during a period set by the Committee (the
"Restriction Period") commencing with the date of such Award, as set forth
in the Restricted Stock Award agreement and such agreement shall set forth
a vesting schedule and any events which would accelerate vesting of the
shares of Restricted Stock. Within these limits, based on service, or
other criteria determined by the Committee, the Committee may provide for
the lapse of such restrictions in installments in whole or in part, or may
accelerate the vesting of all or any part of any Restricted Stock Award.
(b) Rights as Stockholder. Except as provided in this subsection (b)
and subsection (a) above and as otherwise determined by the Committee, the
Participant shall have, with respect to the shares of Restricted Stock,
all of the rights of a holder of shares of Common Stock of the Company
including, without limitation, the right to receive any dividends, the
right to vote such shares and, subject to and conditioned upon the full
vesting of shares of Restricted Stock, the right to tender such shares.
Notwithstanding the foregoing, the payment of dividends shall be deferred
until, and conditioned upon, the expiration of the applicable Restriction
Period, unless the Committee, in its sole discretion, specifies otherwise
at the time of the Award.
(c) Lapse of Restrictions. If and when the Restriction Period
expires without a prior forfeiture of the Restricted Stock subject to such
Restriction Period, the certificates for such shares shall be delivered to
the Participant. All legends shall be removed from said certificates at
the time of delivery to the Participant except as otherwise required by
applicable law.
4. Termination of Employment or Termination of Consultancy for Restricted
Stock. Subject to the applicable provisions of the Restricted Stock Award
agreement and this Plan, upon a Participant's Termination of Employment or
Termination of Consultancy for any reason during the relevant Restriction
Period, all Restricted Stock still subject to restriction will vest or be
forfeited in accordance with the terms and conditions established by the
Committee at grant or thereafter.
16
ARTICLE VIII.
STOCK APPRECIATION RIGHTS
1. Tandem Stock Appreciation Rights. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option (a "Reference Stock
Option") granted under this Plan ("Tandem Stock Appreciation Rights"). In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Reference Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time of the grant
of such Reference Stock Option.
2. Terms and Conditions of Tandem Stock Appreciation Rights. Tandem Stock
Appreciation Rights shall be subject to such terms and conditions, not
inconsistent with the provisions of this Plan, as shall be determined from time
to time by the Committee, including Article X and the following:
(a) Term. A Tandem Stock Appreciation Right or applicable portion
thereof granted with respect to a Reference Stock Option shall terminate
and no longer be exercisable upon the termination or exercise of the
Reference Stock Option, except that, unless otherwise determined by the
Committee, in its sole discretion, at the time of grant, a Tandem Stock
Appreciation Right granted with respect to less than the full number of
shares covered by the Reference Stock Option shall not be reduced until
and then only to the extent the exercise or termination of the Reference
Stock Option causes the number of shares covered by the Tandem Stock
Appreciation Right to exceed the number of shares remaining available and
unexercised under the Reference Stock Option.
(b) Exercisability. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the
Reference Stock Options to which they relate shall be exercisable in
accordance with the provisions of Article VI and this Article VIII.
(c) Method of Exercise. A Tandem Stock Appreciation Right may be
exercised by an optionee by surrendering the applicable portion of the
Reference Stock Option. Upon such exercise and surrender, the Participant
shall be entitled to receive an amount determined in the manner prescribed
in this Section 8.2. Stock Options which have been so surrendered, in
whole or in part, shall no longer be exercisable to the extent the related
Tandem Stock Appreciation Rights have been exercised.
(d) Payment. Upon the exercise of a Tandem Stock Appreciation Right
a Participant shall be entitled to receive up to, but no more than, an
amount in cash and/or Common Stock (as chosen by the Committee in its sole
discretion) equal in value to the excess of the Fair Market Value of one
share of Common Stock over the option price per share specified in the
Reference Stock Option multiplied by the number of shares in respect of
which the Tandem Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of payment.
17
(e) Deemed Exercise of Reference Stock Option. Upon the exercise of
a Tandem Stock Appreciation Right, the Reference Stock Option or part
thereof to which such Stock Appreciation Right is related shall be deemed
to have been exercised for the purpose of the limitation set forth in
Article IV of the Plan on the number of shares of Common Stock to be
issued under the Plan.
3. Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation
Rights may also be granted without reference to any Stock Options granted under
this Plan.
4. Terms and Conditions of Non-Tandem Stock Appreciation Rights.
Non-Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including Article X and the
following:
(a) Term. The term of each Non-Tandem Stock Appreciation Right shall
be fixed by the Committee, but shall not be greater than ten (10) years
after the date the right is granted.
(b) Exercisability. Non-Tandem Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee at grant. If the Committee
provides, in its discretion, that any such right is exercisable subject to
certain limitations (including, without limitation, that it is exercisable
only in installments or within certain time periods), the Committee may
waive such limitation on the exercisability at any time at or after grant
in whole or in part (including, without limitation, that the Committee may
waive the installment exercise provisions or accelerate the time at which
rights may be exercised), based on such factors, if any, as the Committee
shall determine, in its sole discretion.
(c) Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (b) above, Non-Tandem
Stock Appreciation Rights may be exercised in whole or in part at any time
during the option term, by giving written notice of exercise to the
Company specifying the number of Non-Tandem Stock Appreciation Rights to
be exercised.
(d) Payment. Upon the exercise of a Non-Tandem Stock Appreciation
Right a Participant shall be entitled to receive, for each right
exercised, up to, but no more than, an amount in cash and/or Common Stock
(as chosen by the Committee in its sole discretion) equal in value to the
excess of the Fair Market Value of one share of Common Stock on the date
the right is exercised over the Fair Market Value of one (1) share of
Common Stock on the date the right was awarded to the Participant.
5. Limited Stock Appreciation Rights. The Committee may, in its sole
discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a
general Stock Appreciation Right or as a limited Stock Appreciation Right.
Limited Stock Appreciation Rights
18
may be exercised upon the occurrence of such event as the Committee may, in its
sole discretion, designate at the time of grant or thereafter. Upon the exercise
of limited Stock Appreciation Rights, except as otherwise provided in an Award
agreement, the Participant shall receive in cash or Common Stock, as determined
by the Committee, an amount equal to the amount (1) set forth in Section 8.2(d)
with respect to Tandem Stock Appreciation Rights or (2) set forth in Section
8.4(d) with respect to Non-Tandem Stock Appreciation Rights.
6. Termination of Employment or Termination of Consultancy. The following
rules apply with regard to Stock Appreciation Rights upon the Termination of
Employment or Termination of Consultancy of a Participant.
(a) Termination by Death. If a Participant's Termination of
Employment or Termination of Consultancy is by reason of death, any Stock
Appreciation Right held by such Participant, unless otherwise determined
by the Committee at grant or if no rights of the Participant's estate are
reduced, thereafter, may be exercised, to the extent exercisable at the
Participant's death, by the legal representative of the estate, at any
time within a period of one (1) year from the date of such death or until
the expiration of the stated term of such Stock Appreciation Right,
whichever period is the shorter.
(b) Termination by Reason of Disability. If a Participant's
Termination of Employment or Termination of Consultancy is by reason of
Disability, any Stock Appreciation Right held by such participant, unless
otherwise determined by the Committee at grant or, if no rights of the
Participant are reduced, thereafter, may be exercised, to the extent
exercisable at the Participant's termination, by the Participant (or the
legal representative of the Participant's estate if the Participant dies
after termination) at any time within a period of one (1) year from the
date of such termination or until the expiration of the stated term of
such Stock Appreciation Right, whichever period is the shorter.
(c) Termination by Reason of Retirement. If a Participant's
Termination of Employment or Termination of Consultancy is by reason of
Retirement, any Stock Appreciation Right held by such Participant, unless
otherwise determined by the Committee at grant or, if no rights of the
Participant are reduced, thereafter, shall be fully vested and may
thereafter be exercised by the Participant at any time within a period of
one (1) year from the date of such termination or until the expiration of
the stated term of such right, whichever period is the shorter; provided,
however, that, if the Participant dies within such one (1) year period,
any unexercised Non-Tandem Stock Appreciation Right held by such
Participant shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of one (1) year (or such
other period as the Committee may specify at grant or if no rights of the
Participant are reduced, thereafter) from the date of such death or until
the expiration of the stated term of such right, whichever period is the
shorter.
(d) Involuntary Termination Without Cause or Termination for Good
Reason. If a Participant's Termination of Employment or Termination of
Consultancy is by
19
involuntary termination without Cause or for Good Reason, any Stock
Appreciation Right held by such participant, unless otherwise determined
by the Committee at grant or if no rights of the participant are reduced,
thereafter, may be exercised, to the extent exercisable at termination, by
the Participant at any time within a period of ninety (90) days from the
date of such termination or until the expiration of the stated term of
such right, whichever period is shorter.
(e) Termination Without Good Reason. If a Participant's Termination
of Employment or Termination of Consultancy is voluntary but without Good
Reason and occurs prior to, or more than ninety (90) days after, the
occurrence of an event which would be grounds for Termination of
Employment or Termination of Consultancy by the Company for Cause (without
regard to any notice or cure period requirements), any Stock Appreciation
Right held by such Participant, unless greater or lesser exercise rights
are provided by the Committee at the time of grant or, if no rights of the
participant are reduced, thereafter, may be exercised, to the extent
exercisable at termination, by the Participant at any time within a period
of thirty (30) days from the date of such termination, but in no event
beyond the expiration of the stated term of such Stock Appreciation Right.
(f) Other Termination. Unless otherwise determined by the Committee
at grant, or, if no rights of the Participant are reduced thereafter, if a
Participant's Termination of Employment or Termination of Consultancy is
for any reason other than death, Disability, Retirement, Good Reason,
involuntary termination without Cause or voluntary termination as provided
in subsection (e) above, any Stock Appreciation Right held by such
Participant shall thereupon terminate or expire as of the date of
termination, provided, that (unless the Committee determines a different
period upon grant, or, if no rights of the Participant are reduced,
thereafter) in the event the termination is for Cause or is a voluntary
termination as provided in subsection (e) above, within ninety (90) days
after occurrence of an event which would be grounds for Termination of
Employment or Termination of Consultancy by the Company for Cause (without
regard to any notice or cure period requirement), any Stock Appreciation
Right held by the Participant at the time of the occurrence of the event
which would be grounds for Termination of Employment or Termination of
Consultancy by the Company for Cause shall be deemed to have terminated
and expired upon occurrence of the event which would be grounds for
Termination of Employment or Termination of Consultancy by the Company for
Cause.
20
ARTICLE IX.
NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS
1. Options. The terms of this Article IX shall apply only to Options
granted to non-employee directors.
2. Grants.
(a) Initial Grant. Subject to the terms of the Plan, each
non-employee director of the Company who, as of June 30, 1998, has not
previously been granted Options under the Plan shall be granted
non-qualified Options to purchase 18,750 shares of Common Stock as of June
30, 1998, or, if later, as of the date the non-employee director begins
service as a director on the Board.
(b) Subsequent Grants Upon the date of each Annual Meeting of
Stockholders, each non-employee director shall be granted a non-qualified
Options to purchase 4,688 shares of Common Stock (or a pro rata portion
thereof if the director did not serve the entire year since the date of
the last annual meeting). These options vest in full on the date of the
first Annual Meeting of Stockholders held following the date of the grant,
assuming the Non-Employer Director is a director on that date.
3. Non-Qualified Stock Options. Stock Options granted under this Article
IX shall be Non-Qualified Stock Options.
4. Terms of Options. Options granted under this Article shall be subject
to the following terms and conditions and shall be in such form and contain such
additional terms and conditions, not inconsistent with terms of this Plan, as
the Committee shall deem desirable:
(a) Option Price. The purchase price per share deliverable upon the
exercise of an Option granted pursuant to Section 9.2 shall be 100% of the
Fair Market Value of such Common Stock at the time of the grant of the
Option (the "Purchase Price"), or the par value of the Common Stock,
whichever is greater.
(b) Exercisability. Except as otherwise provided herein, twenty-five
percent (25%) of any Option granted under this Article IX shall be
exercisable on or after each of the four anniversaries following the date
of grant.
(c) Method for Exercise. A non-employee director electing to
exercise one or more Options shall give written notice of exercise to the
Company specifying the number of shares to be purchased. Common Stock
purchased pursuant to the exercise of Options shall be paid for at the
time of exercise in cash or by delivery of unencumbered Common Stock owned
by the non-employee director or a combination thereof or by such other
method as approved by the Board.
21
(d) Option Term. Except as otherwise provided herein, if not
previously exercised each Option shall expire upon the tenth anniversary
of the date of the grant thereof.
5. Termination of Directorship. The following rules apply with regard to
Options upon the Termination of Directorship:
(a) Death, Disability or Otherwise Ceasing to be a Director Other
than for Cause. Except as otherwise provided herein, upon the Termination
of Directorship, on account of Disability, death, Retirement, resignation,
failure to stand for reelection or failure to be reelected or otherwise
other than as set forth in (b) below, all outstanding Options then
exercisable and not exercised by the Participant prior to such Termination
of Directorship shall remain exercisable, to the extent exercisable at the
Termination of Directorship, by the Participant or, in the case of death,
by the Participant's estate or by the person given authority to exercise
such Options by his or her will or by operation of law, for the remainder
of the stated term of such Options.
(b) Cause. Upon removal, failure to stand for reelection or failure
to be renominated for Cause, or if the Company obtains or discovers
information after Termination of Directorship that such Participant had
engaged in conduct that would have justified a removal for Cause during
such directorship, all outstanding Options of such Participant shall
immediately terminate and shall be null and void.
(c) Cancellation of Options. No Options that were not exercisable
during the period such person serves as a director shall thereafter become
exercisable upon a Termination of Directorship for any reason or no reason
whatsoever, and such Options shall terminate and become null and void upon
a Termination of Directorship.
6. Changes. The Awards to a non-employee director shall be subject to
Sections 4.2(a), (b) and (c) of the Plan and this Section 9.6, but shall not be
subject to Section 4.2(d).
7. If the Company shall not be the surviving corporation in any merger or
consolidation, or if the Company is to be dissolved or liquidated, then, unless
the surviving corporation assumes the Options or substitutes new Options which
are determined by the Board in its sole discretion to be substantially similar
in nature and equivalent in terms and value for Options then outstanding, upon
the effective date of such merger, consolidation, liquidation or dissolution,
any unexercised Options shall expire without additional compensation to the
holder thereof; provided, that, the Committee shall deliver notice to each
non-employee director at least twenty (20) days prior to the date of
consummation of such merger, consolidation, dissolution or liquidation which
would result in the expiration of the Options and during the period from the
date on which such notice of termination is delivered to the consummation of the
merger, consolidation, dissolution or liquidation, such Participant shall have
the right to exercise in full effective as of such consummation all Options that
are then outstanding (without regard to limitations on exercise otherwise
contained in the Options) but contingent on occurrence of the merger,
consolidation, dissolution or liquidation, and, provided that, if the
contemplated
22
transaction does not take place within a ninety (90) day period after giving
such notice for any reason whatsoever, the notice, accelerated vesting and
exercise shall be null and void and, if and when appropriate, new notice shall
be given as aforesaid.
ARTICLE X.
NON-TRANSFERABILITY
Except as provided in the last sentence of this Article X, no Stock Option
or Stock Appreciation Right granted to an Employee or Consultant shall be
Transferable by the Participant otherwise than by will or by the laws of descent
and distribution. All Stock Options and all Stock Appreciation Rights granted to
an Employee or Consultant shall be exercisable, during the Participant's
lifetime, only by the Participant. Tandem Stock Appreciation Rights shall be
Transferable, to the extent permitted above, only with the underlying Stock
Option. Shares of Restricted Stock under Article VII may not be Transferred
prior to the date on which shares are issued, or, if later, the date on which
any applicable restriction lapses. No Award shall, except as otherwise
specifically provided by law or herein, be Transferable in any manner, and any
attempt to Transfer any such Award shall be void, and no such Award shall in any
manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such Award, nor
shall it be subject to attachment or legal process for or against such person.
All Stock Options granted to non-employee directors shall be Transferable solely
to such non-employee director's principal employer at the time of grant if the
terms of such non-employee director's employment so require. Notwithstanding the
foregoing, the Committee may determine at the time of grant or thereafter, that
a Stock Option, other than an Incentive Stock Option, that is otherwise not
transferable pursuant to this Article X is transferable in whole or part and in
such circumstances, and under such conditions, as specified by the Committee.
ARTICLE XI.
CHANGE IN CONTROL PROVISIONS
1. Benefits. In the event of a Change in Control of the Company (as
defined below), except as otherwise provided by the Committee upon the grant of
an Award, each Participant shall have the following benefits:
(a) All outstanding Options and the related Tandem Stock
Appreciation Rights and Non-Tandem Stock Appreciation Rights of such
Participant granted prior to the Change in Control shall be fully vested
and immediately exercisable in their entirety. The Committee, in its sole
discretion, may provide for the purchase of any such Stock Options by the
Company for an amount of cash equal to the excess of the Change in Control
price (as defined below) of the shares of Common Stock covered by such
Stock Options, over the aggregate exercise price of such Stock Options.
For purposes of this Section 11.1, Change
23
in Control price shall mean the higher of (i) the highest price per share of
Common Stock paid in any transaction related to a Change in Control of the
Company, or (ii) the highest Fair Market Value per share of Common Stock at any
time during the sixty (60) day period preceding a Change in Control.
(b) The restrictions to which any shares of Restricted Stock of such
Participant granted prior to the Change in Control are subject shall lapse
as if the applicable Restriction Period had ended upon such Change in
Control.
(c) Notwithstanding anything else herein, the Committee may, in its
sole discretion, provide for accelerated vesting of an Award (other than a
grant to a non-employee director pursuant to Article IX hereof), upon a
Termination of Employment during the Pre-Change in Control Period. Unless
otherwise determined by the Committee, the Pre-Change in Control Period
shall be the one hundred eighty (180) day period prior to a Change in
Control.
2. Change in Control. A "Change in Control" shall be deemed to have
occurred:
(a) upon any "person" as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company, any trustee or other
fiduciary holding securities under any employee benefit plan of the
Company, or any company owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of
Common Stock of the Company, becoming the owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing forty percent (40%) or more of the combined voting
power of the Company's then outstanding securities (including, without
limitation, securities owned at the time of any increase in ownership);
(b) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors, and any
new director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in
paragraph (a), (c), or (d) of this section) or a director whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than
the Board of Directors of the Company whose election by the Board of
Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the two-year period
or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority of the Board of
Directors;
(c) upon the merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent
24
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; provided, however, that a merger or consolidation effected
to implement a recapitalization of the Company (or similar transaction) in
which no person (other than those covered by the exceptions in (a) above)
acquires more than forty percent (40%) of the combined voting power of the
Company's then outstanding securities shall not constitute a Change in
Control of the Company; or
(d) upon the stockholder's of the Company approval of a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets other than the sale of all or substantially all of the assets of
the Company to a person or persons who beneficially own, directly or
indirectly, at least fifty percent (50%) or more of the combined voting
power of the outstanding voting securities of the Company at the time of
the sale.
25
ARTICLE XII.
TERMINATION OR AMENDMENT OF THE PLAN
1. Termination or Amendment. Notwithstanding any other provision of this
Plan, the Board may at any time, and from time to time, amend, in whole or in
part, any or all of the provisions of the Plan, or suspend or terminate it
entirely, retroactively or otherwise; provided, however, that, unless otherwise
required by law or specifically provided herein, the rights of a Participant
with respect to Awards granted prior to such amendment, suspension or
termination, may not be impaired without the consent of such Participant and,
provided further, without the approval of the stockholders of the Company, if
and to the extent required by the applicable provisions of Rule 16b-3 or, if and
to the extent required, under the applicable provisions of Section 162(m) of the
Code, or with regard to Incentive Stock Options, Section 422 of the Code, no
amendment may be made which would (i) increase the aggregate number of shares of
Common Stock that may be issued under this Plan; (ii) increase the maximum
individual Participant limitations for a fiscal year under Section 4.1(b); (iii)
change the classification of employees, Consultants, and non-employee directors
eligible to receive Awards under this Plan; (iv) decrease the minimum option
price of any Stock Option; (v) extend the maximum option period under Section
6.3; (vi) change any rights under the Plan with regard to non-employee
directors; or (vii) require stockholder approval in order for the Plan to
continue to comply with the applicable provisions, if any, of Rule 16b-3,
Section 162(m) of the Code, any applicable state law, or, with regard to
Incentive Stock Options, Section 422 of the Code. In no event may the Plan be
amended without the approval of the stockholders of the Company in accordance
with the applicable laws or other requirements to increase the aggregate number
of shares of Common Stock that may be issued under the Plan, decrease the
minimum option price of any Stock Option, or to make any other amendment that
would require stockholder approval under the rules of any exchange or system on
which the Company's securities are listed or traded at the request of the
Company.
The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Article IV above or as otherwise
specifically provided herein, no such amendment or other action by the Committee
shall impair the rights of any holder without the holder's consent.
ARTICLE XIII.
UNFUNDED PLAN
This Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments as to which a Participant has a fixed
and vested interest but which are not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any rights that are
greater than those of a general creditor of the Company.
26
ARTICLE XIV.
GENERAL PROVISIONS
1. Legend. The Committee may require each person receiving shares pursuant
to an Award under the Plan to represent to and agree with the Company in writing
that the Participant is acquiring the shares without a view to distribution
thereof. In addition to any legend required by this Plan, the certificates for
such shares may include any legend which the Committee deems appropriate to
reflect any restrictions on Transfer.
All certificates for shares of Common Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities association system upon whose
system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
2. Other Plans. Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
3. No Right to Employment/Directorship. Neither this Plan nor the grant of
any Award hereunder shall give any Participant or other employee any right with
respect to continuance of employment by the Company or any Affiliate, nor shall
they be a limitation in any way on the right of the Company or any Affiliate by
which an employee is employed to terminate his employment at any time. Neither
this Plan nor the grant of any Award hereunder shall impose any obligations on
the Company to retain any Participant as a director nor shall it impose on the
part of any Participant any obligation to remain as a director of the Company.
4. Withholding of Taxes. The Company shall have the right to deduct from
any payment to be made to a Participant, or to otherwise require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld. Upon the vesting of Restricted Stock, or upon
making an election under Code Section 83(b), a Participant shall pay all
required withholding to the Company.
The Committee may permit any such withholding obligation with regard to
any Participant to be satisfied by reducing the number of shares of Common Stock
otherwise deliverable or by delivering shares of Common Stock already owned. Any
fraction of a share of Common Stock required to satisfy such tax obligations
shall be disregarded and the amount due shall be paid instead in cash by the
Participant.
5. Listing and Other Conditions.
27
(a) As long as the Common Stock is listed on a national securities
exchange or system sponsored by a national securities association, the
issue of any shares of Common Stock pursuant to an Award shall be
conditioned upon such shares being listed on such exchange or system. The
Company shall have no obligation to issue such shares unless and until
such shares are so listed, and the right to exercise any Option with
respect to such shares shall be suspended until such listing has been
effected.
(b) If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant to an Award
is or may in the circumstances be unlawful or result in the imposition of
excise taxes on the Company under the statutes, rules or regulations of
any applicable jurisdiction, the Company shall have no obligation to make
such sale or delivery, or to make any application or to effect or to
maintain any qualification or registration under the Securities Act of
1933, as amended, or otherwise with respect to shares of Common Stock or
Awards, and the right to exercise any Option shall be suspended until, in
the opinion of said counsel, such sale or delivery shall be lawful or will
not result in the imposition of excise taxes on the Company.
(c) Upon termination of any period of suspension under this Section
14.5, any Award affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available
before such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension
shall extend the term of any Option.
6. Governing Law. This Plan shall be governed and construed in accordance
with the laws of the state of incorporation of the Company (regardless of the
law that might otherwise govern under applicable principles of conflict of
laws).
7. Construction. Wherever any words are used in this Plan in the masculine
gender they shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and wherever any words are used
herein in the singular form they shall be construed as though they were also
used in the plural form in all cases where they would so apply. To the extent
applicable, the Plan shall be limited, construed and interpreted in a manner so
as to comply with the applicable requirements of Rule 16b-3 and Section 162(m)
of the Code; however, noncompliance with Rule 16b-3 or Section 162(m) of the
Code shall have no impact on the effectiveness of a Stock Option granted under
the Plan.
8. Other Benefits. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its subsidiaries nor affect any benefits under any other benefit plan
now or subsequently in effect under which the availability or amount of benefits
is related to the level of compensation.
9. Costs. The Company shall bear all expenses included in administering
this Plan, including expenses of issuing Common Stock pursuant to any Awards
hereunder.
28
10. No Right to Same Benefits. The provisions of Awards need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.
11. Death/Disability. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will (in
the case of the Participant's death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Award. The
Committee may also require the agreement of the transferee to be bound by all of
the terms and conditions of the Plan.
12. Section 16(b) of the Exchange Act. All elections and transactions
under the Plan by persons subject to Section 16 of the Exchange Act involving
shares of Common Stock are intended to comply with any applicable condition
under Rule 16b-3. The Committee may establish and adopt written administrative
guidelines, designed to facilitate compliance with Section 16(b) of the Exchange
Act, as it may deem necessary or proper for the administration and operation of
the Plan and the transaction of business thereunder.
13. Severability of Provisions. If any provision of the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions hereof, and the Plan shall be construed and enforced as if
such provisions had not been included.
14. Headings and Captions. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.
ARTICLE XV.
TERM OF PLAN
No Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the earlier of the date the Plan is adopted or the date of
stockholder approval, but Awards granted prior to such tenth anniversary may
extend beyond that date.
ARTICLE XVI.
NAME OF PLAN
This Plan shall be known as the 24/7 Media, Inc. 1998 Stock Incentive
Plan.
29
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 7/24/98 |
| | 7/20/98 | | 1 | | 8 |
| | 6/30/98 | | 21 | | | | | 10-Q |
| | 2/13/98 | | 1 | | 2 |
| | 3/8/96 | | 1 |
| List all Filings |
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